CLA-2 RR:TC:SM 560285 JML
Port Director
Miami International Airport
6601 Northwest 25th Street
Miami, FL 331202-5280
RE: Application for Further Review of Protest No. 5201-96-100613; silk sportcoats; reliquidation; 19 U.S.C. 1520(c);
mistake of fact; Andean Trade Preference Act.
Dear Sir:
The above-referenced protest was forwarded to this office
for further review. We have considered the points raised by your
office and the protestant. Our decision follows.
FACTS:
The record indicates that protestant, Oxford Industries,
Inc., made 9 entries of Colombian-origin men's silk sportcoats at
Miami, Florida from September 29, 1994, to November 29,1994. At
the time the goods were entered, protestant claimed they were
eligible for duty-free treatment in accordance with the Andean
Trade Preference Act ("ATPA"), 19 U.S.C. 3202. Subsequently,
your office determined that the goods were classifiable under
subheading 6203.39.4040 of the 1994 Harmonized Tariff Schedule of
the United States ("HTSUS"), but were not eligible for duty-free
treatment under the ATPA because a "J*" appeared in the "Special"
subcolumn, indicating that if subject to textile agreements,
goods classified under such subheading are precluded from duty-free treatment. Silk apparel classifiable in subheading
6203.39.4040, HTSUS, was subject to textile agreements and
assigned textile category designation 733. Accordingly, the
entries were liquidated on February 17, 1995 at a duty rate of
6.9% ad valorem. Protestant paid all liquidated duties due on
March 6, 1995.
On February 12, 1996, protestant filed a petition requesting
a reliquidation of the entries under 19 U.S.C. 1520(c)(1),
alleging a mistake of fact was made concerning the eligibility of
the silk sportcoats for duty-free treatment under the ATPA. The
basis for the petition was that the HTSUS was modified to delete
subheading 6203.39.40 and supplant it with subheading 6203.39.50,
which indicates in the "Special" subcolumn that goods
classifiable therein are unconditionally eligible for ATPA
treatment. Eligibility for such treatment, however, was
effective for goods entered or withdrawn from warehouse after
January 1, 1995. On May 3, 1996, your office denied protestant's
request for reliquidation of the entries, finding that the goods
were ineligible for duty-free treatment under the ATPA. We note
that the May 3, 1996 denial letter incorrectly stated that "the
entries were liquidated as entered" (the entries were entered
duty-free under the ATPA, when, in fact, the entries were
liquidated fully dutiable). On July 26, 1996, protestant timely
filed this protest contesting Customs' denial of reliquidation
under 19 U.S.C. 1520(c)(1).
Protestant argues that Customs mistakenly believed that the
goods in question were not eligible for duty-free treatment under
the ATPA, since the HTSUS in effect in 1994 indicates that they
were not eligible, whereas the HTSUS in effect in 1995, which
proportedly should have been used to ascertain the applicable
rate of duty upon liquidation of the entries, indicates that the
goods are eligible for duty-free treatment. Protestant contends
that the alleged mistake concerning the silk apparel's
eligibility for duty-free treatment under the ATPA is a mistake
of fact correctable under 19 U.S.C. 1520(c)(1).
ISSUE:
Whether a mistake of fact existed concerning the silk
apparel's eligibility for duty-free treatment under the ATPA.
LAW AND ANALYSIS:
Under 514(a), Tariff Act of 1930, as amended (19 U.S.C.
1514(a)), a protest may be filed against, among other things,
"the refusal to reliquidate an entry under section 1520(c) of
[title 19]." 520(c)(1), Tariff Act of 1930, as amended (19
U.S.C. 1520(c)(1)) gives Customs authority to:
...reliquidate an entry to correct....(1) a
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, in any
entry, liquidation, or other customs
transaction, where the error, mistake, or
inadvertence is brought to the attention of
[Customs] within one year after the date of
liquidation or exaction.....
A mistake of fact occurs when the facts are understood to
be other than they really are, whereas an error in the
construction of a law occurs when the true facts are known, but
there is a mistaken belief as to the legal consequences of those
facts. See C.J. Tower & Sons of Buffalo, Inc. v. United States,
68 Cust. Ct. 17, 21 C.D. 4327, 336 F. Supp. 1395 (1972), aff'd,
61 CCPA 90, C.A.D. 1129, 499 F.2d 1277 (1974); Hambro Automotive
Corp. v. United States, 81 Cust. Ct. 29, 458 F. Supp 1220 (1978),
aff'd, 66 CCPA 113, 603 F.2d 850 (1979); PPG Industries, Inc. v.
United States, 7 CIT 118 (1984).
On December 4, 1991, the President of the United States
signed into law the ATPA, which provides the basic authority for
the President to grant duty-free treatment to imports of eligible
articles from countries designated as beneficiaries according to
criteria set forth in the Act. The ATPA was implemented by
Presidential Proclamations 6455 and 6456, both dated July 2,
1992. In Presidential Proclamation 6455, the President
designated Colombia as a beneficiary country for purposes of the
ATPA and modified the HTSUS to incorporate the substance of the
relevant provisions of the ATPA.
The relevant provisions of the ATPA provide that any
eligible article which is the growth, product, or manufacture of
a beneficiary country ("BC") will receive duty-free treatment
provided that (1) the article is imported directly from a BC into
the customs territory of the U.S.; and (2) the sum of (i) the
cost or value of the materials produced in a BC or two or more
BC's under this Act, or a BC under the Caribbean Basin Economic
Recovery Act of 1983, as amended ("CBERA") (19 U.S.C. 2701 et
seq.), or two or more such countries, plus (ii) the direct costs
of processing operations performed in a BC or countries (under
this Act or the CBERA, as amended) is not less than 35% of the
appraised value of such article at the time it is entered. The
cost or value of any U.S. materials may be counted toward the 35%
value-content requirement in an amount not to exceed 15% of the
appraised value of the article at the time it is entered into the
U.S. The ATPA is effective with respect to articles entered, or
withdrawn from warehouse for consumption, on or after July 22,
1992.
Additionally, articles provided for in a provision for which
a rate of duty of "Free" appears in the "Special" subcolumn
followed by the symbol "J" or "J*" in parentheses are eligible
articles for purposes of the ATPA pursuant to section 204 of that
Act. General note 11(d), HTSUS, states that "[a]rticles provided
for in a provision for which a rate of duty of Free' appears in
the Special' subcolumn followed by the symbol J*' in
parentheses shall be eligible for the duty-free treatment
provided for in this note, except-- (i) textile and apparel
articles which are subject to textile agreements." See 19 U.S.C.
3203(3)(b). Therefore, if the garment is classified under a
HTSUS provision which includes a textile category number, it will
not be eligible under the ATPA.
Protestant's assertion that it paid duties on the goods
because Customs incorrectly determined that the goods were
ineligible for duty-free treatment by using the 1994 HTSUS to
determine the applicable rate of duty upon liquidation was a
mistake of fact correctable under 1520(c), is without merit. 19
U.S.C. 1315, states that the applicable rate of duty for entered
goods is the rate or rates in effect at the time of entry. Annex
A to Presidential Proclamation 6763 of December 23, 1994 (60 Fed.
Reg. 2), which eliminated subheading 6203.39.40 from the HTSUS
and replaced it with subheading 6203.39.50, limits its
applicability to goods entered or withdrawn from warehouse for
consumption on or after January 1, 1995. Accordingly, since the
silk sportcoats were entered on various dates from September 1994
through November 1994, the applicable rate of duty is to be
determined under the HTSUS in effect at that time.
Under the 1994 HTSUS, silk sportcoats were properly
classified under subheading 6203.39.4040, which contained a "J*"
in the "Special" subcolumn. Articles classifiable in that
provision were subject to textile agreements. Effective April 1,
1994, the United States Department of Commerce Committee for the
Implementation of Textile Agreements ("CITA") included silk
apparel in the bilateral textile agreement with China and placed
them in textile category 733. By the express terms of the 1994
HTSUS, the silk sportcoats were not eligible for duty-free
treatment at the time of their entry in 1994. As Customs
correctly liquidated the entries as dutiable, there is nothing
to correct under 19 U.S.C. 1520(c)(1). Moreover, the
determination of which tariff subheading was applicable to the
goods is not a mistake of fact within the meaning of 19 U.S.C.
1520(c)(1).
HOLDING:
Based upon the classification of the merchandise in effect
on the dates of entry, Customs correctly determined that the
Colombian-origin men's silk sportcoats were not eligible for
duty-free treatment under the ATPA. As the goods were properly
liquidated as dutiable, no mistake of fact exists to correct
under 19 U.S.C. 1520(c)(1). Accordingly, the protest should be
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 to the
protestant no later than sixty (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 (60) 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
Tariff Classification Appeals
Division