LIQ-9-01 RR:CR:DR
229964RDC


Port Director of Customs
200 East Bay Street
Charleston, S.C. 29401
Att: Leslie Williams

RE: Protest number 1601-03-100018; Request for Further Review of Protest; Mistake of fact; 19 U.S.C. § 1520(c); 19 U.S.C. § 1514; 19 U.S.C. § 1520(a); 19 CFR § 141.68.

Dear Sir or Madam:

On May 1, 2003, Protest number 1601-03-100018 was forwarded to this office for further review. We have considered the evidence provided and the points raised by your office and the Protestant. Our decision follows.

FACTS:

The Protestant, Corus Engineering Steels, LTD. (“CES”), is the importer of record for the subject merchandise and through its counsel protests “the liquidation of two entries with increase in duty” and requests reliquidation of these two entries “at the correct rate.” According to Customs Automated Commercial System (“ACS”), the two entries at issue, numbers 336-xxxx875-2 and 336-xxxx79-4, were entered on March 20, 2002. The Protestant states that “the [protested] entries are of steel bar and coil manufactured by CES in the United Kingdom . . . .” Accordingly, the two protested entries were assessed safeguard duties pursuant to Section 201.

According to the Protestant’s explanation of the events, CES was importing eight separate shipments of steel bar and coil from the United Kingdom. The vessel transporting the steel was originally scheduled to arrive in New Orleans, but was diverted to Charleston at CES’s request. This was done in an effort to secure an earlier entry date to avoid the imposition of Section 201 cumulative steel duties, which would apply to certain steel products entered during the period from March 20, 2002, through March 19, 2003. The vessel arrived in Charleston on March 18, 2002, and the goods were unladen on March 19, 2002.

The broker, Danzas AEI transmitted entries and entry summaries for all eight shipments via the Automated Broker Interface (“ABI”) from New Orleans on March 19, 2002, and received a message from Customs and Border Protection (CBP) that paper documentation was required. The requested documentation was prepared in New Orleans and faxed to the broker’s office in Charleston for filing with CBP there. Five of the eight paper entries were received in Charleston in time for filing with CBP on March 19, 2002.

According to the page 3 of document filed with the Protest, dated January 21, 2003, and prepared by Corus’ counsel, “due to transmission difficulties and delays, the documentation for three entries was not received by Danzas AEI [in Charleston] until Customs’ office in Charleston had already closed for business on March 19. [The hardcopy paperwork for] those entries (two of which are the subject of this Protest . . . ) [was] presented to Customs on the morning of March 20, 2002. Customs subsequently altered the original entry date of March 19, 2002, which originally appeared on the entries when electronically submitted (on March 19), and changed the date of entry to March 20, 2002.”

On page 5 of the document filed with the Protest, the Protestant states that: “the broker’s clerk was instructed to select March 19, 2002 as the elected date of entry by checking the appropriate box on form CF 3461. However, through inadvertence the clerk preparing the entry failed to carry out instructions, and neglected to specifically elect March 19 as the entry date on form CF 3461.” Thus, according to page 5 the brokerage employee who prepared the entries had been instructed by the broker to elect March 19, 2002, as the entry date, but failed to do so, thus no election was made in the ABI transmission to CBP. However, we understood page 3 of this document to contend that Customs altered the entry date on the electronically submitted entries. Clearly, if no date were elected, no subsequent change could be made. We are at a loss as to how to explain the discrepancy in the factual description between these pages.

In addition, the broker’s request for relief dated September 17, 2002, makes no mention of “transmission difficulties” nor of Customs altering the original entry date on the entries. In the document prepared by Danzas AEI, on page 2, the Protestant states that “these three entries were sent overnight, because of the clerk’s belief that an entry date of March 19th had been established, although, through oversight, the date was not entered into the ABI system as an elected entry date.” (Two of those three entries are the subject of this protest (the third was not included because it had not yet been liquidated at the time of protest filing.) No evidence has been provided of any of the events described in either the January 21, 2003, or September 17, 2002, document.

The Port determined that the time of entry for the three entries was March 20, 2002, the date of release, which meant that upon liquidation the higher steel duty rate would apply. On September 17, 2002, the broker filed a petition pursuant to 19 U.S.C. § 1520(a)(4), claiming clerical error in its failure to elect an earlier entry date, and requesting that the three entries be liquidated at the lower rate. It indicated that the entries and entry summaries had been transmitted on March 19, 2002, and that each entry summary specified an entry date of March 19th, 2002. CBP denied the request on November 15, 2002, noting that “[y]ou may not request an elected entry date for a date prior to presenting documents to Customs.” The two entries that are the subject of this protest were liquidated on November 1, 2002, and November 8, 2002, respectively, inclusive of the cumulative steel duty rate. The protest filed on January 22, 2003.

ISSUES:

1. Whether the entry date upon liquidation for the protested entries is March 19, 2002, as asserted by the Protestant, or March 20, 2002, as maintained by the Port?

2. Whether the appraised value of the protested entries should be adjusted to reflect safeguard duties assessed pursuant to Section 201 as non-dutiable costs?

LAW AND ANALYSIS:

In the letter of September 17, 2002, from Danzas to the Port Director, Charleston, CES requested per 19 U.S.C. § 1520(a), that the “entries be forwarded for liquidation with an entry date of March 19, 2002, and at the rate entered.” Pursuant to section 520(a)(4), Tariff Act of 1930, as amended (19 U.S.C. 1520(a)(4)), the port director may, prior to liquidation of an entry, take appropriate action to correct a clerical error that resulted in the deposit or payment of excess duties, fees, charges, or exactions. As is explained in detail below a mistake of law, not a clerical error, is the cause of the March 20, 2002 entry date. As such it is not correctable per 19 U.S.C. § 1520(a)(4).

Moreover, CES’s letter of September 17, 2002, could not have properly been characterized as a petition for reliquidation per § 1520(c)(1) because the only relief provided by this section is reliquidation. The two entries at issue had not yet liquidated and thus could not have been subject to reliquidation until after their liquidation dates of on November 1 and 8, 2002. Further, the letter of September 17, 2002, could not have been considered a protest under 19 U.S.C. § 1514 either because the entries had not yet liquidated. However, in its protest of January 21, 2003, the Protestant states that it “protests the denial of the request for correction under Section 520(a).” 19 U.S.C. § 1514, Protest against decisions of the Customs Service, provides that with certain exceptions,

decisions of the Customs Service, including the legality of all orders and findings entering into the same, as to-- (1) the appraised value of merchandise; (2) the classification and rate and amount of duties chargeable; (3) all charges or exactions of whatever character within the jurisdiction of the Secretary of the Treasury; (4) the exclusion of merchandise from entry or delivery or a demand for redelivery to customs custody under any provision of the customs laws, except a determination appealable under section 337 of this Act [19 U.S.C.S § 1337]; (5) the liquidation or reliquidation of an entry, or reconciliation as to the issues contained therein, or any modification thereof; (6) the refusal to pay a claim for drawback; or (7) the refusal to reliquidate an entry under subsection (c) or (d) of section 520 of this Act [19 U.S.C.S § 1520]; shall be final and conclusive upon all persons (including the United States and any officer thereof) unless a protest is filed . . .

“within 90 days of the notice of liquidation” (19 U.S.C. §1514(c)(3)(B)). Hence, “the denial of the request for correction under Section 520(a)” is not protestable.

However, we may consider the this Protest as protesting the liquidation of the two entries per § 1514(a)(5) and as such it is timely filed, i.e., within 90 days of the liquidation of the entries (19 U.S.C. § 1514(c)(3)(B)). The subject entries were liquidated on November 8, 2002, and November 1, 2002, and this Protest was filed on January 22, 2003. Finally, the criteria for granting a request for further review are set forth in 19 CFR § 174.24 which states: further review will be accorded to the party filing an application for further review which meets the requirements of § 174.25 and at least one of the criterion in § 174.24. The Protestant contends that per 19 CFR § 174.24(b) further review is justified because this Protest involves questions of law or fact that have not been ruled upon by Customs or the Customs court. We agree.

1. Whether the entry date upon liquidation for the protested entries is March 19, 2002, as asserted by the Protestant, or March 20, 2002, as maintained by the Port?

The Protestant maintains that since the “merchandise actually entered Customs’ custody on March 19, 2002, the entries were transmitted and accepted on March 19, 2002, and the electronic documentation showed an entry date of March 19, 2002,” then the protested entries should have an entry date of March 19, 2002. CES provides no statute, regulation or case law to support its conclusion.

The regulations governing the “time of entry” are found in § 141.68 of the Customs Regulations. In this case the broker transmitted eight entries, including the two protested, to Customs through the ABI on March 19. The CF 7501s, entry summaries, for the two protested entries were also transmitted to Customs via ABI on March 19, 2002. However, entry documents were required for these entries. The entry documents of the two protested entries “were presented to Customs on the morning of March 20, 2002. Subsection (a) of section 141.68 provides the general rule for establishing the time of entry when entry documentation is filed without an entry summary. 19 CFR § 141.68 provides, in pertinent part, that:

(a) When entry documentation is filed without entry summary. When the entry documentation is filed in proper form without an entry summary, the “time of entry” shall be: (1) The time the appropriate Customs officer authorizes the release of the merchandise or any part of the merchandise covered by the entry documentation, or (2) The time the entry documentation is filed, if requested by the importer on the entry documentation at the time of filing, and the merchandise has already arrived within the port limits; or (3) The time the merchandise arrives within the port limits, if the entry documentation is submitted before arrival and if requested by the importer on the entry documentation at the time of submission.

Contrary to the Protestant’s assertion that per § 141.68(a)(3) “the importer’s flexibility to select the date of entry is limited only by the arrival of the merchandise” § 141.68(a)(3) is clearly inapplicable because the goods arrived on March 19 but the entry documentation for the two protested entries arrived at Customs on March 20. Hence the entry documentation was submitted after arrival. Section 141.68(a)(2) is also inapplicable in that no election was made in ABI for the time of filing to serve as the time of entry. Even if an election had been made, since the entry documentation arrived at Customs on March 20, per § 141.68(a)(2) March 20 would be the date of entry. Therefore entry occurred per § 141.68(a)(1) when the merchandise was released on March 20, 2002, and the entry date for the protested entries was correct at liquidation.

CES also states, “since the entries have now been liquidated the importer renews the request for correction pursuant to Section 520(c).” CES contends that “the broker’s clerk was instructed to select March 19, 2002, as the elected date of entry by checking the appropriate box on form CF 3461. However, through inadvertence the clerk preparing the entry failed to carry out instructions, and neglected to specifically elect March 19 as the entry date on form CF 3461 [for the two protested entries].” CES provides no evidence to corroborate the assertions in this statement. The Protestant also states that “each entry summary was transmitted, before Customs’ release of the freight, with an entry date of March 19th and the entry clerk believed that this was sufficient to establish an elected entry dated, and neglected to separately elect March 19 as the entry date.” Again, CES provides no evidence of this assertion. Finally, CES states, “clearly, there the failure of the broker’s clerk to check the box for election of the March 19 entry date was ‘error, mistake or inadvertence’ which can be corrected at the importer’s request.” No evidence has been provided to support this assertion.

An election of the date of entry may be made either in ABI or on the CF 3461 entry form itself. In ABI, there is a field called the “Entry Date Election Code.” If the filer places an “A” in that field, the date in the “Estimated Date of Arrival” field is used to determine the time of entry. If there is a “P” in the election field, the presentation date is used as the time of entry. If the election field is left blank then it is assumed that the filer is not requesting that a date other than the release date be the time of entry. Similarly, an importer who is not using ABI must indicate in Box 2 of the CF 3461 that an elected entry date is being made.

In this particular case, it is unclear whether the broker did or did not make the election in its ABI transmission or if the election was made on the CF 3461. However, the entry date for the two protested entries would still be March 20, 2002, and the 30 percent section 201 duties would still apply – even if an election had been made – because the entry documentation, per CES, “were not delivered [to Customs] until March 20.” Therefore, per 19 CFR § 141.68(a)(2), the time of entry is “the time the entry documentation is filed” which remains March 20, 2002.

Moreover, section 520(c) of the Tariff Act of 1930, as codified at 19 U.S.C. § 1520(c), does not afford the Protestant the relief it seeks. Section 1520(c) states,

Notwithstanding a valid protest was not filed, the Customs Service may, in accordance with regulations prescribed by the Secretary, reliquidate an entry or reconciliation to correct - (1) 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, . . . .

Therefore, per § 1520(c)(1) Customs may reliquidate an entry to correct “a clerical error, mistake of fact, or other inadvertence,” which does not amount 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 (19 U.S.C. § 1520(c)(1)). CES states that “through inadvertence the clerk preparing the entry failed to carry out instructions, and neglected to specifically elect March 19 as the entry date on form CF 3461.”

The Protestant’s Petition per § 1520(c)(1) is fatally flawed in two respects. First CES provides no evidence of the clerk’s inadvertence. Nowhere is this clerk or the individual responsible for the instructions to select March 19, 2002, as the entry date, identified. There are no affidavits or documentary evidence. The Court of International Trade (CIT) has ruled that mere assertions by a complainant, such as those described here, without supporting evidence are not sufficient, nor are statements by counsel considered evidence. See Bar Bea Truck Leasing Co., Inc. v. United States, 5 CIT 124, 126 (1983). Section § 1520(c)(1) requires that the error be manifest from the record or established by documentary evidence. Thus no documentary evidence as been provided nor can it be said that any error is manifest from the record because of the conflicting descriptions of the facts. Consequently no relief § 1520(c)(1) can be granted.

Furthermore, even if CES had provided any evidence § 1520(c)(1) does not afford reliquidation for an inadvertence which amounts to “an error in the construction of a law,” such as is the case here. The Protestant states that “each entry summary was transmitted, before Customs’ release of the freight, with an entry date of March 19th and the entry clerk believed that this was sufficient to establish an elected entry date, and neglected to separately elect March 19 as the entry date.” Even if there were evidence to support the entry clerk’s mistaken belief, i.e., that his or her actions established an elected entry date, such a mistake is clearly a mistake as to the legal consequences of deliberate actions. See Chrysler Corporation v. United States (87 F. Supp. 2d 1339; Ct. Intl. 2000) holding “mistakes of law, . . . , occur where the facts are known, but their legal consequences are not known or are believed to be different than they really are."

In Hambro Automotive Corp. v United States, (458 F Supp 1220 (Cust. Ct. 1978)), affd 603 F2d 850 (CCPA 1979) Hambro petitioned for reliquidation per § 1520(c)(1) in order to correct errors in the appraised values of automobiles. The errors sought to be corrected consisted of the use by the manufacturer of general expenses and profits in the home market rather than those of the export market in the cost of production figures it supplied to customs. The Customs Court held that such mistakes “must be considered as being, in essence, misunderstandings of the law, namely, the law governing cost of production, section 402a(f) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1402(f). The mistakes were interpretational and decisional. They were not the careless mistakes in routine office tasks, the consequences of which section 520(c)(1) was intended to alleviate. Even if the entry clerk’s belief that transmitting the entry summary before Customs’ release of the freight was sufficient to establish an elected entry date, the clerk’s beliefs would show a misunderstanding of the law, namely the law establishing the time of entry when entry documentation is filed without an entry summary. Such a misunderstanding of the law is not correctable under § 1520(c)(1).

Moreover, the only error here supported by evidence is the Protestant’s failure to comply with 19 CFR § 141.68 by failing to submit entry documentation timely, which error is an error of law. In Prosegur, Inc. v. United States (140 F. Supp. 2d 1370 (Ct. Intl. Trade 2001) Prosegur contended that imported jewelry should have entered free of duty because it was American Goods Returned. Before classifying plaintiff's goods, Customs sought additional information from plaintiff. Plaintiff failed to provide that information to Customs. The court held that it was the failure of documentation that was the basis for the decision and that Prosegur's error was a failure to comply with CFR § 10.1, a mistake of law, not fact. Based on the foregoing the Protestant is not entitled to relief per 19 U.S.C. § 1520(c)(1).

2. Should the appraised value of the protested entries be adjusted to reflect the safeguard duties assessed pursuant to Section 201 as non-dutiable costs?

The Protestant requests that, if this office finds that the entry date for the two protested entries is March 20, 2002, which we have found, then the entered value of the goods be recalculated to “take into account the Section 201 duties.” Merchandise imported into the United States is appraised in accordance with Section 402 (b) of the Tariff Act of 1930, as amended by the Trade Agreements Act of 1979. See 19 U.S.C. 1401a. The preferred method of appraisement is transaction value. The transaction value of imported merchandise is “the price actually paid or payable for merchandise when sold for exportation to the United States, plus amounts equal to” five statutorily enumerated additions. 19 U.S.C. 1401a (b)(1).

Section 1401a (b)(3)(B) provides that the “transaction value of imported merchandise does not include . . . the following, if identified separately from the price actually paid or payable and from any cost or other item referred to in paragraph (1):”

(B) The customs duties and other Federal taxes currently payable on the imported merchandise by reason of its importation, and any Federal excise tax on, or measured by the value of, such merchandise for which vendors in the United States are ordinarily liable. (Emphasis added).

In the instant case, in order for Customs to allow the exclusion of the costs referred to above, the importer must demonstrate that the price actually paid or payable included the costs at issue. The protestant has provided no invoices, contracts or other documentation through which Customs could confirm that the price actually paid or payable included the payment of Section 201 safeguard duties. Therefore, the entered value of the protested entries should not be adjusted to account for the additional duties assessed per Section 201.

HOLDING:

1. The entry date for the protested entries is March 20, 2002, as maintained by the Port.

2. The appraised value of the protested entries should not be adjusted to reflect safeguard duties assessed pursuant to Section 201 as non-dutiable costs.

The protest should be DENIED IN FULL.

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,

Myles Harmon, Director
Commercial Rulings Division