LIQ-1-09 CO:R:C:E 223627 C
Nicholas R. Devine
Assistant District Director of Customs
Office of Commercial Operations
U.S. Customs Service
Detroit, MI 48266
RE: Protest and application for further review no. 3801-1-
102155; request for reliquidation under 19 U.S.C. 1520(c)(1);
protest of denial of request for reliquidation under 19 U.S.C.
1514(a)(7)
Dear Mr. Devine:
This responds to the referenced protest and application for
further review which you submitted by memorandum of December 19,
1991 (PRO-1-CO:CT DA; P1102155/TXTFRISC). The protest objects to
Customs denial of a petition for reliquidation under 19 U.S.C.
1520(c)(1). We have reviewed the record and our decision
follows.
FACTS:
The facts, as we understand them, are as follows:
Merchandise was entered under dutiable tariff provisions on
January 30 and 31, 1990 (three entries). Prior to liquidation of
these entries, the importer, hereafter the PROTESTANT, submitted
to Customs a request for approval of a blanket certification for
specified auto parts of the kind entitled to the duty exemption
of the Automotive Products Trade Act of 1965 (APTA). (See
General Note 3(c)(iii) of the Harmonized Tariff Schedule of the
United States and section 10.84 of the Customs Regulations (19
C.F.R. 10.84).) The certification is required for duty-free
treatment. The letter making such request, dated April 5, 1990,
did not specify the above entries of merchandise submitted under
dutiable tariff provisions. Instead, it stated that the
certificates would apply to future shipments. The certifications
were approved on April 6, 1990, and evidence of such approval was
forwarded to PROTESTANT. In May 1990, the entries were
liquidated "no change" at the dutiable rate. More than 90 days
after, but within one year of, the date of liquidation,
PROTESTANT filed a request for reliquidation of the entries under
19 U.S.C. 1520(c)(1). Customs denied this request on the ground
that PROTESTANT had "not documented a clerical error that would
be addressable" under 19 U.S.C. 1520(c)(1). PROTESTANT then
filed the instant protest and application for further review,
alleging that an error correctable under the statute did in fact
occur and Customs denial of the section 1520(c)(1) request was in
error. Specifically, PROTESTANT asserts that a correctable error
occurred in Customs liquidation of the entries at a dutiable rate
after approval of the certifications.
ISSUE:
On the facts set forth above, has an error correctable under
19 U.S.C. 1520(c)(1) occurred?
LAW AND ANALYSIS:
The reliquidation provision of 19 U.S.C. 1520(c)(1) is not
an alternative to the protest procedure of 19 U.S.C. 1514. It
applies only to the limited circumstances described therein.
Phillips Petroleum Company v. United States, 55 CCPA 7, 11,
C.A.D. 893 (1966). An entry can be reliquidated, notwithstanding
that a protest has not been timely filed, to correct a clerical
error, mistake of fact, or other inadvertence not amounting to an
error in the construction of a law. The burden is on the
petitioner to support its request for reliquidation by bringing
to Customs attention, within one year of the date of liquidation,
the nature of the alleged error, either as it appears from the
record or by submitting documentary evidence. 19 U.S.C.
1520(c)(1).
The issue under the instant protest is whether or not
PROTESTANT's 1520(c)(1) request was improperly denied. We
believe that the reliquidation request was properly denied for
failure on the part of PROTESTANT to allege facts that would
indicate that some kind of correctable error occurred causing an
erroneous liquidation.
PROTESTANT asserts that the correctable error was Customs
dutiable liquidation of the entries in question in May 1990, when
Customs had approved a blanket certification for duty-free APTA
entries on April 6, 1990. Had PROTESTANT's request for approval
of the certification specifically identified the then
unliquidated entries in question, or notified Customs that there
were entries of qualifying merchandise that had yet to be
liquidated, we might agree that a basis for finding correctable
error had been established. However, the certification request
did not identify the entries in question and in fact explicitly
informed Customs that it would apply to future entries. Customs
approval of the certification was not an approval of duty-free
treatment for the entries in question.
Moreover, the entry process for merchandise entered duty-
free under the APTA at Detroit demonstrates that there was no
occurrence of correctable error in the liquidations in question.
Where merchandise of the kind eligible for duty-free treatment
under the APTA is entered at Detroit, the importer (or broker)
notes on the invoice that either an approved certificate covers
the entered merchandise or a request for certification has been
submitted to Customs. Either notation alerts Customs to the fact
that the importer intends to enter merchandise duty-free under
the APTA. Where there is no certification, nor a request for
certification on file with Customs, the merchandise can still be
entered with a claim for duty-free treatment under the APTA. In
such a case, Customs would request the certifications, which
would, in turn, encourage the importer to comply with the
requirement before liquidation.
A significant fact is that not all automotive merchandise
destined to a bona fide motor vehicle manufacturer in the United
States is entitled to duty-free treatment under the APTA. Only
such merchandise that is intended for use as original equipment
in the manufacture in the United States of a motor vehicle is
entitled to the duty exemption. (See General Note 3(c)(iii),
HTSUS.) Consequently, it is not uncommon for importers to enter
merchandise at the dutiable rate. In such an instance, Customs
accepts the entries at face value - that is, as dutiable - and
does not check with the importer to determine whether or not a
duty-free entry is desired. This would be unworkable. The
burden is on the importer (or broker) to enter qualifying
merchandise under the duty-free provision by so specifying.
On the facts of the instant case, at the time the entries
were made, there was neither an approved certificate nor a
request for certification filed with Customs. There was nothing
to note on the invoice to alert Customs to PROTESTANT's intention
to seek duty-free entry under the APTA. PROTESTANT, through its
broker, filed the entries at the dutiable rate, providing no clue
to its intention to apply for the duty exemption. Consequently,
under the ACS entry processing system (Automated Commercial
Systems), a 90 day automatic liquidation date was set, and the
entries were liquidated as dutiable in May 1990. Customs
liquidation of these entries was not the result of a mistake or
error correctable under the statute. Again, had PROTESTANT's
request for certification identified the entries in question, or
notified Customs that there were, at that time, unliquidated
entries to which the certification applied, PROTESTANT likely
would have obtained the desired duty-free liquidations. As it
was, Customs approval of the certifications was not an approval
of the duty exemption for the entries in question.
Regarding the fact that PROTESTANT, through its broker,
initially filed the entries at dutiable rates, PROTESTANT has not
claimed this act to be correctable error under the statute, nor,
on the facts here, do we believe it to be correctable error.
There is no claim by PROTESTANT, nor any indication in the record
to suggest, that there was a misunderstanding as to the nature of
the merchandise entered. In addition, PROTESTANT was aware at
all times of the duty exemption provided by the APTA. NEC
Electronics U.S.A., Inc. v. United States, 13 CIT 214 (1989).
In summary, we conclude that the remedy PROTESTANT should
have pursued is reliquidation under the protest procedure of 19
U.S.C. 1514. PROTESTANT however failed to file a timely protest.
Again, reliquidation under section 1520(c)(1) is not a simple
alternative for importers who fail to meet the time requirements
of the protest procedure.
HOLDING:
Customs properly denied PROTESTANT's request for
reliquidation under 19 U.S.C. 1520(c)(1), since PROTESTANT failed
to allege facts that demonstrate correctable error and no such
facts appear on the record.
Based on the foregoing, you are instructed to deny the
protest. A copy of this decision should be attached to the Form
19, Notice of Action, to be sent to the PROTESTANT.
Sincerely,
John Durant, Director
Commercial Rulings Division