HQ 0544829 - Application for Further Review of Protest No. 3126-91- 100001; Price Actually Paid or Payable; Proof Thereof - United States International Trade Commision Rulings

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HQ 544829

February 20, 1992

VAL CO:R:C:V 544829 DPS

CATEGORY: VALUATION

District Director
U.S. Customs Service
Portland, Oregon

RE: Application for Further Review of Protest No. 3126-91- 100001; Price Actually Paid or Payable; Proof Thereof

Dear Sir:

The subject protest and application for further review concerns the appraisement of various types of fuel (petroleum products) manufactured by Shell Canada Products, Ltd., imported from Canada by Petro-Diamond, Inc., the protestant, and delivered to Dutch Harbor, Alaska. The sole issue raised by the subject protest focuses on which price, amongst various prices reflected in documents submitted by the importer, should be considered the price actually paid or payable for the imported merchandise when sold for exportation to the United States.

FACTS:

Petro Diamond protests Customs appraisement of fuel products imported from Canada. The protested appraisement is based on prices reflected in a manufacturer's invoice from Shell Canada Products Limited (Shell Canada) referring to Petro Diamond's supplier, Mieco Inc. (Mieco), as the buyer.

The protestant claims that the product valuation should be based on its delivered purchase price pursuant to its contract with its supplier (Mieco), not the price paid by its supplier. The protestant claims that normal industry practice is to use a published price index to obtain average prices. Protestant cites Platt's Oilgram as a basis for the average prices of "waterborn product" delivered at the time the subject merchandise was, and suggests that Customs utilize these average prices for purposes of appraisement.

In response to the import specialist's requests for information, Petro Diamond and its Customs broker supplied various documents including copies of telexed contracts
between Petro Diamond and Mieco, pro-forma invoices prepared by Petro Diamond for Customs purposes, export declarations from Canada and a copy of an invoice from Shell Canada to Mieco reflecting the sale of the specific fuel types which were imported by the protestant.

You take the position that appraisement should be based on the foreign seller's invoiced prices, the applicable invoice being number 214996 from Shell Canada. You note that in response to your request for value information, the importer submitted various copies of telexes and invoice number 214996, all listing various prices. No supporting documentation providing proof of actual payment for the fuel, nor an explanation of the varying prices was submitted by the importer. Accordingly, you indicate that appraisement should be at Shell Canada's invoiced prices.

ISSUE:

Whether the protestant has provided sufficient information to support its claim for reappraisement at prices reflected in an industry average price index.

LAW & ANALYSIS:

For the purpose of this response, we are assuming that transaction value is the appropriate basis of appraisement. Transaction value is defined in section 402(b)(1) of the Tariff Act of 1930, as amended by the Trade Agreements Act of 1979 (19 U.S.C. 1401a(b);TAA) as the "Price actually paid or payable for the merchandise" plus amounts for the five enumerated statutory additions in 402(b)(1).

19 U.S.C. section 1500 (section 500 of the Tariff Act of 1930 as amended by the TAA) provides the general authority for Customs to appraise merchandise. With regard to section 500, Customs Statement of Administrative Action provides:

Section 500 allows Customs to consider the best evidence available in appraising merchandise. It allows Customs to consider the contract between the buyer and the seller, if available, when the information contained in the invoice is either deficient or is known to contain inaccurate figures or calculations. Likewise, a contract which has been outdated by subsequent renegotiations prior to exportation would not be considered when an invoice which reflects these renegotiations is presented.

Section 500 authorizes the appraising officer to weigh the nature of the evidence before him in appraising the imported merchandise under the constraints of section 402.

Here, the import specialist requested and received further information from the protestant concerning the pricing of the imported fuel products. However, the information and documentation submitted by the protestant fails to establish the price actually paid or payable for the imported petroleum products. No proof of payment or thorough explanation of pricing was provided by the protestant. Therefore, the appraising officer had no choice but to rely on the foreign seller's invoiced prices.

HOLDING:

Because no evidence has been submitted which supports the argument that the merchandise was incorrectly appraised, the protest must be denied. Accordingly, you are directed to deny the subject protest. A copy of this decision should be attached to the Customs Form 19 and mailed to the protestant as part of the notice of action on the subject protest.

Sincerely,

John Durant, Director
Commercial Rulings Division

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