HQ 228725 - Internal Advice Request, Port of Tampa; Petition 1801-99-200005; 19 U.S.C. § § 1520 & 1514; Executone Information Systems v. United States, 96 F. 3d 1383, 1386 (Fed. Cir. 1996); C.S.D. 80-250 - United States International Trade Commision Rulings

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HQ 228725

October 30, 2001

LIQ-9-01RR:CR:DR 228725 LLB

CATEGORY: LIQUIDATION

Port Director of Customs
Trade Operations Division
U.S. Customs Service
1624 E. 7th Avenue, Suite 101
Tampa, Florida 33605-3706

RE: Internal Advice Request, Port of Tampa; Petition 1801-99-200005; 19 U.S.C. § § 1520 & 1514; Executone Information Systems v. United States, 96 F. 3d 1383, 1386 (Fed. Cir. 1996); C.S.D. 80-250

Dear Sir/Madam:

This office has reviewed the above-referenced request for internal advice initiated by your letter dated February 3, 2000. We have considered the points raised by the protestant and your office. Our decision follows.

FACTS

The subject merchandise of this protest was entered by the petitioner under 9808.00.3000, HTSUS (1997), which provides for the duty free entry of “Articles for military departments: Materials certified to the Commissioner of Customs by the authorized procuring agencies to be emergency war material purchased abroad.” On April 2 and 9, 1998, the port issued two CF 28s which requested the protestant to provide such certification to support its claim for duty-free treatment under the foregoing provision. The CF 28s further indicated that failure to respond within 30 days would result in liquidation at the alternate HTSUS rate, 9014.10.1000, HTSUS (1997). On June 19, 1998, the entry liquidated at the alternate HTSUS rate at 5.6% (general).

The Defense Logistics Agency issued the certificate on the subject merchandise on July 29, 1998 and on August 10, 1998, protestant submitted the information to Customs; however, protestant discovered that the entry had already liquidated. On October 2, 1998, protestant requested reliquidation via protest (1801-98-10063) pursuant to 19 U.S.C. §§ 1514 and 1520, alleging that failure to submit the requested information was due to clerical error. On January 4, 1999, the port correctly denied the protest as untimely under § 1514; however, erroneously did not consider the protest as a timely petition under § 1520(c)(1). See n.1, infra.

On March 5, 1999, the protestant filed a protest (1801-99-20005) against the port’s denial of protest 1801-98-10063 in which the port refused to reliquidate the subject entry. The protestant reasserted that its failure to present the requested information was due to clerical error.

ISSUE

Whether protestant’s failure to provide Customs with evidence to support its claim for duty-free treatment pursuant to 9808.00.3000 was the result of a clerical error

LAW AND ANALYSIS

Initially, we note that the protest filed on October 2, 1998, pursuant to 19 U.S.C. § 1514, was untimely insofar as it was filed more than 90 days after the June 19, 1998, liquidation date. See 19 U.S.C. § 1514(c)(3). The protestant’s request for reliquidation pursuant to § 1520(c)(1), also included in the foregoing protest, was timely inasmuch as it was filed less than one year from the June 19, 1998, liquidation date. The protest from the denial of the § 1520(c)(1) was timely filed (i.e. within 90 days from the January 4, 1999, denial of reliquidation) under § 1514(a) and the matter is protestable under § 1514(a)(7).

We also note protestant incorrectly asserts in its March 1, 1999, “Addendum to Protest . . .” that when a request for reliquidation is made pursuant to § 1514 and § 1520(c)(1), and the § 1514 protest is untimely, Customs will not automatically address the § 1520(c)(1) claim. A request for reliquidation under § 1520(c)(1) may be filed “[n]otwithstanding a valid protest was not filed.” Therefore, the port should have addressed the protestant’s § 1520(c)(1) claim once it determined that § 1514 claim was untimely.

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. 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); Concentric Pumps, Ltd. v. United States, 10 CIT 505, 508, 643 F. Supp. 623 (1986)).

The protestant argues that its failure to submit the certification was due to clerical error because, unbeknownst to the protestant, its initial request to the Defense Logistics Agency contained an incorrect contract number, which resulted in the denial of the certification. The protestant asserts that by the time the error was discovered and corrected, resulting in the issuance of the certificate, the entry had liquidated. Although the foregoing scenario involves a clerical error, it is more akin to a mistake of fact. "[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).

In Executone, Customs issued Notices of Action indicating that because no documentation had been furnished with the entry to support duty-free entry under the Caribbean Basin Economic Recovery Act, Customs liquidated the entries in question with additional duties. 96 F.3d at 1384. Although the claimant had requested its broker to submit Form A to Customs several times, the broker had failed to do so. Id. A protest had not been filed within 90 days after notice of liquidation as required by 19 U.S.C. §1514. Id. Subsequently, Form A was submitted to Customs with a request to reliquidate the entries under 19 U.S.C. §1520(c)(1). Id. Customs denied the protest because "[n]o supporting documentation other than Form A [was] submitted." Id. The court held that:

In order to protect the viability of protest under 19 U.S.C. § 1514, . . . in the case of missing documentation required by statute or regulation, the importer must prove more than that it can produce proper documentation at the time of trial . At the very least, the importer must prove that, but for a mistake of fact or other inadvertance, proper documentation would have been filed at the time required by law. Simple failure of the broker to file proper documentation does not satisfy § 1520(c)(1).

Id. at 1388-89. The court found that the evidence provided, inter alia, the Form A that Customs originally requested nor its conclusory allegations that “inadvertence is hard to document,” did not show that Executone’s failure to submit the Form A was due to mistake of fact or inadvertence. Id. at 1389-90. Rather, the evidence showed that Executone, by repeating its request to its broker, clearly “knew the forms had not yet been filed, yet failed to act.” Id.

Similar to the facts in Executone, the CF 28s clearly informed the protestant of the need to submit the duty-free certificates in order to claim the preference; however, it failed to do so based on an unsupported allegation that protestant did not know that it had submitted the incorrect information to obtain the certification. As stated above, a mistake of fact must be manifest from the record or established by documentary evidence. Phillips Petroleum Company, 54 CCPA at 11. First, protestant asserts that it submitted the incorrect information to the Defense Logistics Agency, which resulted in the denial of the certificate. Although protestant submitted the entry with the erroneous contract number and a commercial invoice with the correct contract number, there is no evidence as to the date the foregoing documentation was submitted to the Defense Logistics Agency. Second, without reference to dates nor documentary evidence, the protestant asserts in its protest that “the error was eventually discovered and brought to the attention of the Defense Logistics Agency . . .” 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).

Similar to Executone, rather than provide support for its argument that the failure to provide the records was due to inadvertance or mistake of fact, the protestant provides the certificate that was originally requested to support the protestant’s claim for duty preference. Insofar as it is not manifest from the record nor supported by documentary evidence, that its failure to submit the documents to obtain the duty preference was due to mistake of fact, pursuant to Executone, relief under § 1520(c)(1) is not available to the protestant.

Cases involving the submission of incorrect or incomplete documentation and the failure to submit, or late submission, of correct documentation have been held to constitute “negligent inaction.” See C.S.D. 80-250; see also, e.g., HQ 227309 (March 5, 1998); HQ 224047 (February 5, 1993) HQ 222049 (June 17, 1991); HQ 221590 (October 30, 1989); and HQ 221680(October 16, 1989). Customs has ruled that "negligent inaction" is not within the scope of 19 U.S.C. 1520(c)(1). Id.; see also, Occidental Oil & Gas Co. v. United States, 13 C.I.T. 244, 246 (1989). However, “[a] failure to act may be correctable under section 520(c)(1) . . .when it is coupled with another significant factor such as a misunderstanding of the facts, or the inability of the importer to obtain proper documentation to establish a claim.” C.S.D. 80-250.

In C.S.D. 80-250, Customs sent the protestant a CF 28 requesting information regarding the appraisement of certain merchandise. Close to a year later, Customs sent a CF 29 informing the protestant that if it did not hear from the protestant, Customs would appraise the merchandise at a higher value. Within three months, Customs had not received a reply from the protestant, and accordingly, liquidated the entry at the higher value rate. The protestant filed a § 1520(c)(1) petition indicating that its failure to respond to the notices was due to clerical error because its employee filed the requests rather than forwarding the information to Customs. Customs held that the protestant’s failure to respond to the notices constituted negligent inaction and reasoned that “If an importer fails to respond to inquiries from Customs for further information, as happened in this case, Customs must liquidate the entry on the basis of the best information available to it.”

Here, the protestant filed the subject entry on May 28, 1997. Requests for information were made on April 2, and 9, 1998, both of which informed the protestant that it would have 30 days to respond or Customs would liquidate the entries at the alternate classification. Customs did not receive a response from the protestant, and accordingly, on June 19, 1998, liquidated the entry at the alternate classification. The protestant does not explain, in its petition nor its protest, why it did not respond to the notices. Insofar as the protestant has not presented any evidence that would show that it was unable to respond to Customs request for information, its failure to provide the documents constituted negligent inaction. Therefore, § 1520(c)(1) relief is unavailable to the protestant.

HOLDING

The failure of the protestant to provide documentation to support its claim for duty preference under 9808.00.3000, was not due to clerical error, mistake of fact, or other inadvertance for which relief may be granted under 19 U.S.C. § 1520(c)(1).

Sixty days from the date of the decision, the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.ustreas.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

John Durant, Director

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