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HQ 560285




March 24, 1997

CLA-2 RR:TC:SM 560285 JML

CATEGORY: CLASSIFICATION

Port Director
Miami International Airport
6601 Northwest 25th Street
Miami, FL 331202-5280

RE: Application for Further Review of Protest No. 5201-96-100613; silk sportcoats; reliquidation; 19 U.S.C. 1520(c); mistake of fact; Andean Trade Preference Act.

Dear Sir:

The above-referenced protest was forwarded to this office for further review. We have considered the points raised by your office and the protestant. Our decision follows.

FACTS:

The record indicates that protestant, Oxford Industries, Inc., made 9 entries of Colombian-origin men's silk sportcoats at Miami, Florida from September 29, 1994, to November 29,1994. At the time the goods were entered, protestant claimed they were eligible for duty-free treatment in accordance with the Andean Trade Preference Act ("ATPA"), 19 U.S.C. ?3202. Subsequently, your office determined that the goods were classifiable under subheading 6203.39.4040 of the 1994 Harmonized Tariff Schedule of the United States ("HTSUS"), but were not eligible for duty-free treatment under the ATPA because a "J*" appeared in the "Special" subcolumn, indicating that if subject to textile agreements, goods classified under such subheading are precluded from duty-free treatment. Silk apparel classifiable in subheading 6203.39.4040, HTSUS, was subject to textile agreements and assigned textile category designation 733. Accordingly, the entries were liquidated on February 17, 1995 at a duty rate of 6.9% ad valorem. Protestant paid all liquidated duties due on March 6, 1995.

On February 12, 1996, protestant filed a petition requesting a reliquidation of the entries under 19 U.S.C. 1520(c)(1), alleging a mistake of fact was made concerning the eligibility of the silk sportcoats for duty-free treatment under the ATPA. The basis for the petition was that the HTSUS was modified to delete subheading 6203.39.40 and supplant it with subheading 6203.39.50, which indicates in the "Special" subcolumn that goods classifiable therein are unconditionally eligible for ATPA treatment. Eligibility for such treatment, however, was effective for goods entered or withdrawn from warehouse after January 1, 1995. On May 3, 1996, your office denied protestant's request for reliquidation of the entries, finding that the goods were ineligible for duty-free treatment under the ATPA. We note that the May 3, 1996 denial letter incorrectly stated that "the entries were liquidated as entered" (the entries were entered duty-free under the ATPA, when, in fact, the entries were liquidated fully dutiable). On July 26, 1996, protestant timely filed this protest contesting Customs' denial of reliquidation under 19 U.S.C. 1520(c)(1).

Protestant argues that Customs mistakenly believed that the goods in question were not eligible for duty-free treatment under the ATPA, since the HTSUS in effect in 1994 indicates that they were not eligible, whereas the HTSUS in effect in 1995, which proportedly should have been used to ascertain the applicable rate of duty upon liquidation of the entries, indicates that the goods are eligible for duty-free treatment. Protestant contends that the alleged mistake concerning the silk apparel's eligibility for duty-free treatment under the ATPA is a mistake of fact correctable under 19 U.S.C. 1520(c)(1).

ISSUE:

Whether a mistake of fact existed concerning the silk apparel's eligibility for duty-free treatment under the ATPA.

LAW AND ANALYSIS:

Under ?514(a), Tariff Act of 1930, as amended (19 U.S.C. "the refusal to reliquidate an entry under section 1520(c) of [title 19]." ?520(c)(1), Tariff Act of 1930, as amended (19 U.S.C. ?1520(c)(1)) gives Customs authority to:

...reliquidate an entry to correct....(1) a clerical error, mistake of fact, or other inadvertence not amounting to an error in the construction of a law, adverse to the importer and manifest from the record or established by documentary evidence, in any entry, liquidation, or other customs transaction, where the error, mistake, or inadvertence is brought to the attention of [Customs] within one year after the date of liquidation or exaction.....

A mistake of fact occurs when the facts are understood to be other than they really are, whereas an error in the construction of a law occurs when the true facts are known, but there is a mistaken belief as to the legal consequences of those facts. See 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); PPG Industries, Inc. v. United States, 7 CIT 118 (1984).

On December 4, 1991, the President of the United States signed into law the ATPA, which provides the basic authority for the President to grant duty-free treatment to imports of eligible articles from countries designated as beneficiaries according to criteria set forth in the Act. The ATPA was implemented by Presidential Proclamations 6455 and 6456, both dated July 2, 1992. In Presidential Proclamation 6455, the President designated Colombia as a beneficiary country for purposes of the ATPA and modified the HTSUS to incorporate the substance of the relevant provisions of the ATPA.

The relevant provisions of the ATPA provide that any eligible article which is the growth, product, or manufacture of a beneficiary country ("BC") will receive duty-free treatment provided that (1) the article is imported directly from a BC into the customs territory of the U.S.; and (2) the sum of (i) the cost or value of the materials produced in a BC or two or more BC's under this Act, or a BC under the Caribbean Basin Economic Recovery Act of 1983, as amended ("CBERA") (19 U.S.C. 2701 et seq.), or two or more such countries, plus (ii) the direct costs of processing operations performed in a BC or countries (under this Act or the CBERA, as amended) is not less than 35% of the appraised value of such article at the time it is entered. The cost or value of any U.S. materials may be counted toward the 35% value-content requirement in an amount not to exceed 15% of the appraised value of the article at the time it is entered into the U.S. The ATPA is effective with respect to articles entered, or withdrawn from warehouse for consumption, on or after July 22, 1992.

Additionally, articles provided for in a provision for which a rate of duty of "Free" appears in the "Special" subcolumn followed by the symbol "J" or "J*" in parentheses are eligible articles for purposes of the ATPA pursuant to section 204 of that Act. General note 11(d), HTSUS, states that "[a]rticles provided for in a provision for which a rate of duty of Free' appears in the Special' subcolumn followed by the symbol J*' in parentheses shall be eligible for the duty-free treatment provided for in this note, except-- (i) textile and apparel articles which are subject to textile agreements." See 19 U.S.C. 3203(3)(b). Therefore, if the garment is classified under a HTSUS provision which includes a textile category number, it will not be eligible under the ATPA.

Protestant's assertion that it paid duties on the goods because Customs incorrectly determined that the goods were ineligible for duty-free treatment by using the 1994 HTSUS to determine the applicable rate of duty upon liquidation was a mistake of fact correctable under ?1520(c), is without merit. 19 U.S.C. 1315, states that the applicable rate of duty for entered goods is the rate or rates in effect at the time of entry. Annex A to Presidential Proclamation 6763 of December 23, 1994 (60 Fed. Reg. 2), which eliminated subheading 6203.39.40 from the HTSUS and replaced it with subheading 6203.39.50, limits its applicability to goods entered or withdrawn from warehouse for consumption on or after January 1, 1995. Accordingly, since the silk sportcoats were entered on various dates from September 1994 through November 1994, the applicable rate of duty is to be determined under the HTSUS in effect at that time.

Under the 1994 HTSUS, silk sportcoats were properly classified under subheading 6203.39.4040, which contained a "J*" in the "Special" subcolumn. Articles classifiable in that provision were subject to textile agreements. Effective April 1, 1994, the United States Department of Commerce Committee for the Implementation of Textile Agreements ("CITA") included silk apparel in the bilateral textile agreement with China and placed them in textile category 733. By the express terms of the 1994 HTSUS, the silk sportcoats were not eligible for duty-free treatment at the time of their entry in 1994. As Customs correctly liquidated the entries as dutiable, there is nothing to correct under 19 U.S.C. ?1520(c)(1). Moreover, the determination of which tariff subheading was applicable to the goods is not a mistake of fact within the meaning of 19 U.S.C.

HOLDING:

Based upon the classification of the merchandise in effect on the dates of entry, Customs correctly determined that the Colombian-origin men's silk sportcoats were not eligible for duty-free treatment under the ATPA. As the goods were properly liquidated as dutiable, no mistake of fact exists to correct under 19 U.S.C. ?1520(c)(1). Accordingly, the protest should be 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 to the protestant no later than sixty (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 (60) 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,

John Durant, Director
Tariff Classification Appeals

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