HQ 227257 - Protest No. 4195-96-100018; Protest No. 4195-95-200430; Clerical Error, Mistake of Fact, or other Inadvertence; Claim for Preferential Tariff Treatment under U.S.-Canada Free-Trade Agreement; 19 U.S.C. 1514; 19 U.S.C. 1520(c)(1) - United States International Trade Commision Rulings

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HQ 227257

April 24, 1997

LIQ-9-01-RR:IT:EC 227257 PH

CATEGORY: LIQUIDATION

Port Director of Customs
6747 Engle Road
Middleburg Heights, Ohio 44130
ATTN: Protest Section

RE: Protest No. 4195-96-100018; Protest No. 4195-95-200430; Clerical Error, Mistake of Fact, or other Inadvertence; Claim for Preferential Tariff Treatment under U.S.-Canada Free-Trade Agreement; 19 U.S.C. 1514; 19 U.S.C. 1520(c)(1)

Dear Sir or Madam:

The above-referenced protest was forwarded to this office for further review. We have considered the evidence provided and the arguments made by the protestant, as well as Customs records relating to this matter. Our decision follows.

FACTS:

According to the file and Customs records, between November 21, 1991, and November 19, 1993, the protestant entered the merchandise under consideration in six (6) entries. The details of the entries and the merchandise under consideration in these entries are set forth below.

Entry ...347-5
Entry date: November 21, 1991.
Liquidation date: November 14, 1994 (liquidation extended twice with reason for liquidation being code 1 (extension of liquidation is not at issue in this case). Merchandise claimed to have been erroneously classified: Part No. A0370401. Blanket Certificate of Origin dated January 10, 1992, for this part for 1991. Original classification for the merchandise: 8517.90.10008; corrected classification: CA8517.90.05005, resulting in a claimed reduction in duty of $163.37. "Run date" of "Entry Correction Report" February 24, 1995.

Entry ...519-7
Entry date: November 20, 1992.
Liquidation date: November 14, 1994 (liquidation extended once with reason for liquidation being code 1 (extension of liquidation is not at issue in this case). Merchandise claimed to have been erroneously classified: Part No. B0227298. Blanket Certificates of Origin dated December 22, 1992, for this part for 1992, and June 17, 1993, for this part for 1993. Original classification for the merchandise: 8517.90.40002; corrected classification: CA8517.90.50000, resulting in a claimed reduction in duty of $76.71. "Run date" of "Entry Correction Report" September 10, 1993.

Entry ...651-2
Entry date: November 26, 1992.
Liquidation date: November 18, 1994 (liquidation extended once with reason for liquidation being code 1 (extension of liquidation is not at issue in this case). Merchandise claimed to have been erroneously classified: Part No. A0355822. Blanket Certificate of Origin dated January 10, 1992, for this part for 1991. Original classification for the merchandise: 8517.90.05005; corrected classification: CA8517.90.40002, resulting in a claimed reduction in duty of $811.21. "Run date" of "Entry Correction Report" September 8, 1993.

Entry ...413-1
Entry date: September 14, 1993.
Liquidation date: January 14, 1994.
Merchandise claimed to have been erroneously classified: Part No. A0399741. Undated blanket Certificate of Origin for this part for 1993. Original classification for the merchandise: 8517.90.4000; corrected classification: CA8517.90.1000, resulting in a claimed reduction in duty of $143.47. "Run date" of "Entry Correction Report" July 25, 1994.

Entry ...958-4
Entry date: November 4, 1993.
Liquidation date: October 28, 1994.
Merchandise claimed to have been erroneously classified: Part Nos. B0222998, B0231499, and B0231676. Blanket Certificates of Origin for part B0222998 dated December 22, 1992, for 1992, August 13, 1993, for 1993, and February 3, 1994, for 1994. Blanket Certificates of Origin for part B0231676 dated October 28, 1992, for 1992, September 29, 1993, for 1993, and January 15, 1994, for 1994. There is no Certificate of Origin for part B0231499. Original classification for part B0222998: 9801.00.1085; corrected classification: CA8517.90.0500, resulting in a claimed reduction in duty of $1.17. Original classification for part B0231499: 8517.90.0500; corrected classification: CA8531.80.0040, resulting in a claimed reduction in duty of $25.96. Original classification for part B0231676: 8529.90.5000; corrected classification: CA8529.90.5000, resulting in a claimed reduction in duty of $588.80. "Run date" of "Entry Correction Report" July 27, 1994.

Entry ...802-1
Entry date: November 19, 1993.
Liquidation date: November 14, 1994 (this date is for the initial liquidation; a second liquidation effecting a refund of $203.49 in duties occurred May 19, 1995; the timeliness or whether the second liquidation was voidable (see 19 U.S.C. 1501) is not at issue in this case). Merchandise claimed to have been erroneously classified: Part Nos. B0233418 and B0233423. Blanket Certificates of Origin for both parts dated June 17, 1993, for 1993. Original classification for part B0233418: 8517.90.0500; corrected classification: CA8517.90.0500, resulting in a claimed reduction in duty of $49.84. Original classification for part B0233423: 8517.90.0500; corrected classification: CA8517.80.0500, resulting in a claimed reduction in duty of $34.14. "Run date" of "Entry Correction Report" July 27, 1994.

In the case of each of the last two entries (...958-4 and ...802-1), the protestant filed with Customs letters dated July 27, 1994 (date-stamped as received by Customs on August 1, 1994), stating that the protestant's records indicated that the entries were not liquidated and that the duty amounts for the entries were incorrect. Submitted with these letters were "Entry Correction Report[s]", describing the original classifications and proposed corrected classifications (the same as above for these entries, with the same "run date" for the reports), as well as other documentation (entry and invoice documents).

By letter of March 28, 1995 (received by Customs March 30, 1995), the protestant requested reliquidation of the above-described entries under 19 U.S.C. 1520(c) "to correct a mistake of fact." According to this letter, "[a]t the time of entry the fact that this merchandise qualified under the U.S.-Canada Free Trade Agreement was unknown [and] [t]herefore the CA indicator was not applied to these entries." With this letter were submitted "Entry Correction Reports" (described above). According to the letter, copies of the appropriate Certificates of Origin had been filed with Customs previously and were available upon request.

Customs denied this request for reliquidation on November 29, 1995. In the letter of denial the reason for denial was stated to be that "[t]he applicability of 520(c) has not been documented (what was the mistake of fact?)."

On January 24, 1996, the protestant filed the protest under consideration against the denial of the request for reliquidation. The arguments made in the protest are as follows:

We requested reliquidation of the above referenced entries under [s]ection 520(c) of the Tariff Act of 1930 as amended to correct a mistake of fact. The mistake of fact was based on the complexity of the bill of materials the facts that the articles qualified under the provisions in the FTA agreement was unknown. Therefore the CA indicator was not applied to this entry. [Emphasis in original.]

In [Computime, Inc. v. United States, 9 CIT 553, 622 F. Supp. 1083 (1995)] mistake of fact has been denied as "a mistake which takes place when some fact which indeed exists is unknown, or a fact which is thought to exist, in reality does not exist" (emphasis added).

Therefore, the facts that the merchandise was qualifiable for FTA treatment did not exist at the time of entry.

With the protest, the protestant submitted "Entry Correction Reports" (the basis for the entry-by-entry description above) and Certificates of Origin.

Further review was requested and granted.

ISSUE:

May relief be granted under 19 U.S.C. 1520(c)(1) in this protest?

LAW AND ANALYSIS:

Initially, we note that, with one exception, 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), were timely filed. The exception is in regard to entry ...413-1, which was liquidated on January 14, 1994, for which the request for reliquidation (filed on March 30, 1995) was untimely (filed more than 1 year after liquidation). Since the request for reliquidation for this entry was untimely, the protest must be DENIED in regard to this entry.

Under 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 and adverse to the importer, when certain conditions are met. Section 1520(c)(1) has frequently been interpreted by the Courts. It has been stated that "[a] clerical error is a mistake made by a clerk or other subordinate, upon whom devolves no duty to exercise judgement, in writing or copying the figures or in exercising his intention" (see PPG Industries, Inc., v. United States, 7 CIT 118, 124 (1984), and cases cited therein). It has been stated that: "[M]istakes of fact occur in instances where either (1) the facts exist, but are unknown, or (2) the facts do not exist as they are believed to [and] [m]istakes of law, on the other hand, occur where the facts are known, but their legal consequences are not known or are believed to be different than they really are" (Executone Information Systems v. United States, 96 F. 3d 1383, 1386 (Fed. Cir. 1996) (emphasis in original), citing Hambro Automotive Corporation v. United States, 66 CCPA 113, 118, C.A.D. 1231, 603 F. 2d 850 (1979); see also, Degussa Canada Ltd. v. United States, 87 F. 3d 1301 (Fed. Cir. 1996)). Inadvertence has been defined as "an oversight or involuntary accident, or the result of inattention or carelessness, and even as a type of mistake" (Aviall of Texas, Inc. v. United States, 70 F. 3d 1248, 1250 (Fed. Cir. 1995), citing Hambro, supra).

The conditions required to be met under 19 U.S.C. 1520(c)(1) 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, 496 F. Supp. 1326 (1980); see also, Computime, Inc. v. United States, 9 CIT 553, 555, 622 F. Supp. 1083 (1985) (cited by the protestant, see above), and Concentric Pumps, Ltd. v. United States, 10 CIT 505, 508, 643 F. Supp. 623 (1986)).

Basically, the protestant in this case claims that the entries should have been reliquidated because the bill of materials for the merchandise was so complex that it was not known that the articles qualified for preferential tariff treatment under the U.S.-Canada Free-Trade Agreement and, therefore, the merchandise was classified without the "CA" prefix. The protestant claims that the alleged error was due to a mistake of fact, (i.e., "... where either (1) the facts exist, but are unknown, or (2) the facts do not exist as they are believed to ..." (Executone, supra); see also, ITT Corp. v. United States, 812 F. Supp. 213 (CIT 1993), reversed, 24 F. 3rd 1384 (Fed. Cir. 1994) ("... the document preparer simply understood the nature of the merchandise to be other than what it was [and] [t]hus, a mistake of fact occurred" (812 F. Supp. at 216); although the Court of Appeals reversed, it stated about the CIT finding of a mistake of fact: "[the finding] is amply supported by the record and not clearly erroneous" (24 F. 3d at 1388))).

Under 19 U.S.C. 1520(c)(1), the clerical error, mistake of fact, or other inadvertence not amounting to an error in the construction of a law must be "manifest from the record or established by documentary evidence." The alleged error in this case is not manifest from the record (see ITT, 24 F. 3d at 1387, "... manifest from the record [means] apparent to Customs from a facial examination of the entry and the entry papers alone, and thus requir[ing] no further substantiation"). In ITT, the Court stated that "[m]istakes of fact that are not manifest from [the] record ... must be established by documentary evidence" (id.).

In this case the only explanation given as to how or why the alleged error occurred is that the bill of materials was "complex." However, there is documentary evidence in the file that the protestant did know the origin of the merchandise under consideration to be Canada prior to the expiration of the liquidation/protest period. That is, in the case of entry ...519-7, the "run date" of the "Entry Correction Report", showing the alleged correct origin and classification of the merchandise, (September 10, 1993) was prior to the date of liquidation (November 14, 1994). The same is true of entry ...651-2 (respective dates September 8, 1993, and November 18, 1994), entry ...958-4 (respective dates July 27, 1994, and October 28, 1994), and entry ...802-1 (respective dates July 27, 1994, and November 14, 1994). In the case of the last two entries (entry ...958-4 and ...802-1), there were also letters dated and filed prior to liquidation submitted by the protestant to Customs advising Customs of the alleged correct origin and classification of the merchandise. In the case of each of the entries (including the above entries and entry ...347-5), Certificates of Origin specifically identifying the merchandise under consideration and stating the origin of the merchandise to be Canada were signed prior to the date of liquidation of the entries (see FACTS portion of this ruling; in the case of entry ...347-5, the Certificate of Origin is dated January 10, 1992, and the date of liquidation is November 14, 1994).

In NEC Electronics U.S.A., Inc. v. United States, 13 CIT 214, 217-218, 709 F. Supp. 1171 (1989), the Court of International Trade held in a case such as this that:

In the action at bar, it is apparent that plaintiff's representative had actual knowledge of the nature of the goods, as well as the existence of item 807 [Tariff Schedules of the United States (TSUS), under which duty-free treatment had been sought under 19 U.S.C. 1520(c)(1)], prior to the expiration of the liquidation/protest period. Such knowledge distinguishes the instant matter from C.J. Tower [C.J. Tower & Sons v. United States, 68 Cust. Ct. 17, C.D. 4327, 336 F. Supp. 1395 (1972), affirmed 61 CCPA 90, 499 F. 2d 1277 (1974)] and also puts the plaintiff in an even weaker position than its counterpart in Concentric Pumps [supra]. In short, the plaintiff has no remedy under 19 U.S.C. ? 1520(c)(1). [See also footnote 4 in NEC Electronics, 13 CIT at 217, in which the Court stated: "Plaintiff's argument that, at the time of importation, neither it nor Customs had knowledge that the semiconductors contained die of United States origin is of no avail. Both sides possessed this information many months before liquidation ... and the plaintiff thus had ample time to properly contest the classification. ...] [Bold emphasis added in each instance.]

Not only does the evidence in this case show that the protestant and Customs possessed information before liquidation showing the alleged origin of the merchandise under consideration (except in the case of entry ...347-5, in which case the evidence shows the plaintiff possessed such information prior to liquidation), but there is no evidence in the file sufficient to demonstrate or establish a mistake of fact remediable under 19 U.S.C. 1520(c)(1). See Executone, supra, 96 F. 3d at 1388-1390, in which the Court found that a mistake of fact within section 1520(c)(1) had been alleged, but that relief under section 1520(c)(1) was unavailable because Executone had not "... sufficiently demonstrated, rather than merely alleged, a clerical error, mistake of fact, or other inadvertence' as those terms are used in section 1520(c)(1)" (emphasis added). On the basis of NEC Electronics, supra, and in the absence of any such evidence, we have no choice but to DENY the protest as to the entries for which the request for reliquidation under section 1520(c)(1) was timely (entries ...347-5, ...519-7, ...651-2, ...958-4, and ...802-1).

HOLDING:

Relief may NOT be granted under 19 U.S.C. 1520(c)(1) for the reasons given in the LAW AND ANALYSIS portion of this ruling. The protest is DENIED.

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, with the Customs Form 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 Rulings Module in ACS and the public via the Diskette Subscription Service, Freedom of Information Act, and other public access channels.

Sincerely,

Director, International

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