VAL CO:R:C:V 545017 LPF
Area Port Director
U.S. Customs Service
9901 Pacific Highway
Blaine, WA 98230
RE: Application for Further Review of Protest No. 3004-92-100053;
Appraisement under section 402(f) of the TAA; Formal Entry; Merchandise Processing Fee
Dear Sir:
This is a decision on an application for further review of a
protest filed April 20, 1992, against your decision concerning
the appraisement of petroleum waste oil. The entries were
liquidated on March 6, 1992 and March 13, 1992. We regret the
delay in responding.
FACTS:
On December 11, 1991, petroleum waste oil was imported at
Blaine, WA. A debit invoice dated November 26, 1991, included in
the file, indicates that Master Wash Products Ltd. ("Master
Wash") of British Columbia, Canada paid Sol-Pro Inc. of Tacoma,
WA $4986.40 to dispose of the waste oil. We have confirmed
through the U.S. Environmental Protection Agency (EPA) that the
product is subject to the Toxic Substances Control Act (TSCA),
administered by the EPA. The invoice certifies that the
substances comply with the applicable rules or orders under the
TSCA. Information included on the Customs Form (CF) 19 provides
that the goods were not sold for export to the U.S., but were
exported for disposal because no such facility exists in the
British Columbia area.
You appraised the merchandise at the price paid by Master
Wash to the U.S. importer for disposal of the goods.
Furthermore, because you required formal entry, you assessed an
ad valorem merchandise processing fee (MPF) on the merchandise.
The protestant, Master Wash, submits that the goods should
be appraised at a nominal value instead of the price paid by
Master Wash to the U.S. importer. Additionally, the protestant
claims that informal entry should be permitted and that,
consequently, only a minimum MPF appropriately would be assessed
on the merchandise.
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ISSUE:
Whether the protestant has proffered sufficient evidence to
prove that Customs employed unreasonable ways and means to
ascertain the value of the imported merchandise and whether it
was inappropriate to require formal entry and to assess an ad
valorem MPF on the merchandise.
LAW AND ANALYSIS:
Appraisement of the Merchandise
Section 402(a) through (f) of the Tariff Act of 1930, as
amended by the Trade Agreements Act of 1979 (TAA), codified at 19
U.S.C. 1401a, provides the hierarchy of methods used when
appraising imported merchandise. The preferred method of
appraisement is transaction value pursuant to section 402(b) of
the TAA. Section 402(b)(1) of the TAA provides, in pertinent
part, that the transaction value of imported merchandise is the
"price actually paid or payable for the merchandise when sold for
exportation to the United States" plus enumerated statutory
additions.
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 recordkeeping
of either of the parties to the contract.
In this case, because the goods are not "sold for
exportation to the United States," within the meaning of 19
U.S.C. 1401a(b), the "price actually paid or payable" for the
imported merchandise cannot be ascertained and, consequently,
transaction value is not a viable method of appraisement.
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Section 402(f) of the TAA provides that if the value of
the merchandise cannot be determined under the other methods of
appraisement delineated within section 402 of the TAA, the
merchandise is appraised on the basis of a value that is derived
from a method of appraisement, allowing for reasonable
adjustments as necessary to arrive at a value. Accordingly, in
this case, pursuant to section 402(f) the appropriate Customs
officer appraised the merchandise at the price paid by Master
Wash to the U.S. importer for disposal of the goods in the U.S.
Based on the facts presented, especially in light of the
fact that the protestant has not provided any other documentation
such as invoices, contracts, or recordkeeping to show otherwise,
we find that the protestant has not proffered sufficient evidence
to prove that Customs employed unreasonable ways and means to
ascertain the value of the imported merchandise. The appraising
officer, under authority of section 500 and by utilizing a method
of appraisement in accordance with section 402(f), appropriately
considered all the evidence made available by the protestant and
used "all reasonable ways and means in his power" to appraise the
merchandise.
Entry of the Merchandise
Section 10.151, Customs Regulations (19 CFR 10.151)
provides, in pertinent part, that pursuant to section
321(a)(2)(C), Tariff Act of 1930, as amended (19 U.S.C.
1321(a)(2)(C)), the district director shall pass free of duty and
tax and without the preparation of an entry, any importation
having a fair retail value in the country of shipment not
exceeding $5. However, section 143.22, Customs Regulations (19
CFR 143.22) explains, in pertinent part, that the district
director may require a formal consumption or appraisement entry
for any merchandise if deemed necessary for: import admissibility
enforcement purposes, revenue protection, or the efficient
conduct of Customs business.
We note that the protestant has not established whether the
goods have a fair retail value of $5 or less in Canada, the
country of shipment. Regardless of the retail value of the
goods, it is apparent through our confirmation from the EPA and
from the certification on the invoice indicating that the goods
comply with the TSCA, as administered by the EPA, that the goods
are subject to the TSCA. In this case, because the EPA's laws
are involved, it was appropriate, pursuant to section 143.22, for
the district director to require formal entry for the
merchandise.
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In Headquarters Ruling Letter (HRL) 221804, issued December
28, 1989, Customs stated that section 10.151 applies to those
very simple cases which do not involve an other agency's laws.
The same issues raised in that decision pertaining to public
policy concerns when importing such potentially harmful products
and maintaining a record of such merchandise also are applicable
in this case. Section 10.151 was not intended to be used in
these situations but rather when the expense and inconvenience of
collecting duty would be disproportionate to the amount of
revenue that otherwise would be collected. See section 321,
Tariff Act of 1930, as amended by 19 U.S.C. 1321.
With regard to the assessment of the ad valorem MPF on the
merchandise, 19 U.S.C. 58c(a)(9)(A) provides that the Secretary
of the Treasury shall charge and collect an ad valorem fee for
the processing of merchandise that is formally entered or
released. This fee, with certain exceptions, is based on the
value of merchandise as determined under 19 U.S.C. 1401a. 19
U.S.C. 58c(b)(8)(D)(ii). On the contrary, 19 U.S.C. 58c(a)(10)
provides that merchandise that is informally entered or released
is assessed a specific fee (as enumerated within the provision),
depending on the manner in which the entry was prepared.
Because it was appropriate to require formal entry for the
merchandise, it follows, in accordance with 19 U.S.C. 58c, that
the appraising officer properly assessed an ad valorem MPF on the
merchandise.
HOLDING:
The protestant has not proffered sufficient evidence to
prove that Customs employed unreasonable ways and means to
ascertain the value of the imported merchandise. Additionally,
it was appropriate for the appraising officer to require formal
entry and, consequently, to assess an ad valorem MPF on the
merchandise.
You are directed to deny this protest. A copy of this
decision with the Form 19 should be sent to the protestant.
In accordance with Section 3A(11)(b) of Customs Directive
099 3550-065, dated August 4, 1993, Subject: Revised Protest
Directive, this decision should be mailed by your office to the
protestant 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 of 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
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public via the Diskette Subscription Service, the Freedom of
Information Act and other public access channels.
Sincerely,
John Durant, Director
Commercial Rulings Division