Protest 2904-95-100047; transaction value; 19 U.S.C. §1401a(b)(l); consignment; sale; J.L Wood; J.H. Cottman & Co

HQ W546017 August 11, 1995 VAL R:C:V W546017 KCC CATEGORY: Valuation District Director U.S. Customs Service 511 N.W. Broadway Room 0198 Portland, Oregon 97209 RE: Protest 2904-95-100047; transaction value; 19 U.S.C. §1401a(b)(l); consignment; sale; J.L Wood; J.H. Cottman & Co Dear District Director: This is in regards to Protest 2904-95-100047 dated February 21, 1995, concerning the appraisement of merchandise imported by Living & Learning Company. FACTS: The imported merchandise was appraised on the basis of transaction value of identical merchandise. In a protest timely filed on February 21, 1995, the protestant contends that the appraisement of the imported merchandise is based on transaction value using the invoiced prices less freight and insurance. The protestant states that as of April 1, 1994, all merchandise is sold by Living & Learning (Cambridge) Ltd. to Living & Learning Co. (USA) on a CIF basis. However, in a letter to Customs, Portland., Oregon, dated July 7, 1994, protestant's broker states that Living & Learning (Cambridge) Ltd. ships the merchandise to Living & Learning Co. (USA). Living & Learning Co. (USA) hires Taevs Marketing to arrange warehousing and sale of the merchandise. After the merchandise is sold in the U.S., the proceeds are credited to Living & Learning Co. (USA). Living & Learning Co. (USA) pays Taevs Marketing a commission and also pays Living and Learning (Cambridge) Ltd. for the merchandise. ISSUE: Whether the imported merchandise was appropriately appraised? LAW AND ANALYSIS: Merchandise imported into the United States is appraised in accordance with §402 of the Tariff Act of 1930, as amended by the Trade Agreements Act of 1979 (TAA; 19 U.S.C. §1401a). The preferred method of appraisement is transaction value, which is defined as the "price actually paid or payable for merchandise when sold for exportation to the United States," plus certain statutorily enumerated additions. 19 U.S.C. §1401a(b)(l). Therefore, for transaction value to be the proper method of appraisement, the merchandise must be sold for exportation to the United States. For Customs purposes, the word "sale" is generally defined as a transfer of ownership in property from one party to another for a price or other consideration. J.L Wood v United States, 62 CCPA25, C.A.D. I 139 (1974); J.H. Cottman & Co. v. United States, 20 CCPA 344, T.D. 46114 (1932). Based on the information contained in the July 7, 1994, letter to Customs in Portland, Oregon, the merchandise is imported into the U.S. by Living & Learning Co. (USA). After importation, Taevs Marketing warehouses and sells the merchandise for Living & Learning Co. (USA). After the merchandise is sold, Taevs Marketing credits the sales proceeds to Living & Learning Co. (USA). Thereafter, Living & Learning Co. (USA) pays Living & Learning (Cambridge) Ltd. for the merchandise and pays an agreed percentage as a commission to Taevs Marketing. In the instant case, the merchandise provided by Living & Learning (Cambridge) Ltd. is considered consigned to Living & Learning Co. (USA). The merchandise is imported into the United States and then, after it is sold by Taevs Marketing, Living & Learning (Cambridge) Ltd. receives payment for the goods. The merchandise is not sold for exportation to the United States. Consequently, transaction value is inapplicable as a means of appraisement for the merchandise concerned. Protestant contends that the appraisement of the imported merchandise is based on transaction value using the invoiced prices less freight and insurance. However, they have not submitted any evidence substantiating transaction value. In the absence of such evidence we must agree with the action taken. The method of appraisement for the imported merchandise is transaction value of identical merchandise. HOLDING: Based on the information available, the method of appraisement for the imported merchandise is transaction value of identical merchandise. This protest should be DENIED. In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065 dated August 4, 1993, Subject: Revised Protest Directive, this decision, together with the Customs Form 19, 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 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 Commercial Rulings Division