HQ 0223627 - Protest and application for further review no. 3801-1- 102155; request for reliquidation under 19 U.S.C. 1520(c)(1); protest of denial of request for reliquidation under 19 U.S.C. - United States International Trade Commision Rulings

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HQ 223627

February 19, 1992

LIQ-1-09 CO:R:C:E 223627 C

CATEGORY: ENTRY LIQUIDATION

Nicholas R. Devine
Assistant District Director of Customs
Office of Commercial Operations
U.S. Customs Service
Detroit, MI 48266

RE: Protest and application for further review no. 3801-1- 102155; request for reliquidation under 19 U.S.C. 1520(c)(1); protest of denial of request for reliquidation under 19 U.S.C.

Dear Mr. Devine:

This responds to the referenced protest and application for further review which you submitted by memorandum of December 19, 1991 (PRO-1-CO:CT DA; P1102155/TXTFRISC). The protest objects to Customs denial of a petition for reliquidation under 19 U.S.C. 1520(c)(1). We have reviewed the record and our decision follows.

FACTS:

The facts, as we understand them, are as follows: Merchandise was entered under dutiable tariff provisions on January 30 and 31, 1990 (three entries). Prior to liquidation of these entries, the importer, hereafter the PROTESTANT, submitted to Customs a request for approval of a blanket certification for specified auto parts of the kind entitled to the duty exemption of the Automotive Products Trade Act of 1965 (APTA). (See General Note 3(c)(iii) of the Harmonized Tariff Schedule of the United States and section 10.84 of the Customs Regulations (19 C.F.R. 10.84).) The certification is required for duty-free treatment. The letter making such request, dated April 5, 1990, did not specify the above entries of merchandise submitted under dutiable tariff provisions. Instead, it stated that the certificates would apply to future shipments. The certifications were approved on April 6, 1990, and evidence of such approval was forwarded to PROTESTANT. In May 1990, the entries were liquidated "no change" at the dutiable rate. More than 90 days after, but within one year of, the date of liquidation, PROTESTANT filed a request for reliquidation of the entries under 19 U.S.C. 1520(c)(1). Customs denied this request on the ground that PROTESTANT had "not documented a clerical error that would be addressable" under 19 U.S.C. 1520(c)(1). PROTESTANT then filed the instant protest and application for further review, alleging that an error correctable under the statute did in fact occur and Customs denial of the section 1520(c)(1) request was in error. Specifically, PROTESTANT asserts that a correctable error occurred in Customs liquidation of the entries at a dutiable rate after approval of the certifications.

ISSUE:

On the facts set forth above, has an error correctable under 19 U.S.C. 1520(c)(1) occurred?

LAW AND ANALYSIS:

The reliquidation provision of 19 U.S.C. 1520(c)(1) is not an alternative to the protest procedure of 19 U.S.C. 1514. It applies only to the limited circumstances described therein. Phillips Petroleum Company v. United States, 55 CCPA 7, 11, C.A.D. 893 (1966). An entry can be reliquidated, notwithstanding that a protest has not been timely filed, to correct a clerical error, mistake of fact, or other inadvertence not amounting to an error in the construction of a law. The burden is on the petitioner to support its request for reliquidation by bringing to Customs attention, within one year of the date of liquidation, the nature of the alleged error, either as it appears from the record or by submitting documentary evidence. 19 U.S.C.

The issue under the instant protest is whether or not PROTESTANT's 1520(c)(1) request was improperly denied. We believe that the reliquidation request was properly denied for failure on the part of PROTESTANT to allege facts that would indicate that some kind of correctable error occurred causing an erroneous liquidation.

PROTESTANT asserts that the correctable error was Customs dutiable liquidation of the entries in question in May 1990, when Customs had approved a blanket certification for duty-free APTA entries on April 6, 1990. Had PROTESTANT's request for approval of the certification specifically identified the then unliquidated entries in question, or notified Customs that there were entries of qualifying merchandise that had yet to be liquidated, we might agree that a basis for finding correctable error had been established. However, the certification request did not identify the entries in question and in fact explicitly informed Customs that it would apply to future entries. Customs approval of the certification was not an approval of duty-free treatment for the entries in question.

Moreover, the entry process for merchandise entered duty- free under the APTA at Detroit demonstrates that there was no occurrence of correctable error in the liquidations in question. Where merchandise of the kind eligible for duty-free treatment under the APTA is entered at Detroit, the importer (or broker) notes on the invoice that either an approved certificate covers the entered merchandise or a request for certification has been submitted to Customs. Either notation alerts Customs to the fact that the importer intends to enter merchandise duty-free under the APTA. Where there is no certification, nor a request for certification on file with Customs, the merchandise can still be entered with a claim for duty-free treatment under the APTA. In such a case, Customs would request the certifications, which would, in turn, encourage the importer to comply with the requirement before liquidation.

A significant fact is that not all automotive merchandise destined to a bona fide motor vehicle manufacturer in the United States is entitled to duty-free treatment under the APTA. Only such merchandise that is intended for use as original equipment in the manufacture in the United States of a motor vehicle is entitled to the duty exemption. (See General Note 3(c)(iii), HTSUS.) Consequently, it is not uncommon for importers to enter merchandise at the dutiable rate. In such an instance, Customs accepts the entries at face value - that is, as dutiable - and does not check with the importer to determine whether or not a duty-free entry is desired. This would be unworkable. The burden is on the importer (or broker) to enter qualifying merchandise under the duty-free provision by so specifying.

On the facts of the instant case, at the time the entries were made, there was neither an approved certificate nor a request for certification filed with Customs. There was nothing to note on the invoice to alert Customs to PROTESTANT's intention to seek duty-free entry under the APTA. PROTESTANT, through its broker, filed the entries at the dutiable rate, providing no clue to its intention to apply for the duty exemption. Consequently, under the ACS entry processing system (Automated Commercial Systems), a 90 day automatic liquidation date was set, and the entries were liquidated as dutiable in May 1990. Customs liquidation of these entries was not the result of a mistake or error correctable under the statute. Again, had PROTESTANT's request for certification identified the entries in question, or notified Customs that there were, at that time, unliquidated entries to which the certification applied, PROTESTANT likely would have obtained the desired duty-free liquidations. As it was, Customs approval of the certifications was not an approval of the duty exemption for the entries in question.

Regarding the fact that PROTESTANT, through its broker, initially filed the entries at dutiable rates, PROTESTANT has not claimed this act to be correctable error under the statute, nor, on the facts here, do we believe it to be correctable error. There is no claim by PROTESTANT, nor any indication in the record to suggest, that there was a misunderstanding as to the nature of the merchandise entered. In addition, PROTESTANT was aware at all times of the duty exemption provided by the APTA. NEC Electronics U.S.A., Inc. v. United States, 13 CIT 214 (1989).

In summary, we conclude that the remedy PROTESTANT should have pursued is reliquidation under the protest procedure of 19 U.S.C. 1514. PROTESTANT however failed to file a timely protest. Again, reliquidation under section 1520(c)(1) is not a simple alternative for importers who fail to meet the time requirements of the protest procedure.

HOLDING:

Customs properly denied PROTESTANT's request for reliquidation under 19 U.S.C. 1520(c)(1), since PROTESTANT failed to allege facts that demonstrate correctable error and no such facts appear on the record.

Based on the foregoing, you are instructed to deny the protest. 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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