• HQ 962205
• Jun 09, 1999

• Type : Liquidation • HTSUS :
•  Related:   882788; 962065; 693050; 693052; 693054; 693062; 693064; 693066; 693069; 693071; 223524   

LIQ-9-01-RR:CR:DR 962205 SAJ

Port Director of Customs
U.S. Customs Service
200 East Bay Street
Charleston, SC 29401

RE: Application for further review of Protest No. 1601-98-100063 - North American Bus Industries; 19 U.S.C. 1520(c)(1); mistake of fact; reliquidation; Taban Co. v. United States; Zaki Corp. v. United States; reasonable care; subheading 8702.10.30, Harmonized Tariff Schedule of the United States, HTSUS

Dear Sir or Madame:

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 has been filed against your denial of a request for reliquidation of entry numbers 188-00xxx06-9 (06-9) and 188-00xxx13-5 (13-5) pursuant to 19 U.S.C. 1520(c)(1).

This protest concerns entries filed on behalf of North American Bus Industries (protestant), regarding the liquidation of merchandise consisting of bus shell assemblies for motor vehicles, which contain the base structure and body, front and rear suspensions, wheels, power steering, fuel tanks, engine cradle, flooring partial door system, windshield, and outside body trim (merchandise) from Hungary. The Customs broker entered the subject merchandise under Harmonized Tariff Schedule of the United States (HTSUS) tariff classification number 8707.90.5040/4%, HTSUS, which provides for bodies (including cabs) for motor vehicles classified under heading 8701 to 8705, HTSUS. This tariff classification number precludes products of Hungary from eligibility for duty free entry under the General System of Preferences (GSP) program. The subject entries were liquidated under tariff classification number 8707.90.5040/4%, HTSUS.

Protestant argues that the imported merchandise should have been classified in accordance with NY Ruling 882788 dated February 24, 1993. The protestant protested the classification of the transit bus shells on June 29, 1998 in protest number 1601-98-100066. Headquarters Ruling (HQ) 962065, dated November 20, 1998 concluded that protest number 1601-98-100066 should be allowed. In HQ 962065z, Customs agreed with the protestant that the forty and sixty foot transit bus shells are classified under subheading 8702.10.30, HTSUS, as motor vehicles for the transport of 16 or more persons, including the driver. This is consistent with NY 882788, in which Customs held that a similarly unfinished or incomplete trolley bus was classified under heading 8702, HTSUS, pursuant to GRI 2(a).

The protestant did not protest the liquidation of the subject entries within the statutory time frame (within 90 days of the liquidation of the subject entries) set forth under 19 U.S.C. 1514. The subject protest, filed under Customs Form (CF) 6445 dated September 14, 1998, makes a 520(c)(1) claim for the merchandise to be entered under 8702.10.30, HTSUS. Protestant argues that the erroneous description of the subject merchandise led to the erroneous classification. We note that the entry documents for entry numbers 06-9 and 13-5 correctly describe the subject merchandise as “forty-foot city transit bus share body/body assemblies” in the bill of ladings. The broker does not state anywhere in the protest that the entry documents were not reviewed.

Customs Form (CF) 7501 shows that entry number 06-9 was entered on December 22, 1996 under subheading 8707.90.5040/4%, HTSUS. The CF 7501 describes the imported merchandise as "4 40' CITY TRANSIT BUS BARE BODY CHASSIS ASSEMBLY... BODIES FOR VEHICLE HEADING 8702”. Entry number 06-9 was liquidated on April 11, 1997. The entry documents attached to entry number 06-9 are the following:

* Invoice no. 693050 shows a delivery date of November 25, 1996 and an invoice date of December 10, 1996. This invoice reflects item no. 416.08-000-000 as 40' SEPTA city transit bus bare body/chassis assy and item no. 416.08-0000-999 as SEPTA loose components;

* Value statement for invoice no. 693050 dated December 10, 1996; HS No. 8707.9050401 RATE 4% showing a chart of the cost breakdown per bus; * Invoice no. 693052 shows a delivery date of November 27, 1996 and an invoice date of December 10, 1996. This invoice reflects item no. 416.08-0000-000 as 40' SEPTA city transit bus bare body/chassis assy and item no. 416.08-0000-999 as SEPTA loose components;

* Value statement for invoice no. 693052 dated December 10, 1996; HS No. 8707 9050401 RATE 4% showing a chart of the cost breakdown per bus;

* Invoice no. 693054 shows a delivery date of November 27, 1996 and an invoice date of December 10, 1996. This invoice reflects item no. 416.08-0000-000 as 40' SEPTA city transit bus bare body/chassis assy and item no. 416.08-0000-999 as SEPTA loose components;

* Value statement for invoice no. 693054 dated December 10, 1996; HS No. 8707 9050401 RATE 4% showing a chart of the cost breakdown per bus;

* Importer’s endorsement for entry no. 06-9 with an entry date of December 19, 1996;

* Assembler’s declaration dated December 6, 1996 indicates the merchandise was shipped by North American Bus Industries Ltd Budapest and consigned to American Ikarus, Inc. It is declared that the merchandise is “Ikarus 416.08 model city transit bus bare body/chassis assembly”;

* List of U.S. made component/bus bare body/chassis 416.08; and

* Bill of lading dated December 3, 1996 describes the goods as “Forty-Foot City Transit Bus Share Body/Body Assemblies”.

Entry number 13-5, which was entered on January 3, 1997, describes the imported merchandise on CF 7501 as “2 40' CITY TRANSIT BUS BARE BODY CHASSIS ASSEMBLY... BODIES FOR VEHICLE HEADING 8702”. Entry number 13-5 was liquidated on April 18, 1997. The entry documents attached to entry number 13-5 are the following:

* AMS customs inventory update reflects an action date of December 30, 1996 and a vessel arrival date of December 28, 1996 for entry number 13-5; * Invoice no. 693062 shows a delivery date of December 2, 1996 and an invoice date of December 16, 1996. This invoice reflects item no. 416.08-000-000 as 40' SEPTA city transit bus bare body/chassis assy and item no. 416.08-0000-999 as SEPTA loose components;

* Value statement for invoice no. 693062 dated December 16, 1996; HS No. 8707.9050401 RATE 4% showing a chart of the cost breakdown per bus;  * Invoice no. 693064 shows a delivery date of December 3, 1996 and an invoice date of December 16, 1996. This invoice reflects item no. 416.08-0000-000 as 40' SEPTA city transit bus bare body/chassis assy and item no. 416.08-0000-999 as SEPTA loose components;

* Value statement for invoice no. 693064 dated December 16, 1996; HS No. 8707 9050401 RATE 4% showing a chart of the cost breakdown per bus;

* Invoice no. 693066 shows a delivery date of December 3, 1996 and an invoice date of December 16, 1996. This invoice reflects item no. 416.08-0000-000 as 40' SEPTA city transit bus bare body/chassis assy and item no. 416.08-0000-999 as SEPTA loose components;

* Value statement for invoice no. 693066 dated December 16, 1996; HS No. 8707 9050401 RATE 4% showing a chart of the cost breakdown per bus;

* Invoice no. 693069 shows a delivery date of December 8, 1996 and an invoice date of December 16, 1996. This invoice reflects item no. 416.08-0000-000 as 40' SEPTA city transit bus bare body/chassis assy and item no. 416.08-0000-999 as SEPTA loose components;

* Value statement for invoice no. 693069 dated December 16, 1996; HS No. 8707 9050401 RATE 4% showing a chart of the cost breakdown per bus;

* Invoice no. 693071 shows a delivery date of December 8, 1996 and an invoice date of December 16, 1996. This invoice reflects item no. 416.08-0000-000 as 40' SEPTA city transit bus bare body/chassis assy and item no. 416.08-0000-999 as SEPTA loose components;

* Value statement for invoice no. 693071 dated December 16, 1996; HS No. 8707 9050401 RATE 4% showing a chart of the cost breakdown per bus;

* Importer’s endorsement for entry no. 13-5 with an entry date of December 30, 1996;

* Assembler’s declaration dated December 12, 1996 indicates the merchandise was shipped by North American Bus Industries Ltd Budapest and consigned to American Ikarus, Inc. It is declared that the merchandise is “Ikarus 416.08 model city transit bus bare body/chassis assembly”;

* List of U.S. made component/bus bare body/chassis 416.08; and

* Bill of lading dated December 9, 1996 describes the goods as “Forty-Foot City Transit Bus Share Body/Body Assemblies”.

On December 7, 1998, this office sent protestant's counsel, Mr. Damon Pike and Mr. Doug Reed of the North American Bus Industries, Inc. (NABI) a questionnaire to facilitate a determination with respect to this protest. This office did not receive a response from Mr. Reed. Instead, this office received an affidavit dated December 28, 1998, from Mr. Damon Pike stating that he is “the general contact for all matters related to issues involving North American Bus Industries, Inc.” In the affidavit, Mr. Pike states that the protestant requested his assistance in January of 1998 regarding the tariff classification of merchandise imported from Hungary. In response to the questionnaire of December 7, 1998, Mr. Pike provided the following information which was attached to the affidavit dated December 28, 1998:

* Various individuals in the Purchasing Department at NABI placed the orders for the subject merchandise. (p. 1, 9 (a))

* Two departments at NABI are responsible for (physically) reviewing the merchandise ordered upon arrival at NABI’s facility in Anniston, Alabama: Quality Assurance and Shipping/Receiving. (pp. 1 and 2, 9 (b))

* All NABI receives from its related party manufacturer in Hungary is a commercial invoice for the subject merchandise, which is also sent directly to Anderson Shipping by the manufacturer in Hungary. (p. 2, 9 (c))

* The individuals at NABI involved in the importation of the subject merchandise are William Dawe, Director of Purchasing, and Lisa Gardner, Corporate Secretary and Treasurer. The individual at Anderson Shipping Company, Inc. Involved in the importation of the subject merchandise is Donald O. Montgomery. (p. 2, 9 (d))

* Two departments at NABI are responsible for reviewing the merchandise upon arrival at NABI’s facility in Anniston, Alabama to ensure that it conforms to the purchase order specifications and that no damage has occurred in transit: Quality Assurance and Shipping/Receiving. Chris Finley is Director of Quality Assurance and William Dawe oversees Shipping/Receiving in his capacity as Director of Purchasing. The individual who conducted periodic examinations of the imported merchandise at Anderson Shipping Company, Inc. Is Donald O. Montgomery. In addition, Blevins acts as NABI’s freight forwarder and transports the imported goods from Charleston to NABI’s facility in Alabama. It also examines the merchandise upon importation in Charleston to ensure that no damage has occurred and that it conforms to what was ordered before loading the merchandise for delivery to Anniston. (p. 2, 9 (e))

* When NABI’s corporate predecessor, Ikarus, first began importing the subject merchandise in 1989, Donald Montgomery conferred with two employees of Ikarus in California with respect to identification of the merchandise: Rich Himes and Bill Coryell. Since that time, Mr. Montgomery has contacted Jesus Hernandez, an employee of NABI located at NABI’s corporate headquarters in Anniston, Alabama for further information with respect to identification of the subject merchandise. (pp. 2 and 3, 9 (f))

* Mr. Montgomery relied on three primary sources of information in order to reach his belief with respect to the identification of the merchandise: (1) the description of the merchandise on the commercial invoice; (2) verbal discussions with appropriate employees of NABI, and (3) periodic visual inspections of the subject merchandise. (p. 3, 9 (g))

* Mr. Montgomery performed periodic visual inspections of the subject merchandise. (p. 3, 9 (h))

* The vendor invoice from Hungary is compared to the entry summary for values and other information. The calculations are checked on the entry summary, i.e., value times duty rate. The entry summary is then compared to the Anderson Shipping invoice for accuracy. (p. 3, 9 (i))

* Mike Andrews, Accounts Payable Supervisor, and Steve Madeley, General Accounting Manager, process the bills for Anderson Shipping Company on behalf of NABI. Checks are signed by Lisa Gardner, Corporate Secretary and Treasurer, and Doug Reed, Chief Financial Officer, if over $10,000. Steve Taylor, Budget Cost Accounting Manager, signs the checks if under $10,000. (p. 3, 9 (j))

* No paperwork is supplied to Anderson Shipping Company by NABI; it is supplied to Anderson by the manufacturer in Hungary. (p. 3, 9 (k))

* Doug Reed, the Chief Financial Officer of NABI, is responsible for maintaining and producing entry documentation upon Customs request. In addition, Donald Montgomery of Anderson Shipping Company, Inc. is also responsible for maintaining and producing entry documentation upon Customs request. (p. 4, 9 (l)) * I [Damon V. Pike] discovered the error in classification when I visited NABI’s facilities in January of 1998. I conducted a visual examination of the subject merchandise as it arrives at NABI’s finishing facility in Anniston, Alabama from the Port of Charleston (to ascertain its condition as imported). I also conducted a tour of the finishing facility and observed the finishing process (to ascertain the exact components and materials that are added to complete the merchandise into a finished passenger transit bus). I then reviewed the commercial invoice description for the imported merchandise and compared it with the appropriate tariff headings, General Rules of Interpretation, Chapter and Section Notes, as well as applicable Customs rulings and court cases. I determined that the merchandise in NY Ruling 882788 was almost identical to NABI’s merchandise. I therefore concluded that the tariff classification which had been used up to that point in time was incorrect and that the tariff classification used in the aforementioned ruling should apply instead to the subject goods. (p. 4, 9 (m))

* The commercial invoice description of “bus bare body/chassis assemblies” was inadequate to allow proper classification of the merchandise because the broker mistakenly believed the goods were mere bodies and not unfinished buses - a mistake of fact. (p. 4, 9 (n))

Also included in the file is a declaration from Mr. Donald O. Montgomery, dated June 23, 1998. Mr. Montgomery, Vice President at Anderson Shipping Company, Inc., declares the following:

At the time the Customs entries which are the subject of this protest were filed, the commercial invoices accompanying the entries described the articles as “bus bare body/chassis. Declaration of Donald O. Montgomery #3.

At the time the entries were filed, [he] believed that the imported articles covered by the entries were the type of merchandise described under HTSUS subheading 8707.90. Declaration of Donald O. Montgomery #4.

At the time the entries were filed, I believed that the imported articles covered by the entries were of the type of merchandise described under HTSUS subheading 8707.90. Declaration of Donald O. Montgomery #5.

At the time of the filing of the entries which are the subject of this protest, I was not aware of Customs Ruling Letter NY 882788. I was not aware that this ruling covered merchandise similar to that imported by NABI. Declaration of Donald O. Montgomery #6.

By petition dated January 19, 1998, the Customs Port Director, Charleston, South Carolina, was requested to reliquidate entries filed on behalf of the protestant to correct a mistake of fact in connection with the entry of the subject merchandise. The mistake of fact indicated in the petition was that the commercial invoice description of the imported merchandise contained a factual error. The protest at hand solely focuses on whether the liquidation of the subject entries were in error due to a mistake of fact as to the identity of the imported merchandise. Customs denied the reliquidation of the subject entries and this protest ensued.

ISSUE:

Whether the liquidation of the subject entries were in error due to a mistake of fact under 1520(c)(1) as to the identity of the imported merchandise .

LAW AND ANALYSIS:

Initially, we note that the subject protest against the denial of the 1520(c)(1) petition was timely filed pursuant to 19 U.S.C. 1514(c)(3)(B). The petition filed under 19 U.S.C. 1520(c)(1) to request reliquidation of the subject entries was denied on March 30,1998 and the protest against this denial was filed on June 21, 1998, within 90 days from March 30, 1998 as prescribed under 19 U.S.C. 1514(c)(3)(B). The issue at hand, therefore, is whether the denial of the 1520(c)(1) petition was proper.

A protest against the liquidation of an entry under 19 U.S.C. 1514 must be filed within 90 days after the date of liquidation (19 U.S.C. 1514(c)(3)). Otherwise, the tariff treatment of merchandise is final and conclusive. Protestant's request for reliquidation under 19 U.S.C. 1514 would be untimely filed, since more than 90 days elapsed between the date of liquidation and the filing of the protest. The entries at issue were liquidated on April 11, 1997 and April 18, 1997, and were not protested for the classification of the merchandise until January 19, 1998.

19 U.S.C. 1514 sets forth the proper procedure for an importer to protest the classification and appraisal of merchandise when it believes Customs has misinterpreted the applicable law. 19 U.S.C. 1520(c)(1) is an exception to the finality of section 1514. Therefore, although the protest under consideration is untimely under 19 U.S.C. 1514, we note that the courts have treated untimely protest under 19 U.S.C. 1514 as seeking relief under 19 U.S.C. 1520(c), if such protest meet the requirements for claims under 19 U.S.C. 1520(c)(1).

The relief provided for in section 1520(c)(1) is not an alternative to the relief provided for in the form of protests under section 1514. Section 1520(c)(1) only affords "limited relief in situations defined therein." Phillips Petroleum Co. v. United States, 55 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). Under section 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, when certain conditions are met. The error must be adverse to the importer and manifest from the record or established by documentary evidence and brought to the attention of Customs within one year after the date of liquidation. See also, ITT Corp. v. United States, 24 F.3d 1384, 1387 (Fed. Cir. 1994). In the case at hand, protestant timely filed the section 1520(c)(1) claim for entry numbers 06-9 and 13-5.

In this case, the error in classification is adverse to the protestant. The subject merchandise is manufactured in Hungary. Hungary is considered to be a beneficiary developing country under the GSP, as noted in General Note 4 to the HTSUS and 19 C.F.R. 10.171 et seq. The subject merchandise, entered under 8702.10.30, was eligible for the benefits of the GSP program and could be entered free of duty. However, 8707.90.5040/4%, HTSUS precludes products of Hungary from eligibility for duty-free entry under GSP. The subject entries, thus, were liquidated at the MFN rate of 4%. The action was adverse to the importer in that instead of being allowed to import the subject merchandise into the United States free of duty, a duty of 4% based on dutiable value of the articles was charged. Thus, the protestant meets this criteria of 19 U.S.C. 1520(c)(1) that the mistake of fact be “adverse to the importer.”

Another requirement set forth by the statute and regulations is that the mistake of fact is manifest from the record or established by documentary evidence submitted to the appropriate customs officer. 19 C.F.R. 173.4(b)(3). The CIT has ruled that mere assertions without supporting evidence will not be regarded as sufficient to overturn a Customs official's decision. Bar Bea Truck Leasing Co., Inc. v. United States, 5 CIT 124, 126 (1983). Further, upon an assertion that 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." PPG Industries, Inc. v. United States, 4 CIT 143, 147-148 (1982), citing Hambro Automotive Corp. v. United States, 81 Cust. Ct. 29, 31, 458 F. Supp. 1220, 1222 (1978) aff'd. 66 CCPA 113, C.A.D. 1231, 603 F.2d 850 (1979).

In the instant case, the evidence of the entry papers contradict the broker's assertion that he was unaware of the merchandise when he prepared the entry summary and filed it with Customs. See Bill of ladings for entry numbers 06-98 and 13-5, which correctly describe the subject merchandise as “Forty-Foot City Transit Bus Share Body/Body Assemblies”. Moreover, protestant asserts that the broker conducted “periodic visual inspections of the subject merchandise.” Response to questionnaire dated December 7, 1998 #9 (g). In addition, a statement was made that “Blevins acts as NABI’s freight forwarder and transports the imported goods from Charleston to NABI’s facility in Alabama.” Response to questionnaire dated December 7, 1998 #9 (e). Protestant explained that the merchandise is examined “upon importation in Charleston to ensure that no damage has occurred and that it conforms to what was ordered before loading the merchandise for delivery to Anniston. Id. The statute also requires that the mistake of fact be “brought to the attention of the appropriate customs officer within one year after the date of liquidation.” See ITT Corp. (Fed. Cir. 1994). In this case, the error was brought to the attention of Customs by a letter dated January 19, 1998 in which the correct description of the bus shells was provided to Customs. Entry no. 06-9 was liquidated April 11, 1997 and entry no. 13-5 was liquidated April 18, 1997. Therefore, the error was brought within the one year liquidation of the subject entries. The more difficult analysis is whether the liquidation of the subject entries were indeed due to a mistake of fact as to the identity of the imported merchandise. As indicated in the declaration from Mr. Donald Montgomery, at the time of importation of the bus shell assemblies, he contends that he mistakenly believed that the imported articles covered under this protest to be of the type of merchandise as that described in HTSUS subheading 8707.90. Declaration of Mr. Donald O. Montgomery dated June 23, 1998, #5. In Mr. Montgomery’s affidavit, he also contends that he was not aware that products similar to the imported articles (which are more than just the shell of a bus) had been the subject of a formal ruling from the Customs office in New York (Customs Ruling Letter NY 882788) that indicated the correct tariff classification of the imported product to be 8702.10.3000, HTSUS. Declaration of Mr. Donald O. Montgomery dated June 23, 1998, #6 and #7. Therefore, the mistake alleged based on the protest and on Mr. Montgomery’s affidavit is that the broker erroneously believed that the merchandise did not have the essential character of a bus. See pp. 6-7 Protest 1601-98-100063 and Declaration of Mr. Donald O. Montgomery dated June 23, 1998, #5.

The protestant contends that the inadvertence correctable under 1520(c)(1) was that the broker misunderstood the nature of the imported merchandise due to an improper description on the commercial invoice. The commercial invoices submitted to Customs with the subject entries incorrectly indicated that the merchandise consists of “bare bodies.” The merchandise in question consists of bus shell assemblies which are essentially unfinished buses, which, when imported, contain the base structure and body, as well as the front and rear suspensions, the wheels, the power steering, the fuel tanks, the engine cradle, the flooring, a partial door system, the windshield and the outside body trim of a complete bus. It is noted that contrary to the broker's assertions, the entry documents (i.e, the bill of ladings for entry numbers 06-9 and 13-5) correctly describe the subject merchandise as “Forty-Foot City Transit Bus Share Body/Body Assemblies”.

Protestant relies on C.J. Tower & Sons of Buffalo, Inc. v. United States, 336 F. Supp. 1395 (1972). In C.J. Tower, the Court found a mistake of fact existed where neither the importer nor the Customs officer was aware that the merchandise was entitled to duty-free treatment until after the liquidations became final. In the case at hand, Customs did not know that the imported merchandise was describe incorrectly. Both Customs and protestant’s broker were unaware of the actual character of the merchandise until more than 90 days after its liquidation. In Taban Company v. United States, 960 F. Supp 26 (1997) and Zaki Corporation v. United States, 960 F. Supp. 350 (1997), the Court found that an erroneous description of the merchandise at the time of entry is a mistake of fact.

In HQ 223524, it was held that there are instances where misclassifications are correctable under the scope of section 520(c)(1). Customs cited the presence of misleading language, which in this case was "Chief Value Wool" when in fact was "Chief Value Silk", caused the broker to misunderstand the nature of the entered merchandise. See also, Taban Co. v. United States, 960 F. Supp. 326 (CIT 1997)(reprinted in Customs Bulletin, March 19, 1997, p. 43) and Zaki Corp. v. United States, 960 F. Supp. 350 (CIT 1997)(reprinted in Customs Bulletin, April 2, 1997, p. 84)(wherein the U.S. Court of International Trade (CIT) found that there was a mistake of fact, rather than one of law, because "the 'exact physical properties' of the merchandise were not known to the broker or to Customs in this case"). Taban, Customs Bulletin at p. 53; Zaki at 95-96.

In this case, unlike Taban, Zaki, and HQ 223524, the subject entries were denied because the entry documents did not contain misleading language. In the bill of ladings for entry numbers 06-9 and 13-5, the subject merchandise is correctly described as “Forty-Foot City Transit Share Body/Body Assemblies”. Moreover, in the case at hand, there is no evidentiary indication that the importer of the merchandise or the broker was unaware of the nature of the merchandise. Nowhere in the protest is it asserted that the broker did not review the entry documents. It was asserted that Mr. Montgomery conducted “periodic visual inspections of the subject merchandise.” See Response to questionnaire dated December 7, 1998. In addition, the protestant stated that “Blevins acts as NABI’s freight forwarder and transports the imported goods from Charleston to NABI’s facility in Alabama.” Response to questionnaire dated December 7, 1998 #9 (e). The protestant also explained that the merchandise is examined “upon importation in Charleston to ensure that no damage has occurred and that it conforms to what was ordered before loading the merchandise for delivery to Anniston. Id.

The court in Taban and Zaki also concluded that the "broker and Customs were unaware [of the exact physical properties of the merchandise] until more than ninety days after their liquidation and therefore plaintiff's broker could not have relayed the information to Customs for its consideration in classifying and liquidating the merchandise at issue." Id., Taban at 54; Zaki at 95-96. Unlike the instant case, in Taban, the broker testified that she did not examine the merchandise at issue. Moreover, the broker in Taban believed that the merchandise was battery-operated radios when in fact they were nonportable radio broadcast receivers combined with dual cassette tape decks. The physical nature of the merchandise was therefore incorrectly entered. Had the broker in Taban been aware of the true physical nature of the imports, the classification of the merchandise would have been a mistake of law.

Taban and Zaki are distinguishable from the case at hand since in both court cases, the evidentiary documents were unclear as to the nature of the merchandise which caused the incorrect classification. For instance in Taban and Zaki, the documents provided a "limited description of the imports," Zaki, Id. At 47; Taban Id. at 88). In the case at hand, the entry documents contain a clear description of the merchandise. See Bill of ladings for entry numbers 06-9 and 13-5, which correctly describe the subject merchandise as “Forty-Foot City Transit Bus Share Body/Body Assemblies”. In the case at hand, the subject merchandise was examined and a legal determination was made by the broker as to its classification.

Furthermore, in the instant case, there is no allegation that Customs did not know that the merchandise at issue consisted of bus shell assemblies for motor vehicles, just that Customs was not aware of the bus shell assemblies for motor vehicles. Had the import specialist considered the bus shell assemblies for motor vehicles classification, the decision to classify the merchandise as entered would be a mistake of law on the part of Customs. In this case, there is no evidence that Customs considered the classification of the entries at issue.

Protestant's claim is that the subject merchandise was classified under the wrong HTSUS provision. The courts have consistently taken the position that an erroneous classification of merchandise is not a clerical error, mistake of fact, or other inadvertence within the meaning of 19 U.S.C. 1520(c)(1), but is an error in the construction of law. See, Mattel Inc. v. United States, 336 F. Supp. 1395, 68 Cust. Ct. 17, C.D. 4327, aff'd. 499 F.2d 1277, 61 CCPA 90 (1972).

The broker, in the instant case, submitted an affidavit testifying that he erroneously believed the “imported articles covered by the entries were of the type of merchandise described under HTSUS subheading 8707.90.” Declaration of Donald O. Montgomery #4. The protestant asserts that this qualifies under a mistake of fact, not mistake of law. However, there is no evidence of this assertion. Courts have allowed affidavits to establish evidence in some instances. The Court in Andy Mohan, Inc. v. United States, 74 Cust. Ct. 105, C.D. 4593, 396 F. Supp. 1280 (1975), aff'd 63 CCPA 104, C.A.D. 1173, 537, F.2d 516 (1976), noted that affidavits provided as evidence are only "... entitled to little weight, being incomplete and based on unproduced records, and having been executed years after the transaction to which they attest." Mohan, 63 CCPA at 107. In the case at hand, the affidavit is "based on unproduced records."

The affiant, Mr. Montgomery, does not provide evidence of the assertions made. Moreover, it is asserted that Mr. Montgomery conducted periodic visual inspections of the subject merchandise. See Response to questionnaire of December 7, 1998 #9 (g). If Mr. Montgomery inspected the subject merchandise, he made a legal determination upon its classification. The broker’s inspection would have revealed merchandise consisting of bus shell assemblies for motor vehicles, which contain the base structure

and body, front and rear suspensions, wheels, power steering, fuel tanks, engine cradle, flooring partial door system, windshield, and outside body trim.

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. The protestant has provided Customs with timely and adequate notice under the guidelines set forth for 520(c) claims. However, with respect to substantiation, adequate evidence has not been provided. In a footnote on p. 1389 of the ITT Corp. case, the type of evidence that can be considered includes credible proof "of the underlying facts that demonstrate the existence of such error," and the plaintiff/importer bears the burden of establishing the mistake of fact "by demonstrating the underlying facts" needed to prove the allegation. The plain language of the statute requires that the error be established by documentary evidence, if it is not manifest from the record.

Although the invoices did not contain the component material of the imported merchandise, the broker has not stated that the entry documents were not reviewed to ascertain the nature of the imported merchandise. Given the clear description of the subject merchandise described in the bill of ladings, which is not disputed to be inaccurate, the admission that those bill of ladings were filed with the entries renders the broker's affidavit that he did not know the nature of the merchandise unconvincing. In the Declaration of Donald O. Montgomery, dated June 23, 1998, the broker admits that he "believed that the imported articles covered by the entries were of the type of merchandise described under HTSUS subheading 8707.90". (Declaration #5) The broker also admitted that “[a]t the time of the filing of the entries which are the subject of this protest, I was not aware of Customs Ruling Letter NY 882788. I was not aware that this ruling covered merchandise similar to that imported by NABI.” (Declaration #6)

The broker, in the instant case does not assert that the entry documents were ignored. The broker simply states that he "believed that the imported articles covered by the entries were of the type of merchandise described under HTSUS subheading 8707.90.” Declaration of Donald O. Montgomery, #5. Protestant asserts that the broker “relied on three primary sources of information in order to reach his belief with respect to the identification of the merchandise: (1) the description of the merchandise on the commercial invoice [described as 40' SEPTA city transit bus bare body/chassis assy and SEPTA loose components]; (2) verbal discussions with appropriate employees of NABI, and (3) periodic visual inspections of the subject merchandise.” Response to questionnaire dated December 7, 1998. However, the bill of ladings for entry numbers 06-9 and 13-5 do in fact correctly describe the subject merchandise as “Forty-Foot City Transit Bus Share Body/Body Assemblies”. Therefore, the evidence

shows that the broker made a mistake as to what constitutes the essential character of the subject merchandise - a mistake of law.

It was not until Mr. Pike “conducted a visual examination of the subject merchandise as it arrives at NABI’s finishing facility in Anniston, Alabama from the Port of Charleston (to ascertain its condition as imported)” that the error in classification was discovered. See Response to questionnaire of December 7, 1998. Therefore, for entry numbers 06-9 and 13-5 protestant's 1520(c)(1) claim is denied.

HOLDING:

The protest is DENIED and relief may not be granted for entry numbers 01-8, 79-4, 98-9, and 32-6 under 19 U.S.C. 1520(c)(1) for the reasons given in the LAW AND ANALYSIS portion of this ruling.

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 the decision. Sixty days from the date of the decision of 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