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HQ 224850

February 1, 1995

CO:R:C:E 224850 CC/SLR


District Director
U.S. Customs Service
1717 East Loop
Room 401
Houston, TX 77029

RE: Application for further review of Protest No. 5301-93-100088; 19 U.S.C. 1520(c)(1); mistake of fact; Catalyst

Dear Sir:

The above-referenced protest was forwarded to this office for further review. We have considered the facts and issues raised, and our decision follows.


This protest is against your refusal to reliquidate certain entries, in accordance with 19 U.S.C. 1520(c)(1), of Toho THC-32A Catalyst (THC-32A) as supported catalysts under subheading 3815.19.0000 of the Harmonized Tariff Schedule of the United States (HTSUS).

Toho Titanium Company, Limited (Toho) is the manufacturer of the subject catalyst. Mitsubishi International Corporation (Mitsubishi) is the seller/shipper. Rexene Corporation is the importer/protestant. Arguments were submitted by the law firm of Givens and Kelly, counsel for the protestant.

Pertinent dates in this protest include:

Date of Date of 1520(c)(1) 1520(c)(1) 1514(a)(7) Entry Liquidation Request Denial Protest

02/21/89 06/30/89 11/27/90 12/21/92 3/19/93

On February 13, 1989, customhouse broker Dynamic Ocean Services (Dynamic) sent a letter to Customs Houston for a tariff confirmation, stating that classification information regarding catalyst THC-32A imported by its client, Mitsubishi, would be provided at a later time.

On February 23, 1989, Dynamic sent another letter to Customs Houston with communication from Mitsubishi that based on the manufacturer's information, the THC-32A was classifiable under subheading 3815.90.5000, HTSUS, and was dutiable at 5 percent ad valorem. Subheading 3815.90.5000, HTSUS, is a residual provision which includes unsupported catalysts.

In "Report of Classification and Value," Customs Form 6431, the National Import Specialist (NIS) response of March 20, 1989 recommended classification of the catalyst under subheading 3815.90.5000, HTSUS. (Customs Houston had recommended subheading 2917.12.2000, HTSUS, dutiable at 17 percent ad valorem.)

On May 20, 1989 Mitsubishi wrote New York for a tariff classification ruling. On June 15, 1989 New York Ruling Letter (NYRL) 841976 was issued, classifying the THC catalyst under subheading 3815.90.5000, HTSUS. According to that ruling, "[the product] is a Ziegler-Natta type catalyst used to produce polypropylene."

In its request for reliquidation, counsel for the protestant writes that Customs Houston "as early as June 1989, soon after the HTSUS was enacted, [was] notified by counsel for the protestant respecting the mistake of fact (i.e., that the catalyst was physically supported)." Customs Houston's "Memo to file" dated November 18, 1991 confirms that sometime during June 1989, that office spoke with counsel for the protestant regarding the classification of the merchandise under subheading 3815.90.5000, HTSUS. Furthermore, it states that, "[t]he question at this time was whether this catalyst was supported or unsupported."

Counsel indicates in the protest that in June 1989, it apprised Customs Houston that the THC-32A catalyst was Ziegler-Natta, that all of this type of catalyst is a crystalline complex distributed over a second crystalline complex (i.e., supported). but that the manufacturer, Toho, had not yet confirmed for its client the exact physical structure for this catalyst. According to counsel, it was informed by Customs Houston that its claim would be considered only after the manufacturer had confirmed that physical make up of the catalyst. Counsel replied that it would use its best efforts to obtain the information. Counsel later informed Customs Houston that documentary supporting evidence would be supplied just as soon as ongoing Toho-Himont patent litigation was completed.

In a letter dated August 14, 1990, counsel informed Customs Houston that "today's Ziegler-Natta chemical literature, from around the world, shows the catalyst to be structurally 'supported'." Likewise, it was claimed that the Explanatory Notes were no longer correct in stating that the Ziegler-Natta catalysts were not supported. According to counsel, the Explanatory Notes at issue were a carry over from the earlier Brussels Nomenclature, and that while catalyst science has evolved, the Notes have not kept pace.

On September 14, 1990 the developer of the catalyst (Toho's Director of Catalyst Research and Development) met in New York with the NIS and the Customs Catalyst Chemist. According to counsel, the developer responded to all questions about the chemical-physical structure of the catalyst. On October 14, 1990, the developer's answers and explanations were reduced to a sworn affidavit.

In October 1990, the patent litigants came to a meeting of the minds. According to counsel:

Even before the formal ending of the lawsuit, the importer acted to provide personal (to New York) and sworn written representations (to Houston and New York) that Givens and Kelly's factual representations to Customs (that the catalyst was, in fact, physically supported) were in all respects complete and accurate. These representations documented in detail chemical terms how the active catalytic centers were physically supported.

On October 25, 1990 counsel for the protestant wrote New York requesting a tariff classification for Toho THC-32A catalyst from Japan. Attached to the request was the above-mentioned October 14, 1990 affidavit.

On November 13, 1990 NYRL 857568 was issued, classifying the catalyst, under subheading 3815.19.0000, HTSUS, which provides for duty free treatment. The ruling indicates that counsel's inquiry contained specific information concerning the production of the catalyst. Customs Houston received the ruling on November 20, 1990.


Whether the protestant's request pursuant to 19 U.S.C. 1520(c)(1) was timely?

Whether Customs properly denied the protestant's request to reliquidate the subject entries under 19 U.S.C. 1520(c)(1)?


Under 19 U.S.C. 1520(c)(1), an entry may be reliquidated to correct a clerical error, mistake of fact, or other inadvertence not amounting to an error in the construction of the law. The error must be manifest from the record or established by documentary evidence and brought to the attention of the appropriate Customs officer within one year from the date of liquidation.

Two petitions were filed requesting that certain entries be reliquidated in accordance with 19 U.S.C. 1520(c)(1). The first petition, filed on November 27, 1990, related to 13 entries. Only, one of those entries, liquidated on 12/01/89, was liquidated within one year from the date the petition was filed. Consequently, the remaining 12 entries were untimely filed. In addition, the protestant filed a petition on April 22, 1991, relating to 5 entries. Of these entries, 3 were liquidated within one year from the date of the petition, those liquidated on 1/04/91, 8/17/90, and 6/01/90. The remaining two entries, therefore, were untimely filed.
Counsel for the protestant has asserted that the time requirements for 19 U.S.C. 1520(c)(1) have been met for all of the subject entries. Concerning this issue counsel states that "neither the law nor the regulations mentions a "request' or the filing of any request or writing," but "the test for 'timeliness' is whether the 'error, mistake of fact, or inadvertence' is 'brought to the attention of the appropriate Customs officer [the district director at the port of entry] within one year after the date of liquidation or exaction...'" Counsel asserts that it gave notice to Customs import specialists as early as June 1989 that the catalyst was supported and that "these notices of mistake of fact were continued on a regular periodic basis until after Customs Ruling NYRL 857568 was issued on 11/13/90." In addition counsel asserts that notice of a mistake of fact "may be provided even before liquidation." In support of that position, counsel cites 19 CFR 173.4a, HQ 300167 of October 19, 1973, and CIE 1054/64 of June 23, 1964.

Concerning counsel's argument that notice of an error may be provided prior to liquidation and its reliance on HQ 300167 and CIE 1054/64, there have been several cases concerning the issue of the reliquidation of entries pursuant to 19 U.S.C. 1520(c)(1) when the alleged mistake of fact or inadvertence was brought to the attention of Customs prior to liquidation. In PPG Industries, Inc., v. United States, 4 CIT 143, 149 (1982), the Court of International Trade stated the following:

Decisions of this court uniformly have held that to invoke the foregoing statute [19 U.S.C. 1520(c)(1)] the information relating to a mistake of fact must in effect constitute a request for reliquidation and be made within the time requirements specified in the statute. Berkery, Inc. v. United States, 47 Cust. Ct. 102, C.D. 2287 (1961); Hensel, Bruckmann and Lorbacher, Inc. v. United States, 57 Cust. Ct. 52, C.D. 2723 (1966); J. S. Sareussen Marine Supplies Inc. v. United States, 62 Cust. Ct. 449, C.D. 3799 (1969); St. Regis Paper Co. v. United States, 2 CIT 190 (1981); Adorence Co. v. United States, 3 CIT 81 (1982), appeal pending. A claim made to Customs prior to liquidation is not timely "inasmuch as section 1520(c)(1) only supports a claim for reliquidation as distinguished from liquidation." Hensel, supra, at 54.

In addition, both HQ 300167 and CIE 1054/64 were issued prior to amendments to 19 U.S.C. 1520(c)(1), contained in Pub. L. 95-410, ? 210, 92 Stat. 903, Act of October 3, 1978. Those amendments included a change in the time requirements for alleging errors pursuant to 19 U.S.C. 1520(c)(1). In 1984, 19 U.S.C. 1520(a)(4) was added by Pub.L. 98-573, ? 212. Subsection (a)(4) permits the correction of an error prior to liquidation. Similarly, 19 CFR 173.4a was added in 1985 to allow for the correction of a clerical error prior to liquidation, pursuant to 19 U.S.C. 1520(a)(4).

In fact, counsel has cited 19 CFR 173.4a in support of its argument that notice of a mistake of fact may be made before liquidation. But it is clear that 19 CFR 173.4a, pursuant to 19 U.S.C. 1520(a)(4), applies only to entries that have not been liquidated. As stated in HQ 224652 of August 5, 1993, "Section 173.4a is expressly limited to the correction of clerical errors prior to liquidation." Once liquidation occurs 19 CFR 173.4a is inapplicable.

Not only would 19 CFR 173.4a be inapplicable after liquidation occurs, if notice of an error were actually made prior to liquidation, then an incorrect classification at the time of liquidation must be viewed as a mistake of law, as opposed to a mistake of fact. Here, counsel has alleged that notice of a mistake of fact was made to import specialists concerning the catalysts prior to liquidation. If that is the case, then both the importer and the import specialists would have known the facts as they were prior to liquidation. Consequently, the classification at liquidation would constitute a conclusion of law, which could only be challenged by filing a protest pursuant to 19 U.S.C. 1514.

Finally, the protestant had failed to specify what the mistake of fact was that was brought to Customs attention prior to the requests for reliquidation contained in the letters of November 27, 1990 and April 22, 1991. According to the court in PPG Industries, Inc., v. United States, supra, at 147-148, quoting in part from the lower court in Hambro Automotive Corp. v. United States, 81 Cust. Ct. 29, 31, 458 F. Supp. 1220, C.D. 4761 (1978)):

... it is incumbent on the plaintiff to show by sufficient evidence the nature of the mistake of fact. The burden and duty is upon the plaintiff to inform the appropriate Customs official of the alleged mistake with "sufficient particularly to allow remedial action."

Counsel has merely alleged that any notices by counsel to Customs that the catalyst was supported, allegedly beginning in June 1989 and continuing until after NYRL 857568 was issued, constituted mistake of fact claims. In addition, evidence from the file shows that import specialists involved in this matter were unaware of any mistake of fact claims concerning the subject entries prior to the letters of November 27, 1990 and April 22, 1991. Since the protestant had not shown any specifically alleged mistake of fact that was brought to the attention of Customs prior to the letters of November 27, 1990 and April 22, 1991, those two letters constitute the time when mistake of fact claims for the subject entries were made pursuant to 19 U.S.C.

As stated above, the requests for reliquidation for most of the entries in those letters were not made within one year of the date of liquidation. As stated in Omni U.S.A. Inc. v. United States, 840 F.2d 912, 913 (Fed. Cir. 1988), "Since nobody brought the errors to the attention of the appropriate customs officers within a year of the date of liquidation, authority to correct them lapsed according to the terms of section 1520(c)(1), the refusal by customs to correct them upon untimely notice was correct, and was the only course open to them." For those entries in which the protestant failed to make a claim for reliquidation within one year from the date of liquidation, Customs had no choice but to deny the request for reliquidation pursuant to 19 U.S.C. 1520(c)(1).

Counsel has asserted that the subject entries were liquidated under an incorrect classification due to a mistake of fact. For those entries in which a timely 1520(c)(1) claim was made, entries liquidated on 12/01/89, 6/01/90, 8/17/90, and 1/04/91, the protestant has failed to show that there was a mistake of fact.

Our analysis in this protest is the same as that contained in HQ 225851, a similar protest relating to catalysts made by the same manufacturer and concerning the same issues of mistake of fact (copy enclosed and incorporated into this ruling). In that protest we found that no mistake of fact was present since the protestant knew of the nature of the merchandise at the time of and prior to liquidation. The relief provided for in 19 U.S.C. 1520(c)(1) is not an alternative to the relief provided for under 19 U.S.C. 1514 (see cases cited in HQ 225851). Since it would have been no burden for the protestant to have challenged the classification of the catalysts by filing a timely 19 U.S.C. 1514 protest, denial of the 19 U.S.C. 1520(c)(1) request was proper.


For those entries in which a request for reliquidation was not filed within one year after the date of liquidation, protestant's request pursuant to 1520(c)(1) was properly denied as untimely.

For those entries in which a timely request was made, no mistake of fact was present under 19 U.S.C. 1520(c)(1) in an alleged error in the tariff classification of the subject entries. Consequently, the 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, this decision should be mailed by your office 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 the Office of Regulations and Rulings will take steps to make the decision available to customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Freedom of Information Act and other public access channels.


John Durant, Director

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