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HQ 955930





February 21, 1995

LIQ-9-01-CO:R:C:E 955930 AJS

CATEGORY: LIQUIDATION

District Director of Customs
U.S. Customs Service
55 Erieview Plaza
Plaza Nine Building
6th Floor
Cleveland, OH 44114

RE: Protest 4195-93-100108; claimed mistake of fact in filing consumption entry instead of TIB entry due to mistake in classification; 19 U.S.C. 1520(c)(1); PPG Industries, Inc. v. U.S.

Dear Sir:

This is our decision in protest 4195-93-100108, dated June 28, 1993, concerning the substitution of a Temporary Importation under Bond (TIB) entry for a consumption entry.

FACTS:

The imported merchandise, a control unit for smoke detectors, was entered under subheading 8531.10.00, Harmonized Tariff Schedule of the United States (HTSUS), a provision for burglar or fire alarms and similar apparatus. Goods so classified are free of duty under the Civil Aircraft Agreement (CAA), upon compliance with the law and applicable Customs Regulations. Before liquidation, the concerned National Import Specialists (NIS) responded to a Customs Form (CF) 6431 inquiry from the port that subheading 9022.29.40, HTSUS, a provision for ionization type smoke detectors was correct, assuming the merchandise was not just a control unit. The NIS advised that control units are classified under subheading 8537.10.90, HTSUS, as apparatus for electric control or the distribution of electricity. Goods so classified are not duty-free under the CAA. In fact, only the control unit was imported. The entry was liquidated on April 4, 1993, under subheading 9022.29.40, HTSUS.

The protestant claims it was initially advised by Customs, until further instructions, to classify the subject merchandise within subheading 8531.10.00, HTSUS. The protestant asserts that had it been established that a dutiable rate may be applicable, it would have filed a TIB entry. Thus, the protestant requests substitution of a TIB entry for a consumption entry because its intent, as reflected on the commercial invoice, indicates the "articles are returning after warranty repair."

ISSUE:

Whether the subject entry may be reliquidated due to a mistake of fact or other inadvertence pursuant to 19 U.S.C.

LAW AND ANALYSIS:

Initially, we note that this protest was timely filed pursuant to 19 U.S.C. 1514(c)(2)(A). The date of liquidation was April 5, 1993, and this protest was filed on June 28, 1993. We also note that the refusal to reliquidate an entry under section 1520(c) is a protestable matter pursuant to 19 U.S.C. 1514(a)(7)

The text of 19 U.S.C. 1520(c) provides:

Notwithstanding a valid protest was not filed, the appropriate customs officer may, in accordance with regulations prescribed by the Secretary, reliquidate an entry to correct-

(1) A clerical error , mistake of fact, or other inadvertence not amounting to an error in the construction of a law, adverse to the importer and manifest from the record or established by documentary evidence, in any entry, liquidation or other customs transaction, when the error, mistake, or inadvertence is brought to the attention of the appropriate customs officer within one year after the date of liquidation or exaction.

The protestant appears to be claiming that due to a mistake of fact regarding the classification of the subject merchandise, it erroneously entered the merchandise under a consumption entry instead of under a TIB entry. The protestant asserts this intent is reflected on the commercial invoice which indicates the "articles are returning after warranty repair."

The Court of International Trade (CIT) addressed a similar case in PPG Industries, Inc. v. United States, 4 CIT 143 (1982). At the time of entry in PPG, the articles were claimed to be classified under items of the tariff schedules bearing a rate of
duty. The plaintiff partially claimed that due to a mistake of fact and inadvertence, Customs failed to classify the subject articles as items intended to be imported under bond for exportation within a maximum period of three years (i.e., TIB entry).

The CIT stated that "[a] mistake of fact remediable under the provisions of 19 U.S.C. 1520(c)(1) is one 'which takes place when some fact which indeed exists is unknown or a fact which is thought to exists in reality does not exist.'" Id. at 146, citing C.J. Tower & Sons of Buffalo, Inc., v. United States, 68 Cust. Ct. 17, 22, aff'd 61 CCPA 90, 499 F.2d 1277 (1974). In Tower the remediable mistake was the lack of knowledge on the part of the importer until after liquidation that the subject merchandise was in fact to be used as emergency war material, which was duty free.

Paraphrasing the CIT in PPG, any mistake which might have been made in this protest was qualitatively different from the mistake in Tower. Id. at 147. In the latter case, the plaintiff-importer was mistaken as to the use to which the merchandise would be put. In this protest, the protestant was under no such misapprehension. The protestant knew the intended use (i.e., warranty repair) to which the subject merchandise would be placed but erred in classifying the merchandise. The mistake alleged by the protestant is similar to the mistake of law found in Hambro Automotive Corp. v. United States, 66 CCPA 113, 603 F.2d 850 (1979). There the exporter knew the facts regarding the cost of production but erred in the assessment of those costs under the applicable law.

In PPG, the plaintiff contended that the invoices bearing notations "experimental material" and "no charge" constituted such notice to Customs as to require a further inquiry into the eligibility of the subject merchandise for duty-free treatment. Id. The CIT stated that "[h]owever, examination of the consumption entries filed with Customs and prepared by plaintiff and its agents fails to disclose any notations or information relating to the character or the intended use of the imported merchandise." Id. The CIT further stated that "[o]n the contrary, each consumption entry specifically included a claimed classification under a tariff schedule item bearing a rate of duty." Id.

In this case, the protestant contends that the commercial invoices bearing the notation "warranty repair" indicate an intent as to the eligibility of the subject merchandise for duty-free treatment. As in PPG however, examination of the consumption entry filed with Customs and prepared by the
protestant's customs broker fails to disclose any notations or information relating to the character or the intended use of the imported merchandise. Also as in PPG , the consumption entry specifically included a claimed classification under a subheading (i.e., 8531.10.00) bearing a rate of duty (i.e., generally 2.7% for products from France). In addition, the invoice lists the unit price of the merchandise as $37,429.60 which does not lead to the conclusion that the merchandise was simply returning after warranty repair. Instead, this price would indicate that a sale had occurred.

The CIT in PPG did not agree with the plaintiff that a notation "experimental" or "no charge" could have apprised Customs of the character and intended use of the subject merchandise. Likewise, we do not agree with the protestant that the notation "warranty repair" could have apprised Customs of the character and intended use of the merchandise at issue.

In PPG, the CIT stated "[i]n asserting that the subject merchandise has been wrongly classified due to a mistake of fact, it is incumbent on the plaintiff to show by sufficient evidence the nature of the mistake of fact." Id. Furthermore, the CIT stated that "[t]he burden and duty is upon the plaintiff to inform the appropriate Customs official of the alleged mistake with 'sufficient particularity to allow remedial action.'" Id. at 147-48, citing Hambro Automotive Corp. v. United States, 81 Cust. Ct. 29, 31 (1978). The CIT found that "[n]o information was provided by plaintiff that the subject merchandise [as imported] was intended to be imported under bond for their exportation within 1 year or at the expiration of two additional 1-year extensions . . ." In this instance, no information was provided that the subject merchandise as imported was intended to be imported under a TIB entry. In fact, the protestant's comments on the CF 19 indicate its intent regarding the use of a TIB entry only arose after Customs determined the classification of the subject merchandise was within subheading 9022.29.40, HTSUS. Therefore, we are unable to conclude that the subject entry was entered as a consumption entry rather than a TIB entry due to a mistake of fact.

Subheading 8537.10.90, HTSUS, provides for "other" apparatus for electric control or the distribution of electricity. The subject merchandise satisfies the terms of this subheading. It is a control unit for smoke detectors. Therefore, the subject control unit is properly classifiable within subheading 8537.10.90, HTSUS. The subject entry was liquidated within subheading 9022.29.40, HTSUS, and thus should be reliquidated within subheading 8537.10.90, HTSUS.

HOLDING:

The protest is denied. The subject entry may not be reliquidated due to a mistake of fact or other inadvertence pursuant to 19 U.S.C. 1520(c)(1). The control unit is properly classifiable within subheading 8537.10.90, HTSUS, and should be reliquidated to reflect this classification.

A copy of protest 4195-93-100110, dated June 28, 1993, was also forwarded to this office. It involves the same issue and also should be denied and reliquidated as above. In the future such protests should not be forwarded to headquarters with the lead protest but retained at the district level until the lead protest is returned.

In accordance with Section 3A(11) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision should be mailed by your office, with the CF 19, 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 Ruling Module in ACS and the public via the Diskette Subscription Service, Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director
Commercial Rulings Division

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