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HQ 224385

May 24, 1993

LIQ-9-01-CO:R:C:E 224385 JRS


District Director of Customs
ATTN: District Protest Review Officer
111 West Huron Street
Buffalo, New York 14202

RE: Application for Further Review of Protest No. 0901-92-101702; One-year time requirement for filing a petition under 19 U.S.C. 1520(c)(1) statutorily mandated; Bill for duties is not "exaction" within 19 U.S.C. 1520(c)(1); Denial of duty-free treatment for "Amercian goods returned" provision is not a correctable error under 19 U.S.C. 1520(c)(1); mistake of law

Dear Sir:

This is in response to your above-referenced protest which we received in this office for further review on December 29, 1992. We have considered the points raised and our decision follows.


Protestant, the importer's broker, is seeking reliquidation of the subject entries under 19 U.S.C. 1514(a)(7) by contesting the district director's denial of its 19 U.S.C. 1520(c) claim on the grounds of untimeliness. The facts as we understand them follows.

On January 2, 1991, 185 drums of metasol TK 100 powder were imported by the broker on behalf of the Canadian exporter. The broker filed the consumption entry for these goods on January 15, 1991, under subheading 9801.00.1035/free, Harmonized Tariff Schedule of the United States (HTSUS), as U.S. goods returned without having been advanced in value or improved in condition while abroad, claiming that the material being returned to the United States was "not as ordered."

After finding that the U.S. address on the labels was insufficient evidence of U.S. origin because the drums were not labeled as "Made in the U.S.A.," Customs issued on February 8, 1991, a request for information to the broker on the proof of U.S. origin in accordance with 19 CFR 10.1; however, it was stated in that request that Customs may consider other documents such as Shipper's Export Declaration (CF 7525V), Certified Copy of Canada Customs Inward Manifest (E29B), Foreign Customs Invoice and Validated Copy of Foreign Entry, a Statement of the Person or Firm that Produced the Merchandise in the U.S., Specifying the Plant Location(s) or, U.S. Exporter's Commercial Invoice.

The protestant alleges that on March 21, 1991, it sent a copy of the sales invoice between the U.S. exporter (manufacturer) and the Canadian exporter (protestant's client) and a copy of the credit note issued to the Canadian exporter by the U.S. exporter authorizing the return of the merchandise. The case file does not contain a copy of the documents which were allegedly sent to customs in response to the request for information; also, no such documents were attached to the entry summary in the case file. However, these documents, evidencing a "fax code" date of "June XX (illegible), 1992" at the top margin, were attached to the 1520(c)(1) petition.

In early April 1991, Customs issued a Notice of Action (CF 29) reclassifying the goods under subheading 2934.90.1200, HTSUS, at 11.1 percent duty rate. Upon receipt of the CF 29, the Canadian exporter sent to the U.S. exporter (manufacturer) a partially completed CF 3311 for completion. The U.S. exporter failed to complete the form and return it to the Canadian exporter for its further submission to Customs.

On May 24, 1991, Customs liquidated the entry under subheading 2934.90.1200, HTSUS, with an assessment made that additional duties were due in the amount of $13,088.29. A bill for these duties was generated on July 1, 1991.

On June 24, 1992, the broker filed a petition under 19 U.S.C. 1520(c)(1) requesting that the entry be reliquidated under subheading 9801.00.10, HTSUS, as "United States goods returned" and duties paid refunded as an "excess deposit" under 19 U.S.C. 1520(a)(1). Enclosed with the petition was documentary evidence consisting of a completed CF 3311, a copy of a Canadian Entry, and the commercial invoice evidencing the import into Canada from the United States and indicating the country of origin as the United States. The petitioner's arguments are essentially twofold:

(1) that the failure of the U.S. exporter to submit the necessary CF 3311 to the petitioner was merely a clerical error or other inadvertence. The petitioner asserts that this was clerical error because the U.S. exporter's employee responsible for completing the form had left the company and no further action was taken, and as such, the failure of the U.S. exporter's employee to complete the CF 3311 and return it was out his (the petitioner's) control; and

(2) that a mistake of fact occurred because the goods are in fact of U.S. origin as established by the documentary evidence provided with the petition and should have been given duty-free treatment. Additionally, petitioner alleges that a mistake of fact occurred on U.S. Customs behalf because the exporter's commercial invoice was submitted in response to the initial request for information.

On September 17, 1992, Customs denied the request to reliquidate because the petition was not received within one year of the date of liquidation as required by statute. On October 21 1992, the broker filed a timely protest under 19 U.S.C. 1514(a)(7) against Customs refusal to reliquidate the entry under 19 U.S.C. 1520(c). In the protest, the broker's position is that a valid section 1520(c) claim was made on June 24, 1992, because Customs billed (exacted) for additional duties on July 1, 1991, and that the one-year time period under 19 U.S.C. 1520(c)(1) would thus not expire until June 30, 1992.


(1) Whether the petition filed under 19 U.S.C. 1520(c)(1) in this case was untimely.

(2) Whether the denial of duty-free treatment under the "American goods returned" provision of subheading 9801.00.10, HTSUS, is correctable under 19 U.S.C. 1520(c)(1) as a mistake of fact.


Section 514 of the Tariff Act of 1930, as amended, 19 U.S.C. 1514, sets forth the proper procedure for an importer to protest the classification and appraised value of its merchandise when it believes Customs has misinterpreted the applicable law and incorrectly classified the imported merchandise. A protest must be filed within 90 days after notice of liquidation or reliquidation. 19 U.S.C. 1514(c)(2). Otherwise, failure to file a timely protest renders the liquidation binding on the importer and government.

Section 520(c)(1) of the Tariff Act of 1930, as amended, 19 U.S.C. 1520(c)(1) is an exception to the finality of section 514. 19 U.S.C. 1520(c)(1) provides that 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, adverse to the importer and manifest from the record or established by documentary evidence, in any entry, liquidation, or other customs transaction, when the error, mistake, or inadvertence is brought to the attention of the appropriate customs officer within one year after the date of liquidation or exaction;

19 U.S.C. 1520(c)(1)(Emphasis added.)

This reliquidation provision, however, is not intended to be a simple alternative for importers who fail to file timely protests. 19 U.S.C. 1520(c)(1) "is not remedial for every conceivable form of mistake or inadvertence adverse to an importer but rather the statute offers 'limited relief'." Godchaux- Henderson Sugar Co., Inc. v. United States, 85 Cust. Ct. 68, 74, C.D. 4874, 496 F. Supp. 1326 (1980).

We reject the protestant's contention that the applicable time period for filing a section 1520(c)(1) petition commences on the billing date, which protestant coins as a "final exaction," rather than the date of liquidation, which is the date the bulletin notice of liquidation is posted in the customhouse. In Penrod Drilling Co. v. United States, 13 CIT 1005, 1009, 727 F. Supp. 1463 (1989), the plaintiff (importer) asked the court to treat the date of the receipt of the Customs bill as the proper date of notice of liquidation (i.e., 42 days after the date the bulletin notice was posted). The court rejected this argument as untenable. It is well-settled that proper notice of liquidation refers to the bulletin notice of liquidation as the only notice that is statutorily mandated. Goldhofer Fahrzeugwerk GmbH & Co. v. United States, 13 CIT 54, 706 F. Supp. 892, aff'd, 885 F.2d 858 (Fed. Cir. 1989). If proper notice is given, there is no basis of extending the period in which a party may file a protest. Tropicana Products, Inc. v. United States, 13 CIT 390, 395, 713 F. Supp. 415 (1989).

Protestant's argument that the Customs bill is a "final exaction," and therefore, the one-year time period runs from that date (July 1, 1991) lacks merit because the bill is merely the means by which the amount of duties owing on the liquidated entry is collected by Customs. "Charges" and "exactions" are viewed by the court to be "actual assessments of specific sums of money (other than ordinary customs duties) on imported merchandise." Alberta Gas Chemicals, Inc. v. Blumenthal, 82 Cust. Ct. 77, 81-2, C.D. 4792, 467 F. Supp. 1245, 1249-50 (1979). By reading the plain language of the statute cited by the protestant (19 U.S.C. 1520(a) and (c)), a charge or exaction is distinct from "duties and taxes." Congress thus did not intend that ordinary customs duties on imported merchandise be considered a charge or exaction. Please note that the term "exaction" involves only those situations where there is a demand for or the compelling of payment. See Carlingswitch, Inc. v. United States, 85 Cust. Ct. 63, C.D. 4873, 500 F. Supp. 223 (1980), aff'd, 68 CCPA 49, C.A.D. 1264, 651 F.2d 768 (1981).

Since the Customs bill is not an exaction within the meaning of 19 U.S.C. 1520(a)(2) or (c)(1), the applicable time period for filing a petition under 19 U.S.C. 1520(c)(1) expired in this case on May 23, 1992, one year after the posting of the notice of liquidation on May 24, 1991, regardless of when the bill for additional duties payable may have been generated. 19 CFR 159.9. It is our opinion that the Customs district office was correct in finding that the 1520(c)(1) petition was untimely filed. As the procedural requirements of the 19 U.S.C. 1520(c)(1) has not been met, the protest must be denied.

For the sake of argument, however, even assuming that the 1520(c)(1) petition was timely filed, we do not find any clerical error, mistake of fact or other inadvertence which is correctable under 19 U.S.C. 1520(c)(1) since the protestant has also failed in satisfying the first two conditions listed below. As stated by the Court of International Trade in PPG Industries, Inc. v. United States, 7 CIT 118, 124 (1984), three conditions must be satisfied under 19 U.S.C. 1520(c)(1): 1) a mistake of fact must exist; 2) the mistake of fact must be manifest from the record or established by documentary evidence; and 3) the mistake of fact must be brought to the attention of the Customs Service within the time requirements of the statute.

Correctable errors under section 1520(c)(1) are defined in T.D. 54848. See 94 Treas. Dec. 244 (1959). A mistake of fact occurs when a person believes the facts to be other than what they really are and takes action based on that erroneous belief. The reason for the belief may be that a fact exists but is unknown to the person or he may believe that something is a fact when in reality it is not. Clerical error occurs when a person intends to do one thing but does something else, including mistakes in arithmetic and the failure to associate all the papers in a record under consideration. Inadvertence connotes inattention, oversight, negligence, or lack of care. These errors are not necessarily mutually exclusive. However, errors in the construction of a law are not correctable under this section. Those occur when a person knows the true facts of a case but has a mistaken belief of the legal consequences of those facts and acts on that mistaken belief. See 94 Treas. Dec. 244, 245-246 (1959). The Customs Service has held that the submission of incorrect or incomplete documentation and the failure to submit, or late submission, of "correct" documentation are not correctable errors under 19 U.S.C. 1520(c)(1). See HQ 222610, dated November 7, 1990; HQ 221590, dated October 30, 1989; and HQ 221680, dated October 16, 1989.

The protestant's allegation that a mistake of fact existed as to the U.S. origin of the merchandise is simply rejected because it does not fall within definitional meaning of a mistake of fact as defined above. Both the Customs officer and the importer were aware that the origin of the goods was in question. The importer himself knew the goods' true origin but he failed to present the proper documentation establishing that fact at the time of entry to Customs.

The petitioner also alleges that a mistake of fact occurred on U.S. Customs behalf because the exporter's commercial invoice was submitted in response to the initial request for information. From the case file, it is unclear what documentation was actually presented in response to Customs' informational request. Assuming that the invoice was actually submitted to Customs, the import specialist made a legal determination as to the classification of the merchandise on the basis of the documentation provided when he rejected the duty-free claim. Even if the import specialist erred in thinking the commercial invoice insufficient proof for U.S. origin, an erroneous classification of merchandise is not remedial as a clerical error, mistake of fact or inadvertence under 19 U.S.C. 1520(c)(1), as it is a conclusion of law which may only be corrected by the filing of a protest. Cavazos v. United States, 9 CIT 628, 631 (1985); Mattel, Inc. v. United States, 72 Cust. Ct. 257, 262, C.D. 4547, 377 F. Supp. 955, 960 (1974).

We reject protestant's argument that its inability to obtain the necessary certification from the U.S. manufacturer for its "American goods returned" claim was a result of clerical error or other inadvertence because the actions of the responsible employee of the U.S. manufacturer was out of its control. In Occidental Oil & Gas Co. v. United States, 13 CIT 244 (1989), the court addressed the question of whether the delay by the plaintiff in obtaining certain documents to support its "American goods returned" claim for duty-free entry of oil well equipment was an error remediable under 19 U.S.C. 1520(c)(1). In that case, the plaintiff was aware at the time of entry and liquidation that the documents requested by Customs were missing and the plaintiff failed to obtain the necessary manufacturer's affidavit in a timely manner. The court, following Cavazos, supra, stated that the plaintiff's allegation of a mistake of fact or inadvertence was actually a challenge to the legal conclusion of the Customs Service, and held that the proper course of action was to challenge the classification of the merchandise as dutiable through a protest under 19 U.S.C. 1514 within 90 days of the liquidation. The court also found that the delay was not mere inadvertence correctable under 19 U.S.C.

We find that the outcome in this case is controlled by Occidental, supra and Cavazos, supra. The denial of duty-free treatment under the "American goods returned" provision of subheading 9801.00.10, HTSUS, is a legal determination which is not correctable under 19 U.S.C. 1520(c)(1) as a mistake of fact since it is instead a mistake of law. Occidental, supra; Cavazos, supra. Although it appears from the documents submitted with this protest that the goods were in fact of U.S. origin, we cannot remedy this legal error under the reliquidation provisions of 19 U.S.C. 1520(c)(1). Concentric Pumps, Ltd. v. United States, 643 F. Supp. 623, 626, 10 CIT 505 (1986); Godchaux, supra.


(1) The petition filed under 19 U.S.C. 1520(c)(1) is untimely in this case because it was filed beyond one year from the date of liquidation. 19 CFR 159.9. The Customs billing of the duties owed on entry at the time of liquidation is not an exaction within the meaning of 19 U.S.C. 1520. The Customs district office properly denied the petition on the statutorily mandated procedural grounds.

(2) Even if the petition under 19 U.S.C. 1520(c)(1) had been timely, Customs nevertheless would have denied it on the merits since the denial of duty-free treatment under the "American goods returned" provision of subheading 9801.00.10, HTSUS, is a legal determination correctable only under the protest procedure of 19 U.S.C. 1514.

You are instructed to deny the protest. A copy of this decision should be attached to the CF 19, Notice of Action, to be sent to the protestant in accordance with the notice requirement of 19 CFR 174.30.


John Durant, Director

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