HQ 546151 - Application for Further Review of Protest No. 2304-94-100223; Appraisement of Fresh Asparagus; Transaction Value of Identical Merchandise and Similar Merchandise; 19 U.S.C. 1401a(c); HRL 545755 - United States International Trade Commision Rulings

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HQ 546151

December 6, 1995

VAL RR:IT:VA 546151

CATEGORY: VALUATION

Port Director
U.S. Customs Service
P.O. Box 3130
Laredo, TX 78044

RE: Application for Further Review of Protest No. 2304-94-100223; Appraisement of Fresh Asparagus; Transaction Value of Identical Merchandise and Similar Merchandise; 19 U.S.C. 1401a(c); HRL 545755

Dear Director:

This is a decision on an application for further review (AFR) of a protest filed September 26, 1994 concerning the appraisement of fresh asparagus. The entry was liquidated on July 15, 1994.

FACTS:

The appraisement at issue concerns fresh asparagus which was imported during the summer of 1991. Because the merchandise was consigned to the importer, it was the position of the former district director that neither a sale nor an agreed upon price actually paid or payable existed at the time of exportation, foreclosing appraisement based on transaction value pursuant to Section 402(b) of the Tariff Act of 1930, as amended by the Trade Agreements Act of 1979 (TAA), codified at 19 U.S.C. 1401a.

You explain that at the time of the subject importations, two importers of fresh asparagus had established transaction value pursuant to section 402(b). Consequently, the subject merchandise was appraised based on the transaction value of identical or similar merchandise (section 402(c)) using the lowest of these acceptable transaction values.

Counsel provides that the merchandise properly is appraised based on resale prices collected by the USDA for the appropriate period following importation, less appropriate deductions for, inter alia, U.S. inland freight, U.S. resale commissions, U.S. hydro cooling, Customs brokerage and international freight, with appropriate allowance for U.S. packing materials. Alternatively, counsel claims that the appropriate value still would be an amount equivalent to that reflected by the USDA resale prices, albeit established under either transaction value, deductive value, or computed value.

ISSUE:

Based on the evidence presented, whether the asparagus was appropriately appraised based on the transaction value of identical or similar merchandise.

LAW AND ANALYSIS:

As you are aware, the preferred method of appraising merchandise imported into the United States is transaction value pursuant to section 402(b) of the TAA. Section 402(b)(1) of the TAA provides, in pertinent part, that the transaction value of imported merchandise is the "price actually paid or payable for the merchandise when sold for exportation to the United States" plus amounts for the enumerated statutory additions. In this case, because the imported merchandise is consigned to the importer, a sale has not occurred at the time of importation. Accordingly, the merchandise cannot be appraised based on transaction value.

Because there is not a transaction value, we proceed sequentially through the subsequent provisions of section 402 of the TAA. Accordingly, the first alternative basis of appraisement is the transaction value of identical or similar merchandise. Section 402(c) of the TAA provides that the transaction value of identical or similar merchandise is the transaction value, accepted as the appraised value under section 402(b), of merchandise identical or similar to the merchandise currently being appraised which was exported to the U.S. at or about the time that the merchandise currently being appraised was exported to the U.S. Furthermore, section 402(c) provides that such transaction values are based on sales of identical or similar merchandise at the same commercial level and in substantially the same quantity as the sales of the merchandise being appraised. However, if no such sale is found, the merchandise shall be appraised based on sales of identical or similar merchandise at either a different commercial level or in different quantities, adjusted to take account of any such difference.

In accordance with T.D. 91-15, 25 Cust. Bull. 31 (1991), it must be demonstrated that the transaction value is fully acceptable under section 402(b) at the time of appraisement of the merchandise under consideration in order to be applied as the transaction value of identical or similar goods under section 402(c). In T.D. 91-15 it was explained that the information necessary for the determination of the transaction value of identical or similar merchandise under section 402(c) could be made on the basis of information provided by the importer or already available to Customs.

With regard to the application of the transaction value established by the two other asparagus importers to the merchandise at issue, counsel has not demonstrated why such values were not fully acceptable under section 402(b) of the TAA at the time of the appraisement of the subject merchandise and cannot serve, pursuant to section 402(c), as the basis of the transaction value for the subject importations. Furthermore, counsel has not demonstrated that values based on the USDA resale prices ever were fully acceptable, and represented a customs value, under section 402(b) at the time of appraisement of the instant merchandise.

We note that there is no legal authority pursuant to section 402(c)(2) to make adjustments for any differences that may exist in the amounts of the statutorily enumerated additions to the price actually paid or payable, such as packing costs under section 402(b)(1)(A). On the other hand, to the extent that the identical or similar importations include such packing costs, it would be appropriate to make adjustments in this regard, if necessary to account for different commercial levels. Finally, we recognize and emphasize that in accordance with section 402(c)(2), it was proper to appraise the subject merchandise on the lowest of the appropriate transaction values determined for the identical or similar merchandise.

Based on the evidence presented, insofar as it was appropriate to appraise the subject asparagus based on the acceptable values of the identical or similar asparagus, we need not resort to any of the subsequent methods of valuation and base appraisement on the USDA resale prices (or amount equivalent to that figure). This finding is consistent with, and follows from, Headquarters Ruling Letter (HRL) 545755, issued May 18, 1995, involving substantially similar facts and issues.

HOLDING:

Based on the evidence presented, the asparagus was appropriately appraised based on the transaction value of identical or similar merchandise, consistent with the decision reached in HRL 545755. You are directed to deny the protest in accordance with the foregoing. 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,

Acting Director

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