LIQ-9/LIQ-9-01-RR:IT:EC 227306 PH
Area Port Director of Customs
9901 Pacific Highway
Blaine, Washington 98230
ATTN: Protest Section
RE: Protest 3004-96-100620; Claim for Preferential Tariff
Treatment under NAFTA; 19 U.S.C. 1514; 19 U.S.C. 1520(c)(1);
19 U.S.C. 1520(d); 19 CFR 181.31
Dear Sir or Madam:
The above-referenced protest was forwarded to this office for
further review. We have considered the evidence provided and the
arguments made on behalf of the importer, as well as Customs
records relating to this matter. Our decision follows.
FACTS:
The protestant states that on July 10, 1995, a Freightliner truck
was "exported to Canada ... for alteration/addition of box by Ty-Crop." In the file there is a Certificate of Registration
(Customs Form (CF) 4455), with the protestant named as the party
to whom the certified form is to be mailed, listing as the
article exported "Freightliner" and stating a Vehicle
Identification Number (VIN) number. The block for signature of a
Customs officer is signed. There are also copies of
illustrations and specifications for truck boxes indicated to be
available from Ty-Crop Manufacturing Ltd. of British Columbia,
Canada.
In the file there is a letter dated July 11, 1995, from an
official in Freightliner Corporation of Portland, Oregon, stating
that "1989 Freightliner Serial # [the VIN stated on the CF 4455,
see above] was built at the Freightliner Motor Truck Plant in Mt.
Holly, North Carolina. USA." There is a Washington State Vehicle
Certificate of Title for a vehicle with the same VIN, with an
explanation of the codes in the VIN (the first number indicates
manufacturer, and the manufacturer for this VIN is indicated to
be Freightliner Corporation, U.S.A.).
In the file there is a NAFTA Certificate of Origin, dated August
16, 1995, for a "Mounted Ty-Crop Forage Box", HTSUS
classification numbers 9802.00 and 8705.90, with Ty-Crop
Manufacturing Ltd. of British Columbia listed as the producer and
the protestant listed as the exporter and importer. There is an
"Assembler's Declaration for HTSUS Subheading 9802.00.80", dated
August 17, 1995, and stated to have been prepared by Ty-Crop,
declaring that the 1989 Freightliner truck under consideration
(VIN number listed) was assembled in part from a product of the
United States (the truck, with VIN number, is listed) by the
installation of a "Ty-Crop 20' truck box/forage - rear unload,
serial [number stated] together with hydraulic wet kit."
According to the file, on August 30, 1995, the protestant
imported the 1989 Freightliner truck with the Ty-Crop forage box.
The merchandise was entered on August 30, 1995. The Entry
Summary (Customs Form 7501) for the entry, dated September 13,
1995, stated the classification of the merchandise as subheadings
CA9802.00.8065 and CA8705.90.0000, Harmonized Tariff Schedule of
the United States (HTSUS), with duty at the rate of 1.1%
($116.51) on the value of the "new box and labor."
On September 28, 1995, Customs sent the protestant a Request for
Information (CF 28) regarding the entry under consideration.
Specifically, Customs stated:
You have made a claim under NAFTA. In order to verify this
claim it must be documented that the articles originate
under NAFTA as defined in General Note 12 of the Harmonized
Tariff of the U.S. The required documents are as follows:
1. NAFTA Certificates of Origin for the truck and the truck
box, 2. Documents from the manufacturer of the vehicle and
the manufacturer of the truck box which verify that there is
a regional value content of not less than 50% under the net
cost method as defined by the [NAFTA]. ...
According to the protestant, on October 25, 1995, a discussion
took place between Customs and the protestant's broker regarding
the applicability of subheading 9802.00 to this transaction. The
protestant states that the position of Customs in this regard was
that "... the processing in Canada went beyond an [a]ssembly'
step as envisioned in HTS# 9802.00, and that
manufacturing/addition of the box created a new article of
commerce dutiable under HTSUS 8704.22.5080 ...." The protestant
specifically states, in this regard: "We concur with Customs as
to the applicability of HTS# 8704.22.50. This protest does not
challenge this tariff item number." (Emphasis in original.)
On December 13, 1995, Customs issued a Notice of Action (CF 29)
to the protestant. In this notice Customs stated:
The United States Customs Service has completed the
verification of your claim for preferential tariff treatment
under the [NAFTA]. Due to the non-receipt of the NAFTA
Certificate of Origin and the required substantiating
documents, this office denies your NAFTA claim. This notice
constitutes official notification of a negative
determination of origin. The effective date is 30 days from
the date of this notice.
The merchandise is as follows [description of truck with
box].
The classification under the [HTSUS] is advised as follows:
8704.22.50.80 25%, value $30,592 USD.
You have the right to appeal this determination of origin
pursuant to 19USC1514 and Part 174 of the Customs
Regulations (19 CFR Part 174) within 90 days after the
liquidation of the entry listed in this notice. A bulletin
notice of liquidation will be posted at the Customs district
office where the goods were entered on the date the entry
was liquidated. Appeal rights will be allowed for 90 days
after the date of posting of the bulletin notice of
liquidation. Appeals filed prior to liquidation will be
denied as untimely. The United States Customs Service is
willing to review information provided prior to the
conclusion of this 30 days notice. This information should
include the following: NAFTA Certificate of Origin, NAFTA
information from Ty-Crop Manufacturing for the truck box,
regional value content statement from the manufacturer of
the truck, purchase price for the truck alone, etc.
The entry was liquidated in accordance with the above (with
duties in the amount of $7,648) on February 2, 1996.
By letter to Customs of May 23, 1996 (received by Customs on May
25, 1996), the broker for the protestant requested that the entry
under consideration be "reliquidated with a full refund based on
a revised NAFTA presented by [the importer]." According to this
letter (described in the protest as a "[s]ection 520(c)(1), T.A.
application"):
... [T]he NAFTA claim filed at the time of entry was denied
since [the importer] was unable to present a statement from
the truck manufacturer that the truck qualified for special
tariff treatment by meeting the regional value content. [The
importer] now has that statement as well as the NAFTA from
Ty-Crop, on which [the importer] has revised their original
[NAFTA] Certificate. ...
[The classification] [a]t the time of original entry ... was
incorrect due to the work that had to be done on the truck.
Proper entry should have been under H.S. CA8704.22.5080,
free of duty and MPF.
Included with the above letter was a March 15, 1996, letter from
Freightliner of Vancouver Ltd. confirming that the truck under
consideration "was built at the Freightliner Motor Truck Plant in
Mt. Holly, North Carolina, USA and is qualified for preferential
tariff treatment under the Canada/USA Free Trade Agreement [and
also] qualifies for the [NAFTA] by meeting the requirements of
having at least 50% regional value contents under the net cost
method." Also included with the letter was a NAFTA Certificate
of Origin by Ty-Crop Manufacturing Ltd. for the truck under
consideration, with the box described. The date of this
Certificate is August 30, 1995, but according to the protestant,
this NAFTA Certificate was provided to the protestant on April
24, 1996, and that date, indicated to be the date of Facsimile
transmission, appears on the copy in the file.
There is a May 30, 1996, hand-written notation on the May 23,
1996, letter described above stating:
Protest under 520d denied. Ref: Trade Notice No. 57 and
Fact Sheet No. 38. Protest was not filed within the period
of 90 days after liquidation. Protest denied.
On June 25, 1996, the protest under consideration was filed,
"against Customs refusal to reliquidate this entry pursuant to
Section 520(c)(1), Tariff Act of 1930, as amended" (the arguments
in the protest concern the applicability of 19 CFR 181.31,
promulgated under 19 U.S.C. 1520(d), but reference to 19 U.S.C.
1520(c)(1) is also made, although no specific allegation is made
or evidence provided regarding a clerical error, mistake of fact,
or other inadvertence not amounting to a mistake of law).
Further review was requested and granted.
ISSUE:
May the protest under consideration be granted.
LAW AND ANALYSIS:
Initially, we note that denial of a request for reliquidation
under 19 U.S.C. 1520(c)(1) or of a post-importation duty refund
claim under 19 U.S.C. 1520(d) is protestable under 19 U.S.C. 1514
(see section 1514(a)(7) and Treasury Decision (T.D.) 95-68
(Customs Bulletin & Decisions of September 20, 1995, vol. 29, no.
38, pages 12-13)). We note also that the protest under
consideration was filed within 90 days of the date of the May 30,
1996, denial of the May 23, 1996, letter from the broker of the
protestant seeking reliquidation of the entry under consideration
and, therefore, was timely (see 19 U.S.C. 1514(c)(3)(B) and 19
CFR 174.12(e)(2)). We note that the May 23, 1996, letter from
the broker was timely as either a request for reliquidation under
section 1520(c)(1) (within 1 year of liquidation) or a post-importation duty refund claim under section 1520(d) (within 1
year of importation).
Although no specific allegation is made or evidence provided
regarding a clerical error, mistake of fact, or other
inadvertence not amounting to a mistake of law in the protest, we
are briefly discussing the requirements for reliquidation under
19 U.S.C. 1520(c)(1) below. Under section 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 and adverse to the importer, when certain
conditions are met. Section 1520(c)(1) has frequently been
interpreted by the Courts. It has been stated that "[a] clerical
error is 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" (see PPG
Industries, Inc., v. United States, 7 CIT 118, 124 (1984), and
cases cited therein). It has been stated that: "[M]istakes of
fact occur in instances where either (1) the facts exist, but are
unknown, or (2) the facts do not exist as they are believed to
[and] [m]istakes of law, on the other hand, occur where the facts
are known, but their legal consequences are not known or are
believed to be different than they really are" (Executone
Information Systems v. United States, 96 F. 3d 1383, 1386 (Fed.
Cir. 1996) (emphasis in original), citing Hambro Automotive
Corporation v. United States, 66 CCPA 113, 118, C.A.D. 1231, 603
F. 2d 850 (1979); see also, Degussa Canada Ltd. v. United States,
87 F. 3d 1301 (Fed. Cir. 1996)). Inadvertence has been defined
as "an oversight or involuntary accident, or the result of
inattention or carelessness, and even as a type of mistake"
(Aviall of Texas, Inc. v. United States, 70 F. 3d 1248, 1249
(Fed. Cir. 1995), citing Hambro, supra).
The conditions required to be met under 19 U.S.C. 1520(c)(1) are
that the clerical error, mistake of fact, or other inadvertence
not amounting to a mistake of law must be adverse to the
importer, manifest from the record or established by documentary
evidence, and brought to the attention of Customs within one year
after the date of liquidation of the entry. 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, 643 F. Supp. 623 (1986)).
Since no clerical error, mistake of fact, or other inadvertence
not amounting to a mistake of law is manifest from the record or
established by documentary evidence (see ITT Corp. v. United
States, 24 F. 3d 1384, 1387 (Fed. Cir. 1994), reversing the CIT
decision at 82 F. Supp. 213 (1993)) in this case, relief may not
be granted under 19 U.S.C. 1520(c)(1). In the absence of any
such evidence, we are guided by the Court of Appeals ITT decision
according to which--
... [A] prudent importer would submit all its supporting
documentary evidence along with its timely notice alleging a
mistake of fact before Customs' consideration in order to
facilitate a prompt and favorable decision [and as] [t]he
[CIT] correctly notes ... "a party who waits past the time
of filing its ... [section] 1520(c)(1) request to file
supporting documentation risks an adverse decision by
Customs in the interim" [24 F. 3d at 1388.]
Therefore, if the May 23, 1996, letter from the broker for the
protestant is treated as a request for reliquidation under 19
U.S.C. 1520(c)(1), it was properly denied.
Under 19 U.S.C. 1520(d):
Notwithstanding the fact that a valid protest was not filed,
the Customs Service may, in accordance with regulations
prescribed by the Secretary, reliquidate an entry to refund
any excess duties paid on a good qualifying under the
[NAFTA] rules of origin ... for which no claim for
preferential tariff treatment was made at the time of
importation if the importer, within 1 year after the date of
importation, files [a claim meeting certain conditions]"
(emphasis supplied).
The conditions required to be met for a claim filed under section
1520(d) are that the claim must include a written declaration
that the good qualified under the NAFTA rules of origin at the
time of importation, copies of all applicable NAFTA Certificates
of Origin, and such other documentation relating to the
importation of the goods as is required by Customs.
The Customs Regulations promulgated under this provision are
found in 19 CFR 181.31 through 181.33 (see also General Notice on
Post-Importation Duty Refund Claims Under the NAFTA, January 29,
1997, Customs Bulletin and Decisions, vol. 31, no. 5, page 1).
As in the statute (see underlined material above), the Customs
Regulations require as a condition precedent to relief under this
provision that "no claim for preferential tariff treatment on
that originating good was made at that time [i.e., when the good
was imported into the United States]" (19 CFR 181.31).
In this case the above condition precedent to relief under 19
U.S.C. 1520(d) is not met. A claim for preferential tariff
treatment was made at the time of importation. Therefore, if the
May 23, 1996, letter from the broker for the protestant is
treated as a post-importation duty refund claim under section
1520(d), it was properly denied.
We note that this decision is consistent with the General Notice
on Post-Importation Duty Refund Claims Under the NAFTA, published
in the January 29, 1997, Customs Bulletin and Decisions, vol. 31,
no. 5, page 1, and Office of Trade Operations FACT SHEET 38, May
23, 1995 (5143071). We note also that the Notice of Action
issued to the importer in this case specifically advised the
importer that the determination of origin was appealable, within
90 days of liquidation, under 19 U.S.C. 1514 and 19 CFR Part 174.
HOLDING:
The request for reliquidation made in the May 23, 1996, letter
from the broker of the importer was properly denied, whether
treated as a request for reliquidation under 19 U.S.C. 1520(c)(1)
or as a post-importation duty refund claim under 19 U.S.C.
1520(d). The protest is DENIED.
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, with
the Customs Form 19, 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