United States International Trade Commision Rulings And Harmonized Tariff Schedule
faqs.org  Rulings By Number  Rulings By Category  Tariff Numbers
faqs.org > Rulings and Tariffs Home > Rulings By Number > 1993 HQ Rulings > HQ 0112665 - HQ 0221377 > HQ 0221080

Previous Ruling Next Ruling


HQ 221080


February 4, 1991

LIQ-0-01-CO:R:C:E 221080 C

CATEGORY: ENTRY LIQUIDATION

Area Director of Customs
6 World Trade Center
Room 423
New York, NY 10048

RE: Further review of protest no. 1001-3-016325; proper protest under 19 U.S.C. 1514(a)(7); clerical error/inadvertence under 19 U.S.C. 1520(c)(1)

Dear Sir/Madam:

This responds to the referenced protest and application for further review, which pertains to entry number 79-XXXXXXX liquidated on July 16, 1982.

FACTS:

The PROTESTANT in this case imports M-25, a chemical used in the production of photographic color couplers. PROTESTANT sells the imported merchandise to the manufacturer of the couplers. The M-25 is duty-free under a tariff provision which requires that imported merchandise actually be used in accordance with the description set forth in the tariff provision. This is called an actual use tariff provision. The provision germane to this case requires that the imported merchandise be used in the production of photographic color couplers. (See subheading 9902.29.01 of the Harmonized Tariff Schedule of the United States (HTSUS), formerly item 907.10 of the Tariff Schedules of the United States.)

The Customs Regulations, Title 19, Code of Federal Regulations (19 CFR), require that an importer of merchandise subject to an actual use tariff provision must file proof of end use (of the imported merchandise) within three years of entry (or withdrawal from warehouse). Section 10.138 of the regulations provides that such proof shall be in the form of a certificate executed by the manufacturer, end user, or other person having knowledge of the actual use of the imported merchandise. The certificate must be filed by the importer. The importer may choose, depending on its operation, to file a blanket certification covering merchandise imported over a period of time. In addition to filing the certification executed by the manufacturer (end user or other person), the importer, when choosing the blanket certification option, must also file his own statement setting forth, in sufficient detail to identify pertinent entries, the quantities of imported merchandise sold to the manufacturer during the period covered by the certification. 19 CFR 10.138; Additional U.S. Rules of Interpretation 1(b), HTSUS. Failure to timely file the certification will result in liquidation of the imported merchandise under an appropriate dutiable provision.

In the instant case, the importer, PROTESTANT, filed a blanket certification containing documents which appear to be adequate to meet the requirements of the statute and regulations, as above: a statement in letter form from the manufacturer, attesting to the order of M-25 for use in the production of photographic color couplers, and a statement in letter form from PROTESTANT, attesting to the importation of M-25 over a certain period to be sold to the manufacturer for use in such production. The PROTESTANT's statement identified two entries by number, neither of which was the entry in question. (See July 11, 1979 letter to Customs from PROTESTANT.)

The M-25 merchandise covered by the entry in question, as well as such merchandise covered by two other entries, was entered duty-free under the appropriate actual use tariff provision. Upon expiration of the three year certification filing period, the entry in question was liquidated, on July 16, 1982, under its appropriate dutiable provision. The other two entries were liquidated "no change". PROTESTANT filed a timely protest on September 3, 1982, under 19 U.S.C. 1514, objecting to the dutiable liquidation. (This protest would have been considered under 19 U.S.C. 1514(a)(2) or 1514(a)(5); it was not specified in the record.) Specifically, PROTESTANT asserted that the entry in question was covered by the certification, submitted an additional document specifically identifying, by entry number, the entry in question, and alleged, directly or by implication, that Customs misclassified the merchandise under a dutiable provision at liquidation. The protest was denied on the apparent ground that the documentation, including the additional document filed with the protest, was not sufficient to demonstrate that the entry in question was covered by the certification. The instant protest indicates that the initial protest was denied "because Customs is without authority to waive or extend the 3 year statutory limitation period for the filing of proof of end use."

PROTESTANT then timely filed a request for reliquidation on January 20, 1983, under 19 U.S.C. 1520(c)(1), asserting that the blanket certification, covering the two entries listed by entry number, should also have included the entry in question, and that failure to so include such entry was a clerical error or inadvertence correctable under the statute. This is the first instance where the issue of clerical error/inadvertence was raised. The request was denied on September 8, 1983, on the stated ground that Customs is without authority to extend or waive the statutory three year filing requirement. PROTESTANT then timely filed this protest on December 7, 1983, under 19 U.S.C. 1514(a)(7), objecting to the denial of the section 1520(c)(1) request for reliquidation. You recommended that the protest be denied for two reasons: 1) The PROTESTANT is precluded from raising an issue in a second protest that was considered and decided in an earlier protest; and 2) a certification covering the entry in question was not timely filed and Customs is without authority to waive the three year filing requirement.

ISSUES:

1.) Is the instant protest improper for the reason that the issue presented was raised and decided in the initial protest?

2.) Was clerical error or inadvertence, correctable under 19 U.S.C. 1520(c)(1), responsible for Customs dutiable liquidation of the merchandise?

LAW AND ANALYSIS:

Issue 1

You recommend that this protest be denied on the ground that the issue presented was already considered and denied in the first protest and thus cannot now be raised in a second protest. Your proposition is correct. A protest of a 1520(c)(1) denial must be confined to an issue pertinent to the denial of the 1520(c)(1) request and cannot be used as a pretext or means to raise and argue again an issue decided in an earlier protest, one preceding the 1520(c)(1) request. However, this proposition is inapplicable to the instant case because the issue raised in the instant protest is not the same as the issue raised in the initial protest.

The initial protest was to the sufficiency of the documentation submitted. Customs review of the documents led to Customs classification of the merchandise, and liquidation of the entry, under a dutiable provision. The PROTESTANT's position in this initial protest was that the documents submitted were sufficient to meet the certification requirement. (PROTESTANT submitted an additional document identifying the entry in question.) (See Issue 2.) Customs disagreed. The PROTESTANT's objection ultimately was to the classification of the merchandise under a dutiable tariff provision at liquidation. (See 19 U.S.C. PROTESTANT's second protest, the instant protest, raises a somewhat different issue. It objects to Customs decision to deny the 1520(c)(1) request on the ground that clerical error or inadvertence occurred in the preparation of the certification and Customs failure to so conclude was erroneous. (See 19 U.S.C. 1514(a)(7).) It did not protest the classification or liquidation, per se. On the one hand, in the initial protest, PROTESTANT asserted that the documentation was adequate and Customs classification/liquidation was therefore erroneous. On the other hand, in the instant protest, PROTESTANT focuses on the clerical error/inadvertence issue raised in the 1520(c)(1) request, asserting that Customs erred in denying the request.

The cases you cited, Slip. Op. 84-7 and Slip. Op. 85-129, Wally Packaging, Inc. v. U.S., 578 F. Supp. 1408, 7 CIT 19 (1984), and Cavazos v. U.S., 9 CIT 628 (1985), respectively, are distinguishable from the instant case. In the instant case, PROTESTANT filed a timely protest under 19 U.S.C. 1514, presumably section 1514(a)(2) or (a)(5). After it was denied, a timely request for reliquidation under 19 U.S.C. 1520(c)(1) was filed. Upon denial of this request, the instant protest was timely and properly filed under 19 U.S.C. 1514(a)(7). In Wally Packaging, an initial protest was filed and denied. This was followed by two requests for reliquidation under 19 U.S.C. 1520(c)(1), both of which were denied. Neither denial was protested. An action was then filed in the Court of International Trade. In Cavazos, an initial protest was filed and denied, a 1520(c)(1) request was filed and denied, and an action was then filed in the Court of International Trade.

Both cases were dismissed because the court's review was improperly sought. Review in the Court of International Trade cannot be predicated on the denial of a 1520(c)(1) request. The court has jurisdiction to review the denial of protests made under 19 U.S.C. 1514. A denied 1520(c)(1) request must be protested to gain judicial review. (See 19 U.S.C. 1515(a) and 19 C.F.R. 174.31.) Additionally, the Cavazos opinion noted that a 1520(c)(1) request cannot be used, in effect, to protest a classification determination that was already contested and decided in a prior protest. Because the facts of the instant case differ significantly from those of the cited cases, those cases are inapplicable here.

Based on the foregoing, we conclude that the instant protest is a proper protest.

Issue 2

Your rationale in denying PROTESTANT's 1520(c)(1) reliquidation request leaves uncertain whether or not you accepted that a correctable error occurred. Your denial may contemplate that a correctable error occurred but Customs is nonetheless barred from taking the remedial action requested because of the statutory filing period. If that is the basis of your denial, we would advise that the three year filing requirement is not an impediment to approval of the request for reliquidation in this case. If there was a clerical error or inadvertence that resulted in the omission of the entry in question from the blanket certification, the entry could have been reliquidated because the certification was in fact timely filed. In this instance, the filing period requirement would not have precluded Customs remedial action because the requirement already had been fulfilled.

The authority you cited regarding this issue, Customs ruling 715205, dated April 8, 1981, is not applicable to the instant case because the facts of that case are not the same as those presented here. In that case, a certificate of use was not filed within the three year period. Customs is indeed without authority to waive the requirement. On the facts here, the certificate was timely filed, but the entry number in question was not included in that timely filed certification.

If your denial was based on your finding that a correctable error did not occur on the facts of this case, the below analysis is applicable.

The question is this: Was correctable error - clerical error or inadvertence - responsible for the omission of the entry in question from the blanket certification package of documents? Of course, at this stage, we are unable to know with absolute certainty whether or not correctable error occurred. However, examination of the documents in the record indicates that such error occurred. The pertinent documents are:

1) an April 5, 1979, letter to Customs from the manufacturer, acknowledging, in advance, the receipt of M-25 merchandise ordered under purchase order no. T-724176, and stating that such merchandise was imported by PROTESTANT for use (by the manufacturer) in the requisite production and that such merchandise was to be delivered between March 19 and June 11, 1979 (the date of importation of the merchandise covered by the entry in question);

2) a May 2, 1979, letter to Customs from
PROTESTANT, declaring that 17 drums of M-25 are being imported for sale to the manufacturer for use in the requisite production, and that the merchandise referred to will be shipped on board the SS "New
Jersey Maru" under a bill of lading no. MO25- 21270 from Kobe, Japan to New York;

3) a June 1, 1979, letter to PROTESTANT, for Customs attention, from the manufacturer, stating, in advance, that the merchandise received under purchase order T-724176 was manufactured in Japan;

4) a July 11, 1979, letter to Customs from PROTESTANT, referring to importations of M- 25 during the period from April 16 to June 11, 1979 (the date of importation of the merchandise covered by the entry in question), identifying two entries by entry number covering merchandise that was sold and delivered to the manufacturer to be used for the requisite purpose, and requesting duty- free treatment under the appropriate actual use tariff provision;

5) the consumption entry (no. 79-XXXXXXX; June 26, 1979) covering the merchandise in question (17 drums of M-25, 510 kg), indicating bill of lading no. MO25-21270, shipment on board the "New Jersey Maru" from Kobe, Japan to New York, and importation on June 11, 1979, by the PROTESTANT;

6) a bill of lading no. MO25-21270 for order no. T-724176, covering 17 drums of
"Chemicals" and indicating invoice no.
OVC31/623;

7) an invoice no. OVC31/623(C77) covering order no. T-724176 for 17 drums of M-25 and indicating shipment from Kobe to New York; and

8) an unidentified form, reference no. 14851, apparently executed by a customs broker
(Taub, Hammel & Schnall, Inc.), indicating order no. T-724176, invoice no.
OVC31/623(C77), and showing a shipment of 17 drums of M-25 on board the "New Jersey Maru," arriving on June 11, 1979.

All the above documents appear to relate to the entry in question. There are several other documents in the record as well, the above appearing to be the most relevant.

Without "walking through" the significant details of these documents, we believe that they demonstrate a sufficiently clear picture of the transaction in question: The manufacturer ordered M-25 for the requisite use from PROTESTANT who imported it from Japan. Both PROTESTANT and the manufacturer expected shipment of the M-25 over a certain period of time. The order was placed under order no. T-724176, and the merchandise was imported in three shipments under three separate entries during the period of the certification. It appears that the above letters written by PROTESTANT and the manufacturer, and comprising the blanket certification, were written in contemplation and expectation that all the merchandise to be imported under order no. T-724176, the three shipments, would be covered by the blanket certification and, thus, would be entitled to duty-free treatment. The entry in question was covered by order no. T-724176, and appears to have been within PROTESTANT's and the manufacturer's contemplation and expectation of what (merchandise) was to be covered by the certification.

In summation, the foregoing amounts to this: All indications suggest that the entry in question was intended to be covered by the blanket certification, but that it was omitted from the list of entry numbers contained in the certification package. But for that omission, the entry in question would have been regarded by Customs as covered by the certification and entitled to a duty- free "no change" liquidation.

It is with the foregoing summation in mind that we consider whether or not a correctable error occurred. The kind of omission occurring here - failure to include an item or number in a list written into a document - falls within the general concept of clerical error or inadvertence. "Clerical error or inadvertence" has been variously defined. It has been called the improper execution, through carelessness, inadvertence, and/or mistake, of a proper and correct intention. S. Yamada v. United States, 26 CCPA 89, TD 49628 (1938). In fact, the intent of the person committing the error is considered the essential factor in determining whether a correctable clerical error or inadvertence occurred. Charles Neidert v. United States, 30 Cust. Ct. 189, C.D. 1568 (1953).

We believe that the intent of the PROTESTANT, as well as of the manufacturer, was to include the entry in question in the blanket certification. Importantly, we believe that this intent is amply demonstrated in the record, fairly indicating that PROTESTANT, through carelessness, inadvertence, or simple mistake, improperly executed its proper and correct intention.

We hasten to emphasize that without this ample evidence, we could not conclude that a correctable error occurred. First, without this evidence, there would be no basis upon which to determine PROTESTANT's intent, and, second, the statute requires that the correctable error be manifest from the record or established by documentary evidence. We believe that this record establishes PROTESTANT's intent and that unintentional omission, as above, was responsible for the dutiable liquidation.

Based on the foregoing, we conclude that a certification pertaining to the entry in question was timely filed, but an unintentional omission of the entry number from the blanket certification resulted in the dutiable liquidation objected to by PROTESTANT. This omission, considered in light of the considerable evidence indicating PROTESTANT's proper and correct intent - evidence without which a different result would follow, falls within the concept of clerical error or inadvertence under 19 U.S.C. 1520(c)(1). Therefore, we conclude that the denial of PROTESTANT's reliquidation request should be reversed.

You are hereby directed to grant the protest and furnish a copy of this decision to PROTESTANT.

Sincerely,

John Durant, Director

Previous Ruling Next Ruling

See also: