HQ 0222067 - Application for Further Review of Protest No. 1001-4-011417; concerning a request for reliquidation of methanol used for fuel; Section 520(c)(1), and Section 514(a)(7), Tariff Act of 1930. - United States International Trade Commision Rulings

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HQ 222067

August 2, 1991

LIQ-9-01-CO:R:C:E 222067 SR

CATEGORY: ENTRY LIQUIDATION

Ms. Jean McGuire
N.Y. Seaport
6 World Trade Center
New York, N.Y. 10048

RE: Application for Further Review of Protest No. 1001-4-011417; concerning a request for reliquidation of methanol used for fuel; Section 520(c)(1), and Section 514(a)(7), Tariff Act of 1930.

Dear Ms. McGuire:

The above-referenced protest was forwarded to our office on Application for Further Review of Protest No. 1001-4-011417, dated August 13, 1984. We have considered the facts and the issue raised; our decision follows.

FACTS:

The protestant imported 2,787,606 gallons of methyl alcohol (commonly known as methanol). Some of this importation was to be used as fuel. After the methanol was imported, a customer of the protestant realized that it had underestimated the amount of methanol it needed as fuel and wished to purchase more. On June 15, 1983, the protestant filed a claim under Section 520(c)(1) of the Tariff Act of 1930, stating that the tariff classification of the methanol should be changed because the underestimation of the amount of methanol that would be used for fuel constituted a mistake of fact. On June 5, 1984, Customs denied this claim. The claimant now protests under Section 514(a)(7), Customs refusal to grant relief under Section 520(c)(1).

ISSUE:

Whether the methanol that was imported can be reliquidated as fuel under 520(c)(1) of the Tariff Act of 1930, as a mistake of fact.

LAW AND ANALYSIS:

Item 427.96, Tariff Schedules of the United States (TSUS), provides for methyl alcohol, imported only for use in producing synthetic natural gas (SNG) or for direct use as a fuel, free of duty. Methanol that is not imported for use as a fuel has a duty rate of 18 percent ad valorem.

General Headnote 10(e)(ii) to the TSUS provides as follows:

(ii) a tariff classification controlled by the actual use to which an imported article is put in the United States is satisfied only if such use is intended at the time of importation, the article is so used, and proof thereof is furnished within 3 years after the date the article is entered.

The language in 19 C.F.R. 10.133, reaffirms the conditions required for merchandise to be imported under an actual use provision. 19 C.F.R. 10.134, further states that a showing of intent of the actual use of the merchandise must be made on a declaration when filing the appropriate forms at the time of importation.

The importer's letter of September 20, 1982, stated that more methanol was used for fuel than was expected. This letter was sent to Customs after the merchandise was imported but before liquidation occured. Since the merchandise had already been imported there was no intent to use the methanol as fuel at the time of importation. Because the statutory requirement of intent was not fulfilled, the argument of mistake of fact is not applicable.

Headquarters Ruling Letter (HQ) 072130, dated March 1, 1983, dealt with a similar issue. This ruling held that methanol must be intended to be used as fuel at the time of importation in order to be entered duty free under the actual use provision. In this ruling it was stated that Section 10.134 leaves no doubt that the intent must be present at entry.

HOLDING:

The protest under Section 520(c)(1), Tariff Act of 1930, is inapplicable. The methanol at issue can not be reliquidated under item 427.96, TSUS, as methyl alcohol used as a fuel, because there was no intent at the time of importation that the methanol was to be used as fuel.

Accordingly, you are directed to deny the protest. A copy of this decision should be furnished to the protestant in order -3-
to satisfy the notice requirement of section 174.30(a), Customs Regulations.

Sincerely,

John Durant, Director

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