November 10 & 17 CBP Bulletin Notices on Tennis Balls and Valuation of Repaired Watches and Recycled Lacquer Thinner
In the November 10 and 17, 2004 issues of the U.S. Customs and Border Protection Bulletin (CBP Bulletin) (Vol. 38, No. 46 and 47), CBP issued notices: (a) proposing to revoke a classification ruling on tennis balls, (b) modifying a valuation ruling on defective watches sent abroad for repair and then returned to the U.S., and (c) modifying a valuation ruling on used lacquer thinner recycled abroad and then returned to the U.S. CBP states that it is also revoking, or proposing to revoke, any treatment it has previously accorded to substantially identical transactions that are contrary to its position in these notices.
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According to CBP, the modification and revocation are effective for merchandise entered or withdrawn from warehouse for consumption on or after January 9, 2005.
CBP states that any party who has received a contrary ruling or decision on the merchandise that is subject to the proposed ruling, or any party involved with a substantially identical transaction, should advise CBP by December 17, 2004, the date that written comments on the proposed ruling are due. Furthermore, CBP states that an importer's failure to advise CBP of such rulings, decisions, or substantially identical transactions may raise issues of reasonable care on the part of the importer or its agent for importations subsequent to the effective date of the final decision in this notice.
CBP also states that these notices cover any rulings on the subject merchandise that may exist but have not been specifically identified.
Proposed Revocation of Classification Ruling
Tennis Balls. At issue are three multicolored pet toy tennis balls that are decorated with paw prints and made of natural rubber.
CBP is proposing to issue HQ 967293 in order to revoke J82455 and reclassify the balls in HTS 9506.61.0000 as "lawn-tennis balls" rather than in HTS 4016.99.2000 as "toys for pets of vulcanized rubber other than hard rubber."
CBP states, among other things, that regardless of the fact that the balls may ultimately be used as pet toys, examination of the available information leads CBP to conclude that, upon importation, they are of the class or kind of ball that is considered a tennis ball. According to CBP, the balls' ultimate use by pets is not determinative for purposes of classification.
In addition, CBP states the subject balls are seemingly identical to the Fetch ToteTM which was classified in HTS 9506.61.0000 as a tennis ball in NY J89264.
proposed: 9506.61.0000, duty-free; current: 4016.99.2000, 4.3%.
Modification of Two Valuation Rulings
Defective watches sent abroad for repair and then returned to the U.S.; used lacquer thinner recycled abroad and then returned to the U.S. At issue in HQ 548557 are defective watches, both in and out of warranty, which are returned to the importer for repair and then exported to the importer's related party abroad for repair and return. The watches are repaired and then sold back to the importer at prices which cover the cost of repairs plus a mark-up.
At issue in HQ 548569 is used lacquer thinner that is acquired from various auto body paint shops where it has been utilized to clean paint from articles. The thinner is recycled abroad (i.e., the impurities are removed to result in a purified solvent) for a fee and then returned to the U.S.
CBP is issuing HQ 548557 and HQ 548569 in order to modify HQ 544241 and HQ 543859, respectively.
CBP states that it has reassessed its analysis in HQ 544241 and HQ 543859, and now believes that the characterization of the defective watches and the used lacquer thinner as assists, as defined in 19 USC 1401a(h)(1)(A), for valuation purposes was in error. Therefore, CBP is issuing HQ 548557 and HQ 548569 in order to state that the watches and thinner are not assists for valuation purposes.
Regarding the defective watches, CBP is concurrently overturning the determination that the value attributed to the defective watches in their capacity as assists is equal to the costs incurred for transporting them to the related party's plant.
Regarding the used lacquer thinner, CBP states that transaction value cannot be used as the basis for appraisement in all cases, but rather in certain cases, one of the alternative bases of appraisement may need to be used.
(See ITT's Online Archives or 08/25/04 news, 04082535, for BP summary of the proposed rulings. Subscribers should note that CBP had previously indicated that it was proposing to revoke HQ 543859.)
November 10 and 17, 2004 CBP Bulletins (Vol. 38, No. 46 and 47) available at http://www.cbp.gov/xp/cgov/toolbox/legal/bulletins_decisions/bulletins_2004/vol38-11102004_no46/ and http://www.cbp.gov/xp/cgov/toolbox/legal/bulletins_decisions/bulletins_2004/vol38_11172004_no47/