HQ 546053 - Application for Further Review of Protest Number 1001-95-100050; Assists. - United States International Trade Commision Rulings

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HQ 546053

November 7, 1995

RR:IT:VA 546053 er
CATEGORY: VALUATION

Port Director
New York Seaport c/o Residual Liquidation and Protest Branch

RE: Application for Further Review of Protest Number 1001-95-100050; Assists.

Dear Sir:

This is in response to the application for further review of the above-referenced protest dated January 3, 1995. The protest was filed by counsel on behalf of their client, Gelmart Industries, and was forwarded to this office by you under separate memorandum dated June 29, 1995. The merchandise at issue involves knit and woven wearing apparel. We regret the delay in responding.

FACTS:

You state that Gelmart Industries in the U.S. purchases and imports merchandise manufactured and sold by Gelmart Industries in the Philippines. The buyer and seller are related parties within the meaning of 19 U.S.C. 1401a(g) of the Tariff act of 1930, as amended by the Trade Agreements Act of 1979 ("TAA"). The buyer provides the seller, free of charge, with the fabric necessary to produce the imported merchandise. The seller performs cut, make and trim operations on fabric to produce the imported garments.

The importer claims that the entered value of the merchandise was overstated and included the value of fabric not incorporated in the garments. The importer, accordingly, requests an adjustment to the entered value to account for the waste fabric not incorporated in the imported merchandise.

On March 2, 1995, your office requested documentation to substantiate the claim made by the importer. A meeting was subsequently held between your office and counsel for the importer to discuss the documentation required to support the importer's claim. To date you report that no evidence has been submitted which would enable you to review the importer's claim. ISSUE:

Whether the importer has established that it is entitled to an adjustment in the declared value of the imported merchandise.

LAW AND ANALYSIS:

The merchandise was appraised under transaction value which is defined in section 402(b) of the TAA as the "price actually paid or payable" for the merchandise when sold for exportation to the United States, plus certain statutory additions including the value, apportioned as appropriate, of any assist. Section 402(h)(1)(A) defines assists as follows:

(1)(A) The term "assist" means any of the following if supplied directly or indirectly, and free of charge or at reduced cost, by the buyer of imported merchandise for use in connection with the production or the sale for export to the United States of the merchandise:

(i) Materials, components, parts, and similar items incorporated in the imported merchandise.

(iii) Merchandise consumed in producing the imported merchandise.

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).

As described above, the importer claims that the entered value was overstated with respect to the value of the fabric assist. Specifically, the claim is that the value of the assist was overstated by amounts attributable to the waste fabric not incorporated into the imported merchandise. As support for this position, counsel for the importer cite to HRLs 544554 (March 18, 1994) and 545734 (October 4, 1994), which hold that the cost of a fabric assist will be determined by the fabric actually incorporated in the garment.

Your office sent a request for information, dated March 2, 1995, asking for documentation to substantiate the claim made by the importer. Subsequent to the request for information, a meeting was held with counsel to discuss the documentation necessary to support the importer's claim. To date, you report, no information has been submitted to your office which would enable you to evaluate the importer's claim.

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

HOLDING:

Based on the foregoing, we find that the merchandise was properly appraised. In view of the importer'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,

Acting Director
International Trade

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