LIQ-4-01-LIQ-9-01-RR:IT:EC 227609 IOR
Port Director
U.S. Customs Service
2350 N. Sam Houston Parkway East
Suite 1000
Houston, TX 77032
RE: Application for further review of protest no. 5301-95-100027; antidumping duty; certificate of reimbursement;
interest; 19 U.S.C. 1520(c)(1); 19 CFR 353.26; 19 U.S.C.
1677g; mistake of law
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 concerns entry no. 201-xxxx481-2, filed on March 12,
1990, for nitrocellulose imported from Japan on February 21,
1990, by Biachem USA, Inc. (Biachem). The protestant acted as
surety for the entry.
The imported merchandise was the subject of an antidumping
investigation (A-588-812) (Federal Register of October 17, 1989
(54 FR 42536)). In a notice of preliminary determination
(Federal Register of March 5, 1990 (55 FR 7762)), 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merchandise that are entered, or withdrawn from warehouse, for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, March 5, 1990.
Customs was also directed to require a cash deposit or posting of
a bond equal to the estimated preliminary dumping margin of 66%.
A final determination was published in the Federal Register on
May 22, 1990 (55 FR 21054), pursuant to which Customs was
directed to continue to suspend liquidation of entries of the
merchandise. On July 10, 1990, in an Antidumping Duty Order, the
International Trade Administration (ITA) published a
determination in the Federal Register (55 FR 28268) that
importations of the merchandise materially injure a U.S. industry
and Customs was directed to require a cash deposit equal to the
estimated weighted-average antidumping duty margin of 66%.
There were two Customs bonds posted for the subject entry, an
entry bond in the amount of the declared value of the imported
merchandise, and an antidumping bond in the amount of 66% of the
declared value. The protestant was the surety. The file
contains an Entry/Immediate Delivery form (CF 3461) dated
February 28, 1990, with respect to the subject entry . The
applicant on the form is indicated to be the importer of record
of the entry, however, the importer and importer number
identified on the CF 3461, is the party identified as the Customs
broker on the CF 7501.
On August 20, 1991, upon receiving instructions from the
Department of Commerce, the instructions were issued by Customs
telex (No. 1232111, Subject: Antidumping Duties) advising that
the Department 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 telex. Customs
officers were directed to assess antidumping duties on
merchandise entered, or withdrawn from warehouse, for consumption
during the periods listed in the telex 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 [for the] period [of] 03\05\90 - 06\30\91."
The August 20, 1991 telex also states that assessment of dumping
duties requires of the importer the reimbursement statement
described in 19 CFR 353.26 and that prior to appraisement and
liquidation such a statement must accompany each entry on which
duty is to be assessed. With respect to interest, the telex
states that "no interest should be collected on entries, filed
prior to publication of the antidumping duty order, for which
only bonds, and no cash deposits, were posted."
By letter dated May 18, 1992, to Biachem, addressed to the
address that appears on the CF 7501 for Biachem, and which is in
Customs Automated Commercial System (ACS) records for Biachem,
Customs requested Biachem to complete and return a reimbursement
certificate. The letter included a copy of the regulations
requiring the reimbursement, and information to include in such
certification. The information includes the "date of
publication" as 3/5/90, and the "date of final determination" as
5/22/90. The letter requested that the reimbursement certificate
be returned to Customs within five working days of the receipt of
the request.
On July 27, 1992, Customs sent a Notice of Action (CF 29) to
Biachem. The notice stated that the subject entry is in the
liquidation process and will be liquidated at the 66% cash
deposit/bond rate in effect at the time of entry. In addition,
the notice stated:
On 5/18/92 we sent you a request for an
antidumping reimbursement statement. To this date we
have received no response. Your failure to file the
certificate leads us to presume that reimbursement of
dumping duties has taken place. As a result an
additional assessment in the amount of the antidumping
duties has been assessed.
The subject entry was liquidated on September 4, 1992, with an
increase in the antidumping duties in the total amount of
$44,173.00 (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 notices from Customs) for the protested
entry. Demand for payment of the increased antidumping duty (the
$44,173.00, plus $15,158.40 in interest) was made on the
protestant surety on December 12, 1992. According to the
protestant, the increase in antidumping duty was paid by the
surety on April 13, 1993. According to Customs records, payment
was made on the antidumping bond posted with the entry summary.
No separate payment for the increased antidumping duty assessment
has been made.
On June 18, 1993, the protestant filed with Customs a petition
for reliquidation under 19 U.S.C. 1520(c)(1), claiming mistakes
of fact. As grounds for the petition, the protestant claims that
1) the reimbursement presumption is rebutted by virtue of a
reimbursement certification from the importer attached to the
petition, 2) the reimbursement presumption is not applicable to
the subject entry because the merchandise was purchased before
the date of publication suspending liquidation and exported
before the date of final determination, and 3) interest was
improperly assessed because the importer did not make a cash
deposit to secure the antidumping duties, but posted a bond to
secure payment. The only allegation of any mistake is that
"Customs made a mistake of fact as to the type of security
deposited by the importer for estimated dumping duties."
Accompanying the petition is an undated certificate of
reimbursement purported to be signed by a Biachem company
officer. The only date appearing on the document is the
facsimile produced date of June 15, 1993. According to the
supervisory import specialist handling the file, the
reimbursement certificate had not been submitted to Customs prior
to the filing of the 1520(c)(1) petition.
An addendum to the June 18, 1993 petition, dated June 22, 1993
was submitted to Customs. The addendum further describes the
mistakes of fact alleged:
Surety respectfully submits that this case clearly
involves two mistakes of facts and one instance of
other inadvertence by the United States Customs
Service. As is described in surety's original
petition, the Customs Service was mistaken as to the
fact that the importer was not reimbursed by any party
for antidumping duties. The fact is that the importer
has submitted a reimbursement statement certifying that
no reimbursement occurred. Consequently, the entry
should be reliquidated without the imposition of double
the antidumping duties for failure to submit a
reimbursement statement. (Emphasis supplied).
The second mistake of fact concerned the type of
security posted by the importer to secure the estimated
antidumping duties. Surety submits that Customs
mistakenly believed a cash deposit was made otherwise
it would not have charged interest. It is unlawful to
charge interest on a bond. Since the importer posted a
bond to secure antidumping duties, reliquidation of
this entry without the imposition of interest would
correct this error.
Finally, inadvertence by the Customs service,
namely failing to provide notice to the actual importer
that a reimbursement statement was required in this
case, detrimentally affected the importer.
The addendum goes on to describe that the CF 7501 has notations
that a phone number for Biachem could not be located, that
Biachem has a telephone listing in a town other than the one
shown on the CF 7501 and Customs records, and that the name of
the ultimate purchaser noted on the CF 7501, is for someone with
no knowledge of the import transaction.
The petition for reliquidation was denied on October 24, 1994 on
the grounds that no clerical error or other inadvertence
correctable under 19 U.S.C. 1520(c)(1) has occurred. A section
520(c) routing and recommendation sheet completed by the
concerned import specialist, apparently completed on June 24,
1993, includes a handwritten note of May 2, 1994, that with
respect to the allegation of mistake of fact regarding the
interest:
I read interest statement in item 6 of liquidation
instructions - "publication of the antidumping duty
order" to correspond to "date of publication - 3/5/90"
appearing on letter to Biachem of 5/18/92. Since entry
date is 3/12/90 interest would apply.
A protest of the denial of the 1520(c) petition was filed by the
protestant surety on January 13, 1995. The additional
allegations of mistake of fact, are that there was a mistake of
fact as to the date of exportation of the subject merchandise and
the date of final determination, and that the presumption of
reimbursement is not applicable to the facts.
Further review for the protest was requested and granted.
ISSUE:
Whether the petition under 19 U.S.C. 1520(c)(1) should be
granted?
LAW AND ANALYSIS:
Initially we note that this protest was timely filed pursuant to
19 U.S.C. 1514(c)(3). The date of decision to deny
reliquidation under 19 U.S.C. 1520(c)(1), was October 24, 1994
and the protest was filed on January 13, 1995. In addition, the
refusal to reliquidate an entry under 19 U.S.C. 1520(c)(1) is a
protestable matter pursuant to 19 U.S.C. 1514(a)(7).
Under 19 U.S.C. 1514(c)(2), a decision of a Customs officer as
to charges or exactions on imported merchandise is conclusive
against, among others, a surety on an import bond unless the
affected surety files a protest of that decision within 90 days
from the mailing by Customs of a "notice of demand for payment."
See e.g., American Motorists Insurance Co., v. United States, 14
CIT 298, 737 F. Supp. 648 (1990). As the entry was liquidated on
September 4, 1992, and the notice of demand for payment was
mailed to the surety on December 12, 1992, the protestant
surety's right to protest the liquidation of the entry, expired
90 days from the mailing of the notice of demand. The surety
failed to file a timely protest of the liquidation, under 19
U.S.C. 1514, therefore the liquidation of the subject entry is
final.
19 U.S.C. 1520(c)(1) is an exception to the finality of 1514.
Under 1520(c)(1) 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. The error
must be adverse to the importer and manifest from the record or
established by documentary evidence and brought to the attention
of the Customs Service within one year after the date of
liquidation. 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, 10 CIT 505, 508, 643 F. Supp. 623 (1986)).
The protestant essentially alleges that customs made mistakes of
fact and inadvertences in requiring a reimbursement certificate,
relying on the presumption of reimbursement, failing to notify
the importer about the need for a reimbursement certificate, and
in assessing interest when a bond was deposited in lieu of cash.
A "clerical error" has been stated by the courts to be "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." PPG Industries, Inc. v. United
States, 7 CIT 118, 124 (1984). A "mistake of fact" has been
described as "a mistake which takes place when some fact which
indeed exists is unknown, or a fact which is thought to exist, in
reality does not exist." C.J. Tower & Sons of Buffalo, Inc. v.
United States, 68 Cust. Ct. 17, 22; C.D. 4327, 336 F. Supp. 1395,
1399 (1972), aff'd 61 CCPA 90, C.A.D. 1129, 499 F.2d 1277 (1974).
A mistake of fact has also been defined as any mistake except a
mistake of law. 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. Inadvertence is a somewhat
broader term, and has been defined as "an oversight or
involuntary accident, or the result of inattention or
carelessness, and even as a type of mistake." Id.
In order to qualify for relief under 1520(c)(1), it must be
established that there was an error or mistake (i.e., in this
case it must be established that the assessment of double
antidumping duty and assessment of interest at liquidation was
incorrect). The protestant must also establish that the alleged
errors were due to clerical error, mistake of fact, or other
inadvertence, not amounting to an error in the construction of a
law, adverse to the importer and manifest from the record or
established by documentary evidence.
With respect to the assessment of double antidumping duties
pursuant to Commerce Regulations 353.26 (19 CFR 353.26), we do
not believe that an error or mistake has been established. The
regulation provides as follows with respect to the reimbursement
certificate:
(a) In general.(1) In calculating the United States
price, the Secretary will deduct the amount of any
antidumping duty which the producer or reseller:
(i) Paid directly on behalf of the importer;
or
(ii) Reimbursed to the importer.
(2) The Secretary will not deduct the amount of the
antidumping duty paid or reimbursed if the producer or
reseller granted to the importer before initiation of
the investigation a warranty of nonapplicability of
antidumping duties with respect to the merchandise
which was:
(i) Sold before the date of publication of
the Secretary's order suspending liquidation;
and
(ii) Exported before the date of publication
of the Secretary's final determination.
Ordinarily, the Secretary will deduct for
reimbursement of antidumping duties only once
in the calculation of the United States
price.
(b) Certificate. The importer shall file prior to
liquidation a certificate in the following form with
the appropriate District Director of Customs:
I hereby certify that I (have) (have not)
entered into any agreement or understanding
for the payment or for the refunding to me,
by the manufacturer, producer, seller, or
exporter, of all or any part of the
antidumping duties assessed upon the
following importations of G7T2XXXX
(commodity) from G7T2XXXX (country): (List
entry numbers) which have been purchased on
or after G7T2XXXX (date of publication of
notice suspending liquidation in the Federal
Register) or purchased before G7T2XXXX (same
date) but exported on or after G7T2XXXX (date
of final determination of sales at less than
fair value).
(c) Presumption. The Secretary may presume from an
importer's failure to file the certificate required in
paragraph (b) that the producer or reseller paid or
reimbursed the antidumping duties.
The regulations provide that the Secretary of Commerce may
presume from the importer's failure to file the reimbursement
certificate, that payment or reimbursement of the antidumping
duties occurred, and thus the Secretary is required to deduct the
amount of payment or reimbursement from the United States price
(this amounts to a doubling of the antidumping duty). Paragraph
(b) above specifically requires the reimbursement certificate to
be filed prior to liquidation. In this case, a reimbursement
certificate was not filed with Customs prior to liquidation.
Therefore, Customs was correct in deducting the amount of
presumed reimbursement from the United States price which
resulted in a doubled antidumping duty.
The protestant has not presented any support for the position
that the presumption should not be applied in this case. The
mere assertion that ultimately a reimbursement certificate was
completed is insufficient to defeat the presumption in the
regulation. Even if Customs were to take the position that the
presumption should not have been applied, the protestant has not
established that the application of the presumption was due to a
mistake of fact, clerical error or inadvertence. Unlike in
Aviall of Texas v. United States, 70 F.3d 1248 (Fed. Cir. 1995),
cited by protestant, there is no allegation in this case that the
importer believed that a reimbursement certificate had been
filed. The only allegation here is that Customs was mistaken
because the importer was not reimbursed for antidumping duties.
The cause of the assessment of double antidumping duties was not
Customs belief, but the lack of a timely filed reimbursement
certificate.
Protestant cites HQ 220397, dated March 12, 1991 in support of
its position. In HQ 220397, Customs found a mistake of fact
existed when a Customs officer had been unaware at the time of
liquidation that a license requirement to substantiate a duty
free entry had been waived by Presidential Proclamation. Customs
found that:
The Customs official's belief concerning the existence
of an Energy license is a mistake of fact; but for the
missing import license, the entry would have been
liquidated by Customs as free of duty. The
impossibility of obtaining such a license is the very
reason for the importer's noncompliance with the
headnote and regulations.
The same cannot be said in the instant case. In this case,
belief about reimbursement did not cause Customs to apply 19 CFR
353.26(c). The double antidumping duties were correctly assessed
because of the importer's failure to timely file a reimbursement
certificate. Protestant also cites HQ 223160, dated September
13, 1991. In HQ 223160, a mistake of fact was found where a
Customs officer was unaware of the existence of an outstanding
countervailing duty case, and that mistake caused the error in
liquidation. In the instant case, as stated above, the alleged
mistake as to the lack of reimbursement was not the cause of the
alleged error in liquidation.
The protestant makes an alternative argument that the requirement
of a reimbursement certificate was erroneously applied in this
case, as the subject merchandise was purchased before the date of
notification of suspension of liquidation and was exported before
the date of final determination. While the date of purchase by
the importer is not clear from the documents, the invoices show
that the merchandise was purchased by the ultimate consignee on
February 5, 1990 (before the suspension of liquidation on March
5, 1990), and the CF 7501 shows the export date of the
merchandise as February 8, 1990, and the import date as February
21, 1990 (before the final determination date of May 22, 1990).
The above quoted regulations, 19 CFR 353.26(a)(2), specifically
provide for the instance in which merchandise is purchased prior
to the date of the order suspending liquidation, and is exported
before the date of publication of the final determination. The
regulations specify that the amount of the antidumping duty paid
or reimbursed will not be deducted, if a warranty of
nonapplicability of antidumping duties with respect to the
merchandise is granted by the producer or reseller to the
importer. No such warranty is alleged to have been granted in
this case. Therefore, the fact that the dates of purchase and
exportation of the merchandise may have occurred outside of the
dates specified in the reimbursement certificate does not make
the deduction of reimbursed or paid antidumping duties erroneous.
Further, as the export and import dates are included on the CF
7501, and there is no allegation that Customs made any mistake as
to the dates, no mistake of fact is manifest from the record.
Protestant alleges an inadvertence with respect to the
reimbursement certificate, by Customs failure to locate a
telephone number for Biachem. This argument ignores the fact
that the address to which Customs wrote requesting a
reimbursement certificate was the same one that was shown on the
CF 7501 and in Customs ACS records. The protestant has not
presented any evidence that the address was wrong, which would
support an allegation that Customs believed in the existence of
an address which in reality did not exist. Instead it is alleged
that Customs believed that Biachem had a telephone number in
Atlanta, when it did not, but had a telephone number in Norcross,
Georgia. This allegation does constitute a mistake of fact,
however, it is not a mistake of fact that caused the assessment
of double antidumping duties. There is no requirement that
Customs notify the importer about the need for a reimbursement
certificate. The notification provided by Customs is a courtesy
and attempt to reduce protests on the issue. In a June 5, 1991
letter from the Department of Commerce, to Customs, it was
stated:
When the deadline for filing the reimbursement
certificate has not yet passed (e.g....liquidation), I
would propose that Customs attempt to notify the
importer that a certificate has not been filed prior to
assessing double antidumping duties on such entries.
While notification is not required by the regulations,
I believe it would ensure greater cooperation with the
reimbursement certificate requirement and reduce
protests in this area....
A mistake of fact as to the location of the importer may have
caused the failure to notify or inability to notify the importer
of the reimbursement certificate, however it did not directly
cause the assessment of double antidumping duties. The filing of
the reimbursement certificate is a requirement imposed upon the
importer and is the importer's responsibility, whether or not the
importer received a notice or reminder from Customs. It was the
failure to timely file such certificate that directly caused the
assessment of double antidumping duties, not the alleged mistake
with regard to the location of the importer's place of business.
Finally, the protestant alleges that Customs made a mistake as to
the type of antidumping duty security deposited by the importer,
stating that since a bond was posted, no interest should have
been assessed under Timken Co. v. U.S., 37 F.3d 1470 (Fed. Cir.
1994). The provision under which interest was assessed is 19
U.S.C. 1677g:
(a) General rule
Interest shall be payable on overpayments and
underpayments of amounts deposited on merchandise
entered, or withdrawn from warehouse, for consumption
on and after--
(1) the date of publication of a
countervailing or antidumping duty order
under this title or section 303 [19 U.S.C.
1303],...
We agree that interest should not have been assessed on the
antidumping duties, as the entry was made prior to the date of
publication of the antidumping duty order. See, Timken, supra.
The import specialist liquidating the entry, specifically
followed the liquidation instructions in the August 20, 1991
telex. In applying the instructions, the import specialist
referred to the dates he had written on the May 18, 1992 letter
to the importer requesting the reimbursement certificate. The
import specialist interpreted the instruction phrase "publication
of the antidumping duty order" to mean the date of publication of
the notice to suspend liquidation, March 5, 1990. As this date
was prior to the date of entry, March 12, 1990, and the
instructions were that "no interest should be collected on
entries filed prior to publication of the antidumping duty order,
for which only bonds, and no cash deposits, were posted", the
import specialist believed that interest should be collected on
entries filed after March 5, 1990 (the date of publication the
import specialist believed the instructions referred to). The
import specialist knew that a bond had been posted. The mistake
here, is that the import specialist confused the date of
publication of the notice of suspension of liquidation (March 5,
1990) and the date of publication of the antidumping duty order
(July 10, 1990). Had he applied the July 10, 1990 publication
date, no interest would have been assessed. The issue is whether
the import specialist's mistake as to the applicable date is a
mistake of fact correctable under 19 U.S.C. 1520(c)(1).
We conclude that the mistake as to the consequences of the date
is a mistake of law. The import specialist had before him the
date of publication of the notice to suspend liquidation, the
date of publication of the antidumping duty order and the date of
entry. In applying the liquidation instructions, the import
specialist had a mistaken belief as to the legal consequences of
each date and the distinction between the two dates. In other
words, he had the facts of the dates of publication and the date
of entry, but was unaware of their legal consequences with
respect to the assessment of interest. Any error in the
liquidation instructions is a mistake of law, as they incorrectly
apply the law. There is no evidence that any clerical error
occurred in the typing of the telex, and we do not believe that
any error in the telex directly resulted in the assessment of
interest, given the mistake made by the import specialist.
In support of the petition for reliquidation, the protestant
cites HQ 224118, dated July 26, 1993, in which a computer data
error, which caused cost data submitted to Customs to be
incorrect. The computer data error was determined to be a
clerical error, mistake of fact or other inadvertence. Unlike in
HQ 224118, there is no evidence of any erroneous data in this
case. Similarly, in HQ 221080, dated February 4, 1991, a
clerical error or other inadvertence were found when the evidence
presented showed the intent of the importer to include an entry
number in a statement required for duty free treatment. In this
case, no such evidence has been presented.
In ITT Corp. v. United States, 24 F.3d 1384, 1387 (Fed. Cir.
1994), the court found that reliquidation under 19 U.S.C.
1520(c) requires both notice and substantiation. Notice of a
clerical error, mistake of fact, or other inadvertence includes
asserting the existence of a clerical error, mistake of fact, or
other inadvertence "with sufficient particularity to allow
remedial action." In this case, the protestant has failed to
meet the notice requirement, as no mistake of fact or
inadvertence which directly caused the incorrect liquidation has
been asserted. Consequently, there has been no basis presented
for reliquidating the subject entry pursuant to 19 U.S.C.
1520(c)(1). The protestant's claim was therefore correctly
denied.
Finally, in C.J. Tower, supra, the U.S. Court of Customs and
Patent Appeals found a mistake of fact existed where neither the
importer nor Customs was aware that the merchandise under
consideration was emergency war materials entitled to duty-free
entry under a separate item of the tariff schedule until after
liquidation. In C.J. Tower, neither the importer nor Customs was
aware that the merchandise was emergency war materials entitled
to duty-free entry, until after the liquidations became final.
In this case, there is no allegation or evidence that the surety
was unable to protest the liquidation of the entries within 90
days of the mailing of the notice of demand for payment.
HOLDING:
The protestant has not established a mistake of fact in the
liquidation of the subject entry, and reliquidation of the entry
is not permissible pursuant to 19 U.S.C. 1520(c)(1).
Consistent with the decision set forth above, you are hereby
directed to deny the subject 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 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,
Director,
Commercial Rulings
Division