HQ 544178: Decision on Application for Further Review of Protest Nos. 3303-7-000024, 3303-7-000025

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 544178

                                 September 19, 1988

          CLA-2 CO:R:CV:V  544177, 544178 EK

          CATEGORY:  Valuation

          District Director of Customs
          Pembina, North Dakota

          RE:  Decision on Application for Further Review of
               Protest Nos. 3303-7-000024, 3303-7-000025


          Dear Sir:

                These protests were filed against your decision in the
          liquidation of various entries made by (company name)
          (hereinafter referred to as importer).  The merchandise was
          appraised pursuant to section 402(f) of the Tariff Act of 1930,
          as amended by the Trade Agreements Act of 1979 (19 U.S.C.
          1401a(f); TAA).  This was determined by Customs to be equal to
          the invoice price, plus an additional 18 percent.


          FACTS:

                The merchandise in question consists of rowing machines.
          The importer states that it purchased the rowing machines from
          H.C. Enterprises.  This company subsequently changed its name to
          Weslo International (hereinafter referred to as WI).

                In a joint venture between WI and the importer, Pro-X was
          established to monitor production and insure quality control.
          The importer indicates that its purchases were invoiced by WI to
          Pro-X and then re-invoiced by Pro-X to the importer.

                The importer states that although Pro-X is related to WI,
          Pro-X was neither the seller nor the manufacturer of the merchan-
          dise.  The importer alleges that in prior transactions, Pro-X had
          received a commission for the services it rendered.  However, the
          importer states that the commissions were discontinued and that
          the services of Pro-X were subsequently terminated.  




















                                        - 2 -


                It is the position of the importer that transaction value
          pursuant to section 402(b) is applicable in appraising the
          merchandise.  The importer asserts that the "price actually paid
          or payable" for the merchandise when sold for exportation to the
          United States is the price paid by the importer to WI, through
          Pro-X.


          ISSUE:

                Whether transaction value pursuant to section 402(b) of the
          TAA is proper in appraising the imported merchandise.


          LAW AND ANALYSIS:

                Transaction value, the preferred method of appraisement, is
          defined in section 402(b) of the TAA as the "price actually paid
          or payable for the merchandise when sold for exportation to the
          United States . . . plus amounts equal to any selling commission
          incurred by the buyer with respect to the imported merchandise."
          The addition to the "price actually paid or payable" for the
          selling commission must be based upon sufficient information.  If
          sufficient information is not available, then transaction value
          of the imported merchandise cannot be determined.  See, section
          402(b)(1).

                In this case, it is our conclusion that Pro-X is a selling
          agent for WI.  The importer claims that Pro-X had received a
          commission in connection with prior transactions; however, the
          commission payments were discontinued.  Although the importer
          claims that the services of Pro-X were discontinued, the
          documentation submitted clearly establishes that Pro-X was still
          involved with the transactions in question.

                Transaction value pursuant to section 402(b) was properly
          eliminated as a means of appraisement because the amount of the
          commission paid to Pro-X could not be determined.

                However, prior to resorting to a section 402(f)
          appraisement, it is necessary to proceed sequentially through the
          remaining bases of appraisement.  Please note that if it becomes
          necessary to appraise pursuant to section 402(f) of the TAA,
          resort should be made to a previously determined customs value,
          if available.  Values which are determined pursuant to section
          402(f) will be based, to the greatest extent possible, on
          previously determined values.  See, Statement of Administrative
          Action.  













                                        - 3 -


                Under the circumstances, the method established by Customs
          used to liquidate the subject entries was proper.  The 18 percent
          added to the invoice unit values is not an arbitrary figure as
          alleged by the importer.  The figure was based upon the
          importer's records of the last quarter of 1984.  The difference
          reflects the amount paid to Pro-X by the importer and the amount
          remitted by Pro-X to WI, the seller, i.e., the selling
          commission.


          HOLDING:

                In view of the foregoing, it is our conclusion that
          transaction value pursuant to section 402(b) of the TAA was
          properly rejected as a means of appraisement.  Moreover, if it
          becomes necessary to appraise the merchandise pursuant to section
          402(f), the method established by Customs in liquidating the
          subject entries was proper under the circumstances presented.  To
          this date, a Request for Information dated January 1985, has yet
          to be answered by the importer.

                The protest should be denied.  A copy of this decision
          should be attached to the Form 19, Notice of Action, to be sent
          to the protestant.


                                        Sincerely,




                                        John Durant, Director,
                                        Commercial Rulings Division