RR:IT:VA 548234 KV/MMC
Port Director
U.S. Customs Service
300 North Mariposa Road
Nogales, AZ 82621
RE: Application for Further Review of Protest 2604-02-100004; Classification and Appraisement of Steel Molds and Other Equipment pursuant to subheading 9801.00.1097, Harmonized Tariff Schedule of the United States (HTSUS).
Dear Port Director:
This is in response to your memorandum dated October 1, 2002, forwarding an Application for Further Review (AFR) of Protest 2604-02-10004.
FACTS:
The protest was submitted by Capin-Vyborny U.S. Customs Brokers (importer's broker), on behalf of CTM-Mexico, Inc. The request concerns the classification and appraisement of two entries of steel molds and other equipment. At entry protestant asserted that the goods are eligible for preferential tariff treatment under subheading 9801.00.1097, HTSUS. On April 19, 2002 and May 3, 2002 respectfully, 2 subject entries were liquidated at the alternate HTSUS rate based on your conclusion that there was insufficient information to classify the goods in subheading 9801.10.1097, HTSUS. A protest was timely filed on June 21, 2002.
Protestant asserts that the molds were originally owned by Ryobi Outdoor Products (ROP) who transferred them to ICT in June 2000, just before ROP was acquired by MTD. As such MTD gained ownership of the molds when it acquired ROP. The molds were then returned by ICT to MTD for use in one of their U.S. plants.
Entry xxxx597-7, dated November 14, 2001, consisted of three steel molds, unidentified by part number. Invoices submitted at entry indicate a price of $40,000 for two of the molds, and a price of $20,000 for the remaining mold. The molds were entered and liquidated at a value of $100,000. Entry xxxx121-5, dated December, 4, 2001, consisted of three pieces of machinery and four steel molds, identified as part number 50114, 51693, 6841 and 6842. The accompanying invoices provide a price for the steel molds of $40,000, $35,000, $30,000 and $30,000, respectively. The equipment, a hypot tester and an ultrasonic welder machine, were invoiced at $200 and $4,000 respectively. The entered value corresponded to the total amount on the invoices.
The following statement appears on all of the submitted invoices: "[w]e certify that the information and value declared on this invoice is true and accurate." The classification and valuation of the remaining piece of equipment is not being contested.
On December 6, 2001 and January 4, 2002, Customs issued a Request for Information (CF 28) to the protestant, requesting the submission of U.S. manufacturer’s affidavits for the articles subject to this protest, within 30 days, pursuant to 19 CFR 10.1(b). When no affidavits or other documentation was received, the entries were liquidated as fully dutiable on April 19, 2002 and May 3, 2002.
Protestant challenges the classification and the appraised value. According to protestant, the "importer of record, in error, reported the "new" value of the molds in question but in fact they were all fully depreciated at the time of importation."
ISSUE:
Whether the equipment and steel molds are eligible for preferential tariff treatment under subheading 9801.00.110, HTSUS.
Whether the merchandise was properly appraised.
LAW AND ANALYSIS:
Classification
Subheading 9801.00.10, HTSUS, provides for the free entry of products of the United States that have been exported and returned without having been advanced in value or improved in condition by any process of manufacture or other means while abroad, provided the documentary requirements of section 10.1, Customs Regulations (19 CFR 10.1), are satisfied.
Section 10.1(a) outlines the necessary documentation required for duty-free treatment under subheading 9801.00.10, HTSUS. The documentation consists of a declaration by the foreign shipper in substantially the form described in 19 CFR 10.1(a)(1) and a declaration by the owner, importer, consignee, or agent having knowledge of the facts regarding the claim for free entry in substantially the form described in 19 CFR 10.1(a)(2).
Section 10.1(b) states that in addition to the documentation requirements of 19 CFR 10.1(a), in any case in which the value of the returned goods exceeds $2,000 and the articles are not clearly marked with the name and address of the U.S. manufacturer, the port director may require such other documentation or evidence as may be necessary to substantiate the claim for duty-free treatment. Such other documentation or evidence may include a statement from the U.S. manufacturer verifying that the articles were made in the U.S. or an export invoice, bill of lading, or airway bill evidencing the U.S. origin of the articles and/or the reason for the exportation of the articles.
In the instant case, the record shows that your office was not satisfied that the articles imported by CMT Mexico were of U.S. origin and, in conjunction with each entry, issued a CF 28 informing the importer that “an American Manufacturer’s Affidavit is required” and further requested that the importer “please specify if the commodity was exported to Mexico with benefit of drawback” and whether the articles were “manufactured or produced in a customs bonded warehouse or under heading 9813.00.005 [sic] and exported under any provision of law.”
Upon review of the documentation submitted in support of the protest, we note that no manufacturer’s affidavits or other evidence has been submitted in connection with the hypot tester, the ultrasonic welder machine and the mold designated as part number 51693, contained in the first entry. Although an affidavit was submitted with regard to two additional part numbers inasmuch as the three molds imported in connection with this entry were not identified by part number in the entry documentation, we are unable to establish a nexus between the items referenced in this affidavit and any of the steel molds imported into the U.S. Therefore, in the absence of evidence that establishes that the hypot tester, the ultrasonic welder and the four steel molds referenced above are products of the U.S. that were exported and returned without having been advanced in value or improved in condition while in Mexico, they are not eligible for duty-free entry under subheading 9801.00.10, HTSUS.
With regard to the three molds designated as part numbers 50114, 6841 and 6842 in the second entry, the protestant has submitted manufacturer’s affidavits. Nevertheless, we note that the documentation provided by the protestant does not contain all of the information requested by your office (which is also required by the declaration provided for in 19 CFR 10.1(a)(2)). However, 19 CFR 10.1(d) provides that if the port director is reasonably satisfied, based on the nature of the articles or production of other evidence, that the articles are imported in circumstances meeting the requirements of subheading 9801.00.10, HTSUS, the port director may waive the requirements of producing the document specified above. Therefore, if your office is reasonably satisfied that the circumstances and conditions of 19 CFR 10.1(d) are present and met with regard to steel molds 50114, 6841 and 6842, you are hereby instructed to grant the protest in part.
Value
Section 500 of the TAA, codified at 19 U.S.C. 1500, provides the general authority under which Customs appraises merchandise. Section 500(a) states that the appropriate Customs officer shall, under rules and regulations prescribed by the Secretary:
appraise merchandise by ascertaining or estimating the value thereof, under section 1401a of this title, by all reasonable ways and means in his power, any statement of cost or costs of production in any invoice, affidavit, declaration, other document to the contrary notwithstanding . . . .
The Statement of Administrative Action further provides that:
[s]ection 500 allows Customs to consider the best evidence available in appraising merchandise . . . . [It] authorize[s] the appraising officer to weigh the nature of the evidence before him in appraising the imported merchandise. This could be the invoice, the contract between the parties, or even the record keeping of either of the parties to the contract.
In this instance, at the time of entry the importer presented invoices from ICT-Mexico to CTM Mexico representing the sale of the merchandise. You based the appraisement of the merchandise on the invoices as sufficient evidence to establish the transaction value of the merchandise. No other objective evidence has been presented to demonstrate that the prices shown on the invoices do not accurately reflect the prices actually paid or payable for the imported merchandise. In fact, the invoices themselves carry a statement attesting to the accuracy of the information. Therefore, we determine that the merchandise was properly appraised.
HOLDING:
Concerning the CLASSIFICATION issue, the protest is GRANTED IN PART AND DENIED IN PART. The hypot tester, the ultrasonic welder, steel mold part number 51693 encompassed in the first entry, and the three unidentified steel molds encompassed by the second entry are not entitled to preferential tariff treatment under subheading 9801.00.10, HTSUS, as insufficient evidence was presented to demonstrate that they were articles of U.S. origin that were exported and returned without having been advanced in value or improved in condition abroad, they. However, if your office is reasonably satisfied that the circumstances and conditions of 19 CFR 10.1(d) are present and met with regard to steel molds 50114, 6841 and 6842 encompassed in the second entry, you may grant the protest for those molds.
Concerning the VALUE question presented, the protest is DENIED. No evidence was submitted that demonstrated that the appraised value was incorrect.
In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065 dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries 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 make the decision available to Customs personnel, and to the public on customs Home Page on the World Wide Web at www.customs.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Virginia L. Brown, Chief
Value Branch