HQ 0544303 - Calculation of user fees for petroleum products. - United States International Trade Commision Rulings

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HQ 544303

March 27, 1989

CLA-2 CO:R:C:V 544303

CATEGORY: OTHER

Mr. T. N. Pockman
Manager, Regulatory and Administrative Compliance
Mobil Oil Corporation
3225 Gallows Road
FairFax, Virginia 22037-0001

RE: Calculation of user fees for petroleum products.

Dear Mr. Pockman:

Your letters dated April 13, 1988, and January 16, 1989, have been forwarded to this office for response. Please accept our apologies for the delay in responding to your inquiry.

FACTS:

You state that you have received invoices for petroleum products from the Philadelphia District for increases in the harbor maintenance tax and the merchandise processing fee which have been recomputed on the total dollar amount of your foreign purchase invoice. You contend that this final commercial invoice should be used to establish a unit value for your purchase which should then be applied to the actual gross receipt - the volume of cargo on which duty is paid. You have stated that due to the measurement inaccuracies at loading and various sources of operational losses that occur in shipment and handling, the volume actually received is typically a few tenths of a percent less than the volume invoiced by your supplier.

ISSUE:

Whether section 158.7 of the Customs Regulations (19 CFR 158.7) should be taken into account in determining the appropriate user fee promulgated in sections 24.13 and 24.14 of the Customs Regulations (19 CFR 24.13 and 24.14).

LAW AND ANALYSIS:

Section 158.7 of the Customs Regulations (19 CFR 158.7) provides:

"Merchandise subject to ad valorem, specific, or compound rates of duty found at the time of importation to be reduced or diminished by a natural force, such as evaporation, or by leakage, shall be appraised in its condition as imported, with an allowance made in the value, weight, quantity, or measure to the extent of the reduction or loss, except where forbidden by law or regulation."

Consideration of this provision must take into account section 24.23(a) of the Customs Regulations (19 CFR 24.23(a)). Section 24.23 promulgates the user fee statute pursuant to section 8101(a) of the Omnibus Budget Reconciliation Act of 1986 (19 U.S.C. 58) which provides that the user fee shall be based on the value of the merchandise. Subsection (c) provides that the fee shall be due and payable to Customs by the importer of record of merchandise at the time of deposit of estimated duties.

Accordingly, under the procedure explained to you by the national import specialist, Customs bases its appraised value on the transaction value of the imported merchandise as declared by the importer at the time of entry. It is this figure which Customs uses for all purposes required by law including the establishment of user fees. If this figure changes based on an adjustment between the parties prior to importation then it becomes incumbent upon the importer to amend his entry declaration. Absent an amendment of the entry by the importer, we have no authority under 19 CFR 158.7, or elsewhere to, change the appraised value of the imported merchandise.

HOLDING:

The adjustment to the appraised value required by 19 CFR 158.7 must take into account the provisions of 19 CFR 24.23 and 24.24. Accordingly, unless the importer makes an adjustment (amendment) to the value declaration on Customs Form 7501, both user fees will be calculated on the basis of the values declared to Customs.

Sincerely,

John A. Durant, Director

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