LIQ-9-01-CO:R:C:E 225163 PH
Regional Commissioner of Customs
(C/O Protest and Control Section)
6 World Trade Center, Room 762
New York, New York 10048-0945
RE: Protest No. 1001-93-107081; Clerical Error, Mistake of
Fact, or other Inadvertence; Antidumping Duties;
Reimbursement Certification; 19 U.S.C. 1520(c)(1)
Dear Sir:
The above-referenced protest was forwarded to this office for
further review. In its memorandum in support of the protest, the
protestant requested a meeting. An opportunity for such a
meeting was given to the representative of the protest who chose
to submit a supplemental letter addressing issues which this
office had raised in lieu of such a meeting. A copy of the
protestant's April 29, 1994, letter is enclosed for your records.
We have considered the points raised by your office and the
protestant. Our decision follows.
FACTS:
According to the file, on May 7, May 9, and June 5, 1987, the
importer entered certain merchandise (certain enamel cookware)
from Taiwan. The protestant acted as surety for the entries.
The merchandise under consideration was the subject of an
antidumping investigation (case A-583-508) (Federal Register of
December 31, 1985 (50 FR 53353)). In a notice of preliminary
determination (Federal Register of May 20, 1986 (51 FR 18472)),
Customs was directed to suspend liquidation of all entries of
such merchandise that are entered, or withdrawn from warehouse,
for consumption, on or after the date of publication and to
require a cash deposit or the posting of a bond equal to the
estimated weighted-average amount provided in the notice. A
final determination was published in the Federal Register on
October 10, 1986 (51 FR 36425), pursuant to which Customs was
directed to continue to suspend liquidation of entries of the
merchandise and to continue to require a cash deposit based on
the estimated weighted-average amount provided in the notice. On
December 2, 1986, in an Antidumping Duty Order, the International
Trade Administration (ITA) published a determination in the
Federal Register (51 FR 43416) that importations of the
merchandise materially injure a United States industry (on the
basis of findings of the International Trade Commission (ITC))
and Customs was directed to require a cash deposit based on the
estimated weighted-average antidumping duty margins provided in
the notice.
Pursuant to the above determinations, the importer deposited
antidumping duties for the entries protested in the total amount
of $4,426.25.
On February 8, 1988, Customs issued a telegram (No. 001557,
Subject: Antidumping Duties (88-16)) advising that the Depart-
ment of Commerce had not received a request for an administrative
review of the antidumping duty finding/order for certain periods
on merchandise listed in the telegram. Therefore, Customs
officers were directed to assess antidumping duties on the
subject merchandise entered, or withdrawn from warehouse, for
consumption during the periods listed in the telegram at the cash
deposit or bonding rate required at the time of entry. The
instructions for the merchandise under consideration were to
"liquidate all entries for all firms except: [not applicable in
this case] [for the] period [of] 05/20/86 - 11/30/87".
On April 22, 1992, Customs sent a Customs Form 29, Notice of
Action, to the importer in regard to the protested entries, along
with certain other entries. Customs stated in the notice that
the "entries [were] to be liquidated at [antidumping] duty rates
as entered. Please complete attached reimbursement statement and
return it to this office." The "reimbursement statement" form
listed each of the protested entries, along with the other
entries. The form cited 19 CFR 353.26, and stated that failure
to return the document within 20 days could result in "up to
double the amount of final antidumping duty determination rates."
The certification on the form concerned whether the importer had
entered into any agreement or understanding for the payment or
refunding to the importer by the manufacturer, producer, seller
or exporter of all or any part of the antidumping duties upon the
listed entries. According to the box checked on the Customs Form
29, if the importer disagreed with the proposed action, the
importer was requested to furnish its reasons in writing to
Customs within 20 days from the date of the notice; after 20 days
the entries were to be liquidated as proposed.
The entries were liquidated on July 24, 1992, with an increase in
the antidumping duties in the total amount of $4,426.25
(representing the additional assessment equal to the total
dumping duties deposited, on the basis that the reimbursement
notice was not returned to Customs, as provided for in the above-
referenced Customs Form 29) for the protested entries. According
to the protestant, on February 19, 1993, Customs issued a demand
for payment of the increased antidumping duties on the
protestant-surety, "given that the importer was no longer in
business."
On July 23, 1993, the protestant filed a request to reliquidate
the entries under consideration on the basis that the liquidation
of the entries with additional antidumping duties was the result
of a clerical error, mistake of fact, or other inadvertence
adverse to the claimant. By letter of September 1, 1993, Customs
responded to the protestant's July 23, 1993, request for relief
under 19 U.S.C. 1520(c)(1). In its letter, Customs stated (by
checking the appropriate box on the form letter) that:
We have determined that there is no clerical error, mistake
of fact, or other inadvertence correctable under section
520(c)(1). Consequently, the subject of your claim falls
within the scope of Section 514. However, since your
letter was not presented within the time limit prescribed
by section 514, we cannot afford you review under that
section of law.
On October 13, 1993, the protestant filed the protest under
consideration, protesting the denial of the July 23, 1993,
request for relief under 19 U.S.C. 1520(c)(1). Further review of
the protest was requested and granted.
ISSUE:
May the protest in this case be granted?
LAW AND ANALYSIS:
Initially, we note that the protest was timely filed (i.e.,
within 90 days after the denial of the request for relief under
19 U.S.C. 1520(c)(1)) and that the request for relief under
section 1520(c)(1) was timely filed (within 1 year after the date
of liquidation). The matter protested is protestable (see 19
U.S.C. 1514(a)(7)).
No certification that the protest is not being filed collusively
to extend another authorized person's time to protest, as
required for a protest by a surety (see 19 U.S.C. 1514(c)(2)),
was provided. Because the protest must be denied on other
grounds (see below), we are not addressing the issue of whether
such a certification is required in a protest such as this,
protesting the denial of a request by a surety for relief under
19 U.S.C. 1520(c)(1). Nor are we addressing the issue of whether
the filing of a certification after the time for protest has
expired, as the protestant purported to do in its April 29, 1994,
letter, satisfies the requirement for such a certification. We
note, however, that the leading Court case interpreting this
requirement, Washington International Insurance Co. v. United
States, 13 CIT 112, 707 F. Supp. 561 (1989), found the
requirement for this certification to be an absolute,
jurisdictional requirement, noting that "[it (i.e., the Court)
was] hard-pressed to conceive of what such a reason [i.e., for
not complying with the certification requirement] might be." (13
CIT at 115; see also Note 8, id, "This court finds no per se rule
allowing omission of certification in such circumstances [i.e.,
when the importer was not locatable].")
We also are not addressing the issue of standing (because, in any
event, the protest must be denied on other grounds, as explained
below). However, we note that standing is a basic threshold
jurisdictional requirement (see, e.g., Tisza v. Communications
Workers of America, 953 F. 2d 298 (7th Cir. 1992), Shearson
Lehman Hutton, Inc., v. Wagoner, 944 F. 2d 114 (2nd Cir. 1991);
see also, West's Federal Practice Digest, 4th, Vol. 41, Federal
Civil Procedure, 103.1, and cases discussed therein). Standing
could be a bar to relief in this case because, in filing the
request for relief under section 1520(c)(1), the surety sought to
benefit from the provision as the agent of the importer.
Therefore, the surety "merely step[s] into the shoes of [the
importer] and only acquire[s] whatever rights to the refund of
duties [the importer] had." (See, e.g., St. Paul Fire and Marine
Insurance Co. v. United States, 2 CIT 104, 106, 525 F. Supp. 880
(1981).)
If bankruptcy of the importer occurred before the filing of the
request for relief under 19 U.S.C. 1520(c)(1) in this case, as in
the St. Paul Fire and Marine Insurance Co., case, supra, "the
initial obligation for payment of the duties [would be] 'rooted
in the prebankruptcy past'", so that "... any claim for refund of
those duties vested in the trustees in bankruptcy ... [and] only
they [i.e., the trustees in bankruptcy], and not the bankrupts,
could properly pursue the claims by filing the protests." Since
the bankrupt (i.e., the principal) could not properly pursue
relief, neither could the surety, standing in the shoes of the
principal, pursue such relief. However, because the factual
evidence available does not conclusively establish the importer's
bankruptcy (the protestant was given an opportunity to provide
evidence on this issue and did not do so) and because the protest
may be decided on other grounds, we are not denying the protest
on the basis of standing.
In this case, the surety has sought relief under 19 U.S.C.
1520(c)(1). Under this provision, Customs may reliquidate an
entry to correct a clerical error, mistake of fact, or other
inadvertence, not amounting to an error in the construction of a
law, when certain conditions are met. Section 1520(c)(1) has
frequently been interpreted by the Courts. It has been stated
that "[a] clerical error is a mistake made by a clerk or other
subordinate, upon whom devolves no duty to exercise judgement, in
writing or copying the figures or in exercising his intention"
(see PPG Industries, Inc., v. United States, 7 CIT 118, 124
(1984), and cases cited therein). It has been held that a
"mistake of fact exists where a person understands the facts to
be other than they are, whereas a mistake of law 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 (1979), quoted in Concentric Pumps, Ltd., v.
United States, 10 CIT 505, 508, 643 F. Supp. 623 (1986); see
also, C.J. Tower & Sons of Buffalo, Inc. v. United States, 68
Cust. Ct. 17, 22, C.D. 4327, 336 F. Supp 1395 (1972), aff'd, 61
CCPA 90, C.A.D. 1129, 499 F. 2d 1277 (1974), and Universal
Cooperatives, Inc. v. United States, 13 CIT 516, 518, 715 F.
Supp. 1113 (1989)). Inadvertence has been defined as "an
oversight or involuntary accident, or the result of inattention
or carelessness, and even as a type of mistake" (Occidental Oil &
Gas Co. v. United States, 13 CIT 244, 246 (1989), quoting C.J.
Tower & Sons of Buffalo, Inc. v. United States, supra, 68 Cust.
Ct. at 22).
The conditions required to be met under 19 U.S.C. 1520(c)(1) are
that the clerical error, mistake of fact, or other inadvertence
must be adverse to the importer, manifest from the record or
established by documentary evidence, and brought to the attention
of Customs within one year after the date of liquidation of the
entry. The relief provided for in 19 U.S.C. 1520(c)(1) is not an
alternative to the relief provided for in the form of protests
under 19 U.S.C. 1514; section 1520(c)(1) only affords "limited
relief in the situations defined therein" (Phillips Petroleum
Company v. United States, 54 CCPA 7, 11, C.A.D. 893 (1966),
quoted in Godchaux-Henderson Sugar Co., Inc., v. United States,
85 Cust. Ct. 68, 69, C.D. 4874, 496 F. Supp. 1326 (1980); see
also, Computime, Inc. v. United States, 9 CIT 553, 555, 622 F.
Supp. 1083 (1985), and Concentric Pumps, Ltd. v. United States,
supra).
The protestant's June 23, 1993, request for relief under section
1520(c)(1) claimed that the liquidation of the entries with
additional antidumping duties was the result of a clerical error,
mistake of fact, or other inadvertence adverse to the claimant.
Specifically, the protestant argued that although Customs
instructions (i.e., the February 8, 1988, telegram referred to
above) "clearly dictated that the entries should be liquidated on
February 8, 1988, either through mistake or inadvertence these
entries were not liquidated until July 24, 1992." The protestant
contended that Customs committed two mistakes of fact or
inadvertences in this case. The first was that Customs acted as
if the suspension of liquidation had not been lifted in February
of 1988. In this regard, the protestant argued that if Customs
had not delayed the liquidation of the entries, the reimbursement
statement would have been requested while the importer was still
in business. The second mistake of fact or inadvertence by
Customs, according to the protestant, was in acting as though the
entries were unliquidated when, in fact, they were deemed
liquidated on the four-year anniversary of the dates of entry
(under 19 U.S.C. 1504(d)). Since the entries should have been
deemed liquidated on the four-year anniversary, "it was a mistake
to assess double antidumping duties when the entries had already
been deemed liquidated with the amount of antidumping duties
deposited at the time of entry." Finally, the protestant argued
that Customs was mistaken to presume that the importer was
subject to reimbursement of antidumping duties, on the basis of
the failure of the importer to return the completed reimbursement
statement sent to it with the Customs Form 29 (described above).
The evidence submitted with the request for relief consisted of
copies of the February 8, 1988, liquidation instructions, the
April 22, 1992, Request for Information, and the Customs Forms
7501 for the entries under consideration, with notations
recognizing the liquidation instructions (i.e., "ADA As per HQ
Telex 001557, dated 2/8/88 liquidate entry Dumping duty rate
doubled".
The first mistake alleged by the protestant is that Customs acted
as if the suspension of liquidation had not been lifted in
February, resulting in the reimbursement statement being sent to
the protestant after it was out of business. In other words, the
inadvertence or mistake of fact alleged is Customs failure to
liquidate the entry pursuant to the February 8, 1988,
instructions.
As the protestant argues in this regard, we have ruled that
relief may be granted under section 1520(c)(1) when an entry is
prematurely liquidated with countervailing duties, contrary to
instructions to suspend liquidation because of the pendency of
the countervailing duty case (see, e.g., HQ ruling 223160,
September 13, 1991). However, in that case it was established
that the Customs officer who liquidated the merchandise was not
aware that there was an outstanding countervailing duty case and
that liquidation had been suspended. Thus, this position is
consistent with Universal Cooperatives, Inc., v. United States,
13 CIT 516, 518, 715 F. Supp. 1113 (1989), which distinguished
between "decisional mistakes" in which a party may make the wrong
choice between two known alternative sets of facts and which
"must be challenged under Section 514" and "ignorant mistakes"
which are remediable under section 1520(c)(1) (see also, in this
regard, Legal Determination 75-0026).
In this case, there is no evidence as to whether the Customs
official who liquidated the protested entries was ignorant of the
removal of the suspension of liquidation or whether that official
was aware of the removal of suspension and determined that it was
inapplicable to the entries under consideration. As explicitly
stated in section 1520(c)(1), in order to qualify for relief
under that provision, the clerical error, mistake of fact, or
other inadvertence must be manifest from the record or
established by documentary evidence (see, in this regard, PPG
Industries, Inc. v. United States, 4 CIT 143, 147-148 (1982), and
United States v. Lineiro, 37 CCPA 5, 10, C.A.D. 410 (1949),
"[d]etermination of issues in customs litigation may not be based
on supposition"). Since section 1520(c)(1) only affords "limited
relief in the situations defined therein" (see Court cases above
in regard to this proposition) and since the prerequisites for
such relief have not been met in regard to this allegation, the
protest is DENIED in this regard.
The second mistake alleged by the protestant is that of acting as
though the entries were unliquidated (even though the entries
were actually deemed to have been liquidated at the 4-year
anniversary of the dates of entry) when the purported
liquidation, with an increase in antidumping duties, was
effected. In other words, the protestant alleges that it was an
inadvertence or mistake of fact by Customs to liquidate the
entries after they should have been deemed liquidated as entered
on the 4-year anniversary of the entries.
In regard to this issue, the dates of the entries under
consideration were May 7 and 9, and June 5, 1987. The date of
the liquidation instructions was February 8, 1988. The date of
liquidation was July 24, 1992, more than four years after the
dates of entry and more than four years after the date of the
liquidation instructions.
If a protest under 19 U.S.C. 1514 had been timely filed by an
authorized party, relief could have been granted, pursuant to 19
U.S.C. 1504(d), as interpreted before its amendment by section
641 of Public Law 103-182 (the North American Free Trade
Agreement Implementation Act (107 Stat. 2057, 2204), enacted
December 8, 1993), or as so amended. In regard to the
interpretation of section 1504(d) before its 1993 amendment, see
Nunn Bush Shoe Co. v. United States, 784 F. Supp. 892 (CIT 1992)
(i.e., if the suspension of liquidation was removed before the
end of the 4-year period after entry, liquidation was required
before the four-year anniversary of the entries). Because no
timely protest was filed under section 1514, relief may not be
granted under that statute (see United States v. A. N. Deringer,
Inc., 66 CCPA 50, 593 F. 2d 1015 (1979); Omni U.S.A., Inc. v.
United States, 6 Fed. Cir. (T) 99, 840 F. 2d 912 (1988); and
Philip Morris v. United States, 13 CIT 556, 716 F. Supp. 1479
(1989) (affirmed in part and reversed in part in an unpublished
decision of the Court of Appeals for the Federal Circuit, 8 Fed.
Cir. (T) 187, 907 Fed. 2d 158 (1990)), relating to the issue of
"void" versus "voidable" liquidations).
Relief under section 1520(c)(1) is unavailable in this regard
basically for the same reasons cited regarding the first mistake
alleged by the protestant (i.e., lack of evidence establishing
the alleged inadvertence or mistake of fact). That is, there is
no evidence as to whether the Customs official who liquidated the
protested entries did so as a result of inadvertence or mistake
of fact not amounting to an error in the construction of law, or
as a result of a mistake in the construction of law. See SCA
International, Inc., v. United States, 14 CIT 59 (1960), for a
case finding that section 1520(c)(1) is inapplicable without such
evidence in the case of an improper liquidation. As the Court
stated in that case, "[t]he essential question is -- did the
improper liquidations occur as a result of a mistake in the
construction of law or as a result of a mistake of fact" (14 CIT
at 60). As noted above in regard to the first mistake alleged by
the protestant, since section 1520(c)(1) only affords "limited
relief in the situations defined therein" (see Court cases above
in regard to this proposition) and since the prerequisites for
such relief have not been met in regard to this allegation, the
protest is DENIED in this regard.
The protestant also argues that Customs made a clerical error,
mistake of fact, or other inadvertence in presuming that the
importer was reimbursed for the antidumping duties, on the basis
of the importer's failure to provide the reimbursement statement,
is as follows. Our analysis of this argument follows.
The Department of Commerce has advised Customs regarding its
interpretation of this issue (see June 5, 1991, letter from the
Department of Commerce to Customs, copy enclosed). According to
this letter, for entries during the time-period in which the
protested entries were made, the Department of Commerce required
the importer to file a reimbursement certificate with Customs
within 30 days after the earlier of: (1) publication of the
antidumping order or any administrative review thereof pursuant
to 19 CFR 353.53, or, if appropriate, 19 CFR 353.49; or (2)
importation of the merchandise in a district in which not
previously imported (see also 19 CFR 353.55, between 1980 and
1989, now at 19 CFR 353.26). The letter also stated that, "[i]f
the importer goes out of business before the deadline for filing
the certificate has passed, Customs should not presume that
reimbursement has occurred [and] if the importer goes out of
business after the deadline for filing the certificate has
passed, Customs should presume that reimbursement occurred."
There is no requirement, in either the June 5, 1991, letter or in
the applicable regulations (19 CFR 353.55 between 1980 and 1989
and 19 CFR 353.26 now) that Customs must give an importer notice
to provide a reimbursement statement; the applicable regulations
require the importer to file the statement with Customs.
In this case, Customs records indicate that the importer went out
of business as of March 27, 1992, and the protestant does not
disagree with those records. The date of the antidumping order
in this case was December 17, 1986. According to the February 8,
1988, Customs telegram issuing liquidation instructions (see
above), there was no request for administrative review of the
antidumping order. There is no evidence presented as to the date
of first importation in the district of importation of the
protested entries. However, even if we assume that the earlier
of the events 30 days after which the importer was required to
file the reimbursement statement was the date of publication of
the antidumping order, the evidence before us is clear that the
importer went out of business after the deadline for filing the
reimbursement certificate, in which case the Department of
Commerce advised in its June 5, 1991, letter that Customs should
presume that reimbursement occurred. The request for relief is
DENIED in this regard (and we note that a protest, if one had
been timely filed by an authorized party under 19 U.S.C. 1514
would also have been denied in this regard).
HOLDING:
The protest (i.e., as to the demand on the surety for payment of
the increased antidumping duties) is DENIED.
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, with
the Customs Form 19, 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 ECHOES and the public via the Diskette
Subscription Service, Freedom of Information Act, and other
public access channels.
Sincerely,
John Durant, Director
Commercial Rulings Division
Enclosures