LIQ-9-01 RR:CR:DR
229096 RDC
Port Director of Customs
Los Angeles – Long Beach Seaport
300 South Ferry Street
Terminal Island, CA 90731-7495
Att: Gerald E. Rankin
RE: Protest number 2704-00-101217; Request for Further Review of Protest; men’s matching jackets and trousers; track suits; 9503.49.00, HTSUSA; 6307.90.99, HTSUSA; Classification, Mistake of fact; Bar Bea Truck Leasing Co., Inc. v. United States, 5 CIT 124, 126 (1983); 19 USC § 1520(c); water resistant; 6211.33.0030, HTSUSA; 6201.93.3000, HTSUSA; 6203.43.3500, HTSUSA.
Dear Sir or Madam:
Protest number 2704-00-101217 was forwarded to this office for further review. We have considered the evidence provided and the points raised by your office and the Protestant. Our decision follows.
FACTS:
The Protestant, Adidas, America, Inc. (“Adidas”) is the importer of record for the subject merchandise and protests the denial of its Petition for Reliquidation under 19 USC § 1520(c). The subject entry number 112-xxxx128-5 was entered on July 17, 1997. Adidas describes the subject merchandise as:
four versions of a man’s track suit, Style 56752T. The four versions are identified as Article Nos. 235039, 235976, 235977 and 235978. The Article Nos. are identical but for color scheme. The garments are made with a fabric with a plastic coating.
According to the CF 7501, which was prepared by the Tower Group International (“Tower”), the merchandise was entered as “track suits” under subheading 6211.33.0030, Harmonized Tariff Schedule of the United States, (HTSUSA), which imposed a duty rate of 16.7 percent. The entry was liquidated on May 29, 1998, at this rate of duty.
On May 27, 1999, Adidas sought reliquidation of this entry per § 1520(c) because it contends that the subject merchandise was entered and liquidated under an incorrect subheading and thus at the wrong rate of duty due to a clerical error. This Request states:
Adidas provides tariff classifications for a product dictionary database which Tower Group international maintains. This database is used to communicate classification data between Adidas and Tower Group international. The product database was utilized to input the entry summary. Adidas provided the tariff classifications for article numbers 235976, 235977, 235978 and 235039, under subheading 6211.33.0030 / 16.7 and subheading 6211.33.0035 / 16.7, however these classifications were based on articles for the 1997 spring / summer line. The articles imported under the [protested] entry number were actually from the 1997 fall line and water resistant, therefore, the articles should be properly classified HTS# 6201.93.30000/7.4% and 6203.43.3500/7.4%, respectively.
Thus, Adidas states that the subheading (6211.33.00, HTSUSA), used on entry was based on the characteristics for article from the 1997 spring / summer line, but the actual goods entered were from the 1997 fall line. Further, the Protestant contends that the critical difference between these articles in the spring / summer line and the fall line is that the garments from the fall line are water resistant but the spring / summer line garments are not. Adidas states that because the garments actually entered are from the fall line and thus are water resistant they should have been properly classified under subheading 6201.93.30, HTSUSA, for the jackets and 6203.43.35, HTSUSA, for the trousers, at a duty rate of 7.4 percent instead of the 16.7 percent as entered. The § 1520(c) Petition was denied on February 1, 2000, because the Port of Los Angeles determined that the issue depended on a construction of the law which cannot be remedied by that section.
On April 19, 2000, Adidas filed the instant Protest which states that reliquidation per § 1520(c) was sought, “on the basis of an error caused by the Company’s ignorant reliance on out of date product specification in communicating the classification of the subject merchandise to its broker.” The Protestant further states that the garments satisfy the requirements for water resistant garments found in Additional U.S. Note 2, Chapter 62, HTSUSA. Adidas states that it provides classification by article number to Tower and “here the employee responsible for making the entry for the subject merchandise relied upon an out of date product specification.” Further, the Protestant contends that “had the employee referred to the up-dated product specification, [it] would have been clear that the fabric satisfied the requirements of additional U.S. Note 2 and thus, the product dictionary would have been revised to indicate” the correct classification. Included as evidence are the following documents:
A product specification sheet labeled Custom Preclass, for the 1997 fall season shows item number F5G752T. The name is “team legion warm-up.” The fabric is described as “100% nylon 210T Taffeta IO 011CCO flat “pass rain test” clear acryl w/ [nothing further on this line]”. The garment is described as “full zip lined jacket with sleeve stripes and embroidered adidas logo on left sleeve. Elastic waist lined pant with side seam pockets, inside drawcord, leg zips and embroidered adidas logo.” Articles listed include 235976, 235977, 235978; there is no 235039, but there is a 236039. The subheadings listed are 6201.93.3000 and 6203.43.3500. A simple black and white sketch appears on the sheet.
A second product specification sheet labeled Custom Preclass, for the 1997 spring / summer season shows item number F5G752T. The name is “team legion warm-up.” The fabric is described as “100% nylon 210T Taffeta IO 011CCO flat W/R 2 oz/yd2 - 1002. The garment is described as “full zip lined jacket with sleeve stripes and embroidered adidas logo on left sleeve.” “Elastic waist lined pant with side seam pockets, inside drawcord, leg zips and embroidered adidas logo.” Articles listed include 235976, 235977, 235978; there is no 235039, but there is a 236039. A simple black and white sketch appears on the sheet.
A commercial invoice number TSG-1317 from TSG International Limited, Hong Kong, as seller, to Adidas dated June 23, 1997 is included. The merchandise is described as jacket and pants, articles 235976,235977, 235978, 236039. The following information pertinent to this analysis appears on the invoice:
Covering shipment of Adidas branded garments comprising of:
Order number 419662
Style: F5G752T
Name: team legion warm-p
Description: full zip lined jacket with contrasting sleeve stripes, embroidered logo, welt pockets and appliqued three stripes, elastic waist lined pant with welt pockets inside drawcord, leg zips and embroidered logo.
Content: 100 percent nylon (woven)
Liner: 65 percent polyester / 35 cotton (knit)
Remarks: shell: 100 percent nylon 210T with 450mm coated passed rain test.
Handwritten on this invoice are the subheadings 6211.33.0035 and 6211.33.0030.
Also provided as evidence are Special Customs Invoices (CF 5515) stamped as textile export visas from the Economic Department of Macau, numbers 7MO022026; 7MO022025;and 7MO021860 for consignee, Adidas America Inc, order number 419662. These CF 5515s describe the goods as men’s woven pants; shell of 100 % nylon; lining of 65 % polyester and 35 % cotton; classification as 6203.43 (HTSUSA). Other CF 5515s also stamped as textile export visas from the Economic Department of Macau, numbers 7MO021907; 7MO021905; and 7MO021906 for consignee, Adidas America Inc, order number 419662. These CF 5515s show the goods as men’s woven jackets; shell of 100 % nylon; lining of 65 % polyester and 35 % cotton; classification as 6201.93 (HTSUSA).
The Packing and Weight List from TSG International Limited, dated June 23, 1997, for order number 419662 to Adidas America, Inc. shows various sizes of articles number 235976, 235977, 235978 and 236039 were shipped on or about June 20, 1997. The Bill of Lading number 965199, dated June 26, 1997 from Hyundai Merchant Marine Co, Ltd. shows that, per order number 419662 635 cartons of men’s woven jackets and pants, article number 235976, 235977, 235978 and 236039, were shipped from Macau to Hong Kong and then to Kentucky. The Certificates of Origin numbers 021906, 021905, and 021907, dated June 19, 1997, from Macau to Adidas show that order number 419662, consisting of men’s woven jackets were classified at 6201.93, HTSUSA. Certificates of Origin numbers 022026, 022025 and 021860, dated June 19, 1997, from Macau to Adidas show that order number 419662, consisting of men’s woven pants were classified at 6203.43, HTSUSA.
In March 2001, this office requested and received a sample of a garment which Adidas states is identical to the garments at issue. This sample is a navy blue and white men’s jacket with the word Adidas imprinted on it. The trousers are navy blue. The shell of both the jacket and pants is 100 percent nylon and the lining is 65 percent polyester and 35 percent cotton. The garments were found to fit the definition of a track suit as provided for in heading 6211, HTSUSA, except that the garments were unable to breath and wick away moisture. The garments were sent to the Customs Laboratories and Scientific Service Laboratory which concluded that there are applications of plastic on the inner surfaces of the outer shells of both garments and that both garments meet the water resistance requirements specified in HTSUSA, Chapter 62, Additional U.S. Note 2. The following are the identifiers on the garments: 14750 and RN 88387 on the sewn in labels and 235977 L TM LEGION WM-UP NEW NA on the hangtag.
The Port’s decision on the instant Protest included the following remarks: “When wearing apparel is entered under classifications calling for ‘water resistant’ textile materials, Customs frequently draws samples from the shipments and forwards them to the Customs Laboratory for chemical analysis. We have found that samples of articles claimed to be water resistant often fail the test specified in Additional U.S. Note 2 when subjected to testing in the Customs Laboratory. In this case, Customs did not sample the merchandise, since no claim of water resistant material was made at the time of entry presentation. Having been denied the opportunity to test the merchandise by the circumstances of the entry, we do not now assume that the track suits would have qualified as water resistant, given no factual evidence that they do so qualify.”
ISSUE:
Was the liquidation of the subject merchandise under subheadings 6211.33.0030, HTSUSA, and 6211.33.0035, HTSUSA, a “clerical error, mistake of fact, or other inadvertence” correctable per 19 USC § 1520(c)?
LAW AND ANALYSIS:
This Protest number 2704-00-10112187 was the subject of a request for set aside of the denial of further review under 19 USC § 1515(c). This request was granted and the application for further review approved by HRL 228876, August 23, 2000. We note that the instant Protest was timely filed, i.e., within 90 days of the denial of the Request for Reliquidation (19 USC § 1514(c)(3)(B)). The Request for Reliquidation was denied on February 1, 2000, and the subject Protest filed April 19, 2000. Under 19 USC § 1514(a) “decisions of the Customs Service, including the legality of all orders and findings entering into the same, as to . . . the refusal to reliquidate an entry under section 1520(c) . . . (19 USC §1514(a)(7). Hence, the matter protested, the refusal to reliquidate an entry under § 1520(c) is subject to protest.
The Protestant contends that the subheading under which the garments were liquidated, 6211.33.00, HTSUSA, was incorrect and that the correct subheadings for classification of the garments entered are 6201.93.3000, HTSUSA and 6203.42.3500, HTSUSA respectively. Adidas states that the subheading (6211.33.00, HTSUSA), used on entry was based on the characteristics for article from the 1997 spring / summer line, but the actual goods entered were from the 1997 fall line.
With regard to the correct classification of the sample garments provided, assuming the sample provided is identical to the merchandise in the entry under protest, this office has concluded the following.
The sample upper body garment at issue is classifiable under subheading 6201.93.3000, HTSUSA, textile category 634, which provides for “men’s or boys’ overcoats, carcoats, capes, cloaks, anoraks (including ski-jackets), windbreakers, and similar articles (including padded, sleeveless jackets), other than those of heading 6203: Anoraks (including ski-jackets), windbreakers and similar articles (including padded sleeveless jackets); Of man-made fibers: Other: Other: Other: water resistant.” The sample lower body garment at issue is classifiable under subheading 6203.43.3500, HTSUSA, which provides for “Men’s or boys’ suits, ensembles, suit-type jackets, blazers, trousers, bib and brace overalls, breeches and shorts (other than swimwear): Trousers, bib and brace overalls, breeches and shorts: Of synthetic fibers; Other: Other: Other: Other: Water resistant trousers or breeches.” Thus, if the samples provided are identical to the garments in the protested entry, we agree that that the correct classifications would have been subheading 6201.93.3000, HTSUSA, for the jacket and subheading 6203.43.3500, HTSUSA, for the trousers.
In its May 27, 1999, Request for Reliquidation, prepared by Tower, Adidas contends that a clerical error was made when he employee based the classification of the garments on the product specification for the spring 1997 garments. The spring 1997 specifications used the same style and article numbers but those garments were not water resistant, whereas the garments actually entered were for the fall 1997 line and were water resistant. According to the Protestant’s second submission of April 19, 2000, it was this critical characteristic which caused the garments to be misclassified and based on this mistake of fact the Protestant requests reliquidation per 19 USC § 1520(c).
Section 520(c) of the Tariff Act of 1930, as codified at 19 USC § 1520(c), is an exception to the finality of §1514. Per 19 USC § 1520(c):
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 a law, adverse to the importer and manifest from the record or established by documentary evidence, in any entry, liquidation, or other customs transaction, when the error, mistake, or inadvertence is brought to the attention of the Customs Service within one year after the date of liquidation or exaction; . . . .
Therefore, per § 1520(c)(1) Customs may reliquidate the protested entry to correct a clerical error or mistake of fact which does not amount to “an error in the construction of a law.” The error or mistake of fact must also be adverse to the importer, Adidas, and manifest from the record or established by documentary evidence (19 USC § 1520(c)(1)). This means that the nature of the error must be observable upon review of the record or upon submission of documentary evidence. In either event, the burden is on the petitioner to establish the nature of the error claimed and to demonstrate that it falls within the ambit of the statute.
In ITT Corp. v. United States, (24 F.3d 1384, 1387 (Fed. Cir. 1994)) the Court of Appeals said the following:
With regard to substantiation, § 1520(c)(1) requires the importer to establish the asserted inadvertence through documentary evidence submitted to the appropriate customs officer, unless the inadvertence is manifest from the record. Inadvertence manifest from the record are those apparent to Customs from a facial examination of the entry and the entry papers alone, and thus require no further substantiation. While clerical errors likely compose the majority of such inadvertences, mistakes of fact nonetheless also can be manifest from the record that the entry and the entry papers constitute. Mistakes of fact that are not manifest from such record, however, must be established by documentary evidence.
The Court of International Trade (CIT) has ruled that mere assertions by a complainant without supporting evidence will not be regarded as sufficient to overturn a Customs official's decision (Bar Bea Truck Leasing Co., Inc. v. United States, 5 CIT 124, 126 (1983).
The Protestant has not proved that the garments imported with the protested entry were in fact water resistant and thus liquidated under the wrong subheading. Adidas states, and the product specifications corroborate, that the same name, Team Legion Warm-Up, the same style number, F5G752T, and the same article numbers refer to garments some of which are water resistant, some of which are not. Adidas has supplied nothing other than its “mere assertions” that the garments entered were in fact water resistant and thus liquidation under subheading 6211.33.00, HTSUSA, was an error.
Further, we have no evidence that the garments supplied, which were said to be a sample of the goods entered are in fact identical to the garments entered. Moreover, Customs did not have an opportunity to sample the entry and examine those garments to determine if they met the requirements specified in HTSUSA, Chapter 62, Additional U.S. Note 2, for water resistance. Therefore absent an analysis of the actual garments entered or conclusive proof that the sample garments are identical to those entered, the Protestant has not proven that a mistake of fact occurred and thus has not met the requirements of § 1520(c) necessary for reliquidation.
Even if we assume that the sample garments provided are in fact identical to those entered and thus water resistant Adidas has not proven that a clerical error or mistake of fact occurred. Again, the Protestant has supplied no evidence other than its assertions to support its contention that an employee relied on the wrong product specifications and therefore made a mistake of fact (See HRL HQ 227484 February 27, 1998; HQ 226391 April 5, 1996). A clerical error, (which Adidas states occurred in its May 27, 1999, submission) has been described as “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).
There is no evidence, e.g., an affidavit from the individual who made the erroneous classification as to what he or she believed the nature of the merchandise to be and the basis for that belief, establishing that the alleged error was a mistake of fact. Further, the Protestant supplies no evidence that an employee actually based the decision of which tariff number to supply upon entry on the wrong specifications. Since nothing is known about the responsible employee’s decision making-process it is impossible to conclude that a clerical error was “made by a clerk or other subordinate, upon whom devolves no duty to exercise judgement” because that employee relied on the wrong product specifications.
It has been held that a "mistake of fact exists where a person understands the facts to be other than they are, whereas a mistake of law exists where a person knows the facts as they really are but has a mistaken belief as to the legal consequences of those facts" (Hambro Automotive Corporation v. United States, 66 CCPA 113, 118, C.A.D. 1231, 603 F. 2d 850 (1979), quoted in Concentric Pumps, Ltd., v. United States, 10 CIT 505, 508, 643 F. Supp. 623 (1986); 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)). A mistake of fact has also been described as "a mistake which takes place when some fact which indeed exists is unknown, or a fact which is thought to exist, in reality does not exist." C.J. Tower & Sons of Buffalo, Inc. v. United States, 68 Cust. Ct. 17, 22; C.D. 4327, 336 F. Supp. 1395, 1399 (1972), aff'd 61 CCPA 90, C.A.D. 1129, 499 F.2d 1277 (1974).
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. Further, upon an assertion that merchandise has been wrongly classified due to a mistake of fact, "it is incumbent on the plaintiff to show by sufficient evidence the nature of the mistake of fact." PPG Industries, Inc. v. United States, 4 CIT 143, 147-148 (1982), citing Hambro Automotive Corp. v. United States, 81 Cust. Ct. 29, 31, 458 F. Supp. 1220,1222(1978) aff'd 66 CCPA 113, C.A.D. 1231, 603 F.2d 850 (1979).
In Zaki Corporation v. United States, (960 F. Supp. 350; Ct. Intl. Trade (1997)) the CIT found that the company was entitled to reliquidation, pursuant to 19 USC § 1520(c)(1), after meeting a three prong test. The court found that the company met the first prong of the test because the company's broker made a mistake of fact when she entered the merchandise and the exact physical properties of the merchandise were not known to the broker or to customs (see also Taban Company v. United States, (960 F. Supp. 326; Ct. Intl. Trade (1997)) which held that the company's broker made a mistake of fact when she entered the merchandise believing it to be radiobroadcast receivers instead of combination articles).
In the instant protest there is no evidence that the broker was not aware that the garments were water resistant. On the contrary, some of the entry documents filed by Tower indicate that the garments were water resistant. The textile export visas and the certificates of origin state subheadings 6203.43 and 6201.93 (HTSUSA), the subheadings for men’s water resistant jackets and trousers, as the first item in the description of goods. Further, the commercial invoice from TSG states “coated passed rain test.” While this is not conclusive proof that the garments were water resistant, since Tower filed these documents it does suggest that Tower knew the representations made on them.
In addition, on the commercial invoice which states “coated passed rain test” is handwritten subheadings 6211.33.00 and 6211.33.00. Therefore, it appears that someone, knowing the garments to be water resistant as stated on the invoice chose the subheadings for track suits. This is not an unreasonable conclusion in that the garments do in fact, generally, fit the description for track suits found in heading 6211, HTSUSA.
We find that the instant Protest does not satisfy the § 1520(c)(1) requirement that the error, mistake of fact or inadvertence be “manifest from the record or established by documentary evidence . . . .” Adidas fails to provide evidence to prove that an error in the entry or liquidation actually occurred or that, if an error occurred, such error was a clerical error or mistake of fact. For examples of the evidence required by 19 USC § 1520(c)(1) see HQ ruling 224118, July 26, 1993; note also the description of the evidence required by the Court of International Trade in ITT, supra, and note in particular, that evidence to "[make] clear to Customs that a mistake of fact, rather than one of law, actually occurred" is necessary (812 F. Supp. at 217). See also, Andy Mohan Inc. v. United States, 74 Cust. Ct. 105, C.D. 4593, 396 F. Supp. 1280 (1975), aff'd 63 CCPA 104, C.A.D. 1173, 537 F.2d 516 (1976); and Bar Bea Truck, supra at 126, with regard to the sufficiency of evidence when there is "no affidavit or other evidence in support of [plaintiff's] counsel's bald assertion . . . ."
HOLDING:
We find that the § 1520(c)(1) claim was correctly denied because Adidas has supplied no evidence to support its claim that a mistake of fact or clerical error correctable under 19 USC § 1520(c)(1) occurred in the entry or liquidation. The protest should be DENIED IN FULL.
Consistent with the decision set forth above, you are hereby directed to deny the subject protest. 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,
Myles Harmon, Acting Director
Commercial Rulings Division