HQ 221575: Your letter of June 30, 1989, concerning the denial of requests for relief pursuant to 19 U.S.C. 1520(c) for 13 shipments of rail from Canada

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 221575

                         August 23, 1989

LIQ-9-01-CO:R:C:E  221575 L

CATEGORY: Entry/Liquidation

Carrie A. Simons, Esq.
Dow, Lohnes & Albertson
1255 Twenty-Third Street
Washington, D.C. 20037-1194

RE: Your letter of June 30, 1989, concerning the denial of
    requests for relief pursuant to 19 U.S.C. 1520(c) for
    13 shipments of rail from Canada

Dear Ms. Simons:

     This responds to the above-referenced letter concerning the
denial by the District Directors of Customs at Buffalo and
Detroit of requests by A & K Railroad Materials, Inc. ("A & K")
pursuant to 19 U.S.C. 1520(c) to accept certain A & K entries
without the requirement of a surety bond for estimated
countervailing duties and to proceed to liquidate the entries in
accordance with Customs' normal procedures.  The case concerns 19
U.S.C. 1520(c)(1) and whether the use of immediate delivery
procedures rather than entry/entry summary procedures is a
"mistake of fact" under 19 U.S.C. 1520(c)(1).

FACTS:

     The factual situation is set out at length in your
submission but can be summarized briefly as follows:

     In December 1988 and January 1989 A & K orders were placed
with a Canadian manufacturer for carbon steel rails to be entered
at the ports of Detroit and Buffalo.  The Canadian manufacturer
informed A & K that the U.S. Department of Commerce was scheduled
to make a preliminary countervailing duty determination on
February 23, 1989, and would publish that determination shortly
thereafter.  On March 2, 1989, Commerce published its preliminary
countervailing duty determination (54FR8784) and instructed
Customs to suspend liquidation of all entries for consumption on
or after March 2, 1989.  In addition, Customs was directed to
require a cash deposit or bond for all entries of the affected
merchandise equal to 103.55 percent ad valorem.  The merchandise

in issue is said to have crossed the border from Canada into the
United States between February 20 and February 26, 1989 (footnote
2 to your June 30, 1989, letter) or on February 22 or 23, 1989
(page 5, third paragraph, of your June 30, 1989, letter).

     In any event, instead of entering the merchandise by
February 23, 1989, A & K's broker obtained release of the
merchandise under Customs' "immediate delivery" procedures.  From
March 6 through March 9, 1989, the broker presented merchandise
for entry.  From March 8 through March 10, 1989, Customs rejected
all 13 entries because A & K did not post a surety bond or bonds
for the estimated countervailing duties in accordance with
Commerces' preliminary determination.  On March 17, 1989, the
broker informed A & K that its entries had been rejected, that
the shipments had physically crossed the border by February 23,
1989, but that the broker had not attempted to enter the
merchandise until after March 2, 1989, the effective date of the
preliminary determination.

     On April 17, 1989, A & K filed with the District Directors
of Customs in Buffalo and Detroit petitions for relief under 19
U.S.C. 1520(c) alleging mistake of fact by the broker in
obtaining release of the merchandise under immediate delivery
procedures instead of entering the merchandise for consumption
immediately upon importation.  The District Director, Buffalo,
denied the 19 U.S.C. 1520(c) petition on April 25, 1989; the
District Director, Detroit, denied the 19 U.S.C. 1520(c) petition
on May 24, 1989.

ISSUE:

     The issue is whether a mistake of fact correctable under 19
U.S.C. 1520(c)(1) occurred when A & K's broker arranged for
immediate release of merchandise imported prior to the effective
date of a preliminary affirmative countervailing duty
determination under a special permit for immediate delivery
rather than filing entries for consumption for the merchandise
prior to the effective date of the countervailing duty
determination.

LAW AND ANALYSIS:

     The submission is characterized as a request for relief
pursuant to 19 U.S.C. 1520(c).  Requests for relief on the
identical factual situation were previously submitted to and
denied by the District Directors of Customs at Buffalo and
Detroit.  Accompanying this submission is a letter dated
July 3, 1989, from International Business-Government Counsellors,
Inc. referring to new facts concerning "discussions between the
District Director and broker" and suggesting the new facts
warrant a second review.  The submission is directed to the
Deputy Assistant Commissioner, Office of Commercial Operations,
and not to the District Directors of Customs at Buffalo and
Detroit, the "appropriate customs officers" under 19 U.S.C.
1520(c) and 19 CFR 173.4.

     The new facts are not specified, but comparison of the
requests for relief submitted to the District Directors at
Buffalo and Detroit and the June 30, 1989, request submitted to
Customs Headquarters, suggests additional arguments on facts
identical to those in the original requests for relief rather
than new facts.  The additional or expanded arguments appear to
begin at page 7 of the June 30, 1989, submission, and are, in
essence, that A & K satisfies all requirements for relief under
19 U.S.C. 1520(c) because:

     A. The broker's misunderstanding or disregard of A & K's
instructions to enter the rail shipments prior to February 23,
1989, is a mistake of fact or inadvertence.

     B. The broker's mistake is clearly established by
documentary evidence.

     C. The broker's mistake occurred during the entry process.

     D. A & K is not prohibited from obtaining relief under 19
U.S.C. 1520(c) because the broker's mistake occurred prior to a
liquidation.

     Section 1520(c)(1) provides in part that the appropriate
customs officer 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.

     The entries in issue have not been liquidated and the
Customs Service has been directed by the Department of Commerce
to suspend liquidation of the entries until further notice,
54FR8784, 8791, March 2, 1989.

     Addressing argument D first, A & K argues that it is not
prohibited from obtaining relief under 19 U.S.C. 1520(c) because
the merchandise has not been liquidated, stating that it would be
a senseless and time consuming exercise for Customs to make A & K
go through an erroneous liquidation after the annual review of
any countervailing duty order that might be issued and then
reliquidate the merchandise on the basis that the broker made a
mistake in entering the merchandise approximately two years
earlier.  It is further asserted that Customs possesses the
authority, and has exercised that authority, to correct mistakes
of fact or inadvertence prior to liquidation, citing C.S.D.
79-377.

     C.S.D. 79-377 concerned the issue of whether temporary
importation under bond (TIB) entries are subject to review under
19 U.S.C. 1520.  As stated in the A & K submission, under "Law
and Analysis", it is said that ". . .we have permitted clerical
errors or mistake of fact to be corrected prior to liquidation,
in a consumption entry, even though the statute only authorizes
reliquidation.  We feel that to go through an erroneous
liquidation and then reliquidate is needlessly time consuming to
all concerned."

     The next paragraph in C.S.D. 79-377 goes on to say:

          However, we do not feel it is necessary to
          decide the question of 1520(c)(1) review of a
          temporary importation under bond entry since
          authority to grant appropriate relief is
          provided for under the provisions of part 172
          of the Customs Regulations.

     The "Holding" in C.S.D. 79-377 does not involve or refer to
19 U.S.C. 1520 and the statement referred to in C.S.D. 79-377
must be characterized as in the nature of dicta.  Further, in
Diversified Products Corporation v. United States, 7 CIT 49
(1984), a case involving the recomputation of an antidumping
margin resulting in the lowering of the margin, the plaintiff
sought a refund of the difference between the estimated
antidumping duties deposited and the recomputed antidumping
duties.  The Court, noting that the government conceded that
plaintiff would be entitled to a refund, agreed with the
government position that plaintiff must wait until the entries
for which estimated antidumping duties were deposited are
liquidated.

     The argument also presupposes that the Customs Service
agrees that there was a mistake of fact in the filing of an
immediate delivery permit by the broker rather than a consumption
entry as asserted in arguments A and B despite the fact that two
district directors of Customs have denied A & K's requests for
relief under 19 U.S.C. 1520(c) in which mistake of fact was
alleged.


     We are aware of no administrative procedure for the review
of a district director's refusal to reliquidate an entry under 19
U.S.C. 1520(c) other than a protest under 19 U.S.C. 1514(a)(7).
However, a denial, prior to liquidation, of a request for
correction of a clerical error, mistake of fact, or inadvertence
is not subject to protest.  Section 1520(c)(1) supports a claim
for reliquidation as distinguished from liquidation.  J.S.
Sareussen Marine Supplies, Inc. v. United States, 62 Cust. Ct.
449, C.D. 3799 (1969), and cases cited therein.

     Nevertheless, with respect to the mistake of fact issue, we
are not persuaded that the factual situation as described
supports a finding of mistake of fact as opposed to mistake of
law.  The situation is similar to that in C.S.D. 81-56.  In that
case, certain merchandise arrived in the United States and was
released under the immediate delivery procedure on December 29,
1978.  The entry summary and duty payment were made to Customs on
January 8, 1979.  Entry was attempted at the duty rate of 9.5
percent ad valorem.  However, Customs required the merchandise to
be entered at 15 percent ad valorem as the result of a
Presidential Proclamation effective as to the merchandise on or
after January 6, 1979.

     The broker contended that the entries should be reliquidated
at the lower rate because, among other things, due to a clerical
error the broker failed to note "entry" on the releasing
documents and, therefore, Customs should have treated the
immediate delivery release on December 29, 1978, as an "entry."

     The discussion under "Law and Analysis" goes on to point out
that "[s]ince merchandise arriving from contiguous countries by
land shipments are generally released under the immediate
delivery procedure . . .it must be presumed that without the
submission of documentary evidence to the contrary, the importer
or his agent (the broker) intended at the time of release for the
merchandise to be released under the immediate delivery
procedure.  Evidently, the broker at the time of release was
either unaware of the Presidential proclamation or did not fully
appreciate the legal ramifications resulting from obtaining the
release of such merchandise under the immediate delivery
procedure, rather than the new expedited entry procedure.
Therefore, we believe that any error involved in this case was a
mistake of law, rather than a clerical error or mistake of fact
within the meaning of section 520(c)(1) of the Tariff Act."  In
addition, as recently ruled in C.S.D. 89-29, mistake of fact
cannot be presumed from circumstances.

     The documentary evidence submitted consists of affidavits of
two A & K employees (your exhibits "A" and "D"), two telecopy
messages from A & K to the broker in Buffalo, New York (your
exhibits "E" and "F"), and one telecopy message from A & K to CN
Railroad (exhibit "G").

     The first affiant (exhibit "A") gave no instructions
whatsoever to the broker prior to the release of the merchandise
under immediate delivery procedures followed by consumption
entries after the effective date of the preliminary
countervailing duty determination.  The second affiant (exhibit
"D") had discussions with the broker, as pertinent here, on
February 14, 21 and 23, 1989.  There is no indication in any of
the documents that the broker was given specific instructions by
A & K on how to handle the importation, release, and entry of the
merchandise.

     Exhibits "E" and "F" relate to the location of certain
railcars and express concern that the cars cross the border by
February 23, 1989.  Exhibit "G", of course, is not to the broker.

     It is clear that A & K wanted the merchandise to cross the
border by February 23, 1989; but it is not clear that the
importer specifically intended that a consumption entry be filed.
The release of the merchandise under immediate delivery
procedures was entirely lawful and there may have been reasons
for so electing even though the filing of consumption entries
prior to the effective date of the preliminary countervailing
duty determination might have resulted in some benefit for the
importer.  As stated in C.S.D. 89-29 "[w]here it is claimed that
failure to follow the principal's instructions was a
misunderstanding and a mistake of fact under the law, it is
fundamental to establish what those instructions were."

     While it is our opinion that A & K has failed to established
a mistake of fact under the law, it is our further opinion that
the use of immediate delivery procedures rather than the filing
of a consumption entry was a mistake in the construction of a
law.


     A & K also states that "[R]elease pursuant to immediate
delivery is the commencement of the entry process;" apparently
arguing that release under a special permit for immediate
delivery is tantamount to an entry for consumption and that the
holding in  Godchaux Hendersen Sugar Co., Inc. v. United States,
85 Cust. Ct. 68, C.D. 4874 (1980), is not applicable to A & K.
In Godchaux Hendersen the plaintiff imported sugar which was
unladen under an immediate delivery permit on February 24, 1976.
Under this permit, plaintiff was allowed to import the sugar
without filing a consumption entry for 10 business days after
release of the merchandise, in this case March 9, 1976.  Duty-
free status for the sugar in issue was withdrawn, effective with
respect to merchandise entered, or withdrawn from warehouse, for
consumption on or after February 29, 1976.  On March 4, 1976,
plaintiff attempted to file a duty-free entry but the entry was
rejected as the sugar was no longer duty-free.  On March 9, 1976,
the merchandise was entered as dutiable and was liquidated
accordingly on May 14, 1976.  Plaintiff sought reliquidation
under section 520(c)(1) of the Tariff Act alleging clerical
error, mistake of fact, or other inadvertence not amounting to an
error in the construction of the law.

     The court did not decide the issue of whether there was a
mistake of fact or a mistake of law holding that even assuming
arguendo that the duty-free status of the sugar did not involve
"construction of a law," which is excluded from relief under
section 520(c)(1), plaintiff's failure to file a duty-free entry
by the deadline prescribed by law is not within the scope of that
section.  We do not agree that the situation faced by A & K is
entirely different from that in Godchaux Hendersen; we believe
Godchaux Hendersen to be directly in point.

     It is also urged that even if release for immediate delivery
is not an entry, A & K still satisfies the requirement of section
520(c)(1) that the mistake must have occurred in an entry,
liquidation or other customs transaction, claiming that release
under immediate delivery is a "customs transaction," citing
Geo. Wm. Rueff, Inc. v. United States, 41 Cust. Ct. 331, abs.
62204 (1958).  We do not agree that Rueff stands for the
proposition that A & K's use of immediate delivery procedures
when the filing of an entry for consumption might, by inference,
have been more beneficial to them, is an "other customs
transaction" correctable under 520(c)(1).  The selection of
release under a special permit for immediate delivery, as
authorized by 19 U.S.C. 1448(b) was both voluntary and lawful.
In any event, as it is our opinion that if there was a mistake it
was a mistake of law, relief is not available under 19 U.S.C.
1520(c).

HOLDING:

     The failure to file an entry for consumption prior to the
effective date of a preliminary affirmative countervailing duty
determination on merchandise released under an immediate delivery
permit prior to that date is not a clerical error, mistake of
fact, or other inadvertence not amounting to an error in the
construction of a law within the meaning of 19 U.S.C. 1520(c)(1)
unless it can be established by documentary evidence satisfactory
to the Customs Service that the broker had been instructed to
file entries for consumption.  The documents submitted do not
establish that the broker had been so instructed and we affirm
the decisions of the District Directors of Customs in Buffalo and
Detroit denying relief under 19 U.S.C. 1520(c)(1).

                               Sincerely,




                               John Durant, Director
                               Commercial Rulings Division