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HQ 545395
September 30, 1993
CO:R:C:V 545395 ER

CATEGORY: VALUATION

Area Director
JFK Airport
New York, New York

RE: Application For Further Review of Protest No. xxxxxxxxxxxxxx concerning the Appraisement of Men's Leather Shoes and Request for a Duty Refund.

Dear Sir:

This protest was filed by xxxxxxxxxxxxxxxxx, a broker, on behalf of xxxxxxxx (hereinafter collectively referred to as "protestant"), against your appraisement decision in the liquidation of an entry of men's leather shoes. The merchandise was manufactured in Italy by xxxxxxxxxxx.

FACTS:

The subject importation consisted of 1307 pairs of men's leather footwear. The merchandise was entered on March 15, 1992, and liquidated on July 6, 1992, based on the invoice price. On September 25, 1992, protestant filed the subject Protest and Application for Further Review (CF 19) requesting a refund for duty overpayment. It is claimed by protestant that said overpayment occurred due to the fact that the subject entry was wrongly appraised using the stated invoice value without making deductions for non-dutiable charges.

On February 25, 1993, Customs sent a Request for Information (CF 28) to protestant requesting the purchase order, proof of payment and an explanation of the non-dutiable charges claimed. Protestant failed to furnish the information requested, citing to the manufacturer's lack of cooperation as the explanation for such failure to respond. Protestant subsequently advised Customs that it could not provide a correct breakdown of the non-dutiable charges.

Protestant contends that because the invoice identifies the shipping terms as "landed duty and MPF paid", amounts for freight, insurance, duty and MPF should have been deducted from the invoice value. Customs disagrees on the basis that the claimed non-dutiable charges were neither reflected on the invoice nor asserted at entry. Customs further points out that the amounts for international freight charges and insurance that were claimed in the protest were different than the charges identified on the air way bill. These charges, in turn, were different than the charges shown on the entry summary. At no time has protestant been able to reconcile these differing amounts.

ISSUE:

Whether it is proper to appraise merchandise based on the invoice price, and to deny a request for a duty refund, where the non-dutiable amounts claimed are neither separately identified on the invoice nor asserted at entry, and where protestant is unable to provide a correct breakdown of the claimed non-dutiable charges?

LAW AND ANALYSIS:

The primary basis of appraisement under the valuation statute, 402 of the Tariff Act of 1930, as amended by the Trade Agreements Act of 1979 (TAA), is transaction value. Transaction value is defined by TAA section 402(b)(1) as "the price actually paid or payable for the merchandise when sold for exportation to the United States..." plus certain additions specified in

The price actually paid or payable is defined in section 402(b)(4)(A) of the TAA as the "total payment, . . . made, or to be made, for the merchandise by the buyer to . . . seller." The price actually paid or payable does not include those charges, costs, or expenses incurred for transportation, insurance, and related services incident to the international shipment of the merchandise from the country of exportation to the place of importation in the United States.

Section 484(a), Tariff Act of 1930, as amended (19 U.S.C. 1484(a)), requires importers to file with Customs such documentation as is necessary to enable Customs "to assess properly the duties on the merchandise..." It is well settled that the importer has the burden of proving the validity of information on entry documents and the veracity of a transaction in question in order to properly appraise the merchandise. See, C.S.D. 90-37 (HRL 544432 dated January 17, 1990, referring to Treasury Decision (T.D.) 86-56, dated March 6, 1986). The words "landed duty MPF paid" on the invoice are meaningless unless the non-dutiable amounts claimed are ascertainable. Such amounts were not identified or claimed at the time of entry; hence, Customs was correct to appraise the merchandise based on the invoice price.

To date, protestant is unable to provide a correct breakdown of non-dutiable charges. Still unresolved are the inconsistencies between the international freight charges and insurance claimed with the protest and those charges reflected on the air way bill and on the entry summary. Protestant could not produce documents requested by Customs which might have enabled a determination to be made as to whether any non-dutiable charges were included in the price paid. Hence, Customs is unable to determine whether any portion of the stated price on the invoice is non-dutiable. The written statements provided by protestant in conjunction with this protest action, while sustaining its submission of the facts, do not provide any evidentiary support for its position. In view of protestant's failure to meet its burden of proof, the protest is denied.

HOLDING:

Based on the foregoing, we find that the merchandise was properly appraised using the invoice price. In view of protestant's inability to provide Customs with a correct breakdown of the claimed non-dutiable charges or to furnish any other evidence to substantiate its claims, the refund request is denied.

Consistent with the decision set forth above, you are hereby 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 protest.

Sincerely,

John Durant, Director
Commercial Rulings Division

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