LIQ-9-01-CO:R:C:E 955930 AJS
District Director of Customs
U.S. Customs Service
55 Erieview Plaza
Plaza Nine Building
6th Floor
Cleveland, OH 44114
RE: Protest 4195-93-100108; claimed mistake of fact in filing
consumption entry instead of TIB entry due to mistake in
classification; 19 U.S.C. 1520(c)(1); PPG Industries, Inc. v.
U.S.
Dear Sir:
This is our decision in protest 4195-93-100108, dated June
28, 1993, concerning the substitution of a Temporary Importation
under Bond (TIB) entry for a consumption entry.
FACTS:
The imported merchandise, a control unit for smoke
detectors, was entered under subheading 8531.10.00, Harmonized
Tariff Schedule of the United States (HTSUS), a provision for
burglar or fire alarms and similar apparatus. Goods so
classified are free of duty under the Civil Aircraft Agreement
(CAA), upon compliance with the law and applicable Customs
Regulations. Before liquidation, the concerned National Import
Specialists (NIS) responded to a Customs Form (CF) 6431 inquiry
from the port that subheading 9022.29.40, HTSUS, a provision for
ionization type smoke detectors was correct, assuming the
merchandise was not just a control unit. The NIS advised that
control units are classified under subheading 8537.10.90, HTSUS,
as apparatus for electric control or the distribution of
electricity. Goods so classified are not duty-free under the
CAA. In fact, only the control unit was imported. The entry was
liquidated on April 4, 1993, under subheading 9022.29.40, HTSUS.
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The protestant claims it was initially advised by Customs,
until further instructions, to classify the subject merchandise
within subheading 8531.10.00, HTSUS. The protestant asserts that
had it been established that a dutiable rate may be applicable,
it would have filed a TIB entry. Thus, the protestant requests
substitution of a TIB entry for a consumption entry because its
intent, as reflected on the commercial invoice, indicates the
"articles are returning after warranty repair."
ISSUE:
Whether the subject entry may be reliquidated due to a
mistake of fact or other inadvertence pursuant to 19 U.S.C.
1520(c)(1).
LAW AND ANALYSIS:
Initially, we note that this protest was timely filed
pursuant to 19 U.S.C. 1514(c)(2)(A). The date of liquidation was
April 5, 1993, and this protest was filed on June 28, 1993. We
also note that the refusal to reliquidate an entry under section
1520(c) is a protestable matter pursuant to 19 U.S.C. 1514(a)(7)
The text of 19 U.S.C. 1520(c) provides:
Notwithstanding a valid protest was not filed, the
appropriate customs officer may, in accordance with regulations
prescribed by the Secretary, 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, when the error, mistake, or
inadvertence is brought to the attention of the appropriate
customs officer within one year after the date of liquidation
or exaction.
The protestant appears to be claiming that due to a mistake
of fact regarding the classification of the subject merchandise,
it erroneously entered the merchandise under a consumption entry
instead of under a TIB entry. The protestant asserts this intent
is reflected on the commercial invoice which indicates the
"articles are returning after warranty repair."
The Court of International Trade (CIT) addressed a similar
case in PPG Industries, Inc. v. United States, 4 CIT 143 (1982).
At the time of entry in PPG, the articles were claimed to be
classified under items of the tariff schedules bearing a rate of
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duty. The plaintiff partially claimed that due to a mistake of
fact and inadvertence, Customs failed to classify the subject
articles as items intended to be imported under bond for
exportation within a maximum period of three years (i.e., TIB
entry).
The CIT stated that "[a] mistake of fact remediable under
the provisions of 19 U.S.C. 1520(c)(1) is one 'which takes place
when some fact which indeed exists is unknown or a fact which is
thought to exists in reality does not exist.'" Id. at 146,
citing C.J. Tower & Sons of Buffalo, Inc., v. United States, 68
Cust. Ct. 17, 22, aff'd 61 CCPA 90, 499 F.2d 1277 (1974). In
Tower the remediable mistake was the lack of knowledge on the
part of the importer until after liquidation that the subject
merchandise was in fact to be used as emergency war material,
which was duty free.
Paraphrasing the CIT in PPG, any mistake which might have
been made in this protest was qualitatively different from the
mistake in Tower. Id. at 147. In the latter case, the
plaintiff-importer was mistaken as to the use to which the
merchandise would be put. In this protest, the protestant was
under no such misapprehension. The protestant knew the intended
use (i.e., warranty repair) to which the subject merchandise
would be placed but erred in classifying the merchandise. The
mistake alleged by the protestant is similar to the mistake of
law found in Hambro Automotive Corp. v. United States, 66 CCPA
113, 603 F.2d 850 (1979). There the exporter knew the facts
regarding the cost of production but erred in the assessment of
those costs under the applicable law.
In PPG, the plaintiff contended that the invoices bearing
notations "experimental material" and "no charge" constituted
such notice to Customs as to require a further inquiry into the
eligibility of the subject merchandise for duty-free treatment.
Id. The CIT stated that "[h]owever, examination of the
consumption entries filed with Customs and prepared by plaintiff
and its agents fails to disclose any notations or information
relating to the character or the intended use of the imported
merchandise." Id. The CIT further stated that "[o]n the
contrary, each consumption entry specifically included a claimed
classification under a tariff schedule item bearing a rate of
duty." Id.
In this case, the protestant contends that the commercial
invoices bearing the notation "warranty repair" indicate an
intent as to the eligibility of the subject merchandise for duty-free treatment. As in PPG however, examination of the
consumption entry filed with Customs and prepared by the
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protestant's customs broker fails to disclose any notations or
information relating to the character or the intended use of the
imported merchandise. Also as in PPG , the consumption entry
specifically included a claimed classification under a subheading
(i.e., 8531.10.00) bearing a rate of duty (i.e., generally 2.7%
for products from France). In addition, the invoice lists the
unit price of the merchandise as $37,429.60 which does not lead
to the conclusion that the merchandise was simply returning after
warranty repair. Instead, this price would indicate that a sale
had occurred.
The CIT in PPG did not agree with the plaintiff that a
notation "experimental" or "no charge" could have apprised
Customs of the character and intended use of the subject
merchandise. Likewise, we do not agree with the protestant that
the notation "warranty repair" could have apprised Customs of the
character and intended use of the merchandise at issue.
In PPG, the CIT stated "[i]n asserting that the subject
merchandise has been wrongly classified due to a mistake of fact,
it is incumbent on the plaintiff to show by sufficient evidence
the nature of the mistake of fact." Id. Furthermore, the CIT
stated that "[t]he burden and duty is upon the plaintiff to
inform the appropriate Customs official of the alleged mistake
with 'sufficient particularity to allow remedial action.'" Id.
at 147-48, citing Hambro Automotive Corp. v. United States, 81
Cust. Ct. 29, 31 (1978). The CIT found that "[n]o information
was provided by plaintiff that the subject merchandise [as
imported] was intended to be imported under bond for their
exportation within 1 year or at the expiration of two additional
1-year extensions . . ." In this instance, no information was
provided that the subject merchandise as imported was intended to
be imported under a TIB entry. In fact, the protestant's
comments on the CF 19 indicate its intent regarding the use of a
TIB entry only arose after Customs determined the classification
of the subject merchandise was within subheading 9022.29.40,
HTSUS. Therefore, we are unable to conclude that the subject
entry was entered as a consumption entry rather than a TIB entry
due to a mistake of fact.
Subheading 8537.10.90, HTSUS, provides for "other" apparatus
for electric control or the distribution of electricity. The
subject merchandise satisfies the terms of this subheading. It
is a control unit for smoke detectors. Therefore, the subject
control unit is properly classifiable within subheading
8537.10.90, HTSUS. The subject entry was liquidated within
subheading 9022.29.40, HTSUS, and thus should be reliquidated
within subheading 8537.10.90, HTSUS.
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HOLDING:
The protest is denied. The subject entry may not be
reliquidated due to a mistake of fact or other inadvertence
pursuant to 19 U.S.C. 1520(c)(1). The control unit is properly
classifiable within subheading 8537.10.90, HTSUS, and should be
reliquidated to reflect this classification.
A copy of protest 4195-93-100110, dated June 28, 1993, was
also forwarded to this office. It involves the same issue and
also should be denied and reliquidated as above. In the future
such protests should not be forwarded to headquarters with the
lead protest but retained at the district level until the lead
protest is returned.
In accordance with Section 3A(11) of Customs Directive 099
3550-065, dated August 4, 1993, Subject: Revised Protest
Directive, this decision should be mailed by your office, with
the CF 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 Ruling 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