VAL CO:R:C:V 544383 DPS
Area Director
Minneapolis, Minnesota
RE: Application for Further Review of
Protest No. 3501-8-000124
Dear Sir:
The subject protest and application for further review
concerns the appraisement and classification of merchandise
described as "security lights," imported from Taiwan by Euro-
Am Enterprise, Inc. (importer).
FACTS:
The merchandise at issue is an electrical lighting
fixture consisting of fittings for two spotlights, a mounting
bracket and an infrared sensor contained within a control
module. The infrared sensor automatically turns on the
lights when it detects a change in temperature caused by a
moving person or object within a parameter of 50 feet long by
60 feet wide. The importer claims that this lighting product
is classifiable as a signalling apparatus under item 685.73,
Tariff Schedules of the United States (TSUS). The Area
Director determined that the security light is essentially a
lighting device meant to illuminate an area, and classified
it under item 653.39 TSUS, consistent with previous Customs
rulings on similar merchandise. The entries in question
predate the conversion from TSUS to the Harmonized Tariff
Schedule of the United States Annotated (HTSUSA).
Euro-Am consists of two entities, Euro-Am Taiwan and
Euro-Am U.S. In this case, Euro-Am Taiwan buys the security
lights from the Taiwanese manufacturer and resells the
merchandise for export to the United States. Euro-Am U.S.,
the related importer of record, states that it just processes
the entry, does not pay nor receive payment for the goods,
and that the entire transaction is handled directly by
Euro-Am Taiwan. The documentation submitted with the protest
and in response to Customs information requests establishes
that the seller in this transaction is Euro-Am Taiwan, and
the buyer is C.O.M.B. Co., an unrelated U.S. purchaser. The
terms of sale are C & F to Plymouth, Minnesota.
C.O.M.B. Co. remits payment of $22.50 per unit directly
to Euro-Am Taiwan, as evidenced by a copy of a purchase order
and a letter of credit in favor of Euro-Am Taiwan. Further
information suggests that the C & F price for certain models
of the security lights is $24.00. Customs officials at the
port of entry state that appraisement should be in accordance
with Section 402(b) of the Tariff Act of 1930, as amended by
the Trade Agreements Act of 1979 (19 U.S.C. 1401a(b); TAA),
under the transaction value method of appraisement. Customs
in Minneapolis appraised the merchandise at $22.50 and
$24.00, depending on the model,
less non-dutiable charges. Euro-Am U.S., the claimed
importer of record, states that appraisement should be in the
amount of $15.00 per unit, the amount paid to the
manufacturer.
ISSUES:
(1) Classification: Whether the subject merchandise is
classifiable as a signalling apparatus or as an illuminating
apparatus.
(2) Valuation: Whether the subject merchandise was properly
appraised.
LAW & ANALYSIS:
Classification
The classification of automatic security lights,
practically identical to the merchandise at issue, was the
subject of Headquarters Ruling Letter (HRL) 080758 JAS, dated
June 24, 1988 (copy attached), where we concluded that for
classification purposes, automatic security lights did not
qualify as signalling apparatus. Rather, they were found to
be classifiable under the tariff provisions covering
illuminating apparatus.
Inasmuch as the classification of merchandise similar in
all material respects was the subject of HRL 080758, the
request for further review fails to meet the criteria set
forth in section 174.24(b) Customs Regulations (19 CFR
174.24(b), and therefore, should be denied.
Valuation
Section 402(b)(1) of the Tariff Act of 1930, as amended
by the TAA, defines transaction value, the preferred method
of appraisement, as the price actually paid or payable for
imported merchandise when sold for exportation to the United
States, plus amounts for five specified items to the extent
that they are not already included in that price. In
applying transaction value to the circumstances surrounding
the Euro-Am transactions, it is necessary to determine which
sale is the sale for exportation to the United States.
The facts presented by Euro-Am U.S. indicate that the
transaction involving the sale for exportation to the United
States is between Euro-Am Taiwan, the seller, and C.O.M.B.
Co., the U.S. buyer. Invoices and written responses to
Customs information requests support this finding.
Furthermore, statements by Euro-Am U.S. acknowledge that it
does not pay for nor receive payment for the imported
merchandise. Its main purpose is to process the entry and
serve as the importer of record. The price of $15.00 per
unit paid to the manufacturer by Euro-Am Taiwan is not the
price actually paid for the merchandise when sold for
exportation to the U.S. Rather, the price paid when sold
for exportation to the U.S. is the price paid by the U.S.
buyer to the foreign distributor/seller. In this case,
$22.50 or $24.00, depending upon the model. Accordingly, the
merchandise at issue should be appraised at the C & F price
of $22.50 and/or $24.00, less any allowable deductions.
HOLDING:
You are directed to deny the subject protest in
accordance with the decision set forth above. A copy of this
decision should be attached to the Form 19, Notice of Action,
to be sent to the protestant.
Sincerely,
John Durant, Director
Commercial Rulings Division