HQ 220042: Application for Further Review of Protest No. 1001-6-018412, protesting the refusal to reliquidate Entry Nos. 85-466160-8 and 85-466864-3, dated August 6, 1985, and September 13, 1985, respectively, under 19 U.S.C. 1520(c)(1).

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                                      HQ 220042

                                   April 10,  1989

          PRO-1-CO:R:C:E  220042 MS

          CATEGORY:  Entry/Liquidation

          Regional Commissioner of Customs
          New York Region
          6 World Trade Center
          New York, New York  10048-0945

          RE:  Application for Further Review of Protest No. 1001-6-018412,
          protesting the refusal to reliquidate Entry Nos. 85-466160-8 and
          85-466864-3, dated August 6, 1985, and September 13, 1985,
          respectively, under 19 U.S.C. 1520(c)(1).

          Dear Sir:

               The above-referenced protest was forwarded to our office for
          further review.  We have considered the points raised by your
          office and the importer.  Our decision follows:

          FACTS:

               The protestant entered two shipments of merchandise into the
          United States on August 6, 1985, and September 13, 1985.  Each
          shipment contained two styles of women's grain leather "Bean"
          boots designated by the protestant as Style Nos. 21610A and
          21615K.  Both styles of the boots were entered under item 700.57,
          Tariff Schedules of the United States (TSUS).  The entries were
          liquidated on October 11, 1985, and October 25, 1985, with no
          change in the tariff classification of either style of boot.

               On February 11, 1986, Customs received letters from the
          protestant requesting reliquidation and refund of duties under
          section 520(c)(1), Tariff Act of 1930, as amended (19 U.S.C.
          1520(c)(1)).  Customs determined that substantiating
          documentation had not been submitted to show a clerical error,
          mistake of fact, or other inadvertence correctable under 19
          U.S.C. 1520(c)(1) and denied the reliquidation requests on
          October 31 and November 7, 1986.  On November 25, 1986,
          protestant filed the subject protest against these refusals to
          reliquidate.

















                                        - 2 -


               An affidavit of the protestant's employee, the Import
          Traffic Manager (hereafter, the "Manager" or "importer's
          employee") was submitted with the protest.  From that affidavit
          and subsequent information provided by the protestant, we find
          that the circumstances which led to entry of the Style 21615K
          boots under item 700.57, TSUS, were as follows:  The Manager
          began as the protestant's import traffic manager in May, 1985.
          Prior to that, he had no experience relating specifically to the
          classification of footwear under the TSUS.  In the short time
          that he worked for the protestant prior to the making of the
          subject entries, he processed documents for other entries which
          collectively involved several styles of "Bean" boots which he had
          been advised were dutiable at 37.5% ad valorem.   When he
          received the shipping and invoice documents pertaining to the two
          entries in question, the Manager, noting that the merchandise was
          described as "Bean" boots, and assuming that they were the same
          "Bean" boots as previously entered, instructed the protestant's
          broker to enter the merchandise under item 700.57, TSUS, and at
          its duty rate of 37.5% ad valorem.  He did not refer to the CF
          5523, "Invoice for Details for Footwear"  which specifically
          described the leather composition.  He later learned  that the
          Style 21615K boots were entitled to entry under item 700.45,
          TSUS, and at a duty rate of 10% ad valorem by virtue of the
          leather content of their uppers.

               Protestant claims that there were several errors or mistakes
          on the basis of which the protestant's entries should be
          reliquidated under 19 U.S.C. 1520(c)(1).  First, it alleges that
          the Manager inadvertently overlooked the documented  fact that
          style 21615K had uppers of 60% grain leather and 40% rubber, and
          therefore should have been entered and classified under item
          700.45, TSUS, at an 10% ad valorem duty rate, rather than under
          item 700.57, TSUS, at 37.5% ad valorem.  The protestant also
          states that the Manager was not aware of the fact that the
          company intended to enter the boots at a duty rate of 10%, and
          claims this intent is evident by examining the purchase orders
          and confirmation, by which it may be determined that if duty at
          10% was added to the importer's purchase price of the Style
          21615K boots, the boots sale price would have a similar markup
          corresponding to the 31% markup on the other boots involved in
          the transaction.  In contrast, if 37.5% duty was added to the
          purchase price, the resale price would include only a 5% markup
          from the protestant's resale price, which when combined with
          administrative and other costs of the transaction, the total cost
          would exceed the resale price of the merchandise, and "obviously
          not be profitable."















                                        - 3 -


               Protestant alleges the broker's clerk was not aware of the
          true facts regarding the leather content of the boot uppers or
          the importer's intention to enter the merchandise at the lower
          rate due to a mistake of fact and "possibly inadvertence."

               Protestant contends that the broker's clerk who made the
          entries, followed the Manager's instructions and made a mistake
          of fact in thinking that the protestant wanted the Style 21615K
          boots to be entered dutiable at 37.5% ad valorem when, in fact,
          the protestant wanted those boots to be entered dutiable at 10%
          ad valorem.

               Protestant also claims that a mistake of fact occurred on
          the part of the  Customs officer who processed the entries in
          question.  Protestant states that it may reasonably be assumed
          that the appropriate Customs officer was aware of the legal
          consequences of the leather content of the upper surface area of
          the Style 21615K boots and therefore, the Customs officer must
          have also made a mistake of fact when he liquidated the
          merchandise at 37.5% ad valorem.

          ISSUE:

               Whether, within the context of 19 U.S.C. 1520(c)(1):

               (1) When an importer's employee who is responsible for
          advising how his employer's merchandise should be entered, fails
          to take note of a material fact in classifying merchandise under
          the TSUS, such failure constitutes a mistake of fact,
          inadvertence or clerical error;

               (2) a Customs broker who enters a client's merchandise under
          an incorrect classification, as instructed by the importer,
          commits a mistake of fact or inadvertence by not having
          ascertained all material facts regarding the classification
          determination by his client when all correct and supporting
          documentation was provided to the broker;

               (3) a mistake of fact or inadvertence can be inferred on the
          part of a Customs officer who liquidates duties on merchandise
          based on the wrong tariff provision, when all correct and
          relevant information has been provided at this time of entry.

          LAW AND ANALYSIS:

               19 U. S. C. 1520(c)(1) provides that Customs
          may reliquidate an entry to correct:      














                                        - 4 -


               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;

               The alleged clerical errors and mistakes of fact made in
          connection with the two entries were timely brought to the
          attention of Customs under 19 U.S.C. 1520(c)(1).  Customs
          refusals to reliquidate the entries under this provision were
          timely protested within 90 days, in accordance with 19 U.S.C.
          {1514.

               The importer's first claim for relief under 19 U.S.C. 1520
          (c)(1) is that the Manager made a mistake of fact, inadvertence
          or clerical error by failing to recognize that the Style 21615K
          boots have uppers of which 60% of the exterior surface area is
          leather.  Section T.D. 54848 describes and distinguishes
          correctable errors under section 1520(c)(1).  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.  Inadvertence connotes inattention,
          oversight, negligence, or lack of care while 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.  These
          errors are not necessarily mutually exclusive.  However, errors
          in the construction of a law are not correctable under section
          1520(c).  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.  94 Treas. Dec.
          244, 245-246 (1959).

               These entries do not concern a clerical error, since such an
          error is made by one in a clerical capacity who has no duty to
          exercise original thought or judgment.  PPG Industries Inc. v.
          United States 7 CIT 118, 124 (1984).  The importer's traffic
          manager had responsibility to review the documents and determine
          the appropriate tariff item number for each entry.  Although the
          manager had originally been advised that the entries of similar
          merchandise were dutiable at 37 1/2%, he had ongoing















                                        - 5 -


          responsibility to evaluate and process entry documents.  There is
          no indication that any other employee directed him to designate
          the entries in question under a particular tariff item or duty
          rate or that his mistake was in the nature of a transcription
          error.

               We do not believe that the importer's employee's actions
          amounted to negligent inaction, which is not within the scope of
          section 1520(c).  See C.S.D. 80-250.  Negligent inaction cases
          usually are the result of the submission of incorrect or
          incomplete documentation, intentionally or not, and the failure
          to submit or late submission of "correct" documentation.  This
          ruling states that the failure to act may be correctable under 19
          U.S.C. 1520(c), when coupled with another significant factor,
          such as a misunderstanding of the facts.

               There is evidence that the importer's employee made a less
          than thorough review of the entry documents and therefore was
          unaware of a material fact.  In the Manager's affidavit, he
          states that when he received the invoice and shipping documents,
          he assumed the merchandise was the same type of boots as
          previously entered, and instructed the broker to enter them at
          37.5% (corresponding to TSUS item 700.57).  He states that
          because of his mistake and inadvertence in not carefully checking
          the CF 5523, and the importer's purchase orders, he mistakenly
          advised the broker as to the duty rate.

               Some official at the importer's business knew the correct
          composition of the boots before entry, since a correct CF 5523,
          apparently prepared by the importer, detailed the correct
          composition.  The CF 5523 provides evidence that the boots' were
          composed of 60% leather uppers.  The Manager did not review this
          form but based his classification decision on prior experience of
          boots by the same name.  Therefore, due to inattention,
          carelessness or other inadvertence, the Manager was unaware of
          the boots composition, a material fact needed to determine the
          classification of the merchandise.  However, the mistake of fact
          by the importer's employee does not provide direct correlation to
          a mistake of fact made in the entry of the merchandise as
          required under section 1520(c)(1), since the broker, not the
          importer or its employee filed the entry.

               We reject the protestant's argument that the purchase orders
          and confirmation provide proof that the boots were intended to be
          entered at the lower rate of duty.  Disparate profit margins
          provide some indication that the merchandise was intended to be
          entered by the importer at the lower rate, but it is not
          conclusive.  Customs will not evaluate the reasonableness of
          business decisions regarding this kind of difference in profit












                                        - 6 -


          margin to determine the importer's classification intent.
          However, the underlying basis of the importer's intent to use the
          lower duty rate, the composition of the boots, is established by
          the CF 5523, submitted with the entry.

               The record does not establish that any mistake of fact,
          inadvertence or clerical error was made by the Customs Service
          the broker.  No affidavits or other statements are provided from
          those parties to substantiate such an error.  See C.J. Tower &
          Sons v. United States, 68 Cust. Ct. 17, 22, CD 4327, (1972),
          aff'd 61 CCPA 90, C.A.D. 1129 (1974), where Customs agreed it was
          unaware of a material fact at the time of liquidation.  We cannot
          rely on the assumptions and assertions of the protestant without
          any facts.  As we recently ruled in C.S.D. 89-29, mistakes of
          fact cannot be presumed from circumstances that do not
          necessarily support such a finding.  Inferences are not
          sufficient proof.  The requirement in section 1520(c)(1) that
          mistakes of fact be manifest from the record or established by
          documentary evidence necessitates something more than assertions
          of logical inference.   When it is alleged that merchandise has
          been wrongly classified due to a mistake of fact, it is incumbent
          on the protestant to show by sufficient evidence the nature of
          the mistake of fact.  PPG Industries, Inc. v. United States, 4
          CIT 143, 147 (1982).

               The fact that the broker was advised to enter the
          merchandise under the incorrect tariff item number by the
          importer, and that the broker did enter the merchandise
          accordingly, does not provide sufficient proof that a mistake of
          fact occurred in the entry, since accurate documents describing
          the composition entry, were available to the broker and submitted
          with the entry.  The broker has an independent obligation to
          determine the correct tariff classification and duty rate for
          entries it files for a client.  No evidence is provided to refute
          the possibility that the broker considered all relevant facts as
          to the true nature of the imported merchandise and incorrectly
          determined the classification, which would be a mistake of law.

               A Customs broker is licensed to transact Customs business on
          behalf of others.  As defined in the Customs Regulations, section
          111.1, Customs business includes transactions involving entry,
          classification, value and payment of duty.  Furthermore, under 19
          U.S.C. 1641, a broker is required to exercise responsible
          supervision and control over the Customs business it conducts.
          There is no evidence in the record that the broker was not aware
          of all material facts, since the CF 5523 was part of the entry
          documents which were submitted to Customs through the broker.













                                        - 7 -


          The fact that an importer advised the broker of how it wished
          merchandise to be entered does not  presume that the broker, with
          expertise and experience in Customs matters, would evaluate the
          evidence in the same manner as the importer.  See PPG
          Industries,Inc. v. United States, 7 CIT 118, 121, 126 (1984).

               Since the CF 5523 was included in the file, it was also
          available to the Customs officials who reviewed the form, and
          liquidated the entry. There is no evidence that Customs officials
          were unaware of the true composition and erroneously applied the
          incorrect tariff classification.  It is well established that a
          determination that merchandise is covered by a certain tariff
          item is a conclusion of law.  An error of judgement on the part
          of a customs officer who was aware of the pertinent facts but
          entered the merchandise under the wrong tariff item number is a
          mistake in the construction of law, not correctable under section
          520(c)(1).  See  Mattel, Inc. v. United States, 72 Cust. Ct. 257,
          262-264, C.D. 4547 (1974); Computime, Inc. v. United States, 9
          CIT 553 (1985).

               A protest under section 514, Tariff Act of 1930, (19 U.S.C.
          1514) filed within 90 days of liquidation, is the remedy to
          correct erroneous classifications caused by the misinterpretation
          of law.  No such protest was filed.  Section 1520(c)(1) is not
          remedial for every conceivable form of mistake or inadvertance
          adverse to an importer, but offers limited relief.  Concentric
          Pumps, Ltd. v. United States, 643 F.Supp. 623, 626, 10 CIT 505
          (1986).

          HOLDING:

               (1) The importer's employee did not thoroughly review the
          entry documents and was unaware of a material fact contained in
          the entry documents when it advised the broker of the
          classification of merchandise for entry.  This error did not
          amount to a mistake of fact in the entry under 19 U.S.C.
          1520(c)(1) since the broker, not the employee, had
          responsibility for filing the entry.

               (2) The broker had all documentation necessary to file a
          correct entry.  Notwithstanding the erroneous instructions it
          received from the importer, the record does not establish that
          the broker made a mistake of fact, inadvertence or clerical error
          in filing the entry under the wrong classification, rather than a
          mistake of law by improperly classifying the merchandise.
















                                        - 8 -


               (3) The record provides no evidence that Customs made a
          mistake of fact, clerical error or inadvertence in classifying
          the merchandise when all documentation was included in the entry
          and was available before liquidation.

               Since a clerical error, mistake of fact or inadvertence in
          the entry or liquidation is not manifest from the record or
          established by documentary evidence, you are advised to deny the
          protest.

                                        Sincerely,




                                        John Durant, Director
                                        Commercial Rulings Division