VAL CO:R:C:V 544581 ML
District Director
Great Falls, MT
RE: Application For Further Review of Protest No. 3303-90-
000029, Concerning the Appraisement of Wearing Apparel Based
on Visaed Invoices
Dear Sir:
This protest was filed against your appraisement decision in
the liquidation of various entries made by ----- Manufacturing
Inc., (hereinafter referred to as the "importer"). The
merchandise was manufactured in China. The merchandise was
appraised pursuant to section 402(b) of the Tariff Act of 1930,
as amended by the Trade Agreements Act of 1979 (TAA; 19 U.S.C.
1401(a)(b)).
The importer imported wearing apparel made in China and
shipped from Hong Kong. The visaed invoices from China show unit
prices on a C&F basis with a total value listed FOB China. After
deductions are made for actual ocean freight charges, the FOB
total does not match the net FOB amount payable. In most cases
the C&F unit values on the visaed invoices match the C&F unit
values on the commercial invoices. Duties were assessed on the
value shown as FOB on the China textile export license
Section 484(a), Tariff Act of 1930, as amended (19
U.S.C.1484(a)), requires that importers file with Customs
documentation which, among other things, allows Customs "to
assess properly the duties on the merchandise...." Treasury
Decision (T.D.) 86-56, dated March 6, 1986, stated that in
situations where the visaed invoice or document presented to
Customs (and necessary for the entry of the merchandise) contains
erroneous value or price information, such invoice or document
can only be corrected by the presentation to Customs of a new,
corrected invoice or document stamped with the visa of the
government of the country or origin. Customs will not accept pro
forma invoices in any case involving apparent differences in
price or value information in the documents required to be
submitted to Customs and which involve the production of a
document which is required to contain a foreign country's visa.
In the instant case, the importer states that the value on
the export license does not affect the dutiable value. The
importer asserts that the merchandise should be appraised based
on the C&F value on the commercial invoice, less freight charges
since that value was actually paid by the importer.
We have assumed that the merchandise was appraised on the
basis of transaction value. Transaction value is defined in
section 402(b) of the Tariff Act of 1930, as amended by the Trade
Agreements Act of 1979, (TAA; 19 U.S.C. 1401a(b)), as the "price
actually paid or payable for the imported merchandise when sold
for exportation to the United States", plus certain enumerated
additions not relevant here. This is more specifically defined
in section 402(b)(4)(A) of the TAA as:
The term "price actually paid or payable" means the
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.
It is clear freight costs involved in the international
movement of merchandise from the country of exportation are to be
excluded from the dutiable value of imported merchandise
appraised using the transaction value basis. Proper
documentation establishing the actual freight costs to be
excluded must be submitted to Customs.
In the case at bar, the C&F values on the visaed invoices
were not always consistent with the C&F values on the commercial
invoices. On the basis of the information submitted, we find
that the dutiable value of the imported merchandise was properly
determined using the total visaed invoice amounts less actual
ocean freight charges. If the total FOB values on the visaed
invoices match the C&F values on the same invoices after
deductions are made for actual freight, then either the FOB or
the C&F value may be looked to to assess the proper duty amount.
Based on the foregoing, we find that the merchandise was
properly appraised using the amount on the visaed invoice for the
merchandise. The value on the commercial invoices was often
inconsistent with that found on the visaed ones, and therefore,
unacceptable for appraisement purposes.
Accordingly, you are directed to deny the protest. A copy
of this decision should be attached to Form 19, notice of action,
to be sent to the protestant.
Sincerely,
John Durant, Director
Commercial Rulings Division