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HQ 544236

October 31, 1988

CLA-2 CO:R:C:V 544236 EK

CATEGORY: VALUATION

Area Director of Customs
Kennedy Airport Area
Jamaica, New York

RE: Decision on Application for Further Review of Protest No. 1001-5-011625

Dear Sir:

This is in reference to your decision on the liquidation of Entry No. 4701-83-891030 dated May 31, 1985. The merchandise was appraised pursuant to deductive value, section 402(d) of the Tariff Act of 1930, as amended by the Trade Agreements Act of 1979 (TAA; 19 U.S.C. 1401a(d)).

All interested parties are in agreement that deductive value is the correct basis of appraisement. At issue is the proper allowance for international freight pursuant to section 402(d)(3)(A)(ii) of the TAA. That section provides for a deduction for "the actual costs and associated costs of transportation and insurance incurred with respect to international shipments of the merchandise concerned from the country of exportation to the United States."

The importer indicates that the proper allowance for international freight is that which is noted on the airway bill, the actual prepaid freight charge. Customs rejected the amount noted on the airway bill and deducted a freight charge based upon the International Air Traffic Association freight rate. This freight rate was used rather than the amount on the airway bill because the importer failed to provide proof of payment. The importer and the shipper are related.

ISSUE:

Whether the proper amount to be deducted in appraising imported merchandise pursuant to deductive value is the actual amount listed on the airway bill.

LAW AND ANALYSIS:

As indicated above, in determining the proper amount to be deducted for appraisement pursuant to deductive value, section 402(d)(3)(A)(ii) clearly states that the actual costs of transportation are to be deducted. Although actual proof of payment has not been submitted, the airway bill serves as sufficient evidence of the actual costs of transportation. The figure corresponding to the freight chart is not the actual cost but rather, a mere estimate.

The best evidence available for the transportation cost is the airway bill, i.e., a bill for the services performed.

HOLDING:

In view of the foregoing, the proper deduction to be made for transportation pursuant to section 402(d)(3(A)(ii) of the TAA is the amount indicated on the airway bill. You are directed to grant the protest in full. A copy of this decision should be attached to the Form 19, Notice of Action, to be sent to the protestant.

Sincerely,

John Durant, Director,

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