HQ 223611: Request for Further Review of Protests 1001-91-107135 and 1001-91-107136, Dated July 3, 1991

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 223611

                        January 21, 1993

LIQ-9-01-CO:R:C:E 223611

CATEGORY: Reliquidation (19 U.S.C. 1520(c))

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

RE: Request for Further Review of Protests 1001-91-107135 and
    1001-91-107136, Dated July 3, 1991

Dear Sir:

     The following is in response to the request of the Head of
the Protest and Control Section, for further review of the above-
referenced protests.

FACTS:

     The protests concern two different importers with identical
issues except that in Protest No. 1001-91-107135, the request of
May 31, 1989, to reliquidate a Consumption Entry dated March 8,
1988, was not timely made within one year after the date of
liquidation of May 8, 1988, as required by 19 U.S.C. 1520(c)(1). 
All of the other entries were liquidated between June 17, and
September 2, 1988, and within one year after the date of
liquidations, timely requests were made on May 31, 1989, for
reliquidations under 19 U.S.C. 1520(c)(1).  Timely protests were
filed on October 1, 1991, under 19 U.S.C. 1514(a)(7) within
ninety days after the refusal on July 3, 1991, to reliquidate the
entries under 19 U.S.C. 1520(c)(1).

     Temporary legislation which provided for the suspension of
duties for certain merchandise, including Items 906.38 and
907.16, of the Tariff Schedules of the United States (TSUS),
expired on December 31, 1987.  In a Telex numbered 17408, dated
December 31, 1987, the Assistant Commissioner, Office of
Commercial Operations, informed field personnel that Customs had
no statutory authority to continue the preferential (free) duty
rate and issued instructions that merchandise entered or
withdrawn for consumption after January 1, 1988, "must be entered
 
under the appropriate . . . TSUSA number with the applicable
duties deposited."  Because it was anticipated that pending
legislation would extend the expiration date, field personnel
were instructed that "liquidation shall be withheld until further
notice. . ." . Further, the Telex instructed field personnel to
make this information available to all interested parties. The
Deputy Assistant Regional Commissioner (Commercial Operations),
New York Region, in conformity with the Headquarters Telex,
issued a notice, Pipeline No. 1516, dated January 6, 1988, to
customhouse brokers, importers and others concerned to inform
them that there was no statutory authority to extend the
preferential duty treatment and that duties must be deposited. 
The notice also informed the public that "liquidation of these
entries and all entries previously accepted under an expired
Schedule 9 item number will be withheld until further notice is
received from Headquarters."

     On December 8, 1988, Headquarters issued Telex number 15901
advising all field offices of the passage of the Technical and
Miscellaneous Revenue Act of 1988, effective November 10, 1988,
which extended the expiration date of December 31, 1987, to
December 31, 1992, for certain duty reductions including the
merchandise covered by these protests.  Headquarters also stated
that further instructions would follow concerning reliquidation.

     On June 28, 1989, Headquarters issued Fact Sheet number 37,
signed by the Director, Office of Trade Operations noting that
the Act merely extended the existing effective period of the
temporary legislation but did not provide for retroactive
reliquidation.  The Director noted that liquidated entries that
have not become final within ninety days after the dates of
liquidation may be reliquidated under section 171.3 of the
Customs Regulations (19 U.S.C. 1501) or by the filing of a
protest under 19 U.S.C. 1514. Further, it noted that Customs
had no authority to reliquidate those entries whose liquidations
have become final by operation of other laws
(19 U.S.C. 1514).
 
     In conformity with Telex 17408, some of the entry summaries
covered by the protests contained the notation "Liquidation to be
withheld, Headquarters Directive."  Notwithstanding the Telex and
the notations on the entry summaries, the entries were
liquidated.

ISSUE:

     The issue is whether the refusal to reliquidate entries in
accordance with the Technical and Miscellaneous Revenue Act of
1988 was proper.

LAW AND ANALYSIS:

     Customs is required by 19 U.S.C. 1520(c)(1), notwithstanding
a valid protest was filed (under 19 U.S.C. 1514), to 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 when the importer brings it to the attention of Customs
within one year after the date of liquidation.

     Section 9004 of the Technical and Miscellaneous Revenue Act
(Act of November 10, 1988, 102 Stat. 3342, Pub. L. 100-647)
extended the expiration date of several temporary duty
exemptions.  The law became effective November 10, 1988.  The
case of Miles v. U.S., 290 F. Supp. 395, 61 Cust. Ct. 245 (1968)
remanded 416 F. 2d 973, 57 CCPA 1 (1969) involved similar
legislation.  The effect of Public Law 89-468 was considered. 
That law provided, in pertinent part:

                             An Act

          To amend the Tariff Schedules of the United
          States to provide that certain forms of
          copper be admitted free of duty.

          Be it enacted by the Senate and House of
          Representatives of the United States of
          America in Congress assembled, That subpart B
          Part 1 of the appendix to the Tariff
          Schedules of the United States (19 U.S.C.
          sec. 1202) is amended by    

               (a) amending items 911.10, 911.11,
               and 911.12 to read as follows:
 
               911.10  Copper waste and scrap Free

               Sec. 2. The amendments made by the
               first section of this Act shall
               apply to articles entered, or
               withdrawn from warehouse, for
               consumption after February 8, 1966.

               Approved June 23, 1966.

     In Miles, the copper in issue was entered after February 8,
1966, and, thus, was within the express language of section 2 of
the law.  Both the trial and appellate court found that section 2
of the law was a retroactive application provision.  The
appellate court remanded and expressly disagreed that 19 U.S.C.
1520 applied.  Miles had filed a request for reliquidation on
July 11, 1966, 18 days after the law's enactment on June 23,
1966.  The appellate court found that while the entries had been
liquidated correctly between March 7 and April 25, 1966, the
retroactive application of the law created a new right of action
on June 23, 1966.  The request for reliquidation was timely,
although it could not have been based on 19 U.S.C. 1520(c)(1).

     The language of section 9004 of the Act of November 8, 1988
does not contain a provision equivalent to that of section 2 of
the Act of June 23, 1966.  The same appellate court further
explained its reasoning in C.J. Tower & Sons of Buffalo, Inc. v.
U.S., 336 F. Supp. 1395, 68 Cust. Ct. 17 (1977), aff'd. 499 F.
2d. 1277, 61 CCPA 90 (1974) when it stated at 499 F. 2d. 1281:

               In Miles  we did not find that
               appellant's right arose under
               section 520, though recognizing
               rights might arise thereunder, but
               under a retroactive act of
               Congress, P.L. 89-468, providing
               for free entry of copper scrap.

     While the court did not state the statutory basis for
jurisdiction and relief, it expressly held that it did not do so
under 19 U.S.C. 1520.  An analysis of the facts indicates that 19
U.S.C. 1514 was the statutory basis.  The law was retroactive, it
expressly covered the entries in issue, and a request for
reliquidation was filed well within the protest period following
enactment.  The fact that the request cited 19 U.S.C. 1520 would
not necessarily be fatal to finding that the request was a  protest under the rationale in Mattel, Inc. v. U.S., 377 F. Supp.
955, 72 Cust. Ct. 257, 265 (1974).  There, the court found no
basis for denying the sufficiency of letters which were conceded
to meet the requirements of 19 U.S.C. 1514 merely because of the
gratuitous addition of the words "under section 520(c)."

     Here, there are two significant differences from the other
cases, particularly from the situation in Miles.  First, it is
not clear that Congress intended section 9004 of the Act of
November 10, 1988 to be retroactively applied to entries that
were liquidated before the date of enactment, November 10, 1988.
Second, if section 9004 was to be retroactive and created a new
cause of action on November 10, 1988, the requests for
reliquidation were not filed until May 31, 1989, well outside the
90-day protest period.

     The next point to consider is whether the failure of the
appropriate Customs officer to withhold liquidation as instructed
is an error warranting reliquidation under 19 U.S.C. 1520(c)(1).
Instructions to withhold liquidation were issued by the
Commissioner of January 3, 1987; by the Assistant Commissioner,
Commercial Operations, on December 31, 1987, and by New York
Regional Pipeline No. 1516 (January 6, 1988).

     We note that deemed liquidation under 19 U.S.C. 1504 is not
in question here because the dates of consumption entries were
between March, 1988 through July 1988; the date of the
instructions to withhold liquidations were effective January 1,
1988; and the dates of liquidations were between April 1988 of
November 10, 1988.  All events occurred within less than one year
after the dates of entries.

     With respect to the application of 19 U.S.C. 1520(c)(1), it
is important to note that the provision for mistake of fact was
added by the Act of August 8, 1953, 67 Stat 519.  Prior to that
time, clerical errors only were covered.  By T.D. 54848 (1959),
Customs implemented the provision.  The required substantive
elements were:

               (1) does not amount to an error in
               the construction of a law
               (2) is adverse to the importer
               (3) is manifest from the record or
               established by documentary
               evidence.
 
     In ORR Ruling 75-0026 (LIQ-9-01 of January 24, 1975),
Customs took the position that the failure to follow a
Headquarters instruction did not automatically become a mistake
of fact under 19 U.S.C. 1520(c)(1).  That is, if a Customs
officer knew of the existence of an instruction and erroneously
determined that the instruction did not apply to the situation or
if that officer applied the instruction incorrectly, neither
error was correctable under 19 U.S.C. 1520(c)(1), because both
would be errors involving the construction of a law.  On the
contrary, if the evidence showed that the Customs officer was
unaware of the existence of the instruction, and that lack of
knowledge caused the Customs officer to err, that error was
correctable under 19 U.S.C. 1520(c)(1).

     In this case there is no evidence that the liquidating
officials were unaware of the instructions.  On the contrary,
some of the very entry papers in issue contain a notation
referring to those instructions.  A similar situation was
considered by the court in Gerry Schmitt & Co. v. U.S., 71 Cust.
Ct. 194 (1973).  At page 196, the court noted that even if a
request for suspension was made, it was within the discretion of
the district director to suspend the liquidations and that if
there was a failure to do so, the plaintiff's only remedy was to
challenge the liquidation by means of a timely protest.  The
court held that a plaintiff cannot revive its right to challenge
a liquidation by utilizing an administrative method designed to
rectify mistakes other than those which are decisional in nature.

HOLDING:

     The liquidation of entries that were liquidated before the
enactment of the Technical and Miscellaneous Revenue Act of 1988,
even if contrary to an instruction to withhold liquidation, is
not an error within 19 U.S.C. 1520(c)(1).

     There is no evidence to show that the appropriate Customs
officers were unaware of instructions to withhold liquidation so
as to apply the holding of ORR Ruling 75-0026.
 
     You are instructed to deny the protests in full, and provide
each protestant with a copy of this decision attached to the
Customs Form 19 as notice of action.

                                   Sincerely,




                                   John Durant, Director
                                   Commercial Rulings Division