Application for Further Review of Protest No. 2304-19-100898; Error in calculating value of merchandise; Materials costs counted twice

U.S. Department of Homeland Security Washington, DC 20229 U.S. Customs and Border Protection HQ H308275 September 10, 2020 OT:RR:CTF:VS H308275 CMR CATEGORY: Valuation Center Director Base Metal Center of Excellence and Expertise 237 West Service Road Champlain, NY 12919 Attn: IS Marianne Seymour RE: Application for Further Review of Protest No. 2304-19-100898; Error in calculating value of merchandise; Materials costs counted twice Dear Center Director: This is in response to the Application for Further Review (AFR) of Protest No. 2304-19-100898 which were forwarded to this office for our review and response. FACTS: The protestant, EJ Brooks Company, Inc. d/b/a Tydenbrooks, protests the valuation and assessment of duty of merchandise covered by a single entry and described on the commercial invoice as cinchos plasticos (plastic ties), sellos de plasticos (plastic seals), pernos (bolt seals), and sellos de metal (metal seals). The protestant indicates that the commercial invoice identifies all four items as security and tamper evident seals. The protestant claims that the merchandise was incorrectly valued because the value on the commercial invoice for the merchandise incorrectly and inadvertently included the costs of materials twice in the calculation of the merchandise’s value. In support of the protestant’s claim that a mistake occurred in calculating value of the merchandise stated on the commercial invoice, protestant submitted a signed declaration by a legal representative for the Mexican manufacturer. The declaration states that the invoice covering the entry at issue: . . . incorrectly included a Material Value column as well as an Added Value column. The Added Value amount includes the value of materials used in the manufacture of each item. The calculation of the Total included cost of materials twice; the amount in the Material Value column plus the Value Added Column. The declaration also identifies the software program used by the Mexican manufacturer and attached to the declaration was a print screen from the software program for each part number imported. As explained in the declaration, the print screen copy provided “accurately reflects [the manufacturer’s] business records for each job, including the material unit cost, labor unit cost, burden unit cost (rent, utilities, maintenance expenses, etc.), etc.” The declaration further states that “[t]he incorrect Total, which includes the cost of materials twice, was inadvertently reported to CBP on the Entry Summary as the Entered Value for all merchandise listed on [the] invoice. . . .” In addition to the declaration and accompanying printout, a corrected invoice was submitted with a copy of the original invoice. The Base Metal Center of Excellence and Expertise (CEE) indicates that their review of the submitted information finds it to be insufficient and incomplete. In addition, it was noted that no payment records were submitted and the accounting records that were submitted were not comprehensible. A request for proof of payment for the goods was made by this office. The protestant sought further review citing 19 CFR § 174.24(c) stating that this claim involves a question of fact that was the subject of a Post Summary Correction (PSC) denied for lack of sufficient supporting evidence. Protestant submits that additional documentation submitted with this protest and AFR was not considered at the time of the denial of the PSC. ISSUE: Whether the information submitted to support the claim that an error occurred in the entered value of the merchandise is sufficient to allow the protest. LAW AND ANALYSIS: We note the protest was timely filed within 180 days of liquidation, pursuant to 19 U.S.C. § 1514(c)(3). In addition, further review was properly accorded pursuant to 19 CFR 174.24(c) as the protestant has provided additional facts not previously considered. The screen print information which was submitted was discussed via teleconference with this office. However, a supplemental submission which was to follow the conference call was never received. Nor did this office ever receive evidence of payment from the importer to the manufacturer for the imported goods although the request was made nearly 6 months ago. Such evidence could serve to substantiate the claim of an error in overvaluing the goods upon entry due to counting materials costs in the value of the goods twice. Without the requested evidence of payment, this office will not disturb the decision of the CEE to deny this protest. HOLDING: Protest No. 2304-19-100898 should be denied. In accordance with Sections IV and VI of the CBP Protest/Petition Processing Handbook (HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the CBP Form 19, to the Protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision. Sixty days from the date of the decision, the Office of Trade, Regulations and Rulings will make the decision available to CBP personnel, and to the public on the Customs Rulings Online Search System (CROSS) at https://rulings.cbp.gov/ which can be found on the U.S. Customs and Border Protection website at http://www.cbp.gov and other methods of public distribution. Sincerely, For Craig T. Clark, Director Commercial and Trade Facilitation Division