HQ 545861 - Application for further review of protest number 1303-94-100190 concerning whether imported merchandise should be appraised based on the prices shown on the seller's invoices submitted at the time of entry - United States International Trade Commision Rulings

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HQ 545861

May 26, 1995

VAL R:C:V 545861 RSD

CATEGORY: VALUATION

District Director
U.S. Customs Service
200 St. Paul Place
28th Floor
Baltimore, Maryland 21202

RE: Application for further review of protest number 1303-94-100190 concerning whether imported merchandise should be appraised based on the prices shown on the seller's invoices submitted at the time of entry

Dear Sir:

This is in response to your memorandum dated December 20, 1994, concerning the application for further review of protest 103-94-100190 filed by Customs broker John Connor on behalf of the Ford Motor Company (hereinafter Ford).

FACTS:

The merchandise involved in this protest consists of machining centers also referred to as engine assembly loops, which were made in Italy by Comau S.P.A. The merchandise was entered on January 10, 1994, and the entry summary was filed on January 25, 1994. The entry was liquidated on May 6, 1994. Customs appraised the merchandise based on the prices shown on the foreign seller's invoices submitted with the entry.

Ford protests Customs appraisement of the merchandise based on the declared value as shown on the foreign seller's invoices. It claims that the declared value of the merchandise was based on "provisional or estimated pricing information." Ford claims that the final price of the merchandise will not be known until after the equipment has been installed and determined to be operating satisfactorily. The protest further notes that the settlement process is often protracted and may continue for many months beyond the importation of the merchandise. No evidence has been submitted in support of this claim.

Ford claims to have set up business procedures to track this entry and other similar entries. Following settlement, Ford says that it will reconcile the entered value with its purchasing and payment records and report the results of this reconciliation, together with supporting documentation, to Customs.

In the protest, Ford requested that the entry be unliquidated and that the period for liquidation be extended for one year pursuant to 19 CFR 159.12(a)(1) with the appropriate notice of the extension as provided in 19 CFR 159.12(b). Moreover, Ford requested that Customs stop issuing Customs Form 28s for additional information which will be routinely provided as part of its reconciliation report.

The protest file forwarded to our office contains no evidence to demonstrate that the prices shown on the invoices submitted with the entry were only provisional or estimated, nor is there any indication that Ford intended to furnish additional information after the entry was made. Prior to filing the protest, Ford did not request that the time for liquidation be extended. The import specialist has explained that Ford has in the past presented what they claim is provisional invoicing that would be reconciled later with Customs. However, in this case, when it submitted the entry package, Ford did not make reference to other entries or that it intended to submit additional information regarding the prices of the merchandise and to reconcile the entries at a later date.

ISSUE:

Whether the protestant has presented evidence which establishes that the imported merchandise was improperly appraised?

LAW AND 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 401(b)(1) of the Tariff Act of 1930, as amended by the Trade Agreement Act of 1979 (19 U.S.C. 1401a(b); TAA) as the "price actually paid or payable for the merchandise" plus the 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, 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.

In this instance, the importer presented invoices from the seller of the merchandise at the time of entry. No evidence has been presented to demonstrate that the prices shown on the invoices were only provisional or estimated and that they do not accurately reflect the prices actually paid or payable for the imported merchandise. Furthermore, in this particular entry the first time that the protestant indicated to Customs that the prices on the invoices were only provisional and would have to be reconciled at a later date was in this protest. Therefore, the appraising officer had no choice, but to rely on the foreign seller's invoiced prices in appraising the imported merchandise.

Moreover, under Section 174.13,(a)(6) Customs Regulations (19 CFR 174.13(a)(6) protests must set forth distinctly and specifically the justification for the objection. We conclude that the protest is not in compliance with this section because the protestant did not provide any specific justification to show the invoices submitted with the entry were not correct.

The protestant also requests that the entry be "unliquidated" and that the 1-year (unless properly extended or suspended) period for liquidation of an entry (see 19 U.S.C. 1504 and 19CFR 159.9-159.12) be extended. Under United States v. Utex International Inc. 6 Fed. Cir. (T) 166 1988, Customs may not "unliquidate" a liquidation. Customs has followed this Court decision in a number of rulings (See e.g. HRL 221591, February 13, 1990; HRL 222364, August 21, 1990). Since Customs cannot "unliquidate" a liquidated entry, obviously Customs cannot extend or suspend the liquidation of an entry already liquidated (see 19 U.S.C. 1504 and 19 CFR 159.12). Therefore, the protest is denied.

HOLDING:

Ford Motor Company has not presented evidence to demonstrate that the appraisement of the imported merchandise based on the seller invoices was incorrect. Accordingly, you are directed to deny the protest. A copy of this decision with the Form 19 should be sent to the protestant. In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision should be mailed by your office to the protestant 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 to the public via the Diskette Subscription Service, the Freedom of Information Act and other public access channels

Sincerely,

John Durant, Director

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