HQ 226010

March 21, 1997

LIQ-9-01-RR:IT:EC 226010 CC

CATEGORY: Liquidation

Port Director

U.S. Customs Service

300 S. Ferry Street

Terminal Island

San Pedro, CA 90731

RE: Protest No. 2720-94-100839; TIB; 19 CFR 10.31(g); mistake of

fact; subheading 9813.00.35, HTSUS

Dear Sir or Madam:

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 protestant protests 10 entries, which consist of racing

engines. Customs computer records for the subject entries list

the dates of entry ranging from March 29, 1994 to April 27, 1994.

The dates these entries were liquidated range from July 15, 1994

to September 2, 1994. The entries were liquidated under

subheading 8407.34.45 of the Harmonized Tariff Schedule of the

United States (HTSUS), which provides for spark-ignition

reciprocating or rotary internal combustion piston engines at the

heading level.

The protestant claims that the subject entries are eligible

for duty-free treatment as temporary importations under bond

(TIB) under subheading 9813.00.35, HTSUS. The protestant argues

that the subject entries should be changed from consumption

entries to TIBs in accordance with section 10.31(g) of the

Customs Regulations (19 CFR 10.31(g)).

Protest, with application for further review (AFR), was

filed on September 20, 1994. Submitted with this protest is a

memorandum dated August 15, 1994.

The protest and AFR were denied on September 30, 1994. The

protestant requested in a letter dated November 25, 1994 that

denial of AFR be set aside in accordance with 19 U.S.C. 1515(c).

In HQ 225833 of January 6, 1995, we set aside denial of the AFR,

and this protest was forwarded to Headquarters.

The protest listed 11 entries as being protested. In a

letter dated September 21, 1994, the protestant requested that

one of the entries (X0X-XXXX733-7) be excluded from

consideration. Therefore, 10 entries are being protested.

ISSUE:

Whether the subject entries may be changed from consumption

entries to TIBs pursuant to 19 CFR 10.31(g)?

LAW AND ANALYSIS:

Initially, we note that one of the protested entries, XX4-XXXX724-1, was
entered under a TIB. Since the protestant is

requesting that the subject entries be changed to TIB entries,

there is nothing to protest concerning this particular entry.

Consequently, we will consider the protestant\'s claims for the

remaining 9 entries.

Customs has the authority to grant or deny protestable

decisions. According to 19 U.S.C. 1514(a), these include,

\"decisions of the Customs Service, including the legality of all

orders and findings entering into the same, as to \...(5) the

liquidation or reliquidation of an entry, or reconciliation as to

the issues contained therein, or any modification thereof.\"

The matter protested in the submission of September 20, 1994

concerned the liquidation of certain entries as consumption

entries under subheading 8407.34.45, HTSUS. Consequently, the

matter protested was protestable in accordance with 19 U.S.C.

1514(a)(5).

The subject entries were liquidated from July 15, 1994 to

September 2, 1994. The protest on the liquidation of these

entries was filed on September 20, 1994. Consequently, the

protest was timely filed for all of the subject entries.

Through the protest the protestant is seeking to change the

subject entries from consumption entries to TIBs. In order to

effect this change, the protestant relies on 19 CFR 10.31(g),

which states the following:

Claim for free entry under Chapter 98, Subchapter

XIII, HTSUS may be made for articles of any character

described therein which have been previously entered

under any other provision of law and the entry amended

accordingly upon compliance with the requirements of

this section, provided the articles have not been

released from Customs custody, or even though released

from Customs custody if it is established that the

original entry was made on the basis of a clerical

error, mistake of fact, or other inadvertence within

the meaning of section 520(c)(1), Tariff Act of 1930,

as amended, and was brought to the attention of the

Customs Service within the time limits of that section.

If an entry is so amended, the period of time during

which the merchandise may remain in the Customs

territory of the United States under bond shall be

computed from the date of importation\....

To enter merchandise temporarily under bond, the importer

must provide the HTSUS subheading number under which entry is

claimed. 19 CFR 10.31(a). Consequently, in order for the

protestant to change the subject entries from consumption entries

to TIBs, the protestant must show that the entries are

classifiable under a subheading providing for temporary

importation under bond.

The protestant claims that the subject entries are

classifiable under subheading 9813.00.35, HTSUS, which provides

for automobiles, motorcycles, bicycles, airplanes, airships,

balloons, boats, racing shells and similar vehicles and craft,

and the usual equipment of the foregoing; all the foregoing which

are brought temporarily into the United States by nonresidents

for the purpose of taking part in races or other specific

contests.

The subject entries consisted of racing engines for use in

Indy-style racing cars. Clearly, the racing engines would be

considered the usual equipment of automobiles. In addition, the

protestant has provided evidence that the racing engines were

used in cars for Indy-style races. Thus, the remaining issue for

meeting the terms of subheading 9813.00.35, HTSUS, is whether the

racing engines were brought temporarily into the United States by

nonresidents.

The protestant states that the subject engines were imported

after its parent company, a Japanese corporation, decided to

participate in Indy-style racing in the U.S. A new corporation

was formed, the protestant, to coordinate technical operations

for participation in the Indy-style races. The protestant was

formed as a subsidiary corporation and is an American

corporation. The protestant was listed as the importer of record

for the subject entries.

Concerning the issue of what Customs considers a nonresident

for purposes of subheading 9813.00.35, HTSUS, Customs has found,

under that subheading\'s predecessor, 864.35, Tariff Schedules of

the United States (TSUS), that nonresident refers to only

nonresident individuals or persons and not to a foreign firm or

corporation. DB 542.11 (1959). The protestant acknowledges this

position in its protest.

The protestant claims that the engines were brought into the

U.S. temporarily, which is evidenced by the fact that many had

already been shipped back to Japan at the time the protest was

filed. Concerning the issue of whether the engines were brought

in by a nonresident, the protest was denied because the importer

of record was a corporation rather than an individual. The

protestant does not dispute Customs position that for purposes of

subheading 9813.00.35, nonresident refers to individuals.

Instead, the protestant claims nonresident individuals had direct

and specific responsibility for coordinating, testing and

utilizing the subject engines. The protestant states that

approximately 20 individuals received visas to travel to the U.S.

from Japan in connection with the importation of these engines.

The protestant has provided statements from some of these

individuals concerning their activity and responsibility in

relation to the imported engines.

In a supplemental submission, the protestant explained its

position further on this matter. The protestant claims that

certain TIB provisions use the language \"imported by,\" whereas

9813.00.35, HTSUS, uses the language \"brought temporarily into.\"

The protestant claims that the difference in language shows an

intent that 9813.00.35 does not require that the merchandise be

imported by nonresidents. The protestant also argues that the

difference in language of these various TIB provisions was

originally enacted by Congress at the same time in the early

1900\'s, indicating that if a particular party were required to be

the \"importer\" Congress used the term \"imported by.\"

To accept the protestant\'s argument one must conclude that

there is a distinction between the language \"imported by\" and

\"brought temporarily into.\" We see no such distinction in the

plain meaning of the language, nor has the protestant offered any

evidence of an intent by Congress that the language mean

something other than the plain meaning.

We see no difference between the language \"imported\" and

\"brought into.\" There are numerous court cases in which

importation is defined as bringing in. For example, the court in

United States v. Estate of Boshell, 14 Ct. Cust. App. 273, T.D.

41884 (1922) stated the following:

The common ordinary meaning of the word \"import\"

is to bring in. Imported merchandise is merchandise

that has been brought within the limits of a port of

entry from a foreign country with intention to unlade,

and the word \"importation\" as used in tariff statutes,

unless otherwise limited, means merchandise to which

that condition or status has attached.

In United States v. Field & Co., 14 Cust. Appls. 406, T.D. 42052

\(1927\) the court, quoting Cunard S.S. Co. v. Mellon, 262 U.S.

100, at p. 122, stated the following:

Importation, in a like sense, consists in bringing

an article into a country from the outside. If there

be an actual bringing in, it is importation regardless

of the mode in which it is effected.

The protestant claims that because the language \"brought

into by nonresidents\" for the purpose of taking part in races,

the precursor to the current 9813.00.35, was enacted at the same

time as other TIB provisions in which the language \"imported by\"

is used, Congress intended that when \"brought into\" was used the

identity of the actual importer does not effect eligibility for

TIB treatment, whereas when the language \"imported by\" is

utilized the identity of the importer must be established to

qualify for TIB. The statute that the protestant cites was

Section IV, subsection J, subsection 4, Tariff Act of 1913, which

provided for the free importation under bond for:

machinery or other articles to be altered or repaired,

molder\'s patterns for use in the manufacture of

castings\..., models of women\'s apparel imported by

manufacturers for use as models\..., and automobiles,

motor cycles, bicycles, aeroplanes, airships, balloons,

motor boats, racing shells, teams, and saddle horses,

and similar vehicles and craft brought temporarily into

the United States by nonresidents for touring purposes

or for the purpose of taking part in races or other

specific contests.

As stated above, we see nothing in the plain meaning of the

language of this provision to differentiate importation from

bringing in. In addition, the protestant has provided no

evidence that Congress intended anything other than the plain

meaning of the language; all that the protestant has done is make

claims concerning what Congress intended. Finally, we are not

aware of any cases in which it was decided that there are

different requirements for those articles for which the language

is \"imported by\" as opposed to those articles that are \"brought

into by\" under this statute or those following it.

Finally, the protestant argues that the racing engines were

brought in by nonresidents since nonresidents were directing the

protestant\'s efforts in installation and use of the engines in

races. The language of 9813.00.35, HTSUS, is brought in by

nonresidents. As stated above \"bringing in\" is the definition of

\"importation.\" Thus a plain reading of the provision is that a

nonresident must import the merchandise. The protestant, the

importer of record, is a domestic corporation, thus it clearly

is not a nonresident.

The protestant argues that since it was nonresidents who

directed the use of the racing engines, it was nonresidents who

brought in the engines. There is no evidence that these

nonresident individuals were the importers. Just as it is the

importer who is liable for duties, 19 CFR 141.1(b), it is the

importer who is liable for failure to export a temporary

importation under bond in the required time period. Clearly, we

cannot agree that these individuals were importers of the engines

when there is no evidence of such and Customs would have no

ability to hold them liable for duties due on a consumption entry

or for failure to export on a TIB.

Even if we were to find that the racing engines were

eligible under subheading 9813.00.35, HTSUS, as TIBs, we do not

believe that the protestant has established there was a mistake

of fact. The protestant claims that the reason it entered the

racing engines as consumption entries rather than TIBs was that

it was the first time it was participating in Indy-style races

and the protestant was unaware that the engines would be shipped

back to Japan and therefore would be in the U.S. temporarily.

A mistake of fact occurs when a person understands the facts

to be other than what they really are and takes some action based

on that erroneous belief, whereas a mistake of law occurs when a

person knows the true facts of the case but has a mistaken belief

as to the legal consequences of those facts. See, e.g., 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); and PPG Industries, Inc. v.

United States, 7 CIT 118 (1984).

A mistake of fact must be manifest from the record or

established by documentary evidence. See, ITT Corp. v. United

States, 24 F. 3d 1384, 1387 (Fed. Cir. 1994), Mistakes of fact

that are not manifest from \[the\] record \... must be established

by documentary evidence.\"

In support of its claim the protestant has submitted a

letter dated September 21, 1994, from the protestant\'s Customs

Department to Customs-L.A., with an engine shipping schedule

attached. The protestant states in the letter that the engine

shipping schedule was prepared by its parent company and was

received by fax the day before the date of the letter. The

engine shipping schedule, which is dated January 21, 1994,

indicates that when it was prepared there was an intention to

ship many of the engines back to Japan after they were used in

races. The protestant argues that since its Customs Department

was not aware of this information, consumption entries were made

for the racing engines.

We do not find that the documentary evidence supports the

protestant\'s claim. The purported faxed copy of the engine

shipping schedule has no date showing when it was faxed. In

addition, the protestant first brought to Customs attention the

purported mistake of fact in a memorandum dated on August 15,

1994\. This indicates that the protestant was aware that the

engines would be shipped back to Japan prior to the date the

engine shipping schedule was faxed to the protestant.

Finally, as stated earlier, one of the entries which the

protestant is protesting was actually a TIB. This indicates that

the protestant was aware of the information concerning the racing

engines but made a decision that the remaining entries were not

eligible for TIB. In Universal Cooperatives, Inc., v. United

States, 13 CIT 516, 715 F. Supp. 1113 (1989), the court

distinguishes between decisional mistakes, \"in which a party may

make the wrong choice between two known alternative set\[s\] of

facts\" (a mistake of law), and ignorant mistakes, \"in which a

party is unaware of the existence of the correct alternative set

of facts\" (a mistake of fact). Based on the foregoing, the

protestant appeared to choose the alternative of entering the

engines as consumption entries, rather than as TIBs, a decision

made not on ignorance of the facts. Such a decision would be a

mistake of law and not a mistake of fact. Consequently, even if

the subject merchandise were eligible for TIB, we would find no

mistake of fact was present.

HOLDING:

The protest to change consumption entries to TIBs under

19 CFR 10.31(g) is DENIED, since the subject entries are not

eligible for TIB treatment under 9813.00.35, HTSUS.

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 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 Rulings Module in ACS and the public

via the Diskette Subscription Service, Freedom of Information Act

and other public access channels.

Sincerely,

Director, International Trade

Compliance Division