HQ 229414 - FAG Holding Co. Protest # 1303-01-100161; “Mistake in Fact”; 1520(c)(1); 1514; Question of Law. - United States International Trade Commision Rulings

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HQ 229414

April 29, 2002

LIQ-9-01/ LIQ-4-01: RR:CR:DR RDJ
229414RDJ

Port Director of Baltimore
U.S. Customs Service
40 South Gay St.
Baltimore, MD 21202

Attn: Ms. Gail Douglas
Supervisory Import Specialist

RE: FAG Holding Co. Protest # 1303-01-100161; “Mistake in Fact”; 1520(c)(1); 1514; Question of Law.

Dear Ms. Douglas:

This is in reference to FAG Holding’s protest number 1303-01-100161

.We note that Protest 1303-01-100161 reviews entries located in 1520(c)(1) claim # 1303-01-200013 as per CF19. The 1520(c)(1) claim was denied on May 5, 2001. The port sent documents relating to 1303-01-200006 and 1303-01-20007. These are not within the scope of our review. received in OR&R on January 25, 2002. Our decision follows.

FACTS:

This protest involves 54 entries which, at the time of entry, were covered by a certain antidumping duty order referred to as “Anti-friction Bearing (Other Than Tapered Roller Bearings) and Parts Thereof from the Federal Republic of Germany, Italy, and the United Kingdom”, 54 Fed. Reg. 20900 (those from Germany) dated May 15, 1989. The liquidation of these entries was suspended by the Dept. of Commerce pending further review. According to the facts as described by FAG Holding, Commerce conducted an administrative review of the above stated “orders” (covering the 54 entries). Upon completion of the administrative review, the final determinations were published on 58 Fed. Reg 39729 (July 26, 1993). Subsequently, litigation ensued in the Court of International Trade challenging various aspects of that final determination. Finally, on December 12, 1996, the CIT issued a final decision in Slip Op. 96-193. On April 16, 1998, the Commerce Department published a “Notice of Final Court Decision and Amended Final Results of Administrative Reviews” (63 Fed. Reg. 18877). This notice announced the conclusion of the litigation, amended the results of the review and notified that it would instruct Customs to liquidate the subject entries. Customs received Message No. 9287212 on October 14, 1999 instructing the liquidation of these entries. Customs proceeded to issue liquidation instructions to the field concerning all 54 entries that involved German-origin bearings. All 54 entries were liquidated on or before March 17, 2000, that is, within 6 months of the October 14, 1999 date.

FAG Holding filed a 1520(c)(1) claim requesting the reliquidation of these entries because it alleged that the entries had been deemed liquidated 6 months after Commerce’s publication dated October 16, 1998 “Notice of Final Court Decision and Amended Final Results of Administrative Reviews”. FAG Holding argued that Customs committed a “mistake in fact” alleging that Customs liquidated the 54 entries “not knowing that those entries had already been liquidated by operation of law under 1504(d). FAG Holding alleged that this is a mistake in fact redressable under section 1520(c)(1) because Customs believed the facts to be other than they really were and took action to liquidate based on that erroneous belief. It argued that had Customs “been aware at the time of the purported liquidation that the entries had already been deemed liquidated, it would not have liquidated the entries in the manner performed”. FAG Holding stated that this mistake-in-fact is adverse to the importer, manifest upon the record and being properly called to the Customs’ attention within one year of the purported liquidation. It alleged that the mistake in fact is not one of “construction of law”, but a situation similar to the one in Fujitsu General America Inc. v. U.S. 110 F. Supp. 1061(Ct. Intl. Trade, 2000) appeal affirmed 2002 U.S. App. LEXIS 4402. In the Fujitsu case, the court held that the 6 month statutory period began to run on the date of the publication, in the Federal Register of Commerce’s Notice of Final Court Decision and Amended Final Results of Administrative Review”. In the present case, FAG Holding states that the publication made on April 16, 1998 started the running of the 6-month period which eventually expired on October 15, 1998. Therefore, according to FAG Holding, since Customs did not reliquidate the entries by October 15, 1998, the entries were “deemed liquidated” by operation of law at the duty rate, value and quantity asserted at the time of entry by the importer, and that any liquidation made after the October 15, 1998 should be considered improper and invalid. FAG Holding filed a claim under 1520(c)(1) stating that Customs had committed a “mistake in fact” by misinterpreting these dates and requested that entries be declared “deemed liquidated” by operation of law. The port denied their claim on May 2, 2001.

FAG Holding is hereby protesting Customs’ refusal to grant relief under 1520(c)(1). We now proceed to review.

ISSUE:

Whether Custom’s liquidation of the 54 entries within 6 months from the Commerce Department’s message #9287212 dated October 14, 1999 constituted a “mistake in fact” redressable under 1520(c)(1).

LAW AND ANALYSIS:

Initially we note that the protest was timely filed within 90 days from the Port’s refusal (dated May 2, 2001) to reliquidate entries under section 1520(c)(1). The liquidation dates for these 54 entries are February 25, 2000, March 3, 2000 and March 17, 2000. The 1520(c)(1) claim was submitted to the Port on Monday, February 26, 2001. The 1520(c)(1) claim was denied by the Port on May 2, 2001. This protest was filed on July 27, 2001. The matter is protestable under section 1514(a)(7), the port’s refusal to reliquidate under section 1520(c)(1).

In SCA International, Inc. v. U.S. (14 C.I.T. 59) the Court of International Trade stated that if an importer seeks to challenge a voidable liquidation, it must use the administrative protest mechanism of section 1514 unless it can prove that the liquidation is the result of a “mistake in fact”. A mistake in fact is defined defined as a mistake which takes place when some fact which indeed exists is unknown, or a fact which is thought to exist, in reality does not exist”. C.J. Tower & Sons of Buffalo, Inc. v U.S. 68 Cust. Ct. 17, 22, C.D. 4327, 336 F. Supp. 1395 (1972), 490 F.2d. 1277 (1977). The courts have consistently held that section 1520(c)(1) may only be used to correct mistakes of fact or inadvertence such as clerical or ministerial errors and may not be used to rectify incorrect interpretations of the law (Hambro Automotive Corp. v .U.S. 66 CCA 113, 120 C.A.D. 1231, 603 F.2d 850, 855 (1979); PPG Industries, Inc. v. U.S. 7 CIT 118, Slip Op. 84-27; Mattel Inc. v. U.S. 72 Cust Ct. 257, 262 , 377 F.Supp. 955, 960 (1974). Section 1520 (c)(1) is not an alternative to the normal liquidation protest method of obtaining review” but rather affords “limited relief” where an unnoticed or unintentional error has been committed (Computime Inc. v. U.S. 9 CIT 553 (1985) citing. C.J. Tower & Sons, 336 F. Supp. p.1398). The relief provided under 1520(c)(1) is not an “alternative” to the relief provided for in the form of protests under 19 U.S.C. 1514.

We have to determine whether the liquidations made by Customs were improperly made as a result of a mistake in fact redressable under section 1520(c)(1) or whether the actions are the result of Customs’ interpretation of law reviewable only through the processes set under section 1514.

FAG Holding argues that Customs committed a mistake in fact because it had no knowledge of the true facts, meaning, that the entries had already been liquidated by operation of law under section1504.

We find that FAG Holding has failed to establish that Customs’ liquidation of these entries, following the instructions of Commerce Department message # 9287212, were the result of a “mistake in fact” redressable under section 1520(c)(1). The process by which Customs receives notice from Commerce and imparts it to the field is an issue relating to the legal interpretation of the statutes that covers such notices, 19 U.S.C. 1675(a)(3)(B) and 1504(d).

The SCA International case relates to an issue pertaining deemed liquidation and notices of “suspension” under section 1504. It treats the “deemed liquidation” as a “legal position” relating to the construction of law. As in the Fujitsu case, the court analyzed the issue of deemed liquidation strictly as a legal issue which necessarily required a legal interpretation of these statutes. Being such the case, we find that FAG Holding’s allegation that the deemed liquidation constitutes a “mistake in fact” is contrary to the analysis made in the Fujitsu case.

In International Trading Co v. U.S., 281 F. 3d. 1268; 2002 U.S. App.LEXIS 3299 it was established that deemed liquidation occurs when Customs fails to liquidate suspended entries within 6 months from the publication of Commerce’ final conclusion of an ongoing antidumping investigation. The court stated that by virtue of parallelism “suspension is begun by publication of an announcement of the beginning of the antidumping investigation and suspension is removed by the publication of the announcement of the conclusion of the investigation”. If Customs does not liquidate the entries within the time period of 6 months, then the suspended entries become “deemed liquidated”. However, a “deemed liquidation” claim must be raised through the protest procedures set under section 1514. Like in the Fujitsu case (in two out of three of its protests), FAG Holding failed to timely submit its deemed liquidation claims within the time limits set under section 1514(c)(3).

The proper avenue to seek redress in issues involving the interpretation of a Customs statute is section 1514 and not section 1520(c)(1). FAG Holdings could have protested Customs’ purported liquidations under section 1514(a)(5), if timely filed. Section 1520(c)(1) was not designed to determine whether the purported liquidation by Customs must be invalidated on the ground of deemed liquidation. In Fabrene Inc. v. U.S. (17 C.I.T. 911), the court stated that an importer who believes that Customs has misinterpreted the applicable law may file protest within 90 days from the liquidation of the entry pursuant to section 1514. In Fabrene the issue related to a certain classification which also required a legal interpretation of the applicable provisions relating to the “notes” section of the HTSUS. Likewise, in Boast Inc. v. U.S. (17 C.I.T. 114) the court stated that Customs’ flawed or incorrect interpretation “a mistake amounting to an error in the construction of law” is expressly excepted from remedy under section 1520(c)(1).

The Fujitsu case specifically addresses three protests in terms as to whether or not the court had jurisdiction over the matter of deemed liquidation. The court concluded that for the first two protests, the court had no jurisdiction because the plaintiff had not submitted a timely protest under section 1514.

We find that section 1520(c)(1) was not intended to serve as an ‘alternative to the normal liquidation protest method of obtaining review under section 1514. FAG Holdings has failed to allege sufficient facts to establish that a mistake in fact was committed by Customs as contemplated under section 1520(c)(1), therefore, the reliquidation as performed by Customs following Commerce’s instructions is considered correct and final.

Holding:

The subject Protest should be denied.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065 dated August 3, 1993, Subject Revised Protest Directive, this decision should be mailed by your office with Customs Form#19, to he protestant no later than 60 days from the date of this letter. Any reliquidation must be made prior to mailing this decision. Sixty days from the date of the decision, the Office of Rulings and Regulations will take steps to make the decision available to Customs personnel via the Customs Ruling Module in ACS and the public via Diskette Subscription Service, Lexis, Freedom of Information Act and other public access channels.

Sincerely,

John Durant

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