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HQ 545137


May 21, 1993

VAL CO:R:C:V 545137 CRS

CATEGORY: VALUATION

District Director
U.S. Customs Service
300 South Ferry Street
Terminal Island
San Pedro, CA 90731

RE: Household articles; subheading 9804.00.05; appraisement; 19 U.S.C. 1401a(f)

Dear Sir:

This is in reply to your memorandum dated November 5, 1992, under cover of which you forwarded an application for further review of Protest No. 2704-92-102559 filed by Politis, Pollack & Doram, counsel for protestant, Mr. Shahen Avanesyan.

FACTS:

The protest concerns a shipment of eleven carpets of Iranian origin imported by protestant through Los Angeles International Airport (LAX). Protestant contends the carpets are classifiable as household effects of subheading 9804.00.05, Harmonized Tariff Schedule of the United States Annotated (HTSUSA). Protestant has not provided any evidence to substantiate his claim that the carpets are household effects. The carpets in question were not imported with other household goods; moreover, protestant advised Fines, Penalties & Forfeitures at LAX that the carpets were the personal effects of his brother who "intends" to immigrate.

Protestant also maintains the carpets should be appraised on the basis of their original invoice value rather than pursuant to 19 U.S.C. 1401a(f). In support of this, counsel for protestant cites section 143.13, Customs Regulations (19 CFR 143.13) for the proposition that "Customs should rely on the certified invoice provided by the importer to establish value," and has submitted a 1981 invoice from a merchant in Beirut, Lebanon, in the amount of $8,300.00. The carpets were exported from Lebanon to the United States in December 1989. When the carpets arrived at LAX the concerned import specialist appraised them at $50,000.00, on the basis of 19 U.S.C. 1401a(f).

ISSUE:

The issues presented are: (1) whether the merchandise in question is classifiable in subheading 9804.00.05, HTSUSA; and (2) whether the merchandise was properly appraised pursuant to 19 U.S.C. 1401a(f).

LAW AND ANALYSIS:

Subheading 9804.00.05, HTSUSA provides, inter alia, for household effects imported by or for the account of any person arriving in the United States from a foreign country, that were actually used abroad by that person or his family for not less than one year. Protestant has not provided any evidence to substantiate his claim that the carpets are household effects. The carpets were not imported with other household goods, nor were they worn; moreover, they do not even appear to have been the property of the protestant. Accordingly, the carpets in question are not classifiable under the provision for household effects of subheading 9804.0.05, HTSUSA.

Merchandise imported into the United States is appraised in accordance with section 402 of the Tariff Act of 1930, as amended by the Trade Agreements Act of 1979 (TAA; 19 U.S.C. 1401a). The preferred method of appraisement is transaction value, defined as "the price actually paid or payable for merchandise when sold for exportation to the United States." 19 U.S.C.

The protested merchandise was not sold for exportation to the United States. Instead, protestant alleges that he acquired the carpets in Lebanon in 1981 where they apparently remained until December 1989 when they were exported to the United States. In HRL 542416 dated July 31, 1981 (TAA No. 7), Customs held that sales in a foreign country are not "sales for exportation to the United States" unless the merchandise is irrevocably destined for exportation to the United States. When the carpets were acquired by the protestant's brother they were not irrevocably destined for exportation to the United States. Transaction value is therefore inapplicable.

When imported merchandise cannot be appraised on the basis of transaction value, it is appraised in accordance with the remaining methods of valuation, applied in sequential order. The next basis of appraisement is the transaction value of identical or similar merchandise; however there is no information regarding sales of identical or similar merchandise and this method is therefore inapplicable. Deductive value is the next applicable method of appraisement; but as the carpets were ostensibly imported for household use, and as deductive value requires a sale in the United States, this method is also eliminated from consideration. Similarly, computed value is inapplicable since there is no information relating to the cost of production.

Where merchandise cannot be appraised under the methods set forth in 19 U.S.C. 1401a(b)-(e), its value is to be determined in accordance with the "fallback" method of 19 U.S.C. 1401a(f). This method provides that merchandise should be appraised on the basis of a value derived from one of the prior methods reasonably adjusted to arrive at a value.

Protestant contends the carpets at issue should be appraised at $8,300.00, on the basis of their original acquisition price in 1981; however, there is no authority for this approach under the TAA. The carpets were actually appraised at $50,000.00 under the fallback method, 19 U.S.C. 1401a(f), the preceding statutory methods of appraisement (19 U.S.C. 1401a(b)-(e)) having been eliminated from consideration. We have no grounds for disputing the port's determination of value under the fallback method. Accordingly, protestant's claim should be denied.

HOLDING:

The protested carpets are not classifiable as household articles of subheading 9804.00.05, HTSUSA. The correct basis of appraisement is the fallback method under 19 U.S.C. 1401a(f).

You are instructed to deny the protest in full. A copy of this decision should be sent to the protestant together with the Form 19 Notice of Action.

Sincerely,


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