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HQ 225789



October 30, 1995

LIQ-9-01-RR:I:EC 225789 IOR

CATEGORY: LIQUIDATION

Acting Assistant District Director
Commercial Operations
U.S. Customs Service
Lincoln Juarez Bridge, P.O. Box 3130
Laredo, TX 78041-3130

RE: Application for further review of Protest No. 2304-94-100127; 19 U.S.C. 1520(C)(1); mistake of fact; classification of sanitary ware; GSP; failure to submit GSP documentation; legal determination; ITT Corporation v. United States; Occidental Oil & Gas Co. v. United States

Dear Sir:

The above-referenced protest was forwarded to this office for further review. We have considered the facts and issues raised, and our decision follows.

FACTS:

This protest has been filed against your denial of a request for reliquidation of the subject entries, pursuant to 19 U.S.C. 1520(c)(1).

The protest concerns 62 entries of sanitary ware from Mexico, entered between March 21, 1993 and July 26, 1993. The merchandise, consisting of bowls and tanks for toilets, was entered under subheading 6910.10.00 of the Harmonized Tariff Schedule of the United States (HTSUS), which provided for "ceramic sinks, washbasins, washbasin pedestals, baths, bidets, water closet bowls, flush tanks, urinals and similar sanitary fixtures: of porcelain or china," dutiable at 7.2 percent. Subheading 6910.10.00 excludes Mexico from Generalized System of Preferences (GSP) eligibility.

A sample from an entry made on February 2, 1993 was tested by the U.S. Customs Laboratory. In a report dated March 9, 1993 the laboratory concluded that the sample meets the requirements for a ceramic according to Chapter 69, additional U.S. Note 1 of the HTSUS and does not meet the requirements for porcelain or china according to additional U.S. Note 5(a) of the HTSUS. A laboratory report dated July 15, 1993 concluded that a second sample from an entry made on June 8, 1993, is a ceramic article which meets the requirements for ceramic stoneware according to Chapter 69, additional U.S. notes 1 and 5(a) of the HTSUS, and is not an article of porcelain or china. The results of the laboratory tests were provided to the protestant by a Notice of Action, Customs Form (CF) 29, dated July 21, 1993. The CF 29 notified the protestant that the more appropriate classification for the imported merchandise is 6910.90.00 HTSUS and advised the protestant to make the necessary corrections on future importations. The CF 29 refers to the samples obtained from an entry dated February 2, 1993.

The March 9, 1993 laboratory report was based on a sample consisting of a lavatory sink manufactured by Procesadorade Ceramica, imported by the protestant and entered on February 2, 1993. The July 15, 1993 laboratory report was based on a sample consisting of a toilet tank lid manufactured by Lamosa and imported by a party other than the protestant. The entry number indicated on the July 15, 1993 laboratory report is different from each of the two protested entries which were made on June 8, 1993.

Subheading 6910.90.00 provided for the same column 1 duty rate of 7.2 percent and provides for duty free treatment under GSP on qualifying goods from Mexico. According to Customs Protest and Summons Information Report, CF 6445A, 49 of the 62 entries were subsequently reclassified by Customs under subheading 6910.90.00, and liquidated as "no change" because the duty rate did not change. According to the CF 6445A, the remaining 13 entries were liquidated as entered, under subheading 6910.10.00. All of the entries were liquidated from October 22 through November 19, 1993.

On March 16, 1994 the protestant filed a petition for reliquidation of 62 entries of sanitary ware pursuant to 19 U.S.C. 1520(c)(1), claiming that the liquidation of the merchandise as dutiable, at the rate of 7.2%, was based upon a mistake of fact because Customs had agreed in "mid October of 1993" that the same merchandise qualified for GSP. The protestant bases its opinion of Customs "agreement" on the protestant's assertion that previous and subsequent entries of the same merchandise were granted GSP status. In its petition for reliquidation, the protestant asserts its belief that "had [Customs] been aware that these entries covered the merchandise [Customs] had agreed qualified for GSP, [Customs] would not have put these entries through for liquidation as dutiable." The protestant asserts that all 62 entries were liquidated under subheading 6910.10. Protest, p.2. On this ground, the protestant asserts that the liquidation of the entries as dutiable was based upon a mistake of fact, and seeks reliquidation with the benefit of GSP. On May 31, 1994, the district denied the petition stating it does not meet the criteria of section 1520(c)(1) as constituting a "clerical error, inadvertence, or mistake of fact," and referenced Occidental Oil and Gas Co. V United States, 13 CIT 244 (1989).

The protestant filed the protest on the denial of the section 1520(c)(1) claim on June 14, 1994, stating:

In this instance, the Customs service had already determined that the goods in question qualified for GSP, on the basis of information supplied by the importer. It was after thast (sic) agreement that Customs continued to liquidate this merchandise as if it consisted of chinaware or porcelain, and it is that mistake of fact as to which the request herein was directed. ***

We believe that, had [Customs] been aware of the fact that these goods were not "of porcelain or china" [Customs] would not have classified them under subheading 6910.10.00.

The GSP Declaration in the file is dated December 14, 1993, and concerns toilet bowls and tanks manufactured by Lamosa, covered by Lamosa invoices 868, dated December 3, 1993; 869, dated December 3, 1993; and 870, dated December 6, 1993.

The import specialist states in a memorandum dated October 26, 1994, that the subject entries were processed by Customs before any information or GSP cost data was received from the sellers of the merchandise. The import specialist further states:

By the time GSP Cost Data were received by Customs, all of [protestant's] entries were processed for liquidation. No mistake of fact was made by Customs at the time of liquidation, because it was not yet determined by Customs that the goods in question qualified for GSP Status on the basis of the information supplied by the importer.

The file contains two sample entries: no. xxxx495-2, entry date June 25, 1993 and xxxx442-4, entry date May 27, 1993. Both entries cover toilet bowls and tanks manufactured by Lamosa and imported by the protestant. The May 27, entry was liquidated as entered, under subheading 6910.10, and the June 25 entry was liquidated with a change from subheading 6910.10 to 6910.90. According to the responsible commodity team leader, the two sample entries are representative of the merchandise imported, and that in addition to merchandise manufactured by Lamosa, the subject imported merchandise was also manufactured by Procesadorade Ceramica. None of the subject entries covered lavatory bathroom sinks.

ISSUE:

Whether relief may be granted under 19 U.S.C. 1520(c)(1) to correct an alleged mistake of fact in the classification of merchandise?

LAW AND ANALYSIS:

Initially we note that this protest was timely filed pursuant to 19 U.S.C. 1514(c)(2)(B). The date of decision protested was May 31, 1994, and the protest was filed on June 14, 1994. In addition, the refusal to reliquidate an entry under section 1520(c)(1) is a protestable matter pursuant to 19 U.S.C. 1514(a)(7).

19 U.S.C. 1514 sets forth the proper procedure for an importer to protest the classification and appraisal of merchandise when it believes the Customs Service has misinterpreted the applicable law. A protest must be filed within ninety days after notice of liquidation or reliquidation. Otherwise, the tariff treatment of merchandise is final and conclusive.

19 U.S.C. 1520(c)(1) is an exception to the finality of 1514. Under 1520(c)(1) 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. The error must be adverse to the importer and manifest from the record or established by documentary evidence and brought to the attention of the Customs Service within one year after the date of liquidation. 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, 10 CIT 505, 508, 643 F. Supp. 623 (1986)).

The protestant claims that the entries should have been reliquidated because Customs made a mistake of fact in believing that merchandise was of porcelain or china, therefore precluding GSP treatment. The protestant cites the case of ITT Corporation v. United States, 24 F.3d 1384 (Fed. Cir. 1994) in support of its protest. A "mistake of fact" occurs when a person understands the facts to be other than what they really are and takes some action based on that erroneous belief. A "mistake of law," on the other hand, occurs when a person knows the true facts of the case but has a mistaken belief as to the legal consequences of those facts. (See PPG Industries, Inc. v. United States, 7 CIT 188, 123 (1984), and cases cited therein.)

There is no evidence that the merchandise which was the subject of the lab reports had any relation to the merchandise which is the subject of the protested entries. The merchandise tested for the March 9, 1993 laboratory report consisted of a lavatory sink entered prior to any of the entries at issue. None of the entries at issue cover lavatory sinks. The merchandise tested for the July 15, 1993 laboratory report, was not merchandise from any of the subject entries, and it was even imported by a party other than the protestant. There is no connection between the samples tested and the entries which are the subject of this protest, thus there is no evidence that the conclusions contained in the laboratory reports had any bearing on the entries which are the subject of this protest. No other classification evidence is contained in the file, and none has been submitted by the protestant. The protestant has failed to establish that any of the 62 entries were classified incorrectly, and no mistake of fact has been established.

The CIT has ruled that mere assertions by a complainant without supporting evidence will not be regarded as sufficient to overturn a Customs official's decision. Bar Bea Truck Leasing Co., Inc. V. United States, 5 CIT 124, 126 (1983). Consequently, where there is no evidence, there is no support for the assertion that there was a mistake of fact as to the correct classification of the imported merchandise.

The mistake of fact claimed with respect to the failure of Customs to liquidate the entries with GSP allowance is that Customs was not aware that the subject entries covered merchandise Customs had agreed qualified for GSP. The file shows that GSP treatment was not claimed at the time of entry. Customs Regulations 10. 172 (19 CFR 10.172) provide that if duty-free treatment on the ground that GSP is applicable is claimed at the time of entry, "a written claim shall be filed on the entry document by placing the symbol "A" as a prefix to the subheading of the [HTSUS] for each article for which such treatment is claimed." There is no dispute that the symbol "A" was not placed on any of the subject entries. According to the import specialist, the GSP cost data was not submitted to Customs until all of the entries were processed for liquidation. The protestant has not provided any evidence of the date that GSP cost data was provided to Customs, or what entries were the subject of such information. The only GSP information contained in the file consists of a GSP declaration from only one of the manufacturers, which is dated after the entry and liquidation of the subject merchandise and refers only to invoices dated subsequent to the entry and liquidation of the subject merchandise. The protestant has not submitted or directed Customs to the other entries referred to which are asserted to have been granted GSP status. There is no evidence that at the time the entries were processed for liquidation that Customs had any information pertaining to GSP treatment of the subject entries.

Again, in accordance with Bar Bea Truck Leasing Co., Inc. V. United States,supra, mere assertions by a complainant without supporting evidence will not be regarded as sufficient to overturn a Customs official's decision. Consequently, where there is no evidence, or adverse evidence exists (i.e. a GSP Declaration dated after the liquidation) regarding the submission of GSP cost data, there is no support for the assertion that there was a mistake of fact on account of the Customs official not knowing that submitted GSP cost data was applicable to the subject entries. In ITT Corporation v. United States, 24 F.3d 1384 (Fed. Cir. 1994), cited by the Protestant, the CIT had found a mistake of fact when the Plaintiff's agent had used company documents applicable to different merchandise which was to be sent to a different customer. See ITT Corporation v. United States, 812 F.Supp. 213, 216 ( CIT 1993). We find ITT Corporation does not apply to support the protestant's claim.

Furthermore, it has been determined that a decision on duty-free tretment of merchandise is a legal determination. In Occidental Oil & Gas Co. v. United States, 13 CIT 244, 250 (1989), the Court found that the Customs officer made a legal determination as to classification of merchandise, in view of the importer's failure to supply appropriate documents to support its claim for duty-free treatment. Therefore, in this case also, in view of the lack of GSP data the Customs official processing the entries made a legal determination as to their GSP status.

In this case, the protestant was notified of Customs determination of the HTSUS classification for the merchandise well before the liquidation of the merchandise. Therefore, the protestant had 90 days after liquidation in which to protest the classification and GSP treatment of the subject entries under 19 U.S.C. 1514.

HOLDING:

The protestant has not established a mistake of fact in the liquidation of the subject entries, and reliquidation of the entries is not permissible pursuant to 19 U.S.C. 1520(c)(1).

Consistent with the decision set forth above, you are hereby directed to deny the subject protest. 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 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, Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director
Commercial Rulings Division


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