HQ 0223871 - Application for Further Review of Protest No. 1704-91- 100348 - United States International Trade Commision Rulings

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HQ 223871

July 24, 1992

CON-2-07-CO:R:C:E 223871 SR

CATEGORY: ENTRY LIQUIDATION

District Director of Customs
US Customhouse
1 East Bay Street
Savannah, GA 31401

RE: Application for Further Review of Protest No. 1704-91- 100348

Dear Sir:

The above-referenced protest was forwarded to our office on Application for Further Review of Protest No. 1704-91-100348, dated December 5, 1991.

FACTS:

An aircraft engine was entered on behalf of U.S. Air at the port of Atlanta, which is in the Customs District of Savannah. (Other aircraft parts were also entered but are not included in this protest.) U.S. Air states that they were under the belief that they had a Civil Aircraft blanket declaration on file at the district and therefore the engine would enter duty-free. Upon receipt of a bill for duty on the engine for the amount of $36,456.80, U.S. Air discovered that their Customs broker had not filed the blanket agreement that they had prepared.

U.S. Air states that it prepared Civil Aircraft Agreement blanket certificates for Savannah and five other Customs districts, which were filed through Customs brokers. U.S. Air dismissed the broker that it had been using in Savannah and they were unaware that the broker had been filing individual entries rather than using the blanket entry that had been prepared. U.S. Air filed a protest under 19 U.S.C. 1514 which was denied by the port and sent up to Headquarters for further review as a 19 U.S.C. 1514(7) protest.

ISSUE:

Whether the aircraft engine may be reliquidated according to the terms of the Civil Aircraft Agreement because of a mistake of fact under 19 U.S.C. 1520(c)(1).

LAW AND ANALYSIS:

The Agreement of Trade in Civil Aircraft was implemented by Title VI, "Civil Aircraft Agreement" of the Trade Agreements Act of 1979 (Sec. 601, P.L. 96-39, 93 Stat. 144, 96th Cong., 1st Sess. 1979), effective January 1, 1980. On June 7, 1984, 19 CFR Part 10 was amended to include section 10.183, which provides for duty free admission of civil aircraft parts for civil aircraft certified for use in accordance with the provisions of General Note 3(c)(iv) of the Harmonized Tariff Schedule of the United States (HTSUS). 19 CFR 10.183(c)(2), provides that the importer must submit, at the time of filing the entry summary, a certification for each entry or a blanket certification if more than one entry of civil aircraft parts will be made during a 12- month period.

19 CFR 10.112 provides that documentation for free entry that was not filed at the time of entry may be filed at any time prior to liquidation or before liquidation becomes final. However, 19 CFR 10.183 specifically states that the failure to provide the certification at the time of filing the entry summary or to have an approved blanket certification on file with the district director in the district where the entry summary is filed shall result in a dutiable entry.

It is well-settled that a later submission of the required certification is not acceptable unless the importer can satisfy Customs that the failure to procure it at the time of filing the entry summary was due to a clerical error, mistake of fact or other inadvertence within the meaning of 19 U.S.C. 1520(c)(1). In pertinent part section 1520(c)(1) provides as follows:

(c) Notwithstanding a valid protest was not filed, the appropriate customs officer may, . . .reliquidate an entry to correct--

(1) a clerical error, mistake of fact, or other inadvertence not amounting to an error in the construction of a law, adverse to the importer and manifest from the record or established by documentary evidence, in any entry, liquidation, or other customs transaction, when the error, mistake or inadvertence is brought to the attention of the appropriate customs officer within one year after the date of liquidation or exaction; . . .

In order to bring a claim under 19 U.S.C. 1520(c)(1), the mistake made must be one of fact not a mistake of law. These terms are defined in C.J. Tower & Sons of Buffalo, Inc. v. United States, 68 Cust. Ct. 17, C.D. 4327, 336 F. Supp. 1395 (1972), aff'd 499 F.2d 1277, 61 CCPA 90, C.A.D. 1129 (1974). A mistake of fact is defined as any mistake except a mistake of law; a mistake which takes place when some fact which indeed exists is unknown, or a fact which is thought to exist, which in reality does not exist. A mistake of law exists where a person knows the facts as they really are but has a mistaken belief as to the legal consequences of those facts.

To support a claim under 19 U.S.C. 1520(c)(1) the importer must show clear and convincing evidence that all merchandise entered was intended to be covered by a blanket certification. (See HRL 223172, dated August 15, 1991.)

In the case at issue U.S. Air was aware of the legal requirements, that a Civil Aircraft certification must be submitted to Customs, but state they were mistaken in the belief that the blanket certification agreement they had signed had been submitted to Customs by their previous broker. To support this fact that they have submitted copies of signed blanket Civil Aircraft Agreements that they state have been filed in 5 other Customs districts.

Although U.S. Air states that a signed Civil Aircraft Agreement was sent to their broker to be filed with the Customs district they should have been aware that they did not have an agreement filed with Customs. When Customs receives a blanket agreement, it is signed by Customs and the company is notified directly. Even if an agreement is submitted through a broker Customs deals directly with the company since the company has the duty to keep records that the imported merchandise will be used as civil aircraft for 5 years. Because U.S. Air is in the business they should be aware of the procedures.

U.S. Air included in the protest submission a copy of the blanket agreement that was submitted to the district office in Savannah. The document that was submitted would not have been accepted by Customs and would have been returned because it states that it covers all entries made by U.S. Air that go through National Airport. National Airport is not an international airport and it is not in the same district and therefore would not be valid. U.S. Air also submitted copies of agreements that they stated were submitted to the other districts. The copies of agreements for Cleveland, Buffalo, Los Angeles, and one of the agreements labeled Philadelphia all state
that they are for entries at National Airport. Therefore, they have not shown that they have valid blanket agreements at all these other ports as they stated.

HOLDING:

U.S. Air did not provide clear and convincing evidence to show that a mistake of fact did occur under 19 U.S.C. 1520(c)(1).

The protest is denied. A copy of this decision should be attached to the CF 19, Notice of Action, sent to the protestant to satisfy the notice requirement of section 174.30(a), Customs Regulations.

Sincerely,

John Durant, Director

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