HQ 0545314 - Application for further review of Protest No, 1001-82-012671 - United States International Trade Commision Rulings

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HQ 545314

June 10, 1994

VAL CO:R:C:V 545314 CRS

CATEGORY: VALUATION

District Director
U.S. Customs Service
Hemisphere Center
Routes 1 & 9 South
Room 200
Newark, NJ 07114

RE: Application for further review of Protest No, 1001-82-012671

Dear Madam:

This is in reply to an application for further review (AFR) of the above referenced protest, filed on November 12, 1982, by counsel Sharetts, Paley, Carter & Blauvelt, on behalf of GMB Universal Joints, Inc. (the protestant). The AFR was forwarded to this office through the Customs Information Exchange (CIE) on October 31, 1985; however, we have no record of having received the file. Pursuant to a review of aged suspense files, the AFR was resubmitted by the CIE under cover of a memorandum dated May 7, 1993. We regret the delay in responding.

FACTS:

The protested merchandise consists of automobile parts (universal joints and universal joint kits) and was manufactured by Naniwa Semitsu Industry Co., Ltd., a company related to the protestant. Your office requested certain information from the protestant in order to ascertain foreign and export values for the protested merchandise. Based on the information obtained it was determined that the merchandise should be appraised at invoice unit values plus 58.5 percent based on certain 1978 Naniwa Semitsu price lists.

Counsel for protestant contends that the price list obtained by Customs does not represent prices at which the protested merchandise was freely offered for sale for exportation to the United States. Moreover, counsel maintains: (1) that the price list used to appraise the merchandise does not represent prices at which the merchandise was freely sold or offered for sale to the United States; (2) that the price list was not current and therefore should not have been used; (3) that the use of a uniform addition to invoice value to establish appraised value is contrary to law; and that (4) the invoice unit values in fact represent statutory export values.

ISSUE:

The issue presented is whether the protested merchandise was correctly appraised under export value.

LAW AND ANALYSIS:

The protested merchandise consists of certain automobile parts (universal joints and universal joint kits). Automobile parts are specified on the final list pursuant to section 6(a) of the Customs Simplification Act of 1956, approved August 2, 1956, T.D. 54521, 70 Stat. 948 (Public Law 927, 84th Cong.). Merchandise specified on the final list is appraised in accordance with section 402 of the Tariff Act of 1930, as amended by section 2 of the Customs Simplification Act of 1956 (19 U.S.C. 1402).

Section 402(a) provides that the value of imported articles designated on the final list shall be the higher of foreign value or export value. Foreign value is defined in pertinent part as "the market value or the price at which such or similar merchandise is offered for sale for home consumption to all purchasers in the principal markets of the country from which exported, in the usual wholesale quantities and in the ordinary course of trade...." 19 U.S.C. 1402(c). In contrast, export value is defined in pertinent part as "the market value or the price, at which such or similar merchandise is freely offered for sale to all purchasers in the country from which exported, in the usual wholesale quantities and in the ordinary course of trade, for exportation to the United States.... 19 U.S.C. 1402(d).

The file does not contain any information in regard to foreign value. Based on the information presented we are unable to determine that foreign value existed and therefore this basis of appraisement is eliminated from consideration.

In regard to export value, counsel contends that the price list used by Customs to determine the appraised value of the protested merchandise does not reflect prices at which merchandise was ever freely sold, or offered for sale, for exportation to the United States. In support of this counsel has submitted a statement by the protestant that the price list was never distributed and that no sales were ever made pursuant to it. Even had there been any sales, counsel notes that the list predates the protested entries by as much as two years and that as a result it is too remote in time from the entries to be used to appraise the protested merchandise. Furthermore, it is argued that a uniform addition to the invoice value of imported merchandise for the purpose of establishing appraised value is contrary to law.

In C.B.S. Imports Corp. v. United States, 80 Cust. Ct. 61, C.D. 4739, 450 F.Supp. 724 (1978), the issue was whether an increase of 7.2 percent to the invoice price of imported merchandise in order to reflect the appreciation of the Japanese yen vis ? vis the dollar following the collapse of the Bretton Woods system, constituted a valid appraisement under export value. The Customs Court (now the Court of International Trade) stated that export value could not be ascertained or estimated in this manner. Id. at 70. Rather, the statute required that export value be determined with respect to the prices at which the merchandise was sold, or offered for sale. Since the protested merchandise was neither sold nor offered for sale pursuant to the Naniwa Semitsu price lists, it was not correctly appraised on this basis.

Consequently, based on the information presented it is our position that the invoice unit values of the protested merchandise represent the export value of the merchandise in accordance with 19 U.S.C. 1402(d).

HOLDING:

Pursuant to the foregoing, the protest should be allowed in full. In accordance with section 3A(11)(b), Customs Directive 099 3550-065, dated August 4, 1993, this decision should be mailed by your office to the protestant no later than sixty days from the date of this letter. Any reliquidation of the entry in accordance with this decision must be accomplished prior to this time

Sincerely,

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