HQ 545590A - Application for Further Review of Protest Numbers 3501- 93-100050, 3501-92-100374 and 3501-93-100051; Price Actually Paid or Payable; Transaction Value; Freight. - United States International Trade Commision Rulings

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HQ 545590
November 20, 1994
CO:R:C:V 545590 er

CATEGORY: VALUATION

Area Director
Minneapolis, MN 55401

RE: Application for Further Review of Protest Numbers 3501- 93-100050, 3501-92-100374 and 3501-93-100051; Price Actually Paid or Payable; Transaction Value; Freight.

Dear Sir:

These protests were filed by xxxxxxxxxxxxxxxxxxxxx on behalf of their client xxxxxxxxxx, against your appraisement decision in the liquidation of entries of screws. The merchandise was manufactured in Hong Kong and China.

FACTS:

The subject importation consists of screws. The merchandise was entered on June 4, 8 and 27, 1992, and the entries subsequently liquidated on December 4, 1992, based on the original invoice values. Protest 3501-92-100374 involves merchandise for which the invoice reflects $x in freight collect charges and $y in prepaid freight charges. Protestant claims that the correct total amount for non-dutiable freight charges should be $z ($y plus $x) and that the $x amount was erroneously recorded on the invoice as freight collect instead of as freight prepaid. Protestant accordingly claims a refund contending that $a ($x less $b delivered duty charges paid by the importer) in prepaid ocean freight charges should be deducted from the invoiced value to arrive at entered value. It is your position that because the invoice and the bill of lading reflect the price as including $y, only, in prepaid freight, and because no evidence has been submitted which supports protestant's claim, the merchandise was properly appraised at the time of entry based on the invoice value.

Protest 3501-93-100050 involves merchandise for which the invoice reflects $x in freight collect charges. Protestant claims a refund contending that the $x amount was erroneously recorded on the invoice as freight collect instead of as freight prepaid. Protestant accordingly contends that $z ($x less $y delivered duty charges paid by the importer) in prepaid ocean freight charges should be deducted from the invoice value to arrive at the appraised value. It is your position that because the invoice and the bill of lading reflect $x in ocean freight collect, and because protestant has failed to furnish any documentation to prove that such charges were included in the invoiced price, the merchandise was properly appraised at the time of entry based on the invoice value.

Protest 3501-93-100051 involves merchandise for which the invoice reflects $x in freight collect charges. Protestant claims that the $x aount was erroneously recorded on the invoice as freight collect instead of as freight prepaid. Protestant accordingly claims a refund contending that $z($x less $y delivered duty charges paid by the importer) in prepaid ocean freight charges should be deducted from the invoice value to arrive at the appraised value. It is your position that because the invoice and the bill of lading reflect $x in ocean freight collect, and because protestant has failed to furnish any documentation to prove that such charges were included in the invoiced price, the merchandise was properly appraised at the time of entry based on the invoice value.

ISSUE:

Whether protestant has established that it is entitled to a freight adjustment in its appraised value.

LAW AND ANALYSIS:

The primary basis of appraisement under the valuation statute, section 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 section 402(b)(1)(A) through (E).

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 . . . the 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 T.D. 86-56, dated March 6, 1986).

Protestant claims that the value of the subject shipments was overstated by amounts erroneously characterized on the invoices as freight collect charges, instead of as freight prepaid charges. Protestant accordingly claims that these amounts for freight were included in the price and should have been allowed as a deduction to arrive at the entered value; however, protestant has not provided Customs with sufficient evidence to substantiate its claim that the international freight charges were included in the invoice price.

As stated above, it is incumbent upon the importer/protestant to make and prove its case. In order for Customs to properly assess the merits of a claim, sufficient evidence must be provided. Protestant has failed to submit any evidence whatsoever which would support its claim for a lower entered value and request for a duty refund.

HOLDING:

Based on the foregoing, we find that the merchandise was properly appraised. In view of protestant's failure to provide Customs with evidence supporting its claim, you are hereby directed to deny the subject protest. In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, this decision should be mailed by your office no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will take steps to make the decision available to Customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Lexis, Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director
Commercial Rulings Division

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