Upon importation, an importer inspected its merchandise, women’s shirts, and noted that the shirts were made of 98% cotton instead of 100% cotton, and that the sizing ran small and did not match what was listed on the sewn-in label. The merchandise was entered under 6206.30.30, HTSUS and duty paid. The importer’s buyer in the United States rejected the merchandise because it was not what the buyer ordered. The importer ultimately sold the merchandise to a discounted clothing store at 10% of what the original buyer agreed to pay. The importer requested a full refund of duties paid on the merchandise claiming it was defective. Which of the following is the best description of what the importer is entitled to in this situation?
A. The importer is not entitled to any refund of duties under the law.
B. The importer is entitled to a full refund of duties as the merchandise is not what the importer paid for.
C. The importer is entitled to a full refund of duties because the merchandise is essentially worthless.
D. The importer is entitled to a partial refund of duties. The merchandise should be appraised in its condition as imported, with an allowance made in the value to the extent of the damage.
E. The importer is not entitled to a refund of duties because no allowance or reduction of duties may be made for ad valorem duties paid.
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The Answer is: D
Citation: 19CFR158.12
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