OT:RR:CTF:VS HQ H340312 TMF
Center Director
U.S. Customs and Border Protection
726 Exchange Street
Buffalo, New York 14210
Attn: Andrey Shcherenko, Import Specialist
RE: Application for Further Review of Protest No. 4601-24-137219; Eurasia Stone Work Corp. d/b/a Eurasia Stone; Valuation of a Refund or Credit
Dear Center Director:
This is in response to an Application for Further Review ("AFR") of Protest No. 4601-24-137219, which was timely filed by the Shayne Law Firm ("Counsel"), on behalf of its client, the protestant, Eurasia Stone Work Corporation ("Eurasia"). This protest, which was received by your office June 13, 2024, contests the valuation of goods delivered and invoiced as not being what was ordered, and the value does not constitute the value of the goods when sold for export to the United States. Counsel requests AFR, which your office correctly approved.
FACTS:
The protestant is a supplier of various stone products for high-end projects and supplies specialized materials to purchasers. The protestant's choice of tile was glass over stone. On September 20, 2021, Eurasia ordered blue crackle glass tile, and glass herringbone mosaic tile from Xiamen Stone. No prices are indicated on the purchase order. Xiamen Stone issued an invoice on June 23, 2022, for four types of mosaic tile for a total of $59,811.81. One of the types of tile is for 10,000 pieces of "Herringbone Ceramic Mosaic", valued at $32,200.00. Eurasia indicates that this June 23 invoice shows what was sent, but not ordered. Another invoice, also dated June 23, 2022, was submitted, and instead of "Herringbone Ceramic Mosaic", 10,000 pieces of "Herringbone Glass Mosaic" are shown, valued at $3,000. Eurasia states that this is what was ordered, but not shipped. The total value on this invoice is $30,611.81. Entry was made on September 7, 2022, with a value of $59,812.00. An email of August 9, 2023, from Xiamen Stone, acknowledged the error that the wrong tile was shipped. On May 17, 2023, Xiamen Stone issued a "Statement" that a refund of $29,200 was provided and kept as a credit for a future shipment. Another "Statement" credit, also dated May 17, 2023, was issued in the amount of $2,078, for a similar mistake concerning other invoices. The protestant claims that since the wrong product was received, the value for the ordered products was incorrect, and the protestant, therefore, seeks a refund of duties paid.
ISSUE:
Whether the protestant has provided sufficient documentation to support its claim that the wrong merchandise was shipped with incorrect valuation of the merchandise, and the importer is entitled to a refund of duties due to the errors.
LAW AND ANALYSIS:
Merchandise imported into the United States is appraised in accordance with section 402 of the Tariff Act of 1930, as amended by the Trade Agreements Act of 1979 (TAA; 19 U.S.C. 1401a). The preferred method of appraisement is transaction value, which is defined as "the price actually paid or payable for the merchandise when sold for exportation to the United States," plus amounts for certain statutorily enumerated additions to the extent not otherwise included in the price actually paid or payable.
19 U.S.C. 1401a(b)(1).
The term "price actually paid or payable" is defined as:
[T]he total payment (whether direct or indirect, and exclusive of any costs, charges, or expenses incurred for transportation, insurance, and related services incident to the international shipment of the merchandise from the country of exportation to the place of importation in the United States) made, or to be made, for imported merchandise by the buyer to, or for the benefit of, the seller. 19 U.S.C. 1401a(b)(4)(A).
In determining transaction value, the price actually paid or payable "will be considered without regard to its method of derivation. It may be the result of discounts, increases, or negotiations, or may be arrived at by the application of a formula . . ." 19 C.F.R. 152.103(a)(1).
Counsel relies on two Headquarters Rulings (HQ): HQ 546141, dated April 16,1996; and HQ H300260, dated February 9, 2019. In HQ 546141, the importer ordered sensitized metal plates, but they were invoiced at an incorrect unit price. The invoice price was revised by the seller and a credit was issued. CBP approved amending the transaction value to the corrected price due to the clerical error, and CBP determined the error was not a post importation price adjustment or rebate within the meaning of section 402(b)(4)(B) of the TAA, and ordered a reliquidation of the corrected invoiced amount, along with a refund of any overpaid duties and fees.
In HQ H300260, dated February 9, 2019, CBP determined a refund was appropriate since the pro forma invoices contained overstated values which were based on a clerical error from an Excel database. After the mistake was discovered, the importer provided detailed documentation to show how the mistake was made and the correct information.
These two rulings are not applicable to this case since these two decisions show how a mistake was made concerning the calculation of the merchandise itself. Here, there is no dispute that the value of the "Herringbone Ceramic Mosaic" was not correct. The price of the ceramic tile was correct, it was just not what was ordered. There is no evidence that the ceramic tile was returned to Xiamen Stone. Therefore, Eurasia did receive ceramic and the value on this article was correct. While Eurasia did receive a credit for Xiamen Stone's mistake, this does not warrant reducing the duty due on the merchandise that Eurasia did, in fact, receive. Therefore, no adjustment in duty is warranted.
Inasmuch as a credit was issued to the protestant by the supplier for future use, the transaction values supplied on the entry documents remain unchanged and should not be corrected due to clerical error. The total payment made by the protestant is the price actually paid for tiles which were shipped to the United States.
HOLDING:
The total payment made for the tiles in the subject protest is the transaction value which was made for imported tile merchandise received by the protestant. The price for the received tiles is correct, and the tiles were not returned to the seller. As such, there is no need to amend the total price in this case. The protest should be DENIED.
You are instructed to notify the protestant of this decision no later than 60 days from the date of this decision. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to this notification. Sixty days from the date of the decision, the Office of Trade, Regulations and Rulings will make the decision available to CBP personnel and the public on the Customs Rulings Online Search System (CROSS) at https://rulings.cbp.gov/, or other methods of public distribution.
Sincerely,
For Yuliya A. Gulis, Director
Commercial and Trade Facilitation Division