LIQ-9-01 RR:CR:DR 960623 CB
United States Customs Service
2350 N. Sam Houston Parkway
Suite 1000
Houston, TX 77032
RE: Protest and Application for Further Review No. 5301-97-100164; 19 U.S.C. §1520(c)(1); Phenothiazine; subheadings 2934.30.23 and 2934.30.50, HTSUS; mistake of fact; mistake of law
Dear Sir or Madam:
The above-referenced protest was forwarded to this office for a determination. We have considered the points raised and a decision follows.
FACTS:
This protest covers six entries of pure phenothiazine identified by Chemical Abstract Service (“CAS”) number 92-84-2 entered by protestant, Amsyn Inc., d/b/a Alemark Chemicals. The entries at issue were all filed and liquidated under subheading 2934.30.50, Harmonized Tariff Schedule of the United States (HTSUS). The entries were made between January 1, 1995 and August 10, 1995. The entries were liquidated between April 28, 1995 and December 1, 1995.
The importer filed a request for reliquidation, dated April 26, 1996 alleging mistake of fact in the classification of the merchandise. The request alleged that the broker did not recognize that the phenothiazine at issue was the same phenothiazine, with CAS no. 92-84-2, that appears in the Pharmaceutical Appendix to the HTSUS and therefore qualified for duty free entry using the prefix “K” per HTSUS General Note 13. An affidavit, from the broker, to this effect was attached to the request for reliquidation. The commercial invoices accompanying each importation of the subject merchandise identified the product as “Plastic Additives”. Per protestant, the broker misinterpreted this description to indicate that the product consisted of a plastic additive containing phenothiazine as an ingredient.
According to the Customs Protest and Summons Information Report (CF 6445A), your office has developed information that serves to refute key elements set forth in the broker’s affidavit. Upon request, the broker provided examples of the Combined Transport Bills of Lading which clearly state:
Phenothiazine(PTZ) Flake
CAS No. 92-84-2
Plastic Additives
Veterinary Pharmaceutical Grade
On June 5, 1997, two import specialists interviewed the broker and reviewed representative entry files for this merchandise going back to March, 1994. Your office determined that, from at least 1994 on, the broker had been making entry based on a “Broker Instruction Sheet” that was provided by the importer for each entry. The sheets advise the broker that the goods are phenothiazine and classifiable under subheading 2934.30.50, HTSUS. The broker indicated that she classified the entries at issue based on the instructions provided with each entry. The broker stated that sometime in February of 1996 she noticed that the merchandise might be covered by the Pharmaceutical Appendix and faxed pertinent HTSUS pages to the importer asking if the goods might qualify. Faxes dated March 29, 1996, indicate that the company had been dealing with the question for about one month.
It is your position that the written evidence indicates that both the importer and the broker were aware of the nature of the product and that the broker was instructed to classify the goods under subheading 2934.30.50, HTSUS. All entries covered by this protest contain Certificates of Analysis which yield a range of purity for the PTZ flake from 99.98 to 99.88 percent. Further, it is your position that the question of whether the already properly classified PTZ qualified for duty free entry under the Pharmaceutical Appendix is considered a construction of the law not correctable under 19 U.S.C. §1520(c)(1).
ISSUE:
Whether Customs properly denied the request to reliquidate the subject entries under 19 U.S.C. §1520(c)(1).
LAW AND ANALYSIS:
Initially, we note that both the request for reliquidation under 19 U.S.C. §1520(c)(1) and the protest of the denial of that request, under 19 U.S.C. §1514, were timely filed. The refusal to reliquidate an entry under section 1520(c) is a protestable decision under section 1514 (19 U.S.C. §1514(a)(7)).
Under 19 U.S.C. §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, 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, 1250 (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 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, 508, 643 F. Supp. 623 (1986)). Under 19 U.S.C. §1520(c)(1), the clerical error, mistake of fact, or other inadvertence must be “manifest from the record or established by documentary evidence.” ITT Corp. v. United States, 812 F. Supp. 213 (CIT 1993)), rev’d, 24 F. 3d 1384 (Fed. Cir. 1994). The Court stated that “. . . manifest from the record [means] apparent to Customs from a facial examination of the entry and the entry paper alone, and thus requir[ing] no further substantiation.” ITT, at 1387. The Court also stated that “[m]istakes of fact that are not manifest from [the] record . . . must be established by documentary evidence.” Id.
In the instant case, the protestant is alleging that the broker inadvertently left out the “K” prefix when preparing the entries because he/she was not aware of the exact physical properties of the merchandise. However, in reality, protestant is challenging its own decision as to the proper classification of the merchandise. As stated above, the importer instructed the broker as to where the merchandise was classifiable. Indeed, the instructions from the importer to the broker specifically state that it [the importer] will not be responsible for costs incurred due to non-compliance with, or implied interpretation, of its specific instructions. In order to sustain its argument, protestant would now have us believe that either: 1) the importer was not aware of the nature of its merchandise, or 2) that, on her own initiative and without being aware of the true nature of the merchandise, the broker coincidentally decided to classify the merchandise under the same subheading indicated in the instructions issued by the protestant. Of course, this interpretation of the facts is rebutted by the broker’s oral admission to Customs representatives that she simply followed the importer’s instructions in classifying the merchandise. Thus, based on the broker’s own admission, whether the broker lacked knowledge as to the nature of the merchandise is irrelevant. It was the importer who made the classification decision. We must conclude that the importer was fully aware as to the nature of its imported merchandise and made
a legal decision as to the proper classification. This is a mistake of law which is not correctable under 19 U.S.C. §1520(c)(1).
Protestant relies on the Court of International Trade’s decision in George Weintraub & Sons, Inc. v. United States, 691 F. Supp. 1449, 12 CIT 643 (1988), vacated as moot 855 F. Supp. 401 (CIT 1994), to support its position that since Customs is not disputing that the imported phenothiazine was entitled to Column 1 “Special” duty, then it must follow that there was a mistake of fact correctable under 19 U.S.C. §1520(c)(1). Protestant states that Weintraub, supra, is valid precedent even though it was vacated. However, we are not persuaded by protestant’s argument. The Weintraub decision cannot be read in a vacuum. Subsequent CIT and
CAFC decisions have held that it is not sufficient to allege that a mistake of fact or inadvertence has occurred. See, ITT Corp. v. United States, supra, and Executone Information Systems v. United States, 96 F.3d 1383 (Fed. Cir. 1996). “We do not accept such conclusory allegations, which do nothing more than track the language of the relevant statute.” Id. citing Degussa Canada Ltd. v. United States, 87 F.3d 1301 (Fed. Cir. 1996) (citations omitted). Protestant has submitted an affidavit from the broker stating that “[t]he commercial invoices accompanying each importation identified the product as ‘Plastic Additives.’ The invoice failed to identify the product as pure phenothiazine. . . rather merely indicated that the ‘Plastic Additives’ contained ‘phenothiazine (PTZ) flake.’” However, this conclusion is contradicted by protestant’s own admission that the invoice identified the merchandise as PTZ flake. Additionally, the “Broker Instruction Sheet” provided by the importer to the broker identifies the goods as Phenothiazine. See entry no. 227-XXXXX52-8: the CF 7501 lists the merchandise as phenothiazine, the broker instruction sheet dated January 26, 1995, describes the merchandise as phenothiazine flake, and the invoice dated January 18, 1995, also lists the merchandise as phenothiazine (PTZ) flake. The same information appears on the entry documents for each of the protested entries, as shown by Exhibit “A” to protestant’s letter of May 3, 1996. General Note 13, HTSUSA, provides that any product classifiable under a subheading which shows the symbol “K” under the rate of duty, shall be entered free of duty provided that such product is included in the pharmaceutical appendix to the HTSUSA. Phenothiazine is specifically listed in the pharmaceutical appendix. The broker’s failure to follow General Note 13 is a mistake of law not correctable under 19 U.S.C. §1520(c)(1).
Additionally, according to the CF 6445A, Customs officers reviewed representative entry files for this merchandise and found notations on the Bills of Lading indicating that the merchandise was Phenothiazine and the corresponding CAS number. Thus, it is not manifest from the entry records that protestant’s failure was due to a mistake of fact or inadvertence. See ITT Corp II, 24 F.3d at 1387.
Finally, the fact that a protest on the same merchandise was approved in HQ 953451 does not establish, in and of itself, that there was a mistake of fact. Quite the contrary, we have reviewed the protest file for HQ 953451 and the record shows that the proper classification of the merchandise was raised through a timely 19 U.S.C. §1514 protest. Thus, protestant has incorrectly compared the two protests. Mistakes of law are remediable via a timely §1514 protest. The same does not hold true for §1520(c)(1) petitions.
HOLDING:
We must conclude, based on the foregoing discussion, that the error in classification was in the construction of the law which can only be corrected by filing a timely section 1514 protest.
The subject protest should be DENIED in full.
In accordance with Section 3A(11)(b) of Customs Directive 099 3550 065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.
Sixty days from the date of the decision, the Office of Regulations and Rulings
will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.ustreas.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
John A. Durant, Director
Commercial Rulings Division