HQ 0222989 - Application for Further Review of Protest No. 2704-90- 001021; Sufficiency of Evidence; 19 U.S.C. 1520(c)(1) - United States International Trade Commision Rulings

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HQ 222989

May 24, 1991

LIQ-9-01-CO:R:C:E 222989 PH

CATEGORY: LIQUIDATION

Regional Commissioner of Customs
Pacific Region

RE: Application for Further Review of Protest No. 2704-90- 001021; Sufficiency of Evidence; 19 U.S.C. 1520(c)(1)

Dear Sir:

The above-referenced protest was forwarded to this office for further review. We have considered the points raised by your office and the protestant. Our decision follows (original documents in the file are returned with this ruling).

FACTS:

According to the file, on August 1, 1988, the protestant imported a quantity of various kinds of footwear, including the footwear which is the subject of this protest. The footwear under consideration, stated to be 2,083 cartons of 27,828 pairs of vinyl footwear for women (identified as style 2287) and 1,787 cartons of 20,196 pairs of athletic footwear (with uppers of 90 percent rubber or plastic) for youths and children (identified as style 9140) were entered under items 700.56, Tariff Schedules of the United States (TSUS), dutiable at the rate of 6 percent ad valorem, with duty in the amount of $16,958.28. A Customs Form (CF) 5523 (Invoice Details for Footwear) was provided for the youths' and children's footwear. In the CF5523 it was stated that the percentage of exterior surface area of the upper was 85 percent plastic, 5 percent rubber, and 10 percent fiber. According to the file, no CF5523 was provided for the women's footwear and a bond was posted for submission of that form for these shoes.

The entry date for the merchandise under consideration was August 1, 1988. By a Notice of Advance, dated March 13, 1989, the classification of the footwear was advanced from the item under which it was entered to items 700.59 and 700.61, TSUS, dutiable at the rate of 37.5 percent ad valorem. The explanations given for the rate advance were: "1. (Bond was posted for CF5523(1)) & it has not been received)[; and] 2. 009140 - Per CF5523 90% ESAU, 10% fiber." The entry was liquidated accordingly on July 14, 1989.

On November 2, 1989, the protestant filed a request that the entry be reliquidated under 19 U.S.C. 1520(c) because "[t]he untimely notice of [advance] ... made it impossible to receive corrected CF5523's." With regard to the youths' and children's footwear, the protestant enclosed a copy of an interim footwear invoice and a laboratory analysis, dated September 22, 1989, of a sample of this style footwear. The laboratory analysis stated that the percentage (of material by area of the external surface area of the upper) was 96 percent rubber and/or plastic and that the sample did not have any foxing or foxing-like band, that the overlapping of rubber around the forepart is 36 percent of the total perimeter of the shoe, and that the sample is a black sneaker with a plastic upper and a rubber sole. With regard to the women's footwear, the protestant enclosed a copy of an inter- im footwear invoice and stated that the merchandise was an all plastic shoe, with an invoice description of "ladies P.U. shoe."

The protestant's request for reliquidation was denied on December 13, 1989, on the basis that the claim was not correctable under 19 U.S.C. 1520(c)(1). On March 12, 1990, the protestant filed the protest under consideration and applied for further review. The basis for the protest was that the CF5523 relied upon by Customs in its rate advance was claimed to have been prepared in error by the manufacturer. The protestant claimed to have been unable to obtain a corrected CF5523 from the manufacturer due to the time (nearly 7 months) that had elapsed between the date of importation and the rate advance. The pro- testant stated that it did provide Customs with interim footwear invoices. With regard to the factual question of whether the shoes had external surface areas of more than 90 percent rubber or plastic, the protestant cited the laboratory test for the youths' and children's athletic footwear and the alleged fact that the women's footwear is an all-plastic shoe. The protestant offered to supply a sample of both styles of footwear. The protestant contended that the liquidation in this case is correctable under 19 U.S.C. 1520(c)(1) "because [it was] based on either clerical errors of the manufacturer or an incorrect factual representation with regard to the actual features of the shoes (i.e., an incorrect belief that the external surface area of the uppers was not more than 90% rubber or plastic)."

The protest was forwarded to Headquarters, through the Customs Information Exchange (C.I.E.). In the course of its review of the protest, the C.I.E. requested further information on this case from the protestant. In response to questions as to how the alleged clerical error occurred in this case, the protestant provided an affidavit, dated December 11, 1990, of Mr. Scott C. Larson, Director of Transportation, International and Planning, for the protestant. The affiant stated that the "shoe form" accompanying the importations of the youths' and children's footwear was prepared incorrectly by the factory in that the information on the form related to another style of footwear. The affiant stated that usually shoe forms are reviewed by the protestant's Customs broker before submission to Customs but in this instance "the broker apparently did not realize the factory's error." The affiant stated that the samples provided to Customs and the laboratory were not samples from the shipment in question because, according to the affiant, no samples were left in inventory. Samples of the identical shoe style were requisitioned from the protestant's distribution center for the laboratory analysis.

The protestant provided the C.I.E. with copies of documents from the laboratory which explained the analysis of the youths' and children's footwear under consideration. Also provided by the protestant were copies of two approved protests (under 19 U.S.C. 1514(c); relief was not sought under 19 U.S.C. 1520(c)(1) in these other protests), with related invoices, for footwear alleged to be of the same style as the youths' and children's footwear under consideration in this protest.

ISSUE:

Was there sufficient evidence in this case to grant the petition filed under 19 U.S.C. 1520(c)(1), the denial of which is the subject of this protest?

LAW AND ANALYSIS:

Initially, we note that both the request for reliquidation under 19 U.S.C. 1520(c)(1) and the protest of the denial of that request, under 19 U.S.C. 1514(a), were timely filed.

Under section 520(c)(1), Tariff Act of 1930, as amended (19 U.S.C. 1520(c)(1)), Customs may reliquidate an entry to correct a clerical error (see PPG Industries, Inc., v. United States, 7 CIT 118, 124 (1984), and cases cited therein), mistake of fact (Hambro Automotive Corporation v. United States, 66 CCPA 113, 118, C.A.D. 1231, 603 F. 2d 850 (1979)), or other inadvertence (see Occidental Oil & Gas Co. v. United States, Vol. 23 Cust. Bull. & Dec. No. 17, April 20, 1989, page 40, 42, CIT Slip Op. 89-40), not amounting to an error in the construction of a law (see Mattel, Inc. v. United States, 72 Cust. Ct. 257, 262-263, C.D. 4547 (1974), and cases cited therein) when certain conditions are met.

The conditions required to be met under 19 U.S.C. 1520(c)(1) are that the clerical error, mistake of fact, or other inadver- tence must be adverse to the importer, manifest from the record or established by documentary evidence, and brought to the attention of Customs within one year after the date of liquida- tion of the entry. The relief provided for in 19 U.S.C. 1520(c)(1) is not an alternative to the relief provided for in the form of protests under 19 U.S.C. 1514; section 1520(c)(1) only affords "limited relief in the situations defined therein" (Phillips Petroleum Company v. United States, 54 CCPA 7, 11, C.A.D. 893 (1966), quoted in Godchaux-Henderson Sugar Co., Inc., v. United States, 85 Cust. Ct. 68, 69, C.D. 4874 (1980); see also, Computime, Inc. v. United States, 9 CIT 553, 555, 622 F. Supp. 1083 (1985), and Concentric Pumps, Ltd. v. United States, 10 CIT 505, 508, 643 F. Supp. 623 (1986)).

Customs has ruled that "negligent inaction" (see Customs Service Decision (C.S.D.) 80-250; see also, Occidental Oil & Gas Co. v. United States, Vol. 23 Cust. Bull. & Dec. No. 17, April 20, 1989, page 40, 42, CIT Slip Op. 89-40) is not within the scope of 19 U.S.C. 1520(c). Cases involving the submission of incorrect or incomplete documentation and the failure to submit, or late submission, of "correct" documentation have been held to constitute negligent inaction (see, e.g., rulings 221590, dated October 30, 1989, and 221680, dated October 16, 1989).

Basically, the clerical error, mistake of fact, or other inadvertence upon which the request for relief under 19 U.S.C. 1520(c) was based in this case, with regard to the women's footwear, was that no CF5523 could be supplied to Customs because of the time that had elapsed between the date of importation and the Notice of Advance. According to the file, however, the protestant posted a bond for submission of the CF5523 for these shoes. Under such a bond, the protestant had 120 days after the filing of the entry summary to provide the CF5523 (see 19 CFR 141.91(d)). This is a classic case of negligent inaction. As the Court stated in Occidental Oil & Gas Co. v. United States (see above, Vol. 23 Cust. Bull. & Dec. No. 17, April 20, 1989, at page 45):

The record shows that plaintiff had not supplied the appropriate documents to support its claim. Hence, the Customs officer made a legal determination as to the classification of the merchandise on the basis of the facts presented.

The protest is DENIED with regard to the women's footwear.

With regard to the youths' and children's footwear, the gravamen of the protestant's request for relief under 19 U.S.C. 1520(c) was that the CF5523 for these shoes was incorrect (in that it stated that 90 percent, instead of 96 percent, of the exterior surface area of the upper was plastic and rubber), that the CF5523 was incorrectly completed by the manufacturer in that the information provided was for another shoe not contained in the entry under consideration, that the protestant's Customs broker, who usually reviews the CF5523's before submission to Customs, failed to realize the manufacturer's error, and that because of the time that had elapsed between the date of importation and the Notice of Advance, no corrected CF5523 could be obtained.

As stated above, in order to qualify for relief under 19 U.S.C. 1520(c)(1), the clerical error, mistake of fact, or other inadvertence must be manifest from the record or established by documentary evidence. According to the Court in PPG Industries, Inc. v. United States, 4 CIT 143 (1982), quoting, in part, from the lower court in Hambro, id, (Hambro Automotive Corp. v. United States, 81 Cust. Ct. 29, 31, C.D. 4761, 458 F. Supp. 1220

... it is incumbent on the plaintiff to show by sufficient evidence the nature of the mistake of fact. The burden and duty is upon the plaintiff to inform the appropriate Customs official of the alleged mistake with "sufficient particularity to allow remedial action." [4 CIT at 147-148; see also, United States v. Lineiro, 37 CCPA 5, 10, C.A.D. 410 (1949), in which the Court stated "[d]etermination of issues in customs litigation may not be based on supposition."]

In this case, with regard to the youths' and children's footwear, it is not manifest from the record or established by documentary evidence that the CF5523 provided with these shoes on entry was incorrect (i.e., the laboratory analysis submitted by the protestant was not of shoes in this shipment). The evi- dence as to the alleged incorrect completion of the CF5523 (i.e., that some unknown person in the factory used specifications for some other unidentified shoe in completing the CF5523) is not of sufficient particularity and there is no showing as to why the person providing the evidence would have knowledge of the alleged error (i.e., the affiant is an employee of the protestant, not of the manufacturer in the factory of which the error was allegedly made). The same is true of the alleged failure of the protes- tant's Customs broker to realize the manufacturer's alleged error (with regard to the kind of evidence which could have been submitted, see C.S.D. 89-87) (these evidentiary deficiencies are also found with regard to the women's footwear). To paraphrase the statement of the Court in United States v. Lineiro, quoted above, "determination of [these] issues ... may not be based on supposition." The protest is DENIED with regard to the youths' and children's footwear.

This is not to say that relief could not have been obtained in this case. If a protest of the liquidation of the footwear had been timely filed under 19 U.S.C. 1514, it may be that the protest would have been approved, as was the case in the two other protests cited by the protestant. However, as stated above, the relief provided for in 19 U.S.C. 1520(c)(1) is not an alternative to the relief provided for in 19 U.S.C. 1514, it affords only "limited relief in the situations defined therein."

HOLDING:

The evidence submitted in this case was insufficient to grant the petition filed under 19 U.S.C. 1520(c)(1), the denial of which is the subject of this protest. The protest is DENIED. A copy of this decision should be attached to the Form 19, Notice of Action, to be sent to the protestant.

Sincerely,

John Durant, Director

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