Customs Ruling HQ H247308 - Application for Further Review of Protest Number 2304-13-100102; Certificate of Origin; Originating Goods; Gas Turbine Parts; Disassembly, 19 CFR 181.132; Controverting a Consumption Entry to a TIB Entry; 19 C.F.R. § 10.31(g)

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HQ H247308
Dec 15, 2016

Type : Classification • HTSUS :
Related: 561991; 229200; H112456

OT:RR:CTF:VS H247308 RSD

Port Director
Customs and Border Protection
P.O. Box 3130
Laredo, Texas 78044-3130

RE: Application for Further Review of Protest Number 2304-13-100102; Certificate of Origin; Originating Goods; Gas Turbine Parts; Disassembly, 19 CFR 181.132; Controverting a Consumption Entry to a TIB Entry; 19 C.F.R. § 10.31(g)

Dear Port Director:

This is in response to the application for further review of Protest Number 2304-13-100102, filed by counsel on behalf of Sulzer Turbo (Sulzer) concerning the denial of Protestant’s request for preferential tariff treatment under the North American Free Trade Agreement (NAFTA) for several sets of parts from a gas turbine electrical generating system that were imported for a repair through the Port of Laredo, Texas. In addition, Counsel also contends that Protestant should have been able to change the type of entry made for the imported turbine parts from a consumption entry to an entry made under a Temporary Importation Bond (TIB). We note that in the course of considering the protest, Protestant changed counsels. A telephone conference to discuss this matter was conducted with Sulzer’s counsel and several company officials on August 31, 2016.

FACTS:

The Protest record indicates that on February 9, 2012, Sulzer’s customs broker filed a consumption entry for gas turbine parts on Sulzer’s behalf. This entry was filed because a Mexican utility company, Comision Federal de Electricidad (CFE) shipped the gas turbine parts to Sulzer’s facility located in Houston, Texas. The particular merchandise at issue consisted of 16 sets of parts for a Siemens Westinghouse Model W501FD2 Gas Turbine (“Gas Turbine”). It is claimed that CFE originally purchased the entire gas turbine system, Model W501FD2, from Siemens Westinghouse Power Corporation in 2002 as part of an electric generation facility. According to the information contained in the protest file, the gas turbine system was originally imported into Mexico during 2003.

CFE contracted with Sulzer to repair certain parts of the gas turbine. It removed these parts, identified by a serial number, from the gas turbine system and shipped them to Sulzer in the U.S. for repair. According to counsel, after Sulzer repaired the damaged parts, they were shipped back to CFE in Mexico on May 17, 2012. Sulzer submitted a document in which CFE certified the parts that it shipped to Sulzer were the original parts from the turbine machine that they had imported into Mexico in 2003, and that CFE only removed the parts from the turbine system for purposes of being repaired by Sulzer in the United States. The contract for service between CFE and Sulzer similarly describes the repair work to be performed on the parts. Sulzer repaired the parts in accordance with this contract and shipped the parts back to CFE in Mexico on May 17, 2012. CFE then incorporated the parts back into the gas turbine to the original configuration.

Counsel states that at the time of entry of the turbine parts, Sulzer believed that they were U.S. origin goods because at the time CFE purchased the turbine from Siemens Westinghouse, Siemens had manufacturing facilities in the United States and Canada. Sulzer did not enter the merchandise under a TIB because it believed that the U.S.-origin goods were eligible for duty-free entry as American goods returned under subheading 9801.00.10 of the Harmonized Tariff Schedule of the United States (HTSUS). As such, Sulzer directed its customs broker to enter the parts for repair as a consumption entry under subheading 9801.00.10 HTSUS. However, the record indicates that Sulzer’s customs broker did not enter the parts under any Chapter 98, HTSUS provision. Rather, Sulzer’s Customs broker entered the parts as generator parts in subheading 8405.90.00, HTSUS. Because subheading 8405.9000, HTSUS, is a duty free provision, counsel states that no corrective action was taken to correct the entry into a Chapter 98 HTSUS entry. Nonetheless, subheading 8405.90.00, HTSUS, was an incorrect tariff classification provision; according to Sulzer’s counsel, the parts should have been classified in subheading 8411.99.9085, HTSUS, as turbine parts.

On May 11, 2012, Sulzer received a Customs Border Protection (CBP) Form (CBPF) 28, which was a Request for Information from CBP regarding the classification of the imported parts. Specifically, CBP requested documentation accompanying the entry as well as descriptive or illustrative information regarding the nature and function of the imported parts. In response, Sulzer submitted a diagram of a single shaft gas turbine, which depicted a single shaft gas turbine of the type from which the imported parts had been removed and provided explanatory information for the parts comparable to the imported parts. Sulzer did not explain to CBP that the diagram it provided was for a General Electric Model MS5001 gas turbine even though the actual imported parts were from a Siemens Westinghouse Model W501FD2 gas turbine. Sulzer claims that at that time, it did not have a comparable diagram for the Siemens turbine, but subsequently Sulzer did provide CBP with a diagram for the Siemens turbine. Sulzer’s response neither detailed the errors in the classification of the entry, nor thoroughly explained the descriptive and illustrative literature it submitted. Despite the fact that the parts sent to Sulzer for repair were accurately identified as turbine parts on the commercial invoice and in the service contract, Sulzer’s customs broker still incorrectly described the parts as generator parts.

Additionally, Sulzer later learned that the country of origin of the gas turbine and the parts imported for repair was Canada, not the United States as had been declared on the CF-7501 entry document. Sulzer claims that this error was not corrected in its response to the CF-28 because it believed that as Canadian origin, they would be eligible for duty-free treatment under the NAFTA. On July 11, 2012, CBP issued a CF-29 Notice of Action notifying Sulzer that because the parts were turbine engine parts properly classified under subheading 8411.99.9085, it was advancing the rate of duty on the Entry from free to a rate of 2.4 percent. CBP liquidated the entry on July 27, 2012.

On September 7, 2012, Sulzer timely filed a protest disputing the demand for payment by U.S. Customs. In its protest, the company stated that the imported merchandise was eligible for a duty preference under NAFTA, and it was making a claim for preferential treatment of the parts. On October 30, 2012, CBP denied the protest in full. The protest denial indicated that the protest was improperly filed as a NAFTA post-importation claim under 19 U.S.C. 1514. It was further noted that the sole avenue to request NAFTA preference treatment would be a post importation NAFTA claim under 19 U.S.C. 1520(d). On October 10, 2012, Sulzer filed a post entry NAFTA claim asserting that the parts were entitled to NAFTA preferential treatment. Due to other errors in verbiage, Sulzer revised the claim in accordance with the Port’s instructions on December 7, 2012 as a claim filed under 19 U.S.C. 1520(d).

Subsequently, your office conducted a NAFTA verification on the claim. On December 12, 2012, your office sent a CF 28 to CFE, the exporter shown on the certificate of origin, requesting supporting documentation for the NAFTA claim with a costed bill of materials, a written description of the manufacturing process, and a flowchart of the manufacturing process. CFE responded on December 17, 2012, by stating that since it was not the manufacturer of the original equipment, it was not able to submit the requested information. However, CFE did provide a certificate of origin from the manufacturer of the turbine system, Siemens Westinghouse, which was given to CFE for the blanket period from April 25, 2003 through April 25, 2004. The certificate of origin indicates that the country of origin of the turbine equipment was Canada. The certificate of origin from CFE that Sulzer originally submitted indicated that the gas turbine was classified in heading 8502, HTS. However, Counsel explains that this classification was incorrect because it was not for the gas turbine, but for a separately imported generator system that was connected to the turbine in Mexico, and that this classification was made pursuant to instructions that CFE received from Mexican Customs. Counsel further explains that the correct classification for the turbine system should have been heading 8411, HTS. In addition, Sulzer submitted a photograph of an identification tag from the turbine equipment that shows the words “Made in Canada”.

On January 10, 2013, CBP sent another CF 28 to Siemens Westinghouse Power to verify the origin of the imported Gas Turbine Parts. After doing some research, the manager of Export Control and Customs for Siemens responded in a letter stating that Siemens Energy was not a party to the transaction under consideration and that the shipper used a Siemens Westinghouse NAFTA certificate of origin from 2003-2004 to substantiate a NAFTA qualification for an entry that took place on February 10, 2012. The Siemens manager also noted that it was an error for the shipper to use a NAFTA certificate with an incorrect classification of the imported merchandise. Because the importer of record should not have used the outdated and incorrect NAFTA certificate of origin, CBP issued a CF 29 Notice for the entry. The notice explained that the verification revealed that the goods did not qualify for NAFTA preferential treatment tariff treatment pursuant to General Note 12(b)(ii) to the HTSUS, and the entry was value advanced. On March 25, 2013, CBP denied the NAFTA claim stating that the information provided did not support the NAFTA claim. On April 16, 2013, Sulzer’s prior counsel submitted a Protest and Application for Further Review.

ISSUES:     I. Whether the parts removed from the gas turbine equipment in Mexico and imported into and the United States for repair qualify for preferential tariff treatment under NAFTA.

II. Whether the entry for the gas turbine equipment can be converted from an entry for consumption to a TIB entry pursuant to 19 CFR § 10.31(g). LAW AND ANALYSIS: NAFTA Preference General Note (“GN”) 12, HTSUS, incorporates Article 401 of NAFTA into the HTSUS. General Note 12(a)(ii) provides, in pertinent part: Goods that originate in the territory of a NAFTA party under the terms of subdivision (b) of this note and that qualify to be marked as goods of Mexico under the terms of the marking rules set forth in regulations issued by the Secretary of the Treasury (without regard to whether the goods are marked), when such goods are imported into the customs territory of the United States and are entered under a subheading for which a rate of duty appears in the “Special” subcolumn followed by the symbol “MX” in parentheses, are eligible for such duty rate, in accordance with section 201 of the NAFTA Implementation Act. Accordingly, the imported product will be eligible for the “Special” “MX” rate of duty provided it is a NAFTA “originating” good under GN 12(b), HTSUS, and qualifies to be marked as a product of Mexico under the NAFTA Marking Rules. GN 12(b), HTSUS, provides, in pertinent part: For the purposes of this note, goods imported into the customs territory of the United States are eligible for the tariff treatment and quantitative limitations set forth in the tariff schedule as goods originating in the territory of a NAFTA party only if—(i) they are goods wholly obtained or produced entirely in the territory of Canada, Mexico and /or the United States; or (ii) they have been transformed in the territory of Canada, Mexico and/or the United States so that—(A) except as provided in subdivision (f) of this note, each of the non-originating materials used in the production of such goods undergoes a change in tariff classification described in subdivisions (r), (s) and (t) of this note or the rules set forth therein, or (B) the goods otherwise satisfy the applicable requirements of subdivisions (r), (s) and (t) where no change in tariff classification is required, and the goods satisfy all other requirements of this note; or(iii) they are goods produced entirely in the territory of Canada, Mexico and/or the United States exclusively from originating materials.     In connection with a claim for preferential tariff treatment for a good under the NAFTA, a U.S. importer must make a formal declaration that the good qualifies for such treatment. Except in specified instances, the declaration must be based on a complete and properly executed original certificate of origin, or a copy thereof, which is in the possession of the importer and which covers the good being imported. See Section 181.21(a), CBP Regulations (19 CFR § 181.21(a)). Pursuant to 19 CFR § 181.22(b), an importer claiming preferential treatment shall provide, at the request of the port director, a copy of each certificate of origin pertaining to the goods in question. Thus, an importer is required to submit a certificate of origin which was in its possession at the time of importation to CBP upon request, in order to receive preferential tariff treatment. A certificate of origin shall be accepted by the port director as valid, provided that the certificate is completed, signed, and dated in accordance with the requirements of 19 CFR § 181.22(b). This section requires that the certificate of origin: be on CBP Form 434, another approved form, or in another format approved by CBP be signed by the exporter or by the exporter’s authorized agent having knowledge of the relevant facts; and, be in English or the language of the country from which the good is exported. See also 19 CFR § 181.22(c). In Headquarter Ruling Letter (HQ) 228506, CBP stated that “[t]he failure to supply promptly, within the 30-day period set in CF 28, a certificate of origin creates a rebuttable presumption that the importer did not have such a certificate of origin in its possession at the time of importation.” However, this presumption can be rebutted if the importer provides credible and sufficient evidence that the party had a valid certificate of origin in its possession at the time of the claim. See, e.g., HQ 561991, dated March 29, 2001.

In this instance, Sulzer did not make a claim for NAFTA duty preference when it first filed its entry for the imported goods because it believed they were classified in an otherwise duty-free provision, or were of U.S. origin and would qualify for duty-free entry as American goods returned under subheading 9801.00.10, HTSUS. Eventually, Sulzer filed a post entry NAFTA claim asserting that the entry was entitled to NAFTA preferential treatment on October 10, 2012. Even if an importer fails to make a claim for NAFTA at the time of entry, it may claim NAFTA by filing a request under 19 U.S.C. § 1520(d). Specifically, that provision states in pertinent part that: Notwithstanding the fact that a valid protest was not filed, the Customs Service may . . . reliquidate an entry to refund any excess duties (including any merchandise processing fees) paid on a good qualifying under the rules of origin set out in section 202 of the North American Free Trade Agreement Implementation Act [19 USCS § 3332], . . . 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, in accordance with those regulations, a claim that includes— It is not disputed that Sulzer made a timely claim for NAFTA pursuant to 19 U.S.C. § 1520(d). To make a 19 U.S.C. § 1520(d) claim, a valid certificate of origin is required to be filed. 19 CFR 181.32(b). In order to determine if Sulzer presented a valid claim for NAFTA preferential tariff treatment on the turbine parts under 19 U.S.C. § 1520(d), CBP initiated a verification. Section 181.71, Customs Regulations (19 CFR 181.71), provides as follows:

…Customs shall deny preferential tariff treatment on an imported good, or shall deny a post-importation claim for a refund filed under subpart D of this part, only after initiation of an origin verification under section 181.72(a) of this part which results in a determination that the imported good does not qualify as an originating good or shall not be accorded such treatment for any other reason as specifically provided for elsewhere in this part.

Furthermore, section 181.72(a), Customs Regulations (19 CFR 181.72(a)), provides as follows: …Customs may initiate a verification in order to determine whether a good imported into the United States qualifies as an originating good for purposes of preferential tariff treatment under the NAFTA as stated on the Certificate of Origin pertaining to the good. Such a verification (1) May also involve a verification of the origin of a material that is used in the production of a good that is the subject of a verification under this section;…

In this instance, Sulzer did not present a valid NAFTA certificate of origin from the Mexican exporter of the turbine parts, CFE. The certification requirement is central to the implementation of NAFTA preference and it gives effect to the understanding by all three parties to the NAFTA that a claim for tariff preference must be based on knowledge that a good originates. This “knowledge” must be actual knowledge of the factual information that, under the post-entry verification procedures of the NAFTA, is sufficient to demonstrate that the specific rule of origin is satisfied, e.g., that the change in tariff and the regional value content requirements are, in fact, satisfied. Specifically, in this instance, when the Port attempted to verify the information contained on the certificate of origin that Sulzer submitted, the producer did not substantiate that the imported turbine parts were originating goods. Sulzer’s counsel contends the subject merchandise were parts from a gas turbine system that was a product of Canada made by Siemens Westinghouse, which CFE purchased and imported into Mexico in 2003. According to counsel, since the gas turbine was produced in Canada, it was NAFTA originating when it was imported into Mexico in 2003. Consequently, it is claimed that the parts removed from the gas turbine system should qualify as NAFTA originating. However, Sulzer did not present a valid certificate of origin from the actual exporter of the turbine parts. Instead, in order to show that they were NAFTA originating, Sulzer furnished a certificate of origin that CGE obtained from the manufacturer of the entire gas turbine system, Siemens Westinghouse, when the turbine system was imported into Mexico in 2003. This document indicates that the country of origin of the entire gas turbine system was Canada. There was also confusion whether the information on the certificate of origin was accurate. Your office notes that there were some discrepancies in the certificate of origin presented, including the HTSUS classification of the turbine parts as generator parts rather than as turbine parts. Counsel further explains at the same time when CFE imported the turbine produced in Canada into Mexico, it also imported a generator produced in the United States into Mexico, and that it received certificates of origin for both products. This caused confusion, because when Sulzer made its NAFTA claim, Sulzer mistakenly submitted a certificate of origin for the U.S. produced generator that CFE imported into Mexico rather than for the turbine that was produced in Canada. When your office attempted to verify the accuracy of the certificate of origin, Siemens indicated that it could not verify the contents of the certificate of origin as it related to the parts that were imported into the United States in 2012. Counsel contends that if Siemens had been asked, they would have indicated that the certificate of origin was accurate with respect to the entire gas turbine system, which was imported into Mexico from Canada in 2003. Counsel maintains that Siemens has not been cooperative in providing information regarding the turbine and its parts because it is a competitor of Sulzer in the business of repairing gas turbines. Thus, counsel claims that Sulzer was unable to get Siemens to affirm that the turbine parts were from the turbine system of Canadian origin sold to CFE in Mexico in 2003. Nonetheless, in its response to the inquiry from CBP regarding the 2003 certificate of origin, Siemens did not affirmatively acknowledge that the gas turbine system was of Canadian origin. Even if Siemens had, there is still no documentation linking the turbine parts to the turbine system. In order to establish that the parts came from the gas turbine system imported into Mexico in 2003, Sulzer presented statements from CFE officials that the parts sent to Sulzer for repair only came from the gas turbine system that it purchased from Siemens and imported into Mexico during 2003. However, without an affirmation from the actual producer, Siemens, that the imported merchandise was of Canadian origin, we believe that these statements alone are insufficient. Submitting affidavits and other statements from CFE officials cannot serve as a substitute for providing a properly executed certificate of origin from the exporter or the producer, as required by 19 CFR § 181.22(b), to demonstrate that the imported goods were NAFTA originating. To further support its claim that the turbine parts were of originating, Sulzer also furnished a copy of a picture of a tag or a plate, which it claims came from the gas turbine system purchased by CFE in 2003. This picture shows the words “Made in Canada”. The model number and serial number matches the number shown on the sales contact between Siemens and CFE. However, as noted above, your office was unable to verify that the turbine system was originating. The imported parts could also qualify for preferential tariff treatment under NAFTA, pursuant to 19 CFR § 181.132, which pertains to disassembly. The regulation states that: For purposes of implementing the rules of origin provisions of General Note 12, HTSUS and Chapter Four of the NAFTA, except as provided in paragraph (b) of this section, disassembly is considered to be production, and a component recovered from a good disassembled in the territory of a Party will be considered to be originating as the result of such disassembly provided that the recovered component satisfies all applicable requirements of Annex 401 of this part.

Counsel claims that the imported turbine parts were disassembled in Mexico and affidavits from CFE officials were submitted supporting this claim. Therefore, it is necessary to review the applicable rule of origin for the turbine parts. The turbine parts are classified in subheading 8411.99, and the specific rule of origin under General Note 12(t)/84.22, HTSUS, specifies that there must be “A change to subheadings 8411.91 through 8411.99 from any other heading.” Counsel concedes that both the turbine and the imported parts are classified in heading 8411, HTSUS. Consequently, the turbine parts do not undergo a change in heading and the applicable tariff shift rule is not satisfied as result of the disassembly operation that occurred in Mexico. Counsel contends that although the turbine parts do not undergo the requisite tariff shift by being disassembled, they would be qualify as NAFTA originating goods under General Note 12(b)(iv), HTSUS. That provision provides that goods imported into the customs territory of the United States are eligible for the tariff treatment and quantitative limitations set forth in the tariff schedule as goods originating in the territory of a NAFTA party only if: … (B) the goods otherwise satisfy the applicable requirement of subdivision (r), (s) and (t) where no change in tariff classification is required, and the goods satisfy all other requirements of this note; or They are produced entirely in the territory of Canada, Mexico and/or the United States but one or more of the non-originating materials falling under provisions for “parts” and used in the production of such goods does not undergo a change in tariff classification because …

(B) the tariff heading for such goods provide for and specifically describe both the goods themselves and their parts and is not further divided into subheadings or the subheadings for such goods provide for and specifically describe both the goods themselves and their parts. A review of the applicable HTSUS heading of 8411 for the imported turbine parts and the relevant subheading indicates that General Note 12(b)(iv)(B) does not apply to this situation because heading 8411, HTSUS does not meet the conditions set forth in General Note 12(b)(iv)(B), HTSUS, for a good to be considered as NAFTA originating. First, heading 8411, HTSUS, is further divided into subheadings. In addition, subheading 8411.99 HTSUS, only describes the parts and does not describe both the goods themselves (gas turbines), and their parts. Therefore, we find that the protestant has failed to provide sufficient support for its preferential tariff claim for the imported gas turbine parts under NAFTA. TEMPORARY IMPORTATION BOND In addition to its claim that the gas turbine parts were eligible for preferential tariff treatment under its post importation NAFTA claim, Sulzer contends that the imported parts are eligible for duty-free treatment if its original consumption entry could be converted into a Temporary Importation Bond (TIB) entry. Sulzer’s position is based on subheading 9813.00.05, HTSUS, which permits goods to be temporarily imported into the United States to be repaired, free of duty. Subheading 9813.00.05, HTSUS, provides that articles to be repaired, altered or processed (including processes that result in articles manufactured or produced in the United States), may be entered temporarily free of duty, under a TIB for exportation within one year from the date of importation. See U.S. Note 1(a) of Subchapter XIII, Chapter 98, HTSUS. To satisfy the requirements for the TIB, the imported article must be timely exported. Id. Additionally, to qualify under this provision, the merchandise imported may not be imported for the purpose of sale or sale on approval. Id. In this case, Sulzer’s Customs broker entered the imported merchandise, the turbine system parts, into the United States under a consumption entry. Counsel contends that the broker did not attempt to convert the consumption entry into a TIB entry because of the belief that the goods were duty-free anyway. Nonetheless, CBP regulations allow for the conversion of a consumption entry to a TIB in some circumstances. 19 CFR 10.31(g) indicates that a conversion may be possible “… even though released from CBP custody if it is established that the original entry was made on the basis of a clerical error, mistake of fact, or other inadvertence within the meaning of section 514(a), Tariff Act of 1930, as amended, and was brought to the attention of CBP within the time limits of that section.” Counsel argues that there was a mistake of fact because when Sulzer imported the turbine parts into the United States, it mistakenly believed that the parts to be of U.S.-origin or in an otherwise duty-free provision. It is alleged that when Sulzer brought this fact to the broker’s attention, he offered no explanation for failing to follow Sulzer’s instructions to enter the items as American goods returned, and he did not correct the entry in accordance with Sulzer’s prior instructions. The meaning of the term “mistake of fact” was addressed in HQ H112456 dated June 17, 2013. The decision provides:      A mistake of fact is "a mistake which takes place when some fact which indeed exists is unknown, or a fact which is thought to exist, in reality does not exist." C.J. Tower & Sons of Buffalo, Inc. v United States, 68 Cust. Ct. 17, 22 (1972) (citations omitted), aff'd by 499 F.2d 1277 (C.C.P.A. 1974) (citations omitted). A clerical error is "mistake by a subordinate, who does not have any duty to exercise judgment with regard to classification." Xerox Corp. v. United States, 219 F. Supp. 2d 1345, 1348 (Ct. Int'l Trade 2002) (citations omitted). An "inadvertence" is even broader in scope, encompassing oversights or involuntary accidents, even mistakes resulting from inattention and carelessness. Hambro Automotive Corp. v. United States, 603 F.2d 850, 854 (C.C.P.A. 1979). In contrast, a mistake in the construction of law exists when "the facts are known, but their legal consequences are not known or believed to be different than they really are." Id. at 855. CBP has addressed the issue of whether a TIB entry may be substituted for an entry for consumption under 19 CFR § 10.31(g). In HQ 229200, dated July 6, 2001, the importer protested CBP’s decision to deny the substitution of a TIB entry for a consumption entry filed on imported non-corrugated cardboard cartons that had been imported for the testing of a packaging machine. The cartons were determined to be subject to duty after the shipment had already been released from CBP custody. CBP examined the documents submitted with the subject entry to determine whether there were any notations or information relating to the character or the intended use of the imported merchandise, and none were found to indicate that the merchandise was being imported for testing or experimental purposes. In determining that the importer failed to justify a change from a consumption entry to a TIB entry, HQ 229200 states that “an importer’s failure to provide a customs broker with complete information pertaining to the use and purpose of merchandise being imported does not constitute a mistake in fact under Section 520(c)(1), Tariff Act of 1930.” Thus, its failure to communicate with its broker did not qualify as a mistake of fact for purposes of 19 CFR 10.31(g). In HQ H112456, supra, the importer sought to substitute a TIB entry in lieu of the entry for consumption, for a shipment of natural bristle paint brushes from China, classified under subheading 9603.40.40, HTSUS, pursuant to 19 CFR § 10.31(g). The entered brushes were covered by three separate commercial invoices. None of the invoices nor any of other documents included in the original entry package indicated that the brushes were being imported temporarily for testing purposes. Further, no evidence was provided by the importer that it had instructed the broker to file a TIB entry for the merchandise. There was no indication in the facts presented that the importer had informed the broker that the brushes were being imported for testing. It was only after the merchandise had been entered and released, that the importer sought to enter the goods temporarily, free of duty under subheading 9813.00.30, HTSUS. Accordingly, CBP held that the fact that the broker was unaware the importer intended to import the brushes temporarily free of duty for testing, was insufficient to substantiate that a mistake of fact occurred. In the present case, Sulzer has not presented evidence establishing that it had informed its customs broker that the merchandise should be entered under a TIB for purposes of repair. Rather, Sulzer has indicated that it directed its customs broker to enter the gas turbine parts as a consumption entry under subheading 9801.00.10 HTSUS, as American goods returned. Counsel claims Sulzer directed its broker to enter the parts that way because it believed them to be of U.S.-origin parts. However, for unexplained reasons, Sulzer’s customs broker did not enter the turbine parts under any provision in Chapter 98, HTSUS, but as a consumption entry under subheading 8405.90.00, HTSUS, which was a duty free provision. It has been represented that the reason why Sulzer did not take corrective action was because no duty would be owed and a correction would not be needed. In any event, it is clear that there was no indication that the customs broker failed to enter the parts under a TIB because the parts would be repaired. Thus, we find Sulzer has not established that its failure to file a TIB entry was the result of "a mistake which takes place when some fact which indeed exists is unknown, or a fact which is thought to exist, in reality does not exist." HOLDING: The protest should be denied. Based on the evidence presented, we find that insufficient documentation was presented to support the 19 U.S.C. § 1520(d) claim for preferential tariff treatment under NAFTA. The evidence in this case is also insufficient to establish that the imported turbine parts were entered as a consumption entry rather than as a TIB entry for repair in the United States and then exported from the United States was due to a mistake of fact under 19 CFR § 10.31(g), and therefore the entry is not eligible for a change from a consumption entry to a TIB entry. In accordance with Sections IV and VI of the CBP Protest/Petition Processing Handbook (HB 3500-08A, December 2007, pp. 24 and 26), 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 in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

Myles B. Harmon, Director
Commercial & Trade Facilitation Division