HQ 225841: Application for further review of Protest No. 3801-94- 101536; 19 U.S.C. 1520(c)(1); mistake of fact; alloy steel bars and rods; HQ 955737

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 225841

                         January 16, 1996




LIQ-9-01-RR:IT:EC   225841 CC 

CATEGORY: Liquidation

Port Director 
U.S. Customs Service
477 Michigan Avenue
Detroit, MI 48226-2657

RE:  Application for further review of Protest No. 3801-94-      101536; 19 U.S.C. 1520(c)(1); mistake of fact; alloy steel  bars and rods; HQ 955737

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:

     The entry the subject of this protest consisted of alloy
steel bars and rods.  The merchandise was entered on May 27,
1992.  The entry was liquidated on October 2, 1992 under
subheading 7228.50 of the Harmonized Tariff Schedule of the
United States (HTSUS), which provides for other bars and rods,
not further worked than cold-formed or cold-finished.
   
     On September 28, 1993 the protestant requested, in
accordance with 19 U.S.C. 1520(c)(1), that you reliquidate the
entry under subheading 7228.40, HTSUS, which provides for other
bars and rods, not further worked than forged. 

     Therefore, the protestant's claim is that there was a
mistake of fact in classifying the merchandise.  Specifically,
the protestant claims that the subject merchandise was
misdescribed on the invoice as "machined," "peeled," or "turned."
The misdescription led Customs to conclude that the merchandise
was "cold-formed or cold-finished," and, thus, classified under
subheading 7228.50, HTSUS, which was an incorrect classification,
according to the protestant. 

     On January 12, 1994 the section 1520(c)(1) claim was denied. 
This protest on the denial of the section 1520(c)(1) claim was
filed on April 6, 1994.

ISSUE:

     Whether Customs properly denied the protestant's request to
reliquidate the subject entry 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.  As noted by the
protestant at the time the protest was filed, the issue of the
classification of essentially the same merchandise, alloy steel
bars imported by the same importer, was pending before Customs as
a protest.  That protest, ruled on in HQ 955737, was issued on
July 19, 1995.  In that protest we found that removing between
0.01 inch to 0.1 inch from the entire external surface area of
alloy tool steel bars constitutes cold forming or cold finishing
for tariff purposes; therefore, the merchandise was classified
under subheading 7228.50, HTSUS.  The merchandise involved here
is essentially the same merchandise subjected to the same
processes as that involved in HQ 955737.  Consequently, the
merchandise the subject of this protest is classified under
subheading 7228.50, HTSUS.

     The protestant also argued that NY 847047, dated December 5,
1989, which classified tool steel bars under subheading 7228.40,
HTSUS, applies to the merchandise of this protest.  In HQ 955737
the same argument was made and dismissed because the merchandise
of NY 847047 was "distinguished on the facts."  Consequently, NY
847047 does not apply to this protest.  

     Based on the foregoing, we find that the subject merchandise
was properly classified.  Consequently, no mistake of fact exists
for the tariff classification of the subject merchandise. 

     Even it were shown that classification of the subject entry
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 subject merchandise was
misdescribed on the invoice as "machined," "peeled," or "turned." 
In HQ 955737 we used these same terms to describe the merchandise
classified, so we find it difficult to conclude there was any
misdescription of the merchandise of this protest.  If somehow
these terms were a misdescription, it would be based on the legal
consequences; there is no evidence of any mistake present as to
the processes involved or the nature of the merchandise. 
Consequently, 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
entry.  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 
                         Compliance Division