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HQ 225814





February 26, 1996

LIQ-9-01-RR:IT:EC 225814 CC

CATEGORY: LIQUIDATION

Port Director
U.S. Customs Service
4430 East Adamo Drive, Suite 301
Tampa, FL 33605

RE: Application for further review of Protest No. 1801-94- 100043; 19 U.S.C. 1520(c)(1); mistake of fact

Dear Sir or Madam:

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

FACTS:

This protest consists of 15 entries, which the protestant states are "internal drives." The dates of entry for the subject merchandise range from December 24, 1991 to July 15, 1992. The dates these entries were liquidated range from May 29, 1992 to November 6, 1992. The entries were liquidated under subheading 8471.93.60 of the Harmonized Tariff Schedule of the United States (HTSUS), which provides for automatic data processing machines and units thereof, other, storage units, whether or not entered with the rest of a system, other storage units, other.

On March 1, 1993 the protestant requested, in accordance with 19 U.S.C. 1520(c)(1), that you reliquidate the entries under subheading 8471.93.50, HTSUS, which provides for automatic data processing machines and units thereof, other, storage units, whether or not entered with the rest of a system, other storage units, not assembled in cabinets for placing on a table, desk, wall, floor or similar place.

Therefore, the protestant's claim is that there was a mistake of fact in classifying the merchandise. The protestant claims that the broker who filed the entries believed that the subject merchandise was "external drives" when it was "internal drives," classifiable under subheading 8471.93.50, HTSUS.

On July 15, 1994 the section 1520(c)(1) claim was denied. This protest on the denial of the section 1520(c)(1) claim was filed on October 13, 1994.

ISSUE:

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

LAW AND ANALYSIS:

Initially, we note that both the request for reliquidation under 19 U.S.C. 1520(c)(1) and the protest of the denial of that request under 19 U.S.C. 1514(a)(7) were timely filed.

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. As stated in PPG Industries, Inc. v. United States, 7 CIT 118 (1984), the following three conditions must be satisfied in order for an entry to be reliquidated to correct a mistake of fact pursuant to section 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.

Consequently, the protestant must first show that the subject merchandise was misclassified. In the 1520(c)(1) claim, the protestant states that the merchandise the subject of the protest is "tape drives - data storage devices for computers." In addition, it is stated in the 1520(c)(1) claim, "internal tape drive models ... ,properly classified [under subheading] 8471.93.5000 (Free), were incorrectly entered as external drives under [subheading] 8471.93.6000 (dutiable at 3.7% ad. val.)." In support of this claim the protestant states, [b]ills of material for the models involved are enclosed with this letter, demonstrating that the models involved were in fact internal drives." The claims concerning the alleged misclassification are essentially the same in the protest. Concerning these claims counsel for the protestant states the following:

The misclassification here was due to a mistake of fact in that the customs broker filing the entry believed that the internal drives were in fact external drives. Hence, we claim that the internal tape drive models the subject of this protest, assessed with duty under HTS item 8471.93.6000, at 3.7% ad valorem, are properly classifiable under HTS item 8471.93.5000, duty free. The claims and supporting evidence before us do not show that the subject merchandise was classified improperly; in fact, the evidence before us is insufficient to properly classify the subject merchandise. There is not contained in the file any clear explanation of what the merchandise is, any clear description of the merchandise, or any other information to make it possible to properly classify the merchandise. In addition, there is no explanation, based on the characteristics and attributes of the merchandise, why it fits the terms of the purported classification, subheading 8471.93.50, HTSUS. All that we have before us are vague assertions and suppositions about internal and external drives, and bills of material that are alleged to show that the merchandise was improperly classified. As stated by the Court of International Trade in Bar Bea Truck Leasing Co., Inc. v. United States, 5 CIT 124, 126 (1983), assertions of counsel are not evidence. See also, United States v. Lineiro, 37 CCPA 5, 10, C.A.D. 410 (1949), "[d]etermination of issues in customs litigation may not be based on supposition."

Based on the foregoing, we cannot find that the subject merchandise was improperly classified. Consequently, no mistake of fact exists for the tariff classification of the subject merchandise.

Even it were shown that classification of the subject merchandise was incorrect, the protestant's request for reliquidation pursuant to section 1520(c)(1) could not be approved for the following reasons.

A mistake of fact occurs when a person understands the facts to be other than what they really are and takes some action based on that erroneous belief, whereas a mistake of law occurs when a person knows the true facts of the case but has a mistaken belief as to the legal consequences of those facts. See, e.g., C.J. Tower & Sons of Buffalo, Inc. v. United States, 68 Cust. Ct. 17, 21, C.D. 4327, 336 F. Supp. 1395 (1972), aff'd, 61 CCPA 90, C.A.D. 1129, 499 F.2d 1277 (1974); Hambro Automotive Corp. v. United States, 81 Cust. Ct. 29, 458 F.Supp. 1220 (1978), aff'd, 66 CCPA 113, 603 F.2d. 850 (1979); and PPG Industries, Inc. v. United States, 7 CIT 118 (1984). The courts have taken the position that generally an error in the classification of merchandise is not a clerical error, mistake of fact, or inadvertence within the meaning of 19 U.S.C. 1520(c)(1), but is an error in the construction of the law. See, e.g., Cavazos v. United States, 9 CIT 628 (1985); Mattel, Inc. v. United States, 72 Cust. Ct. 257, C.D. 4547, 377 F.Supp. 955 (1974); and Fibrous Glass Products v. United States, 63 Cust. Ct. 62, C.D. 3874 (1969), appeal dismissed, 57 CCPA 141 (1970).

The protestant claims that the mistake of fact was that the broker filing the entry believed that the merchandise was something other than what it was; the broker believed the merchandise was "external drives," when it was "internal drives." In the 1520(c)(1) claim, this "incorrect belief" is attributed to "faulty communications between [the company] and [its broker] as to which models were internal and which models were external," and "[c]ertain inaccuracies in the descriptions shown on invoices prepared by the exporter." In support of these claims, bills of material for the models involved were submitted with this explanation: "[p]lease note the absence of enclosures from the list of parts on the bills." In addition, pro-forma invoices were submitted.

According to the court in PPG Industries, Inc., v. United States, 4 CIT 143, 147-148 (1982), 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)):

In asserting that the subject merchandise has been wrongly classified due to a mistake of fact, 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 particularity to allow remedial action."

In addition, as stated above, a mistake of fact must be manifest from the record or established by documentary evidence. See, ITT Corp. v. United States, 24 F. 3d 1384, 1387 (Fed. Cir. 1994), Mistakes of fact that are not manifest from [the] record ... must be established by documentary evidence"; see also, United States v. Lineiro, supra, "[d]etermination of issues in customs litigation may not be based on supposition." The bill of materials submitted by the protestant is essentially a long list of part numbers. The pro-forma invoices also contain part numbers, along with information such as sales order numbers and prices. The protestant has underlined what it considers merchandise that is "internal drives." There is no explanation, however, how one concludes that the underlined items in the pro-forma invoice are "internal drives" based on the information contained in the invoice and the bill of materials. Moreover, the submitted information fails to show what was the mistake of fact. Consequently, there has not been sufficient evidence presented as to the nature of the mistake of fact, nor is there sufficient documentary evidence to show that a mistake of fact existed.

Finally, counsel for the protestant has sought to rely on ITT Corp. v. United States, 812 F.Supp. 213 (CIT 1993), in support of its claim, stating that the court found in that case that a mistake of fact occurred when the document preparer understood that the nature of the merchandise was other than what it was. Contrary to counsel's assertions, this case, upon further analysis, appears to contradict rather than support the protestant's contentions.

The court's conclusion that there was a mistake of fact was based on evidence presented at the trial, which was not present before Customs when the request for reliquidation was made. At that time, the evidence before Customs did not demonstrate what was the correct classification, nor the nature of the alleged error. The court concluded, therefore, "[t]he nature of the error and the correct classification was not manifest from the record or established by documentary evidence before Customs rendered its decision." That conclusion applies equally to the protestant's claim in this matter.

Based on the foregoing, no mistake of fact is present, and no remedy is available under 19 U.S.C. 1520(c)(1).

HOLDING:

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 merchandise. 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.

Sincerely,

Director, International Trade

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