HQ 224385

May 24, 1993

LIQ-9-01-CO:R:C:E 224385 JRS

CATEGORY: Liquidation/Protest

District Director of Customs

ATTN: District Protest Review Officer

111 West Huron Street

Buffalo, New York 14202

RE: Application for Further Review of Protest No. 0901-92-101702;

One-year time requirement for filing a petition under 19 U.S.C.

1520(c)(1) statutorily mandated; Bill for duties is not \"exaction\"

within 19 U.S.C. 1520(c)(1); Denial of duty-free treatment for

\"Amercian goods returned\" provision is not a correctable error

under 19 U.S.C. 1520(c)(1); mistake of law

Dear Sir:

This is in response to your above-referenced protest which we

received in this office for further review on December 29, 1992.

We have considered the points raised and our decision follows.

FACTS:

Protestant, the importer\'s broker, is seeking reliquidation

of the subject entries under 19 U.S.C. 1514(a)(7) by contesting

the district director\'s denial of its 19 U.S.C. 1520(c) claim on

the grounds of untimeliness. The facts as we understand them

follows.

On January 2, 1991, 185 drums of metasol TK 100 powder were

imported by the broker on behalf of the Canadian exporter. The

broker filed the consumption entry for these goods on January 15,

1991, under subheading 9801.00.1035/free, Harmonized Tariff

Schedule of the United States (HTSUS), as U.S. goods returned

without having been advanced in value or improved in condition

while abroad, claiming that the material being returned to the

United States was \"not as ordered.\"

After finding that the U.S. address on the labels was

insufficient evidence of U.S. origin because the drums were not

labeled as \"Made in the U.S.A.,\" Customs issued on February 8,

1991, a request for information to the broker on the proof of U.S.

origin in accordance with 19 CFR 10.1; however, it was stated in

that request that Customs may consider other documents such as

Shipper\'s Export Declaration (CF 7525V), Certified Copy of Canada

Customs Inward Manifest (E29B), Foreign Customs Invoice and

Validated Copy of Foreign Entry, a Statement of the Person or Firm

that Produced the Merchandise in the U.S., Specifying the Plant

Location(s) or, U.S. Exporter\'s Commercial Invoice.

The protestant alleges that on March 21, 1991, it sent a copy

of the sales invoice between the U.S. exporter (manufacturer) and

the Canadian exporter (protestant\'s client) and a copy of the

credit note issued to the Canadian exporter by the U.S. exporter

authorizing the return of the merchandise. The case file does not

contain a copy of the documents which were allegedly sent to

customs in response to the request for information; also, no such

documents were attached to the entry summary in the case file.

However, these documents, evidencing a \"fax code\" date of \"June XX

(illegible), 1992\" at the top margin, were attached to the

1520(c)(1) petition.

In early April 1991, Customs issued a Notice of Action (CF

29\) reclassifying the goods under subheading 2934.90.1200, HTSUS,

at 11.1 percent duty rate. Upon receipt of the CF 29, the Canadian

exporter sent to the U.S. exporter (manufacturer) a partially

completed CF 3311 for completion. The U.S. exporter failed to

complete the form and return it to the Canadian exporter for its

further submission to Customs.

On May 24, 1991, Customs liquidated the entry under subheading

2934.90.1200, HTSUS, with an assessment made that additional duties

were due in the amount of \$13,088.29. A bill for these duties was

generated on July 1, 1991.

On June 24, 1992, the broker filed a petition under 19 U.S.C.

1520(c)(1) requesting that the entry be reliquidated under

subheading 9801.00.10, HTSUS, as \"United States goods returned\"

and duties paid refunded as an \"excess deposit\" under 19 U.S.C.

1520(a)(1). Enclosed with the petition was documentary evidence

consisting of a completed CF 3311, a copy of a Canadian Entry, and

the commercial invoice evidencing the import into Canada from the

United States and indicating the country of origin as the United

States. The petitioner\'s arguments are essentially twofold:

\(1\) that the failure of the U.S. exporter to submit the

necessary CF 3311 to the petitioner was merely a clerical error or

other inadvertence. The petitioner asserts that this was clerical

error because the U.S. exporter\'s employee responsible for

completing the form had left the company and no further action was

taken, and as such, the failure of the U.S. exporter\'s employee to

complete the CF 3311 and return it was out his (the petitioner\'s)

control; and

\(2\) that a mistake of fact occurred because the goods are in

fact of U.S. origin as established by the documentary evidence

provided with the petition and should have been given duty-free

treatment. Additionally, petitioner alleges that a mistake of fact

occurred on U.S. Customs behalf because the exporter\'s commercial

invoice was submitted in response to the initial request for

information.

On September 17, 1992, Customs denied the request to

reliquidate because the petition was not received within one year

of the date of liquidation as required by statute. On October 21

1992, the broker filed a timely protest under 19 U.S.C. 1514(a)(7)

against Customs refusal to reliquidate the entry under 19 U.S.C.

1520(c). In the protest, the broker\'s position is that a valid

section 1520(c) claim was made on June 24, 1992, because Customs

billed (exacted) for additional duties on July 1, 1991, and that

the one-year time period under 19 U.S.C. 1520(c)(1) would thus not

expire until June 30, 1992.

ISSUES:

\(1\) Whether the petition filed under 19 U.S.C. 1520(c)(1) in

this case was untimely.

\(2\) Whether the denial of duty-free treatment under the

\"American goods returned\" provision of subheading 9801.00.10,

HTSUS, is correctable under 19 U.S.C. 1520(c)(1) as a mistake of

fact.

LAW AND ANALYSIS:

Section 514 of the Tariff Act of 1930, as amended, 19 U.S.C.

1514, sets forth the proper procedure for an importer to protest

the classification and appraised value of its merchandise when it

believes Customs has misinterpreted the applicable law and

incorrectly classified the imported merchandise. A protest must

be filed within 90 days after notice of liquidation or

reliquidation. 19 U.S.C. 1514(c)(2). Otherwise, failure to file

a timely protest renders the liquidation binding on the importer

and government.

Section 520(c)(1) of the Tariff Act of 1930, as amended, 19

U.S.C. 1520(c)(1) is an exception to the finality of section 514.

19 U.S.C. 1520(c)(1) provides that 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, adverse

to the importer and manifest from the record or established

by documentary evidence, in any entry, liquidation, or other

customs transaction, when the error, mistake, or inadvertence

is brought to the attention of the appropriate customs officer

within one year after the date of liquidation or exaction;

19 U.S.C. 1520(c)(1)(Emphasis added.)

This reliquidation provision, however, is not intended to be

a simple alternative for importers who fail to file timely

protests. 19 U.S.C. 1520(c)(1) \"is not remedial for every

conceivable form of mistake or inadvertence adverse to an importer

but rather the statute offers \'limited relief\'.\" Godchaux-

Henderson Sugar Co., Inc. v. United States, 85 Cust. Ct. 68, 74,

C.D. 4874, 496 F. Supp. 1326 (1980).

We reject the protestant\'s contention that the applicable time

period for filing a section 1520(c)(1) petition commences on the

billing date, which protestant coins as a \"final exaction,\" rather

than the date of liquidation, which is the date the bulletin notice

of liquidation is posted in the customhouse. In Penrod Drilling

Co. v. United States, 13 CIT 1005, 1009, 727

F. Supp. 1463 (1989), the plaintiff (importer) asked the court to

treat the date of the receipt of the Customs bill as the proper

date of notice of liquidation (i.e., 42 days after the date the

bulletin notice was posted). The court rejected this argument as

untenable. It is well-settled that proper notice of liquidation

refers to the bulletin notice of liquidation as the only notice

that is statutorily mandated. Goldhofer Fahrzeugwerk GmbH & Co.

v\. United States, 13 CIT 54, 706 F. Supp. 892, aff\'d, 885 F.2d 858

(Fed. Cir. 1989). If proper notice is given, there is no basis of

extending the period in which a party may file a protest.

Tropicana Products, Inc. v. United States, 13 CIT 390, 395, 713 F.

Supp. 415 (1989).

Protestant\'s argument that the Customs bill is a \"final

exaction,\" and therefore, the one-year time period runs from that

date (July 1, 1991) lacks merit because the bill is merely the

means by which the amount of duties owing on the liquidated entry

is collected by Customs. \"Charges\" and \"exactions\" are viewed by

the court to be \"actual assessments of specific sums of money

(other than ordinary customs duties) on imported merchandise.\"

Alberta Gas Chemicals, Inc. v. Blumenthal, 82 Cust. Ct. 77, 81-2,

C.D. 4792, 467 F. Supp. 1245, 1249-50 (1979). By reading the plain

language of the statute cited by the protestant (19 U.S.C. 1520(a)

and (c)), a charge or exaction is distinct from \"duties and taxes.\"

Congress thus did not intend that ordinary customs duties on

imported merchandise be considered a charge or exaction. Please

note that the term \"exaction\" involves only those situations where

there is a demand for or the compelling of payment. See

Carlingswitch, Inc. v. United States, 85 Cust. Ct. 63, C.D. 4873,

500 F. Supp. 223 (1980), aff\'d, 68 CCPA 49, C.A.D. 1264, 651 F.2d

768 (1981).

Since the Customs bill is not an exaction within the meaning

of 19 U.S.C. 1520(a)(2) or (c)(1), the applicable time period for

filing a petition under 19 U.S.C. 1520(c)(1) expired in this case

on May 23, 1992, one year after the posting of the notice of

liquidation on May 24, 1991, regardless of when the bill for

additional duties payable may have been generated. 19 CFR 159.9.

It is our opinion that the Customs district office was correct in

finding that the 1520(c)(1) petition was untimely filed. As the

procedural requirements of the 19 U.S.C. 1520(c)(1) has not been

met, the protest must be denied.

For the sake of argument, however, even assuming that the

1520(c)(1) petition was timely filed, we do not find any clerical

error, mistake of fact or other inadvertence which is correctable

under 19 U.S.C. 1520(c)(1) since the protestant has also failed in

satisfying the first two conditions listed below. As stated by the

Court of International Trade in PPG Industries, Inc. v. United

States, 7 CIT 118, 124 (1984), three conditions must be satisfied

under 19 U.S.C. 1520(c)(1): 1) a mistake of fact must exist; 2)

the mistake of fact must be manifest from the record or established

by documentary evidence; and 3) the mistake of fact must be brought

to the attention of the Customs Service within the time

requirements of the statute.

Correctable errors under section 1520(c)(1) are defined in

T.D. 54848. See 94 Treas. Dec. 244 (1959). A mistake of fact

occurs when a person believes the facts to be other than what they

really are and takes action based on that erroneous belief. The

reason for the belief may be that a fact exists but is unknown to

the person or he may believe that something is a fact when in

reality it is not. Clerical error occurs when a person intends to

do one thing but does something else, including mistakes in

arithmetic and the failure to associate all the papers in a record

under consideration. Inadvertence connotes inattention, oversight,

negligence, or lack of care. These errors are not necessarily

mutually exclusive. However, errors in the construction of a law

are not correctable under this section. Those occur when a person

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

legal consequences of those facts and acts on that mistaken belief.

See 94 Treas. Dec. 244, 245-246 (1959). The Customs Service has

held that the submission of incorrect or incomplete documentation

and the failure to submit, or late submission, of \"correct\"

documentation are not correctable errors under 19 U.S.C.

1520(c)(1). See HQ 222610, dated November 7, 1990; HQ 221590,

dated October 30, 1989; and HQ 221680, dated October 16, 1989.

The protestant\'s allegation that a mistake of fact existed as

to the U.S. origin of the merchandise is simply rejected because

it does not fall within definitional meaning of a mistake of fact

as defined above. Both the Customs officer and the importer were

aware that the origin of the goods was in question. The importer

himself knew the goods\' true origin but he failed to present the

proper documentation establishing that fact at the time of entry

to Customs.

The petitioner also alleges that a mistake of fact occurred

on U.S. Customs behalf because the exporter\'s commercial invoice

was submitted in response to the initial request for information.

From the case file, it is unclear what documentation was actually

presented in response to Customs\' informational request. Assuming

that the invoice was actually submitted to Customs, the import

specialist made a legal determination as to the classification of

the merchandise on the basis of the documentation provided when he

rejected the duty-free claim. Even if the import specialist erred

in thinking the commercial invoice insufficient proof for U.S.

origin, an erroneous classification of merchandise is not remedial

as a clerical error, mistake of fact or inadvertence under 19

U.S.C. 1520(c)(1), as it is a conclusion of law which may only be

corrected by the filing of a protest. Cavazos v. United States,

9 CIT 628, 631 (1985); Mattel, Inc. v. United States, 72 Cust. Ct.

257, 262, C.D. 4547, 377 F. Supp. 955, 960 (1974).

We reject protestant\'s argument that its inability to obtain

the necessary certification from the U.S. manufacturer for its

\"American goods returned\" claim was a result of clerical error or

other inadvertence because the actions of the responsible employee

of the U.S. manufacturer was out of its control. In Occidental Oil

& Gas Co. v. United States, 13 CIT 244 (1989), the court addressed

the question of whether the delay by the plaintiff in obtaining

certain documents to support its \"American goods returned\" claim

for duty-free entry of oil well equipment was an error remediable

under 19 U.S.C. 1520(c)(1). In that case, the plaintiff was aware

at the time of entry and liquidation that the documents requested

by Customs were missing and the plaintiff failed to obtain the

necessary manufacturer\'s affidavit in a timely manner. The court,

following Cavazos, supra, stated that the plaintiff\'s allegation

of a mistake of fact or inadvertence was actually a challenge to

the legal conclusion of the Customs Service, and held that the

proper course of action was to challenge the classification of the

merchandise as dutiable through a protest under 19 U.S.C. 1514

within 90 days of the liquidation. The court also found that the

delay was not mere inadvertence correctable under 19 U.S.C.

1520(c)(1).

We find that the outcome in this case is controlled by

Occidental, supra and Cavazos, supra. The denial of duty-free

treatment under the \"American goods returned\" provision of

subheading 9801.00.10, HTSUS, is a legal determination which is

not correctable under 19 U.S.C. 1520(c)(1) as a mistake of fact

since it is instead a mistake of law. Occidental, supra; Cavazos,

supra. Although it appears from the documents submitted with this

protest that the goods were in fact of U.S. origin, we cannot

remedy this legal error under the reliquidation provisions of 19

U.S.C. 1520(c)(1). Concentric Pumps, Ltd. v. United States, 643

F. Supp. 623, 626, 10 CIT 505 (1986); Godchaux, supra.

HOLDINGS:

\(1\) The petition filed under 19 U.S.C. 1520(c)(1) is untimely

in this case because it was filed beyond one year from the date of

liquidation. 19 CFR 159.9. The Customs billing of the duties owed

on entry at the time of liquidation is not an exaction within the

meaning of 19 U.S.C. 1520. The Customs district office properly

denied the petition on the statutorily mandated procedural grounds.

\(2\) Even if the petition under 19 U.S.C. 1520(c)(1) had been

timely, Customs nevertheless would have denied it on the merits

since the denial of duty-free treatment under the \"American goods

returned\" provision of subheading 9801.00.10, HTSUS, is a legal

determination correctable only under the protest procedure of 19

U.S.C. 1514.

You are instructed to deny the protest. A copy of this

decision should be attached to the CF 19, Notice of Action, to be

sent to the protestant in accordance with the notice requirement

of 19 CFR 174.30.

Sincerely,

John Durant, Director