HQ 0225191 - Request for Internal Advice; Pre-classification ruling; Bypass Liquidation; 19 U.S.C. 1520(c); Mistake of Fact - United States International Trade Commision Rulings

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HQ 225191

April 18, 1994

LIQ-9-01-CO:R:C:E 225191 CB

CATEGORY: ENTRY

Ms. Patricia McCauley
District Director of Customs
Portway Plaza, Suite 400
1717 East Loop
Houston, TX 52790

RE: Request for Internal Advice; Pre-classification ruling; Bypass Liquidation; 19 U.S.C. 1520(c); Mistake of Fact

Dear Ms. McCauley:

This is in reply to your request for internal advice (your file LIQ 9-01-H:C:C2 JLD) dated January 28, 1994, wherein you requested our advice regarding a request for reliquidation under 19 U.S.C. 1520(c)(1) to correct a liquidation on an entry summary which was processed under "Bypass" procedures.

FACTS:

The entry summary subject to the request was dated December 7, 1992, and covers merchandise which was the subject of a ruling under the pre-entry classification program on March 13, 1992. The merchandise covered by the entry summary was not entered by the importer in accordance with the pre-classification ruling issued by the Field National Import Specialist. Nor did Customs liquidate the entry at the classification and rate of duty set forth in the pre-classification ruling.

The subject entry was liquidated on March 6, 1993. On October 13, 1993, the broker filed a request for reliquidation under 19 U.S.C. 1520(c)(1) alleging a clerical error was made. The petitioner alleges that all entries had been made in accordance with the pre-classification ruling except for the subject entry. The petitioner alleges that the entry was incorrectly classified by its employee.

ISSUE:

Whether an entry liquidated under the "bypass" procedures is subject to a 19 U.S.C. 1520(c) review?

LAW AND ANALYSIS:

You state that it is your opinion that "bypass" liquidations amount to intentional acts by the appropriate officers of the Customs Service. It is your position that these liquidations represent acceptance of the entered classification and constitute interpretations of the Harmonized Tariff Schedules (HTS). Thus, this is an error in the interpretation of the law and is excluded from consideration under 19 U.S.C. 1520(c)(1).

While it is true that "bypass" liquidations are intentional acts by Customs officers, the same holds true for all liquidations. The fact that there has been a legally correct liquidation does not, in and of itself, preclude a 1520(c)(1) petition. There still exists the possibility of a clerical error or mistake of fact on the part of Customs or the importer. However, with respect to the classification issue, you are correct in your conclusion that a request for relief should be denied if the importer is alleging mistake of fact by a Customs officer in processing a "bypass" entry summary for liquidation. Entry summaries are evaluated against a pre-set criteria. One of the elements in this criteria is classification. See C.D. 3550-26, Entry Simplification - Bypass Procedures, issued September 8, 1987. Once the appropriate Customs officer has determined that an entry summary is eligible for bypass processing and has accepted the classification asserted by the filer as correct, a legal determination has been made which is not subject to review under 19 U.S.C. 1520(c)(1).

However, it must be pointed out that, in this instance, the petitioner is alleging a clerical error on its part and not on the part of a Customs officer. Section 1520, Tariff Act of 1930, as amended (19 U.S.C. 1520(c)(1)), is an exception to the 90-day limitation on protests set forth in 19 U.S.C. 1514. Under 1520(c)(1), an entry may be reliquidated to correct a clerical error, mistake of fact, or other inadvertence not amounting to an error in the construction of a law. Section 1520(c)(1) provides only limited relief in the situations described therein. Phillips Petroleum Company v. United States, 54 CCPA 7, 11, C.A.D. 893 (1966); Computime, Inc. v. United States, 9 CIT 553, 555, 622 F. Supp. 1083 (1985); Concentric Pumps, Ltd. v. United States, 10 CIT 505, 508, 643 F. Supp. 623 (1986). It is not the purpose of the reliquidation provision in 19 U.S.C. 1520(c)(1) to extend the period for filing objections that are properly redressable under the protest procedure.

The burden of proof requirement imposed under 1520(c)(1) is one that must be met by the petitioner during the 1520(c)(1) petition and review process. It is the affirmative burden of the petitioner to establish, from the record or by documents submitted, the nature of the error and to demonstrate, thereby, that the error is in fact correctable under the statute. Where an incorrect classification can be explained by either a legal error or a correctable mistake of fact or clerical error, the petitioner's burden is to show how correctable error was responsible. Failure to rule out legal error by proving correctable error will result in a denial of the petition for want of evidence.

In the instant case, the importer is alleging that "[t]his entry was incorrectly classified by the same employee (who made subsequent entries under the correct HTS subheading). The error was simply clerical and the entries handled for this importer after this entry, were classified correctly." The petitioner has failed to meet its burden of proof. A bald assertion by the petitioner is not sufficient to rebut the presumption that its employee made a legal determination regarding the classification of the merchandise subject to this entry; thus, placing the error in classification outside the scope of a 1520(c)(1) petition. Indeed, the argument can be made that because the employee classified subsequent entries under a different subheading, the employee made a deliberate decision on how to classify the merchandise subject to this entry.

HOLDING:

The subject 19 U.S.C. 1520(c)(1) petition should be DENIED in full.

The Office of Regulations and Rulings will take steps to make this decision available to Customs personnel via the Customs Rulings Module in ACS and to the public via the Diskette Subscription Service, Lexis, Freedom of Information Act and other public access channels within 60 days from the date of this decision.

Sincerely,

John Durant, Director
Commercial Rulings Division

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