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HQ 227847





February 27, 1998

LIQ-9-01/12/15 RR:CR:DR 227847 CB

CATEGORY: LIQUIDATION

Port Director
U.S. Customs Service
Num. 1 Puntilla Street
San Juan, PR 00901
ATTN.: Protest Officer
Hampton Carter

RE: Protest and Application for Further Review No. 4909-97-100059; Harbor Maintenance Fee; Exemption; 26 U.S.C. ?4462(b)(1)(B) and (C); Mistake of Fact; 19 U.S.C. ?1520(c);
Timeliness of Claim

Dear Sir/Madam:

The above-referenced protest was forwarded to this office for a determination. We have considered the points raised and a decision follows.

FACTS:

There are fifty entries which are the subject of this protest. The entries cover shipments of petroleum products shipped from St. Croix, U.S. Virgin Islands by Hess Oil Virgin Islands Corporation and unloaded for consumption in San Juan, Puerto Rico and consigned to protestant. All entries were liquidated with the assessment of the harbor maintenance fee (HMF). The earliest liquidation date covered by this protest is March 18, 1994, and the most recent is dated July 28, 1995.

According to the file, protestant filed a 19 U.S.C. seeking a refund of the HMF. Your denial of the petition is dated October 24, 1997. You denied the 1520(c)(1) petition on the grounds that assessment of the HMF was a mistake of law not correctable under this statutory provision. The subject protest was filed on November 25, 1997.

Protestant is seeking a refund of the HMF based on the exemption provided for in 26 U.S.C. ?4462. Protestant is alleging that (as a matter of equity), because Customs has not amended its regulations to conform with the statutory language, the period to file claims and
protests against the assessment of the HMF should be extended until the applicable regulations are amended. Protestant also contends that your office's failure to correctly apply the statute is not a mistake of law. This conclusion is based on Protestant's interpretation that, because the applicable regulations have not been amended, your office correctly interpreted and applied the regulations.

ISSUE:

Should the subject protest be granted?

LAW AND ANALYSIS:

Initially, we note that the protest, with application for further review, was timely filed under the statutory and regulatory provisions for protests (see 19 U.S.C. ?1514 and 19 CFR Part
174). We also note that refusal to reliquidate an entry under section 1520(c) is a protestable decision under section 1514 (19 U.S.C. 1514(a)(7)).

The statutory authority for the harbor maintenance fee is found in the Water Resources Development Act of 1986 (Pub. L. 99-662; 100 Stat. 4082, 4266; 26 U.S.C. ?4461 et seq.) Under this statute, a fee is imposed for the use of a port, defined as any channel or harbor or component thereof in the United States which is not an inland waterway, is open to public navigation, and at which Federal funds have been used since 1977 for construction, maintenance, or operation. Pursuant to 26 U.S.C. . . .
(B) cargo loaded on a vessel in Alaska,
Hawaii, or any possession of the United
States for transportation to the United
States mainland, Alaska, Hawaii, or such a possession for ultimate use or consumption in the United States mainland, Alaska,
Hawaii, or such a possession,

(C) the unloading of cargo described in subparagraph (A) or (B) in Alaska, Hawaii, or any possession of the United States, or in the United States mainland, respectively, or . . .

The effective date provision of the amendment provides that the amendment takes effect as if included in the provision of the Harbor Maintenance Revenue Act of 1986. The Customs Regulations implementing this provision are found at 19 CFR Part 24. The applicable regulation provides that "possessions" of the United States include Puerto Rico and the U.S. Virgin Islands. See 19

As indicated in the FACTS portion of this ruling, the consumption entries under protest covered merchandise loaded on a vessel in the U.S. Virgin Islands and unloaded in San Juan,

Puerto Rico. Thus, both movements (i.e., the loading and unloading) are exempt from the HMF pursuant to 26 U.S.C.

According to information provided by your office, the port determined that such movements between insular possessions were subject to the HMF based on your reading of the applicable regulation and required that the HMF be paid. The regulation (19 CFR 24.24(c)(4)(i)(B)) was not amended to conform to the 1988 statutory change which exempts such movements from the HMF. A regulatory provision does not override statutory language. Thus, the fact that the regulation has not been amended to include movements for ultimate consumption in an insular possession does not negate the fact that statutorily these movements are exempt from the HMF.

Having said that, we disagree with protestant's contention that the Customs officer's failure to follow 26 U.S.C. ?4662(b) is not a mistake of law. The courts have defined mistake of law as mistakes which 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)). The instant protest falls squarely within that definition. Customs was aware that the entries covered movements between two insular possessions but incorrectly believed that these movements were subject to the HMF. This is a mistake of law which is not correctable under 19 U.S.C. ?1520(c)(1).

We note that these entries were made after December 8, 1993, the date of enactment of the North American Free Trade Agreement Implementation Act (NAFTA). That Act amended the entry statute (19 U.S.C. ?1484) to require importers to use reasonable care in making entry and permitting Customs to rely on the accuracy of the information submitted by importers. See H. Rept. No. 103-361, Part 1, p. 136 (Nov. 15, 1993).

Protestant contends that failure to refund these paid fees would be equivalent to compensating the government for its inaction in amending timely the Customs regulations. Equity is inapplicable in this instance. The Court of International Trade has stated that jurisdictional statutory requirements cannot be waived or subjected to excuse or remedy based upon equitable principles. See Mitsubishi Electronics America, Inc. v. United States, 18 CIT 929 (1994) citing NEC Corp. v. United States, 5 Fed. Cir. (T) 49, 806 F.2d 247 (1986); see also, San Francisco Newspaper Printing Co. v. United States, 9 CIT 517 (1985), "[a] time limitation that is a jurisdictional prerequisite is not subject to waiver or estoppel." (citations omitted) Congress has enacted a statutory scheme within which an importer can request that Customs correct any perceived mistakes in the liquidation of an entry, i.e., through a ?1514 protest or a ?1520(c)(1) petition (except for mistakes of law). One of the statutory requirements for a request to reliquidate is that it must be filed within one year from the date of liquidation. The Customs Service does not have any discretionary authority to waive this statutory requirement. Thus, since neither a timely protest nor a timely petition was filed and, given our conclusion that liquidation resulted from a mistake of law, there is no relief available to protestant.

Finally, protestant contends that the erroneous deposits of the HMF were made because the ABI program was erroneous. It appears that protestant is misinformed as to the nature of the ABI filing process. The software program used by ABI filers is not provided by Customs; rather, the software is sold by private vendors. Thus, protestant is incorrect when it alleges that Customs required the payment of the HMF through the ABI program. The onus is on the ABI filer to know when it is appropriate to pay the HMF. If the software program being used by the filer requires that the HMF be calculated then it is up to the filer to discuss this problem with the software vendor.

HOLDING:

The subject protest against the denial of a 19 U.S.C. because it was not filed within the statutory time frame.

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,

John A. Durant, Director
Commercial Rulings Division

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