HQ 229685 - Petition number 4601-02-200606; Internal Advice; 19 CFR 177.11; Foster Wheeler Energy Corporation; Red Oak HRSG Piping Materials; Red Oak HRSG Project; 19 USC 1520(c)(1); Mistake of Fact; ITT Corp. v. United States, 24 F.3d 1384, 1387 (Fed Cir. 1994); Hambro Automotive Corporation v. United States, 66 CCPA 113, 118, C.A.D. 1231, 603 F.2d 850 (1979); Concentric Pumps, Ltd., v. United States, 10 CIT 505, 508, 643 F Supp. 623 (1986); C.J. Tower & Sons of Buffalo, Inc. v. United States, 68 Cust. Ct. 17, 22; C.D. 4327, 336 F. Supp. 1395, 1399 (1972), aff’d 61 CCPA 90, C.A.D. 1129, 499 F.2d 1277 (1974); PPG Industries, Inc. v. United States, 4 CIT 143, 147-148 (1982); Taban Co. V. United States, 960 F. Supp. 326, 334-35 (Ct. Int’l Trade 1997); Zaki Corp. v. United States, 960 F. Supp. 350, 359-360 (Ct. Int’l Trade 1997); Bar Bea Truck Leasing Co., Inc. v. United States, 5 CIT 124, 126 (1983). - United States International Trade Commision Rulings

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HQ 229685

January 24, 2003

LIQ-9-01 RR:CR:DR
229685 AL
CATEGORY: LIQUIDATION

Port Director
Port of Newark, New York
C/O Residual Liquidation and Protest Branch 1210 Corbin Street
Elizabeth, New Jersey 07201
Attention: Susan M. Masser

RE: Petition number 4601-02-200606; Internal Advice; 19 CFR 177.11; Foster Wheeler Energy Corporation; Red Oak HRSG Piping Materials; Red Oak HRSG Project; 19 USC 1520(c)(1); Mistake of Fact; ITT Corp. v. United States, 24 F.3d 1384, 1387 (Fed Cir. 1994); Hambro Automotive Corporation v. United States, 66 CCPA 113, 118, C.A.D. 1231, 603 F.2d 850 (1979); Concentric Pumps, Ltd., v. United States, 10 CIT 505, 508, 643 F Supp. 623 (1986); C.J. Tower & Sons of Buffalo, Inc. v. United States, 68 Cust. Ct. 17, 22; C.D. 4327, 336 F. Supp. 1395, 1399 (1972), aff’d 61 CCPA 90, C.A.D. 1129, 499 F.2d 1277 (1974); PPG Industries, Inc. v. United States, 4 CIT 143, 147-148 (1982); Taban Co. V. United States, 960 F. Supp. 326, 334-35 (Ct. Int’l Trade 1997); Zaki Corp. v. United States, 960 F. Supp. 350, 359-360 (Ct. Int’l Trade 1997); Bar Bea Truck Leasing Co., Inc. v. United States, 5 CIT 124, 126 (1983).

Dear Sir/Madam:

This is in response to your internal advice request dated October 17, 2002, concerning Foster Wheeler Energy Corporation (“Foster”) in accordance with Customs Regulations Part 177 (19 CFR 177). This regulation allows requests for “advice or guidance to the interpretation or proper application of the Customs and related laws with respect to a specific Customs transactionfrom the Headquarters Office at any time, whether the transaction is prospective, current, or completed.” 19 CFR §177.11(a).

FACTS:

Foster is the importer of record for the subject merchandise. According to the CF 7501, prepared by the Nissin Customs Service (“Nissin”), the subject merchandise was entered by Nissin as “Red Oak Piping Material” and classified as “Parts Other of STM/Vapor Generator” under subheading 8402.90.0090 of the Harmonized Tariff Schedule of the United States (HTSUS), which imposed a duty rate of 4.3 percent. The subject entry number K64-XXXX133-3 was exported from Korea on December 8, 2000 and entered into the United States on December 28, 2000. According to its ACS entry, the entry was liquidated on November 16, 2001.

In addition to the CF 7501, the petitioner provided a signed copy of the commercial invoice prepared by the Hyundai Corporation & Hyundai Heavy Industries Co., Ltd. in Korea for the shipment which is described as:

Shipper/Exporter: Hyundai Corporation & Hyundai Heavy Industries Co., Ltd. For Account & Risk of Messrs.: Foster Wheeler Energy Corporation Notify party: Same as above
Port of Loading: Kwangyang Port, Korea
Final Destination: Newark, New Jersey, U.S.A. Carrier: M/V Maersk Plymouth
Sailing on or About: Dec. 05, 2000
No. & Date of Invoice: B0001-H004 & Nov. 23, 2000 DC No. & Date of Issue: N/A
L/C issuing bank: N/A
Remarks: 1) P.O. No.: 7668001 2) “Freight Collect” Mark & No. of PKGS: No comments were provided. Description of Goods: Red Oak-HRSG Project; Red Oak HRSG Piping; Unit 1,2 Q’ty: 8 Containers
Unit-Price: No comments were provided.
Amount (USS): US$9XX,XXX,XXX

Attached to the commercial invoice is Packing List (A) and Packing List (B). Packing List (A) is similar to the commercial invoice described above, although it mentions the “Net-W’t (KG); Gross-W’t (KG) and Measurement (M3) of the shipment. Packing List (B) provides detailed information as to what is contained in each of the eight containers. The containers included such items as “Reheater 2 Outlet Manifold Detail to TP57; L.P Evaporator Riser Pipe; H.P Economizer Interconnecting Pipe; I.P Eco. 1 Inlet and Outlet Piping TP35; 8” Kettle Boiler Return Pipe Arrangement & Details; H.P Economizer Inlet Manifold TP70(7); L.P Superheater Transfer Pipe; L.P Economizer Inlet 7 Recirculation Pump Discharger Piping; L.P Economizer Outlet to L.P Drum, Boiler Feed & Recirc. Pumps Suction Piping; and Steam Sampling Connection Details.

In a correspondence to the Port dated August 27, 2002, Foster sought for reliquidation of the entry, pursuant to 19 U.S.C. §1520(c), stating that “[a]t the time of review and liquidation, the evaluator making the final ruling did not have all information available to him.” Foster also prepared a revised entry in its correspondence, reclassifying the subject merchandise at HTSUS subheading 7304.41.60 with a duty rate of 2.3 percent. The revised entry that the protestant proposed is described as follows:

Value: $9XX, XXX.XX
HTS Code: 7304.41.60 Piping 2.3%
Duties Owed: $21, XXX.XX
Total Duties Paid on original entry: $39, XXX.XX Total Duties Due: $21, XXX.XX
Balance Due Foster Wheeler: $18, XXX.XX

Also attached to the correspondence was a bill of lading, prepared by the carrier, Maersk Sealand and is described as follows:

Shipper/Exporter: Transoceanic Project (Korea) C/O Hyundai Heavy Industries Co., Ltd. Consignee: Total Transport International
Vessel: Maersk Plymouth/0002
Port of Loading: Kwangyang, Korea
Port of Discharge: Newark
Place of Deliver: Sayreville
Description of Goods (Particulars Furnished by Shipper): Cont’rs said to contain 8 packages, Red Oak HRSG Piping Materials Place of Issue: Seoul
Date: December 8, 2000
Shipped on Board: December 2, 2000

On August 29, 2002, the Customs official who prepared the CF 6445A for the entry inadvertently wrote the wrong corresponding entry numbers on the form. Petition number 4601-02-200606 is for the entry number K64-XXXX133-3. The Port gave the petitioner an opportunity to address its reasons for reliquidation. Foster sent a letter to the Port dated September 25, 2002 to Ms. Susan Masser addressing the “ submission of five (5) 520C Protests received under . . . numbers 4601-02-200605 and 4601-02-200606 showing . . . date stamp or receipt on August 29, 2002.”

The letter also outlined “ [their] basis for these protests.” Foster recounts the following in its letter:

1 Recently Foster Wheeler’s imports of HRSG equipment was reviewed by Mr. Robert Loesch, National Import Specialist, U.S. Customs, New York. During that review, a determination to re-liquidate these entries at a higher duty rate was made and forwarded to the Elizabeth group for processing. At the same time, re-liquidation notices were distributed to the New Orleans Customs Offices as well.

2 After reviewing the re-liquidated entries, Foster Wheeler discovered that these had been processed in error and contacted the appropriate parties. At that time, Foster Wheeler initiated 520C protests for all entries that had past the 90 day time limit on the basis that at the time of re-liquidation, neither the associated Customs Offices nor Mr. Loesch were in possession of all facts pertaining to these entries. In conversation with Mr. Loesch and Mr. Gerald Gaudreau of the New Orleans Office, this was confirmed. As provided in the 520C criteria, a mistake of fact is criteria for re-liquidation.

Although Foster addresses the re-liquidation of entries, the entry at issue has not been reliquidated.

The Port stated in its position that the “[i]mporter’s protest is for classification filed over 90 days.” Therefore, the Port believes that a mistake of fact does not exist.

ISSUE:

Whether a mistake of fact exists pursuant to 19 U.S.C. §1520(c). Whether the evidence presented is sufficient to show that an error exists. Whether the alleged error is a mistake of fact.

LAW AND ANALYSIS:

Initially, we note that the protestant’s August 29, 2002, §520(c)(1) petition was timely, inasmuch as it was filed less than one year after the subject entries were liquidated. Section 520(c) of the Tariff Act of 1930, codified as 19 U.S.C. §1520(c), states that

The Customs Service may, in accordance with regulations prescribed by the Secretary, reliquidate an entry or reconciliation to correct— 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, when the error, mistake, or inadvertence is brought to the attention of the Customs Service within one year after the date of liquidation or exaction;

Therefore, under 19 U.S.C. §1520(c)(1), Customs may reliquidate the protested entry to correct a clerical error or mistake of fact which does not amount to “an error in the construction of a law.”

Whether a mistake of fact exists pursuant to 19 U.S.C. § 1520(c)(1).

According to its reliquidation request, Foster contends that the subheading under which the “Red Oak piping materials” were liquidated, 8402.90.0090 HTSUS, was incorrect and suggests that the correct subheading for classification of the equipment should have been entered under subheading 7304.41.60 of the HTSUS. Foster believes that this misclassification constitutes an error that would substantiate a mistake of fact under 19 U.S.C. § 1520(c)(1).
a. Whether the evidence presented is sufficient to show if an error exists.

The petitioner alleges that an error occurred due to the absence of “all facts” but it is not clear as to what facts were not present before the Port that would lead to such an error. The burden falls on the petitioner to establish the nature of the error and if it does not manifest from the record, the petitioner must establish its alleged error by documentary evidence. See 19 U.S.C. § 1520(c)(1).

The petitioner provided Packing List B as documentary evidence to show that an error occurred in the Port’s liquidation of the entry. However, after reviewing this list, Packing List B is found to be insufficient to determine whether an error exists.

Packing List B describes items that include the term “piping,” for example, “L.P Evaporator Piping TP35” or “L.P Economizer Inlet 7 Recirculation Pump Discharger Piping” (emphasis added). This same Packing List also mentions an “H.P Economizer Inlet Manifold TP70(7)” (emphasis added). The petitioner argues that all of these items should have been classified under the subheading 7304.41.60 of the HTSUS for “Tubes, pipes and hollow profiles, seamless, of iron (other than cast iron) or steel; other.” Therefore, the petitioner alleges that an error occurred in the misclassification of the entry. However, we find that Packing List B is insufficient and is not able to demonstrate that such an error exists.

The subheading 7304 of the HTSUS classifies “other” as “of circular cross section, of stainless steel.” 19 U.S.C. § 1202. Alternatively, the “manifold” mentioned in the description of the merchandise is not consistent with the classification of subheading 7304.41.60 of the HTSUS. A manifold can be defined as “[a] pipe with several apertures for making multiple connections.” Webster’s II New Riverside University Dictionary 723 (1984). In other words, a manifold is a component that provides various inlets and outlets for multiple connections and therefore, we can conclude that it is not a “pipe” within the context of subheading 7304.41.60 of the HTSUS. The petitioner argues that the merchandise should have been classified under the subheading for “pipe,” however, it is not evident that the definition of a manifold remains consistent with the classification for a “pipe” under the HTSUS. An error is not evident in our review of Packing List B and therefore, this document is insufficient to determine the existence of an error.

The nature of the error must be observable upon review of the record or upon submission of documentary evidence. In either event, the burden is on the petitioner to establish the nature of the error claimed and to demonstrate that it falls within the ambit of the statute. In ITT Corp. v. United States, (24 F.3d 1384, 1387 (Fed. Cir. 1994)) the Court of Appeals said the following:

With regard to substantiation, §1520(c)(1) requires the importer to establish the asserted inadvertence through the documentary evidence submitted to the appropriate customs officer, unless the inadvertence is manifest from the record. Inadvertence manifest from the record are those apparent to Customs from a facial examination of the entry and the entry papers alone, and thus require no further substantiation. While clerical errors likely compose the majority of such inadvertences, mistakes of fact nonetheless also can be manifest from the record that the entry and the entry papers constitute. Mistakes of fact that are not manifest from such record, however, must be established by documentary evidence.

In the instant case, the alleged error is not evident based upon the review of Packing List B and therefore, due to the insufficient nature of this document, the petitioner has not demonstrated that an error exists.

In addition, the Court of International Trade (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). Therefore, the mere assertions made by the petitioner that all of the facts were not present at the time the Port liquidated the subject merchandise is not enough to support its petition.

Whether the alleged error is a mistake of fact.

A mistake of fact has been described 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. United States, 68 Cust. Ct. 17, 22; C.D. 4327, 336 F. Supp. 1395, 1399 (1972), aff’d 61 CCPA 90, C.A.D. 1129, 499 F.2d 1277 (1974). The petitioner alleges that all of the facts were unavailable to the Port at the time of the liquidation and argues that the misclassification of the merchandise was due to a mistake of fact. Relief can be available to the petitioner if the mistake concerns the nature of the goods which would be the reason for its incorrect classification. C.J. Tower & Sons of Buffalo, Inc. V. United States, 499 F.2d 1277 (1974); Taban Co. V. United States, 960 F. Supp. 326, 334-35 (Ct. Int’l Trade 1997); Zaki Corp. v. United States, 960 F. Supp. 350, 359-360 (Ct. Int’l Trade 1997).

Alternatively, the misclassification of the Red Oak HRSG piping materials can also be construed as a legal argument where it cannot find relief under 19 USC §1520(c)(1). It has been held that a “mistake of fact exists where a person understands the facts to be other than they are, whereas a mistake of law exists where a person knows the facts as they really are but has a mistaken belief as to the legal consequences of those facts.” Hambro Automotive Corporation v. United States, 66 CCPA 113, 118, C.A.D. 1231, 603 F.2d 850 (1979), quoted in Concentric Pumps, Ltd., v. United States, 10 CIT 505, 508, 643 F Supp. 623 (1986). Therefore, upon an assertion that the merchandise has been wrongly classified due to a mistake of fact, “it is incumbent on the plaintiff to show by sufficient evidence the nature of the mistake of fact.” PPG Industries, Inc. v. United States, 4 CIT 143, 147-148 (1982), citing Hambro Automotive Corp. v. United States, 81 Cust. Ct. 29, 31, 458 F. Supp. 1220m, 1222 (1978), aff’d 66 CCPA 113, C.A. D. 1231, 603 F.2d 850 (1979).

We have already established that the petitioner failed to produce sufficient documentary evidence in order to determine its alleged error and without such documentary evidence, we cannot draw upon the submitted documents to determine the nature of the merchandise. Therefore, we can conclude that due to the insufficiency of the evidence, the petitioner failed to show that a mistake of fact exists because the burden is on the petitioner to provide evident that would support a claim for a mistake of fact.

HOLDING:

The documentary evidence provided by the petitioner was found to be insufficient to substantiate a claim for the alleged error. Therefore, whether an error exists, the documentary evidence is insufficient to prove such a claim.

Because the evidence presented is insufficient to determine the nature of the merchandise, we cannot draw upon any conclusion whether a mistake of fact exists pursuant to 19 U.S.C. §1520(c)(1).

Relief should not be granted inasmuch as protestant has not established a mistake of fact within the meaning of 19 U.S.C. §1520(c)(1).

You are to mail this decision to the internal advice applicant no later than 60 days from the date of this letter. On that date, 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.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

Myles B. Harmon, Director

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