HQ 0224088 - Protest and application for further review no. 1303-91- 100346; denial of request for reliquidation; sufficiency of allegations; clerical error; protest not timely filed; 19 U.S.C. - United States International Trade Commision Rulings

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HQ 224088

October 5, 1992

LIQ-9-01 CO:R:C:E 224088 C

CATEGORY: LIQUIDATION

District Director of Customs
U.S. Customs Service
40 South Gay Street
Baltimore, MD 21202

RE: Protest and application for further review no. 1303-91- 100346; denial of request for reliquidation; sufficiency of allegations; clerical error; protest not timely filed; 19 U.S.C.

Dear Sir:

This responds to the referenced protest and application for further review. We have examined the record, and our decision follows.

FACTS:

The relevant facts, as we understand them from review of the record, follow. PROTESTANT imported merchandise and had it admitted into a foreign trade zone. The merchandise was removed from the zone on two separate dates and under two separate consumption entries. The first entry occurred on February 22, 1990; the second occurred on April 10, 1990. With respect to the second entry, Customs issued a rate advance, CF 29, dated May 1, 1990, which proposed an increase in duties for the reasons that the entered value was incorrect (due to an erroneous rate of exchange in the calculation) and the proper classification of the merchandise was subheading 9009.90.0090, HTSUS. PROTESTANT was notified that the entry would be liquidated accordingly unless Customs received a response within 20 days of the date of the CF 29. PROTESTANT did not respond, and the entry was liquidated on September 28, 1990.

By letter dated November 30, 1990, PROTESTANT's broker filed a request for reliquidation under the authority of 19 U.S.C. 1520(c)(1), referencing only the second entry. The letter identified three errors, describing them as clerical errors that could be corrected under the statute: 1) the rate of exchange should have been .006838 (as Customs had indicated in its rate advance); 2) the entered value should have been 11,140,000 yen; and 3) the classification for some of the merchandise had been omitted from the entry documents. On July 11, 1991, Customs denied the request for reliquidation based on the fact that all three claimed errors had been addressed by Customs in its rate advance and acted upon at liquidation. Since the request for reliquidation had not contested the points set forth in the rate advance, nor alleged additional information to suggest that the liquidation was incorrect, it was denied.

The protest and application for further review (CF 19) was filed on October 9, 1991. It identifies only the second entry as the subject of the protest (in item 5). (While the Protest and Summons Information Report (CF 6445A) identifies both the first and second entries in item 4, this protest covers only the second entry.) The protest asserts three points: 1) the quantity of photoreceptive drums actually entered under the second entry was less than the number calculated in the liquidation; 2) the classification for the starter kit was incorrect based on Customs failure to apply the principle of "entireties"; and 3) certain non-dutiable charges should have been deducted from the value of the merchandise as calculated in the liquidation.

ISSUE:

On the above facts, did Customs err in denying the PROTESTANT's request for reliquidation under 19 U.S.C.

LAW AND ANALYSIS:

Under 19 U.S.C. 1520(c)(1), a liquidation that is otherwise final can be reliquidated to correct a clerical error, mistake of fact, or other inadvertence if certain conditions are met: The alleged error must be adverse to the importer, manifest from the record or established by documentary evidence, and brought to Customs attention within one year of the date of liquidation. This form of relief is not to be confused with the protest procedure of 19 U.S.C. 1514, which provides an importer the opportunity to contest certain decisions by Customs officers if the importer notifies the appropriate Customs officer within 90 days of the liquidation or decision. The protest procedure offers a broad range of relief. The reliquidation procedure is limited to clerical errors, mistakes of fact, or other inadvertence; it is not a simple alternative to the protest procedure. Phillips Petroleum Company v. United States, 54 CCPA 7, C.A.D. 893 (1966); Godchaux-Henderson Sugar Co., Inc. v. United States, 85 Cust. Ct. 68, C.D. 4874 (1980); Computime, Inc. v. United States, 9 CIT 553, 622 F. Supp. 1083 (1985); and Concentric Pumps, Ltd. v. United States, 10 CIT 505, 643 F. Supp. 623 (1986).

Under 19 U.S.C. 1514(a)(7), an importer can protest, within 90 days of the decision, a Customs officer's denial of a request for reliquidation. Such a protest is a challenge to the denial; thus, the issue to be decided in the protest is whether the decision to deny the reliquidation request was correct. In order to determine this issue, the substance of the request for reliquidation, the substance of the decision to deny, and the information, or evidence, upon which the decision was based must be examined. Only the errors alleged at the time the reliquidation request was made are considered. Any additional reasons put forward in the protest are beyond the scope of review.

PROTESTANT's (timely filed) request for reliquidation identified three alleged clerical errors. PROTESTANT failed to explain why the alleged errors were, in fact, clerical errors correctable under the statute. 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. As the United States Court of International Trade stated in PPG Industries, Inc. v. United States, 4 CIT 143 (1982) (quoting in part from the United States Customs Court's opinion in Hambro Automotive Corp. v. United States, 81 Cust. Ct. 29, 31, C.D. 4761, 458 F. Supp. 1220, 1222 (1978)):

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

The foregoing means that a petitioner under 19 U.S.C. 1520(c)(1) must identify the errors and explain with particularity how they constitute mistake of fact or clerical error. It is not enough to simply allege specific errors without explaining how such errors constitute correctable error under the statute. For example, it would not be enough to simply inform Customs that the classification or value assessment was incorrect; an explanation of the nature of the mistake that led to the incorrect classification or value would be necessary. PROTESTANT's request for reliquidation failed to explain how the alleged errors were in fact clerical errors correctable under the statute.

Further, and of greater significance, the letter from PROTESTANT's broker requesting reliquidation appeared simply to repeat what Customs had pointed out in its rate advance (CF 29). Consequently, Customs, by the time it received PROTESTANT's 1520(c)(1) request, had already corrected the errors alleged in it. Since the request did not contest the points raised by Customs in the rate advance, and since no new information was submitted or additional errors alleged, Customs denied the request. The denial was thus proper and correct. PROTESTANT, in its June, 22, 1992, letter (which you submitted with this protest), appears to recognize that its broker failed to properly identify and fully explain the nature of the alleged mistakes in this case. (See page 2, third full paragraph, of that letter.)

Regarding the more specific errors alleged in the instant protest, had these been included in the request for reliquidation, Customs could have considered them and acted upon them. They are different from the points raised in the rate advance, and they are set forth with sufficient particularity to inform the Customs officer of their nature. However, since they were not raised in the 1520(c)(1) request, they cannot be considered now in this protest. Moreover, the protest, as to these issues, is untimely.

Based on the foregoing, we conclude that Customs did not err in denying PROTESTANT's request for reliquidation under 19 U.S.C. 1520(c)(1). In addition, the errors alleged in the protest have been brought to Customs attention for the first time in this protest. Thus, these issues have been raised too late to be considered in either a protest or a request for reliquidation. The protest should thus be denied for two reasons: 1) the denial of the request for reliquidation was proper and 2) the protest respecting the issues raised therein was not filed timely.

HOLDING:

On the facts of this case, Customs did not err in denying the request for reliquidation under 19 U.S.C. 1520(c)(1). The errors alleged in the request had already been identified by Customs in a rate advance (CF 29) issued to PROTESTANT and were corrected by Customs in the ensuing liquidation. The errors alleged in this protest have not been brought to the attention of the appropriate Customs officer in time to be corrected under either a protest or a request for reliquidation. The protest is DENIED. A copy of this decision should be attached to the Customs Form 19 to be sent to PROTESTANT as notice of this action.

Sincerely,

John Durant, Director

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