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HQ 544453
March 8, 1990
VAL CO:R:C:V 544453 ML

CATEGORY: VALUATION

District Director
Los Angeles District

RE: Decision on Application for Further Review of Protest No. 2704-85-005542

Dear Sir:

This protest was filed against your decision in the liquidation of various entries made by ---------------., Inc. on behalf of --------------- Importing, Inc. The Merchandise was appraised pursuant to section 402(b) of the Tariff Act of 1930, as amended by the Trade Agreements Act of 1979 (19 U.S.C. 1401a(b); TAA).

FACTS:

The imports in question are ceiling fans that were manufactured in Hong Kong. The price paid for these fans was $34.20 at the time of their exportation. Subsequent to their importation into the United States, the seller ------, allowed the buyer, --------------- to debit their account in an amount consistent with a reduced unit cost of $32.20.

Transaction value was determined to be the originally agreed price of $34.20. The importer argues that, as the price actually paid or payable was reduced, the accessed duty should also be reduced.

ISSUE:

Whether the initially agreed upon price between the buyer and the seller or the subsequent reduction in the price for the merchandise, is the price actually paid or payable for the merchandise when it was sold for exportation to the United States.

LAW AND ANALYSIS:

Transaction value, the preferred method of appraisement, is defined in section 402(b) of the TAA as the "price actually paid or payable for the merchandise when sold for exportation to the United States..." (emphasis added). Section 402(b)(4) of the TAA provides:

Any rebate of, or other decrease in, the price actually paid or payable made or otherwise effected between the buyer and the seller after the date of importation of the merchandise into the United States shall be disregarded in determining the transaction value under paragragh (1).

Based upon the evidence presented, the price of $34.20 was the transaction value at the time of exportation. The latter price of $32.72 for the ceiling fans was one which was agreed upon by the parties after the merchandise was imported into the United States, and cannot be taken into account in the calculation of transaction value under authority of section

HOLDING:

In view of the foregoing, the price actually paid or payable was the initial contract price. A latter agreed upon price will not reduce the transaction value as the subsequent price was reached only after the importation of the merchandise into the United States.

Accordingly, you are directed to deny this protest. Please send a copy of this decision and Notice of Action, Customs Form 19 to the protestant.

Sincerely,

John Durant, Director
Commercial Rulings Division

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