RR:IT:VA 546824 ASB
Port Director
United States Customs Service
P.O. Box 3130
Laredo, TX 78044
RE: Application for Further Review of Protest 2304-96-100132;
transaction value; 402(b)(4)(A); 402(f); value if other
values cannot be determined or used; prickly pears; 19
C.F.R. 174.13(a)(6); 484(a); HRL 544432; T.D. 86-56.
Dear Port Director:
This is in regard to the Application for Further Review of
Protest 2304-96-100132 dated May 31, 1996, filed by Intercargo
Insurance Company. This protest concerns whether Customs
properly valued a shipment of prickly pears under 402(f) of the
Tariff Act of 1930, as amended by the Trade Agreements Act of
1979 ("TAA"), codified at 19 U.S.C. 1401. We regret the delay
in responding.
FACTS:
Intercargo Insurance Company ("Intercargo") is protesting
the appraisement of a shipment of 500 boxes of prickly pears
weighing 30 kilograms each that were imported from Mexico. The
importer of record and broker in this case, Sandra L. Herrera,
valued the prickly pears at their invoice price of $0.0909 per
kilogram. Customs appraised the pears under 402(f) of the TAA
("Value If Other Values Cannot Be Determined or Used") at $0.639
per kilogram.
Customs sent a Notice of Action (CF 29) to the broker,
Sandra L. Herrera for the additional duty owed. According to the
Customs Automated Commercial System (ACS), Customs liquidated the
entry shortly thereafter. When the broker failed to pay the
additional duty, Intercargo, who was the surety for the broker at
the time of liquidation, was billed. On May 31, 1996, Intercargo
timely filed its Application for Further Review with Customs, in
which Intercargo protests the appraisement of the prickly pears
under 402(f) of the TAA, arguing instead that the invoice price
is sufficient to establish transaction value.
Intercargo subsequently filed a request under the Freedom of
Information Act for various documents and other relevant
information relating to the prickly pears. After receiving the
requested documentation, Intercargo notified Customs that it did
not wish to supplement its protest and that Customs should
proceed based on the information contained in its Application for
Further Review dated May 31, 1996.
ISSUE:
Whether the protestant has provided enough evidence to
establish that the invoice price constituted transaction value,
and, thus, appraisement pursuant to 402(f) was incorrect.
LAW AND ANALYSIS:
The primary basis of appraisement under 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
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."
If the importer cannot establish transaction value, the
merchandise is valued in accordance with 402(b)-(e): the
transaction value of identical merchandise, the transaction value
for similar merchandise, deductive value, or computed value. If
none of the aforementioned can be established, Customs can value
the merchandise in accordance with 402(f) ("Value if Other
Values Cannot be Determined or Used").
In determining whether transaction value is applicable,
484(a) of the Tariff Act of 1930, as amended (codified at 19
U.S.C. 1484(a)), requires importers to file such documentation
as is necessary to enable Customs "to assess properly the duties
on the merchandise . . . ." 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).
In this case, the importer was unable to provide information
that established transaction value. In addition, transaction
value of identical or similar merchandise, deductive value, and
computed could not be established, so the merchandise could not
be appraised under 402(a)-(e). Therefore, Customs properly
appraised the prickly pears under 402(f).
With respect to a protest, the Application for Further
Review must contain "the nature of, and justification for the
objection set forth distinctly and specifically with respect to
each category, payment, claim, decision, or refusal." 19 C.F.R.
174.13(a)(6). Therefore, the protestant has the burden of
proving the validity of and justification for its protest.
Intercargo was unable to provide any additional information in
the protest to justify its claim that transaction value was the
correct method of appraisement. In view of Intercargo's failure
to meet its burden of proof, the protest is denied.
HOLDING:
The protestant has failed to provide enough evidence to
establish that the invoice price constituted transaction value,
therefore, 402(f) was the correct method of appraisement.
You are directed to deny the protest. In accordance with
3A(11)(b) of Customs Directive 099 3550-065 dated August 4,
1993, Subject: Revised Protest Directive, this decision, together
with the Customs Form 19, should be mailed to the protestant 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 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, Freedom of Information
Act, and other public access channels.
Sincerely,
Thomas L. Lobred, Chief
Value Branch