HQ 227094 - Application for further review of Protest No. 2704-96-101149; 19 U.S.C. ?1520(c)(1); 19 U.S.C. ?1313; Drawback; Mistake of fact - United States International Trade Commision Rulings

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HQ 227094

February 14, 1997

LIQ-9-01-RR:IT:EC 227094 IOR

CATEGORY: LIQUIDATION

Port Director
U.S. Customs Service
Attn: Protest Section
300 South Ferry Street
Terminal Island CA 90731

RE: Application for further review of Protest No. 2704-96-101149; 19 U.S.C. ?1520(c)(1); 19 U.S.C. ?1313; Drawback; Mistake of fact

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:

On January 14, 1990, the protestant entered 40,032 yards of cotton sheeting. Of the sheeting, on May 9, 1990, 19, 447 yards were delivered by protestant to Lee Limited Co. ("Lee"), who in turn delivered the sheeting to Patty Patterns, Inc. ("Patty"), on October 15, 1992, for export. The sheeting was exported on November 28, 1992. The protestant filed entry no. 350-xxxxx91-3 for same condition drawback on November 12, 1992. On December 3, 1992, Customs requested proof of export to verify the claim for drawback. The protestant was given until approximately December 31, 1992 to provide the requested information. The requested information was received by Customs on December 16, 1992. Subsequently, on January 8, 1993, Customs requested that protestant provide 1) a Certificate of Delivery on CF 331 from the protestant (drawback claimant) to the shipper or exporter shown on the export bill of lading document, and 2) an endorsement signed by the exporter stating that the drawback claimant is authorized to claim drawback and receive payment. Protestant was provided 20 days in which to submit the requested information to Customs, and was notified that the failure to provide the information within the 20 day period may result in a denial of drawback.

On November 3, 1994, protestant was notified that in no less than 10 days, protestant's drawback claim will be liquidated with no payment of drawback due to protestant's failure to provide the documents requested in the January 8, 1993 notice. The November 3, 1994 notice specified that unless the documents were received, the claim would be considered abandoned. On January 20, 1995, Customs liquidated the drawback claim without drawback being allowed. On December 11, 1995, the protestant filed a claim under 19 U.S.C. ?1520(c)(1), requesting "administrative review" under 19 CFR 173.4 and section 520(c), and submitted the requested Certificate of Delivery and blanket declaration exporter affidavit, requesting that the drawback entry be reliquidated with a duty refund. Customs denied the section 1520(c) petition on January 29, 1996 as being untimely filed as the Certificate of Delivery was filed more than three years after exportation of the merchandise.

This protest was filed on April 1, 1996, against your denial of the request for reliquidation of the drawback claim pursuant to section 1520(c)(1). As grounds for the protest, the protestant includes the following in the "Detailed Reasons For Protest" section:

It was a clerical error that the certification of delivery was not submitted on time. I apologize that we did not submit the CD on time. It was our mistake regardless of any problem I may have had with the exporter. The problem was finally resolved in November of last year. Therefore, I submitted the certification of delivery and filed it along with the administrative review under 520C.

I am not requesting an extension for this drawback entry. I would like to be considered for administrative review under Part 173.4 sec. 520C which states that this must be filed within 1 (one) year after the date of liquidation....

I admit that it was in fact our mistake that a certification of delivery was not submitted on time which was why this drawback entry liquidated on 01-20-95 with no duty refund.

The protest incorporates the section 1520(c)(1) claim, which includes the following:

There was a missing Certificate of delivery of imported merchandise which is attached herewith as well as a blanket declaration exporter affidavit.

Please review this case and reliquidate this entry with a duty refund in the amount of US $1,393.03.

It is your position that a section 1520(c) petition does not extend the 3 year filing period of any documents required to complete a claim for drawback.

ISSUE:

Whether the petition under 19 U.S.C. ?1520(c)(1) should be granted.

LAW AND ANALYSIS:

Initially we note that this protest was timely filed pursuant to 19 U.S.C. ?1514(c)(3). The date of decision protested was January 29, 1996, and the protest was filed on April 1, 1996. In addition, the refusal to reliquidate an entry under ?1520(c)(1) is a protestable matter pursuant to 19 U.S.C.

19 U.S.C. ?1514 sets forth the proper procedure for an importer to protest the refusal to pay a claim for drawback 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, or the date of the decision as to which protest is made. Otherwise, the drawback decision is final and conclusive.

19 U.S.C. ?1520(c)(1) is an exception to the finality of 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)).

Petitions under section 1520(c)(1) relating to the denials of drawback claims would not necessarily generally meet the requirement that the clerical error, mistake of fact, or other inadvertence be "adverse to the importer." Under 19 CFR 191.73, it is the exporter that is deemed entitled to receive drawback, unless the manufacturer or producer reserves the right to claim drawback and provides evidence that such reservation was made with the knowledge and consent of the exporter. However, in many other instances, the drawback claimant would be the exporter only of the merchandise, or the manufacturer or producer. In those situations, the drawback claimant would not meet the requirements of section 1520(c)(1), because the denial of drawback would not be "adverse to the importer."

Further, the plain language of the statute specifies that the remedy under section 1520(c) is "reliquidation" of an entry. In this case, the protestant seeks an extension of the time allowed to complete it's drawback claim in order to file with Customs its Certificate of Delivery and exporter's affidavit. While reliquidation may be the ultimate conclusion sought by the protestant, the only immediate relief that could be provided to the protestant is an extension of the time to complete the drawback claim. Customs Regulations 191.61 (19 CFR 191.61), provides the following regarding time for filing a drawback claim:

A drawback entry and all documents necessary to complete a drawback claim..., shall be filed or applied for, as applicable, within 3 years after the date of exportation of the articles on which drawback is claimed.... Claims not completed within the 3-year period shall be considered abandoned. No extension will be granted unless it is established that a Customs officer was responsible for the untimely filing.

The foregoing regulation parallels 19 U.S.C. ?1313(r)(1), as amended by section 632, title VI - Customs Modernization, Pub. L. No. 103-182, the North American Free Trade Agreement Implementation ("NAFTA") Act (107 Stat. 2057), enacted December 8, 1993. Under 19 CFR 191.141(g)(2), upon review of a drawback claim, if the claim is determined to be incomplete, the liquidator is required to notify the claimant of an opportunity to amend the claim prior to denial, and the claimant is required to respond in writing within 20 days of Customs notice.

In this case, the subject merchandise was exported on November 28, 1992, and as of November 28, 1995, the documents required to complete the claim had not been filed with Customs, although notice of the missing documents was given to the protestant on January 8, 1993. The documents were required in accordance with 19 CFR 191.62(b)(2), 191.65 and 191.66. The documents were not filed with Customs until January 29, 1996, over three years after the exportation of the merchandise on which drawback was claimed. There is no allegation that a Customs officer was responsible for the untimely filing. Based on the language of 19 CFR 191.61, the protestant requires an extension of time in which to submit the documents to complete the drawback claim. An extension of time is not a remedy available under 19 U.S.C. ?1520(c)(1).

The sole remedy provided under 19 U.S.C. 1520(c)(1) is reliquidation of an entry. An error, regardless of its nature, is outside the scope of section 1520(c)(1) if the requested remedy is something other than the act of reliquidation of an entry. See, HQ 224131, dated October 30, 1992. In HQ 224131, the protestant was requesting a remedy that Customs does not have the authority to provide under section 1520(c)(1), i.e. to allow the importer to file updated cost submissions, after the entries had already been liquidated. Similarly, in this case, the protestant requests a remedy that Customs does not have the authority to provide under section 1520(c)(1), i.e. to file documents after the time limit for filing had expired.

Finally, the protestant has failed to establish any clerical error, mistake of fact or other inadvertence caused the failure to complete a claim within the statutory time limit. As stated above, a mistake of fact must be manifest from the record or established by documentary evidence. 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). In ITT Corp. v. United States, 24 F.3d 1384, 1387 (Fed. Cir. 1994), the court found that reliquidation under 19 U.S.C. ?1520(c) requires both notice and substantiation. Notice of a clerical error, mistake of fact, or other inadvertence includes asserting the existence of a clerical error, mistake of fact, or other inadvertence "with sufficient particularity to allow remedial action." A mistake of fact must be manifest from the record or established by documentary evidence. See, id., ("Mistakes of fact that are not manifest from [the] record ... must be established by documentary evidence"). Clearly, in this case, there is no mistake of fact manifest from the record. Although the protestant has submitted the missing documents, the protestant has failed to explain in any way why they were not submitted in a timely manner, or prior to the expiration of the three year period. Other than simply stating that the protestant had made a mistake, no mistake, clerical error or inadvertence is alleged by the protestant. Further, the protestant has not demonstrated how any alleged mistake was a mistake of fact rather than a mistake of law.

HOLDING:

There is insufficient evidence to show that the denial of the petition under 19 U.S.C. ?1520(c)(1) was improper.

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,

Director,

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