LIQ-9-01-CO:R:C:E 224657 SR

Area Director
J.F.K. Airport
Building 178
Jamaica, New York 11430

RE: Application for Further Review of Protest No. 1001-90- 006117; 19 U.S.C. 1514(a)(7); Protest of 19 U.S.C. 1520(c)(1) denial.

Dear Sir:

The above-referenced protest was forwarded to our office on Application for Further Review of Protest No. 1001-90-006117 dated, July 16, 1990. The protested entries include entry number 4701-89-XXXXXXX-X, dated 2/8/89, 4701-89-XXXXXXX-X dated 2/15/89, and 4701-89-XXXXXXX-X, dated 3/21/89. We have considered the facts and the issues raised; our decision follows.

FACTS:

Sandoz Pharmaceuticals Corp. entered antineiopastic/ immunosuppressives, called Sandimmune. Nine entries were entered during the period of January, 1989 to March 1989 under subheading 3004.90.6015, Harmonized Tariff Schedules of the United States (HTSUS). The entries were liquidated "NO CHANGE" between March 3, 1989 to July 21, 1989.

After the entries at issue were liquidated Sandoz made another entry of Sandimmune in September 1989 of which a sample was sent to the Customs lab. The lab reported that the sample contained an ingredient called cyclosporine which is an antibiotic. Sandoz then filed claims under 19 U.S.C. 1520(c)(1) on March 2, 1990 (1001-90-200391) and April 9, 1990 (1001-90- 200597) requesting reclassification of the merchandise as medicaments "containing other antibiotics" under subheading 3004.20.00 and 9902.29.88, HTSUS, free of duty. The claims were denied. Protests were filed under 19 U.S.C. 1514 (a)(7) (1001- 90-6118, 1001-90-7171 and 1001-90-6117) which allows a protest against the refusal of a Customs officer to reliquidate an entry under section 1520(c).

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ISSUE:

Whether the importer has shown that it lacked knowledge of the charactor of a pharmacuetical so as to be a mistake of fact within 19 U.S.C. 1520(c)(1).

LAW AND ANALYSIS:

Section 520(c)(1) of the Tariff Act of 1930, as amended (19 U.S.C.(c)(1), provides that Customs may correct certain errors, if adverse to the importer, within one year of the date of liquidation. Section 520(c)(1) provides as follows:

(c) Notwithstanding a valid protest was not filed, the appropriate customs officer may, in accordance with regulations prescribed by the Secretary, reliquidate an entry to correct-

(1) a clerical error, mistake of fact, or other inadvertence not amounting to an error in the construction of 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; . . .

In order to bring a claim under 19 U.S.C. 1520(c)(1), the mistake made must be one of fact not a mistake of law. These terms are defined in C.J. Tower & Sons of Buffalo, Inc. v. United States, 68 Cust. Ct. 17, C.D. 4327, 336 F. Supp. 1395 (1972), aff'd 499 F.2d 1277, 61 CCPA 90, C.A.D. 1129 (1974). A mistake of fact is defined as any mistake except a mistake of law; a mistake which takes place when some fact which indeed exists is unknown, or a fact which is thought to exist, which in reality does not exist.

A mistake of law, on the other hand, exists where a person knows the facts as they really are but has a mistaken belief as to the legal consequences of those facts. Hambro Automotive Corporation v. United States, 66 CCPA 113, 118, C.A.D. 1231, 603 F.2d 850, 854 (1979)(citing 58 C.J.S. Mistake, section 832).

It is well established that a mistake made in the classification of goods, when all the facts are known, is not a mistake of fact under 19 U.S.C. 1520(c)(1). When merchandise is

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misclassified despite full knowledge of the facts it is considered to be a decisional error and is considered a mistake of law. See Computine, Inc. v. United States, 9 CIT 553 (1985), Mattel, Inc. v. United States, 72 Cust. Ct. 257 (1974), and Headquarters Ruling Letter (HQ) 222636 dated September 16, 1991.

In order to find that a mistake of fact has occurred in this case it has to be shown that Sandoz did not have knowledge that Sandimmune contains the antibiotic cyclosporin. Sandoz has submitted correspondence between Sandoz and the FDA from 1982- 1983 as proof that they did not know Sandimmune contains an antibiotic. These documents reference application on Antibiotic Form 5. Sandoz states that they were merely using this form as part of FDA procedure; that the final letter and approval of the FDA did not state the word antibiotic. Lack of the word on the forms is not proof that the company was not aware of the antibiotic properties of their merchandise.

Sandimmune, which is patented by Sandoz, is the trade name for cyclosporin. A memo was written by the Customs lab in New York dated October 14, 1992, concerning Sandimmune and whether Sandoz had knowledge that it contains an antibiotic. The memo states as follows:

To find the answer to this question, a search of the scientific literature was done. The first reference to cyclosporin as an antibiotic is the abstract summary of the process developed for the production of cyclosporin A. This work resulted in the U.S. patent 4,117,118 awarded in 1978 to Sandoz. The title of this summary is "Antibiotics". In the first sentence cyclosporin A is referred to as "Antiin- flammatory and immunosuppressant antibiotics . . .". In addition, other references were found in the literature which call cyclosporin an antibiotic.

The information submitted shows that Sandoz was aware that Sandimmune contains cyclosporin. A 1983 certificate of analysis of Sandimmune drink solution states that the required specification for cyclosporin must be between 90-100% and the shipment contains 99% cyclosporin. In a letter to the Office of New Drug Evaluation dated November 7, 1983, Cyclosporin was stated in parentheses each time Sandimmune was mentioned.

Based on the above information, Sandoz has not submitted sufficient proof that they were unaware that Sandimmune contains an antibiotic as one of its ingredients.

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HOLDING:

The protest should be denied in full. A copy of this decision should be attached to the CF 19 Notice of Action to satisfy the notice requirement of section 174.30(a), Customs Regulations.

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 this decision must be accomplished prior to the mailing of the decision. Sixty days from the date of this 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 to the public via the Diskette Subscription Service, Lexis, Freedom of Information Act and other public access channels.

Sincerely,

John A. Durant, Director
Commercial Rulings Division