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HQ 229252




July 8, 2002

LIQ-9-01 RR:CR:DR
229252 RDC
CATEGORY: PROTEST

Port Director of Customs
2nd and Chestnut Streets
Philadelphia, PA 19106
Attn: Henry Carr

RE: Protest number 1703-01-100037; Request for Further Review of Protest; Pillow Buddies; Stuffed Toys; 9503.49.00, (HTSUS); 6307.90.99, (HTSUS); Classification, Mistake of fact; Untimely filing of protest; 19 USC § 1520(c); 19 USC § 1514; 19 CFR § 174.11; Cartoon characters.

Dear Sir or Madam:

Protest number 1703-01-100037 was forwarded to this office for further review. We have considered the evidence provided and the points raised by your office and the Protestant. Our decision follows.

FACTS:

The Protestant, Crown Crafts, Inc. (“Crown”), is the importer of merchandise called Pillow Buddies® which are described as “pillow like articles designed and shaped to resemble animals” and cartoon animal characters. Crown requests further review of Protest number 1703-01-100037 wherein it protest the denial of 18 Petitions for reliquidation per 19 USC § 1520(c). These Petitions request the reliquidation of 18 entries classified at subheading 6307.90.99, (HTSUS), at a duty rate of 7 percent. Crown states that the correct subheading applicable to this merchandise is 9503.49.00, “stuffed toys representing animals or other non human creatures”((HTSUS,) 1999), with a tariff rate of zero.

The 18 entries at issue were all entered between January and August 1999 through the port of Savannah. The Protestant states that it was instructed to enter the merchandise under subheading 6307.90.99, “textiles and textile articles, other made up articles (HTSUS 1999), by Customs officials at the Charleston port. Heading 6307 (HTSUS) is a basket provision wherein a variety of merchandise is classified when no other heading more specifically provides for given merchandise.

The following evidence was provided to this office by the Port of Charleston on May 28, 2002. A CF 29 issued to Crown Crafts, Inc. on September 17, 1996, by the Charleston port shows that an entry of Pillow Buddies was subject to a rate advance and its classification changed: these goods were entered at subheading 9503.41.0010 (HTSUS). The Charleston port changed the classification to subheading 6307.90.9989 (HTSUS). The change in classification was based on HRL 951737, issued June 8, 1992, which classified an article described as a “‘Belle’ pillow-like article’” and further as a “textile pillow-like article measuring approximately 24 inches long by 14 inches wide” with a fabric shell stuffed with a polyester filling. This article was “printed on one side only with a flat image” of the character from the Beauty and the Beast movie named Belle. The pillow had “small protrusions” representing the “character’s right arm and a book, the based on her left arm, the wall on which she sits, and the tips of her feet.” Finally, the characters printed dress covered her legs from calf to ankle and the dress’ hem had lace trim. HRL 951737 classified this article under subheading 6307.90.9480, HTSUS.

On May 12, 1997, Customs issued NY B84947 to an attorney on behalf of Crown Crafts, Inc. NY B84947 classified Pillow Buddies Babies which were described as “soft textile figures that represent various animal and non-human creatures” of six to eight inches in length and about three inches wide. The torso was filled with pellets and the arms legs and tail were attached to the torsos. Apparently, Pillow Buddies Babies are smaller versions of Pillow Buddies. NY B84947 classified Pillow Buddies Babies under subheading 9503.49.00, “stuffed toys representing animals or other non human creatures” (HTSUS), which subheading had a duty rate of free.

Customs issued NY D81816 on September 15, 1998, to an attorney on behalf of Crown Crafts Inc. NY D81816 classified Pillow Buddies depicting the fictional characters Winnie the Pooh (a bear), and Mickey Mouse under subheading 9503.41.00, (HTSUS), with a tariff rate of zero. The Mickey Mouse was described as a “full-figured, textile sculpture.” The Winnie the Pooh was a polyester shell stuffed with a polyester fill and about 28 inches long and 13 inches wide.

NY E80193 was issued April 5, 1999, to an attorney on behalf of Crown Crafts, Inc. and classified “plush animal depictions,” specifically “Snoopy” the beagle dog and “Woodstock” the bird from the Peanuts comic strip. Though not identified as a Pillow Buddies the articles were described as 24 inch-high, three dimensional representations having a polyester outer shell and filled with polyester fiber material. These articles were classified under subheading 9503.41.00, “stuffed toys representing animals or other non human creatures” (HTSUS 1999).

HRL 963390 was issued on November 24, 2000, in response to a request for classification of pillow buddies from counsel on behalf of Crown Crafts, Inc. The articles were described as pillow-like articles which resemble animals and fictional creatures such as “Bugs Bunny,” “Dumbo,” “Scooby Doo” and “Tigger” among others. The articles were all about 27 inches long (excluding tails) and the outer surfaces were textile filled with a soft filling material. In HRL 963390 we held

The Pillow Buddies representing cartoon characters are classifiable in subheading 9503.41.00, (HTSUS), which provides for “toys representing animals or non-human creatures . . . stuffed toys . . . stuffed toys.”

The 18 protested entries were liquidated from November 1999 through June 1999 under subheading 6307.90.99 (HTSUS), with a 7 percent duty rate. According to Customs electronic data collection (ACS) these entries were liquidated “no change” and “bypassed.” The Protestant filed Requests for Reliquidation per 19 USC § 1520(c) of the protested entries on November 15, 2000. The Protestant states that it did not file protests per 19 USC § 1514(a)(2) because the period in which to protest had elapsed. Further, according to Crown, the protest period elapsed without Crown filing a protest because of an error by its broker.

The requests for reliquidation were denied on December 18, 2000, by the port because “classification [is] not protestable under 19 USC §1520(c) but rather 19 USC § 1514 (which is untimely).” Crown protested the Port’s denial of the § 1520(c) Petitions by filing this Protest, number 1703-01-100037, and Application for Further Review on March 16, 2001. The Protestant includes as evidence of the protested entries the CF 7501 entry summaries; the CF 19 protest forms; debit notes; invoices; packing lists; and certificates of origin. These entry documents show that the Pillow Buddies were entered under subheading 6307.90.99 (HTSUS), at a tariff rate of 7 percent through port number 1703, Savannah. Among the characters depicted by the articles entered were: “Scooby-Doo II,” “Blues Clues,” “Sylvester,” “Tweety Bird,” “Tigger II,” and “Pooh.”

Crown also filed other entries – not in issue here – of Pillow Buddies under subheading 6307.90.99 (HTSUS), and protested their classification, presumably per 19 USC § 1514(a)(2). HRL 960479 and HRL 960480 (November 24, 2000), and HRL 962131 (November 2, 2000), both address applications for further review of protests filed by Crown against the classification of Pillow Buddies under 6307.90.99, (HTSUS). These protests both find that Pillow Buddies are classified under subheading 9503.41.00.

We note that Protestant’s counsel made a request for information per the Freedom of Information Act (5 USC § 552) to the Charleston port on behalf of “Union-Transport, Inc.” for, inter alia, copies of communications between Customs in Charleston and Crown Crafts, Inc., dated on of after May 12, 1997, regarding importation of “pillow like articles.” The response to this request from the Charleston port advised that the information sought was exempt from disclosure pursuant to 5 USC § 552(b)(4) and § 552(b)(5). There is no evidence that Protestant’s counsel appealed this decision

ISSUE:

1. Was the liquidation of the subject merchandise under subheading 6307.90.99 (HTSUS), a “clerical error, mistake of fact, or other inadvertence” correctable per 19 USC § 1520(c)?

2. Was the failure to file a timely protest per 19 USC § 1514 of the liquidations at issue a “clerical error, mistake of fact, or other inadvertence” correctable per 19 USC § 1520(c)?

LAW AND ANALYSIS:

The refusal to reliquidate an entry under 19 USC § 1520(c) is a decision subject to review per 19 USC § 1514(a)(7) and 19 CFR § 174.11. Customs Regulations provide that a protesting party may seek further review of a protest in lieu of review by the District Director by filing an application for further review (19 CFR § 174.23), but that such a request must be filed within 90 days from the date of liquidation or the date of the decision which is being protested (19 CFR § 174.12(e)). Crown filed this Protest and Request for Further Review (per 19 CFR § 174.25) on March 16, 2001; the petition for reliquidation was denied on December 18, 2000. Therefore, this Protest and Request for Further Review was timely filed (19 CFR § 174.12(e)).

The criteria for granting a request for further review are set forth in 19 CFR § 174.24 which states: further review will be accorded to the party filing an application for further review which meets the requirements of § 174.25 and at least one of the criterion in § 174.24. The Protestant contends that per 19 CFR § 174.24(b) further review is justified because this Protest involves questions of law or fact that have not been ruled upon by Customs or the Customs court. We agree.

19 USC § 1514(a)(7), states in pertinent part, decisions of the Customs Service, including the legality of a refusal to reliquidate an entry under § 1520(c), inter alia, shall be final and conclusive upon all persons unless a protest is filed within the allotted 90 days. Section 520(c) of the Tariff Act of 1930, as codified at 19 USC § 1520(c), is an exception to the finality of §1514. Section 1520(c) states,

Notwithstanding a valid protest was not filed, the Customs Service may, in accordance with regulations prescribed by the Secretary, reliquidate an entry or reconciliation to correct - (1) a clerical error, mistake of fact, or other inadvertence, whether or not resulting from or contained in electronic transmission, 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, . . . .

Therefore, per § 1520(c)(1) Customs may reliquidate an entry to correct “a clerical error, mistake of fact, or other inadvertence,” which does not amount to “an error in the construction of a law.” The error must be adverse to the importer and manifest from the record or established by documentary evidence (19 USC § 1520(c)(1)).

The following table shows that all Customs decisions classifying Pillow Buddies agree that they are “toys representing animals or non human creatures” (subheadings 9503.41 and 9503.49, HTSUS). All but one of the Customs decisions classified Pillow Buddies as “toys representing animals or non human creatures, stuffed toys” (subheading 9503.41.00, HTSUS).

Ruling
Published
Classification
NY B84947
May 12, 1997
9503.49.00
NY D81816
September 15, 1998
9503.41.00
NY E80193
April 5, 1999
9503.41.00
HRL 962131
November 2, 2000
9503.41.00
HRL 963390
November 22, 2000
9503.41.00
HRL 960479
November 24, 2000
9503.41.00

It seems clear then that the merchandise at issue is correctly classified under subheading 9503.41.00 (HTSUS). It also seems clear from descriptions of the Pillow Buddies and the description of the pillow that was the subject of HRL 951737, that HRL 951737 upon which the Charleston port relied to classify the Pillow Buddies does not apply to these articles.

The Protestant contends that two mistakes correctable per 19 USC § 1520(c) occurred because, Crown states, it was instructed by Customs officials at the Charleston port to enter the merchandise under subheading 6307.90.99, (HTSUS):

By directing Crown Crafts to file [the protested] entries as pillows [under subheading 6307.90.99, (HTSUS)] rather than as toys, Customs officers made two separate mistakes of fact, each of which justifies reliquidation under section 1520(c).

The two mistakes of fact, according to Crown, were that Customs officers were unaware of the fact that rulings existed applicable to the Pillow Buddies and that the Customs officials failed to recognize the fact that the Pillow Buddies had the characteristics of toys which made them classifiable under chapter 95, (HTSUS).

Essentially, the Protestant first argues that a Customs official was unaware that rulings correctly classifying Pillow Buddies existed and therefore committed a mistake of fact because those rulings were not misapplied so as to constitute an error in the construction of law. However, the protested entries were “bypassed” meaning no Customs official examined the merchandise upon entry and the entries were liquidated “no change” which means that the entries were liquidated as entered by the importer. Taken together these facts dictate that Customs took no action whatsoever with regard to the protested entries and therefore there was no opportunity for Customs to make a mistake as to the classification of the subject protested entries. In its subject Protest, Crown only can raise the issue of whether the alleged misclassification of the subject protested entries was an error correctable under 19 USC § 1520(c)(1).

Also with regard to Crown’s assertion that Customs officers were unaware of the fact that rulings existed applicable to the Pillow Buddies, Crown offers no evidence that any Customs officials made any decision with regard to classification of the subject protested entries. Without evidence or corroboration, the Protestant’s assertions as to whether Customs officials erred or the nature of this error are conjecture. In this regard, Crown’s assertions do not meet the requirement of § 1520(c): that the error be “manifest from the record or established by documentary evidence” (19 USC §1520(c)(1)). (See also Bar Bea Truck Leasing Co. Inc. v. U.S., 5 CIT 124, 126 (Ct. Int’l Trade 1983)).

Further, Crown states that per ORR Ruling 75-0026, dated January 24, 1975, Customs has found that reliquidation per § 1520(c) is proper when a Customs officer is not aware of a classification ruling (see for example HQ 227912, January 19, 1999)). ORR Ruling 75-0026 also states, however, that if an import specialist takes note of a Headquarters ruling, and decides it is not applicable to the merchandise, that decision is an error in the construction of the law, excluded from relief under 19 USC § 1520(c)(1). It must also be true then, that if a Customs official takes note of a Headquarters ruling, and decides it is applicable to the merchandise, such as the case here, when the Charleston port applied HRL 951737 to the Pillow Buddies, that that decision is an error in the construction of the law, excluded from relief under 19 USC § 1520(c)(1). Thus, Crown’s reliance on ORR Ruling 75 0026 in this regard is misplaced..

19 USC § 1520(c)(1) itself provides that an error which occurs in the construction of a law is not subject to correction under that statute. In both Fibrous Glass Products, Inc. v. United States, (63 Cust. Ct. 62, C.D. 3874 Cust. Ct. (1969)) and United China & Glass Co. v. United States,(66 Cust. Ct. 207, C.D. 4191 (1971)), the Customs Court found that the protestants' requests for reliquidation under 19 USC § 1520(c)(1) to correct a clerical error or mistake of fact were actually attempts to correct alleged errors of judgment by the customs collectors in classifying the subject merchandise under the wrong provisions of the Tariff Act of 1930. Those errors of judgment were found to be mistakes in the applicable law. The court held in both cases that the appropriate remedy was to file a protest under 19 USC § 1514 within 90 days after liquidation. Since the protests were not filed within the statutory limit, they were dismissed for lack of jurisdiction. Further, the court noted in C.J. Tower & Sons of Buffalo, Inc. v. United States, (68 Cust. Ct. 17, 21, C.D. 4327 (1972)) that 19 USC § 1520(c)(1) is "not an alternative to the normal liquidation protest method of obtaining review," but that it offers "limited relief" in those situations specifically defined therein. See also Computime, Inc. v. United States, 9 CIT 553, 556 (1985).

In support of its contention that Customs “misunderstood the nature of the goods” and consequently misclassified them, the Protestant offers Black and White Vegetable Co. v. United States, 125 F. Supp. 2d 531 (Ct. Int’l Trade 2000). In that case, the CIT allowed § 1520(c) relief to an importer whose limes were misclassified upon entry,
because the proper botanical classification of an imported botanical item is not part of the legal analysis for classification purposes.

(Id. at 534.) However, at the time the limes were entered

Customs and the entire lime importing community were under the mistaken belief that the limes were of the ‘Citrus auranitoflia’ variety, when, in fact, they were actually of the ‘Citrus latifolia’ variety.

(Id.) The facts in Black and White are different than those at issue here in at least one critical aspect. Unlike the limes no new facts about the Pillow Buddies, nothing new as to their appearance, characteristics, description or their nature became known after they were entered.

Mistakes 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] mistakes 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) quoting 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)).

Moreover, unlike the case of Taban Co. v United States, (960 F.Supp 326 (Ct Int’l Trade 1997)) it is clear that Crown was well aware of the nature of the goods imported and the correct classification of the goods. In Taban the importer’s broker was mistaken as to the nature of the merchandise at issue. The broker was unaware that the radio broadcast receivers were actually combined with sound recording or reproducing apparatus. Crown had at least two Ruling letters issued to it which classified the Pillow Buddies under subheading 9503 before entering any of the protested entries and at least three Ruling letters were issued to it before all the protested entries had been entered. In addition the invoices, packing lists, certificates of origin all clearly identify the goods as either Pillow Buddies or stuffed toys or both.

The Protestant has not shown that the misclassification of the Pillow Buddies when entered involved the misunderstanding or misinterpretation of facts about the Pillow Buddies themselves. Therefore the classification mistake made when the Pillow Buddies were entered has not been proven to be a “mistake of fact or other inadvertence not amounting to an error in the construction of law” (see Mattel, Inc. v. U.S., 377 F. Supp. 955, 960 (Cust. Ct. 1974)).

The Protestant further contends that the protest period elapsed without Crown filing a protest because of a clerical error or inadvertence by Crown’s broker. The Protestant states that during the 90-day period after liquidation of the entries, during which Crown’s broker should have filed the protests, this broker was
acquired by another broker, and in the confusion of transferring files and records the personnel at the brokers’ offices in Savannah failed to file timely protests.

The Protestant argues that its broker intended to file timely protests, as evidenced by the other timely protests it filed on Crown’s behalf, but failed to do so through inadvertence or error.

It is well settled that the relief provided by § 1520(c)(1) is not an alternative to the relief provided in the form of protests under 19 USC § 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, 508, 643 F. Supp. 623 (1986). Crown however, appears to be using § 1520(c) as an alternative to § 1514.

The Protestant states that it filed timely protests (which were granted) of other liquidations of Pillow Buddies classified at subheading 6307.90.99, (HTSUS). Further, Crown intended that its broker file protests but the statutory filing time elapsed. This evidences that Crown knew that the remedy for the incorrect classification of the goods was a protest per 19 USC § 1514 and is attempting to use § 1520(c) as an alternative. Not only is § 1520(c) not an alternative to § 1514 but § 1520(c) cannot provide the relief required by the Protestant. The only relief available per § 1520(c) is reliquidation of the entry which does not correct the mistake of failing to file a protest against the classification of a good.

Moreover, Crown offers no proof to support the statement that its broker failed to file timely protests because of a clerical error or inadvertence. No does Crown offer any proof or evidence to support its assertion that any Customs officials directed it to use subheading 6307.90.99, (HTSUS) to enter the Pillow Buddies or that Customs officials were not aware of the NY Ruling classifying the goods. To result in reliquidation under 19 USC § 1520(c)(1), a clerical error, mistake of fact, or other inadvertence must be "manifest from the record or established by documentary evidence." In this regard, according to the Court in PPG Industries, Inc., v. United States, (4 CIT 143 (1982), quoting in part from the lower court in Hambro, supra, (Hambro Automotive Corp. v. United States, 81 Cust. Ct. 29, 31, 458 F. Supp. 1220, C.D. 4761 (1978))
it is incumbent on the plaintiff to show by sufficient evidence the nature of the mistake of fact. The burden and duty is upon the plaintiff to inform the appropriate Customs official of the alleged mistake with "sufficient particularity to allow remedial action"

(4 CIT at 147-148). Though HRL 962131 and HRL 960480 support Crown’s contention that other protests of Pillow Buddies’ classification were filed, there is no evidence that the broker who was retained to file the protests of the liquidations at issue nor of any broker failing to file such protests as a result of clerical error or inadvertence. Relief per § 1520(c) is not available when the error alleged is not supported by evidence.

HOLDING: We find that the § 1520(c)(1) claim was correctly denied because, for the reasons discussed above, the misclassification has not been shown to be an error correctable under 19 USC § 1520(c)(1). The protest should be DENIED IN FULL.

Consistent with the decision set forth above, you are hereby directed to deny the subject protest. 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 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,

Myles Harmon, Acting Director

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