LIQ-9-01-RR:IT:EC 226010 CC
Port Director
U.S. Customs Service
300 S. Ferry Street
Terminal Island
San Pedro, CA 90731
RE: Protest No. 2720-94-100839; TIB; 19 CFR 10.31(g); mistake of
fact; subheading 9813.00.35, HTSUS
Dear Sir or Madam:
The above-referenced protest was forwarded to this office
for further review. We have considered the facts and issues
raised, and our decision follows.
FACTS:
This protestant protests 10 entries, which consist of racing
engines. Customs computer records for the subject entries list
the dates of entry ranging from March 29, 1994 to April 27, 1994.
The dates these entries were liquidated range from July 15, 1994
to September 2, 1994. The entries were liquidated under
subheading 8407.34.45 of the Harmonized Tariff Schedule of the
United States (HTSUS), which provides for spark-ignition
reciprocating or rotary internal combustion piston engines at the
heading level.
The protestant claims that the subject entries are eligible
for duty-free treatment as temporary importations under bond
(TIB) under subheading 9813.00.35, HTSUS. The protestant argues
that the subject entries should be changed from consumption
entries to TIBs in accordance with section 10.31(g) of the
Customs Regulations (19 CFR 10.31(g)).
Protest, with application for further review (AFR), was
filed on September 20, 1994. Submitted with this protest is a
memorandum dated August 15, 1994.
The protest and AFR were denied on September 30, 1994. The
protestant requested in a letter dated November 25, 1994 that
denial of AFR be set aside in accordance with 19 U.S.C. 1515(c).
In HQ 225833 of January 6, 1995, we set aside denial of the AFR,
and this protest was forwarded to Headquarters.
The protest listed 11 entries as being protested. In a
letter dated September 21, 1994, the protestant requested that
one of the entries (X0X-XXXX733-7) be excluded from
consideration. Therefore, 10 entries are being protested.
ISSUE:
Whether the subject entries may be changed from consumption
entries to TIBs pursuant to 19 CFR 10.31(g)?
LAW AND ANALYSIS:
Initially, we note that one of the protested entries, XX4-XXXX724-1, was entered under a TIB. Since the protestant is
requesting that the subject entries be changed to TIB entries,
there is nothing to protest concerning this particular entry.
Consequently, we will consider the protestant's claims for the
remaining 9 entries.
Customs has the authority to grant or deny protestable
decisions. According to 19 U.S.C. 1514(a), these include,
"decisions of the Customs Service, including the legality of all
orders and findings entering into the same, as to ...(5) the
liquidation or reliquidation of an entry, or reconciliation as to
the issues contained therein, or any modification thereof."
The matter protested in the submission of September 20, 1994
concerned the liquidation of certain entries as consumption
entries under subheading 8407.34.45, HTSUS. Consequently, the
matter protested was protestable in accordance with 19 U.S.C.
1514(a)(5).
The subject entries were liquidated from July 15, 1994 to
September 2, 1994. The protest on the liquidation of these
entries was filed on September 20, 1994. Consequently, the
protest was timely filed for all of the subject entries.
Through the protest the protestant is seeking to change the
subject entries from consumption entries to TIBs. In order to
effect this change, the protestant relies on 19 CFR 10.31(g),
which states the following:
Claim for free entry under Chapter 98, Subchapter
XIII, HTSUS may be made for articles of any character
described therein which have been previously entered
under any other provision of law and the entry amended
accordingly upon compliance with the requirements of
this section, provided the articles have not been
released from Customs custody, or even though released
from Customs custody if it is established that the
original entry was made on the basis of a clerical
error, mistake of fact, or other inadvertence within
the meaning of section 520(c)(1), Tariff Act of 1930,
as amended, and was brought to the attention of the
Customs Service within the time limits of that section.
If an entry is so amended, the period of time during
which the merchandise may remain in the Customs
territory of the United States under bond shall be
computed from the date of importation....
To enter merchandise temporarily under bond, the importer
must provide the HTSUS subheading number under which entry is
claimed. 19 CFR 10.31(a). Consequently, in order for the
protestant to change the subject entries from consumption entries
to TIBs, the protestant must show that the entries are
classifiable under a subheading providing for temporary
importation under bond.
The protestant claims that the subject entries are
classifiable under subheading 9813.00.35, HTSUS, which provides
for automobiles, motorcycles, bicycles, airplanes, airships,
balloons, boats, racing shells and similar vehicles and craft,
and the usual equipment of the foregoing; all the foregoing which
are brought temporarily into the United States by nonresidents
for the purpose of taking part in races or other specific
contests.
The subject entries consisted of racing engines for use in
Indy-style racing cars. Clearly, the racing engines would be
considered the usual equipment of automobiles. In addition, the
protestant has provided evidence that the racing engines were
used in cars for Indy-style races. Thus, the remaining issue for
meeting the terms of subheading 9813.00.35, HTSUS, is whether the
racing engines were brought temporarily into the United States by
nonresidents.
The protestant states that the subject engines were imported
after its parent company, a Japanese corporation, decided to
participate in Indy-style racing in the U.S. A new corporation
was formed, the protestant, to coordinate technical operations
for participation in the Indy-style races. The protestant was
formed as a subsidiary corporation and is an American
corporation. The protestant was listed as the importer of record
for the subject entries.
Concerning the issue of what Customs considers a nonresident
for purposes of subheading 9813.00.35, HTSUS, Customs has found,
under that subheading's predecessor, 864.35, Tariff Schedules of
the United States (TSUS), that nonresident refers to only
nonresident individuals or persons and not to a foreign firm or
corporation. DB 542.11 (1959). The protestant acknowledges this
position in its protest.
The protestant claims that the engines were brought into the
U.S. temporarily, which is evidenced by the fact that many had
already been shipped back to Japan at the time the protest was
filed. Concerning the issue of whether the engines were brought
in by a nonresident, the protest was denied because the importer
of record was a corporation rather than an individual. The
protestant does not dispute Customs position that for purposes of
subheading 9813.00.35, nonresident refers to individuals.
Instead, the protestant claims nonresident individuals had direct
and specific responsibility for coordinating, testing and
utilizing the subject engines. The protestant states that
approximately 20 individuals received visas to travel to the U.S.
from Japan in connection with the importation of these engines.
The protestant has provided statements from some of these
individuals concerning their activity and responsibility in
relation to the imported engines.
In a supplemental submission, the protestant explained its
position further on this matter. The protestant claims that
certain TIB provisions use the language "imported by," whereas
9813.00.35, HTSUS, uses the language "brought temporarily into."
The protestant claims that the difference in language shows an
intent that 9813.00.35 does not require that the merchandise be
imported by nonresidents. The protestant also argues that the
difference in language of these various TIB provisions was
originally enacted by Congress at the same time in the early
1900's, indicating that if a particular party were required to be
the "importer" Congress used the term "imported by."
To accept the protestant's argument one must conclude that
there is a distinction between the language "imported by" and
"brought temporarily into." We see no such distinction in the
plain meaning of the language, nor has the protestant offered any
evidence of an intent by Congress that the language mean
something other than the plain meaning.
We see no difference between the language "imported" and
"brought into." There are numerous court cases in which
importation is defined as bringing in. For example, the court in
United States v. Estate of Boshell, 14 Ct. Cust. App. 273, T.D.
41884 (1922) stated the following:
The common ordinary meaning of the word "import"
is to bring in. Imported merchandise is merchandise
that has been brought within the limits of a port of
entry from a foreign country with intention to unlade,
and the word "importation" as used in tariff statutes,
unless otherwise limited, means merchandise to which
that condition or status has attached.
In United States v. Field & Co., 14 Cust. Appls. 406, T.D. 42052
(1927) the court, quoting Cunard S.S. Co. v. Mellon, 262 U.S.
100, at p. 122, stated the following:
Importation, in a like sense, consists in bringing
an article into a country from the outside. If there
be an actual bringing in, it is importation regardless
of the mode in which it is effected.
The protestant claims that because the language "brought
into by nonresidents" for the purpose of taking part in races,
the precursor to the current 9813.00.35, was enacted at the same
time as other TIB provisions in which the language "imported by"
is used, Congress intended that when "brought into" was used the
identity of the actual importer does not effect eligibility for
TIB treatment, whereas when the language "imported by" is
utilized the identity of the importer must be established to
qualify for TIB. The statute that the protestant cites was
Section IV, subsection J, subsection 4, Tariff Act of 1913, which
provided for the free importation under bond for:
machinery or other articles to be altered or repaired,
molder's patterns for use in the manufacture of
castings..., models of women's apparel imported by
manufacturers for use as models..., and automobiles,
motor cycles, bicycles, aeroplanes, airships, balloons,
motor boats, racing shells, teams, and saddle horses,
and similar vehicles and craft brought temporarily into
the United States by nonresidents for touring purposes
or for the purpose of taking part in races or other
specific contests.
As stated above, we see nothing in the plain meaning of the
language of this provision to differentiate importation from
bringing in. In addition, the protestant has provided no
evidence that Congress intended anything other than the plain
meaning of the language; all that the protestant has done is make
claims concerning what Congress intended. Finally, we are not
aware of any cases in which it was decided that there are
different requirements for those articles for which the language
is "imported by" as opposed to those articles that are "brought
into by" under this statute or those following it.
Finally, the protestant argues that the racing engines were
brought in by nonresidents since nonresidents were directing the
protestant's efforts in installation and use of the engines in
races. The language of 9813.00.35, HTSUS, is brought in by
nonresidents. As stated above "bringing in" is the definition of
"importation." Thus a plain reading of the provision is that a
nonresident must import the merchandise. The protestant, the
importer of record, is a domestic corporation, thus it clearly
is not a nonresident.
The protestant argues that since it was nonresidents who
directed the use of the racing engines, it was nonresidents who
brought in the engines. There is no evidence that these
nonresident individuals were the importers. Just as it is the
importer who is liable for duties, 19 CFR 141.1(b), it is the
importer who is liable for failure to export a temporary
importation under bond in the required time period. Clearly, we
cannot agree that these individuals were importers of the engines
when there is no evidence of such and Customs would have no
ability to hold them liable for duties due on a consumption entry
or for failure to export on a TIB.
Even if we were to find that the racing engines were
eligible under subheading 9813.00.35, HTSUS, as TIBs, we do not
believe that the protestant has established there was a mistake
of fact. The protestant claims that the reason it entered the
racing engines as consumption entries rather than TIBs was that
it was the first time it was participating in Indy-style races
and the protestant was unaware that the engines would be shipped
back to Japan and therefore would be in the U.S. temporarily.
A mistake of fact occurs when a person understands the facts
to be other than what they really are and takes some action based
on that erroneous belief, whereas a mistake of law occurs when a
person knows the true facts of the case but has a mistaken belief
as to the legal consequences of those facts. See, e.g., C.J.
Tower & Sons of Buffalo, Inc. v. United States, 68 Cust. Ct. 17,
21, C.D. 4327, 336 F. Supp. 1395 (1972), aff'd, 61 CCPA 90,
C.A.D. 1129, 499 F.2d 1277 (1974); Hambro Automotive Corp. v.
United States, 81 Cust. Ct. 29, 458 F.Supp. 1220 (1978), aff'd,
66 CCPA 113, 603 F.2d. 850 (1979); and PPG Industries, Inc. v.
United States, 7 CIT 118 (1984).
A mistake of fact must be manifest from the record or
established by documentary evidence. See, ITT Corp. v. United
States, 24 F. 3d 1384, 1387 (Fed. Cir. 1994), Mistakes of fact
that are not manifest from [the] record ... must be established
by documentary evidence."
In support of its claim the protestant has submitted a
letter dated September 21, 1994, from the protestant's Customs
Department to Customs-L.A., with an engine shipping schedule
attached. The protestant states in the letter that the engine
shipping schedule was prepared by its parent company and was
received by fax the day before the date of the letter. The
engine shipping schedule, which is dated January 21, 1994,
indicates that when it was prepared there was an intention to
ship many of the engines back to Japan after they were used in
races. The protestant argues that since its Customs Department
was not aware of this information, consumption entries were made
for the racing engines.
We do not find that the documentary evidence supports the
protestant's claim. The purported faxed copy of the engine
shipping schedule has no date showing when it was faxed. In
addition, the protestant first brought to Customs attention the
purported mistake of fact in a memorandum dated on August 15,
1994. This indicates that the protestant was aware that the
engines would be shipped back to Japan prior to the date the
engine shipping schedule was faxed to the protestant.
Finally, as stated earlier, one of the entries which the
protestant is protesting was actually a TIB. This indicates that
the protestant was aware of the information concerning the racing
engines but made a decision that the remaining entries were not
eligible for TIB. In Universal Cooperatives, Inc., v. United
States, 13 CIT 516, 715 F. Supp. 1113 (1989), the court
distinguishes between decisional mistakes, "in which a party may
make the wrong choice between two known alternative set[s] of
facts" (a mistake of law), and ignorant mistakes, "in which a
party is unaware of the existence of the correct alternative set
of facts" (a mistake of fact). Based on the foregoing, the
protestant appeared to choose the alternative of entering the
engines as consumption entries, rather than as TIBs, a decision
made not on ignorance of the facts. Such a decision would be a
mistake of law and not a mistake of fact. Consequently, even if
the subject merchandise were eligible for TIB, we would find no
mistake of fact was present.
HOLDING:
The protest to change consumption entries to TIBs under
19 CFR 10.31(g) is DENIED, since the subject entries are not
eligible for TIB treatment under 9813.00.35, HTSUS.
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 take steps to make the 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.
Sincerely,
Director, International Trade
Compliance Division