HQ 544283: Decision on Application for Further Review of Protest No. 3801-6-001460

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                                      HQ 544283

                                February 23, 1989

          CLA-2  CO:R:CV:V   544283 VLB

          CATEGORY: Valuation

          District Director of Customs
          Detroit, Michigan  48226-2568

          RE:  Decision on Application for Further Review of Protest
               No. 3801-6-001460

          Dear Sir:

                This protest was filed against your decision in the
          liquidation of various entries made by ------------------, a
          lumber distributor (hereinafter referred to as the
          "distributor").  The merchandise was appraised pursuant to
          sections 402(b) and 402(f) of the Tariff Act of 1930, as amended
          by the Trade Agreements Act of 1979 (19 U.S.C. 1401a(b) and (f);
          TAA).


          FACTS:

                The merchandise in question is waferboard (particle board)
          that is manufactured in Canadian mills.  You appraised several of
          the entries under section 402(b) of the TAA using the amount that
          the distributor's U.S. customer paid to the distributor as the
          price actually paid or payable for the merchandise.

                You appraised the remaining entries under section 402(f) of
          the TAA due to the fact that the distributor had failed to
          produce the invoice to its U.S. customer.  It appears that you
          used the price paid by other U.S. customers to U.S. distributors,
          for identical or similar merchandise, as the starting point for
          the appraisements.

                The distributor contends that all of the entries should be
          appraised pursuant to section 402(b) of the TAA, and that the
          transaction value is the price that it paid to the Canadian
          manufacturer.



















                                        - 2 -

          ISSUES:

                (1)  Whether transaction value is the proper method for the
          appraisement of the merchandise.

                (2)  Whether the sale between the manufacturer and the
          distributor, or the sale between the distributor and its
          customer, is the price actually paid or payable for the
          merchandise when it was sold for exportation to the United
          States.


          LAW AND ANALYSIS:

                The first issue involves what appraisal method should be
          used to determine the value of the merchandise for duty purposes.
          In Headquarters Ruling 554998 dated January 24, 1989, we held
          that if the documentation shows that the distributor sold the
          merchandise from the reload center, e.g. the distributor invoiced
          its customer at the time the merchandise is exported from the
          reload center, or shortly thereafter, transaction value is the
          proper method of appraisement.

                In this case, the documentation submitted for the entries
          that were appraised under section 402(b) of the TAA shows that
          the distributor's invoice was dated shortly after the merchandise
          was exported.  Based on this information and ruling 554998, we
          hold that the merchandise was appraised properly under section
          402(b) of the TAA.

                In addition, we hold that Customs correctly used the price
          that the distributor's U.S. customer paid for the merchandise as
          the price actually paid or payable under transaction value.

                The importer has submitted documentation for one entry that
          was appraised under section 402(f) of the TAA.  The submission
          does not include the distributor's invoice to its U.S. customer.

                In ruling 544284 dated January 26, 1989, we held that the
          importer failed to submit any documentation or explanation
          supporting its claim that waferboard was improperly appraised
          under section 402(f) of the TAA.  The facts and the lack of
          documentation in this case are the same as in ruling 544284.
          Based on that ruling we find that the distributor has failed to
          prove its claim that the merchandise was appraised improperly.

                If the distributor's invoice to its U.S. customer is















                                        - 3 -

          available, then transaction value is the appropriate method of
          appraisement.  Please note that you must determine whether the
          sale between the distributor and its customer occurred before the
          distributor placed the order with the mill or occurred after the
          goods reached the reload center.


          HOLDING:

                (1)  Transaction value is the proper appraisement method
          for the entries that contain the distributor's invoice to its
          U.S. customer.  For the entries appraised under section 402(f) of
          the TAA, the distributor has not submitted this documentation or
          an explanation of when the sale to its U.S. customer occurred.
          Therefore, the distributor has failed to support its claim that
          the merchandise was appraised incorrectly.

                (2)  The evidence in the transactions appraised under
          section 402(b) of the TAA shows that the distributor invoiced its
          customer for the merchandise on the date of exportation from the
          reload center or shortly thereafter.  Thus, we conclude that the
          sale between the distributor and its U.S. customer is the sale
          that directly caused the merchandise to be exported from Canada
          to the U.S.  The amount of that sale is the price actually paid
          or payable for the goods under transaction value.

                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