LIQ-9-01-CO:R:C:E 225399 DHS/PH
Assistant District Director
U.S. Customs Service
Commercial Operations
1215 Royal Lane, P.O. Box 619050
Dallas/Ft. Worth TX 75261
RE: Internal Advice Request; Mistake of Fact; 19 U.S.C.
1520(c)(1)
Dear Sir:
This is in reference to your request for internal advice, dated
May 5, 1994, forwarding a March 1, 1994, "supplement" to a
petition under 19 U.S.C. 1520(c)(1) from the firm of Glad &
Ferguson, stated to be on behalf of B & G Arnold and Sekin
Transportation International (Sekin). This office has received
additional materials relating to this matter. Copies of those
materials are enclosed for your files.
Our advice follows.
FACTS:
In a letter to you dated July 1, 1993 (filing date unknown), an
attorney stating he represented Sekin stated that "[he was]
requesting a thirty day extension for the filing of a Petition
for Re-liquidation for the entries that are attached to [his
letter]." The attorney stated that "[his] client [had] advised
[him] that a recent internal review of an accounts records
indicated that due to clerical error and/or mistake of fact the
account had overpaid duty." The attorney stated "[s]ince I have
not had a chance to review the files, I would like to preserve my
client's right to file a Petition for Re-liquidation pursuant to
19 CFR 173." Attached to the letter was a list of eight entry
numbers, with the liquidation dates (July 6 (4 entries), 10 (2
entries), 17 (1 entry), and 24 (1 entry)), and a "Sekin
reference" number.
In a letter to you dated July 22, 1993, and indicated to have
been filed on the same date, the attorney who wrote the July 1,
1993, letter purported to "supplement" the July 1, 1993, letter.
In this letter the mistakes, errors, or other inadvertences
involved were described as being mistakes by the district
director as to: (1) whether or not the movements contained more
than one or no jewels; (2) whether or not the watch cases were
plated with gold or silver; and (3) the value of the watches.
Reliquidation was sought for each of the entries listed in an
exhibit attached to the letter. The writer of the July 22, 1993,
letter stated that he "reserves to further supplement [the
application]." According to the writer:
In this case, Sekin ... classified watches under the tariff
classification shown on the pertinent entry based on facts
provided to Sekin by [the importer] and other parties. The
determination of facts that lead to the classification
brought about an assumption of facts that proved later to be
incorrect. The facts assumed at the time of entry would
have made the classification proper, however discovery of
new facts subsequently, showed that the classification was
not correct.
The attachment to the July 22, 1993, letter listed 11 entries
(dated between November 14, 1991, and March 6, 1992) liquidated
between March 6, 1992 and June 19, 1992 (i.e., more than one year
before the July 1, 1993, letter). The attachment listed 7
entries (dated between March 20, 1992, and April 2, 1992)
liquidated between July 6, 1992, and July 17, 1992 (i.e., within
one year before the July 1, 1993, letter but more than one year
before the July 22, 1993, letter). The attachment listed 47
entries (dated between April 10, 1992, and December 1, 1992)
liquidated between July 24, 1992, and March 19, 1993 (i.e.,
within one year before the July 22, 1993, letter). The
attachment listed 14 entries (dated between January 4, 1993, and
April 1, 1993) liquidated between April 23, 1993, and July 16,
1993 (we understand that protests under 19 U.S.C. 1514 were filed
for these entries and that the protests were granted).
In the March 1, 1994, letter which you forwarded with your
request for internal advice, the section 1520(c)(1) petition
under consideration was purported to be further "supplemented."
In this submission, the nature of the alleged mistakes of fact
was specified. The mistakes were specifically described as
relating to the number of jewels in the movements, whether
certain of the cases were electro-plated, the type of display on
certain models, and the type of watch (i.e., wrist or pocket).
Two affidavits were submitted with the March 1, 1994, letter.
In the first of these affidavits, dated February 24, 1994, the
affiant states that she is employed by Sekin as a licensed
customhouse broker. The affiant states that during the course of
her employment she was responsible for making the initial three
or four entries in this case. The affiant states that when she
first undertook the original classification of the watch models
under consideration, she relied completely on the Sekin office in
Dallas to determine classification. She states that she sent the
files to the Dallas office to perform the classification analysis
and assumed that the Dallas office contacted the importer to
ascertain the facts concerning "the watch movement, the
composition of the cases, the display types, etc." She states
that she received by FAX from the Dallas office two
classifications (subheading 9102.11.9510, HTSUS, and subheading
9102.11.2510, HTSUS). The affiant states that she assumed that
these classifications represented the Dallas office's final
determination as to the proper classifications and that she rated
the models on the invoices accordingly. The affiant states that
she turned the account over to the second affiant (see below).
The affiant states that at all times relevant, until June 1993,
she believed that the two original classifications were correct
and based upon facts ascertained by the Dallas office of Sekin
from the importer concerning the composition of the movements,
cases, displays, etc., of the original models imported in the
first three or four entries. She states that there was nothing
in the invoices or catalogues which she found to be at odds with
what she believed to be the correct classifications, as
determined by the Dallas office, and that the invoices were never
clear on the questions of composition and she was never given a
"key" to the codes used on the invoices.
The second affidavit, dated February 17, 1994, is by a person who
states that she was employed by Sekin as a licensed customhouse
broker between November 1991 and February 1993. She states that
after she arrived at Sekin, sometime in December 1991, she was
assigned the account for the importer. She states that at least
three entries had been made for the importer and that she was
advised that the watches in the entries had been rated by the
Dallas office. She states that she assumed that the prior
ratings made by the Dallas office had been based upon actual
determinations of the questions of fact concerning the component
compositions of the bands, cases, and movements. The affiant
states that she obtained catalogues from the importer and
examined the catalogue representation of the original models
imported against the original ratings (for the earlier ratings)
and classified like or similar models accordingly (i.e., as done
in the earlier entries). The affiant states that if she was in
doubt about a particular model, she would ask the importer if the
model was similar or identical to a previously imported and rated
model and if advised that the models were similar, she would rate
the model on the basis of the previously imported and rated
model.
According to the second affiant, she used the index in the back
of the catalogues she had obtained from the importer to note the
basic facts for classification of bands and cases. The affiant
provides a copy of these indices as an exhibit to her affidavit.
Her notations next to the model numbers are stated to indicate
band composition and case composition. In regard to the latter,
on the basis of the original rating (assumed to have been done by
the Dallas office), the affiant states that she assumed that
there was no electroplating used and that she treated the watches
as if they were base metal with gold or silver tones and, in all
cases, with stainless steel or plastic backs. In regard to the
display of the watches (digital or mechanical), the affiant
states that she mistakenly understood that all models imported by
the importer were mechanical displays.
According to information obtained during the processing of this
case, after the importer performed its end of the year analysis
which reflected the costs and profits associated with the watch
models under consideration, an official of the importer requested
an official of the watch manufacturer to provide him with a list
of the materials used in the cases. In a "FAX" dated June 18,
1993, the official of the watch manufacturer provided a list of
symbols (abbreviations or letters found on the invoices) and the
case material and case covering material that the symbols
represented (e.g., "EGP" or "GP" is stated to indicate a brass or
zinc case with gold plating). The "FAX" also listed some of the
model numbers and the case material and case covering material
used on the models as examples. In a letter dated June 29, 1993,
the official of the watch manufacturer advised the official of
the importer that the watches (with the trade name of the
manufacturer) sold to the importer since 1990 contained no jewels
or only one jewel except for three styles (RVUXX1P, RRJXX1P and
RRJXX3P) which contained four jewels.
With the March 1, 1994, letter, in the form of Attachments I
through XV, is a list of product (or model) numbers, the original
tariff classification, the proposed tariff classification, and a
summary explanation. This information is set forth below in
summary form.
Att. No. of Original Current Status
No. models Class. Class.
I 3 9102.11.9510 9102.11.9510 Correctly classified as
having 2 jewels, case not
plated, etc.
II 40 9102.11.2510 9102.11.2510 Correctly classified
(mechanical display, less
than 2 jewels, band of
textile or metal, cases
not electroplated
III 1 9102.11.9510 9102.12.8010 Originally classified
with mechanical display:
Has opto electric display
IV 125 9102.11.9510 9102.11.4510 Originally classified as
having 2 jewels: Has
less than 2 jewels
V 135 9102.11.9510 9102.11.3010 Originally classified as
having 2 jewels and cases
not gold-electroplated:
Has less than 2 jewels
with gold electroplated
cases
VI 76 9102.11.2510 9102.11.1010 Originally classified as
having gold cases not
electroplated: Has
electroplated gold cases
with less than 2 jewels
VII 1 9102.11.2510 9102.11.4510 Originally classified as
having textile or metal
band: Has plastic or
leather band
VIII 1 9102.11.2510 9102.11.3010 Originally classified as
having textile or metal
band with cases not
electroplated with gold:
Has plastic or leather
band with gold
electroplated cases and
less than 2 jewels
IX 2 9102.11.9510 9102.11.2510 Originally classified as
having 2 jewels with band
of plastic or leather:
Has less than 2 jewels
with band of textile or
metal
X 3 9102.11.9510 9102.11.1010 Originally classified as
more than 2 jewels with
plastic or leather band
and case not gold
electroplated: Has less
than two jewels, band of
textile or metal and case
is gold electroplated
XI 4 9102.11.2510 9102.12.8010 Originally classified as
having a mechanical
display: Has opto-
electric display
XII 30 9102.11.9510 9102.12.8010 Originally classified as
having a mechanical
display: Has opto-
electric display
XIII 18 9102.11.9510 9102.19.4010 Originally classified as
having a mechanical
display: Has combination
of opto-electric and
mechanical display
XIV 4 9102.11.2510 9102.19.2010 Originally classified as
having a mechanical
display: Has combination
of opto-electric and
mechanical display
XV 3 9210.11.2510 9102.91.4010 Originally classified as
wrist watches: Is a
pocket watch
The representative of Sekin met with attorneys of the Entry
Rulings Branch about this matter on June 6, 1994. After that
meeting, with a letter dated August 24, 1994, Sekin provided
Customs with copies of documents (Entry Summary forms, invoices,
and excerpts from catalogues illustrating and listing watch
models) for four of the entries under consideration. According
to the August 24, 1994, letter, these documents "indicate the
mistake of fact which resulted in the misclassification of the
various watch models imported by [the importer]." These
documents are stated to be "a representative sample". According
to the August 24, 1994, letter, "if [Sekin's files were] audited,
[they] would indicate identical documentation which resulted in
the mistake of fact which led to the misclassification." The
documents for the four entries are summarized below:
Entry Invoice Model Classification Number Number Number Status
409-04xxx15-5 HR2-1669 RMF007P Originally classified as
having a textile or metal
band
409-04xxx60-3 HR2-1655 RPG262P Originally classified as
having textile or metal
band with case not
electroplated with gold
409-04xxx56-9 H3R1084 RES031P-2 Originally classified as
having a mechanical
display
409-04xxx95-9 H3R1065 RRS046P Originally classified as
a wrist watch
ISSUE:
May relief be granted under 19 U.S.C. 1520(c)(1) for the entries
involved in this case?
LAW AND ANALYSIS:
Under 19 U.S.C. 1520(c)(1) (as of the time under consideration),
Customs may reliquidate an entry to correct a clerical error,
mistake of fact, or other inadvertence, not amounting to an error
in the construction of a law, when certain conditions are met.
Section 1520(c)(1) has frequently been interpreted by the Courts.
It has been stated that "[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" (see PPG Industries, Inc., v. United
States, 7 CIT 118, 124 (1984), and cases cited therein). 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) (emphasis in
original), quoted in Concentric Pumps, Ltd., v. United States, 10
CIT 505, 508, 643 F. Supp. 623 (1986); see also, C.J. Tower &
Sons of Buffalo, Inc. v. United States, 68 Cust. Ct. 17, 22, C.D.
4327, 336 F. Supp 1395 (1972), aff'd, 61 CCPA 90, C.A.D. 1129,
499 F. 2d 1277 (1974), and Universal Cooperatives, Inc. v. United
States, 13 CIT 516, 518, 715 F. Supp. 1113 (1989)). Inadvertence
has been defined as "an oversight or involuntary accident, or the
result of inattention or carelessness, and even as a type of
mistake" (Occidental Oil & Gas Co. v. United States, 13 CIT 244,
246 (1989), quoting C.J. Tower & Sons of Buffalo, Inc. v. United
States, supra).
The conditions required to be met under 19 U.S.C. 1520(c)(1) are
that the clerical error, mistake of fact, or other inadvertence
must be adverse to the importer, manifest from the record or
established by documentary evidence, and brought to the attention
of the appropriate Customs officer within one year after the date
of liquidation of the entry. 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" (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, supra).
Seven of the entries under consideration (the first seven listed
in the July 1, 1993, letter described in the FACTS portion of
this ruling) were liquidated more than one year before the July
22, 1993, letter to you listing all of the entries under
consideration and describing the mistakes, errors, or other
inadvertences for which relief was sought (no relief under
section 1520(c)(1) may be granted in regard to the 11 entries
liquidated between March 6, 1992, and June 19, 1992, because the
July 1, 1993, letter was untimely in regard to those entries;
this ruling does not address the 14 entries liquidated between
April 23, 1993, and July 16, 1993, since we understand that those
entries were timely protested and the issues were resolved under
19 U.S.C. 1514). In the July 1, 1993, letter, a 30-day extension
for the filing of a petition for reliquidation was sought on the
basis that Sekin had advised the attorney writing the letter that
an internal review indicated that "due to clerical error and/or
mistake of fact the account had overpaid duty." The attorney
writing the letter stated that he had not had a chance to review
the files but would like to preserve his client's right to file a
petition for reliquidation.
There is no authority under section 1520(c)(1) for the extension
of the time for filing a petition for reliquidation under that
section. Failure to bring an error, mistake, or other
inadvertence to the attention of the appropriate Customs officers
within a year from liquidation results in the lapse of the
authority to correct liquidations under section 1520(c)(1) (see
Omni U.S.A., Inc., v. United States, 6 Fed. Cir. (T) 99, 101, 840
F. 2d 912 (1988)). The Courts have distinguished between notice
and substantiation under section 1520(c)(1). In the recent case
of ITT Corp. v. United States, 24 F. 3d 1384 (Fed. Cir. 1994),
the Court stated, "[w]ith regard to notice, the importer must
assert the existence of an inadvertence to Customs 'within the
proper time and with sufficient particularity to allow remedial
action.'" (24 F. 3d at 1387) With regard to substantiation, the
Court stated that "[m]istakes of fact that are not manifest from
[the] record ... must be established by documentary evidence."
(24 F. 3d at 1387) In reversing the CIT decision (ITT
Corporation v. United States, 812 F. Supp. 213 (CIT 1993))
denying relief under section 1520(c)(1) because a mistake of fact
was not established from the documentary evidence ITT submitted
to Customs before the reliquidation decision, the Court stated:
The [CIT] correctly notes that "a party who waits past the
time of filing its 19 U.S.C. 1520(c)(1) request to file
supporting documentation risks an adverse decision by
Customs in the interim." ... While true, such an adverse
decision does not preclude an importer from introducing
additional evidence, documentary or otherwise, at trial de
novo before the [CIT] ... to substantiate further the
alleged mistake of fact. [24 F. 3d at 1388]
If there were no other evidence (i.e., other than the July 1,
1993, letter) regarding the bringing to the attention of Customs
the error, mistake, or other inadvertence, we believe that the
July 1, 1993, letter would be insufficient to meet the one year
requirement for bringing the error, mistake, or other
inadvertence to the attention of Customs. However, at the
request of the party who wrote the March 1, 1994, letter to you,
we have consulted with a member of your staff, Ms. Sue Linneman,
who is familiar with this case. She states that during the
period between July 1, 1993, and July 22, 1993, and before July
6, 1993 (i.e., the 1-year anniversary of the earliest liquidation
of the entries listed in the July 1, 1993, letter), it was
brought to her attention that there was an error, mistake, or
other inadvertence in the liquidation of the listed entries;
i.e., that the merchandise was misclassified, in some cases
because of mistakes involving the number of jewels in the
movements of the watches. Therefore, we conclude that the
requirement for bringing the alleged error, mistake, or other
inadvertence to the attention of the appropriate Customs officer
within one year of liquidation has been met in regard to the
entries listed in the July 1, 1993, letter. See, in this regard,
C.I.E. 2003/64, in which it was stated in regard to the issue of
notice to Customs under section 1520(c)(1) that:
... although written notice to customs is always preferable,
the law requiring that errors be "... brought to the
attention of the Customs Service" does not state a notice
must be in writing [and therefore] if the ... [C]ustoms
employee can state that the matter was called to his [or
her] attention within one year after the date of
liquidation, the time requirements of section 520(c)(1), as
amended, will have been satisfied.
Basically, reliquidation under section 1520(c)(1) is sought in
this case on the basis of the affidavits stating that when the
initial classifications of the merchandise under consideration
were made, the responsible party assumed that the Dallas office
of Sekin had ascertained the facts as to "the watch movement, the
composition of the cases, the display types, etc." and that a FAX
transmittal from that office listing two classifications was that
office's final determination as to the proper classification.
Classifications of subsequent entries, according to the second
affiant, were based on the same assumption (i.e., that the Dallas
office of Sekin had ascertained the facts (see above) and that
the FAX transmittal from that office listing the two
classifications was that office's final determination as to the
proper classification). For subsequent classifications, the
affiant stated that she compared catalogue representations of the
models classified in the initial entries with models in
subsequent entries or, if she was in doubt, she would ask the
importer if the model was similar or identical to a previously
imported model, and that she classified like or similar models
accordingly. This affiant stated that she noted the basic facts
for classification on the indices of the catalogues she had
obtained from the importer (a copy of the indices, with
notations, is provided). In regard to case composition, this
affiant stated that based on what she believed to be the Dallas
office's classification, she assumed that there was no
electroplating used and in regard to the display of the watches
she understood that all models imported by the importer were
mechanical (rather than digital) display.
The mistakes alleged in this case are mistakes in the factual
nature of the merchandise (i.e., in the display (mechanical or
opto-electric), number of jewels (more or less than 2), band
composition, case plating, and type (wrist or pocket)) which
resulted in misclassification of the merchandise. Generally, an
erroneous classification of merchandise is a mistake of law and
is not remediable under 19 U.S.C. 1520(c)(1) (see, e.g., Mattel,
Inc. v. United States, 72 Cust. Ct. 257, 262-263, C.D. 4547, 377
F. Supp. 955 (1974)). However, "[a] mistake sufficient to invoke
the relief provided by 1520(c)(1), is one which 'goes to the
nature of the merchandise and is the underlying cause for its
incorrect classification.'" (Fabrene, Inc., v. United States,
CIT Slip Op. 93-164, Vol 27, Customs Bulletin and Decisions, No.
36, p. 9, 11 (1993), quoting from Boast, Inc., v. United States,
CIT Slip Op. 93-20, Vol. 27, Customs Bulletin and Decisions, No.
9, p. 11, 14 (1993)) In Universal Cooperatives, Inc., v. United
States, supra, the Court distinguished between "decisional
mistakes" in which a party may make the wrong choice between two
known alternative sets of facts and which "must be challenged
under Section 514" and "ignorant mistakes" which are remediable
under 19 U.S.C. 1520(c)(1).
With one exception, in regard to the alleged mistake regarding
the coating of the cases (see Attachments V, VIII, and X), we
note that the effect of this mistake, by itself, was not adverse
to the importer. The information as to the case material is
necessary to correct the classification in cases where other
alleged mistakes may result in a classification of the watches
under consideration which is adverse to the importer and which
can be corrected under section 1520(c)(1).
The exception to the above is Attachment VI, in which both the
original and the proposed classification were stated to be for
watches with less than 2 jewels and the original classification
was for watches having gold cases not electroplated and the
proposed classification is for watches with electroplated gold
cases. The original classification is stated to have been under
subheading 9102.11.2510, HTSUS, and the proposed classification
is subheading 9102.11.1010, HTSUS. Initially we note that if the
cases had actually been of gold, it appears that the correct
classification would have been under heading 9101, not heading
9102 (see Note 2, Chapter 91, HTSUS). We note also that this is
completely inconsistent with the second affiant's statement
(i.e., she states that she assumed that there was no
electroplating used and that she treated the watches as if they
were base metal with gold or silver tones). Clearly, in regard
to Attachment VI, it has not been established by documentary
evidence that the original classification was the result of a
mistake of fact not amounting to an error in the construction of
a law (if the facts as described in Attachment VI are correct,
any mistake appears to have been an error in the construction of
a law).
The example of this alleged mistake provided by Sekin is found in
entry 409-04xxx60-3. (NOTE: In each of the invoices for the
examples provided by Sekin, there appears to be indicated a 6-
digit classification (e.g., in invoice HR2-1655, the indicated
classification for model RPG262P is "9102.11"). Since the
original classification for this model is claimed to have been
under subheading 9102.11.25 (Attachment II, in which the original
classification is stated to have been correct; or Attachment VIII
in which the "correct" classification is claimed to be subheading
9102.11.3010), the apparent ignoring of this indication by the
affiants would not have affected the classification. See
discussion of Livingston, infra, as to how this could affect
relief under section 1520(c)(1).) The invoice cited is HR2-1655.
The model number is RPG262P. According to the entry summary for
this entry regarding this invoice, 1800 units (movements, cases,
straps, and batteries) were classified under subheading
9102.11.95, HTSUS, and 900 units (movements, casts, straps, and
batteries) were classified under subheading 9102.11.25, HTSUS.
The invoice (HR2-1655) lists 2,700 units, as follows (references
to Attachment, Original Classification, and "Correct"
Classification are to that information in the March 1, 1994,
submission):
Model # Units Attach. Orig. Clas. "Correct" Clas.
RME011P 150 IV 9102.11.9510 9102.11.4510
RMF333P 300 IV 9102.11.9510 9102.11.4510
RMF474P 150 V 9102.11.9510 9102.11.3010
RMF510P 150 VI 9102.11.2510 9102.11.1010
RMF510P-2 150 V 9102.11.9510 9102.11.3010
RPG212P 150 V 9102.11.9510 9102.11.3010
RPG252P 150 II 9102.11.2510 9102.11.2510
RPG262P 150 II 9102.11.2510 9102.11.2510
RPH043P-3 300 IV 9102.11.9510 9102.11.4510
RPH236P 150 V 9102.11.9510 9102.11.3010
RQF024P 150 XIII 9102.11.9510 9102.19.4010
RRS034P 150 VI 9102.11.2510 9102.11.1010
RRS073P 150 II 9102.11.2510 9102.12.2510
RRS074P 150 VI 9102.11.2510 9102.11.1010
RSA011P 150 IV 9102.11.9510 9102.11.4510
RYA002P 150 V 9102.11.9510 9102.11.3010
Although the above is consistent with the entry summary for
invoice HR2-1655 (i.e., as to the total units classified under
subheadings 9102.11.95 and 9102.11.25, HTSUS), there is no way,
based on the information available to us, to determine whether
the referenced model (RPG262-P) was originally classified under
subheading 9102.11.25 or 9102.11.95, HTSUS. This is so because
the values of the various models are cumulated (compare to the
discussion below of the example provided for the alleged mistake
involving the type of watch (entry 409-04xxx95-9, invoice
H3R1065, model RRS046P) in which only 150 units were initially
classified under subheading 9102.11.25 and the values
corresponded to those in the invoice for model RRS046P). The
effect of the lack of certainty as to the actual original
classification is amplified when, as is true of model RPG262,
Sekin concedes that the original classification could have been
correct (see Attachment II).
As stated above, "[m]istakes of fact that are not manifest from
[the] record ... must be established by documentary evidence"
(ITT Corp. v. United States, supra, 24 F. 3d at 1387). Rather
than establishing the alleged mistake of fact regarding case
coatings, the documentary evidence submitted by Sekin with its
August 24, 1994, letter casts doubt on the affidavits regarding
this issue. Furthermore, it is essential that the actual
original classification of the model under consideration be
established (i.e., because of the requirement quoted above; see
also United States v. Lineiro, 37 CCPA 5, 10, C.A.D. 410 (1949),
"[d]etermination of issues in customs litigation may not be based
on supposition") and, in the example for this mistake this could
not be done. We note that it is stated in the August 24, 1994,
letter that "if [Sekin's files were] audited, [they] would
indicate identical documentation ...." No relief should be
granted in regard to this issue (i.e., in regard to the models
listed in Attachment VI).
In regard to the alleged mistake concerning watch displays (see
Attachments III, XI, XII, XIII, and XIV), the first affiant
states that she believed that the Sekin office in Dallas had
ascertained the facts (including those concerning the display
types) and that the HTSUS number provided by that office
reflected those facts. The second affiant states that she
understood that all models imported by the importer were
mechanical displays.
The example of this alleged mistake provided by Sekin is found in
entry 409-04xxx56-9. The invoice cited is H3R1084. The model
number is RES031P-2. According to the entry summary for this
entry regarding this invoice, 1200 units (movements, cases,
straps, and batteries) were classified under subheading
9102.11.95, HTSUS, and 600 units (movements, casts, straps, and
batteries) were classified under subheading 9102.11.25, HTSUS.
The model under consideration (RES031P-2) is listed in
Attachments III (original classification: 9102.11.9510; "correct"
classification: 9102.12.8010) and XI (original classification:
9102.11.2510; "correct" classification: 9102.12.8010). In this
example, as opposed to the above example, the 6-digit
classification indicated in the invoice for this model
("9102.12") would have affected the original classification
(i.e., the indicated classification was under a 9102.12.--
subheading, indicating an opto-electronic display rather than a
mechanical display). The presence of this 6-digit classification
indication on the invoice is inconsistent with the statement of
the first affiant that there was nothing in the invoices which
she found to be at odds with the Dallas classifications (both
under a 9102.11.-- subheading) which she states she believed were
correct. Furthermore, the presence of this 6-digit
classification indication on the invoice, without any explanation
by the importer or broker as to why it was apparently ignored, is
grounds for invoking the rule in B.S. Livingston & Co. v. United
States, 13 CIT 889 (1989).
In the Livingston case, the Court held that where the broker of
the importer had a clear and correct invoice description of the
merchandise but through "carelessness" requested or claimed that
the merchandise was classifiable under the wrong tariff
provision, no relief was available under section 1520(c)(1). The
Court noted that it was "eminently clear that the determination
by the Customs Service that the imported merchandise was
classifiable under [the broker's initial claimed classification]
is a determination of law" (13 CIT at 892). The Court
distinguished the facts in the Livingston case from those in C.J.
Tower, supra, on the basis that the plaintiff "was fully aware of
the nature of the imported merchandise" and "can only state that
it 'carelessly placed the incorrect tariff classification on the
entry documents'" (13 CIT at 894). The Court concluded that
since in all of its submissions the plaintiff's claimed
classification for the imported merchandise was the proposed
corrected classification but, nonetheless, Customs classified the
merchandise under the initial claimed classification, "[i]f
plaintiff was of the opinion that customs classification was
incorrect, the appropriate procedure or remedy was to file a
timely protest pursuant to 19 U.S.C. 1514(a)." (13 CIT at 894)
In this case, the invoice clearly and correctly indicates that
the model involved has an opto-electronic display, classifiable
under a subheading 9102.12-- provision. In the absence of any
explanation as to why the classification indicated on the
invoice, which Sekin now claims was correct, was ignored by the
broker, we conclude that the broker must have been fully aware of
the nature of the imported merchandise but through "carelessness"
requested or claimed that the merchandise was classifiable under
the subheading under which it was actually classified
(9102.11.95). That being the case, under Livingston, "the
appropriate procedure or remedy was to file a timely protest
pursuant to 19 U.S.C. 1514(a)" (supra). We note that it is
stated in the August 24, 1994, letter that "if [Sekin's files
were] audited, [they] would indicate identical documentation
...." No relief should be granted in regard to this issue (i.e.,
in regard to the models listed in attachments III, XI, XII, XIII,
and XIV).
In regard to the alleged mistake concerning the number of jewels
in the movements (see Attachments IV, V, IX, and X), the first
affiant states that she believed that the Sekin office in Dallas
had ascertained the facts (including those concerning the watch
movements) and that the HTSUS number provided by that office
reflected those facts. The second affiant states that she
assumed that the prior ratings had been based upon actual
determinations of the questions of fact concerning, among other
things, the movements. In our opinion, this alleged mistake
could be remediable under section 1520(c)(1), as being the kind
of mistake "where a person understands the facts to be other than
they are" (Hambro Automotive, and Concentric Pumps, supra) or an
"ignorant mistake" (see Universal Cooperatives, supra), provided
that the mistake (including the actual original classification,
see preceding paragraph) is established by documentary evidence.
No example of this alleged mistake was provided by Sekin with its
letter of August 24, 1994. A "FAX" communication, dated June 13,
1994, appears to relate to this alleged mistake. The "FAX"
communication consists of a copy of invoice HR1-1685, dated March
20, 1992. The invoice is for 10 units of model RMF645P and 450
units of model RWG009P (the 6-digit classification indicated in
the invoice for model RMF645P is "9102.11", not inconsistent with
the claimed original classification (see discussion above)). No
copy of the entry summary is provided. Models RMF645 and RWG009
are listed in Attachment IV (initial classification 9102.11.9510,
HTSUS; "correct" classification 9102.11.4510, HTSUS).
In the absence of an entry summary related to this example (in
contrast to the other examples), we are unable to discern under
what HTSUS provision the model (RMF645P) was actually initially
classified (see discussion above regarding the importance of the
actual initial classification). As stated above, "[m]istakes of
fact that are not manifest from [the] record ... must be
established by documentary evidence" (ITT Corp. v. United States,
supra, 24 F. 3d at 1387). The required documentary evidence has
not been submitted in regard to this issue. In view of the doubt
cast on the evidence submitted by or on behalf of Sekin in this
case regarding other issues (discussed elsewhere in this ruling),
we recommend that no relief be granted in regard to this issue
(i.e., in regard to the models listed in attachments IV, V, IX,
and X).
In regard to the alleged mistake concerning the bands of the
watches (see Attachments VII and VIII), the first affiant states
that she believed that the Sekin office in Dallas had ascertained
the facts and that the HTSUS number provided by that office
reflected those facts. The second affiant states that she
assumed that the prior ratings had been based upon actual
determinations of the questions of fact concerning, among other
things, the compositions of the bands. This affiant states that
she used the index in the back of the catalogues she had obtained
from the importer to note the basic facts for classification of
bands and cases. In particular regard to the model listed in
Attachment VII, the affiant states that "[she] was mistaken as to
the band composition. It was plastic and [she] classified it as
being textile or metal."
The example of this alleged mistake provided by Sekin was stated
to be in entry 409-04xxx15-5. The invoice cited is HR2-1669.
The model number is RMF007P. This example does not establish
this alleged mistake, according to the submissions made by or on
behalf of Sekin (i.e., model RMF007 is found in Attachment IV;
the Attachments in which a mistake as to band composition is
alleged are Attachments VII and VIII; model RMF007 is not found
in those attachments).
Model RMF007-2 is found in Attachment VII. According to invoice
HR2-1685, model RMF007P-2 was entered on entry 409-04xxx15-5.
According to the entry summary for this entry regarding this
invoice, 300 units (movements, cases, straps, and batteries) were
classified under subheading 9102.11.95, HTSUS, and 600 units
(movements, cases, straps, and batteries) were classified under
subheading 9102.11.25, HTSUS. The invoice (HR2-1685) lists 300
units of model RME073P (Attachment IV; original classification:
9102.11.9510, "correct" classification: 9102.11.4510) and 600
units of model RMF007P-2 (Attachment VII; original
classification: 9102.11.2510, "correct" classification:
9102.11.4510) (the 6-digit classification indicated in the
invoice for model RMF007P-2 is "9102.11", not inconsistent with
the claimed original classification (see discussion above)). The
values for the movement, case, battery, band, and box are listed.
These values correspond to the values listed in the entry summary
so as to indicate that the 300 units of model RME073P were
originally classified under subheading 9102.11.95 and the 600
units of model RMF007P-2 were originally classified under
subheading 9102.11.25.
In our opinion, based on the above analysis of model RMF007P-2 in
the invoice and entry described (instead of the model cited by
Sekin as an example of the alleged mistake), this alleged mistake
may be (see following paragraph) remediable under section
1520(c)(1), as being the kind of mistake "where a person
understands the facts to be other than they are" (Hambro
Automotive, and Concentric Pumps, supra) or an "ignorant mistake"
(see Universal Cooperatives, supra). We state that the alleged
mistakes regarding band composition "may be" remediable under
section 1520(c)(1) because, in contrast to the other alleged
mistakes (discussed above), there appears to be no objective
evidence in the file establishing that the bands for the models
listed in Attachments VII and VIII were actually composed of
plastic. The importer should be required to provide such
evidence before the entries involving these alleged mistakes are
reliquidated. Furthermore, relief should only be granted for
entries, invoices, and/or models other than the example if Sekin
establishes (with documentary evidence) the actual initial
classification of the models (with the sort of analysis used
above).
In regard to the alleged mistake concerning the type of watch
(Attachment XV, watch models stated to have been originally
classified as wrist watches under subheading 9102.11.2510;
"correct" classification stated to be as pocket watches under
subheading 9102.91.4010, HTSUS), the first affiant states that
she believed that the Sekin office in Dallas had ascertained the
facts and that the HTSUS number provided by that office reflected
those facts. The second affiant states that she assumed that the
prior ratings had been based upon actual determinations of the
questions of fact. In contrast to the other alleged mistakes,
neither of the affiants specifically states that she assumed that
the purported Dallas office classifications were based on facts
concerning the type of watch. Neither of the affiants
specifically refers in any way to the alleged mistake as to the
type of watch (e.g., that she believed or assumed the watches
were wrist watches when they were actually pocket watches).
The example of this alleged mistake provided by Sekin is found in
entry 409-04xxx95-9. The invoice cited is H3R1065. The model
number is RRS046P. According to the entry summary for this entry
regarding this invoice, 8250 units (movements, cases, straps, and
batteries) were classified under subheading 9102.11.95, HTSUS,
and 150 units (movements, casts, straps, and batteries) were
classified under subheading 9102.11.25, HTSUS. The invoice
(H3R1065) lists 8,400 units, including two lots (one with 50
units and the other with 100 units) referring to RRS046P (the 6-
digit classification indicated in the invoice for model RRS046P
is "9102.11", not inconsistent with the claimed original
classification (see discussion above)). The values for the
movement, case, battery, band, and box are listed. These values
correspond to the values listed in the entry summary for the 150
units classified under subheading 9102.11.25, HTSUS, and are the
only values of the 8,400 units in the invoice which so
correspond. Accordingly, we are satisfied that in this example
the 150 units of model RRS046P were initially classified under
subheading 9102.11.25, HTSUS.
However, as stated above, in the case of this alleged mistake (in
contrast to the other alleged mistakes), there is no specific
evidence as to the alleged mistake (neither of the affiants
refers to or describes this alleged mistake). As explicitly
stated in section 1520(c)(1), in order to qualify for relief
under that provision, the clerical error, mistake of fact, or
other inadvertence must be manifest from the record or
established by documentary evidence (see, in this regard, PPG
Industries, Inc. v. United States, supra, 4 CIT at 147-148, and
United States v. Lineiro, supra, "[d]etermination of issues in
customs litigation may not be based on supposition"). Since
section 1520(c)(1) only affords "limited relief in the situations
defined therein" (see Court cases above in regard to this
proposition) and since the prerequisites for such relief have not
been met in regard to this allegation, no relief should be
granted in regard to this alleged mistake.
Obviously, care should be taken so that any reliquidations under
section 1520(c)(1) reflect correct classifications. In this
regard we note that there may be inconsistencies in some of the
submissions in this case (e.g., Model RPG262 is described in
Attachment II as "watches with mechanical display, less than two
jewels, band of textile or metal, cases not electroplated" and in
Attachment VII as "watches with less than two jewels with plastic
or leather and with gold electroplated cases" (the description of
model RPG262 in entry 409-04xxx60-3 submitted with the August 13,
1994, letter described in the FACTS portion of this ruling is
consistent with the latter description); see also the possible
discrepancy regarding Attachment VI, discussed above). Prior to
reliquidation of any of the entries under section 1520(c)(1), the
importer/broker should be required to satisfactorily explain any
such discrepancies. In regard to the submission by Sekin of such
evidence and in regard to the general failures of the evidence
submitted, as discussed in this ruling, we note the statement by
the Court of Appeals for the Federal Circuit in ITT Corporation
v. United States, supra, 24 F. 3d at 1388, "that 'a party who
waits past the time of filing its 19 U.S.C. 1520(c)(1) request
to file supporting documentation risks an adverse decision by
Customs in the interim" (excerpt from more complete quotation
above).
HOLDING:
Relief under 19 U.S.C. 1520(c)(1) for the entries involved in
this case should be granted or denied as stated in the LAW AND
ANALYSIS portion of this ruling and as summarized below:
1. No relief under section 1520(c)(1) may be granted in
regard to the 11 entries liquidated between March 6, 1992,
and June 19, 1992;
2. This ruling does not address the 14 entries liquidated
between April 23, 1993, and July 16, 1993, and understood to
have been timely protested under 19 U.S.C. 1514;
3. Attachments I and II are claimed to have been correctly
classified, so no relief is sought under section 1520(c)(1);
4. No relief should be granted regarding Attachments III,
IV, V, VI, IX, X, XI, XII, XIII, XIV, and XV;
5. If satisfactory evidence is provided establishing the
actual composition of the bands in the cases of Attachments
VII and VIII, and if the actual initial classification of
the models is established (with documentary evidence),
relief may be granted regarding those Attachments;
6. Any possible discrepancies/inconsistencies (see final
paragraph in the LAW AND ANALYSIS portion of this ruling)
found in the reliquidation process should be satisfactorily
explained prior to reliquidation under section 1520(c)(1).
The Office of Regulations and Rulings will take steps to
make this 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 60 days from the date of this decision.
Sincerely,
John Durant, Director
Commercial Rulings Division
Enclosures