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