VAL CO:R:C:V 544784 ML
District Director
San Diego, California
RE: Proper Appraisement for Merchandise Under Deductive Value;
Application For Further Review of Protest No. XXXX-XX-XXXXXX
Dear Sir:
The protest was filed against your decision in the
liquidation of an entry made by Salico Farms, (hereinafter
referred to as the ,,importer") of honeydew melons of various
sizes. The merchandise was consigned to the importer and grown
in Mexicali, Mexico. The merchandise was appraised using
deductive value, based on the price of the greatest aggregate
quantity.
FACTS:
The merchandise consisted of honeydew melons that were
imported from Mexicali, Mexico, through Calexico on May 24, 1988.
The merchandise was consigned to the importer and appraised using
deductive value. The method of appraisement is not protested.
The importer's position is that since the market in Mexicali is
different than the market in Nogales, the merchandise should be
appraised at values the importer sold the merchandise for in the
United States, less allowable deductions, (i.e., the U.S. selling
price, less deductions- The concerned import specialist is of
the opinion that the merchandise was correctly appraised using
the price of the greatest aggregate quantity.
ISSUE:
Whether an appraisement using deductive value includes the
use of similar merchandise sold in the greatest aggregate
quantity.
LAW AND ANALYSIS:
Deductive value, the method of appraisement used in
connection with the imported merchandise, is defined in section
402(d)(2)(A)(i) and (ii) of the Tariff Act of 1930, as amended by
the Trade Agreements Act of 1979 (TAA; 19 U.S.C. 1401a(d)), as
the price at which the merchandise concerned is sold in the
condition as imported at or about the date of importation of the
merchandise being appraised, sold in the greatest aggregate
2
quantity at or about such date, or before the close of the 90th
day after the date of such importation. The unit price at which
merchandise is sold in the greatest aggregate quantity is the
unit price at which such merchandise is sold to unrelated
persons, at the first commercial level after importation.
The importer stated that honeydews from Mexicali or the
marketing of honeydews from Mexicali is different than the
marketing of honeydews in Nogales. It is argued that this
alleged discrepancy was said to cause substantial pricing and
value differences. Therefore, the greatest aggregate quantity
for the merchandise, as was found in Nogales and used in the
402(d) appraisement was not appropriate.
Section 402(h)(4)(A) of the TAA states that similar
merchandise is merchandise that--
"(iii) is commercially interchangeable with
the merchandise being appraised;...."
We are of the opinion that if the merchandise was
commercially interchangeable, (for example, the same USDA
standard grade) then the merchandise found in Nogales was
"similar" (as provided for in the statute) to the imported
merchandise, and therefore, we must accept it. In our opinion,
the growing region in Mexico has no relevance in the application
of deductive value. Merchandise is either similar or it is not,
as per the above definition. Since the concerned import
specialist has found the honeydews to be similar, the import
specialist's use of the greatest aggregate quantity of similar
merchandise is in accord with the statute.
HOLDING:
Based on the foregoing, the deductive value of the imported
merchandise was properly arrived at using the greatest aggregate
quantity of similar merchandise as found in Nogales.
Accordingly, you are directed to deny the protest in full.
A copy of this decision should be attached to the Customs Form 19
and mailed to the protestant as part of the notice of action on
the protest.
Sincerely,
John Durant, Director
Commercial Rulings Division