LIQ-9-01 RR:CR:DR 229678 LLB
Category: Liquidation
Port Director of Customs
Second and Chestnut Streets
Philadelphia, Pennsylvania 19106
Attn: Lee Mayer
Re: Protest No. 1101-02-100476; 19 U.S.C. § 1520(c)(1); classification; Arthur L. Franklin d/b/a Health Technologies Network v. United States, 135 F. Supp. 2d 1336 (Ct. Int’l Trade 2001) rev’d Arthur L. Franklin v. United States, 289 F. 3d 753 (Fed. Cir. 2002); HQ 963265 (March 12, 2002); HQ 228021 (July 9, 1998); HQ 227931 (April 8, 1998); HQ 223478 (February 21, 1992); HQ 222610(November 7, 1990); HQ 302144 (ORR Ruling 75-0026)(January 24, 1975); Executone Information Systems v. United States, 96 F. 3d 1383(Fed. Cir. 1996)
Dear Mr. Mayer:
The above-referenced protest has been forwarded to this office for further review. We have considered the points raised by the petitioner, Washington International Insurance Company (WIIC), and your office. Our decision follows.
FACTS
“Ericssons Alka-Mine Coral Calcium,” the subject merchandise of this petition, was entered by the petitioner under subheading 2836.50.00, HTSUS (1998) in 1998 at a zero duty rate. The port liquidated the subject entries between May 14, 1999 and June 11, 1999, classifying the merchandise under subheading 2106.90.9998, HTSUS with an increase in duties and with interest thereon. According to the Automated Commercial System (ACS), all bills on the subject entries have been fully paid.
On August 12, 1999, the petitioner filed a protest (1104-99-100016) thereto against Customs’ decision to classify the merchandise under subheading 2106.90.9998. The petitioner argued in its protest that the merchandise should be classified under 2836.50.0000 or 2505.10.5000, HTSUS. At the time the protest was filed, the proper classification of “Ericssons Alka-Mine Coral Calcium” was an issue pending before the Court of International Trade (CIT). See Arthur L. Franklin d/b/a Health Technologies Network v. United States, 135 F. Supp. 2d 1336 (Ct. Int’l Trade 2001)(hereinafter Arthur Franklin I ). As such, on August 11, 2000, Customs informed the petitioner that pursuant to 19 C.F.R. § 177.7(b)(2000)and 174.25(b)(2)(ii), it could not issue a ruling regarding the classification of the merchandise and gave the petitioner the option to have Customs deny the protest or continue to suspend the action until a decision was made by the court. The petitioner chose the latter.
On March 28, 2001, the CIT held in Arthur Franklin, that Customs correctly classified the subject merchandise under subheading 2106.90.99, HTSUS. 135 F. Supp. at 1345. On May 21, 2001, the petitioner amended its protest arguing that in the alternative, the merchandise should be classified under subheading 3824.90.90, HTSUS. On March 12, 2002, Customs issued a ruling holding that pursuant to the CIT’s decision in Arthur Franklin, supra , that the merchandise is correctly classified under 2106.90.99, HTSUS. HQ 963265 (March 12, 2002). Subsequently, on April 26, 2002, the Federal Circuit reversed the CIT’s decision in Arthur Franklin holding that “Ericssons Alka-Mine Coral Calcium” is properly classified in 8421.21.00. Arthur L. Franklin v. United States, 289 F. 3d 753 (Fed. Cir. 2002)(hereinafter Arthur Franklin II). According to the port, the CF-19 and the copy of Customs decision in HQ 963265 was sent on April 30, 2002.
On June 28, 2002, the petitioner filed a request for reliquidation pursuant to 19 U.S.C. § 1520(c)(1) arguing that Customs classification decision in HQ 963265 was a mistake of fact insofar as it was issued while the appeal taken from the CIT’s decision in Arthur Franklin I was still pending in the Federal Circuit. The port denied the petition on July 9, 2002 and the petitioner filed a protest and AFR thereto on August 5, 2002.
On December 16, 2002, this office was informed that summons was filed in the CIT on October 25, 2002, against Customs’ protest decision (HQ 963265) regarding the classification of the merchandise.
ISSUE
Whether the 19 U.S.C. § 1520(c)(1) petition was timely filed
LAW and ANALYSIS
Pursuant to 19 U.S.C. §1520(c)(1), in pertinent part:
Notwithstanding a valid protest was not filed, the Customs Service may, in accordance with regulations prescribed by the Secretary, reliquidate an entry . . .
(1) a clerical error, mistake of fact, or other inadvertence, . . . not amounting to an error in construction in 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 is brought to the attention of the Customs Service within one year after the date of liquidation or exaction. . .
(emphasis added) . The ACS records show that the entries were liquidated between May 14, 1999 and June 11, 1999. Based on the liquidation date, the protestant’s § 1520(c)(1) petition is not timely insofar as it was filed on June 28, 2002—more than one year after liquidation.
However, petitioner argues in its reliquidation request that its petition was timely as it was filed within one year of the “Exaction Date,” that is, April 30, 2002, which is the date the port sent the petitioner the CF-19 and Customs decision on protest 1104-99-100016. Hence, the petitioner appears to be arguing that its petition was timely insofar as it was filed within one year of Customs’ decision on its protest which petitioner coins as the “exaction date.” Neither Customs nor the CIT have determined whether Customs decisions on protests constitute “exactions” within the meaning of § 1520(c)(1); however, Customs and the courts have decided, in the context of both § 1514(a)(3) and § 1520(c)(1), that certain Customs decisions and actions do not constitute exactions.
In Alberta Gas Chemicals, Inc. v. Blumenthal, 467 F. Supp 1245,1249-50 (Cust. Ct. 1979), the plaintiff argued that it filed a valid protest pursuant to § 1514(a)(3) because the decision by the Secretary of Treasury to initiate an antidumping investigation, which the plaintiff alleged was void and ultra vires, constituted a “charge or exaction”. The court held that the terms “charges” and “exactions” were not intended embrace such decisions and that based on the court’s precedent, these terms have been applied to “actual assessments of specific sums of money (other than ordinary customs duties) on imported merchandise.” Id. (internal citations omitted). In HQ 223999 (February 9, 1993), Customs held that its decision to deny a request for a refund of a voluntary tender, did not constitute an exaction within the meaning of § 1520(c)(1). See also HQ 224385 (May 24, 1993)(holding that decision to issue a Customs bill is not an exaction). Also, in HQ 227931 (April 8, 1998), Customs held that its decision issued in a ruling request was not an exaction within the meaning of § 1514(a)(3). See also HQ 228021 (July 9, 1998)(holding that Customs held that its decision issued in an internal advice was not an exaction within the meaning of § 1514(a)(3)). The rationale behind the holdings in the foregoing cases is that the decisions contemplated in these cases did not result in Customs compelling the protestant to pay a specific sum of money on the entries in question. Likewise, the Customs decision on protest 1104-99-100016 did not require the protestant to pay any additional sum of money.
Hence, based on the foregoing precedent, the issuance of the protest denial in protest number 1104-99-100016 is not an exaction. Thus, since the dates of liquidation were between May 14, 1999 and June 11, 1999, petitioner’s June 28, 2002 request for reliquidation is untimely as it was filed more than one year after the liquidations.
Even assuming that the petition was timely filed, we do not find any clerical error, mistake of fact, or other inadvertence which is correctable under § 1520(c)(1). Essentially, the error petitioner alleges is that the subject merchandise was classified under the wrong HTSUS provision. The petitioner is not alleging that the petitioner or the broker did not understand the nature of the merchandise; rather, the petitioner is arguing that Customs, when denying the § 1514 protest, (1104-99-100016), was not aware that an appeal was pending from the CIT’s decision in Arthur L. Franklin d/b/a Health Technologies Network v. United States, 135 F. Supp. 2d 1336 (Ct. Int’l Trade 2001) and therefore, the application of the CIT’s decision to the subject merchandise was a “mistake of fact”.
[M]istakes of fact occur in instances where either (1) the facts exist, but are unknown, or (2) the facts do not exist as they are believed to [and] [m]istakes of law, on the other hand, occur where the facts are known, but their legal consequences are not known or are believed to be different than they really are." Executone Information Systems v. United States, 96 F. 3d 1383, 1386 (Fed. Cir. 1996)(emphasis in original) citing Hambro Automotive Corporation v. United States, 603 F. 2d 850 (Fed.Cir. 1979); see also, Degussa Canada Ltd. v. United States, 87 F. 3d 1301 (Fed. Cir. 1996).
Beginning with its entry, the petitioner submitted that the correct classification of the merchandise was 2836.50.00, HTSUS. In its protest and amendment thereto, the petitioner argued that the correct classification is 2836.50.000, 2505.10.5000 or 3824.90.90, HTSUS. We fail to see how petitioner’s argument in its § 1520(c)(1) petition that, but for Customs unawareness that an appeal had been taken from the CIT’s decision in Arthur Franklin I, Customs would have classified the goods in 8421.21.00, HTSUS, establishes a mistake of fact when the classifications alleged by the petitioner in its protest are different than the holding in Arthur Franklin II that the goods should be classified in 8421.21.00, HTSUS. Additionally, the petitioner is not alleging, nor does the record show, that Customs did not understand the nature of the merchandise or that the facts critical to the understanding of the nature of the merchandise were unknown. Hence, it is not manifest in the record nor has any documentary evidence been provided to establish mistake of fact.
Based on the foregoing, the petitioner has not established that it has met the requirements for relief under 19 U.S.C. § 1520(c)(1).
HOLDING
Relief pursuant to 19 U.S.C. § 1520(c)(1) should not be granted inasmuch as the petition was filed more than one year after the subject entry was liquidated. Further, the protestant has not established a mistake of fact within the meaning of 19 U.S.C. § 1520(c)(1). The protest should be DENIED.
Sixty days from the date of the decision, the Office of Regulations and Rulings
will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.ustreas.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles Harmon, Acting Director
Commercial Rulings Division