Internal Advice; Petition No. 1901-00-200053; 19 U.S.C. § 1520(c)(1); mistake of fact; classification; nematic liquid crystal molecular mixtures; liquid crystal displays; E.M. Chemicals v. United States, 728 F. Supp. 723, 916 (Ct. Int’l Trade 1989) aff’d 920 F.2d 910 (Fed. Cir. 1990); In Sharp Microelectronics Technology, Inc. v. United States, 122 F. 3d 1446 (Fed. Cir. 1997); 9013.80.90, HTSUS; HQ 963003 (November 7, 2000); HQ 961194 (September 29, 1998); HQ 951868 (October 31, 1992); HQ 951609(October 20, 1992); HQ 952973(August 5, 1993); Executone Information Systems v. United States, 96 F. 3d 1383, 1386 (Fed. Cir. 1996); Computime, Inc. v. United States, 622 F.Supp. 1083, 1085(Ct. Int’l Trade 1985)

HQ 229112 May 23, 2002 LIQ-9-01 RR:CR:DR 229112 LLB Category: Liquidation Port Director of Customs 150 N. Royal Street, Room 3000 Mobile, Alabama 36602 Re: Internal Advice; Petition No. 1901-00-200053; 19 U.S.C. § 1520(c)(1); mistake of fact; classification; nematic liquid crystal molecular mixtures; liquid crystal displays; E.M. Chemicals v. United States, 728 F. Supp. 723, 916 (Ct. Int’l Trade 1989) aff’d 920 F.2d 910 (Fed. Cir. 1990); In Sharp Microelectronics Technology, Inc. v. United States, 122 F. 3d 1446 (Fed. Cir. 1997); 9013.80.90, HTSUS; HQ 963003 (November 7, 2000); HQ 961194 (September 29, 1998); HQ 951868 (October 31, 1992); HQ 951609(October 20, 1992); HQ 952973(August 5, 1993); Executone Information Systems v. United States, 96 F. 3d 1383, 1386 (Fed. Cir. 1996); Computime, Inc. v. United States, 622 F.Supp. 1083, 1085(Ct. Int’l Trade 1985) Dear Sir or Madam: The above-referenced internal advice has been forwarded to this office for review. We have considered the points raised by the petitioner, E.M. Industries, and your office. Our decision follows. FACTS Licristal®, the subject merchandise of this petition, was entered by the petitioner under subheading 3824.90.9090, HTSUS (1999) on April 30, and November 26, 1999. According to the petitioner, Licristal ® mixtures are free flowing organic liquids, and according to the commercial invoices, these liquids are shipped in vials. On January 31, 2000, the petitioner filed a protest (1901-00-100043) thereto, arguing that its broker had incorrectly entered the merchandiseunder subheading 3824.90.9090, HTSUS, when the merchandise should have been entered and properly classifiable under subheading 8531.90.90, HTSUS. To support its argument the petitioner attached to its protest, copies of E.M. Chemicals v. United States, 728 F. Supp. 723, 916 (Ct. Int’l Trade 1989) and E.M. Chemicals v. United States, 920 F.2d 910 (Fed. Cir. 1990), copies of its brochures, and copies of product data sheets. The protest was denied on August 9, 2000. In denying the protest the import specialist stated: The data provided is insufficient to establish the identicalness of [the]subject merchandise, both in composition and conjunctively, suitability for application, to that the subject of the cited court rulings. Further, it has not been established that those court rulings, rendered in the context of classification under the TSUSA, would be equivalently applicable to the subject merchandise entered under the HTSUSA, previous approval of a similar protest notwithstanding. According to the protest module in the Automated Commercial System (ACS), the petitioner did not appeal Customs decision in the Court of International Trade. Subsequently, on August 18, 2000, the petitioner filed the subject petition under 19 U.S.C. § 1520(c)(1), arguing that Customs denial of its § 1514 protest, in which it misclassified the subject merchandise, was a mistake of fact in light of the holding in E.M. Chemicals v. United States, supra. You request that this office provide the proper classification for the subject merchandise as well as determine if the alleged mistake of fact is correctable under 19 U.S.C. § 1520(c)(1). ISSUES 1) Whether the proper classification for the Licristal® nematic liquid crystal molecular mixtures falls under subheading 3824.90.90 or 8531.90.90, HTSUS 2) Whether the error alleged by the petitioner is correctable under 19 U.S.C. § 1520(c)(1) LAW and ANALYSIS Issue 1 Licristal® is the registered trademark for certain nematic liquid crystal molecular mixtures used in liquid crystal displays (LCDs). Liquid crystal materials are organic molecules that exhibit properties of both liquids and crystals in their nematic state. The nematic state of liquid crystal is the normal operating temperature of LCDs. The molecules of liquid crystal material are rod shaped and tend to align in a parallel array. An electric field can be applied and used to manipulate this array of rods. By changing the orientation of the rods, light passing through the liquid crystal fluid can be rotated. To create an LCD, the liquid crystal fluid is sandwiched between two pieces of glass coated with transparent conductors. Polarizers on the outside of the glass sandwich are used to orient the light past the material. When an electric field is applied across the fluid the light can either be blocked or allowed to pass based on its orientation to the polarizers. Licristal® is found in LCDs for calculators, watches, measuring instruments, instrument panels in cars and aircraft, computer games, large scale display boards for airports, train stations and banks, welding masks, high resolution displays for Notebooks and personal computer monitors, digital cameras and camcorders, etc. “Since the invention of Twisted Nematic (TN) cell by Schadt and Helfrich in 1971, Liquid Crystal Displays have effectively formed the information technology. At the beginning only small displays with little information content for watches, calculators, measuring instruments and other simple presentations were used. Soon, the resolution of LCDs increased . . . . So, LCDs could be used in electronic games, simple alphanumeric devices and automotive applications.” Market and Technology Trends of Flat Panel Displays 1999 to 2-005 with Special Emphasis on Liquid Crystal Displays, Werner Becker, Liquid Crystals Division, Merck KgaA. The subject entries were liquidated under subheading 3824.90.90, HTSUS, the provision for “Prepared binders for foundry molds or cores; chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included; residual products of the chemical or allied industries, not elsewhere specified or included: Other: Other." As discussed below, the appropriate classification for the subject merchandise is 9013.90.90, HTSUS. Merchandise imported into the United States is classified under the HTSUS. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (GRIs) and, in the absence of special language or context that requires otherwise, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUS and are to be considered statutory provisions of law. GRI 1 requires that classification be determined first according to the terms of the headings of the tariff schedule and any related section or chapter notes and, unless otherwise required, according to the remaining GRIs taken in order. GRI 6 requires that the classification of goods in the subheadings of headings shall be determined according to the terms of those subheadings, any related subheading notes and mutatis mutandis, to the GRIs. In interpreting the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System may be utilized. The ENs, although not dispositive or legally binding, provide a commentary on the scope of each heading, and are generally indicative of the proper interpretation of the HTSUS. See T.D. 89-80, 54 Fed. Reg. 35127 (August 23, 1989). The HTSUS provisions under consideration are as follows: 3824 Prepared binders for foundry molds or cores; chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included; residual products of the chemical or allied industries, not elsewhere specified or included: * * * * * * 8531 Electric sound or visual signaling apparatus (for example, bells, sirens, indicator panels, burglar or fire alarms), other than those of heading 8512 or 8530; parts thereof: 8531.90 Parts: Other [than of printed circuit assemblies] 8531.90.90 Other [than of the panels of subheading 8531.20; of paging alert devices or of flat panel displays for paging alert devices of subheading 8531.80] * * * * * * 9013: Liquid crystal devices not constituting articles provided for more specifically in other headings; lasers, other than laser diodes; other optical appliances and instruments, not specified or included elsewhere in this chapter; parts and accessories thereof: 9013.90 Parts and accessories: 9013.90.90 Other [than of telescopic sights for rifles or of flat panel displays other than for articles of heading 8528] The ENs to heading 8531, HTSUS, state, in pertinent part, the following: (D) Indicator panels and the like. These are used (e.g., in offices, hotels and factories) for calling personnel, indicating where a certain person or service is required, indicating whether a room is free or not. They include: (1) Room indicators. These are large panels with numbers corresponding to a number of rooms. When a button is pressed in the room concerned the corresponding number is either lit up or exposed by the falling away of a shutter or flap. (2) Number indicators. The signals appear as illuminated figures on the face of a small box; in some apparatus of this kind the calling mechanism is operated by the dial of a telephone. Also clock type indicators in which the numbers are indicated by a hand moving round a dial. (3) Office indicators, for example, those used to indicate whether the occupant of a particular office is free or not. Some types are merely a simple “come in” or “engaged” sign illuminated at will by the occupant of the office. (4) Lift indicators. These indicate, on an illuminated board, where the lift is and whether it is going up or down. (5) Engine room telegraph apparatus for ships. (6) Station indicating panels for showing the times and platforms of trains. (7) Indicators for race courses, football stadiums, bowling alleys, etc. The ENs to heading 9013, HTSUS, page 1478, state: (1) Liquid crystal devices consisting of a liquid crystal layer sandwiched between two sheets or plates of glass or plastics, whether or not fitted with electrical connections, presented in the piece or cut to special shapes and not constituting articles described more specifically in other headings of the Nomenclature. E.M. Chemicals v. United States, 728 F. Supp. 723, 916 (Ct. Int’l Trade 1989), aff’d, 920 F.2d 910 (Fed. Cir. 1990), held that liquid crystals were classifiable under item 685.70, of the Tariff Schedules of the United States (TSUS) (the predecessor provision to heading 8531, HTSUS) as parts of signaling apparatus. The court found that although the liquid crystals were also classifiable as to their chemical composition as mixtures, the use provision prevailed as a more specific provision describing the goods. Id. Therefore, petitioner is correct that nematic liquid crystals cannot be classified in heading 3824, HTSUS, as mere chemical mixtures. However, there has been a significant change in the relevant tariff provisions under the HTSUS and LCDs have been technologically developed for a myriad of uses, many of which cannot be said to be for "signaling." While counsel suggests in his submission dated February 8, 2002, that nematic liquid crystal mixtures are principally used as a part of signaling devices, we find this assertion to be incorrect. Rather, nematic liquid crystal, in its condition as imported here (in a vial), is most immediately used as a part of a glass sandwich. In Sharp Microelectronics Technology, Inc. v. United States, 122 F. 3d 1446 (Fed. Cir. 1997), the appellate court affirmed the holding of the Court of International Trade, 20 CIT 793 (1996), that imported glass cells consisting of two pieces of processed glass with a layer of liquid crystal injected between them were classified in subheading 9013.80.60, HTSUS. Subheading 9013.80.60, HTSUS, is the predecessor provision to current subheading 9013.80.90, HTSUS. See also, HQ 963003 (November 7, 2000); HQ 961194 (September 29, 1998); HQ 951868 (October 31, 1992); HQ 951609(October 20, 1992); HQ 952973(August 5, 1993). LCD modules having 80 or fewer characters or having a principal use as global positioning, lottery system, portable data collector, medical instrument, and gasoline pump indicators meet the terms of heading 8531, HTSUS, as signaling apparatus. See HQ 952973(August 5, 1993) and HQ 955062 (March 21, 1994). However, the nematic liquid crystal used in glass sandwiches used in LCD modules are far removed from the LCD module itself. The nematic liquid crystal inside a glass sandwich used in LCD modules for signaling apparatus is indistinguishable from that used in LCD modules unsuitable for signaling apparatus. Hence, nematic liquid crystal mixtures are not classified in heading 8531, HTSUS. In accordance with Sharp Electronics and HQs 963003, 961194, 951868, 951609, 952973, supra, glass sandwiches are classifiable under subheading 9013.80.90, HTSUS. The nematic liquid crystal mixture, in a vial, being a part of a glass sandwich, is classifiable in subheading 9013.90.90, HTSUS, the provision for "[L]iquid crystal devices not constituting articles provided for more specifically in other headings; lasers, other than laser diodes; other optical appliances and instruments, not specified or included elsewhere in this chapter; parts and accessories thereof: [P]arts and accessories: [O]ther [than of telescopic sights for rifles or of flat panel displays other than for articles of heading 8528]." Issue 2 Initially, we note that the petitioner August 18, 2000, § 1520(c)(1) petition was timely, inasmuch as it was filed less than one year after the subject entries liquidated. (November 26, and December 17, 1999). Under 19 U.S.C. §1520(c)(1), Customs 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 and adverse to the importer, when certain conditions are met. The conditions required to be met under 19 U.S.C. §1520(c)(1) are that the clerical error, mistake of fact, or other inadvertence must be adverse to the importer, manifest from the record or established by documentary evidence, and brought to the attention of Customs within one year after the date of liquidation of the entry. Essentially, the error petitioner alleges is that the subject merchandise was classified under the wrong HTSUS provision. The petitioner is not alleging that the petitioner or the broker did not understand the nature of the merchandise; rather, the petitioner is arguing that Customs, when denying the § 1514 protest, (1901-00-100043), was not “aware” of the application of E.M. Chemicals v. United States, 920 F.2d 910 (Fed. Cir. 1990), to the subject merchandise and that such was a “mistake of fact.” Using the data provided by the petitioner, the port determined that E.M. Chemicals was not applicable because the use of the subject merchandise was not identical to the use of the merchandise described in E.M. Chemicals and therefore, concluded that the Licristal ® was a chemical mixture under heading 3824, HTSUS. The port misinterpreted E.M. Chemicals. As discussed in Issue 1, nematic liquid crystals cannot be classified in heading 3824, HTSUS, as mere chemical mixtures. “Courts have consistently held that § 1520(c)(1) may not be used to rectify incorrect interpretations of law or mistake in the application of law.” Computime, Inc. v. United States, 622 F.Supp. 1083, 1085(Ct. Int’l Trade 1985); Fibrous Glass Products, Inc. v. United States, 63 Cust. Ct. 62 (1969); see, Fabrene, Inc. v. United States, 17 C.I.T. 911, 914-15 (1993). The petitioner is not alleging that the petitioner or the broker did not understand the nature of the merchandise or that facts critical to the understanding of the nature of the merchandise were unknown. See Executone Information Systems v. United States, 96 F. 3d 1383, 1386 (Fed. Cir. 1996) citing Hambro Automotive Corporation v. United States, 66 CCPA 113, 118, C.A.D. 1231, 603 F. 2d 850 (1979) (“[M]istakes of fact occur in instances where either (1) the facts exist, but are unknown, or (2) the facts do not exist as they are believed to [and] [m]istakes of law, on the other hand, occur where the facts are known, but their legal consequences are not known or are believed to be different than they really are.")(emphasis in original). There is no dispute that the merchandise is correctly described as a liquid crystal mixture in a vial. The dispute is whether the principle of E.M. Chemicals was applied correctly in determining the classification of the merchandise. We hold that the principle was misapplied. However, misapplication of a court decision, as stated above, is one legal interpretation and is outside of § 1520(c)(1). If the petitioner was dissatisfied with Customs’ classification of the merchandise, the petitioner could have sought further review of protest 1901-01-100043, or filed a timely suit challenging the classification in the Court of International Trade. See Degussa Canada Ltd. v. United States, 87 F. 3d 1301, 1304 (Fed. Cir. 1996). HOLDING 1. For the reasons outlined above, nematic liquid crystal mixtures are classified in subheading 9013.90.90, HTSUS. 2. Insofar as the error alleged by petitioner constitutes a mistake in the application of law, relief pursuant to 19 U.S.C. § 1520(c)(1) should be denied. Sixty days from the date of the decision, the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.ustreas.gov, by means of the Freedom of Information Act, and other methods of public distribution. Sincerely, John Durant, Director Commercial Rulings Division