• HQ H018936
• Feb 11, 2008

• Type : • HTSUS :
•  Related:   229413; 225382; H014711   

LIQ-9-01
LIQ-4-01
OT:RR:CTF:ER H018936 DCC


Port Director
U.S. Customs and Border Protection
11099 South La Cienega Boulevard
Los Angeles, CA 90045

Attn: Susan Frias

Re: Protest and Application for Further Review 2720-07-100281

Dear Sir or Madam:

This letter is in response to your correspondence, dated July 13 and October 17, whereby you forwarded an Application for Further Review (“AFR”) of Protest Number 2720-07-100281, filed on behalf of Mel Hare (doing business as “W.T. Importing”), the Protestant. In addition, the Protestant filed an earlier protest concerning the liquidation of some of the same entries. That protest is addressed in Headquarters Ruling Letter (“HRL”) H014711. Our decision follows.

FACTS:

On March 12, 2007, the Protestant filed a request for reliquidation (Claim No. 2720-07-200001) of 20 entries of ball bearings on the basis of an alleged mistake of fact by CBP in the liquidation of those entries. CBP subsequently denied the mistake of fact petition on May 2, 2007. On June 22, 2007, Mel Hare filed Protest 2720-07-100281 to challenge the denial of the mistake of fact petition with regard to 28 entries. Some of the entries covered by Protest 2720-07-100281 were not included in the relevant mistake of fact petition. Protest 2720-07-100281 covers the following entries:

Date of Date of Entry No. Date of Entry Liquidation 1520(c)(1) Claim 1. XXX-XXXX915-7 05/05/2003 03/31/2006 * 2. XXX-XXXX893-5 07/14/2003 03/31/2006 * 3. XXX-XXXX874-4 09/22/2003 03/17/2006 03/12/2007 4. XXX-XXXX000-3 10/02/2003 03/31/2006 * 5. XXX-XXXX623-2 11/12/2003 09/29/2006 * 6. XXX-XXXX680-2 11/17/2003 03/31/2006 03/12/2007 7. XXX-XXXX978-0 12/09/2003 03/31/2006 03/12/2007 8. XXX-XXXX039-0 12/10/2003 03/31/2006 03/12/2007 9. XXX-XXXX266-9 01/07/2004 03/31/2006 03/12/2007 10. XXX-XXXX596-9 01/22/2004 03/24/2006 * 11. XXX-XXXX626-4 01/29/2004 03/24/2006 03/12/2007 12. XXX-XXXX866-6 02/13/2004 03/31/2006 03/12/2007 13. XXX-XXXX147-0 03/10/2004 03/24/2006 03/12/2007 14. XXX-XXXX238-7 03/18/2004 03/31/2006 03/12/2007 15. XXX-XXXX402-9 03/29/2004 03/31/2006 * 16. XXX-XXXX035-6 05/10/2004 09/29/2006 03/12/2007 17. XXX-XXXX365-7 06/01/2004 09/29/2006 03/12/2007 18. XXX-XXXX546-2 06/10/2004 09/29/2006 03/12/2007 19. XXX-XXXX973-8 07/06/2004 10/06/2006 03/12/2007 20. XXX-XXXX073-6 07/14/2004 10/06/2006 03/12/2007 21. XXX-XXXX365-6 07/29/2004 10/20/2006 03/12/2007 22. XXX-XXXX432-4 08/04/2004 10/20/2006 03/12/2007 23. XXX-XXXX807-7 08/27/2004 10/20/2006 03/12/2007 24. XXX-XXXX951-3 09/07/2004 10/20/2006 03/12/2007 25. XXX-XXXX283-0 09/29/2004 10/20/2006 03/12/2007 26. XXX-XXXX321-8 10/07/2004 10/27/2006 * 27. XXX-XXXX769-8 11/01/2004 10/06/2006 03/12/2007 28. XXX-XXXX849-8 11/03/2004 10/06/2006 *

* Entry not subject to a mistake of fact petition under 19 U.S.C § 1520(c)(1). 2001 – 2002 Administrative Review and Reseller Policy

On March 10, 2003, the U.S. Department of Commerce (“Commerce”) published the preliminary results of its dumping investigation for ball bearing products from Japan for the period May 1, 2001, through April 30, 2002. See Ball Bearings and Parts Thereof From Japan: Preliminary Results of Antidumping Duty Administrative Review, Partial Rescission of Administrative Review, and Notice of Intent to Rescind Administrative Review, 68 Fed. Reg. 11,357 (March 10, 2003) (the “Preliminary Results, 2001 – 2002 Administrative Review”). That notice states:

We intend to rescind the administrative reviews we initiated of Jiro Okayama, Eisho Trading Co., Ltd., and Phoenix International Corporation (collectively ‘‘Japanese trading companies’’) with respect to subject merchandise from Japan. These Japanese trading companies informed us that, although they are the resellers of Japanese-manufactured ball bearings, their suppliers knew at the time of sale that the merchandise was destined for exportation to the United States. If in fact the suppliers had knowledge that the sales they made to these trading companies were destined for exportation to the United States, then the suppliers would be the proper parties to an administrative review since their sales would be the point in the sales chain at which merchandise ‘‘is first sold (or agreed to be sold) before the date of importation by the producer or exporter of the subject merchandise outside of the United States to an unaffiliated purchaser in the United States or to an unaffiliated purchaser for exportation to the United States * * *’’ pursuant to section 772(a) of the Tariff Act of 1930, as amended (the Act).

68 Fed. Reg. 11,357 – 58.

On May 6, 2003, Commerce published a clarification on the automatic-liquidation regulation where a reseller has been involved in the chain of commerce. See Antidumping and Countervailing Duty Proceedings: Assessment of Antidumping Duties, 68 Fed. Reg. 23,954 (May 6, 2003). That notice states:

As described in the October 15, 1998, Federal Register notice, automatic liquidation at the cash-deposit rate required at the time of entry can only apply to a reseller which does not have its own rate if no administrative review has been requested, either of the reseller or of any producer of merchandise the reseller exported to the United States. If the Department conducts a review of a producer of the reseller’s merchandise where entries of the merchandise were suspended at the producer’s rate, automatic liquidation will not apply to the reseller’s sales. If, in the course of an administrative review, the Department determines that the producer knew, or should have known, that the merchandise it sold to the reseller was destined for the United States, the reseller’s merchandise will be liquidated at the producer’s assessment rate which the Department calculates for the producer in the review. If, on the other hand, the Department determines in the administrative review that the producer did not know that the merchandise it sold to the reseller was destined for the United States, the reseller’s merchandise will not be liquidated at the assessment rate the Department determines for the producer or automatically at the rate required as a deposit at the time of entry. In that situation, the entries of merchandise from the reseller during the period of review will be liquidated at the all-others rate if there was no company-specific review of the reseller for that review period.

68 Fed. Reg. at 23,954 (emphasis added).

2003 – 2004 Administrative Review

On September 16, 2005, Commerce published a notice regarding the final determination of its dumping investigation for ball bearing products from Japan for the period May 1, 2003, through April 30, 2004. See Ball Bearings and Parts Thereof from France, Germany, Italy, Japan, Singapore, and the United Kingdom: Final Results of Antidumping Duty Administrative Reviews, 70 Fed. Reg. 54,711 (September 16, 2005). That notice states:

Assessment Rates The Department will determine and CBP shall assess antidumping duties on all appropriate entries. We will issue appropriate assessment instructions directly to CBP within 15 days of publication of these final results of reviews. In accordance with 19 CFR 351.212(b)(1), we have calculated, whenever possible, an importer/customer–specific assessment rate or value for subject merchandise. The Department clarified its ‘‘automatic assessment’’ regulation on May 6, 2003 (68 FR 23954). This clarification will apply to entries of subject merchandise during the period of review produced by companies included in these final results of reviews for which the reviewed companies did not know their merchandise was destined for the United States. In such instances, we will instruct CBP to liquidate unreviewed entries at the all–others rate if there is no rate for the intermediate company(ies) involved in the transaction. For a full discussion of this clarification, see Notice of Policy Concerning Assessment of Antidumping Duties, 68 FR 23954 (May 6, 2003).

70 Fed. Reg. at 54,713.

On February 18, 2006, Commerce issued message number 6047204, which contained liquidation instructions for ball bearings from Japan produced or exported by Nippon Seiko K.K. (“NSK”) that were subject to Antidumping Duty Orders A-588-201-008. On February 27, 2006, Commerce issued Message number 6058201, which contained liquidation instructions for ball bearings from Japan produced or exported by NTN Corporation (“NTN”) that were subject to Antidumping Duty Orders A-588-201-009. Pursuant to those instructions and Commerce’s clarification of its assessment regulation, Commerce set the antidumping duty rate for shipments of BBs from Japan that were not subject to the manufacturer-specific rates for NSK and NTN, that were entered or withdrawn from warehouse for consumption during the period May 1, 2003 through April 30, 2004, at the all-others rate of 45.83 percent.

2004 - 2005 Administrative Review

On July 14, 2006, Commerce published a notice regarding the final determination of its dumping investigation for ball bearing products from Japan for the period May 1, 2004, through April 30, 2005. See Ball Bearings and Parts Thereof from France, Germany, Italy, Japan, and the United Kingdom: Final Results of Antidumping Duty Administrative Reviews, 71 Fed. Reg. 40,064 (July 14, 2006). That notice states:

Assessment Rates The Department will determine and U.S. Customs and Boarder Protection (CBP) shall assess antidumping duties on all appropriate entries. We intend to issue appropriate assessment instructions directly to CBP within 15 days of publication of these final results of reviews. In accordance with 19 CFR 351.212(b)(1), we have calculated, whenever possible, an importer/customer–specific assessment rate or value for subject merchandise.

The Department clarified its ‘‘automatic assessment’’ regulation on May 6, 2003. See Notice of Policy Concerning Assessment of Antidumping Duties, 68 FR 23954 (May 6, 2003) (Assessment–Policy Notice). This clarification will apply to entries of subject merchandise during the period of review produced by companies included in these final results of reviews for which the reviewed companies did not know that the merchandise it sold to the intermediary (e.g., a reseller, trading company, or exporter) was destined for the United States. In such instances, we will instruct CBP to liquidate unreviewed entries at the all–others rate if there is no rate for the intermediary involved in the transaction. See the Assessment–Policy Notice for a full discussion of this clarification.

On August 10, 2006, Commerce issued Message numbers 6222208 and 6222209, which contained liquidation instructions for ball bearings from Japan produced or exported by Nippon Seiko K.K. (“NSK”) and NTN Corporation (“NTN”) that were subject to Antidumping Duty Orders A-588-201-008 and A-588-201-009, respectively. Pursuant to those instructions and Commerce’s clarification of its assessment regulation, Commerce set the antidumping duty rate for shipments of BBs from Japan that were not subject to the manufacturer-specific rates for NSK and NTN, that were entered or withdrawn from warehouse for consumption during the period May 1, 2004 through April 30, 2005, at the all-others rate of 45.83 percent.

The Protestant claims that CBP improperly liquidated the subject entries with the assessment of antidumping duties on ball bearings at the all others rate of 45.83%, and that the entries should have been liquidated with the antidumping duty rates assigned to Japanese manufacturers.

ISSUES:

Whether the Protestant properly filed its mistake of fact petition and protest; Whether there was a mistake of fact pursuant to 19 U.S.C. § 1520(c)(1).

LAW AND ANALYSIS:

Mistake of Fact Petition Filing

On March 12, 2007, the Protestant filed a request for reliquidation (Claim No. 2720-07-200001) to challenge the liquidation of 20 entries on the basis of a mistake of fact pursuant to 19 U.S.C. 1520(c)(1). CBP denied that claim on May 2, 2007. The Protestant then filed Protest 2720-07-100281 to challenge the denial of its mistake of fact petition. Although the Protestant filed a second mistake of fact petition (Claim No. 2720-07-100177), none of the entries covered by that claim are the subject of either of the pending protests.

Although repealed by § 2105 of Public Law 108-429 in 2004, 19 U.S.C. §1520(c)(1) was effective for entries made on or before December 18, 2004. For entries made on or before that date, section 1520(c)(1) provides that CBP will reliquidate an entry to correct

a clerical error, mistake of fact, or other inadvertence, whether or not resulting from or contained in electronic transmission, 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 Customs Service within one year after the date of liquidation or exaction;

Former section 1520(c)(1).

Initially, we note that the refusal to reliquidate an entry under former § 1520(c)(1) is a protestable matter pursuant to 19 U.S.C. 1514(a)(7), provided the requirements of 19 C.F.R. § 174.12 are satisfied.

A protest to challenge the denial of reliquidation request for a particular entry may only be filed with regard to entries for which a request for reliquidation was filed. In the absence of an underlying reliquidation request, there is no basis for protest under 19 U.S.C. § 1514(c)(3). In this case, eight of the entries identified under Protest 2720-07-100281 were not the subject of a reliquidation request. Consequently, there was no denial of a request for reliquidation for the following entries: XXX-XXXX915-7; XXX-XXXX893-5; XXX-XXXX000-3; XXX-XXXX623-2; XXX-XXXX596-9; XXX-XXXX402-9; XXX-XXXX321-8; and XXX-XXXX849-8.

Protest Filing

Under 19 U.S.C. § 1514(a), “decisions of the Customs Service, including the legality of all orders and findings entering into the same, as to . . . the liquidation or reliquidation of an entry . . . shall be final and conclusive . . . unless a protest is filed in accordance with this section.” For merchandise entered before December 18, 2004, a protest of a liquidation is timely if it is filed within 90 days after but not before the date of liquidation or the date of the decision which is the subject of the protest. See 19 U.S.C. § 1514(c)(3). Section 1514(c)(1) states:

A protest of a decision made under subsection (a) shall be filed in writing, or transmitted electronically pursuant to an electronic data interchange system, in accordance with regulations prescribed by the Secretary.

* * * Only one protest may be filed for each entry of merchandise, except that where the entry covers merchandise of different categories, a separate protest may be filed for each category.

CBP denied the Protestant’s mistake of fact petition on May 2, 2007. The Protestant subsequently filed Protest No. 2704-07-100281 on June 22, 2007 to contest that determination. Because the Protest was filed within 90 days after, but not before, CBP’s decision to deny the mistake of fact petition it was timely filed in accordance with the requirements under the former section 1514(c)(3).

Mistake of Fact

The Protestant filed a request for reliquidation on the basis of a mistake of fact, pursuant to 19 U.S.C. 1520(c)(1), which claims that CBP’s refusal to reliquidate the subject entries was the result of a mistake of fact.

Mistakes 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] mistakes 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), citing Hambro Automotive Corporation v. United States, 66 C.C.P.A. 113, 118, C.A.D. 1231, 603 F. 2d 850 (1979); see also, Degussa Canada Ltd. v. United States, 87 F. 3d 1301 (Fed. Cir. 1996).

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.” See PPG Industries, Inc. v. United States, 7 C.I.T. 118, 124 (1984). “Inadvertence connotes inattention, oversight, negligence, or lack of care.” 94 Treas. Dec. 244, 245-6, T.D. 54848 (1959). “It should be noted that ‘clerical error, mistake of fact, or other inadvertence’ are not necessarily mutually exclusive terms. In other words some “mistakes of facts” also might be clerical errors or other inadvertence; or some ‘clerical errors’ also might be mistakes of fact or other inadvertence, and so on.” Id.

The Protestant claims that there was a mistake of fact because CBP was not aware that the Japanese manufacturers knew when they sold the ball bearings to Jiro Okayama, the reseller, that they would be exported to the United States. Had CBP known this fact, the Protestant claims, the Protestant would have been assessed antidumping duties at the producers’ rates assigned to NSK and NTN. The importer argues that the International Trade Administration determined that Jiro Okayama’s suppliers knew at the time of their sales to Jiro Okayama that the bearings were destined for exportation to the United States. See, Preliminary Results, 2001 – 2002 Administrative Review, 68 Fed. Reg. at 11,357.

The port denied the Protestant’s mistake of fact petition because the port determined that the claim did not involve a clerical error, mistake of fact, or other inadvertence as required under the statute. The port noted that the importer should have raised the issue during the appropriate administrative review of the antidumping duty order conducted by the International Trade Administration, U.S. Department of Commerce (“Commerce”). With regard to the Protestant’s claim that Commerce determined that the Japanese manufacturers were aware that bearings sold to Jiro Okayama would be exported to the United States, the port states that Commerce’s determination was made for the 2001 – 2002 administrative review. Because the entries at issue occurred after the period of review in the 2001 – 2002 administrative review, the port determined that the subject entries were beyond the scope of that investigation and Jiro Okayama’s exports to the Protestant were not entitled to the benefit of manufacturer-specific antidumping duty rate.

By statute, Customs is charged with the liquidation of entered merchandise. See 19 U.S.C. § 1500(d). The regulations promulgated under the authority of section 1500 define liquidation as, in pertinent part: “ . . . the final computation or ascertainment of the duties or drawback accruing on an entry.” See 19 C.F.R. § 159.1. CBP and the Customs courts have held that the role of CBP in the antidumping process is “simply to follow Commerce’s instructions in collecting deposits of estimated duties and in assessing antidumping duties, together with interest, at the time of liquidation.” See HQ 229413 (March 12, 2002); HQ 225382 (July 3, 1995); see also Mitsubishi Electronic America Inc. v. United States, 44 F.3d 973. According to the record, at the time of liquidation, CBP followed the liquidation instructions from Commerce which directed Customs to liquidate the subject entries at 45.83% antidumping rate. Hence, there was not error in liquidation.

Even if errors by Commerce were correctable under § 1520(c)(1), the errors alleged by the Protestant are not manifest in the record or supported by documentary evidence. The only documentary evidence presented by the Protestant is the Preliminary Results for the 2001 – 2002 Administrative Review. We note that the Protestant did not provide any documentary evidence from Commerce’s investigation that may indicate the existence of a mistake of fact.

Furthermore, the Protestant mischaracterizes Commerce’s decision from the 2001 – 2002 Preliminary Results as a finding that the Japanese manufacturers knew the bearings sold to Jiro Okayama was destined for exportation to the United States. In fact, the 2001 – 2002 Preliminary Results state that Commerce rescinded the administrative review for Jiro Okayama on the basis of the reseller’s representations. Rather than a determination, the Preliminary Results present the issue as an open question with alternative possibilities, one of which would be that Jiro Okayama’s suppliers knew that the ball bearings sold to Jiro Okayama were destined for the United States. See Preliminary Results, 68 Fed. Reg. at 11,357-58.

Furthermore, the administrative record relied on by the Protestant covers a period of review different than the period of the subject entries. The cited Preliminary Results were published from Commerce’s investigation of imports of ball bearings during the 2001 – 2002 administrative review. The entries that are the subject the instant protests occurred more than one year after the period of review for the Preliminary Results, i.e., between May 5, 2003 and November 3, 2004. Because Commerce’s investigation regarding sales to Jiro Okayama only applied to entries during the review period, there is no reason to presume that Jiro Okayama’s suppliers were aware that ball bearings sold to Jiro Okayama in later years were destined for the United States.

Finally, the other available documentary evidence does not support the Protestant’s claim that there was a mistake of fact manifest in the liquidation instructions issued by Commerce. As part of the entry summary package, CBP received certain commercial and customs documents including invoices issued by the reseller to the Protestant, packing lists, air waybills, and certificates of reimbursement/non-reimbursement. Although the invoices, packing lists, and air waybills identify the manufacturer of the bearings, there is no information in these documents to suggest the manufacturers knew of the transactions between the reseller and the Protestant. The certificates of reimbursement/non-reimbursement states that W.T. Importing was not reimbursed by Jiro Okayama. There is no evidence to show that Jiro Okayama informed either NSK or NTN of its intention to export the merchandise to the United States. Moreover, there are no documents regarding the transactions between Jiro Okayama and either producer. Based on our review of these documents, we find no evidence to support the Protestant’s claim that there was a mistake of fact with regard to liquidation instructions issued by Commerce. Therefore, Protest 2720-07-100281, which protested the denial of the Protestant’s mistake of fact petition, should be denied with regard to any remaining entries that were timely filed and for which there was an underlying mistake of fact petition.

HOLDING:

Protest 2720-07-100281 is DENIED IN FULL for the reasons set forth in Law and Analysis above.

In accordance with the Protest/Petition Processing Handbook (CIS HB, January 2002, pp. 18 and 21), you are to mail this decision, together with the Customs Form 19, to the Protestant no later than 60 days from the date of this letter. Any reliquidation of the claim 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 make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

Myles B. Harmon, Director
Commercial and Trade Facilitation Division