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HQ 544581

February 25, 1991

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.

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.


John Durant, Director
Commercial Rulings Division

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