HQ 227609

February 24, 1998

LIQ-4-01-LIQ-9-01-RR:IT:EC 227609 IOR

CATEGORY: Liquidation

Port Director

U.S. Customs Service

2350 N. Sam Houston Parkway East

Suite 1000

Houston, TX 77032

RE: Application for further review of protest no. 5301-95-100027;
antidumping duty; certificate of reimbursement;

interest; 19 U.S.C. §1520(c)(1); 19 CFR 353.26; 19 U.S.C.

1677g; mistake of law

Dear Sir:

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 concerns entry no. 201-xxxx481-2, filed on March 12,

1990, for nitrocellulose imported from Japan on February 21,

1990, by Biachem USA, Inc. (Biachem). The protestant acted as

surety for the entry.

The imported merchandise was the subject of an antidumping

investigation (A-588-812) (Federal Register of October 17, 1989

(54 FR 42536)). In a notice of preliminary determination

(Federal Register of March 5, 1990 (55 FR 7762)), Customs was

directed to suspend liquidation of all entries of such

merchandise that are entered, or withdrawn from warehouse, for

consumption, on or after the date of publication, March 5, 1990.

Customs was also directed to require a cash deposit or posting of

a bond equal to the estimated preliminary dumping margin of 66%.

A final determination was published in the Federal Register on

May 22, 1990 (55 FR 21054), pursuant to which Customs was

directed to continue to suspend liquidation of entries of the

merchandise. On July 10, 1990, in an Antidumping Duty Order, the

International Trade Administration (ITA) published a

determination in the Federal Register (55 FR 28268) that

importations of the merchandise materially injure a U.S. industry

and Customs was directed to require a cash deposit equal to the

estimated weighted-average antidumping duty margin of 66%.

There were two Customs bonds posted for the subject entry, an

entry bond in the amount of the declared value of the imported

merchandise, and an antidumping bond in the amount of 66% of the

declared value. The protestant was the surety. The file

contains an Entry/Immediate Delivery form (CF 3461) dated

February 28, 1990, with respect to the subject entry . The

applicant on the form is indicated to be the importer of record

of the entry, however, the importer and importer number

identified on the CF 3461, is the party identified as the Customs

broker on the CF 7501.

On August 20, 1991, upon receiving instructions from the

Department of Commerce, the instructions were issued by Customs

telex (No. 1232111, Subject: Antidumping Duties) advising that

the Department of Commerce had not received a request for an

administrative review of the antidumping duty finding/order for

certain periods on merchandise listed in the telex. Customs

officers were directed to assess antidumping duties on

merchandise entered, or withdrawn from warehouse, for consumption

during the periods listed in the telex at the cash deposit or

bonding rate required at the time of entry. The instructions for

the merchandise under consideration were to \"liquidate all

entries for all firms \[for the\] period \[of\] 03\\05\\90 -
06\\30\\91.\"

The August 20, 1991 telex also states that assessment of dumping

duties requires of the importer the reimbursement statement

described in 19 CFR 353.26 and that prior to appraisement and

liquidation such a statement must accompany each entry on which

duty is to be assessed. With respect to interest, the telex

states that \"no interest should be collected on entries, filed

prior to publication of the antidumping duty order, for which

only bonds, and no cash deposits, were posted.\"

By letter dated May 18, 1992, to Biachem, addressed to the

address that appears on the CF 7501 for Biachem, and which is in

Customs Automated Commercial System (ACS) records for Biachem,

Customs requested Biachem to complete and return a reimbursement

certificate. The letter included a copy of the regulations

requiring the reimbursement, and information to include in such

certification. The information includes the \"date of

publication\" as 3/5/90, and the \"date of final determination\" as

5/22/90. The letter requested that the reimbursement certificate

be returned to Customs within five working days of the receipt of

the request.

On July 27, 1992, Customs sent a Notice of Action (CF 29) to

Biachem. The notice stated that the subject entry is in the

liquidation process and will be liquidated at the 66% cash

deposit/bond rate in effect at the time of entry. In addition,

the notice stated:

On 5/18/92 we sent you a request for an

antidumping reimbursement statement. To this date we

have received no response. Your failure to file the

certificate leads us to presume that reimbursement of

dumping duties has taken place. As a result an

additional assessment in the amount of the antidumping

duties has been assessed.

The subject entry was liquidated on September 4, 1992, with an

increase in the antidumping duties in the total amount of

\$44,173.00 (representing the additional assessment equal to the

total dumping duties deposited, on the basis that the

reimbursement notice was not returned to Customs, as provided for

in the above-referenced notices from Customs) for the protested

entry. Demand for payment of the increased antidumping duty (the

\$44,173.00, plus \$15,158.40 in interest) was made on the

protestant surety on December 12, 1992. According to the

protestant, the increase in antidumping duty was paid by the

surety on April 13, 1993. According to Customs records, payment

was made on the antidumping bond posted with the entry summary.

No separate payment for the increased antidumping duty assessment

has been made.

On June 18, 1993, the protestant filed with Customs a petition

for reliquidation under 19 U.S.C. §1520(c)(1), claiming mistakes

of fact. As grounds for the petition, the protestant claims that

1\) the reimbursement presumption is rebutted by virtue of a

reimbursement certification from the importer attached to the

petition, 2) the reimbursement presumption is not applicable to

the subject entry because the merchandise was purchased before

the date of publication suspending liquidation and exported

before the date of final determination, and 3) interest was

improperly assessed because the importer did not make a cash

deposit to secure the antidumping duties, but posted a bond to

secure payment. The only allegation of any mistake is that

\"Customs made a mistake of fact as to the type of security

deposited by the importer for estimated dumping duties.\"

Accompanying the petition is an undated certificate of

reimbursement purported to be signed by a Biachem company

officer. The only date appearing on the document is the

facsimile produced date of June 15, 1993. According to the

supervisory import specialist handling the file, the

reimbursement certificate had not been submitted to Customs prior

to the filing of the 1520(c)(1) petition.

An addendum to the June 18, 1993 petition, dated June 22, 1993

was submitted to Customs. The addendum further describes the

mistakes of fact alleged:

Surety respectfully submits that this case clearly

involves two mistakes of facts and one instance of

other inadvertence by the United States Customs

Service. As is described in surety\'s original

petition, the Customs Service was mistaken as to the

fact that the importer was not reimbursed by any party

for antidumping duties. The fact is that the importer

has submitted a reimbursement statement certifying that

no reimbursement occurred. Consequently, the entry

should be reliquidated without the imposition of double

the antidumping duties for failure to submit a

reimbursement statement. (Emphasis supplied).

The second mistake of fact concerned the type of

security posted by the importer to secure the estimated

antidumping duties. Surety submits that Customs

mistakenly believed a cash deposit was made otherwise

it would not have charged interest. It is unlawful to

charge interest on a bond. Since the importer posted a

bond to secure antidumping duties, reliquidation of

this entry without the imposition of interest would

correct this error.

Finally, inadvertence by the Customs service,

namely failing to provide notice to the actual importer

that a reimbursement statement was required in this

case, detrimentally affected the importer.

The addendum goes on to describe that the CF 7501 has notations

that a phone number for Biachem could not be located, that

Biachem has a telephone listing in a town other than the one

shown on the CF 7501 and Customs records, and that the name of

the ultimate purchaser noted on the CF 7501, is for someone with

no knowledge of the import transaction.

The petition for reliquidation was denied on October 24, 1994 on

the grounds that no clerical error or other inadvertence

correctable under 19 U.S.C. §1520(c)(1) has occurred. A section

520(c) routing and recommendation sheet completed by the

concerned import specialist, apparently completed on June 24,

1993, includes a handwritten note of May 2, 1994, that with

respect to the allegation of mistake of fact regarding the

interest:

I read interest statement in item 6 of liquidation

instructions - \"publication of the antidumping duty

order\" to correspond to \"date of publication - 3/5/90\"

appearing on letter to Biachem of 5/18/92. Since entry

date is 3/12/90 interest would apply.

A protest of the denial of the 1520(c) petition was filed by the

protestant surety on January 13, 1995. The additional

allegations of mistake of fact, are that there was a mistake of

fact as to the date of exportation of the subject merchandise and

the date of final determination, and that the presumption of

reimbursement is not applicable to the facts.

Further review for the protest was requested and granted.

ISSUE:

Whether the petition under 19 U.S.C. §1520(c)(1) should be

granted?

LAW AND ANALYSIS:

Initially we note that this protest was timely filed pursuant to

19 U.S.C. §1514(c)(3). The date of decision to deny

reliquidation under 19 U.S.C. §1520(c)(1), was October 24, 1994

and the protest was filed on January 13, 1995. In addition, the

refusal to reliquidate an entry under 19 U.S.C. §1520(c)(1) is a

protestable matter pursuant to 19 U.S.C. §1514(a)(7).

Under 19 U.S.C. §1514(c)(2), a decision of a Customs officer as

to charges or exactions on imported merchandise is conclusive

against, among others, a surety on an import bond unless the

affected surety files a protest of that decision within 90 days

from the mailing by Customs of a \"notice of demand for payment.\"

See e.g., American Motorists Insurance Co., v. United States, 14

CIT 298, 737 F. Supp. 648 (1990). As the entry was liquidated on

September 4, 1992, and the notice of demand for payment was

mailed to the surety on December 12, 1992, the protestant

surety\'s right to protest the liquidation of the entry, expired

90 days from the mailing of the notice of demand. The surety

failed to file a timely protest of the liquidation, under 19

U.S.C. §1514, therefore the liquidation of the subject entry is

final.

19 U.S.C. §1520(c)(1) is an exception to the finality of §1514.

Under §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. The error

must be adverse to the importer and manifest from the record or

established by documentary evidence and brought to the attention

of the Customs Service within one year after the date of

liquidation. The relief provided for in 19 U.S.C. 1520(c)(1) is

not an alternative to the relief provided for in the form of

protests under 19 U.S.C. 1514; section 1520(c)(1) only affords

\"limited relief in the situations defined therein\" (Phillips

Petroleum Company v. United States, 54 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);

see also, Computime, Inc. v. United States, 9 CIT 553, 555, 622

F. Supp. 1083 (1985), and Concentric Pumps, Ltd. v. United

States, 10 CIT 505, 508, 643 F. Supp. 623 (1986)).

The protestant essentially alleges that customs made mistakes of

fact and inadvertences in requiring a reimbursement certificate,

relying on the presumption of reimbursement, failing to notify

the importer about the need for a reimbursement certificate, and

in assessing interest when a bond was deposited in lieu of cash.

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.\" PPG Industries, Inc. v. United

States, 7 CIT 118, 124 (1984). A \"mistake of fact\" has been

described as \"a mistake which takes place when some fact which

indeed exists is unknown, or a fact which is thought to exist, in

reality does not exist.\" C.J. Tower & Sons of Buffalo, Inc. v.

United States, 68 Cust. Ct. 17, 22; C.D. 4327, 336 F. Supp. 1395,

1399 (1972), aff\'d 61 CCPA 90, C.A.D. 1129, 499 F.2d 1277 (1974).

A mistake of fact has also been defined as any mistake except a

mistake of law. A mistake of law exists where a person knows the

facts as they really are but has a mistaken belief as to the

legal consequences of those facts. Inadvertence is a somewhat

broader term, and has been defined as \"an oversight or

involuntary accident, or the result of inattention or

carelessness, and even as a type of mistake.\" Id.

In order to qualify for relief under §1520(c)(1), it must be

established that there was an error or mistake (i.e., in this

case it must be established that the assessment of double

antidumping duty and assessment of interest at liquidation was

incorrect). The protestant must also establish that the alleged

errors were due to 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.

With respect to the assessment of double antidumping duties

pursuant to Commerce Regulations 353.26 (19 CFR 353.26), we do

not believe that an error or mistake has been established. The

regulation provides as follows with respect to the reimbursement

certificate:

\(a\) In general.(1) In calculating the United States

price, the Secretary will deduct the amount of any

antidumping duty which the producer or reseller:

\(i\) Paid directly on behalf of the importer;

or

\(ii\) Reimbursed to the importer.

\(2\) The Secretary will not deduct the amount of the

antidumping duty paid or reimbursed if the producer or

reseller granted to the importer before initiation of

the investigation a warranty of nonapplicability of

antidumping duties with respect to the merchandise

which was:

\(i\) Sold before the date of publication of

the Secretary\'s order suspending liquidation;

and

\(ii\) Exported before the date of publication

of the Secretary\'s final determination.

Ordinarily, the Secretary will deduct for

reimbursement of antidumping duties only once

in the calculation of the United States

price.

\(b\) Certificate. The importer shall file prior to

liquidation a certificate in the following form with

the appropriate District Director of Customs:

I hereby certify that I (have) (have not)

entered into any agreement or understanding

for the payment or for the refunding to me,

by the manufacturer, producer, seller, or

exporter, of all or any part of the

antidumping duties assessed upon the

following importations of G7T2XXXX

(commodity) from G7T2XXXX (country): (List

entry numbers) which have been purchased on

or after G7T2XXXX (date of publication of

notice suspending liquidation in the Federal

Register) or purchased before G7T2XXXX (same

date) but exported on or after G7T2XXXX (date

of final determination of sales at less than

fair value).

\(c\) Presumption. The Secretary may presume from an

importer\'s failure to file the certificate required in

paragraph (b) that the producer or reseller paid or

reimbursed the antidumping duties.

The regulations provide that the Secretary of Commerce may

presume from the importer\'s failure to file the reimbursement

certificate, that payment or reimbursement of the antidumping

duties occurred, and thus the Secretary is required to deduct the

amount of payment or reimbursement from the United States price

(this amounts to a doubling of the antidumping duty). Paragraph

\(b\) above specifically requires the reimbursement certificate to

be filed prior to liquidation. In this case, a reimbursement

certificate was not filed with Customs prior to liquidation.

Therefore, Customs was correct in deducting the amount of

presumed reimbursement from the United States price which

resulted in a doubled antidumping duty.

The protestant has not presented any support for the position

that the presumption should not be applied in this case. The

mere assertion that ultimately a reimbursement certificate was

completed is insufficient to defeat the presumption in the

regulation. Even if Customs were to take the position that the

presumption should not have been applied, the protestant has not

established that the application of the presumption was due to a

mistake of fact, clerical error or inadvertence. Unlike in

Aviall of Texas v. United States, 70 F.3d 1248 (Fed. Cir. 1995),

cited by protestant, there is no allegation in this case that the

importer believed that a reimbursement certificate had been

filed. The only allegation here is that Customs was mistaken

because the importer was not reimbursed for antidumping duties.

The cause of the assessment of double antidumping duties was not

Customs belief, but the lack of a timely filed reimbursement

certificate.

Protestant cites HQ 220397, dated March 12, 1991 in support of

its position. In HQ 220397, Customs found a mistake of fact

existed when a Customs officer had been unaware at the time of

liquidation that a license requirement to substantiate a duty

free entry had been waived by Presidential Proclamation. Customs

found that:

The Customs official\'s belief concerning the existence

of an Energy license is a mistake of fact; but for the

missing import license, the entry would have been

liquidated by Customs as free of duty. The

impossibility of obtaining such a license is the very

reason for the importer\'s noncompliance with the

headnote and regulations.

The same cannot be said in the instant case. In this case,

belief about reimbursement did not cause Customs to apply 19 CFR

353.26(c). The double antidumping duties were correctly assessed

because of the importer\'s failure to timely file a reimbursement

certificate. Protestant also cites HQ 223160, dated September

13, 1991. In HQ 223160, a mistake of fact was found where a

Customs officer was unaware of the existence of an outstanding

countervailing duty case, and that mistake caused the error in

liquidation. In the instant case, as stated above, the alleged

mistake as to the lack of reimbursement was not the cause of the

alleged error in liquidation.

The protestant makes an alternative argument that the requirement

of a reimbursement certificate was erroneously applied in this

case, as the subject merchandise was purchased before the date of

notification of suspension of liquidation and was exported before

the date of final determination. While the date of purchase by

the importer is not clear from the documents, the invoices show

that the merchandise was purchased by the ultimate consignee on

February 5, 1990 (before the suspension of liquidation on March

5, 1990), and the CF 7501 shows the export date of the

merchandise as February 8, 1990, and the import date as February

21, 1990 (before the final determination date of May 22, 1990).

The above quoted regulations, 19 CFR 353.26(a)(2), specifically

provide for the instance in which merchandise is purchased prior

to the date of the order suspending liquidation, and is exported

before the date of publication of the final determination. The

regulations specify that the amount of the antidumping duty paid

or reimbursed will not be deducted, if a warranty of

nonapplicability of antidumping duties with respect to the

merchandise is granted by the producer or reseller to the

importer. No such warranty is alleged to have been granted in

this case. Therefore, the fact that the dates of purchase and

exportation of the merchandise may have occurred outside of the

dates specified in the reimbursement certificate does not make

the deduction of reimbursed or paid antidumping duties erroneous.

Further, as the export and import dates are included on the CF

7501, and there is no allegation that Customs made any mistake as

to the dates, no mistake of fact is manifest from the record.

Protestant alleges an inadvertence with respect to the

reimbursement certificate, by Customs failure to locate a

telephone number for Biachem. This argument ignores the fact

that the address to which Customs wrote requesting a

reimbursement certificate was the same one that was shown on the

CF 7501 and in Customs ACS records. The protestant has not

presented any evidence that the address was wrong, which would

support an allegation that Customs believed in the existence of

an address which in reality did not exist. Instead it is alleged

that Customs believed that Biachem had a telephone number in

Atlanta, when it did not, but had a telephone number in Norcross,

Georgia. This allegation does constitute a mistake of fact,

however, it is not a mistake of fact that caused the assessment

of double antidumping duties. There is no requirement that

Customs notify the importer about the need for a reimbursement

certificate. The notification provided by Customs is a courtesy

and attempt to reduce protests on the issue. In a June 5, 1991

letter from the Department of Commerce, to Customs, it was

stated:

When the deadline for filing the reimbursement

certificate has not yet passed (e.g\....liquidation), I

would propose that Customs attempt to notify the

importer that a certificate has not been filed prior to

assessing double antidumping duties on such entries.

While notification is not required by the regulations,

I believe it would ensure greater cooperation with the

reimbursement certificate requirement and reduce

protests in this area\....

A mistake of fact as to the location of the importer may have

caused the failure to notify or inability to notify the importer

of the reimbursement certificate, however it did not directly

cause the assessment of double antidumping duties. The filing of

the reimbursement certificate is a requirement imposed upon the

importer and is the importer\'s responsibility, whether or not the

importer received a notice or reminder from Customs. It was the

failure to timely file such certificate that directly caused the

assessment of double antidumping duties, not the alleged mistake

with regard to the location of the importer\'s place of business.

Finally, the protestant alleges that Customs made a mistake as to

the type of antidumping duty security deposited by the importer,

stating that since a bond was posted, no interest should have

been assessed under Timken Co. v. U.S., 37 F.3d 1470 (Fed. Cir.

1994). The provision under which interest was assessed is 19

U.S.C. §1677g:

\(a\) General rule

Interest shall be payable on overpayments and

underpayments of amounts deposited on merchandise

entered, or withdrawn from warehouse, for consumption

on and after\--

\(1\) the date of publication of a

countervailing or antidumping duty order

under this title or section 303 \[19 U.S.C. §

1303\],\...

We agree that interest should not have been assessed on the

antidumping duties, as the entry was made prior to the date of

publication of the antidumping duty order. See, Timken, supra.

The import specialist liquidating the entry, specifically

followed the liquidation instructions in the August 20, 1991

telex. In applying the instructions, the import specialist

referred to the dates he had written on the May 18, 1992 letter

to the importer requesting the reimbursement certificate. The

import specialist interpreted the instruction phrase \"publication

of the antidumping duty order\" to mean the date of publication of

the notice to suspend liquidation, March 5, 1990. As this date

was prior to the date of entry, March 12, 1990, and the

instructions were that \"no interest should be collected on

entries filed prior to publication of the antidumping duty order,

for which only bonds, and no cash deposits, were posted\", the

import specialist believed that interest should be collected on

entries filed after March 5, 1990 (the date of publication the

import specialist believed the instructions referred to). The

import specialist knew that a bond had been posted. The mistake

here, is that the import specialist confused the date of

publication of the notice of suspension of liquidation (March 5,

1990\) and the date of publication of the antidumping duty order

(July 10, 1990). Had he applied the July 10, 1990 publication

date, no interest would have been assessed. The issue is whether

the import specialist\'s mistake as to the applicable date is a

mistake of fact correctable under 19 U.S.C. §1520(c)(1).

We conclude that the mistake as to the consequences of the date

is a mistake of law. The import specialist had before him the

date of publication of the notice to suspend liquidation, the

date of publication of the antidumping duty order and the date of

entry. In applying the liquidation instructions, the import

specialist had a mistaken belief as to the legal consequences of

each date and the distinction between the two dates. In other

words, he had the facts of the dates of publication and the date

of entry, but was unaware of their legal consequences with

respect to the assessment of interest. Any error in the

liquidation instructions is a mistake of law, as they incorrectly

apply the law. There is no evidence that any clerical error

occurred in the typing of the telex, and we do not believe that

any error in the telex directly resulted in the assessment of

interest, given the mistake made by the import specialist.

In support of the petition for reliquidation, the protestant

cites HQ 224118, dated July 26, 1993, in which a computer data

error, which caused cost data submitted to Customs to be

incorrect. The computer data error was determined to be a

clerical error, mistake of fact or other inadvertence. Unlike in

HQ 224118, there is no evidence of any erroneous data in this

case. Similarly, in HQ 221080, dated February 4, 1991, a

clerical error or other inadvertence were found when the evidence

presented showed the intent of the importer to include an entry

number in a statement required for duty free treatment. In this

case, no such evidence has been presented.

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. Notice of a

clerical error, mistake of fact, or other inadvertence includes

asserting the existence of a clerical error, mistake of fact, or

other inadvertence \"with sufficient particularity to allow

remedial action.\" In this case, the protestant has failed to

meet the notice requirement, as no mistake of fact or

inadvertence which directly caused the incorrect liquidation has

been asserted. Consequently, there has been no basis presented

for reliquidating the subject entry pursuant to 19 U.S.C.

§1520(c)(1). The protestant\'s claim was therefore correctly

denied.

Finally, in C.J. Tower, supra, the U.S. Court of Customs and

Patent Appeals found a mistake of fact existed where neither the

importer nor Customs was aware that the merchandise under

consideration was emergency war materials entitled to duty-free

entry under a separate item of the tariff schedule until after

liquidation. In C.J. Tower, neither the importer nor Customs was

aware that the merchandise was emergency war materials entitled

to duty-free entry, until after the liquidations became final.

In this case, there is no allegation or evidence that the surety

was unable to protest the liquidation of the entries within 90

days of the mailing of the notice of demand for payment.

HOLDING:

The protestant has not established a mistake of fact in the

liquidation of the subject entry, and reliquidation of the entry

is not permissible pursuant to 19 U.S.C. §1520(c)(1).

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 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,

Commercial Rulings

Division