LIQ-9-01-CO:R:C:E 222636 TLS
Area Director
U.S. Customs Service
110 South Fourth Street
Minneapolis, Minnesota 55401
RE: Request for further review of protest #3501-9-000023;
reliquidation of an entry under 19 U.S.C. 1520(c)(1);
misclassification of merchandise on entry documents.
Dear Sir:
We have received your memorandum of April 18, 1990,
forwarded to us from the Chicago regional office requesting
further review of the above-referenced protest. Upon review of
your position and the protestant's arguments, we have reached a
decision that is discussed in detail below.
FACTS:
The protestant, LaCrosse Footwear, Inc. (LaCrosse), entered
3,600 pairs of ladies' boots on September 4, 1987 through the
Minneapolis port. This entry was liquidated on October 9, 1987,
with the importer listing the merchandise as being classified
under Tariff Schedules of the United States (TSUS) item number
700.57, dutiable at 37.5%. On subsequent review, LaCrosse found
that the appropriate classification for the boots was TSUS item
number 700.56, which carries a duty rate of 6%. The latter
classification is more correct because the boots contained over
90% of plastics on its exterior surface. The protestant claims
not to have been aware of this fact at the time it filed for
entry. LaCrosse claims that the broker who filed the entry
documents on its behalf did not know of the correct
classification because the broker did not have all the facts
needed to make a proper classification decision.
You contend that the protestant was in fact aware of all
pertinent facts necessary to make the proper classification
decision. Specifically, you state in your memo that the
importer's entry documents indicate that it had knowledge of the
exact physical composition of the footwear, including the 97%
plastic exterior content. This fact is listed on LaCrosse's CF-
5523, which was filed with other entry papers.
The protestant requested reliquidation due to a clerical
error, mistake of fact, or other inadvertence as provided for
under section 520(c)(1) of the Tariff Act of 1930, amended (19
U.S.C. 1520(c)(1) (1990). In particular, the protestant argues
that a mistake of fact was made when the broker unknowingly
misclassified the merchandise because he believed the boots had a
different physical make-up than they actually do. You contend
that the misclassification of the goods constitutes an error in
the construction of law rather than a mistake of fact. It is on
that basis that you denied the request for reliquidation.
Consequently, the importer filed this protest which has been
forwarded to us for further review.
ISSUE:
Whether the importer's misclassification of merchandise
constitutes a mistake of fact correctable under 19 U.S.C.
1520(c)(1) when documents filed with Customs indicate that the
broker had knowledge of the pertinent facts at the time of entry.
LAW AND ANALYSIS:
As noted above, the relevant law in the present case is
found in section 520(c)(1) of the Tariff Act, which reads as
follows:
(c) Notwithstanding a valid protest was not filed, the
appropriate customs officer may, in accordance with
regulations prescribed by the Secretary, reliquidate an
entry to correct-
(1) a clerical error, mistake of fact, or
other inadvertence not amounting to an error
in the construction of law, adverse to the
importer and manifest from the record or
established by documentary evidence, in any
entry, liquidation, or other customs
transaction, when the error, mistake, or
inadvertence is brought to the attention of
the appropriate customs officer within one
year after the date of liquidation or
exaction;... (emphasis added.)
The record shows that the broker in this case requested
reliquidation of the subject entry within one year of the
original liquidation. That the decision to classify the
merchandise under item 700.57 is an error adverse to the importer
is not in dispute. The relevant terms of section 520(c)(1) have
been defined before in previous rulings. In 94 Treas. Dec. 244
(May 6, 1959) [T.D. 54848], a "clerical error" is defined as when
a person intends to do one thing but does something else, e.g.,
he meant to write 'par. 231' but wrote 'par. 131.' A "mistake of
fact" occurs when a person believes the facts to be other than
they really are and takes some action based on that erroneous
belief. "Inadvertence" is defined as inattention, oversight,
negligence, or lack of care. The ruling states that these terms
are not necessarily mutually exclusive. 94 Treas. Dec. 244, 245-
46. Clerical error, mistake of fact, and inadvertence are
distinguished from an "error in the construction of a law", which
occurs when a person knows the true facts of a case but has a
mistaken belief of the legal consequences of those facts and acts
on that mistaken belief.
In the present case, the protestant argues that a mistake of
fact occurred when its broker entered the subject merchandise
under the incorrect classification number. The protestant
contends that the decision to classify the merchandise under TSUS
item 700.57 instead of item 700.56 amounted to a factual
determination that was made without knowledge of the true facts.
This argument is based on the belief that because similar
articles had previously been entered under the correct
classification number the classification decision itself is
merely a "matter of calculation."
Customs has ruled on a similar issue in a previous ruling.
In HQ 220042 (April 10, 1989), it was held that an error of
judgement on the part of a customs officer who was aware of the
pertinent facts but entered the merchandise under the wrong
tariff item number is a mistake in the construction of law, not
correctable under section 520(c)(1). Customs Ruling HQ 220042 at
p. 7, citing Computime, Inc. v. United States, 9 CIT 553 (1985)
and Mattel, Inc. v. United States, 72 Cust. Ct. 257 (1974).
While it is indeed a fact that the boots are constructed with
over 90% plastic on its exterior surface, the classification
decision itself is a legal determination based in part upon that
fact. HQ 220042 involved a misclassification of goods upon entry
and a subsequent request for reliquidation, as is the case here.
While the aforementioned court cases involved decisions made
by Customs officials, we find that the precedent is applicable to
alleged mistakes made by importers and their agents as well.
There exists no reason to distinguish those cases from the
present one on that basis alone. In fact, the similarities are
too numerous to ignore. In HQ 220042, the case involved the
misclassification of articles that had been classified under the
correct TSUS item on several previous occasions. Here, the
protestant is claiming that the incorrect classification decision
constitutes a mistake of fact because of several previous
decisions made with regard to similar merchandise. The importer
in the previous ruling claimed that its agent did not know all
the true facts necessary to make a correct determination. It was
subsequently found that the agent had access to the information
through entry documents that he filed with Customs. In the
present case, the protestant claims that its agent did not know
all the true facts necessary to make its classification decision.
Entry documents filed by the agent, however, show that the
critical facts alleged to not have been known at the time were in
fact recorded on page 6 of the invoice submitted to Customs.
Thus, just as we found in the previous ruling with similar
circumstances to consider, the true facts necessary to make a
correct classification decision were known to the importer's
agent responsible for making the determination in this case.
The protestant cites to HQ 220965 to further support its
argument that a mistake of fact exists here. In that case, the
broker's agent who normally handled entry processing for the
importer was not available and someone not familiar with the
transactions was charged with the responsibility of making the
entries. The substitute agent's inexperience evidently led to
the misclassification of the merchandise. As a result, Customs
found a mistake of fact based upon the importer's previous
dealings with the agency. In this case, agent was indeed
familiar with the normal operations and as is evident from the
documents she filed with Customs, had constructive knowledge, if
not actual knowledge, of the true facts. Therefore, no mistake
of fact is found to exist in this case.
It is also argued in the alternative that an inadvertence
occurred based on the same set of facts. Referring back to the
definition of inadvertence, it states that inattention,
oversight, negligence, or lack of care characterizes such a
mistake. In proving the assertion that its agent made his
decision due to inadvertence, the importer must provide evidence
to refute the possibility that the agent made his decision after
reviewing all the facts available to him, albeit incorrectly.
See PPG Industries, Inc. v. United States, 4 CIT 143, 147 (1982).
The protestant has not presented any evidence that might indicate
that the agent did not consider all the relevant facts before
making the classification decision. As noted before, the record
reflects that she had the crucial facts at his disposal when the
decision was filed with Customs. Customs cannot presume that the
importer meant to record one classification number over another
when the importer apparently made its decision with all the
necessary documents in order as presented to the agency.
To further support this claim, the protestant cites to HQ
303373, which held that a clerk's unintentional omission of a
crucial designation on entry documents was an inadvertence
correctable under 520(c). Customs had found that the record
reflected an intent to claim free of duty status under the
Generalized System of Preferences (GSP). The documentary evidence
here simply does not support a finding of inadvertence on the
part of the importer, however. Furthermore, none has been shown
by the protestant. The importer's employee's statement
notwithstanding, the documents she controlled and was in charge
of, which she ultimately filed, indicate that she at the very
least had constructive knowledge of the boots' composition. The
fact that she chose an alternative classification to the one
potentially most favorable shows that a decision was made that
the importer apparently now regrets. This was not a mere
recordation of a decision already made. Therefore, we do not
find inadvertence to be present here. Consequently, the error
that was made in this case constitutes an error in the
construction of the relevant law, which is not correctable under
section 520(c)(1) of the Tariff Act.
HOLDING:
No mistake of fact or other inadvertence has been shown to
exist through either the documentary evidence presented or a
manifestation of the record in this case. As a result, there is
no mistake correctable under 19 U.S.C. 1520(c)(1). The protest
should be denied in full.
Sincerely,
John Durant, Director