RR:CR:DR 228020 CK
Port Director of Customs
U.S. Customs Service
Attn: Ana B. Hinojosa
9901 South Cage
Pharr, TX 78577
RE: Protest and AFR No. 2304-97-100291; Vasquez Limes; 19 U.S.C. 1520(c); mistake of fact; 19 U.S.C. 1514; premature protest; 19 CFR 152.2
The above-numbered protest has been forwarded to our office for further review on May 7, 1998. We have considered the issues and arguments made, and our decision follows.
Protestant, Vazquez Limes, Inc., filed this protest on October 21, 1997. Protestant seeks reliquidation of 32 entries pursuant to 19 U.S.C. 1520(c). Protestant made 32 entries of fresh Persian Limes between June 13, 1997 and June 25, 1997. The classification asserted by Protestant at the time of entry was subheading 0805.90.0010, HTSUS.
On June 13, 1997 Customs by memorandum 7164071 reclassified Haitian and Persian limes in subheading 0805.90.0010, HTSUS. The Port states that memorandum 7164071 was posted to the ABI Bulletin on June 13, 1997 notifying brokers, importers, and import specialists of the correct classification of limes and that the correct classification would be effective immediately.
A CF 29, Notice of Action, dated August 25, 1997 was sent to Protestant, stating that per the instructions found in message 7164071 dated June 13, 1997, effective immediately all limes should be entered under subheading 0805.30, HTSUS. It notifies Protestant that all entries it had made from Mexico from June 13, 1997 forward were rate advanced to reflect the correct duty. A list of the 32 entries at issue was attached.
Twenty-seven of the subject entries were liquidated on September 12, 1997, with the rate advance. Five of the entries were liquidated on two dates in April 1998, also with the rate advance.
As stated earlier, Protestant filed the present protest on October 21, 1997 seeking reliquidation of its entries pursuant to 19 U.S.C. 1520(c). Protestant argues that Customs made a mistake of fact by not notifying importers of the increase in duties on limes. Protestant states that its entries filed prior to June 26, 1997 should be reliquidated with no duty, because Customs made a mistake in not notifying it of the reclassification.
The Port denied Protestant’s claim for reliquidation pursuant to section 1520(c), and the case was sent for further review.
Did the port correctly deny Protestant’s request for reliquidation pursuant to 19 U.S.C. 1520(c)?
2. Should the request for reliquidation be granted under 19 U.S.C. 1514?
LAW AND ANALYSIS:
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. The error must be adverse to the importer and manifest from the record or established by documentary evidence and brought to the attention of the Customs Service within one year after the date of liquidation.
In the present case, twenty-seven of the subject entries were liquidated on September 12, 1997. Five of the subject entries were liquidated in April 1998. Protestant filed the petition under section 1520(c) on October 21, 1997. Therefore, the section 1520(c) petition is timely filed within one-year of the liquidation for twenty-seven of the entries that liquidated on September 12, 1997. However, for the five entries that liquidated in April 1998, the petition is not timely filed.
The United States Customs Court in J.S. Sareussen Marine Supplies, Inc. v. United States, 304 F. Supp. 1185 (1969), discusses the issue of timely filing a petition for reliquidation pursuant to section 1520(c). In that case the Plaintiff entered for consumption paint imported from Norway, on five separate occasions from November 1959 to August 1960. The entries were liquidated on three occasions between February 1963 and August 1963. Plaintiff timely filed protests in each instance claiming the paint was dutiable under a different tariff provision than that assessed by Customs. At the trial the Plaintiff amended the protests to claim a denial of relief under section 1520(c), by reason of the refusal of the collector to reliquidate the entries based o the Plaintiff’s ‘mistake of fact’ as to the composition of the imported paints. Plaintiff states it made a request for reliquidation pursuant to section 1520(c) by letter to the collector dated April 11, 1961.
The court states that in Berkery, Inc., et al. v. United States, 47 Cust. Ct. 102, C.D. 2287 (1961), “this court held that the denial of an importer’s request for correction of a clerical error under section 520(c), supra, ‘prior to liquidation’ did not afford the importer the same right of access to the court as a request made after liquidation.” Id, at 1186.
The court also cites to Hensel, Bruckmann and Lorbacher, Inc., a/c Naftone International Corp. et al. v. United States, 57 Cust. Ct. 52, C.D. 2723 (1966). “In that case, a letter was addressed to the collector on September 1, 1961 requesting relief under section 1520(c)(1) to correct a clerical error. The request was denied and the entry was liquidated on October 25, 1961. The letter was thus found not to be a request for reliquidation, as no liquidation had in fact been made.” Id. The court held in that case, that “ ‘Inasmuch as section 1520(c) (1) only supports a claim for reliquidation as distinguished from liquidation, no relief can be granted under the protest as to this entry in the absence of a request for reliquidation seasonably made to the collector in conformity with section 1520(c)(1).’” Id.
The court concludes that the Plaintiff’s request for reliquidation made on April 11, 1961, when liquidation did not occur until 1963, was not a proper request for reliquidation as is contemplated in the statute. Additionally, there was no evidence that any request was made by Plaintiff subsequent to the liquidation which would fulfill the requirements of the statute.
The present case is similar to the situation in J.S. Sarreussen. In this case five of the entries, which would liquidate in April 1998, had not liquidated when Protestant filed its 1520(c) petition on October 21, 1997. Therefore, those five entries are not timely for purposes of the 1520(c) petition filed on October 21, 1997.
As to the merits of a 1520(c) petition, the relief provided for in 19 U.S.C. §1520(c)(1) is an exception to the finality of section 1514. 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) 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 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 GodchauxHenderson 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, Supra).
Under 19 U.S.C. §1520(c)(1), the clerical error, mistake of fact, or other inadvertence not amounting to an error in the construction of a law must be "manifest from the record or established by documentary evidence." The alleged error in this case is not manifest from the record (see ITT Corp. v. United States, 812 F. Supp. 213 (CIT 1993), reversed, 24 F. 3rd 1384 (Fed. Cir. 1994) at 1387, "... manifest from the record [means] apparent to Customs from a facial examination of the entry and the entry papers alone, and thus requir[ing] no further substantiation"). In ITT, the Court stated that "[m]istakes of fact that are not manifest from [the] record ... must be established by documentary evidence." Id.
In the case before us Protestant’s arguments are based on Customs failure to provide notice of its reclassification. The mistake of fact alleged by Protestant is not manifest from the record, nor has Protestant offered any documentary evidence of a mistake of fact on the part of the Port. Additionally, Protestant argues that Customs lack of notice is a violation of its Fourth Amendment right. Protestant asserts lack of notice is a violation of its due process rights. Protestant states that while Customs has the right to reclassify merchandise, it must in fairness, give notice to importers.
The Court of International Trade in Penrod Drilling Co. v. United States, 727 F. Supp. 1463, 1467 (1989), aff’d, 925 F.2d 406 (Fed. Cir. 1991), states in regard to the issue of notice,
“It is well settled that proper notice of liquidation refers to the bulletin notice of liquidation. Goldhofer Fahrzeugwerk GmbH v. United States, 13 CIT 54, 706 F. Supp. 892, aff’d, 885 F.2d 858 (Fed. Cir. 1989; St. Regis Paper Co. v. United States, 13 CIT 992, Slip Op. 89-166 (Dec. 11, 1989); Timken Co. v. United States, 6 CIT 75, 569 F. Supp. 65 (1983). Bulletin notice is the statutorily mandated notice: ‘the date of liquidation shall be the date the bulletin notice is posted in the customhouse.’ United States v. Reliable Chemical Co., 66 CCPA 123, 127, C.A.D. 1232, 605 F.2d 1179, 1183 (1979); Goldhofer, 13 CIT at 58, 706 F. Supp. at 895. The importer bears the burden for examining all notices posted to determine whether its goods have been liquidated, and to protest timely. Omni U.S.A., Inc. v. United States, 11 CIT 480, 483, 663 F. Supp. 1130, 1133 (1987), aff’d, 840 F.2d 912 (Fed. Cir. 1988), cert. denied, 109 S. Ct. 56; Goldhofer, 13 CIT at 58, 706 F. Supp. at 895.”
Additionally the CIT in Goldhofer Fahrzeugwerk GmbH v. United States, 13 CIT 54, 57, 706 F. Supp. 892, aff’d, 885 F.2d 858 (Fed. Cir. 1989) addressed the issue of notice. The Plaintiff in Goldhofer claimed inadequate bulletin notice of liquidation concerning its importation of a multiaxle “gooseneck” semitrailer, on February 16, 1980. Plaintiff argued in the alternative that the bulletin notice, if adequate, is insufficient to meet the minimum constitutional due process requirements.
First the court addresses the issue of the adequacy of the bulletin notice, by noting that the only notice that is statutorily mandated is bulletin notice “ ‘in a conspicuous place in the customhouse at the port of entry. . . .’” 19 CFR 159.9(b). Id. at 895. The court states that proper liquidation notice requires only that an importer’s name be posed and displayed “ ‘ in a conspicuous place in the customhouse at the port of entry.’” Id. at 894. The court refers to United States v. Judson Sheldon Div., Nat’l Caroloading Corp., 42 CCPA 202, 203-204, C.A.D. 594(1955), stating, “Notice is legally sufficient if ‘the importer could [not] have reasonably been misled or confused by the bulletin notice of liquidation, as posted.’”
In regards to the minimum due process requirements the court relies first on Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950), in which “the court ruled that notice must be ‘reasonably calculated, under all the circumstances, to appraise interested parties of the pendency of the action and afford them an opportunity to present their objections.’” Id. at 896. The court next looks at Greene v. Lindsey, 456 U.S. 444, 451 (1982) in which the court stated, “the sufficiency of notice must be tested with reference to its ability to inform people of the pendency of the proceedings that affect their interests.” Id. The court also cites to Tulsa Professional Collection Services, Inc. v. Pope, 484 U.S. 813, Slip Op. 86-1961 at 6 ( April 19, 1988), in which the court stated,
“ ‘whether a particular method of notice is reasonable depends on the particular circumstances.’” Id.
The court in Goldhofer found that the particular circumstances in that action merit the court to conclude that the method of posting bulletin notice was reasonable. The likelihood of the parties obtaining notice is the crucial factor. The court stated that the bulletin notice is means which is reasonably calculated to apprise an importer of the liquidation. The court then stated, “A reasonably prudent importer is amply apprised of any action taken with respect to his merchandise through the bulletin process and must merely monitor the bulletin to be aware of liquidation. Thus, the Court finds bulletin notice to fall within the minimum constitutional standard since plaintiff is not in the same position as one in which notice is unlikely to reach.” Id. at 897.
In the present case, Protestant has not alleged any particular mistake of fact or any inadvertence. Protestant has not offered any documentary evidence of a mistake of fact or any inadvertence. Protestant’s argument is that Customs made a mistake in giving inadequate notice of the change in tariff classification of limes. In the cases discussed above, the court’s have taken the position that the posting of the bulletin notice of liquidation is the only notice required, and such notice meets the constitutional minimum requirements of due process. In this case, the Protestant in addition to having bulletin notice, received a CF 29, dated August 25, 1997, informing Protestant of the rate advance. Thus, Protestant received more than the minimum amount of constitutionally mandated due process and notice in regards to its entries. Therefore, for the twenty-seven entries that were liquidated on September 12, 1997, and were timely for purposes of the 1520(c) petition filed on October 21, 1997, the port correctly denied the 1520(c) petition. Protestant has not evidenced any mistake of fact or inadvertence in the liquidation of its entries correctable under section 520(c).
However, the classification of imported merchandise is a protestable matter under 19 U.S.C. 1514(a)(2). Protest may be filed against the classification and rate and amount of duties chargeable, if the protest is filed within, but not before, 90 days of liquidation of the entry of the merchandise. See, 19 U.S.C. 1514(a)(2).
In the present case, 27 of the subject entries which were entered between June 13, 1997 and June 26, 1997, were liquidated on September 12, 1997. Protestant filed this protest on October 21, 1997, which is within the 90-day period provided in section 1514. However, five of the entries were liquidated on two dates in April 1998. These five entries are not timely filed for purposes of section 1514. Instead, the protest filed against these five entries is premature as liquidation had not even occurred prior to the filing of the protest in October 1997.
The statute, 19 U.S.C. 1514, fixes a definite time within which a protest may be filed. The requirement that protest be filed within 90 days after but not before notice of liquidation or reliquidation or the date of the decision protested has been interpreted by the Courts (see The Best Foods, Inc. v. United States, 37 Cust. Ct. 1, 9-10, 147 F. Supp. 749, C.D. 1791 (1956) (prematurely filed protest dismissed); United States v. Reliable Chemical Co., 66 CCPA 123, 605 F. 2d 1179, C.A.D. 1232 (1979) (prematurely filed protest, filed after a "courtesy" notice advising of scheduled liquidation but before the date of the bulletin notice of liquidation, dismissed in appellate decision reversing lower court’s denial of motion to dismiss); and McDonnell Douglas Corp. v. United States, 75 Cust. Ct. 6, 465 F. Supp. 1291, C.D. 4604 (1975)). See also, HQ 224846, dated February 17, 1994; HQ 226891, dated January 8, 1997; and HQ 227844, dated March 5, 1998. Therefore, the five entries liquidated in April 1998 are not timely for the purpose of this protest, and the request for reliquidation for these five entries should be denied.
As to whether relief should be granted under section 1514 for the remaining 27 entries, it should be noted that Protestant seeks reliquidation based on a lack of notice by Customs, and not the classification of the limes. The requirements for notification to an importer of increased duties are found in section 152.2 of the Customs Regulations.
Section 152.2 states, “If the port director believes that the entered rate or value of any merchandise is too low, or if he finds that the quantity imported exceeds the entered quantity, and the estimated aggregate of the increase in duties on that entry of the increase in duties of that entry exceeds $15, he shall promptly notify the importer on Customs Form 29, specifying the nature of the difference on the notice. Liquidation shall be made promptly and shall not be withheld for a period of more than 20 days from the date of mailing of such notice unless in the judgment of the port director there are compelling reasons that would warrant such action.” (emphasis added)
The port in this case had been informed that memorandum 7164071 had been posted the bulletin board which would give notice to all importers, brokers, and import specialists. Additionally, the port, complying with section 152.2 sent the Protestant a CF 29 dated August 25, 1997 stating that for the attached 32 entries, the limes were being rate advanced. Finally, for the 27 entries that were timely protested, all were liquidated on September 12, 1997, within the 20-day period provided in section 152.2. Thus, the port complied with all the notice requirements in section 152.2, informing the Protestant its merchandise was being reclassified and rate advanced.
It should also be noted that the language in section 152.2 is directory, not mandatory. The United States Court of Appeals for the Federal Circuit discussed discretionary language, rather than mandatory requirements in Canadian Fur Trappers Corp. and Meldisco, a division of Melville Corp. v. United States, 884 F.2d 563 (1989). In that case, Plaintiff appealed the decision of the CIT which held that its entries which were subject to countervailing duties were not deemed liquidated pursuant to 19 U.S.C. 1504. The court took up the issue of the meaning of the language in section 1504(d), which states the “entry shall be liquidated within 90 days therefrom.” The court first states that “while Congress included the operative language ‘deemed liquidated’ in section (a) and the first part of section (d), no such consequential language appears in the final part of section (d).” Id. at 566. The court then states that “even though the statute includes a 90 day time frame for the Customs Service to act, the lack of consequential language in the latter part of section (d) if the Customs Service does not meet that time frame leads us to conclude that Congress intended this part of section (d) to be only directory.” Id.
The court, while following the plain meaning of the statute also discusses persuasive evidence that furthers its conclusion. The court states that the Report of the House of Representatives committee which drafted the proposed statute, is such persuasive evidence. The court then quotes from the House Report which is referring to the 90 day time frame in the last part of section 1504(d), “ ‘this last provision is discretionary, rather than mandatory, and recognizes that there will be instances when it may be impossible to complete liquidation within 90 days because of the sheer number of entries to be liquidated after a long-continued suspension.’ H.R. Rep. No. 621, 95th Cong., 1st Sess. 26 (1977).
Following the court’s analysis in Canadian Fur Trappers that the use of the word “shall,” which is not followed by consequential language in section 1502(d) is directory, not mandatory, the same can be said for section 152.2 of the Customs Regulations. The word “shall” is use, and no consequential language follows the use of the term, making the language directory, not mandatory. However, that is not at issue for twenty-seven of the entries in this case, as the Protestant had received a CF 29, with the rate advance, dated August 25, 1997, and liquidation followed for those twenty-seven on September 12, 1997. As to the five entries that liquidated in April 1998, while untimely protested, see above discussion, those liquidations were correct even if they followed the CF 29 by eight months since the language of section 152.2 is only directory, not mandatory.
Therefore, Protestant’s argument that Customs failed to provide notice regarding the reclassification and rate advance, and its entries should be reliquidated is denied. The request should be denied not only based on the notice it received in compliance with section 152.2, but on the basis of the discussion under Issue #1, above. The only notice Protestant is entitled to, which meets the constitutionally mandated minimum of due process is the bulletin notice of liquidation. All other notice is a courtesy, and beyond the minimum required notice.
Protestant failed to allege any mistake of fact on the part of the Customs service that is correctable under 19 U.S.C. 1520(c), and further failed to provide any documentary evidencing such a mistake of fact. The port correctly denied Protestant’s request for reliquidation of its entries pursuant to section 1520(c).
If the protest was pursuant to 19 U.S.C. 1514, the protest should also be denied. Five of the entries that liquidated in April 1998 would be premature for this protest, and therefore, should be denied as untimely. Second, the port complied with the notice requirements found in 19 CFR 152.2 regarding notice of reclassification and a rate advance for merchandise already entered. The language in section 152.2 is merely directory and the notice is discretionary, since, such notice is beyond the constitutionally mandated minimum requirement of due process, which is adequately preserved by the bulletin notice of liquidation. Thus, Protestant’s argument that it failed to receive notice of such reclassification and rate advanced is denied under section
19 U.S.C. 1514.
The protest should be DENIED. 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.
John Durant, Director
Commercial Rulings Division