HQ 0223598 - Protest 1501-91-100054; 19 U.S.C. 1520(c)(1); clerical error; 19 CFR 177.1(b); 19 U.S.C. 1313(j)(1); 19 CFR 191.141(b)(1); 19 CFR 191.141(b)(2)(i); 19 CFR 191.141 (b)(2)(ii); C.S.D. 85-35; C.S.D. 86-25; C.S.D. 90-34. - United States International Trade Commision Rulings

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HQ 223598

February 24, 1994

DRA-4-CO:R:C:E 223598 AJS

CATEGORY: DRAWBACK

Regional Director
Commercial Operations
Southeast Region
U.S. Customs Service
909 S.E. 1st Avenue
Miami, Florida 33131

RE: Protest 1501-91-100054; 19 U.S.C. 1520(c)(1); clerical error; 19 CFR 177.1(b); 19 U.S.C. 1313(j)(1); 19 CFR 191.141(b)(1); 19 CFR 191.141(b)(2)(i); 19 CFR 191.141 (b)(2)(ii); C.S.D. 85-35; C.S.D. 86-25; C.S.D. 90-34.

Dear District Director:

This is our decision in protest 1501-91-100054, dated September 4, 1991, concerning the denial of certain drawback entries.

FACTS:

This protest deals with 44 pallets of polypropylene film. The protestant's broker intended to file four same condition drawback (SCD) entries concerning this merchandise. Due to a delay in the delivery of the mail from one of the broker's offices in a different port, the entries could not be filed at least five working days prior to the date of intended exportation of the merchandise. It is claimed that the broker contacted Customs, and was informed that these SCD entries would not be approved because of the untimely filing problem. The broker thus decided to not file the entries. The departure of the vessel was subsequently delayed so that more than five days passed from the time the broker could have initially filed the SCD entries. The broker then filed the entries with Customs, but not within 5 days prior to the date of intended exportation.

Customs was not given an opportunity to examine the merchandise prior to departure in order to determine if it was in the same condition as at the time of importation. The protestant did not initially provide sufficient evidence to support its claim that the subject film was, in fact, in the same condition at the time of export. However, the protestant submitted additional information regarding the same condition of the film. For example, an entry summary with an import date of 8/13/90 indicates that 2,662 rolls of polypropylene film were imported. Invoice number J5C-15049 of 7/27/90, listed under importer order number 80722 and under manufacturer number 860211, contains the same amount of film. A packing list from the importer indicates that order 80722 was sent to the exporter on 11/12/90. A hand written note from the exporter's warehouse is claimed to establish that order 80722 was sent in one of two containers to Charleston for export. A facsimile message sent by the importer to the exporter on 12/28/90 is claimed to support the assertion that order 80722 is related to order 860211 and that this order was shipped for export. A shipping/packing list from the exporter of 1/23/91 indicates that 44 pallets of film were shipped to Charleston for export to Honk Kong. It is claimed that 19 pallets of the 2,662 rolls from the original import entry were included within these 44 pallets. A bill of lading of 1/25/91 lists the exporter as the shipper, Charleston as the port of loading, Hong Kong as the port of discharge, and 44 pallets of film as the description of the goods. Documentation for the other three entries, including the one not liquidated, provide similar information. In addition, the documentation indicates that more pallets of film were imported than exported.

A Certificate of Quality issued by the manufacturer was forwarded to the foreign importer for the same type of film specified on the shipper/packing list. This certificate was issued before the film was imported into the United States. Counsel stated that this type of film will not deteriorate, so the certificate remained acceptable as to the quality of the film at this later date. Counsel also stated that the lesser value of the film upon exportation was due to technological changes regarding its use in the United States, and that the film could still be used in other machinery.

ISSUE:

Whether the failure of the protestant to timely file the Customs Form 7539 was a clerical error.

Whether the additional information submitted with the protest reasonably establishes that the merchandise qualifies for treatment under 19 U.S.C. 1313(j)(1).

LAW AND ANALYSIS:

Initially, we note that the protest has been timely filed pursuant to 19 U.S.C. 1514(c)(2)(B). The subject drawback entries were liquidated on 6/7/91, and the protest was filed on 9/4/91. The refusal to pay a claim for drawback is protestable under section 1514(a)(6). An additional drawback entry which was included as part of the 44 exported pallets has not been liquidated and was not included as part of this protest.

19 U.S.C. 1520(c)(1) allows Customs to reliquidate an entry to correct a clerical error or other inadvertence not amounting to an error in the construction of a law when certain conditions are met. These conditions are that the clerical error or other inadvertence 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 of the entry.

A "clerical error" has been stated by the Courts to be "a mistake made by a clerk or other subordinate, upon whom devolves no duty to exercise judgement, in writing or copying the figures or in exercising his intention." See PPG Industries, Inc. v. United States, 7 CIT 118, 124 (1984), and cases cited therein.; see also, Treasury Decision (T.D.) 54848, wherein an example of a clerical error is given as: "[a person] meant to write 'par. 231' but wrote 'par. 131'"). In Ruth F. Sturm's Customs Law & Administration (3rd edition), it is stated that "[clerical error has been found where mistakes were made in copying of typing figures or where figures have been transposed", and a number of Customs Court decisions are cited for this proposition (section 9.4, at pages 5 and 6).

The protestant claims that the broker's failure to timely file the drawback entries was a clerical error, and that this error was based solely on the claimed verbal advice of Customs. Oral opinions or advice of Customs Service personnel are not binding on the Customs Service. 19 CFR 177.1(b). Therefore, any reliance by the broker on verbal advice is not binding in this instance. Furthermore, the broker's failure to file their drawback claims was also not a clerical error. Their failure to file certainly did not involve a mistake by a subordinate upon whom devolves no duty to exercise judgement. The broker simply decided that there was no reason in attempting to file the entries because they could not be timely filed. Therefore, the broker's decision to not file the entries when it initially received them was a result of the exercise of its own judgement. Accordingly, the broker's failure to file the subject entries was not a clerical error within the meaning of 19 U.S.C. 1520(c)(1).

19 U.S.C. 1313(j)(1) provides that "[i]f imported merchandise, on which was paid any duty, tax, or fee imposed under Federal law because of its importation-

(A) is, before the close of the three-year period beginning on the date of importation-

(i) exported in the same condition as when imported, or
(ii) destroyed under Customs Supervision; and

(B) is not used within the United States before such exportation or destruction;
then upon such exportation or destruction 99 per centum of the amount of each such duty, tax and fee so paid shall be refunded as drawback.

19 CFR 191.141(b)(1) provides that an exporter-claimant who desires to export merchandise with drawback under 19 U.S.C. 1313(j) shall file with the appropriate Customs officer a completed Customs Form (CF) 7539. It shall certify that the merchandise is in the same condition as when imported and not used within the United States before such exportation.

19 CFR 191.141(b)(2)(i) states that the completed CF 7539 shall be filed with the appropriate Customs officer at least 5 working days prior to the date of intended exportation of the merchandise, unless the Customs officer approves a shorter period (emphasis added). As stated beforehand, the CF 7539 was not filed within the required time frame and Customs was not given an opportunity to examine the merchandise. Therefore, the broker has clearly not followed the proper procedures for SCD exportations. In C.S.D. 86-25, we stated that "[t]he failure to file the required notice of intent to export deprived the Government of the ability to verify the identity of the merchandise with that of the imported merchandise, and the condition of the merchandise that is to be exported." In addition, we ruled that the failure to file notice of intent to export is a basis on which to deny drawback. See also C.S.D. 90-34.

The broker argues that it could have timely filed the CF 7539 because the actual departure date of the vessel was delayed. Section 191.141 specifically provides that the CF 7539 shall be filed at least five days prior to the date of intended exportation and not the actual date of exportation. As stated previously, the broker was unablee eee to file the CF7539 within at least five days before the intended exportation of the merchandise. Accordingly, the broker's argument regarding actual departure is immaterial inasmuch as it could not file within the required time period.

The protestant requests that we grant a Waiver of Prior Notice of Intent to Export. The authority to grant such waivers is found in 19 CFR 191.141(b)(2)(ii). This provision states that "[t]he appropriate Customs officer may waive prior notice [of intent to export] at any time for any exporter- claimant." In C.S.D. 85-35, we stated that "inasmuch as the appropriate Customs officer, by virtue of 191.141(b)(2)(ii), can waive the prior notice 'at any time', this language is broad enough to allow the officer to waive the requirement in cases where the merchandise has already been exported. The burden on the claimant of proving same condition in these cases is naturally greater, as such proof of same condition must be based on secondary evidence." Therefore, Customs may grant a retroactive waiver of prior notice of intent to export if the protestant provides sufficient information regarding the same condition of the film.

The protestant submitted additional information to this office regarding the condition of the subject film. This information indicates that film was imported, a portion of this film was shipped to the exporter, that this film was exported, and at the time of exportation the film was of the same quality as at the time of importation. The film also does not appear to have been used during this time, otherwise, it could not be exported for further use by another party. Based on the above information, the protestant has satisfied their burden concerning the same condition of the film upon exportation. Consequently, the granting of a retroactive waiver of prior notice of intent to export is proper in this case.

HOLDING:

The protest is granted. The failure to timely file the CF 7539 is not a clerical error subject to correction pursuant to 19 U.S.C. 1520(c))(1). However, the granting of a retroactive waiver of prior notice of intent to export is proper under circumstances in which the protestant submits evidence to establish that the merchandise was exported in the same condition as imported.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision should be mailed,
with the CF 19, by your office to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will take steps to make the decision available to customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Lexis, Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director
Commercial Rulings Division

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