LIQ-9-01-CO:R:C:E 224657 SR
Area Director
J.F.K. Airport
Building 178
Jamaica, New York 11430
RE: Application for Further Review of Protest No. 1001-90-
006117; 19 U.S.C. 1514(a)(7); Protest of 19 U.S.C. 1520(c)(1)
denial.
Dear Sir:
The above-referenced protest was forwarded to our office on
Application for Further Review of Protest No. 1001-90-006117
dated, July 16, 1990. The protested entries include entry number
4701-89-XXXXXXX-X, dated 2/8/89, 4701-89-XXXXXXX-X dated 2/15/89,
and 4701-89-XXXXXXX-X, dated 3/21/89. We have considered the
facts and the issues raised; our decision follows.
FACTS:
Sandoz Pharmaceuticals Corp. entered antineiopastic/
immunosuppressives, called Sandimmune. Nine entries were entered
during the period of January, 1989 to March 1989 under subheading
3004.90.6015, Harmonized Tariff Schedules of the United States
(HTSUS). The entries were liquidated "NO CHANGE" between March
3, 1989 to July 21, 1989.
After the entries at issue were liquidated Sandoz made
another entry of Sandimmune in September 1989 of which a sample
was sent to the Customs lab. The lab reported that the sample
contained an ingredient called cyclosporine which is an
antibiotic. Sandoz then filed claims under 19 U.S.C. 1520(c)(1)
on March 2, 1990 (1001-90-200391) and April 9, 1990 (1001-90-
200597) requesting reclassification of the merchandise as
medicaments "containing other antibiotics" under subheading
3004.20.00 and 9902.29.88, HTSUS, free of duty. The claims were
denied. Protests were filed under 19 U.S.C. 1514 (a)(7) (1001-
90-6118, 1001-90-7171 and 1001-90-6117) which allows a protest
against the refusal of a Customs officer to reliquidate an entry
under section 1520(c).
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ISSUE:
Whether the importer has shown that it lacked knowledge of
the charactor of a pharmacuetical so as to be a mistake of fact
within 19 U.S.C. 1520(c)(1).
LAW AND ANALYSIS:
Section 520(c)(1) of the Tariff Act of 1930, as amended (19
U.S.C.(c)(1), provides that Customs may correct certain errors,
if adverse to the importer, within one year of the date of
liquidation. Section 520(c)(1) provides 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; . . .
In order to bring a claim under 19 U.S.C. 1520(c)(1), the
mistake made must be one of fact not a mistake of law. These
terms are defined in C.J. Tower & Sons of Buffalo, Inc. v. United
States, 68 Cust. Ct. 17, C.D. 4327, 336 F. Supp. 1395 (1972),
aff'd 499 F.2d 1277, 61 CCPA 90, C.A.D. 1129 (1974). A mistake
of fact is defined as any mistake except a mistake of law; a
mistake which takes place when some fact which indeed exists is
unknown, or a fact which is thought to exist, which in reality
does not exist.
A mistake of law, on the other hand, 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, 854 (1979)(citing 58 C.J.S. Mistake, section 832).
It is well established that a mistake made in the
classification of goods, when all the facts are known, is not a
mistake of fact under 19 U.S.C. 1520(c)(1). When merchandise is
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misclassified despite full knowledge of the facts it is
considered to be a decisional error and is considered a mistake
of law. See Computine, Inc. v. United States, 9 CIT 553 (1985),
Mattel, Inc. v. United States, 72 Cust. Ct. 257 (1974), and
Headquarters Ruling Letter (HQ) 222636 dated September 16, 1991.
In order to find that a mistake of fact has occurred in this
case it has to be shown that Sandoz did not have knowledge that
Sandimmune contains the antibiotic cyclosporin. Sandoz has
submitted correspondence between Sandoz and the FDA from 1982-
1983 as proof that they did not know Sandimmune contains an
antibiotic. These documents reference application on Antibiotic
Form 5. Sandoz states that they were merely using this form as
part of FDA procedure; that the final letter and approval of the
FDA did not state the word antibiotic. Lack of the word on the
forms is not proof that the company was not aware of the
antibiotic properties of their merchandise.
Sandimmune, which is patented by Sandoz, is the trade name
for cyclosporin. A memo was written by the Customs lab in New
York dated October 14, 1992, concerning Sandimmune and whether
Sandoz had knowledge that it contains an antibiotic. The memo
states as follows:
To find the answer to this question, a search of the
scientific literature was done. The first reference to
cyclosporin as an antibiotic is the abstract summary of the
process developed for the production of cyclosporin A. This
work resulted in the U.S. patent 4,117,118 awarded in 1978
to Sandoz. The title of this summary is "Antibiotics". In
the first sentence cyclosporin A is referred to as "Antiin-
flammatory and immunosuppressant antibiotics . . .". In
addition, other references were found in the literature
which call cyclosporin an antibiotic.
The information submitted shows that Sandoz was aware that
Sandimmune contains cyclosporin. A 1983 certificate of analysis
of Sandimmune drink solution states that the required
specification for cyclosporin must be between 90-100% and the
shipment contains 99% cyclosporin. In a letter to the Office of
New Drug Evaluation dated November 7, 1983, Cyclosporin was
stated in parentheses each time Sandimmune was mentioned.
Based on the above information, Sandoz has not submitted
sufficient proof that they were unaware that Sandimmune contains
an antibiotic as one of its ingredients.
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HOLDING:
The protest should be denied in full. A copy of this
decision should be attached to the CF 19 Notice of Action to
satisfy the notice requirement of section 174.30(a), Customs
Regulations.
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 this decision
must be accomplished prior to the mailing of the decision. Sixty
days from the date of this 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 to
the public via the Diskette Subscription Service, Lexis, Freedom
of Information Act and other public access channels.
Sincerely,
John A. Durant, Director
Commercial Rulings Division