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HQ 115462

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December 13, 2001

ENT-1-RR:IT:EC 115462 GG

CATEGORY: ENTRY

Ms. Angela Downey
Port Director
U.S. Customs Service
1 E Bay Street, No. 104
Savannah, GA 31401

RE: Application for further review of protest number 1703-01-100060; substitution of warehouse entry for consumption entry.

Dear Ms. Downey:

This is in response to the above-referenced protest and application for further review, which was forwarded to our office in August, 2001, for consideration of the issues involved. Our response follows.

FACTS:

Acerinox USA Inc. (“Acerinox”) imported several shipments of stainless steel hot rolled angles from Spain on January 8 and 11, 2001, respectively. The shipments were unladen in Charleston and sent in-bond under immediate transportation entries to Savannah on the same day that they arrived in Charleston. On January 12, 2001, notice of a preliminary determination that stainless steel angles from Spain were being sold in the United States at less-than-fair-value prices was published in the Federal Register (66 FR 2881). As a result, Customs was ordered to suspend liquidation and to require a cash deposit or the posting of a bond equal to the published dumping margins for all affected steel that was entered, or withdrawn from warehouse, for consumption on or after January 12, 2001. The dumping margin for the stainless steel angles in question was 61.45%.

The angles were entered for consumption on January 16 and 17, 2001. The Customs Form (CF) 3461’s reflect a Type 1 entry code (free and dutiable consumption entry). An ACS entry note contained in the case file explains in the “remarks” field that the system had not been set up at the time of entry to accept antidumping case A470-810. The note instructed the Entry Branch to change the entry type code from an “01” to an “03”. The entry summaries reflect the change from a Type 1 to a Type 3 entry code (countervailing/antidumping duty consumption entry). A bond was posted equal to the dumping margins.

Counsel for Acerinox filed a protest on May 2, 2001, against the decision by Customs to require payment of duties and fees on February 2, 2001. Acerinox states that subsequent to the filing of the CF 3461’s but prior to the release of the angles it attempted to substitute a warehouse entry for the consumption entries. According to the protestant, the request was denied. Customs, in its Protest and Summons Information Report, counters that the request for the cancellation of the entries was a telephonic request from the customs broker, made after the merchandise had already been released. The report also notes that the protestant has not presented any documentation to verify that a request for substitution was ever made.

The protestant states it requested the change from consumption entries to a warehouse entry to avoid suspension of liquidation due to the antidumping investigation. Although Acerinox knew a suspension was likely it did not anticipate the specific date on which it was applied.

Acerinox points to an unnumbered Administrative Message to support its position that substitution of a warehouse entry for a consumption entry is routinely allowed. The administrative message in question is dated January 4, 1995, and addresses effective rates of duty and the use of immediate delivery instead of entry procedures at the end of the previous calendar year. The relevant part of this message allowed importers to change consumption entries to warehouse entries for merchandise which had initially been transported in bond, provided the merchandise was still in the carrier’s possession at the time the change was made. This arrangement enabled the importers to take advantage of the lower duty rates which came into effect in the new year.

Acerinox also seeks relief under 19 U.S.C. 1520(a)(4), on the theory that excess duties were deposited by reason of clerical error. It supports this argument by stating that Acerinox personnel had been instructed by counsel to avoid consumption entries when the suspension occurred. This advice was allegedly misunderstood and not acted on promptly. Counsel cites to HQ 723375, dated August 27, 1984, in support of its position that relief should be granted.

ISSUE:

Whether relief may be granted under 19 U.S.C. 1514? Alternatively, whether relief is available pursuant to 19 U.S.C. 1520. LAW AND ANALYSIS:

Section 514(a)(3) of the Tariff Act of 1930, as amended (19 U.S.C. 1514(a)(3)) allows a protest to be filed against a decision by Customs as to all charges or exactions of whatever character within the jurisdiction of the Secretary of the Treasury. The protest must be filed within 90 days after but not before the decision being protested was made. The protest at issue here is timely because it was filed within 90 days of the requirement to pay duties on February 2, 2001.

The crux of Acerinox’s argument is that a demand for payment of duties should never have been made because Customs should have granted its request to substitute a warehouse entry for the consumption entries which had already been filed. Had the steel angles been entered for warehouse, duties would not have become due. Acerinox supports its argument under 19 U.S.C. 1514 by referencing the 1995 year-end administrative message, described in the “facts” section above.

As noted above, the administrative message issued on January 4, 1995, pertains to the year-end immediate delivery procedures implemented for merchandise arriving at the end of 1994. Authority for such procedures is found in 19 CFR §142.21(g), which permits Customs Headquarters to authorize the release of merchandise under the immediate delivery procedures in circumstances other than those specifically outlined by regulation. Typically, this authority is invoked at the end of the year to allow importers who import merchandise in December to take advantage of lower duty rates which come into effect in the following year. The use of the immediate delivery procedures accomplishes this duty savings by shifting the duty rate from the rate in effect at the time of release to the rate in effect at the time of entry summary filing, which if timed correctly will be in January.

The 1995 message was the last of five administrative messages issued by Customs between December 15th, 1994 and January 4th, 1995, to assist importers and brokers in selecting the most favorable duty rate. Persisting confusion by filers about the correct entry and release procedures led Customs in its last message to grant retroactive blanket immediate delivery privileges to all non-quota shipments which had arrived directly between December 16th and December 31st, 1994. In addition, Customs took the unusual step of allowing the retroactive amendment of consumption entries to warehouse entries with respect to merchandise which had been shipped in-bond and then entered for consumption at the port of destination. This allowed those importers to claim the lower 1995 duty rate upon withdrawal for consumption, instead of the higher 1994 duty rate which would have attached upon the acceptance of the transportation entry at the port of arrival (see 19 CFR 141.69(a) & (b)).

The 1995 Administrative Message, and the instructions contained therein, are not germane to the issues raised in this protest. That message applied only with respect to shipments imported at the end of 1994, for which immediate delivery was requested. The pertinent guidance for Acerinox’s situation is found in 19 CFR §141.67, which allows the importer to recall the entry and entry summary documentation at any time before the effective time of entry. The effective time of entry of the steel angles was the time they were released after the CF 3461 entry documentation was filed. See 19 CFR §141.68(a)(1). Acerinox claims that it requested substitution of a warehouse entry for the consumption entry prior to the release of the steel angles. However, it has provided no written evidence to support this claim. Customs disputes the claim, stating that the request was made after release had occurred. In the absence of evidence to support the protestant’s claim, we find that the request to substitute was made too late, after the time of entry. Therefore, the demand for payment of duties which accrued as a result of the filing of the consumption entries was proper, and the protest must be denied with respect to the argument made under 19 U.S.C. 1514(a)(3).

Acerinox also claims that relief is available under section 520(a)(4) of the Tariff Act of 1930, as amended (19 U.S.C. 1520(a)(4)). Section 520(a)(4) authorizes duty refunds whenever it is ascertained prior to liquidation that excess duties, fees, charges, or exactions have been deposited or paid by reason of clerical error. Acerinox contends that this section applies because “Acerinox personnel had been instructed by counsel to avoid consumption entries when the suspension occurred [however] this advice was misunderstood and not acted on promptly”. This request for relief must be denied because there is no evidence of clerical error.

A clerical error is a mistake made by a clerk or other subordinate, upon whom devolves no duty to exercise judgement, in writing or copying the figures or in exercising his intention. S. Yamada v. United States, 26 CCPA 89, T.D. 49628 (1938); Import Export Service of N.J. et al. v. United States, 38 Cust. Ct. 235, C.D. 1869 (1957); Geo. Wm. Rueff, Inc. v. United States, 41 Cust. Ct. 331, Abstract 62204 (1958), rehearing denied, 41 Cust. Ct. 399, Abstract 62433 (1958). It is a mistake occasioned by negligence or inadvertence, which caused the improper execution of a proper intention. S. Jackson & Son, Inc. v. United States, 40 Cust. Ct. 511, Abstract 61794. Clerical error occurs when a person intends to do one thing but does something else, e.g., he meant to write “par. 231” but wrote “par. 131.” It includes mistakes in arithmetic and the failure to associate all the papers in a record under consideration. (94 Treas. Dec. 244, 245-6, T.D. 54848 (1959)). In J.J. McQuillan v. United States, 18 CCPA 215, T.D. 44401 (1930), there were two invoices, one of which declared the value in Japanese yen and the other in American dollars, C.I.F. duty paid. An employee of the broker was instructed to make entry in accordance with the yen price. Instead, he used the C.I.F. duty paid price and deducted certain nondutiable items but overlooked the amount of duty included in the price. The court held that while he disobeyed instructions, the entry was precisely as he intended it to be in form and substance and that the error committed by him was not clerical in character.

Acerinox’s situation is similar to that in McQuillan. The protestant asserts that Acerinox personnel failed to follow instructions to avoid filing consumption entries when the antidumping suspension occurred. However, nothing in the record suggests that the consumption entries were unintentionally filed, or that they were not in the form and substance intended by the filer. Consequently, their filing was not the result of a clerical error.

Finally, Acerinox cites to HQ 723375, supra, in support of its position that the entries should be cancelled and duties refunded. HQ 723375 was a petition for reliquidation of consumption entries and for a refund of duties under 19 U.S.C. 1520(c)(1). Section 520(c)(1) permits reliquidation of an entry to correct mistakes of fact, clerical errors, and inadvertences which do not amount to an error in the construction of a law. Resort to that statutory provision for relief may only be made when the underlying entry has already been liquidated, because section 520(c)(1) supports a claim for reliquidation as distinguished from liquidation. See Berkery, Inc. et al. v. United States, 47 Cust. Ct. 102, C.D. 2287 (1961); Hensel, Bruckmann & Lorbacher, Inc. a/c Naftone International Corp. et al. v. United States, 57 Cust. Ct. 52, C.D. 2732 (1966); J.S. Sareussen Marine Supplies, Inc. v. United States, 62 Cust. Ct. 449, C.D. 3799, 304 F. Supp. 1185 (1969). The liquidation of the two Acerinox entries has been suspended as a result of the preliminary antidumping determination. Consequently, HQ 723375 is inapplicable here.

HOLDING:

Relief is not available under 19 U.S.C. 1514; and Relief is not available under 19 U.S.C. 1520.

The protest should be DENIED. 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 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,

Larry L. Burton
Chief

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