HQ 226766 - Application for Further Review Protest No. 2809-96-100010; 19 U.S.C. 1520(c)(1); Protest of 19 U.S.C. 1514(a)(7) protest denial; Classification of printers; Other inadvertence - United States International Trade Commision Rulings

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HQ 226766

October 15, 1996

LIQ-9-01-RR:IT:EC 226766 JRS

CATEGORY: LIQUIDATION

Port Director of Customs
U.S. Customs Service
Protest Section
33 New Montgomery Street
San Francisco CA 94126

RE: Application for Further Review Protest No. 2809-96-100010; 19 U.S.C. 1520(c)(1); Protest of 19 U.S.C. 1514(a)(7) protest denial; Classification of printers; Other inadvertence

Dear Sir:

This is in response to your memorandum dated March 12, 1996, forwarding the above-referenced protest to this office for further review. We have considered the facts and issue raised, and our decision follows.

FACTS:

On July 20, 1995, the importer's broker requested reliquidation of its entry dated November 19, 1994, which was liquidated on March 24, 1995, under 19 U.S.C. 1520(c)(1). On October 24, 1995, Customs denied this request on the grounds that a misclassification is an error in the construction of a law not correctable under the statute. Subsequently, on January 5, 1996, the importer filed this protest under 19 U.S.C. 1514(a)(7), against your denial of its request for reliquidation of the subject entry, in accordance with section 174.23 of the Customs Regulations (19 C.F.R. 174.23). You submitted this protest to this office for our determination in accordance with 19 C.F.R. 174.26(b).

The protested entry consisted of 3 invoices. Invoice "a" had 4 lines of 2 models of facsimile transreceivers which were entered as line no. 001 on the CF 7501. Invoice "b" had 4 lines of 3 types of non impact LED printers which were entered as line no. 002 on the CF 7501. Invoice "c" had 25 lines of items which translated into 8 different classifications on the CF 7501 as line nos. 003 through 010. Invoice lines 13 - 17 (line no. 005 on the CF 7501) were classified as dot matrix printers.

The broker, on behalf of its importer (also referred to as "protestant" herein), contends item 17 of Invoice "c" of the protested entry was inadvertently classified with items 13 through 16 as a "printer with printhead" under subheading 8471.92.5240, HTSUS, at 3.7% duty. The protestant states on the protest form that item 17 should have been classified under subheading 8471.92.7200, HTSUS, with a free rate of duty in accordance with NY Ruling Letter 893810. The protestant explains that the misclassification of item 17 resulted because of clerical oversight, that is, the entry clerk employed by the broker failed to notice that the last line "without printhead" from the grouping of the Dot Matrix Serial Printers (items 13-17) on the invoice sheet. The protestant explains that after reviewing 48 pages of invoices for this entry, the clerk failed to note only one line in a grouping of similar dot matrix printers, which is what caused the single misclassification in the entire entry. The protestant submitted to this office a written statement from the entry clerk in Hankyu's import department who prepared the entry in question as to how the inadvertence occurred:

My name is Michael A. Carey and I am the entry clerk who prepared entry #610-XXXXXXX-7 on behalf of OKIDATA. I handle all ocean entries for OKIDATA and I am aware that Oki's printers without print mechanisms are classifiable under 8471.92.72, HTSUS, as duty free as per ruling (NY#893810). In regards to the above entry #610-XXXXXXX-7 I did classify the printers in Invoice "b" correctly as printers without print mechanisms but in classifying Invoice "c" Item #17 I missed the words "without printhead". I misclassified this item even though I had a copy of ruling (NY#893810) for this entry.

Protestant contends that this was a mere inadvertence or oversight on part of the clerk which is correctable under 19 U.S.C. 1520(c)(1), and requests reliquidation of the entry with a refund of the duty overpayment.

The Port of San Francisco is of the opinion that the merchandise was misclassified by the broker since "the information that the printer was imported without the printhead was given to the broker, as evidenced by the clear notation on the invoice, but he incorrectly determined the classification," and as such, resulted in an error in the construction of the law. The Port cites
HQ 221352, dated May 14, 1990, to support its position.

ISSUE:

Whether there was sufficient evidence in this case to grant the petition filed under 19 U.S.C. 1520(c)(1), such that this protest filed under 19 U.S.C. 1514(a)(7), against the denial for reliquidation, should be approved?

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 section 520(c)(1), Tariff Act of 1930, as amended (19 U.S.C. 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 when certain conditions are met. These conditions 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 Customs 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 (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)).

According to the court in PPG Industries, Inc. v. United States, 4 CIT 143 (1982) (quoting, in part, from the lower court in Hambro Automotive Corp. v. United States, 81 Cust. Ct. 29, 31, 458 F. Supp. 1220, C.D. 4761 (1978)): [I]t is incumbent on the plaintiff to show by sufficient evidence the nature of the mistake of fact. The burden and duty is upon the plaintiff to inform the appropriate Customs official of the alleged mistake with "sufficient particularity to allow remedial action." 4 CIT at 147-148.

In determining a protest filed under 19 U.S.C. 1514(a)(7), the issue to be decided is as set forth above: Did Customs err in denying the section 1520(c)(1) request for reliquidation? If Customs erred by failing to recognize the error as one correctable under the statute, the protest can be approved where the evidence reviewed on the protest record indicates that such an error was, at the time the reliquidation request was considered, either manifest from the record reviewed at that time or established by documentary evidence submitted at that time. If, however, the claimed error, even if later concluded by the protest reviewer to be of the kind that is correctable under the statute, was not manifest from the record, or made apparent by documentary evidence submitted by the petitioner, at the time the section 1520(c)(1) determination was made, the denial of the 1520(c)(1) request cannot be said to be erroneous.

Mistakes of fact occur when a person believes the facts to be other than what they really are and takes action based on that erroneous belief. Inadvertence connotes inattention, oversight, negligence, or lack of care, while clerical error occurs when a person intends to do one thing but does something else. These errors are not mutually exclusive. However, errors in the construction of the law are not correctable under section 520(c)(1). T.D. 54848 (94 Treas. Dec. 244 (1959)). Only when an error correctable under 19 U.S.C. 1520(c)(1) is identified as responsible for the misclassification can there be a reliquidation of a classification error under section 1520(c)(1).

San Francisco Customs asserts that a mistake of law occurred in the instant case and cited HQ 221352, dated May 14, 1990, as support for its position. In HQ 221352, Customs denied relief under 19 U.S.C. 1520(c)(1) on the basis that a factual mistake was not a factor in deciding to classify, or liquidate, imported fabric under item 336.64, TSUS, because there was no indication that the fiber content was a factor that prompted the importer to classify the fabric under item 336.64, TSUS, as woven fabrics, of wool, as opposed to under item 357.15, TSUS as woven upholstery fabrics, of wool. Customs held that a factual mistake did not occur because the "Lucy" fabric would probably have been classified the same way [under item 336.64, TSUS] had it been known that it was a wool/acrylic blend, instead of 100% wool as listed on the invoice.

We find San Francisco's reliance on HQ 221352 to be misplaced based on the record of the instant case. In HQ 221352, both a 100% wool fabric and a 50% wool/50% acrylic blend could have been correctly classified under either of these two TSUS item numbers. On the other hand, in this case, a printer without a printhead mechanism is precluded from being classified under the subheading for a printer with a printhead, because there are two separate and distinct subheadings for such printers. The applicable six-digit subheadings for printers under consideration in the 1994 HTSUS are as follows:

8471 Automatic data processing machines and units thereof; magnetic or optical readers; machines for transcribing data onto data media in coded form and machine for processing such data, not elsewhere specified or included (con.):
8471.92 Other (con.):
Input or output units, whether or not entered with the rest of a system and whether or not containing storage units in the same housing (con.):
Other (con.):
Printer units:
Assembled units incorporating at least the media transport, control and print mechanisms
(Emphasis ours):

8471.92.52 Other...3.7 percent ad valorem

Daisy wheel...
Dot matrix.....
Other.............

Other:

8471.92.72 Other...Free

The correct classification under the 1994 tariff for a printer with a printhead is under subheading 8471.92.52, HTSUS, and a printer without a print mechanism is under subheading 8471.92.72, HTSUS. Moreover, under the 1994 tariff, a printer unit (a dot serial matrix printer [as in Invoice "c"] or a non-impact LED printer [as in Invoice "b"]) without a print mechanism (e.g., a printhead, EP cartridge or a postscript board) would be classified under the same tariff classification subheading of 8471.92.72, HTSUS. These facts make clear that this is not a case as in HQ 221351 where a decisional mistake was made concerning the classification of the merchandise under two different possible TSUS numbers. Rather, it is one where the failure to see the words, "without printhead" on the invoice caused the error in having the printer entered as a printer with a print mechanism. Accordingly, had the entry clerk seen the phrase, "without printhead," the broker would have had no other choice but to classify item 17, the dot matrix serial printer without printhead, under subheading 8471.92.72, HTSUS, because there is no other comparable subheading into which item 17 could have fallen.

We have reviewed the entry documents contained in the file for this case. We find that there is evidence as to the claimed inadvertence on the part of the broker, and it is manifest from the record. We note that, from Invoice "b" of this entry, the protestant correctly classified all printers without print mechanisms under subheading 8471.92.72, HTSUS, at the free rate of duty, in accordance with its Customs classification ruling. This fact demonstrates that the protestant was aware of the proper classification for printers without printheads because it had secured a binding ruling from Customs to that effect (see NY Ruling Letter, NY 893810, dated January 14, 1994), a copy of that ruling was in the broker's file, and the merchandise in Invoice "b" was classified under the correct subheading in accordance with the Customs ruling.

In Invoice "c" of this same entry, item lines 13 through 16 grouped various "printers with printhead" under subheading 8471.92.52, HTSUS, at 3.7% duty. From reviewing Invoice "c" itself, it is clear from the grouping of the printers and the description therein of each printer that the broker had skipped over the last line of the description, "without printhead," of item 17 because the above four items in that grouping of dot matrix serial printers had the same description but for the last line of item 17 (i.e., without printhead), and item 18 was a different product, namely, film black ribbon for plastic cartridge for printer.

The error in this case is the entry clerk's failure to see the words, "without printhead," from item 17. The inadvertence was that after reading through a total of 48 pages of invoices for this entry, the clerk failed to notice that, item 17, albeit a Dot Matrix Printer like items 13 - 16, was "without" a printhead. The clerk's written statement that he did not see these words is corroborated by other factual evidence in the record. First, there was only one tariff classification subheading for printers with print mechanisms and another subheading for printers without print mechanisms. There was no choice in the classification; it was either one subheading or the other. Secondly, the entry clerk was aware of the importer's ruling on subheading 8471.92.72, HTSUS, for printers without print mechanisms when he classified the items in this entry. The ruling was in his files. Thirdly, the broker's employee knew the applicable law because he properly classified printers without printheads in Invoice "b" of this same entry in accordance with the importer's classification ruling. Thus, we must conclude that there is no question that the dot matrix printer in question would have been classified under subheading 8471.92.72, HTSUS, in accordance with importer's binding ruling if the entry clerk had not overlooked the phrase, "without printhead," in item 17. The evidence presented makes it clear that a mistake of fact, rather than one of law, actually occurred because the broker knew the law; it was not a decisional legal mistake in the classification of the printers. Thus, this oversight or inadvertence by the broker is the type of mistake that is correctable under 19 U.S.C.

We find that the 1989 Court of International Trade case of B.S. Livingston & Co., Inc. v. United States, 13 CIT 889 (1989), does not control the outcome of this case because it is factually distinguishable for the following reasons. In Livingston, the plaintiff claimed that a mistake correctable under 19 U.S.C. 1520(c)(2) resulted because the invoice description which clearly indicated that the subject merchandise was API plain end casing, which would have been clearly classifiable only under TSUS item 610.39/0.5% [which provision specifically provides for API casing], had been inadvertently overlooked and the merchandise was classified under TSUS item 610.32/1.9%. Plaintiff indicated that several entries made at this time had been properly entered under TSUS item 610.39 and that its broker overlooked the fact that the invoices were marked API plain casing and entered the material under TSUS item as steel pipes, an incorrect tariff classification, due to inattention and carelessness.

The Livingston court held that where the representative of the importer had a correct invoice description of the merchandise but through "carelessness" improperly classified the merchandise, no relief was in order under 19 U.S.C. 1520(c)(1), as the appropriate remedy was to file a 19 U.S.C. 1514 protest within 90 days of the liquidation of the subject entry. The plaintiff had filed this action on the 91st day after the entry liquidated. The court stated that "it is eminently clear that the determination by the Customs Service that the imported merchandise was classifiable under item 610.32 is a determination of law. Consequently, it is equally clear that plaintiff's allegation of mistake of fact or inadvertence is actually a challenge to the legal conclusion of the Customs Service' (quoting Occidental Oil)." 13 CIT at 892. In Livingston, the customs officer made a judgement at liquidation that the steel pipes fell under the tariff provision originally requested by the importer's broker, namely TSUS 610.32. The court found that the plaintiff in that case was attempting to use section 520(c)(1) to rectify an allegedly incorrect interpretation of law.

In the instant case, although the facts appear on the surface to be quite similar, they are not. Unlike Livingston, where only one type of merchandise (steel pipes) had been entered, the instant entry had 5 different subheadings covering many different items of automatic data processing equipment under Chapters 84 and 85, HTSUS, and typewriter or similar ribbons under Chapter 96, HTSUS. The error of "inadvertence" herein involved the protestant failing to read one phrase in only one line item of one invoice which included 25 line items, and not the entire entry of merchandise as in Livingston, which was covered under one tariff number.

Unlike Livingston, the importer possessed and was aware of the proper classification for printers without print mechanisms, having received a binding ruling from Customs. Protestant cannot have made a "decisional" mistake in the classification of the item 17 because the broker knew the relevant subheading from its ruling letter. The broker's mistake in the classification of item 17 of Invoice "c" stemmed from his failure to see the last line of the full description of the dot matrix serial printer which resulted in the printer without printhead being included in the group of printers with printheads. This type of mistake of fact or inadvertence is the kind of error which Congress had intended section 520(c)(1) to cure.

Unlike Livingston, Customs is in agreement with the protestant that the dot matrix printers without printheads are properly classified under subheading 8471.52.72, HTSUS, as are the non-impact LED printers without EP cartridges (a print mechanism). Unlike Livingston where plaintiff asserts as proof of its inadvertence that several entries made at this time had been properly entered under TSUS item 610.39, here in this protest, other printers without print mechanisms as set forth in Invoice "b" were correctly classified in this same entry by the protestant.

After reviewing the state of the record at the time of the 1520(c)(1) determination, it is apparent that the denial of the reliquidation request was erroneous because the oversight was brought to the attention of the Customs officer with sufficient particularity, but the Customs officer failed to recognize it as correctable error. Also, the written statement from the entry clerk explained the particulars of how the oversight occurred. The record of this protest establishes that a correctable error was responsible for the misclassification.

HOLDING:

The evidence to establish inadvertence is manifest from the record and thus sufficient for Customs to have granted relief under the petition which was originally filed under 19 U.S.C. 1520(c)(1). The protest is GRANTED/APPROVED.

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, with the Customs Form 19, 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. 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, Freedom of Information Act and other public access channels within the 60 days from the date of this decision.
Sincerely,

Director, International Trade
Compliance Division

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