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HQ 227306




March 12, 1997

LIQ-9/LIQ-9-01-RR:IT:EC 227306 PH

CATEGORY: LIQUIDATION

Area Port Director of Customs
9901 Pacific Highway
Blaine, Washington 98230
ATTN: Protest Section

RE: Protest 3004-96-100620; Claim for Preferential Tariff Treatment under NAFTA; 19 U.S.C. 1514; 19 U.S.C. 1520(c)(1); 19 U.S.C. 1520(d); 19 CFR 181.31

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 on behalf of the importer, as well as Customs records relating to this matter. Our decision follows.

FACTS:

The protestant states that on July 10, 1995, a Freightliner truck was "exported to Canada ... for alteration/addition of box by Ty-Crop." In the file there is a Certificate of Registration (Customs Form (CF) 4455), with the protestant named as the party to whom the certified form is to be mailed, listing as the article exported "Freightliner" and stating a Vehicle Identification Number (VIN) number. The block for signature of a Customs officer is signed. There are also copies of illustrations and specifications for truck boxes indicated to be available from Ty-Crop Manufacturing Ltd. of British Columbia, Canada.

In the file there is a letter dated July 11, 1995, from an official in Freightliner Corporation of Portland, Oregon, stating that "1989 Freightliner Serial # [the VIN stated on the CF 4455, see above] was built at the Freightliner Motor Truck Plant in Mt. Holly, North Carolina. USA." There is a Washington State Vehicle Certificate of Title for a vehicle with the same VIN, with an explanation of the codes in the VIN (the first number indicates manufacturer, and the manufacturer for this VIN is indicated to be Freightliner Corporation, U.S.A.).

In the file there is a NAFTA Certificate of Origin, dated August 16, 1995, for a "Mounted Ty-Crop Forage Box", HTSUS classification numbers 9802.00 and 8705.90, with Ty-Crop Manufacturing Ltd. of British Columbia listed as the producer and the protestant listed as the exporter and importer. There is an "Assembler's Declaration for HTSUS Subheading 9802.00.80", dated August 17, 1995, and stated to have been prepared by Ty-Crop, declaring that the 1989 Freightliner truck under consideration (VIN number listed) was assembled in part from a product of the United States (the truck, with VIN number, is listed) by the installation of a "Ty-Crop 20' truck box/forage - rear unload, serial [number stated] together with hydraulic wet kit."

According to the file, on August 30, 1995, the protestant imported the 1989 Freightliner truck with the Ty-Crop forage box. The merchandise was entered on August 30, 1995. The Entry Summary (Customs Form 7501) for the entry, dated September 13, 1995, stated the classification of the merchandise as subheadings CA9802.00.8065 and CA8705.90.0000, Harmonized Tariff Schedule of the United States (HTSUS), with duty at the rate of 1.1% ($116.51) on the value of the "new box and labor."

On September 28, 1995, Customs sent the protestant a Request for Information (CF 28) regarding the entry under consideration. Specifically, Customs stated:

You have made a claim under NAFTA. In order to verify this claim it must be documented that the articles originate under NAFTA as defined in General Note 12 of the Harmonized Tariff of the U.S. The required documents are as follows: 1. NAFTA Certificates of Origin for the truck and the truck box, 2. Documents from the manufacturer of the vehicle and the manufacturer of the truck box which verify that there is a regional value content of not less than 50% under the net cost method as defined by the [NAFTA]. ...

According to the protestant, on October 25, 1995, a discussion took place between Customs and the protestant's broker regarding the applicability of subheading 9802.00 to this transaction. The protestant states that the position of Customs in this regard was that "... the processing in Canada went beyond an [a]ssembly' step as envisioned in HTS# 9802.00, and that manufacturing/addition of the box created a new article of commerce dutiable under HTSUS 8704.22.5080 ...." The protestant specifically states, in this regard: "We concur with Customs as to the applicability of HTS# 8704.22.50. This protest does not challenge this tariff item number." (Emphasis in original.)

On December 13, 1995, Customs issued a Notice of Action (CF 29) to the protestant. In this notice Customs stated:

The United States Customs Service has completed the verification of your claim for preferential tariff treatment under the [NAFTA]. Due to the non-receipt of the NAFTA Certificate of Origin and the required substantiating documents, this office denies your NAFTA claim. This notice constitutes official notification of a negative determination of origin. The effective date is 30 days from the date of this notice.
The merchandise is as follows [description of truck with box].
The classification under the [HTSUS] is advised as follows: 8704.22.50.80 25%, value $30,592 USD.
You have the right to appeal this determination of origin pursuant to 19USC1514 and Part 174 of the Customs Regulations (19 CFR Part 174) within 90 days after the liquidation of the entry listed in this notice. A bulletin notice of liquidation will be posted at the Customs district office where the goods were entered on the date the entry was liquidated. Appeal rights will be allowed for 90 days after the date of posting of the bulletin notice of liquidation. Appeals filed prior to liquidation will be denied as untimely. The United States Customs Service is willing to review information provided prior to the conclusion of this 30 days notice. This information should include the following: NAFTA Certificate of Origin, NAFTA information from Ty-Crop Manufacturing for the truck box, regional value content statement from the manufacturer of the truck, purchase price for the truck alone, etc.

The entry was liquidated in accordance with the above (with duties in the amount of $7,648) on February 2, 1996.

By letter to Customs of May 23, 1996 (received by Customs on May 25, 1996), the broker for the protestant requested that the entry under consideration be "reliquidated with a full refund based on a revised NAFTA presented by [the importer]." According to this letter (described in the protest as a "[s]ection 520(c)(1), T.A. application"):

... [T]he NAFTA claim filed at the time of entry was denied since [the importer] was unable to present a statement from the truck manufacturer that the truck qualified for special tariff treatment by meeting the regional value content. [The importer] now has that statement as well as the NAFTA from Ty-Crop, on which [the importer] has revised their original [NAFTA] Certificate. ...
[The classification] [a]t the time of original entry ... was incorrect due to the work that had to be done on the truck. Proper entry should have been under H.S. CA8704.22.5080, free of duty and MPF.

Included with the above letter was a March 15, 1996, letter from Freightliner of Vancouver Ltd. confirming that the truck under consideration "was built at the Freightliner Motor Truck Plant in Mt. Holly, North Carolina, USA and is qualified for preferential tariff treatment under the Canada/USA Free Trade Agreement [and also] qualifies for the [NAFTA] by meeting the requirements of having at least 50% regional value contents under the net cost method." Also included with the letter was a NAFTA Certificate of Origin by Ty-Crop Manufacturing Ltd. for the truck under consideration, with the box described. The date of this Certificate is August 30, 1995, but according to the protestant, this NAFTA Certificate was provided to the protestant on April 24, 1996, and that date, indicated to be the date of Facsimile transmission, appears on the copy in the file.

There is a May 30, 1996, hand-written notation on the May 23, 1996, letter described above stating:

Protest under 520d denied. Ref: Trade Notice No. 57 and Fact Sheet No. 38. Protest was not filed within the period of 90 days after liquidation. Protest denied.

On June 25, 1996, the protest under consideration was filed, "against Customs refusal to reliquidate this entry pursuant to Section 520(c)(1), Tariff Act of 1930, as amended" (the arguments in the protest concern the applicability of 19 CFR 181.31, promulgated under 19 U.S.C. 1520(d), but reference to 19 U.S.C. 1520(c)(1) is also made, although no specific allegation is made or evidence provided regarding a clerical error, mistake of fact, or other inadvertence not amounting to a mistake of law).

Further review was requested and granted.

ISSUE:

May the protest under consideration be granted.

LAW AND ANALYSIS:

Initially, we note that denial of a request for reliquidation under 19 U.S.C. 1520(c)(1) or of a post-importation duty refund claim under 19 U.S.C. 1520(d) is protestable under 19 U.S.C. 1514 (see section 1514(a)(7) and Treasury Decision (T.D.) 95-68 (Customs Bulletin & Decisions of September 20, 1995, vol. 29, no. 38, pages 12-13)). We note also that the protest under consideration was filed within 90 days of the date of the May 30, 1996, denial of the May 23, 1996, letter from the broker of the protestant seeking reliquidation of the entry under consideration and, therefore, was timely (see 19 U.S.C. 1514(c)(3)(B) and 19 CFR 174.12(e)(2)). We note that the May 23, 1996, letter from the broker was timely as either a request for reliquidation under section 1520(c)(1) (within 1 year of liquidation) or a post-importation duty refund claim under section 1520(d) (within 1 year of importation).

Although no specific allegation is made or evidence provided regarding a clerical error, mistake of fact, or other inadvertence not amounting to a mistake of law in the protest, we are briefly discussing the requirements for reliquidation under 19 U.S.C. 1520(c)(1) below. Under section 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, 1249 (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 not amounting to a mistake of law 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), and Concentric Pumps, Ltd. v. United States, 10 CIT 505, 643 F. Supp. 623 (1986)).

Since no clerical error, mistake of fact, or other inadvertence not amounting to a mistake of law is manifest from the record or established by documentary evidence (see ITT Corp. v. United States, 24 F. 3d 1384, 1387 (Fed. Cir. 1994), reversing the CIT decision at 82 F. Supp. 213 (1993)) in this case, relief may not be granted under 19 U.S.C. 1520(c)(1). In the absence of any such evidence, we are guided by the Court of Appeals ITT decision according to which--

... [A] prudent importer would submit all its supporting documentary evidence along with its timely notice alleging a mistake of fact before Customs' consideration in order to facilitate a prompt and favorable decision [and as] [t]he [CIT] correctly notes ... "a party who waits past the time of filing its ... [section] 1520(c)(1) request to file supporting documentation risks an adverse decision by Customs in the interim" [24 F. 3d at 1388.]

Therefore, if the May 23, 1996, letter from the broker for the protestant is treated as a request for reliquidation under 19 U.S.C. 1520(c)(1), it was properly denied.

Under 19 U.S.C. 1520(d):

Notwithstanding the fact that a valid protest was not filed, the Customs Service may, in accordance with regulations prescribed by the Secretary, reliquidate an entry to refund any excess duties paid on a good qualifying under the [NAFTA] rules of origin ... for which no claim for preferential tariff treatment was made at the time of importation if the importer, within 1 year after the date of importation, files [a claim meeting certain conditions]" (emphasis supplied).

The conditions required to be met for a claim filed under section 1520(d) are that the claim must include a written declaration that the good qualified under the NAFTA rules of origin at the time of importation, copies of all applicable NAFTA Certificates of Origin, and such other documentation relating to the importation of the goods as is required by Customs.

The Customs Regulations promulgated under this provision are found in 19 CFR 181.31 through 181.33 (see also General Notice on Post-Importation Duty Refund Claims Under the NAFTA, January 29, 1997, Customs Bulletin and Decisions, vol. 31, no. 5, page 1). As in the statute (see underlined material above), the Customs Regulations require as a condition precedent to relief under this provision that "no claim for preferential tariff treatment on that originating good was made at that time [i.e., when the good was imported into the United States]" (19 CFR 181.31).

In this case the above condition precedent to relief under 19 U.S.C. 1520(d) is not met. A claim for preferential tariff treatment was made at the time of importation. Therefore, if the May 23, 1996, letter from the broker for the protestant is treated as a post-importation duty refund claim under section 1520(d), it was properly denied.

We note that this decision is consistent with the General Notice on Post-Importation Duty Refund Claims Under the NAFTA, published in the January 29, 1997, Customs Bulletin and Decisions, vol. 31, no. 5, page 1, and Office of Trade Operations FACT SHEET 38, May 23, 1995 (5143071). We note also that the Notice of Action issued to the importer in this case specifically advised the importer that the determination of origin was appealable, within 90 days of liquidation, under 19 U.S.C. 1514 and 19 CFR Part 174.

HOLDING:

The request for reliquidation made in the May 23, 1996, letter from the broker of the importer was properly denied, whether treated as a request for reliquidation under 19 U.S.C. 1520(c)(1) or as a post-importation duty refund claim under 19 U.S.C. 1520(d). 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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