LIQ-9-01-CO:R:C:E 224829 CB
District Director
U.S. Customs Service
1801-K Cross Beam Drive
Charlotte, NC 28217
RE: Protest and Application for Further Review No. 1512-93-
100031; Claimed clerical error; 19 U.S.C. 1520(c);
misclassification of merchandise
Dear Sir:
The above-referenced protest and application for further
review was forwarded to this office for further review. We have
considered the points raised and our decision follows.
FACTS:
According to the file 57 entries were made between September
3, 1991 and March 9, 1992. The entries were liquidated between
December 27, 1991 and July 6, 1992 respectively. On November 16,
1992, the protestant filed a request for reliquidation under 19
U.S.C. 1520(c) on behalf of the importer. Protestant asserted
that a mistake of fact had been made at the time of entry in
classifying the merchandise.
In its request, the protestant stated that it believed, based
on the information supplied, that the goods were properly
classified under subheading 5506.20.0000, HTSUS, as synthetic
staple fibers, carded, combed or otherwise processed and dutiable
at 6.5% ad valorem. Subsequent to the liquidation of the subject
entries, the importer completed its end of the half-fiscal year
review of its general accounts. One of those accounts included
duty payments made to U.S. Customs through protestant. Upon review
of this account, the importer became aware that the amounts
recorded were much higher than projected. An investigation
disclosed that protestant had been misclassifying the merchandise
upon entry. The goods are, in fact, not carded, combed or
otherwise processed and should have been entered under subheading
5503.20.0000, HTSUS, and dutiable at 4.9% ad valorem.
Protestant alleges that all of the relevant facts pertinent
to classification were not known at the time of entry. The
commercial invoices and all other documentation for the shipments
failed to disclose whether the merchandise was carded or not
carded. According to protestant, the entry filer was well aware
of the difference between carded fiber and fiber which is not
carded but believed the goods to be carded based on previous
entries of similar merchandise. Once the error had been made on
the initial entry, the error was perpetuated in subsequent entries.
The 1520(c) petition was denied and this protest was filed.
ISSUE:
Does the above-described fact situation qualify as a mistake
of fact under 19 U.S.C. 1520(c)(1)?
LAW AND ANALYSIS:
Initially, we note that protestant's request for reliquidation
under 19 U.S.C. 1520(c)(1) and its instant protest filed under 19
U.S.C. 1514(a)(7) were timely filed. Its application for further
review of this protest is proper under 19 C.F.R. 174.24(a) or (c).
Section 514, Tariff Act of 1930, as amended (19 U.S.C. 1514
(1982)), sets forth the proper procedure for an importer to protest
the classification and appraisal of merchandise when it believes
the Customs Service has misinterpreted the applicable law. A
protest must be filed within ninety days after notice of
liquidation or reliquidation. Otherwise, the tariff treatment of
merchandise is final and conclusive. Under the entry processing
scheme, it is the protest procedure that provides for redress of
errors in the liquidation of entries. Virtually any error in the
liquidation can be corrected if brought to Customs attention within
90 days of the date of liquidation. Such redress is not available
if the 90-day period has expired.
Section 520, Tariff Act of 1930, as amended (19 U.S.C.
1520(c)(1)), is an exception to the finality of 1514. An entry
may be reliquidated to correct a clerical error, mistake of fact,
or other inadvertence not amounting to an error in the construction
of a law. However, certain conditions must be met. These are:
1) the error is adverse to the importer's interest; 2) the error
is manifest from the record or established by documentary evidence;
and 3) the error is brought to Customs attention within one year
of the date of liquidation. Section 1520(c)(1) provides only
limited relief in the situations described therein. Phillips
Petroleum Company v. United States, 54 CCPA 7, 11, C.A.D. 893
(1966); Computime, Inc. v. United States, 9 CIT 553, 555, 622 F.
Supp. 1083 (1985); Concentric Pumps, Ltd. v. United States, 10 CIT
505, 508, 643 F. Supp. 623 (1986). It is not the purpose of the
reliquidation provision of 19 U.S.C. 1520(c)(1) to extend the
period for filing objections that are properly redressable under
the protest procedure.
The burden of proof requirement imposed under 1520(c)(1) is
one that must be met by the petitioner during the 1520(c)(1)
petition and review process. It is the affirmative burden of the
petitioner to establish, from the record or by documents submitted,
the nature of the error and to demonstrate, thereby, that the error
is in fact correctable under the statute. Where a
misclassification can be explained by either a legal error or a
correctable mistake of fact or clerical error, the petitioner's
burden is to show, on the record or by documentary evidence, how
correctable error was responsible. Failure to rule out legal error
by proving correctable error will result in a denial of the
petition for want of evidence.
In the instant case, in both the 1520(c)(1) petition and
subsequent protest, the protestant has alleged that it was not
aware of all of the relevant facts pertinent to classification at
the time of entry. A critical fact relative to the classification
of the merchandise had not been provided. Consequently, the
merchandise was incorrectly classified upon entry. Once the error
was made on the initial entry at the new port, this mistake was
followed on all subsequent entries until the importer conducted its
review. Prior to this instance, the protestant had been
classifying the merchandise correctly at a different port.
Protestant contends that HQ 220965 (November 26, 1990) is
controlling in this instance. However, protestant incorrectly
states that said ruling held that the "misclassification of this
merchandise constituted a mistake of fact." HQ 220965 did not
address the question of classification. The protest under
consideration in that ruling concerned the type of entry filed (a
consumption entry was filed rather than a temporary importation
under bond entry which was protestant's usual practice), not the
classification of the merchandise entered. Therefore, contrary to
protestant's contention, HQ 220965 is not controlling in this
instance.
However, Customs has ruled on a similar issue in previous
rulings. In HQ 222841 (March 12, 1991) the protestant alleged that
it had misclassified men's golf jackets because it was not aware
that the jackets were water resistant. In denying the protest, it
was noted that among other things "[t]here is no affidavit by an
appropriate employee of the protestant and/or manufacturer or
foreign exporter as to the facts of the claimed clerical error,
mistake of fact, or other inadvertence. . . ." Just as in HQ
222841, the protestant herein has not provided any documentary
evidence to substantiate its claim that the entry filer was not
aware of the true nature of the merchandise.
Likewise, in HQ 223524 (February 13, 1992) it was held that
"[w]here the invoice is not materially misleading, and there is
lacking sufficient other evidence to establish that a mistake of
fact. . . is responsible for an erroneous classification, mistake
of fact will not be found because of this failure of evidence."
In that ruling, three different scenarios were discussed. In the
third scenario some merchandise was misclassified by the broker
because it was not aware of the width of the fabric. The
documentation included with the entry package did not indicate the
width of the fabric. In discussing this fact scenario, it was
noted that there was no ". . .evidence to establish that mistake
of fact was responsible for the misclassification rather than the
importer's or broker's ignorance of the legal significance of loom
width. . . . There is no evidence to establish that this error was
an ignorant mistake and not a decisional mistake." The same
conclusion must be reached with respect to the subject protest.
Protestant simply asserts that "[t]he entry filer was well aware
of the differences between carded fiber and fiber which is not
carded in terms of tariff treatment. . . ." However, protestant
did not provide any evidence in support of this conclusion.
Additionally, we note that the record includes a copy of a
"fax" transmission dated October 8, 1992 from "Manny Seligman" to
"WGCMGR" which states that "[w]e have gone back thru (sic) our
records and can find no written evidence of where the bad number
originated. It is our practice to consult with our textile clients
when we begin a relationship to ensure proper classifications;
however, in this instance we cannot prove our case one way or the
other." In view of this information and the above discussion, we
conclude that Customs did not err in denying the reliquidation
request.
HOLDING:
You are hereby directed to DENY this protest in full. The
evidence submitted in this case was insufficient to grant the 19
U.S.C. 1520(c)(1) petition, the denial of which is the subject of
this 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 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 Durant, Director
Commercial Rulings Division