United States International Trade Commision Rulings And Harmonized Tariff Schedule
faqs.org  Rulings By Number  Rulings By Category  Tariff Numbers
faqs.org > Rulings and Tariffs Home > Rulings By Number > 2006 HQ Rulings > HQ 116752 - HQ 563352 > HQ 230585

Previous Ruling Next Ruling
HQ 230585




September 5, 2006

RR:CTF:ER LIQ-9-01 230585 LLB

Category: LIQUIDATION

U.S. Customs and Border Protection
423 Canal Street
Protest Office, Room 236
Attn: Ms. Patricia Burke
New Orleans, LA 70130

RE: Protest/AFR-2002-04-100489; ELG Haniel Trading Corp.; 19 U.S.C. §§ 1514(a) and 1520(c)(1); Aviall of Texas, Inc. v. The United States, 70 F.3d 1248 (Fed. Cir. 1995); Trade Act of 2002, § 4101, et. seq., 116 Stat. 950, Pub. L. 107-210 (Aug. 6, 2002); 7202.41.0000, HTSUS

Dear Ms. Burke:

The above-referenced protest (2002-04-100489) was forwarded to this office for further review. We have reviewed the arguments set forth by the protestant, ELG Haniel Trading Corp., and your office. Our decision follows.

Facts

According to the entry record, on March 29, 2002, entered merchandise under HTSUS subheading 7204.41.0080 (2002), which provided, in pertinent part: Quantity General Special
7204 Ferrous waste and scrap; remelting scrap ingots of iron or steel:
. . .
7204.41.00 Turnings, shavings, chips, milling waste, sawdust, fillings, trimmings and stampings, whether or not in bundles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Free . . .
80 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . t

The Commercial Invoice attached thereto described the merchandise as “South African High Carbon Ferrochrome.”

On June 14, 2002, CBP rate-advanced the entry explaining in its Notice of Action that the proper classification was under HTSUS subheading 7202.41.0000 (2002), which provided, in pertinent part:

Quantity General Special
7202 (con.) Ferroalloys (con.):
. . .
Ferrochromium:
7202.41.00 00 Containing by weight more than 4 percent of carbon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . kg . . . . . . 1.9% Free (A,CA,E,IL,J, Cr kg JO)

The entry was liquidated on October 4, 2002, under HTSUS subheading 7202.41.0000 at 1.9% ad valorem indicated in the Notice of Action. On November 18, 2002, a protest was filed thereto (2002-02-101136) pursuant to 19 U.S.C. § 1514 in which the protestant argued that the entry was eligible for duty-free treatment under the African Growth and Opportunity Act (AGOA). Attached to the protest were Certificates of Origin along with a revised entry summary, which classified the entry under HTSUS subheading 7202.41.0000 with an “A” indicator next to the classification. The protest was denied on February 19, 2003 as not eligible for duty-free treatment under the AGOA.

On October 1, 2003, the protestant filed a petition pursuant to 19 U.S.C. § 1520(c)(1) arguing that duty-free entry was not claimed for the subject entry under the Generalized System of Preferences (GSP) based on mistake of fact, clerical error, or other inadvertence. On January 28, 2004, the port denied the § 1520(c)(1) and it is from this decision the protestant timely protests.

Pursuant to 19 U.S.C. § 1514(c)(3)(A), an importer has 90 days from notice of liquidation or reliquidation to file a protest. In circumstances where § 1514(c)(3)(A) is inapplicable, an importer has 90 days from the date of the decision as to which the protest is made. See 19 U.S.C. § 1514(c)(3)(B). Insofar as the protest decision was issued on January 28, 2004, the protestant had until April 27, 2004, to file its protest. Insofar as the port received a faxed copy of the protest on April 26, 2004, the protest was timely. Section 1514(c)(3) was amended by the Act of December 3, 2004, as to the entries made on or after December 18, 2004, to provide a 180-day protest period. The Act also repealed section 1520(c) with an effective date of December 18, 2004.

Issue

Whether the protestant has established that a clerical error, mistake of fact, or other inadvertence, occurred in the entry, liquidation, or in other customs transactions

Law and Analysis

Pursuant to former 19 U.S.C. § 1520(c)(1) which provided:

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 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 . . .

[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). A “clerical error” has been stated by the courts to be “a mistake made by a clerk or other subordinate, upon whom devolves no duty to exercise judgment, in writing or copying the figures or in exercising his intention.” See PPG Industries, Inc. v. United States, 7 C.I.T. 118, 124 (1984). “Inadvertence connotes inattention, oversight, negligence, or lack of care.” 94 Treas. Dec. 244, 245-6, T.D. 54848 (1959). “It should be noted that ‘clerical error, mistake of fact, or other inadvertence’ are not necessarily mutually exclusive terms. In other words some "mistakes of facts" also might be clerical errors or other inadvertence; or some "clerical errors" also might be mistakes of fact or other inadvertence, and so on.” Id.

In its protest, in which it also incorporates arguments from its 19 U.S.C. § 1520(c)(1), petition, the protestant argues that GSP preference under the Trade Act of 2002, was not claimed by the statutory deadline, due to a mistake of fact, inadvertence, or other clerical error. Section 501 of the Trade Act of 1974, as amended, authorizes the President to establish a GSP to provide duty-free treatment for eligible articles imported directly from designated beneficiary countries for specific time periods. On December 17, 1999, the Trade Act of 1974 was amended to extend duty-free treatment and the retroactive application for certain liquidations and reliquidations under the GSP to eligible articles from designated beneficiary countries that were entered, or withdrawn from warehouse, for consumption on or after July 1, 1999, through September 30, 2001. See Ticket To Work and Work Incentives Improvement Act of 1999, Pub.L. 106-170 § 508, 113 Stat. 1860). On August 6, 2002, the GSP was extended to December 31, 2006 and was made retroactive to entries made on or after September 30, 2001. See Trade Act of 2002, § 4101, et. seq., 116 Stat. 950, Pub. L. 107-210 (Aug. 6, 2002). The Trade Act of 2002 provides in pertinent part:

. . .
(b) RETROACTIVE APPLICATION FOR CERTAIN LIQUIDATIONS AND RELIQUIDATIONS.—
(1) IN GENERAL.—Notwithstanding section 514 of the Tariff Act of 1930 or any other provision of law, and subject to paragraph (2), the entry—
. . .
(B) that was made after September 30, 2001, and before the date of the enactment of this Act, and (C) to which duty-free treatment under title V of that Act did not apply, shall be liquidated or reliquidated as free of duty, and the Secretary of the Treasury shall refund any duty paid with respect to such entry.
(2) REQUESTS.—Liquidation or reliquidation may be made under paragraph (1) with respect to an entry only if a request therefor is filed with the Customs Service, within 180 days after the date of the enactment of this Act, that contains sufficient information to enable the Customs Service— (A) to locate the entry; or
(B) to reconstruct the entry if it cannot be located.

Pub. L. 107-210,Title XLI, § 4101(b)(emphasis added). Thus, in order for the protestant’s entry to be eligible under the Trade Act of 2002, it should have been made between September 30, 2001 and August 6, 2002, and its request for treatment thereto should have been received by Customs within 180 days of August 6, 2002, which was February 2, 2003.

Initially, we note the entry qualified for GSP treatment insofar as the entry was filed on March 29, 2002. Thus, the remaining issue is whether the liquidation without GSP preference for the subject entry was due to a mistake of fact, clerical error, or other inadvertence.

First, the protestant argues that there was a mistake due to a typographical error in the protestant’s instruction to the broker. That is, the protestant asserts that it erroneously notified its broker that the merchandise was classified under HTSUS subheading 7204.41.0000, which was not eligible for GSP preference, rather than HTSUS subheading 7202.41.0000, which was eligible GSP preference. In addition, the protestant argues that there was a mistake in correcting the entry because the broker failed to follow its instructions to correct the entry. The protestant has offered in support of its argument two letters, the first letter, which is on the protestant’s stationary, erroneously dated March 14, 2001, and is addressed to the broker—“Attention: Stacy”. While the letter is dated March 14, 2001, the stamped receipt date is “15 Mar 02” and it bears a handwritten signature of Pat McGuire dated March 18, 02 and the merchandise description and vessel name matches the relevant CF 7501 data. The text of the letter is as follows:

SUBJECT: Importation of High Carbon Ferrochrome M/V Pindos, [redacted] MT’s Ex. South Africa

Dear Stacy:

Enclosed are the following documents pertaining to our shipment:

Four copies of the Original Bills of Lading (the originals have been sent to Southport Agencies) Four copies of the Commercial Invoices
Four Original Certificates of Origin
One Original TSCA Certificate
Four copies of Certificates of Analysis

The f.o.b. Richards Bay value of this shipment is [redacted]. Please enter this ferrochrome using Harmonized Number 7204.41.0000.

Our IRS number is [redacted] and our bond number is [redacted].

If you have any questions please call me.

The second letter, which noted the typographical error as to the tariff subheading is dated April 11, 2002, and signed by Mr. Patrick A. McGuire, Manager of Corporate Logistics for Haniel. The letter provides as follows:

Dear Stacy:

I was reviewing the subject file and noticed that I mistyped the Tariff Schedule number on my instructions as 7204.41.000, rather than 7202.41.0000, “ferrochrome containing by weight more than 4 percent carbon.” GSP expired on September 30, 2001, so the 1.9% duty is applicable. However, please use the Special Program Indicator “A” on the entry in the event GSP is retroactively reinstated. Also, we have paid U.S. Customs for the HMF and MPF. ELG Haniel Trading will be responsible for the payment of the duty.

I apologize for the error, but please correct it as soon as possible.

If you have any questions please call me [phone number redacted].

Based on the foregoing letters, and the July 14, 2002, Notice of Action, we conclude, as explained below, that a mistake of fact did occur in the liquidation and that the error was correctable under former section 1520(c)(1).

In Aviall of Texas, Inc. v. The United States, 70 F.3d 1248 (Fed. Cir. 1995), the broker had filed a blanket certificate for aircraft parts under the Civil Aircraft Agreement. The certificate was valid for one year. The broker failed to renew the certificate, and when Customs failed to grant duty-free treatment for the imported merchandise, Aviall protested, claiming that its failure to renew was a "clerical error." Customs denied the protest, contending that there was no proof of clerical error. The U.S. Court of Appeals for the Federal Circuit found that because (1) Aviall regularly renewed its blanket certificate, (2) the certificate on file was accurate, though out-dated, and (3) Customs had notice of the error (entry summaries were marked with a "C" indicating Civil Aircraft Agreement), Aviall was entitled to relief under section 1520(c)(1) for its "inadvertent" failure to timely renew its certificate.

Similar to Aviall, the broker failed to claim GSP preference, although instructed to do so by the importer’s April 11, 2002, letter. The port liquidated the entry without the benefit of such preference and denied the importer’s1520(c)(1) petition and protest on the basis that the claim for GSP preference was not timely filed. Like the entry in Aviall, the entry here was eligible for duty-free treatment, as discussed above, insofar as the entry was filed on March 29, 2002, within the deadline outlined under the Trade Act of 2002, and the merchandise was classified under a HTSUS subheading, 7202.41.0000, which was eligible for GSP preference. CBP had notice of the foregoing because it issued a notice with the corrected classification. The notice also signifies that the importer inadvertently believed the broker had corrected the subject entry based on the issuance of the April 11, 2002, letter. In addition, the port had notice the importer wished to claim GSP preference because the importer submitted a corrected entry attached to protest 2002-02-101136 has an “A” indicator next to the line item for which the importer claims GSP preference. As such, we conclude that it is manifest from the record that an error in the liquidation occurred.

In addition, the circumstances here meet the observations as to the application of former section 1520 (c) (1) made in the case of Executone Information Systems v U.S., 96 F 3d 1383 (Fed. Cir.,1996). The court first observed that Executone alleged that a mistake of fact had occurred in that Executone believed at the time of importation that valid Form A’s had been filed when,in fact, they had not been filed. The court explained that, contrary to the Government’s position that the alleged error constituted a mistake of law, the alleged error of no Form A’s having been filed alleged an error of the mistake of fact variety. The court held that Executone failed to support that allegation with evidence. Unlike the situation in Executone, the April 11,2002 letter shows that the importer requested its broker to correct the importer’s classification error and to place the special program indicator for GSP in the event that Congress re-instated the program. There is no dispute that the broker failed to take those actions or that the merchandise met the GSP requirements.

The protestant also argues that it also attempted to make its GSP claim by having its broker file a protest (protest 2002-02-101136 dated Nov. 18, 2002) with a corrected copy of the entry; however, by clerical error, the broker requested duty-free treatment under the AGOA, rather than under the GSP. 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." Godchaux-Henderson Sugar Co., Inc., v. United States, 496 F. Supp. 1326 (1980)(internal citation omitted). However, in view of the conclusion that the liquidation of the entry was due to an error correctable under § 1520(c)(1), it is not necessary to address this issue.

Holding

Insofar as the protestant has established that an error which is correctable under former 19 U.S.C. 1520 (c ) (1) occurred in the liquidation, as described herein, relief is warranted. The protest should be allowed.

In accordance with the Protest/Petition Processing Handbook (CIS HB, January 2002, pp. 18 and 21), you are to mail this decision, together with the Customs Form 19, 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 CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

Myles B. Harmon, Director
Commercial Trade and Facilitation Division

Previous Ruling Next Ruling

See also: