United States International Trade Commision Rulings And Harmonized Tariff Schedule
faqs.org  Rulings By Number  Rulings By Category  Tariff Numbers
faqs.org > Rulings and Tariffs Home > Rulings By Number > 1995 HQ Rulings > HQ 225339 - HQ 226123 > HQ 225399

Previous Ruling Next Ruling
HQ 225399




November 8, 1994

LIQ-9-01-CO:R:C:E 225399 DHS/PH

CATEGORY: LIQUIDATION

Assistant District Director
U.S. Customs Service
Commercial Operations
1215 Royal Lane, P.O. Box 619050
Dallas/Ft. Worth TX 75261

RE: Internal Advice Request; Mistake of Fact; 19 U.S.C.

Dear Sir:

This is in reference to your request for internal advice, dated May 5, 1994, forwarding a March 1, 1994, "supplement" to a petition under 19 U.S.C. 1520(c)(1) from the firm of Glad & Ferguson, stated to be on behalf of B & G Arnold and Sekin Transportation International (Sekin). This office has received additional materials relating to this matter. Copies of those materials are enclosed for your files.

Our advice follows.

FACTS:

In a letter to you dated July 1, 1993 (filing date unknown), an attorney stating he represented Sekin stated that "[he was] requesting a thirty day extension for the filing of a Petition for Re-liquidation for the entries that are attached to [his letter]." The attorney stated that "[his] client [had] advised [him] that a recent internal review of an accounts records indicated that due to clerical error and/or mistake of fact the account had overpaid duty." The attorney stated "[s]ince I have not had a chance to review the files, I would like to preserve my client's right to file a Petition for Re-liquidation pursuant to 19 CFR 173." Attached to the letter was a list of eight entry numbers, with the liquidation dates (July 6 (4 entries), 10 (2 entries), 17 (1 entry), and 24 (1 entry)), and a "Sekin reference" number.

In a letter to you dated July 22, 1993, and indicated to have been filed on the same date, the attorney who wrote the July 1, 1993, letter purported to "supplement" the July 1, 1993, letter. In this letter the mistakes, errors, or other inadvertences involved were described as being mistakes by the district director as to: (1) whether or not the movements contained more than one or no jewels; (2) whether or not the watch cases were plated with gold or silver; and (3) the value of the watches. Reliquidation was sought for each of the entries listed in an exhibit attached to the letter. The writer of the July 22, 1993, letter stated that he "reserves to further supplement [the application]." According to the writer:

In this case, Sekin ... classified watches under the tariff classification shown on the pertinent entry based on facts provided to Sekin by [the importer] and other parties. The determination of facts that lead to the classification brought about an assumption of facts that proved later to be incorrect. The facts assumed at the time of entry would have made the classification proper, however discovery of new facts subsequently, showed that the classification was not correct.

The attachment to the July 22, 1993, letter listed 11 entries (dated between November 14, 1991, and March 6, 1992) liquidated between March 6, 1992 and June 19, 1992 (i.e., more than one year before the July 1, 1993, letter). The attachment listed 7 entries (dated between March 20, 1992, and April 2, 1992) liquidated between July 6, 1992, and July 17, 1992 (i.e., within one year before the July 1, 1993, letter but more than one year before the July 22, 1993, letter). The attachment listed 47 entries (dated between April 10, 1992, and December 1, 1992) liquidated between July 24, 1992, and March 19, 1993 (i.e., within one year before the July 22, 1993, letter). The attachment listed 14 entries (dated between January 4, 1993, and April 1, 1993) liquidated between April 23, 1993, and July 16, 1993 (we understand that protests under 19 U.S.C. 1514 were filed for these entries and that the protests were granted).

In the March 1, 1994, letter which you forwarded with your request for internal advice, the section 1520(c)(1) petition under consideration was purported to be further "supplemented." In this submission, the nature of the alleged mistakes of fact was specified. The mistakes were specifically described as relating to the number of jewels in the movements, whether certain of the cases were electro-plated, the type of display on certain models, and the type of watch (i.e., wrist or pocket). Two affidavits were submitted with the March 1, 1994, letter.

In the first of these affidavits, dated February 24, 1994, the affiant states that she is employed by Sekin as a licensed customhouse broker. The affiant states that during the course of her employment she was responsible for making the initial three or four entries in this case. The affiant states that when she first undertook the original classification of the watch models under consideration, she relied completely on the Sekin office in Dallas to determine classification. She states that she sent the files to the Dallas office to perform the classification analysis and assumed that the Dallas office contacted the importer to ascertain the facts concerning "the watch movement, the composition of the cases, the display types, etc." She states that she received by FAX from the Dallas office two classifications (subheading 9102.11.9510, HTSUS, and subheading 9102.11.2510, HTSUS). The affiant states that she assumed that these classifications represented the Dallas office's final determination as to the proper classifications and that she rated the models on the invoices accordingly. The affiant states that she turned the account over to the second affiant (see below). The affiant states that at all times relevant, until June 1993, she believed that the two original classifications were correct and based upon facts ascertained by the Dallas office of Sekin from the importer concerning the composition of the movements, cases, displays, etc., of the original models imported in the first three or four entries. She states that there was nothing in the invoices or catalogues which she found to be at odds with what she believed to be the correct classifications, as determined by the Dallas office, and that the invoices were never clear on the questions of composition and she was never given a "key" to the codes used on the invoices.

The second affidavit, dated February 17, 1994, is by a person who states that she was employed by Sekin as a licensed customhouse broker between November 1991 and February 1993. She states that after she arrived at Sekin, sometime in December 1991, she was assigned the account for the importer. She states that at least three entries had been made for the importer and that she was advised that the watches in the entries had been rated by the Dallas office. She states that she assumed that the prior ratings made by the Dallas office had been based upon actual determinations of the questions of fact concerning the component compositions of the bands, cases, and movements. The affiant states that she obtained catalogues from the importer and examined the catalogue representation of the original models imported against the original ratings (for the earlier ratings) and classified like or similar models accordingly (i.e., as done in the earlier entries). The affiant states that if she was in doubt about a particular model, she would ask the importer if the model was similar or identical to a previously imported and rated model and if advised that the models were similar, she would rate the model on the basis of the previously imported and rated model.

According to the second affiant, she used the index in the back of the catalogues she had obtained from the importer to note the basic facts for classification of bands and cases. The affiant provides a copy of these indices as an exhibit to her affidavit. Her notations next to the model numbers are stated to indicate band composition and case composition. In regard to the latter, on the basis of the original rating (assumed to have been done by the Dallas office), the affiant states that she assumed that there was no electroplating used and that she treated the watches as if they were base metal with gold or silver tones and, in all cases, with stainless steel or plastic backs. In regard to the display of the watches (digital or mechanical), the affiant states that she mistakenly understood that all models imported by the importer were mechanical displays.

According to information obtained during the processing of this case, after the importer performed its end of the year analysis which reflected the costs and profits associated with the watch models under consideration, an official of the importer requested an official of the watch manufacturer to provide him with a list of the materials used in the cases. In a "FAX" dated June 18, 1993, the official of the watch manufacturer provided a list of symbols (abbreviations or letters found on the invoices) and the case material and case covering material that the symbols represented (e.g., "EGP" or "GP" is stated to indicate a brass or zinc case with gold plating). The "FAX" also listed some of the model numbers and the case material and case covering material used on the models as examples. In a letter dated June 29, 1993, the official of the watch manufacturer advised the official of the importer that the watches (with the trade name of the manufacturer) sold to the importer since 1990 contained no jewels or only one jewel except for three styles (RVUXX1P, RRJXX1P and RRJXX3P) which contained four jewels.

With the March 1, 1994, letter, in the form of Attachments I through XV, is a list of product (or model) numbers, the original tariff classification, the proposed tariff classification, and a summary explanation. This information is set forth below in summary form.

Att. No. of Original Current Status
No. models Class. Class.

I 3 9102.11.9510 9102.11.9510 Correctly classified as having 2 jewels, case not plated, etc.

II 40 9102.11.2510 9102.11.2510 Correctly classified (mechanical display, less than 2 jewels, band of textile or metal, cases not electroplated

III 1 9102.11.9510 9102.12.8010 Originally classified with mechanical display:
Has opto electric display

IV 125 9102.11.9510 9102.11.4510 Originally classified as having 2 jewels: Has less than 2 jewels

V 135 9102.11.9510 9102.11.3010 Originally classified as having 2 jewels and cases not gold-electroplated:
Has less than 2 jewels with gold electroplated cases

VI 76 9102.11.2510 9102.11.1010 Originally classified as having gold cases not electroplated: Has electroplated gold cases with less than 2 jewels

VII 1 9102.11.2510 9102.11.4510 Originally classified as having textile or metal band: Has plastic or leather band

VIII 1 9102.11.2510 9102.11.3010 Originally classified as having textile or metal band with cases not electroplated with gold:
Has plastic or leather band with gold electroplated cases and less than 2 jewels

IX 2 9102.11.9510 9102.11.2510 Originally classified as having 2 jewels with band of plastic or leather:
Has less than 2 jewels with band of textile or metal

X 3 9102.11.9510 9102.11.1010 Originally classified as more than 2 jewels with plastic or leather band and case not gold electroplated: Has less than two jewels, band of textile or metal and case is gold electroplated

XI 4 9102.11.2510 9102.12.8010 Originally classified as having a mechanical display: Has opto- electric display

XII 30 9102.11.9510 9102.12.8010 Originally classified as having a mechanical display: Has opto- electric display

XIII 18 9102.11.9510 9102.19.4010 Originally classified as having a mechanical display: Has combination of opto-electric and mechanical display

XIV 4 9102.11.2510 9102.19.2010 Originally classified as having a mechanical display: Has combination of opto-electric and mechanical display

XV 3 9210.11.2510 9102.91.4010 Originally classified as wrist watches: Is a pocket watch

The representative of Sekin met with attorneys of the Entry Rulings Branch about this matter on June 6, 1994. After that meeting, with a letter dated August 24, 1994, Sekin provided Customs with copies of documents (Entry Summary forms, invoices, and excerpts from catalogues illustrating and listing watch models) for four of the entries under consideration. According to the August 24, 1994, letter, these documents "indicate the mistake of fact which resulted in the misclassification of the various watch models imported by [the importer]." These documents are stated to be "a representative sample". According to the August 24, 1994, letter, "if [Sekin's files were] audited, [they] would indicate identical documentation which resulted in the mistake of fact which led to the misclassification." The documents for the four entries are summarized below:

Entry Invoice Model Classification Number Number Number Status

409-04xxx15-5 HR2-1669 RMF007P Originally classified as having a textile or metal band

409-04xxx60-3 HR2-1655 RPG262P Originally classified as having textile or metal band with case not electroplated with gold

409-04xxx56-9 H3R1084 RES031P-2 Originally classified as having a mechanical display

409-04xxx95-9 H3R1065 RRS046P Originally classified as a wrist watch

ISSUE:

May relief be granted under 19 U.S.C. 1520(c)(1) for the entries involved in this case?

LAW AND ANALYSIS:

Under 19 U.S.C. 1520(c)(1) (as of the time under consideration), 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 a law, when certain conditions are met. Section 1520(c)(1) has frequently been interpreted by the Courts. It has been stated that "[a] clerical error is 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). It has been held that a "mistake of fact exists where a person understands the facts to be other than they are, whereas 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" (Hambro Automotive Corporation v. United States, 66 CCPA 113, 118, C.A.D. 1231, 603 F. 2d 850 (1979) (emphasis in original), quoted in Concentric Pumps, Ltd., v. United States, 10 CIT 505, 508, 643 F. Supp. 623 (1986); see also, C.J. Tower & Sons of Buffalo, Inc. v. United States, 68 Cust. Ct. 17, 22, C.D. 4327, 336 F. Supp 1395 (1972), aff'd, 61 CCPA 90, C.A.D. 1129, 499 F. 2d 1277 (1974), and Universal Cooperatives, Inc. v. United States, 13 CIT 516, 518, 715 F. Supp. 1113 (1989)). Inadvertence has been defined as "an oversight or involuntary accident, or the result of inattention or carelessness, and even as a type of mistake" (Occidental Oil & Gas Co. v. United States, 13 CIT 244, 246 (1989), quoting C.J. Tower & Sons of Buffalo, Inc. v. United States, supra).

The conditions required to be met under 19 U.S.C. 1520(c)(1) are that the clerical error, mistake of fact, or other inadvertence must be adverse to the importer, manifest from the record or established by documentary evidence, and brought to the attention of the appropriate Customs officer within one year after the date of liquidation of the entry. The relief provided for in 19 U.S.C. 1520(c)(1) is not an alternative to the relief provided for in the form of protests under 19 U.S.C. 1514; section 1520(c)(1) only affords "limited relief in the situations defined therein" (Phillips Petroleum Company v. United States, 54 CCPA 7, 11, C.A.D. 893 (1966), quoted in Godchaux-Henderson Sugar Co., Inc., v. United States, 85 Cust. Ct. 68, 69, C.D. 4874, 496 F. Supp. 1326 (1980); see also, Computime, Inc. v. United States, 9 CIT 553, 555, 622 F. Supp. 1083 (1985), and Concentric Pumps, Ltd. v. United States, supra).

Seven of the entries under consideration (the first seven listed in the July 1, 1993, letter described in the FACTS portion of this ruling) were liquidated more than one year before the July 22, 1993, letter to you listing all of the entries under consideration and describing the mistakes, errors, or other inadvertences for which relief was sought (no relief under section 1520(c)(1) may be granted in regard to the 11 entries liquidated between March 6, 1992, and June 19, 1992, because the July 1, 1993, letter was untimely in regard to those entries; this ruling does not address the 14 entries liquidated between April 23, 1993, and July 16, 1993, since we understand that those entries were timely protested and the issues were resolved under 19 U.S.C. 1514). In the July 1, 1993, letter, a 30-day extension for the filing of a petition for reliquidation was sought on the basis that Sekin had advised the attorney writing the letter that an internal review indicated that "due to clerical error and/or mistake of fact the account had overpaid duty." The attorney writing the letter stated that he had not had a chance to review the files but would like to preserve his client's right to file a petition for reliquidation.

There is no authority under section 1520(c)(1) for the extension of the time for filing a petition for reliquidation under that section. Failure to bring an error, mistake, or other inadvertence to the attention of the appropriate Customs officers within a year from liquidation results in the lapse of the authority to correct liquidations under section 1520(c)(1) (see Omni U.S.A., Inc., v. United States, 6 Fed. Cir. (T) 99, 101, 840 F. 2d 912 (1988)). The Courts have distinguished between notice and substantiation under section 1520(c)(1). In the recent case of ITT Corp. v. United States, 24 F. 3d 1384 (Fed. Cir. 1994), the Court stated, "[w]ith regard to notice, the importer must assert the existence of an inadvertence to Customs 'within the proper time and with sufficient particularity to allow remedial action.'" (24 F. 3d at 1387) With regard to substantiation, the Court stated that "[m]istakes of fact that are not manifest from [the] record ... must be established by documentary evidence." (24 F. 3d at 1387) In reversing the CIT decision (ITT Corporation v. United States, 812 F. Supp. 213 (CIT 1993)) denying relief under section 1520(c)(1) because a mistake of fact was not established from the documentary evidence ITT submitted to Customs before the reliquidation decision, the Court stated:

The [CIT] correctly notes that "a party who waits past the time of filing its 19 U.S.C. ? 1520(c)(1) request to file supporting documentation risks an adverse decision by Customs in the interim." ... While true, such an adverse decision does not preclude an importer from introducing additional evidence, documentary or otherwise, at trial de novo before the [CIT] ... to substantiate further the alleged mistake of fact. [24 F. 3d at 1388]

If there were no other evidence (i.e., other than the July 1, 1993, letter) regarding the bringing to the attention of Customs the error, mistake, or other inadvertence, we believe that the July 1, 1993, letter would be insufficient to meet the one year requirement for bringing the error, mistake, or other inadvertence to the attention of Customs. However, at the request of the party who wrote the March 1, 1994, letter to you, we have consulted with a member of your staff, Ms. Sue Linneman, who is familiar with this case. She states that during the period between July 1, 1993, and July 22, 1993, and before July 6, 1993 (i.e., the 1-year anniversary of the earliest liquidation of the entries listed in the July 1, 1993, letter), it was brought to her attention that there was an error, mistake, or other inadvertence in the liquidation of the listed entries; i.e., that the merchandise was misclassified, in some cases because of mistakes involving the number of jewels in the movements of the watches. Therefore, we conclude that the requirement for bringing the alleged error, mistake, or other inadvertence to the attention of the appropriate Customs officer within one year of liquidation has been met in regard to the entries listed in the July 1, 1993, letter. See, in this regard, C.I.E. 2003/64, in which it was stated in regard to the issue of notice to Customs under section 1520(c)(1) that:

... although written notice to customs is always preferable, the law requiring that errors be "... brought to the attention of the Customs Service" does not state a notice must be in writing [and therefore] if the ... [C]ustoms employee can state that the matter was called to his [or her] attention within one year after the date of liquidation, the time requirements of section 520(c)(1), as amended, will have been satisfied.

Basically, reliquidation under section 1520(c)(1) is sought in this case on the basis of the affidavits stating that when the initial classifications of the merchandise under consideration were made, the responsible party assumed that the Dallas office of Sekin had ascertained the facts as to "the watch movement, the composition of the cases, the display types, etc." and that a FAX transmittal from that office listing two classifications was that office's final determination as to the proper classification. Classifications of subsequent entries, according to the second affiant, were based on the same assumption (i.e., that the Dallas office of Sekin had ascertained the facts (see above) and that the FAX transmittal from that office listing the two classifications was that office's final determination as to the proper classification). For subsequent classifications, the affiant stated that she compared catalogue representations of the models classified in the initial entries with models in subsequent entries or, if she was in doubt, she would ask the importer if the model was similar or identical to a previously imported model, and that she classified like or similar models accordingly. This affiant stated that she noted the basic facts for classification on the indices of the catalogues she had obtained from the importer (a copy of the indices, with notations, is provided). In regard to case composition, this affiant stated that based on what she believed to be the Dallas office's classification, she assumed that there was no electroplating used and in regard to the display of the watches she understood that all models imported by the importer were mechanical (rather than digital) display.

The mistakes alleged in this case are mistakes in the factual nature of the merchandise (i.e., in the display (mechanical or opto-electric), number of jewels (more or less than 2), band composition, case plating, and type (wrist or pocket)) which resulted in misclassification of the merchandise. Generally, an erroneous classification of merchandise is a mistake of law and is not remediable under 19 U.S.C. 1520(c)(1) (see, e.g., Mattel, Inc. v. United States, 72 Cust. Ct. 257, 262-263, C.D. 4547, 377 F. Supp. 955 (1974)). However, "[a] mistake sufficient to invoke the relief provided by ? 1520(c)(1), is one which 'goes to the nature of the merchandise and is the underlying cause for its incorrect classification.'" (Fabrene, Inc., v. United States, CIT Slip Op. 93-164, Vol 27, Customs Bulletin and Decisions, No. 36, p. 9, 11 (1993), quoting from Boast, Inc., v. United States, CIT Slip Op. 93-20, Vol. 27, Customs Bulletin and Decisions, No. 9, p. 11, 14 (1993)) In Universal Cooperatives, Inc., v. United States, supra, the Court distinguished between "decisional mistakes" in which a party may make the wrong choice between two known alternative sets of facts and which "must be challenged under Section 514" and "ignorant mistakes" which are remediable under 19 U.S.C. 1520(c)(1).

With one exception, in regard to the alleged mistake regarding the coating of the cases (see Attachments V, VIII, and X), we note that the effect of this mistake, by itself, was not adverse to the importer. The information as to the case material is necessary to correct the classification in cases where other alleged mistakes may result in a classification of the watches under consideration which is adverse to the importer and which can be corrected under section 1520(c)(1).

The exception to the above is Attachment VI, in which both the original and the proposed classification were stated to be for watches with less than 2 jewels and the original classification was for watches having gold cases not electroplated and the proposed classification is for watches with electroplated gold cases. The original classification is stated to have been under subheading 9102.11.2510, HTSUS, and the proposed classification is subheading 9102.11.1010, HTSUS. Initially we note that if the cases had actually been of gold, it appears that the correct classification would have been under heading 9101, not heading 9102 (see Note 2, Chapter 91, HTSUS). We note also that this is completely inconsistent with the second affiant's statement (i.e., she states that she assumed that there was no electroplating used and that she treated the watches as if they were base metal with gold or silver tones). Clearly, in regard to Attachment VI, it has not been established by documentary evidence that the original classification was the result of a mistake of fact not amounting to an error in the construction of a law (if the facts as described in Attachment VI are correct, any mistake appears to have been an error in the construction of a law).

The example of this alleged mistake provided by Sekin is found in entry 409-04xxx60-3. (NOTE: In each of the invoices for the examples provided by Sekin, there appears to be indicated a 6- digit classification (e.g., in invoice HR2-1655, the indicated classification for model RPG262P is "9102.11"). Since the original classification for this model is claimed to have been under subheading 9102.11.25 (Attachment II, in which the original classification is stated to have been correct; or Attachment VIII in which the "correct" classification is claimed to be subheading 9102.11.3010), the apparent ignoring of this indication by the affiants would not have affected the classification. See discussion of Livingston, infra, as to how this could affect relief under section 1520(c)(1).) The invoice cited is HR2-1655. The model number is RPG262P. According to the entry summary for this entry regarding this invoice, 1800 units (movements, cases, straps, and batteries) were classified under subheading 9102.11.95, HTSUS, and 900 units (movements, casts, straps, and batteries) were classified under subheading 9102.11.25, HTSUS. The invoice (HR2-1655) lists 2,700 units, as follows (references to Attachment, Original Classification, and "Correct" Classification are to that information in the March 1, 1994, submission):

Model # Units Attach. Orig. Clas. "Correct" Clas.

RME011P 150 IV 9102.11.9510 9102.11.4510
RMF333P 300 IV 9102.11.9510 9102.11.4510
RMF474P 150 V 9102.11.9510 9102.11.3010
RMF510P 150 VI 9102.11.2510 9102.11.1010
RMF510P-2 150 V 9102.11.9510 9102.11.3010 RPG212P 150 V 9102.11.9510 9102.11.3010
RPG252P 150 II 9102.11.2510 9102.11.2510
RPG262P 150 II 9102.11.2510 9102.11.2510
RPH043P-3 300 IV 9102.11.9510 9102.11.4510 RPH236P 150 V 9102.11.9510 9102.11.3010
RQF024P 150 XIII 9102.11.9510 9102.19.4010 RRS034P 150 VI 9102.11.2510 9102.11.1010
RRS073P 150 II 9102.11.2510 9102.12.2510
RRS074P 150 VI 9102.11.2510 9102.11.1010
RSA011P 150 IV 9102.11.9510 9102.11.4510
RYA002P 150 V 9102.11.9510 9102.11.3010

Although the above is consistent with the entry summary for invoice HR2-1655 (i.e., as to the total units classified under subheadings 9102.11.95 and 9102.11.25, HTSUS), there is no way, based on the information available to us, to determine whether the referenced model (RPG262-P) was originally classified under subheading 9102.11.25 or 9102.11.95, HTSUS. This is so because the values of the various models are cumulated (compare to the discussion below of the example provided for the alleged mistake involving the type of watch (entry 409-04xxx95-9, invoice H3R1065, model RRS046P) in which only 150 units were initially classified under subheading 9102.11.25 and the values corresponded to those in the invoice for model RRS046P). The effect of the lack of certainty as to the actual original classification is amplified when, as is true of model RPG262, Sekin concedes that the original classification could have been correct (see Attachment II).

As stated above, "[m]istakes of fact that are not manifest from [the] record ... must be established by documentary evidence" (ITT Corp. v. United States, supra, 24 F. 3d at 1387). Rather than establishing the alleged mistake of fact regarding case coatings, the documentary evidence submitted by Sekin with its August 24, 1994, letter casts doubt on the affidavits regarding this issue. Furthermore, it is essential that the actual original classification of the model under consideration be established (i.e., because of the requirement quoted above; see also United States v. Lineiro, 37 CCPA 5, 10, C.A.D. 410 (1949), "[d]etermination of issues in customs litigation may not be based on supposition") and, in the example for this mistake this could not be done. We note that it is stated in the August 24, 1994, letter that "if [Sekin's files were] audited, [they] would indicate identical documentation ...." No relief should be granted in regard to this issue (i.e., in regard to the models listed in Attachment VI).

In regard to the alleged mistake concerning watch displays (see Attachments III, XI, XII, XIII, and XIV), the first affiant states that she believed that the Sekin office in Dallas had ascertained the facts (including those concerning the display types) and that the HTSUS number provided by that office reflected those facts. The second affiant states that she understood that all models imported by the importer were mechanical displays.

The example of this alleged mistake provided by Sekin is found in entry 409-04xxx56-9. The invoice cited is H3R1084. The model number is RES031P-2. According to the entry summary for this entry regarding this invoice, 1200 units (movements, cases, straps, and batteries) were classified under subheading 9102.11.95, HTSUS, and 600 units (movements, casts, straps, and batteries) were classified under subheading 9102.11.25, HTSUS. The model under consideration (RES031P-2) is listed in Attachments III (original classification: 9102.11.9510; "correct" classification: 9102.12.8010) and XI (original classification: 9102.11.2510; "correct" classification: 9102.12.8010). In this example, as opposed to the above example, the 6-digit classification indicated in the invoice for this model ("9102.12") would have affected the original classification (i.e., the indicated classification was under a 9102.12.-- subheading, indicating an opto-electronic display rather than a mechanical display). The presence of this 6-digit classification indication on the invoice is inconsistent with the statement of the first affiant that there was nothing in the invoices which she found to be at odds with the Dallas classifications (both under a 9102.11.-- subheading) which she states she believed were correct. Furthermore, the presence of this 6-digit classification indication on the invoice, without any explanation by the importer or broker as to why it was apparently ignored, is grounds for invoking the rule in B.S. Livingston & Co. v. United States, 13 CIT 889 (1989).

In the Livingston case, the Court held that where the broker of the importer had a clear and correct invoice description of the merchandise but through "carelessness" requested or claimed that the merchandise was classifiable under the wrong tariff provision, no relief was available under section 1520(c)(1). The Court noted that it was "eminently clear that the determination by the Customs Service that the imported merchandise was classifiable under [the broker's initial claimed classification] is a determination of law" (13 CIT at 892). The Court distinguished the facts in the Livingston case from those in C.J. Tower, supra, on the basis that the plaintiff "was fully aware of the nature of the imported merchandise" and "can only state that it 'carelessly placed the incorrect tariff classification on the entry documents'" (13 CIT at 894). The Court concluded that since in all of its submissions the plaintiff's claimed classification for the imported merchandise was the proposed corrected classification but, nonetheless, Customs classified the merchandise under the initial claimed classification, "[i]f plaintiff was of the opinion that customs classification was incorrect, the appropriate procedure or remedy was to file a timely protest pursuant to 19 U.S.C. ? 1514(a)." (13 CIT at 894)

In this case, the invoice clearly and correctly indicates that the model involved has an opto-electronic display, classifiable under a subheading 9102.12-- provision. In the absence of any explanation as to why the classification indicated on the invoice, which Sekin now claims was correct, was ignored by the broker, we conclude that the broker must have been fully aware of the nature of the imported merchandise but through "carelessness" requested or claimed that the merchandise was classifiable under the subheading under which it was actually classified (9102.11.95). That being the case, under Livingston, "the appropriate procedure or remedy was to file a timely protest pursuant to 19 U.S.C. ? 1514(a)" (supra). We note that it is stated in the August 24, 1994, letter that "if [Sekin's files were] audited, [they] would indicate identical documentation ...." No relief should be granted in regard to this issue (i.e., in regard to the models listed in attachments III, XI, XII, XIII, and XIV).

In regard to the alleged mistake concerning the number of jewels in the movements (see Attachments IV, V, IX, and X), the first affiant states that she believed that the Sekin office in Dallas had ascertained the facts (including those concerning the watch movements) and that the HTSUS number provided by that office reflected those facts. The second affiant states that she assumed that the prior ratings had been based upon actual determinations of the questions of fact concerning, among other things, the movements. In our opinion, this alleged mistake could be remediable under section 1520(c)(1), as being the kind of mistake "where a person understands the facts to be other than they are" (Hambro Automotive, and Concentric Pumps, supra) or an "ignorant mistake" (see Universal Cooperatives, supra), provided that the mistake (including the actual original classification, see preceding paragraph) is established by documentary evidence.

No example of this alleged mistake was provided by Sekin with its letter of August 24, 1994. A "FAX" communication, dated June 13, 1994, appears to relate to this alleged mistake. The "FAX" communication consists of a copy of invoice HR1-1685, dated March 20, 1992. The invoice is for 10 units of model RMF645P and 450 units of model RWG009P (the 6-digit classification indicated in the invoice for model RMF645P is "9102.11", not inconsistent with the claimed original classification (see discussion above)). No copy of the entry summary is provided. Models RMF645 and RWG009 are listed in Attachment IV (initial classification 9102.11.9510, HTSUS; "correct" classification 9102.11.4510, HTSUS).

In the absence of an entry summary related to this example (in contrast to the other examples), we are unable to discern under what HTSUS provision the model (RMF645P) was actually initially classified (see discussion above regarding the importance of the actual initial classification). As stated above, "[m]istakes of fact that are not manifest from [the] record ... must be established by documentary evidence" (ITT Corp. v. United States, supra, 24 F. 3d at 1387). The required documentary evidence has not been submitted in regard to this issue. In view of the doubt cast on the evidence submitted by or on behalf of Sekin in this case regarding other issues (discussed elsewhere in this ruling), we recommend that no relief be granted in regard to this issue (i.e., in regard to the models listed in attachments IV, V, IX, and X).

In regard to the alleged mistake concerning the bands of the watches (see Attachments VII and VIII), the first affiant states that she believed that the Sekin office in Dallas had ascertained the facts and that the HTSUS number provided by that office reflected those facts. The second affiant states that she assumed that the prior ratings had been based upon actual determinations of the questions of fact concerning, among other things, the compositions of the bands. This affiant states that she used the index in the back of the catalogues she had obtained from the importer to note the basic facts for classification of bands and cases. In particular regard to the model listed in Attachment VII, the affiant states that "[she] was mistaken as to the band composition. It was plastic and [she] classified it as being textile or metal."

The example of this alleged mistake provided by Sekin was stated to be in entry 409-04xxx15-5. The invoice cited is HR2-1669. The model number is RMF007P. This example does not establish this alleged mistake, according to the submissions made by or on behalf of Sekin (i.e., model RMF007 is found in Attachment IV; the Attachments in which a mistake as to band composition is alleged are Attachments VII and VIII; model RMF007 is not found in those attachments).

Model RMF007-2 is found in Attachment VII. According to invoice HR2-1685, model RMF007P-2 was entered on entry 409-04xxx15-5. According to the entry summary for this entry regarding this invoice, 300 units (movements, cases, straps, and batteries) were classified under subheading 9102.11.95, HTSUS, and 600 units (movements, cases, straps, and batteries) were classified under subheading 9102.11.25, HTSUS. The invoice (HR2-1685) lists 300 units of model RME073P (Attachment IV; original classification: 9102.11.9510, "correct" classification: 9102.11.4510) and 600 units of model RMF007P-2 (Attachment VII; original classification: 9102.11.2510, "correct" classification: 9102.11.4510) (the 6-digit classification indicated in the invoice for model RMF007P-2 is "9102.11", not inconsistent with the claimed original classification (see discussion above)). The values for the movement, case, battery, band, and box are listed. These values correspond to the values listed in the entry summary so as to indicate that the 300 units of model RME073P were originally classified under subheading 9102.11.95 and the 600 units of model RMF007P-2 were originally classified under subheading 9102.11.25.

In our opinion, based on the above analysis of model RMF007P-2 in the invoice and entry described (instead of the model cited by Sekin as an example of the alleged mistake), this alleged mistake may be (see following paragraph) remediable under section 1520(c)(1), as being the kind of mistake "where a person understands the facts to be other than they are" (Hambro Automotive, and Concentric Pumps, supra) or an "ignorant mistake" (see Universal Cooperatives, supra). We state that the alleged mistakes regarding band composition "may be" remediable under section 1520(c)(1) because, in contrast to the other alleged mistakes (discussed above), there appears to be no objective evidence in the file establishing that the bands for the models listed in Attachments VII and VIII were actually composed of plastic. The importer should be required to provide such evidence before the entries involving these alleged mistakes are reliquidated. Furthermore, relief should only be granted for entries, invoices, and/or models other than the example if Sekin establishes (with documentary evidence) the actual initial classification of the models (with the sort of analysis used above).

In regard to the alleged mistake concerning the type of watch (Attachment XV, watch models stated to have been originally classified as wrist watches under subheading 9102.11.2510; "correct" classification stated to be as pocket watches under subheading 9102.91.4010, HTSUS), the first affiant states that she believed that the Sekin office in Dallas had ascertained the facts and that the HTSUS number provided by that office reflected those facts. The second affiant states that she assumed that the prior ratings had been based upon actual determinations of the questions of fact. In contrast to the other alleged mistakes, neither of the affiants specifically states that she assumed that the purported Dallas office classifications were based on facts concerning the type of watch. Neither of the affiants specifically refers in any way to the alleged mistake as to the type of watch (e.g., that she believed or assumed the watches were wrist watches when they were actually pocket watches).

The example of this alleged mistake provided by Sekin is found in entry 409-04xxx95-9. The invoice cited is H3R1065. The model number is RRS046P. According to the entry summary for this entry regarding this invoice, 8250 units (movements, cases, straps, and batteries) were classified under subheading 9102.11.95, HTSUS, and 150 units (movements, casts, straps, and batteries) were classified under subheading 9102.11.25, HTSUS. The invoice (H3R1065) lists 8,400 units, including two lots (one with 50 units and the other with 100 units) referring to RRS046P (the 6- digit classification indicated in the invoice for model RRS046P is "9102.11", not inconsistent with the claimed original classification (see discussion above)). The values for the movement, case, battery, band, and box are listed. These values correspond to the values listed in the entry summary for the 150 units classified under subheading 9102.11.25, HTSUS, and are the only values of the 8,400 units in the invoice which so correspond. Accordingly, we are satisfied that in this example the 150 units of model RRS046P were initially classified under subheading 9102.11.25, HTSUS.

However, as stated above, in the case of this alleged mistake (in contrast to the other alleged mistakes), there is no specific evidence as to the alleged mistake (neither of the affiants refers to or describes this alleged mistake). As explicitly stated in section 1520(c)(1), in order to qualify for relief under that provision, the clerical error, mistake of fact, or other inadvertence must be manifest from the record or established by documentary evidence (see, in this regard, PPG Industries, Inc. v. United States, supra, 4 CIT at 147-148, and United States v. Lineiro, supra, "[d]etermination of issues in customs litigation may not be based on supposition"). Since section 1520(c)(1) only affords "limited relief in the situations defined therein" (see Court cases above in regard to this proposition) and since the prerequisites for such relief have not been met in regard to this allegation, no relief should be granted in regard to this alleged mistake.

Obviously, care should be taken so that any reliquidations under section 1520(c)(1) reflect correct classifications. In this regard we note that there may be inconsistencies in some of the submissions in this case (e.g., Model RPG262 is described in Attachment II as "watches with mechanical display, less than two jewels, band of textile or metal, cases not electroplated" and in Attachment VII as "watches with less than two jewels with plastic or leather and with gold electroplated cases" (the description of model RPG262 in entry 409-04xxx60-3 submitted with the August 13, 1994, letter described in the FACTS portion of this ruling is consistent with the latter description); see also the possible discrepancy regarding Attachment VI, discussed above). Prior to reliquidation of any of the entries under section 1520(c)(1), the importer/broker should be required to satisfactorily explain any such discrepancies. In regard to the submission by Sekin of such evidence and in regard to the general failures of the evidence submitted, as discussed in this ruling, we note the statement by the Court of Appeals for the Federal Circuit in ITT Corporation v. United States, supra, 24 F. 3d at 1388, "that 'a party who waits past the time of filing its 19 U.S.C. ? 1520(c)(1) request to file supporting documentation risks an adverse decision by Customs in the interim" (excerpt from more complete quotation above).

HOLDING:

Relief under 19 U.S.C. 1520(c)(1) for the entries involved in this case should be granted or denied as stated in the LAW AND ANALYSIS portion of this ruling and as summarized below:

1. No relief under section 1520(c)(1) may be granted in regard to the 11 entries liquidated between March 6, 1992, and June 19, 1992;

2. This ruling does not address the 14 entries liquidated between April 23, 1993, and July 16, 1993, and understood to have been timely protested under 19 U.S.C. 1514;

3. Attachments I and II are claimed to have been correctly classified, so no relief is sought under section 1520(c)(1);

4. No relief should be granted regarding Attachments III, IV, V, VI, IX, X, XI, XII, XIII, XIV, and XV;

5. If satisfactory evidence is provided establishing the actual composition of the bands in the cases of Attachments VII and VIII, and if the actual initial classification of the models is established (with documentary evidence), relief may be granted regarding those Attachments;

6. Any possible discrepancies/inconsistencies (see final paragraph in the LAW AND ANALYSIS portion of this ruling) found in the reliquidation process should be satisfactorily explained prior to reliquidation under section 1520(c)(1).

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 the public via the Diskette Subscription Service, Freedom of Information Act and other public access channels 60 days from the date of this decision.

Sincerely,


Previous Ruling Next Ruling

See also: