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HQ 545877

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March 23, 1995

VAL CO:R:C:V 545877 EK

CATEGORY: VALUATION

District Director
Chicago, Illinois 60607

RE: Protest No. 3901-94-102436; Packing Costs; Container Stuffing Charges

Dear Sir:

This is in response to the above-referenced protest and application for further review regarding your decision in the valuation of merchandise imported by Oriental Trading Company, Inc.

FACTS:

The imported merchandise was appraised pursuant to transaction value, section 402(b) of the Tariff Act of 1930, as amended by the Trade Agreements Act of 1979 (TAA). Customs appraised the merchandise based upon the price actually paid or payable for the merchandise plus an amount invoiced for container stuffing charges. The importer indicates that these stuffing charges were paid to a container freight station on behalf of the steamship line, and that they should be considered as part of ocean freight expenses, and therefore, not dutiable.

ISSUE:

Whether the container stuffing charges were appropriately added to the price actually paid or payable in determining transaction value.

LAW AND ANALYSIS:

Transaction value is applicable in appraising the imported merchandise in this case. Transaction value is defined in section 402(b)(1) of the TAA as "the price actually paid or payable for the merchandise when sold for exportation to the United States", plus any costs that are incurred by the buyer for packing. Packing costs are defined in section 402(h)(3) of the TAA as the "cost of all containers and coverings of whatever nature and of packing, whether for labor or materials, used in placing merchandise in condition, packed ready for shipment to the United States."

The container stuffing charges at issue are considered to be "packing costs" and were added to the price actually paid or payable. The importer's position that these costs should be considered as part of the ocean freight expenses has not been substantiated. It is our conclusion that they are in fact packing costs in that they are costs incurred in placing merchandise in condition, packed ready for shipment to the United States. The fact that the payment is not made to the seller is irrelevant. Packing costs are to be added to the price actually paid or payable even though they are paid to a party other than the seller.

HOLDING:

The protest should be denied in full. In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision should be mailed by your office to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the office of Regulations and Rulings will take steps to make the decision available to customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director

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