HQ 543908: Internal Advice Request

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 543908

                                   April 19, 1988

          CLA-2 CO:R:CV:V 543908 EK

          CATEGORY:  Valuation

          District Director of Customs
          Los Angeles, California

          RE:  Internal Advice Request

          Dear Sir:

               This is in response to an internal advice request initiated
          on behalf of a certain company (hereinafter referred to as
          importer) regarding the applicability of T.D. 86-56 to
          merchandise imported into the United States.  This T.D. precluded
          the acceptance of entry documents in connection with the
          importation of merchandise which contain inconsistencies or
          differences.  In such circumstances, the entry documentation is
          not accepted by Customs and is returned to the importer for
          correction.

          FACTS:

               The importer proposes to import merchandise from Taiwan
          using the following procedure.  First, the importer agrees with a
          quota broker to obtain a particular quota allocation and
          merchandise at a stated price.  The quota holder or shipper
          prepares commercial invoices and Special Customs Invoices to be
          used for visa purposes which indicate an F.O.B. Taiwan price
          which totals that for the merchandise plus that for the quota.
          The manufacturer of the merchandise will issue a separate invoice
          to the importer which includes the price for the merchandise
          exclusive of the charge for quota.  A document will be submitted
          to Customs which is prepared which itemizes for each purchase the
          following information:  the purchase order number, style number,
          quantity, the relationship of the quota holder to the
          manufacturer, the name of the quota holder/shipper, the F.O.B.
          Taiwan value of the goods, i.e., the price of the goods plus
          quota, the name of the manufacturer of the goods, the
          manufacturer's price for the goods (the price exclusive of quota
          charges), the name of the quota broker used, and the relationship
          of the quota broker to the manufacturer.


















                                        - 2 -


                The discrepancy in the documents is that between the
          manufacturer's invoice which the importer alleges to be the value
          of the goods for appraisement purposes, and the visaed invoice
          which corresponds with the quota seller's invoice representing
          both the price of the goods and the cost of the quota.


          ISSUE:

                Whether the discrepancy in the documentation between the
          visaed invoice and the commercial invoice mandates rejection of
          the entry documents in light of T.D. 86-56.


          LAW AND ANALYSIS:

                The importer states that the "price actually paid or
          payable" for purposes of determining transaction value (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)), is the price of
          the goods exclusive of the expense incurred for quota.  For the
          sole purpose of determining whether this situation is covered by
          the T.D., we are assuming that the "price actually paid or
          payable" for the goods is represented by the manufacturer's
          invoice, i.e., the price of the goods exclusive of quota.  The
          visaed invoice indicates a total value, i.e., the price of the
          goods plus the quota.  There is no indication on the visaed
          invoice which represents the fact that a portion of the value is
          an amount for quota.  Therefore, the visaed invoice indicates an
          amount higher than that which the importer purports the
          transaction value of the merchandise to be.

                In Headquarters Ruling No. 543809 dated November 5, 1987,
          we ruled that the situation indicated above is in fact covered by
          T.D. 86-56 which requires rejection of entry documentation
          containing inconsistent or erroneous information.

                The importer, through counsel, argues that Ruling No.
          543809 is inconsistent with a prior ruling issued by Headquarters
          (No. 543825 dated July 7, 1987).  However, No. 543825 presents a
          different factual scenario.  In No. 543825, the visaed invoice
          submitted by the importer indicated the price for the merchandise
          with no reference to the quota paid by the importer.  The
          commercial invoice indicated both the price of the goods and the
          quota.  In that ruling, we did not reject the documentation and
          allowed entry of the merchandise.  In Ruling No. 543809, the
          amount on the visaed invoice was a total amount, with no
          indication as to what portion of that total represents the price
          of the merchandise or the amount of the quota.  












                                        - 3 -


                The situation covered by Ruling No. 543825 is not the same
          as the instant case.  The case at hand is on point with Ruling
          No. 543809.


          HOLDING:

                In view of the foregoing, it is the position of the Customs
          Service that the entries with respect to the merchandise should
          be rejected until documents which are not inconsistent are
          received by Customs.

                                        Sincerely,




                                        John Durant
                                        Acting Director, Commercial
                                        Rulings Division