CO:R:C:E 224850 CC/SLR
District Director
U.S. Customs Service
1717 East Loop
Room 401
Houston, TX 77029
RE: Application for further review of Protest No. 5301-93-100088; 19 U.S.C. 1520(c)(1); mistake of fact; Catalyst
Dear Sir:
The above-referenced protest was forwarded to this office
for further review. We have considered the facts and issues
raised, and our decision follows.
FACTS:
This protest is against your refusal to reliquidate certain
entries, in accordance with 19 U.S.C. 1520(c)(1), of Toho THC-32A
Catalyst (THC-32A) as supported catalysts under subheading
3815.19.0000 of the Harmonized Tariff Schedule of the United
States (HTSUS).
Toho Titanium Company, Limited (Toho) is the manufacturer of
the subject catalyst. Mitsubishi International Corporation
(Mitsubishi) is the seller/shipper. Rexene Corporation is the
importer/protestant. Arguments were submitted by the law firm of
Givens and Kelly, counsel for the protestant.
Pertinent dates in this protest include:
Date of Date of 1520(c)(1) 1520(c)(1) 1514(a)(7)
Entry Liquidation Request Denial Protest
Filed
02/21/89 06/30/89 11/27/90 12/21/92 3/19/93
03/13/89 07/28/89 '' '' ''
04/26/89 06/30/89 '' '' ''
04/07/89 07/28/89 '' '' ''
03/23/89 08/11/89 '' '' ''
05/12/89 09/01/89 '' '' ''
05/30/89 09/22/89 '' '' ''
06/06/89 09/22/89 '' '' ''
06/26/89 10/13/89 '' '' ''
07/10/89 10/27/89 '' '' ''
07/24/89 11/13/89 '' '' ''
08/03/89 11/24/89 '' '' ''
08/14/89 12/01/89 '' '' ''
09/17/90 01/04/91 04/22/91 '' ''
05/03/90 08/17/90 '' '' ''
02/12/90 06/01/90 '' '' ''
10/16/89 02/02/90 '' '' ''
09/15/89 01/05/90 '' '' ''
On February 13, 1989, customhouse broker Dynamic Ocean
Services (Dynamic) sent a letter to Customs Houston for a tariff
confirmation, stating that classification information regarding
catalyst THC-32A imported by its client, Mitsubishi, would be
provided at a later time.
On February 23, 1989, Dynamic sent another letter to Customs
Houston with communication from Mitsubishi that based on the
manufacturer's information, the THC-32A was classifiable under
subheading 3815.90.5000, HTSUS, and was dutiable at 5 percent ad
valorem. Subheading 3815.90.5000, HTSUS, is a residual provision
which includes unsupported catalysts.
In "Report of Classification and Value," Customs Form 6431,
the National Import Specialist (NIS) response of March 20, 1989
recommended classification of the catalyst under subheading
3815.90.5000, HTSUS. (Customs Houston had recommended subheading
2917.12.2000, HTSUS, dutiable at 17 percent ad valorem.)
On May 20, 1989 Mitsubishi wrote New York for a tariff
classification ruling. On June 15, 1989 New York Ruling Letter
(NYRL) 841976 was issued, classifying the THC catalyst under
subheading 3815.90.5000, HTSUS. According to that ruling, "[the
product] is a Ziegler-Natta type catalyst used to produce
polypropylene."
In its request for reliquidation, counsel for the protestant
writes that Customs Houston "as early as June 1989, soon after
the HTSUS was enacted, [was] notified by counsel for the
protestant respecting the mistake of fact (i.e., that the
catalyst was physically supported)." Customs Houston's "Memo to
file" dated November 18, 1991 confirms that sometime during June
1989, that office spoke with counsel for the protestant regarding
the classification of the merchandise under subheading
3815.90.5000, HTSUS. Furthermore, it states that, "[t]he
question at this time was whether this catalyst was supported or
unsupported."
Counsel indicates in the protest that in June 1989, it
apprised Customs Houston that the THC-32A catalyst was Ziegler-Natta, that all of this type of catalyst is a crystalline complex
distributed over a second crystalline complex (i.e., supported).
but that the manufacturer, Toho, had not yet confirmed for its
client the exact physical structure for this catalyst. According
to counsel, it was informed by Customs Houston that its claim
would be considered only after the manufacturer had confirmed
that physical make up of the catalyst. Counsel replied that it
would use its best efforts to obtain the information. Counsel
later informed Customs Houston that documentary supporting
evidence would be supplied just as soon as ongoing Toho-Himont
patent litigation was completed.
In a letter dated August 14, 1990, counsel informed Customs
Houston that "today's Ziegler-Natta chemical literature, from
around the world, shows the catalyst to be structurally
'supported'." Likewise, it was claimed that the Explanatory
Notes were no longer correct in stating that the Ziegler-Natta
catalysts were not supported. According to counsel, the
Explanatory Notes at issue were a carry over from the earlier
Brussels Nomenclature, and that while catalyst science has
evolved, the Notes have not kept pace.
On September 14, 1990 the developer of the catalyst (Toho's
Director of Catalyst Research and Development) met in New York
with the NIS and the Customs Catalyst Chemist. According to
counsel, the developer responded to all questions about the
chemical-physical structure of the catalyst. On October 14,
1990, the developer's answers and explanations were reduced to a
sworn affidavit.
In October 1990, the patent litigants came to a meeting of
the minds. According to counsel:
Even before the formal ending of the lawsuit, the
importer acted to provide personal (to New York) and
sworn written representations (to Houston and New York)
that Givens and Kelly's factual representations to
Customs (that the catalyst was, in fact, physically
supported) were in all respects complete and accurate.
These representations documented in detail chemical
terms how the active catalytic centers were physically
supported.
On October 25, 1990 counsel for the protestant wrote New
York requesting a tariff classification for Toho THC-32A catalyst
from Japan. Attached to the request was the above-mentioned
October 14, 1990 affidavit.
On November 13, 1990 NYRL 857568 was issued, classifying the
catalyst, under subheading 3815.19.0000, HTSUS, which provides
for duty free treatment. The ruling indicates that counsel's
inquiry contained specific information concerning the production
of the catalyst. Customs Houston received the ruling on November
20, 1990.
ISSUE:
Whether the protestant's request pursuant to 19 U.S.C.
1520(c)(1) was timely?
Whether Customs properly denied the protestant's request to
reliquidate the subject entries under 19 U.S.C. 1520(c)(1)?
LAW AND ANALYSIS:
Under 19 U.S.C. 1520(c)(1), 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 the law. The
error must be manifest from the record or established by
documentary evidence and brought to the attention of the
appropriate Customs officer within one year from the date of
liquidation.
Two petitions were filed requesting that certain entries be
reliquidated in accordance with 19 U.S.C. 1520(c)(1). The first
petition, filed on November 27, 1990, related to 13 entries.
Only, one of those entries, liquidated on 12/01/89, was
liquidated within one year from the date the petition was filed.
Consequently, the remaining 12 entries were untimely filed. In
addition, the protestant filed a petition on April 22, 1991,
relating to 5 entries. Of these entries, 3 were liquidated
within one year from the date of the petition, those liquidated
on 1/04/91, 8/17/90, and 6/01/90. The remaining two entries,
therefore, were untimely filed.
Counsel for the protestant has asserted that the time
requirements for 19 U.S.C. 1520(c)(1) have been met for all of
the subject entries. Concerning this issue counsel states that
"neither the law nor the regulations mentions a "request' or the
filing of any request or writing," but "the test for 'timeliness'
is whether the 'error, mistake of fact, or inadvertence' is
'brought to the attention of the appropriate Customs officer [the
district director at the port of entry] within one year after the
date of liquidation or exaction...'" Counsel asserts that it
gave notice to Customs import specialists as early as June 1989
that the catalyst was supported and that "these notices of
mistake of fact were continued on a regular periodic basis until
after Customs Ruling NYRL 857568 was issued on 11/13/90." In
addition counsel asserts that notice of a mistake of fact "may be
provided even before liquidation." In support of that position,
counsel cites 19 CFR 173.4a, HQ 300167 of October 19, 1973, and
CIE 1054/64 of June 23, 1964.
Concerning counsel's argument that notice of an error may be
provided prior to liquidation and its reliance on HQ 300167 and
CIE 1054/64, there have been several cases concerning the issue
of the reliquidation of entries pursuant to 19 U.S.C. 1520(c)(1)
when the alleged mistake of fact or inadvertence was brought to
the attention of Customs prior to liquidation. In PPG
Industries, Inc., v. United States, 4 CIT 143, 149 (1982), the
Court of International Trade stated the following:
Decisions of this court uniformly have held that
to invoke the foregoing statute [19 U.S.C. 1520(c)(1)]
the information relating to a mistake of fact must in
effect constitute a request for reliquidation and be
made within the time requirements specified in the
statute. Berkery, Inc. v. United States, 47 Cust. Ct.
102, C.D. 2287 (1961); Hensel, Bruckmann and Lorbacher,
Inc. v. United States, 57 Cust. Ct. 52, C.D. 2723
(1966); J. S. Sareussen Marine Supplies Inc. v. United
States, 62 Cust. Ct. 449, C.D. 3799 (1969); St. Regis
Paper Co. v. United States, 2 CIT 190 (1981); Adorence
Co. v. United States, 3 CIT 81 (1982), appeal pending.
A claim made to Customs prior to liquidation is not
timely "inasmuch as section 1520(c)(1) only supports a
claim for reliquidation as distinguished from
liquidation." Hensel, supra, at 54.
In addition, both HQ 300167 and CIE 1054/64 were issued
prior to amendments to 19 U.S.C. 1520(c)(1), contained in Pub. L.
95-410, 210, 92 Stat. 903, Act of October 3, 1978. Those
amendments included a change in the time requirements for
alleging errors pursuant to 19 U.S.C. 1520(c)(1). In 1984, 19
U.S.C. 1520(a)(4) was added by Pub.L. 98-573, 212. Subsection
(a)(4) permits the correction of an error prior to liquidation.
Similarly, 19 CFR 173.4a was added in 1985 to allow for the
correction of a clerical error prior to liquidation, pursuant to
19 U.S.C. 1520(a)(4).
In fact, counsel has cited 19 CFR 173.4a in support of its
argument that notice of a mistake of fact may be made before
liquidation. But it is clear that 19 CFR 173.4a, pursuant to 19
U.S.C. 1520(a)(4), applies only to entries that have not been
liquidated. As stated in HQ 224652 of August 5, 1993, "Section
173.4a is expressly limited to the correction of clerical errors
prior to liquidation." Once liquidation occurs 19 CFR 173.4a is
inapplicable.
Not only would 19 CFR 173.4a be inapplicable after
liquidation occurs, if notice of an error were actually made
prior to liquidation, then an incorrect classification at the
time of liquidation must be viewed as a mistake of law, as
opposed to a mistake of fact. Here, counsel has alleged that
notice of a mistake of fact was made to import specialists
concerning the catalysts prior to liquidation. If that is the
case, then both the importer and the import specialists would
have known the facts as they were prior to liquidation.
Consequently, the classification at liquidation would constitute
a conclusion of law, which could only be challenged by filing a
protest pursuant to 19 U.S.C. 1514.
Finally, the protestant had failed to specify what the
mistake of fact was that was brought to Customs attention prior
to the requests for reliquidation contained in the letters of
November 27, 1990 and April 22, 1991. According to the court
in PPG Industries, Inc., v. United States, supra, at 147-148,
quoting in part from the lower court in Hambro Automotive Corp.
v. United States, 81 Cust. Ct. 29, 31, 458 F. Supp. 1220, C.D.
4761 (1978)):
... it is incumbent on the plaintiff to show by
sufficient evidence the nature of the mistake of fact.
The burden and duty is upon the plaintiff to inform the
appropriate Customs official of the alleged mistake
with "sufficient particularly to allow remedial
action."
Counsel has merely alleged that any notices by counsel to Customs
that the catalyst was supported, allegedly beginning in June 1989
and continuing until after NYRL 857568 was issued, constituted
mistake of fact claims. In addition, evidence from the file
shows that import specialists involved in this matter were
unaware of any mistake of fact claims concerning the subject
entries prior to the letters of November 27, 1990 and April 22,
1991. Since the protestant had not shown any specifically
alleged mistake of fact that was brought to the attention of
Customs prior to the letters of November 27, 1990 and April 22,
1991, those two letters constitute the time when mistake of fact
claims for the subject entries were made pursuant to 19 U.S.C.
1520(c)(1).
As stated above, the requests for reliquidation for most of
the entries in those letters were not made within one year of the
date of liquidation. As stated in Omni U.S.A. Inc. v. United
States, 840 F.2d 912, 913 (Fed. Cir. 1988), "Since nobody brought
the errors to the attention of the appropriate customs officers
within a year of the date of liquidation, authority to correct
them lapsed according to the terms of section 1520(c)(1), the
refusal by customs to correct them upon untimely notice was
correct, and was the only course open to them." For those
entries in which the protestant failed to make a claim for
reliquidation within one year from the date of liquidation,
Customs had no choice but to deny the request for reliquidation
pursuant to 19 U.S.C. 1520(c)(1).
Counsel has asserted that the subject entries were
liquidated under an incorrect classification due to a mistake of
fact. For those entries in which a timely 1520(c)(1) claim was
made, entries liquidated on 12/01/89, 6/01/90, 8/17/90, and
1/04/91, the protestant has failed to show that there was a
mistake of fact.
Our analysis in this protest is the same as that contained
in HQ 225851, a similar protest relating to catalysts made by the
same manufacturer and concerning the same issues of mistake of
fact (copy enclosed and incorporated into this ruling). In that
protest we found that no mistake of fact was present since the
protestant knew of the nature of the merchandise at the time of
and prior to liquidation. The relief provided for in 19 U.S.C.
1520(c)(1) is not an alternative to the relief provided for under
19 U.S.C. 1514 (see cases cited in HQ 225851). Since it would
have been no burden for the protestant to have challenged the
classification of the catalysts by filing a timely 19 U.S.C. 1514
protest, denial of the 19 U.S.C. 1520(c)(1) request was proper.
HOLDING:
For those entries in which a request for reliquidation was
not filed within one year after the date of liquidation,
protestant's request pursuant to 1520(c)(1) was properly denied
as untimely.
For those entries in which a timely request was made, no
mistake of fact was present under 19 U.S.C. 1520(c)(1) in an
alleged error in the tariff classification of the subject
entries. Consequently, the protest should be denied in full.
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,
John Durant, Director
Commercial Rulings Division
Enclosure