LIQ-0-01-CO:R:C:E 221080 C
Area Director of Customs
6 World Trade Center
Room 423
New York, NY 10048
RE: Further review of protest no. 1001-3-016325; proper protest
under 19 U.S.C. 1514(a)(7); clerical error/inadvertence under 19
U.S.C. 1520(c)(1)
Dear Sir/Madam:
This responds to the referenced protest and application for
further review, which pertains to entry number 79-XXXXXXX
liquidated on July 16, 1982.
FACTS:
The PROTESTANT in this case imports M-25, a chemical used in
the production of photographic color couplers. PROTESTANT sells
the imported merchandise to the manufacturer of the couplers.
The M-25 is duty-free under a tariff provision which requires
that imported merchandise actually be used in accordance with the
description set forth in the tariff provision. This is called an
actual use tariff provision. The provision germane to this case
requires that the imported merchandise be used in the production
of photographic color couplers. (See subheading 9902.29.01 of
the Harmonized Tariff Schedule of the United States (HTSUS),
formerly item 907.10 of the Tariff Schedules of the United
States.)
The Customs Regulations, Title 19, Code of Federal
Regulations (19 CFR), require that an importer of merchandise
subject to an actual use tariff provision must file proof of end
use (of the imported merchandise) within three years of entry (or
withdrawal from warehouse). Section 10.138 of the regulations
provides that such proof shall be in the form of a certificate
executed by the manufacturer, end user, or other person having
knowledge of the actual use of the imported merchandise. The
certificate must be filed by the importer. The importer may
choose, depending on its operation, to file a blanket
certification covering merchandise imported over a period of
time. In addition to filing the certification executed by the
manufacturer (end user or other person), the importer, when
choosing the blanket certification option, must also file his own
statement setting forth, in sufficient detail to identify
pertinent entries, the quantities of imported merchandise sold to
the manufacturer during the period covered by the certification.
19 CFR 10.138; Additional U.S. Rules of Interpretation 1(b),
HTSUS. Failure to timely file the certification will result in
liquidation of the imported merchandise under an appropriate
dutiable provision.
In the instant case, the importer, PROTESTANT, filed a
blanket certification containing documents which appear to be
adequate to meet the requirements of the statute and regulations,
as above: a statement in letter form from the manufacturer,
attesting to the order of M-25 for use in the production of
photographic color couplers, and a statement in letter form from
PROTESTANT, attesting to the importation of M-25 over a certain
period to be sold to the manufacturer for use in such production.
The PROTESTANT's statement identified two entries by number,
neither of which was the entry in question. (See July 11, 1979
letter to Customs from PROTESTANT.)
The M-25 merchandise covered by the entry in question, as
well as such merchandise covered by two other entries, was
entered duty-free under the appropriate actual use tariff
provision. Upon expiration of the three year certification
filing period, the entry in question was liquidated, on July 16,
1982, under its appropriate dutiable provision. The other two
entries were liquidated "no change". PROTESTANT filed a timely
protest on September 3, 1982, under 19 U.S.C. 1514, objecting to
the dutiable liquidation. (This protest would have been
considered under 19 U.S.C. 1514(a)(2) or 1514(a)(5); it was not
specified in the record.) Specifically, PROTESTANT asserted that
the entry in question was covered by the certification, submitted
an additional document specifically identifying, by entry number,
the entry in question, and alleged, directly or by implication,
that Customs misclassified the merchandise under a dutiable
provision at liquidation. The protest was denied on the apparent
ground that the documentation, including the additional document
filed with the protest, was not sufficient to demonstrate that
the entry in question was covered by the certification. The
instant protest indicates that the initial protest was denied
"because Customs is without authority to waive or extend the 3
year statutory limitation period for the filing of proof of end
use."
PROTESTANT then timely filed a request for reliquidation on
January 20, 1983, under 19 U.S.C. 1520(c)(1), asserting that the
blanket certification, covering the two entries listed by entry
number, should also have included the entry in question, and that
failure to so include such entry was a clerical error or
inadvertence correctable under the statute. This is the first
instance where the issue of clerical error/inadvertence was
raised. The request was denied on September 8, 1983, on the
stated ground that Customs is without authority to extend or
waive the statutory three year filing requirement. PROTESTANT
then timely filed this protest on December 7, 1983, under 19
U.S.C. 1514(a)(7), objecting to the denial of the section
1520(c)(1) request for reliquidation. You recommended that the
protest be denied for two reasons: 1) The PROTESTANT is precluded
from raising an issue in a second protest that was considered and
decided in an earlier protest; and 2) a certification covering
the entry in question was not timely filed and Customs is without
authority to waive the three year filing requirement.
ISSUES:
1.) Is the instant protest improper for the reason that the
issue presented was raised and decided in the initial protest?
2.) Was clerical error or inadvertence, correctable under
19 U.S.C. 1520(c)(1), responsible for Customs dutiable
liquidation of the merchandise?
LAW AND ANALYSIS:
Issue 1
You recommend that this protest be denied on the ground that
the issue presented was already considered and denied in the
first protest and thus cannot now be raised in a second protest.
Your proposition is correct. A protest of a 1520(c)(1) denial
must be confined to an issue pertinent to the denial of the
1520(c)(1) request and cannot be used as a pretext or means to
raise and argue again an issue decided in an earlier protest, one
preceding the 1520(c)(1) request. However, this proposition is
inapplicable to the instant case because the issue raised in the
instant protest is not the same as the issue raised in the
initial protest.
The initial protest was to the sufficiency of the
documentation submitted. Customs review of the documents led to
Customs classification of the merchandise, and liquidation of the
entry, under a dutiable provision. The PROTESTANT's position in
this initial protest was that the documents submitted were
sufficient to meet the certification requirement. (PROTESTANT
submitted an additional document identifying the entry in
question.) (See Issue 2.) Customs disagreed. The PROTESTANT's
objection ultimately was to the classification of the merchandise
under a dutiable tariff provision at liquidation. (See 19 U.S.C.
1514(a)(2) or (5).)
PROTESTANT's second protest, the instant protest, raises a
somewhat different issue. It objects to Customs decision to deny
the 1520(c)(1) request on the ground that clerical error or
inadvertence occurred in the preparation of the certification and
Customs failure to so conclude was erroneous. (See 19 U.S.C.
1514(a)(7).) It did not protest the classification or
liquidation, per se. On the one hand, in the initial protest,
PROTESTANT asserted that the documentation was adequate and
Customs classification/liquidation was therefore erroneous. On
the other hand, in the instant protest, PROTESTANT focuses on the
clerical error/inadvertence issue raised in the 1520(c)(1)
request, asserting that Customs erred in denying the request.
The cases you cited, Slip. Op. 84-7 and Slip. Op. 85-129,
Wally Packaging, Inc. v. U.S., 578 F. Supp. 1408, 7 CIT 19
(1984), and Cavazos v. U.S., 9 CIT 628 (1985), respectively, are
distinguishable from the instant case. In the instant case,
PROTESTANT filed a timely protest under 19 U.S.C. 1514,
presumably section 1514(a)(2) or (a)(5). After it was denied, a
timely request for reliquidation under 19 U.S.C. 1520(c)(1) was
filed. Upon denial of this request, the instant protest was
timely and properly filed under 19 U.S.C. 1514(a)(7). In Wally
Packaging, an initial protest was filed and denied. This was
followed by two requests for reliquidation under 19 U.S.C.
1520(c)(1), both of which were denied. Neither denial was
protested. An action was then filed in the Court of
International Trade. In Cavazos, an initial protest was filed
and denied, a 1520(c)(1) request was filed and denied, and an
action was then filed in the Court of International Trade.
Both cases were dismissed because the court's review was
improperly sought. Review in the Court of International Trade
cannot be predicated on the denial of a 1520(c)(1) request. The
court has jurisdiction to review the denial of protests made
under 19 U.S.C. 1514. A denied 1520(c)(1) request must be
protested to gain judicial review. (See 19 U.S.C. 1515(a) and 19
C.F.R. 174.31.) Additionally, the Cavazos opinion noted that a
1520(c)(1) request cannot be used, in effect, to protest a
classification determination that was already contested and
decided in a prior protest. Because the facts of the instant
case differ significantly from those of the cited cases, those
cases are inapplicable here.
Based on the foregoing, we conclude that the instant protest
is a proper protest.
Issue 2
Your rationale in denying PROTESTANT's 1520(c)(1)
reliquidation request leaves uncertain whether or not you
accepted that a correctable error occurred. Your denial may
contemplate that a correctable error occurred but Customs is
nonetheless barred from taking the remedial action requested
because of the statutory filing period. If that is the basis of
your denial, we would advise that the three year filing
requirement is not an impediment to approval of the request for
reliquidation in this case. If there was a clerical error or
inadvertence that resulted in the omission of the entry in
question from the blanket certification, the entry could have
been reliquidated because the certification was in fact timely
filed. In this instance, the filing period requirement would not
have precluded Customs remedial action because the requirement
already had been fulfilled.
The authority you cited regarding this issue, Customs ruling
715205, dated April 8, 1981, is not applicable to the instant
case because the facts of that case are not the same as those
presented here. In that case, a certificate of use was not filed
within the three year period. Customs is indeed without
authority to waive the requirement. On the facts here, the
certificate was timely filed, but the entry number in question
was not included in that timely filed certification.
If your denial was based on your finding that a correctable
error did not occur on the facts of this case, the below analysis
is applicable.
The question is this: Was correctable error - clerical error
or inadvertence - responsible for the omission of the entry in
question from the blanket certification package of documents? Of
course, at this stage, we are unable to know with absolute
certainty whether or not correctable error occurred. However,
examination of the documents in the record indicates that such
error occurred. The pertinent documents are:
1) an April 5, 1979, letter to Customs from
the manufacturer, acknowledging, in advance,
the receipt of M-25 merchandise ordered under
purchase order no. T-724176, and stating that
such merchandise was imported by PROTESTANT
for use (by the manufacturer) in the
requisite production and that such
merchandise was to be delivered between March
19 and June 11, 1979 (the date of importation
of the merchandise covered by the entry in
question);
2) a May 2, 1979, letter to Customs from
PROTESTANT, declaring that 17 drums of M-25
are being imported for sale to the
manufacturer for use in the requisite
production, and that the merchandise referred
to will be shipped on board the SS "New
Jersey Maru" under a bill of lading no. MO25-
21270 from Kobe, Japan to New York;
3) a June 1, 1979, letter to PROTESTANT, for
Customs attention, from the manufacturer,
stating, in advance, that the merchandise
received under purchase order T-724176 was
manufactured in Japan;
4) a July 11, 1979, letter to Customs from
PROTESTANT, referring to importations of M-
25 during the period from April 16 to June
11, 1979 (the date of importation of the
merchandise covered by the entry in
question), identifying two entries by entry
number covering merchandise that was sold and
delivered to the manufacturer to be used for
the requisite purpose, and requesting duty-
free treatment under the appropriate actual
use tariff provision;
5) the consumption entry (no. 79-XXXXXXX;
June 26, 1979) covering the merchandise in
question (17 drums of M-25, 510 kg),
indicating bill of lading no. MO25-21270,
shipment on board the "New Jersey Maru" from
Kobe, Japan to New York, and importation on
June 11, 1979, by the PROTESTANT;
6) a bill of lading no. MO25-21270 for order
no. T-724176, covering 17 drums of
"Chemicals" and indicating invoice no.
OVC31/623;
7) an invoice no. OVC31/623(C77) covering
order no. T-724176 for 17 drums of M-25 and
indicating shipment from Kobe to New York;
and
8) an unidentified form, reference no. 14851,
apparently executed by a customs broker
(Taub, Hammel & Schnall, Inc.), indicating
order no. T-724176, invoice no.
OVC31/623(C77), and showing a shipment of 17
drums of M-25 on board the "New Jersey Maru,"
arriving on June 11, 1979.
All the above documents appear to relate to the entry in
question. There are several other documents in the record as
well, the above appearing to be the most relevant.
Without "walking through" the significant details of these
documents, we believe that they demonstrate a sufficiently clear
picture of the transaction in question: The manufacturer ordered
M-25 for the requisite use from PROTESTANT who imported it from
Japan. Both PROTESTANT and the manufacturer expected shipment of
the M-25 over a certain period of time. The order was placed
under order no. T-724176, and the merchandise was imported in
three shipments under three separate entries during the period of
the certification. It appears that the above letters written by
PROTESTANT and the manufacturer, and comprising the blanket
certification, were written in contemplation and expectation that
all the merchandise to be imported under order no. T-724176, the
three shipments, would be covered by the blanket certification
and, thus, would be entitled to duty-free treatment. The entry
in question was covered by order no. T-724176, and appears to
have been within PROTESTANT's and the manufacturer's
contemplation and expectation of what (merchandise) was to be
covered by the certification.
In summation, the foregoing amounts to this: All indications
suggest that the entry in question was intended to be covered by
the blanket certification, but that it was omitted from the list
of entry numbers contained in the certification package. But for
that omission, the entry in question would have been regarded by
Customs as covered by the certification and entitled to a duty-
free "no change" liquidation.
It is with the foregoing summation in mind that we consider
whether or not a correctable error occurred. The kind of
omission occurring here - failure to include an item or number in
a list written into a document - falls within the general concept
of clerical error or inadvertence. "Clerical error or
inadvertence" has been variously defined. It has been called the
improper execution, through carelessness, inadvertence, and/or
mistake, of a proper and correct intention. S. Yamada v. United
States, 26 CCPA 89, TD 49628 (1938). In fact, the intent of the
person committing the error is considered the essential factor in
determining whether a correctable clerical error or inadvertence
occurred. Charles Neidert v. United States, 30 Cust. Ct. 189,
C.D. 1568 (1953).
We believe that the intent of the PROTESTANT, as well as of
the manufacturer, was to include the entry in question in the
blanket certification. Importantly, we believe that this intent
is amply demonstrated in the record, fairly indicating that
PROTESTANT, through carelessness, inadvertence, or simple
mistake, improperly executed its proper and correct intention.
We hasten to emphasize that without this ample evidence, we
could not conclude that a correctable error occurred. First,
without this evidence, there would be no basis upon which to
determine PROTESTANT's intent, and, second, the statute requires
that the correctable error be manifest from the record or
established by documentary evidence. We believe that this record
establishes PROTESTANT's intent and that unintentional omission,
as above, was responsible for the dutiable liquidation.
Based on the foregoing, we conclude that a certification
pertaining to the entry in question was timely filed, but an
unintentional omission of the entry number from the blanket
certification resulted in the dutiable liquidation objected to by
PROTESTANT. This omission, considered in light of the
considerable evidence indicating PROTESTANT's proper and correct
intent - evidence without which a different result would follow,
falls within the concept of clerical error or inadvertence under
19 U.S.C. 1520(c)(1). Therefore, we conclude that the denial of
PROTESTANT's reliquidation request should be reversed.
You are hereby directed to grant the protest and furnish a
copy of this decision to PROTESTANT.
Sincerely,
John Durant, Director
Commercial Rulings Division