VAL RR:IT:VA 546803 AJS
Port Director
U.S. Customs Service
2350 N. Sam Houston Parkway East
Suite 1000
Houston, TX 77032
Attn: Team 671
RE: Protest Number 5301-95-100288; inland freight; through bill
of lading; 19 CFR 152.103(a)(5); HRL 542101; HRL 543744.
Dear Director:
This is in reply to the application for further review (AFR)
of the above referenced protest, dated June 29, 1995, filed on
behalf of the Michelin Tire Corporation concerning the
appraisement of truck tires.
FACTS:
The protestant asserts that the non-dutiable charges (NDC)
were incorrectly calculated on invoices number 2 and 3 for the
subject entry. Although the protestant specifically claims that
"ocean freight charges" should have been deducted but were
inadvertently omitted, the submitted invoices do not list any
"ocean freight charges". It appears from the invoices and the
"corrected" 7501's submitted by the protestant that the charge
for "inland freight" was not included as a NDC.
Your office states that the protestant has not provided a
through bill of lading and thus the inland freight charges are
properly included in the price actually paid or payable.
ISSUE:
Whether the subject inland freight charges are part of the
price actually paid or payable for the imported merchandise.
-2-
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
primary method of appraisement is transaction value, which is
defined in section 402(b)(1) of the TAA as the "price actually
paid or payable for the merchandise when sold for exportation to
the United States," plus certain enumerated additions. The term
"price actually paid or payable" is more specifically defined in
section 402(b)(4)(A) as the total payment (whether direct or
indirect, and exclusive of any charges, costs, 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), see also 19 CFR 152.102(f).
The Customs Regulations provide that as a general rule, in
those situations where the price actually paid or payable for
imported merchandise includes a charge for foreign inland
freight, whether or not itemized separately on the invoices or
other commercial documents, that charge will be part of the
transaction value to the extent included in the price. 19 CFR
152.103(a)(5)(ii). However, charges for foreign inland freight
and other services incident to the shipment of the merchandise to
the U.S. may be considered incident to the international shipment
of that merchandise if they are identified separately and they
occur after the merchandise has been sold for export to the U.S.
and placed with a carrier for through shipment to the U.S. Id.
A sale for export and placement for through shipment to the
United States shall be established by means of a through bill of
lading presented to the port director. 19 CFR
152.103(a)(5)(iii); See also All Channel Products v. U.S., 16 CIT
169, 787 F. Supp. 1457 (1992), aff'd., All Channel Products v.
U.S., 982 F. 2d 513 (1992). Only in those situations where it
clearly would be impossible to ship merchandise on a through bill
of lading (e.g., shipments via the seller's own conveyance) will
other documentation satisfactory to the port director showing a
sale for export to the U.S. be accepted in lieu of a through bill
of lading.
Customs rulings on inland freight provide that if the
buyer's total payment to the seller includes charges for foreign
inland freight, then these charges form part of the price
actually paid or payable. Headquarters Ruling Letter (HRL)
542101 (March 4, 1980) (TAA No. 1). However, they also provide
that foreign inland freight is nondutiable where such charges are
identified separately, and they occur after the merchandise has
been sold for export to the U.S. and placed with a carrier for
through shipment to the U.S. HRL 543744 (July 30, 1986), HRL
544881 (March 8. 1993). A through bill of lading must be
presented to Customs. Id.
In this case, a through bill of lading was not presented to
Customs. Therefore, the subject inland freight charges may not
be considered incident to the international shipment of the
imported tires. Consequently, the subject charges are part of
the price actually paid or payable of the imported tires.
-3-
HOLDING:
The protest should be denied. The subject inland freight
charges are part of the price actually paid or payable of the
imported tires.
A copy of this decision with the Customs 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 public via the Diskette Subscription Service, the
Freedom of Information Act and other public access channels.
Sincerely,
Acting Director
International Trade Compliance Division