HQ 548459 - Request for Set Aside of Denial of Further Review and to Void the Denial of Protest; 19 U.S.C. 1515 (c); Criteria for Further Review; 19 C.F.R. 174.24. - United States International Trade Commision Rulings

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HQ 548459

February 24, 2004

VAL:RR:IT:VA 548459 jsj

CATEGORY: VALUATION

Michael J. Horton, Esq.
Horton, Whiteley & Cooper
One Kaiser Plaza, Suite 455
Oakland, California 94612

RE: Request for Set Aside of Denial of Further Review and to Void the Denial of Protest; 19 U.S.C. 1515 (c); Criteria for Further Review; 19 C.F.R. 174.24.

Protest No.: 320103100015, Dated: July 29, 2003. Protestant: Yoav Madar, d/b/a Aloha & Co.

Dear Mr. Horton:

The purpose of this correspondence is to respond to your submission dated December 22, 2003. The submission in issue is a Request for Set Aside of Denial of Further Review and to Void the Denial of Protest filed on the behalf of Yoav Madar, d/b/a Aloha & Co. The Protestant is represented by counsel in this matter and was represented by counsel in the initial protest. The Office of Regulations and Rulings (OR&R), subsequent to your initial submission, received your submission dated February 4, 2004.

Yoav Madar, d/b/a Aloha & Co., the Protestant, filed a protest on July 29, 2003 addressing three entries that liquidated on June 27, 2003. The protest number is: 320103100015. A review of the records of Customs and Border Protection (CBP) indicates that the protest was timely filed pursuant to 19 U.S.C. 1514 (c)(3) (West 1999) and 19 C.F.R. 174.12 (e)(2).

Item 7 of Customs and Border Protection’s Protest form, CBP Form 19, provides:

Section II – Detailed Reasons for Protest” “7. With respect to each category of merchandise, set forth, separately, (1) each decision protested, (2) the claim of the protesting party, and (3) the factual material and legal arguments which are believed to support the protest. All such material and arguments should be specific. General statements of conclusions are not sufficient.

The protestant responded in Item 7 as follows:

Each Entry billing decision is based upon an incorrect value of the entered merchandise, which includes not dutiable components. More specific information cannot yet be given because Customs has had possession and control of all importer records. Now that Customs has released these records, further information will be filed within 45 days.

Counsel for the importer filed an amendment to the protest on September 24, 2003. The amendment specifically addressed “Section II – Detailed Reasons for Protest,” and Section V addressing applications for further review. The Protestant’s amendment to Section II, Item 7 included, in its entirety:

We hereby protest the appraised value of the imported merchandise. It is claimed that the appraised value is incorrect because it includes international freight and other non-dutiable charges and it is based on an invoice price that is not the transaction value of the merchandise. The appraised value of the imported merchandise is subject to protest in accordance with 19 USC § 1514(a)(1).

Counsel’s amendment to the protest continued with respect to the application for further review:

We are also amending the protest by checking all the boxes marked “NO” in Section V – Application for Further Review, item 14, and adding the following to item 15: “The decision being protested is alleged to be inconsistent with numerous rulings of the Commissioner of Customs in accordance with 19 CFR § 174.24(a).”

The Assistant Port Director of the Port of Honolulu, subsequent to receiving the protest and the amendment to the protest denied the application for further review. The application for further review was denied on October 29, 2003. The Assistant Port Director stated the decision of the Port in Item 16 of the CBP 19: “Failure to meet the criteria of 19 CFR 174.24 and the justification requirements of 19 CFR 174.25(b)(3).”

The decision of the Port concerning the protest was subsequently issued on November 6, 2003. The Port, in Item 17 of the protest form, denied the protest in full. The Port denied the protest because the “[v]alue advances on the subject entries are based upon transaction value of the merchandise, including dutiable quota charges.”

The basis for setting aside a denial of further review and for voiding a denial of a protest are set forth in 19 U.S.C. 1515 (c). Section 1515 (c) provides, in pertinent part:

If a protesting part believes that an application for further review was erroneously or improperly denied or was denied without authority for such action, it may file with the Commissioner of Customs a written request that the denial of the application for further review be set aside. Such request must be filed within 60 days after the date of the notice of the denial. The Commissioner of Customs may review such request and, based solely on the information before the Customs Service at the time the application for further review was denied, may set aside the denial of the application for further review and void the denial of protest, if appropriate. . . . (emphasis added).

The criteria for further review as stated in the regulations of U.S. Customs and Border Protection, 19 CFR §174.24, provides:

Further review of a protest which would otherwise be denied by the port director shall be accorded a party filing an application for further review which meets the requirements of §174.25 when the decision against which the protest was filed: Is alleged to be inconsistent with a ruling of the Commissioner of Customs or his designee, or with a decision made at any port with respect to the same or substantially similar merchandise; Is alleged to involve questions of law or fact which have not been ruled upon by the Commissioner of Customs or his designee or by the Customs courts; Involves matters previously ruled upon by the Commissioner of Customs or his designee or by the Customs courts but facts are alleged or legal arguments presented which were not considered at the time of the original ruling; or Is alleged to involve questions which the Headquarters Office, United States Customs Service, refused to consider in the form of a request for internal advice pursuant to §177.11(b)(5) of this chapter.

The requirements of section 174.25 (b) provide, in part, that the application “shall contain the following information:

(3) A statement of any facts or additional legal arguments, not part of the record, upon which the protesting party relies, including the criterion set forth in § 174.24 which justifies further review.

It is the position of Aloha & Co. that it met the requirements for further review. The importer specifically maintains that it met the criteria of 19 C.F.R. 174.24 (a) and 174.25 (b). Counsel asserts that the application for further review of protest stated that “[t]he decision being protested is alleged to be inconsistent with numerous rulings of the Commissioner of Customs in accordance with 19 CFR § 174.24(a)” and further stated that “[i]t is claimed that the appraised value is incorrect because it includes international freight and other non-dutiable charges.”

It is the determination of this office that the Port of Honolulu correctly determined the issue of whether Aloha & Co. met the criteria for further review of its protest by CBP Headquarters. The importer alleged that the decision of the port was “inconsistent with numerous rulings of the Commissioner of Customs,” but failed to identify any specific ruling. In addition, Customs and Border Protection has consistently held, pursuant to 19 U.S.C. 1401a (b)(4)(A), that “any costs, charges, 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” are not part of the “price actually paid or payable.” See HQ 546363 (July 15, 1997), HQ 544538 (Dec. 17, 1992). A review of the documentation before the Port at the time the AFR protest was filed further fails to substantiate the importer’s allegation that international freight and other non-dutiable charges were included in the transaction value.

The Office of Regulations and Rulings, reviewing the information available to CBP beyond that necessary to address the specific question of whether the importer met the criteria for further review of its protest, confirms that the entered values of the respective entries were value advanced because CBP officers at the Port of Honolulu concluded from a comparison of invoices, pro forma invoices and payment records that the values declared were lower than the price actually paid or payable by the importer to the seller for the merchandise and that the invoice price failed to include dutiable quota charges.

The Request for Set Aside of Denial of Further Review and to Void the Denial of Protest of Yoav Madar, d/b/a Aloha & Co. is DENIED.

Sincerely,

Virginia L. Brown, Chief
Value Branch

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