HQ 0223903 - Protest No. 4195-91-100197; 19 U.S.C. 1520(c)(1); Mistake of Fact; Error in Construction of Law. - United States International Trade Commision Rulings

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HQ 223903

August 14, 1992

LIQ-9-01-CO:R:C:E 223903 SLR

CATEGORY: ENTRY LIQUIDATION

District Director of Customs
55 Erieview Plaza
Cleveland, OH 44114

RE: Protest No. 4195-91-100197; 19 U.S.C. 1520(c)(1); Mistake of Fact; Error in Construction of Law.

Dear Sir:

The above-mentioned protest was forwarded to this office for further review. We have considered all arguments raised and our decision follows.

FACTS:

This protest is against your decision not to reliquidate certain entries under 19 U.S.C. 1520(c)(1). Twelve entries are involved.

Between April 30, 1990 and October 9, 1990, the protestant imported from Canada merchandise described as "motor parts." The merchandise was entered as dutiable under various tariff provisions. The entries were liquidated between August 17, 1990 and March 1, 1991. No protests were filed under 19 U.S.C. 1514.

On August 15, 1991, the broker for the protestant filed a request that the entries be reliquidated under 1520(c)(1) because the merchandise was eligible for reduced duty rates under the provisions of the United States-Canada Free Trade Agreement (FTA). According to the broker:

[A]n Exporter's Certificate of Origin [ECO] was not submitted at the time of entry since [the importer] did not have the information necessary to determine the correct origin criteria. After consulting with knowledgeable individuals, the origin criteria was determined [and the importer] proceeded to issue [ECO's] for entries that contained eligible merchandise.

ECO's signed and dated after the entry of the merchandise were submitted along with the 1520(c)(1) request. Based on these ECO's, the broker requested that the entries be reliquidated with the benefit of the reduced duty rate under the FTA. The broker claimed that 1520(c)(1) relief was warranted due to mistake of fact, in that had the importer known all the facts at the time of entry, timely ECO's would have been filed.

On September 12, 1991, your office denied the 1520(c)(1) petition for reliquidation because the ECO's were not filed at the time of entry summary, citing 19 CFR 10.307(a) and (d). On November 7, 1991, the broker filed the subject protest and applied for further review. The grounds for the protest were basically the same as those stated in the initial request for reliquidation under 19 U.S.C. 1520(c)(1), although it was also claimed that "when it was determined that the merchandise was eligible [for FTA treatment], and the [ECO] was prepared, it was prepared incorrectly. * * * Clerical error occurred in the incorrect preparation of the document which created a greater length of time before our claim could be filed."

ISSUE:

Did Customs err in its denial of the 1520(c)(1) request, such that the subject protest should be approved?

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 19 U.S.C. 1520(c)(1), Customs may reliquidate an entry to correct a clerical error, mistake of fact, or other inadvertence not amounting to an error in the construction of the law. The error 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 liquidation.

The protestant alleges mistake of fact. A "mistake of fact" occurs when a person understands the facts to be other than what they really are and takes some action based on that erroneous belief. A "mistake of law," on the other hand, occurs when a person knows the true facts of the case but has a mistaken belief as to the legal consequences of those facts. (See PPG Industries, Inc. v. United States, 7 CIT 188, 123 (1984), and cases cited therein.)

In an April 10, 1991 letter forwarded with the 1520(c)(1) petition, the protestant indicated that the reason the ECO's were not timely filed was that "there was some misunderstanding of the origin criteria rules at that time" (emphasis added). This clearly indicates that the mistake in this case was one of law (see Concentric Pumps, Ltd. v. United States, 10 CIT 505, 643 F. Supp 623 (1986); see also NEC Electronics U.S.A., Inc. v. United States, 13 CIT 214; 709 F. Supp 1171 (1989)).

We note that based on information received, ECO's for seven of the twelve entries were filed within 90 days of each liquidation date. If this is so, the protestant should have obtained relief for these entries under 19 U.S.C. 1514 (see U.S. Customs Service Fact Sheet 22 dated August 16, 1990). In this regard, we note that courts have held that "[19 U.S.C. 1520(c)(1)] is not considered an alternative to a liquidation/protest review under 19 U.S.C. 1514, and its application is limited to [the circumstances therein]" (NEC Electronics, supra, 13 CIT at 216). For the remaining five entries whose ECO's were filed beyond the protest period, no relief is in order as no mistake of fact under 19 U.S.C. 1520(c)(1) has been found.

The protestant alleges that clerical error caused further delay in the submission of the ECO's. This claim was not made in the 1520(c)(1) petition but was only made in the protest of the denial of the 1520(c)(1) petition. Customs will not address for the first time at the protest stage a claim which was not manifest from the record, or made apparent by the documentary evidence by the petitioner at the time the initial 1520(c)(1) request for reliquidation was made (see Hambro Automotive Corp. v. United States, 81 Cust. Ct. 29, C.D. 4761, 458 F. Supp 1220 (1978); aff'd 66 CCPA 113, C.A.D. 1231, 603 F.2d 850 (1979)). Consequently, we will not entertain the instant clerical error claim.

The protestant cites the granting of a protest at the district level as authority for granting this protest. The documents available to us with regard to this other protest are insufficient to establish that the procedures and facts pertaining to that protest are materially the same as those of the instant protest. Furthermore, we do not accept the proposition that a decision by one Customs district director governs all similar requests for reliquidation under 1520(c)(1) or protests.

HOLDING:

Customs did not err in its refusal to reliquidate under 19 U.S.C. 1520(c)(1). The failure of the protestant to claim preferential duty treatment under the FTA did not amount to a mistake of fact. As for protestant's clerical error claim, Customs will not address for the first time at the protest stage that which was not alleged in the initial 1520(c)(1) petition.

This protest is denied in full. A copy of this decision should be attached to the Customs Form 19 and mailed to the protestant as part of the notice of action on the protest.

Sincerely,

John Durant, Director
Commercial Rulings Division

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