HQ 224695: Protest No. 0201-93-100101; mistake of fact; substitution of consumption entry for TIB entry

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 224695

                         August 20, 1993

LIQ-9-01-CO:R:C:E 224695 CB

CATEGORY:  Entry

District Director
U.S. Customs Service
Main and Stebbins Streets, PO Bldg.
P.O. Box 1490
St. Albans, VT 05478

RE:  Protest No. 0201-93-100101; mistake of fact; substitution
     of consumption entry for TIB entry

Dear Sir:

     The above-referenced protest and application for further
review was forwarded to this office for determination.  The facts
and arguments presented have been considered and a decision
follows.

FACTS:

     A temporary importation under bond (TIB) was filed under
subheading 9813.00.05, of the Harmonized Tariff Schedule of the
United States (HTSUS) for the subject merchandise on February 6,
1992.  The entry documentation indicates that the merchandise was
being imported under a TIB for the purpose of repairs.  The record
indicates that by way of telefax transmittal dated February 18,
1992, the purchaser questioned why the protestant had filed a TIB
entry rather than a consumption entry. 

     On January 27, 1993, protestant submitted a request for
permission to substitute a consumption entry for the TIB entry
alleging mistake of fact.  This request was denied by way of letter
dated January 28, 1993.  The subject protest was filed timely. 
Protestant alleges that a TIB entry was not intended by the
importer but, that due to a misunderstanding, a TIB was filed in
lieu of a consumption entry.  Protestant contends that this is a
mistake of fact within the meaning of Section 520(c)(1) of the
Tariff Act of 1930.  In support of its contention, protestant cites
Headquarters Ruling 710679 and T.D. 78-363.

ISSUE:

     Whether the relief sought may be granted under this set of
facts?
 
LAW AND ANALYSIS:

     Initially, we note that the protest, with application for
further review, was timely filed under the statutory and regulatory
provisions for protests (see 19 U.S.C.  1514 and 19 CFR Part 174).

     There is no regulatory or statutory authority to grant
protestant the relief sought.  Under the Customs regulations there
is authority to allow the substitution of a TIB entry for a
consumption entry.  Specifically, 19 CFR 10.31(g) provides:

     (g)  Claim for free entry under Chapter 98,... may be made for
     articles of any character described therein which have been
     previously entered under any other provision of law and the
     entry amended accordingly upon compliance with the
     requirements of this section, provided... or even though
     released from Customs custody if it is established that the
     original entry was made on the basis of a clerical error,
     mistake of fact, or other inadvertence within the meaning of
     section 520(c)(1), . . . .

Therefore, the regulation is very specific in setting forth under
which circumstances substitution will be permitted.  There is
nothing in the pertinent regulation to indicate that substitution
of a consumption entry for a TIB entry is permitted.

     Protestant contends that, under 19 U.S.C.  1520(c)(1), Customs
has the authority to grant substitution of a consumption entry for
a TIB entry based on a mistake of fact.  The statutory provision
in question states:

(c)  Reliquidation of entry

     Notwithstanding a valid protest was not filed, the appropriate
     customs officer may, in accordance with regulations prescribed
     by the Secretary, reliquidate an entry to correct -- (emphasis
     provided)

          (1)  a clerical error, mistake of fact, or other
          inadvertence not amounting to an error in the
          construction of a law,. . . .

As stated above, pursuant to 19 CFR  10.31(h), TIB entries are
never liquidated.  An entry which is never liquidated cannot be
reliquidated.  Section 520(c)(1) of the Tariff Act of 1930, as
amended (19 U.S.C.  1520(c)(1)) provides that Customs may correct
certain errors, if adverse to the importer, within one year of the
date of liquidation.  An entry may be reliquidated in order to
correct a clerical error, mistake of fact, or inadvertence not
amounting to an error in the construction of a law.  See 19 U.S.C.
 1520(c)(1); 19 CFR  173.4.  Section 520(c) is not an alternative
to the normal liquidation-protest method of obtaining review, but
rather affords limited relief where an unnoticed or unintentional
error has been committed.  See Computime, Inc. v. United States,
9 Ct. Int'l Trade 553, 554, 622 F. Supp. 1083, 1085 (1985); see
also Universal Cooperatives, Inc. v. United States, 13 Ct. Int'l
Trade 516, 518, 715 F. Supp. 1113, 1114 (1989).

     Protestant states that a TIB entry was not intended by the
importer; however, due to a misunderstanding a TIB entry was filed
in lieu of a consumption entry.  Protestant cites T.D. 78-363 and
Headquarters Ruling 710679 in support of its contention.  In T.D.
78-363 the Customs Service denied the request to substitute a
consumption entry for a temporary importation entry on the ground
that the facts did not support a finding that the entry for
temporary importation was made as the result of a mistake of fact
or inadvertence.  The ruling did state that with the proper facts
the statute, 19 U.S.C.  1520(c)(1), could be used to allow the
substitution of an entry.

     In HQ 710679 (September 20, 1979), a situation involving a
former item 832.00, TSUS, was considered.  The Customs Service
found that the military procuring officer failed to correctly
certify the articles under the provision because it involved a
lease rather than a purchase.  The Customs Service was informed by
the procuring officer that the failure was erroneous and contrary
to the military's position.  In view of the decision in C.J. Tower
v. United States, 68 Cust. Ct. 17, C.D. 4327 (1972), aff'd 61 CCPA
90 (1974) which dealt with the interpretation of former item
832.00, TSUS, and 19 U.S.C.  1520(c)(1), the Customs Service ruled
that substitution of a consumption entry for a temporary
importation entry was permissible.

     Subsequent to HQ 710679 and T.D. 78-363, the court decided the
case of Godchaux-Henderson Sugar Co. v. United States, 85 Cust. Ct.
68, C.D. 4874 (1980).  The issue involved the scope of 19 U.S.C. 
 1520(c)(1).  The Customs Court stated in Godchaux-Henderson Sugar
that there is "nothing in either section 520(c)(1) or the
legislative history cited by plaintiff which suggests that Congress
intended the statute to be remedial in situations where, as here,
the importer mistakenly or inadvertently failed to make an entry
within the time limit prescribed by law to obtain duty-free
treatment. . . ."  (at p. 74)  The facts in Godchaux-Henderson were
that sugar was imported from Nicaragua on February 24, 1976, which
was unladen under an immediate delivery permit, but no consumption
entry was filed at that time.  At the time of importation,
plaintiff was not aware of the duty-free status of Nicaraguan sugar
under the GSP.  On March 3, 1976, plaintiff learned for the first
time that the sugar could have been entered duty-free under the
GSP, but that the duty-free status of that merchandise terminated
on February 29, 1976, by virtue of an Executive order.  The
shipment was entered as dutiable and liquidated accordingly.  The
court went on to say that "[s]imply put, plaintiff's 'mistake' or
'inadvertence' was not in an entry, but rather in failing to make
an entry. . . ."  85 Cust. Ct. at 74.  Therefore, even assuming
arguendo that a  1520(c)(1) protest could be filed under the
present facts, protestant's "mistake" or "inadvertence" was not in
an entry but rather, in failing to make an entry.  Thus, following
the Customs Court's holding in Godchaux-Henderson, "the scope of
relief afforded by section 520(c)(1) is not addressed to the facts
and circumstances disclosed by the record."  85 Cust. Ct. at 75.
This statutory provision grants limited authority to reliquidate
in order to correct a liquidation which resulted from a clerical
error, mistake of fact, or other inadvertence.

     TIB entries are considered entries.  However, TIB entries
shall not be liquidated (19 CFR  10.31(h) and  159.2).  Entries,
once properly accepted, may not be rejected by Customs (see 19 CFR
 141.64 and  141.68; see also ruling 222367, dated December 28,
1990).  There is no authority for the conversion of a TIB entry
which has been accepted by Customs to a consumption entry (19 CFR
 10.31-10.40).  The correct procedure for Customs to follow when
a TIB entry is filed and accepted by Customs for merchandise
subsequently found not to qualify for the TIB provision is to
consider the bond breached and to assess liquidated damages (letter
723561/726002, dated August 13, 1984).

HOLDING:

     Customs has no authority to allow an importer to convert the
TIB entry under which merchandise has been entered to a consumption
entry after the TIB entry has been accepted by Customs.  T.D. 78-
363 and Headquarters Ruling 710679 were superseded by the court's
decision in Godchaux-Henderson Sugar Co. v. United States, 85 Cust.
Ct. 68, C.D. 4874 (1980).  Therefore, this protest should be
DENIED.

     A copy of this decision should be attached to the Customs Form
19 and provided to the protestant as part of the notice of action
on the protest.

                                   Sincerely,




                                   John Durant, Director
                                   Commercial Rulings Division