HQ 225841 - Application for further review of Protest No. 3801-94- 101536; 19 U.S.C. 1520(c)(1); mistake of fact; alloy steel bars and rods; HQ 955737 - United States International Trade Commision Rulings

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HQ 225841

January 16, 1996

LIQ-9-01-RR:IT:EC 225841 CC

CATEGORY: LIQUIDATION

Port Director
U.S. Customs Service
477 Michigan Avenue
Detroit, MI 48226-2657

RE: Application for further review of Protest No. 3801-94- 101536; 19 U.S.C. 1520(c)(1); mistake of fact; alloy steel bars and rods; HQ 955737

Dear Sir or Madam:

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:

The entry the subject of this protest consisted of alloy steel bars and rods. The merchandise was entered on May 27, 1992. The entry was liquidated on October 2, 1992 under subheading 7228.50 of the Harmonized Tariff Schedule of the United States (HTSUS), which provides for other bars and rods, not further worked than cold-formed or cold-finished.

On September 28, 1993 the protestant requested, in accordance with 19 U.S.C. 1520(c)(1), that you reliquidate the entry under subheading 7228.40, HTSUS, which provides for other bars and rods, not further worked than forged.

Therefore, the protestant's claim is that there was a mistake of fact in classifying the merchandise. Specifically, the protestant claims that the subject merchandise was misdescribed on the invoice as "machined," "peeled," or "turned." The misdescription led Customs to conclude that the merchandise was "cold-formed or cold-finished," and, thus, classified under subheading 7228.50, HTSUS, which was an incorrect classification, according to the protestant.

On January 12, 1994 the section 1520(c)(1) claim was denied. This protest on the denial of the section 1520(c)(1) claim was filed on April 6, 1994.

ISSUE:

Whether Customs properly denied the protestant's request to reliquidate the subject entry under 19 U.S.C. 1520(c)(1)?

LAW AND ANALYSIS:

Initially, we note that both the request for reliquidation under 19 U.S.C. 1520(c)(1) and the protest of the denial of that request under 19 U.S.C. 1514(a)(7) were timely filed.

Under 19 U.S.C. 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 the law. The error must be manifest from the record or established by documentary evidence and brought to the attention of the appropriate Customs officer within one year from the date of liquidation. As stated in PPG Industries, Inc. v. United States, 7 CIT 118 (1984), the following three conditions must be satisfied in order for an entry to be reliquidated to correct a mistake of fact pursuant to section 1520(c)(1):

(1) A mistake of fact must exist;

(2) The mistake of fact must be manifest from the record or established by documentary evidence; and

(3) The mistake of fact must be brought to the attention of the Customs Service within the time requirements of the statute.

Consequently, the protestant must first show that the subject merchandise was misclassified. As noted by the protestant at the time the protest was filed, the issue of the classification of essentially the same merchandise, alloy steel bars imported by the same importer, was pending before Customs as a protest. That protest, ruled on in HQ 955737, was issued on July 19, 1995. In that protest we found that removing between 0.01 inch to 0.1 inch from the entire external surface area of alloy tool steel bars constitutes cold forming or cold finishing for tariff purposes; therefore, the merchandise was classified under subheading 7228.50, HTSUS. The merchandise involved here is essentially the same merchandise subjected to the same processes as that involved in HQ 955737. Consequently, the merchandise the subject of this protest is classified under subheading 7228.50, HTSUS.

The protestant also argued that NY 847047, dated December 5, 1989, which classified tool steel bars under subheading 7228.40, HTSUS, applies to the merchandise of this protest. In HQ 955737 the same argument was made and dismissed because the merchandise of NY 847047 was "distinguished on the facts." Consequently, NY 847047 does not apply to this protest.

Based on the foregoing, we find that the subject merchandise was properly classified. Consequently, no mistake of fact exists for the tariff classification of the subject merchandise.

Even it were shown that classification of the subject entry was incorrect, the protestant's request for reliquidation pursuant to section 1520(c)(1) could not be approved for the following reasons.

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, whereas a mistake of law 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, e.g., C.J. Tower & Sons of Buffalo, Inc. v. United States, 68 Cust. Ct. 17, 21, C.D. 4327, 336 F. Supp. 1395 (1972), aff'd, 61 CCPA 90, C.A.D. 1129, 499 F.2d 1277 (1974); Hambro Automotive Corp. v. United States, 81 Cust. Ct. 29, 458 F.Supp. 1220 (1978), aff'd, 66 CCPA 113, 603 F.2d. 850 (1979); and PPG Industries, Inc. v. United States, 7 CIT 118 (1984). The courts have taken the position that generally an error in the classification of merchandise is not a clerical error, mistake of fact, or inadvertence within the meaning of 19 U.S.C. 1520(c)(1), but is an error in the construction of the law. See, e.g., Cavazos v. United States, 9 CIT 628 (1985); Mattel, Inc. v. United States, 72 Cust. Ct. 257, C.D. 4547, 377 F.Supp. 955 (1974); and Fibrous Glass Products v. United States, 63 Cust. Ct. 62, C.D. 3874 (1969), appeal dismissed, 57 CCPA 141 (1970).

The protestant claims that the subject merchandise was misdescribed on the invoice as "machined," "peeled," or "turned." In HQ 955737 we used these same terms to describe the merchandise classified, so we find it difficult to conclude there was any misdescription of the merchandise of this protest. If somehow these terms were a misdescription, it would be based on the legal consequences; there is no evidence of any mistake present as to the processes involved or the nature of the merchandise. Consequently, no mistake of fact is present, and no remedy is available under 19 U.S.C. 1520(c)(1).

HOLDING:

No mistake of fact was present under 19 U.S.C. 1520(c)(1) in an alleged error in the tariff classification of the subject entry. Consequently, the protest should be DENIED in full.

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,

Director, International Trade

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