VAL CO:R:C:V 544677 VLB
District Director of Customs
555 Battery Street
P.O. Box 2450
San Francisco, California 94126
RE: Application for Further Review of Protest 28099-000887;
Item 911.95, TSUS
Dear Sir:
This is in response to an Application for Further Review of
the above-referenced protest.
FACTS:
The buyer, Sharper Image, Inc. (hereinafter referred to as
"the buyer") purchased sound soothers/clock radios from JPM
Resources Ltd. located in Hong Kong. The JPM Resources Ltd.
invoice to the buyer, dated June 19, 1987, indicates that the
buyer purchased 300 sound soothers at a $50.00 unit price, C.I.F.
San Francisco. The total amount of the invoice was $15,000. The
merchandise was entered under item 685.14, Tariff Schedules of
the United States ("TSUS"), which carried a 6% rate of duty.
However, in the Omnibus Trade and Competitiveness Act of
1988 (102 Stat. 1107), Congress retroactively extended the
effective date of item 911.95, TSUS, which originally expired on
December 31, 1986, to December 12, 1990. Under item 911.95 TSUS
the following items were free of duty:
Entertainment broadcast band receivers valued not over
$40 each (however provided for in schedule 6)
incorporating timekeeping or time display devices, not
in combination with any other article, and not designed
for motor vehicle installation.
You determined that the imported merchandise covered by this
protest did not qualify for treatment under item 911.95, TSUS
because the unit value exceeded $40.00.
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ISSUE:
Whether the value of the imported merchandise exceeded
$40.00.
LAW AND ANALYSIS:
It appears that the merchandise was appraised under
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, (19 U.S.C. 1401a(b); TAA) as the "price
actually paid or payable for the merchandise when sold for
exportation to the United States" plus enumerated statutory
additions.
The "price actually paid or payable is defined in section
402(b)(4) of the TAA as "the total payment (. . . 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".
In this case, the "price actually paid or payable" for
purposes of transaction value was determined to be $12,916.19.
This figure was arrived at by taking the $15,000.00 invoice price
and subtracting the nondutiable charges totalling $2,083.81. The
buyer has not submitted any evidence that indicates that this was
an incorrect appraised value.
When the appraised value, $12,916.19 is divided by the 300
units that were entered, the resulting appraised value per unit
price was $43.05. As previously stated, item 911.95, TSUS,
applied to entertainment broadcast band receivers "valued not
over $40 each". The value of the imported merchandise exceeded
$40.00; therefore, we hold that merchandise could not have been
properly classified under item 911.95, TSUS.
HOLDING:
The imported merchandise had an appraised value over $40.00.
Therefore, the merchandise could not have been properly
classified under item 911.95, TSUS.
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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