CON-9-04/09-CO:C:R:E 221835 JR
TARIFF NOS.: 9813.00.30; 9813.00.05
District Director of Customs
P.O. Box 9516
El Paso, Texas 79985
RE: Temporary importation under bond for processing and testing
pecans
Dear Sir:
This is in response to your memorandum (FILE: CON 9-EP:C
JJF) dated October 11, 1989, requesting our advice on the proper
classification for a pecan processing and testing operation.
FACTS:
A nut company takes the following steps in testing every
shipment of pecans that they receive.
1. Upon receipt, a random sample is taken from as many bags as
possible, but at least from every fourth bag. A hole is made
into the bag and a number of the unshelled pecans are extracted.
2. A two to four pound sample is taken from a shipment, marked
and taken to the laboratory area for testing.
3. A composite sample of 300 grams is divided out. The
unshelled pecans are then cracked, and the meats are extracted,
weighed, and graded. (This is a processing operation.) This
gives an initial indication of the percentage of nut meats to the
overall weight of the shipment.
4. The nut meats are then tested in a moisture tester (a
testing operation) to determine the percentage of moisture in
the meats. Too dry a nut will not crack well and will give
broken or shredded meats. Too much moisture means they will
just be paying extra for the water involved. This is important
when one considers that the nut company will be buying millions
of pounds of pecans. The moisture content is also important,
because too much moisture means the nuts could develop mold
during storage, and be a total loss.
5. The remaining sample of nuts is then visually inspected for
pecans that are off-size, mis-shaped, damaged or infested. A
count of these off-grade nuts is taken.
6. A separate visual inspection is made for possible signs of
mold or disease.
It appears that the nut company performs the above-mentioned
steps to determine the price it will offer to the grower for that
lot of pecans. The grower will often be present during the
testing of his pecans. The grower is then free to accept or
reject the offer for his pecans and take his shipment back if he
disagrees with the price. The nut company is free to reject the
shipment of pecans if it does not meet their specifications.
ISSUE:
Whether the processing and testing of the pecans are
eligible for entry under multiple provisions of the Harmonized
Tariff Schedule of the United States (HTSUS), namely subheadings
9813.00.30 and 9813.00.05, HTSUS (formerly items 864.30 and
864.05, TSUS).
LAW AND ANALYSIS:
Under subheading 9813.00.30, HTSUS, articles intended solely
for testing, experimental, or review purposes may be entered
duty-free, temporarily, under bond for their exportation within
one year from the date of importation unless an extension for
one or more additional periods, which when added to the initial
period does not exceed three years, is granted by the district
director. Likewise, articles to be repaired, altered or
processed (including processes which result in articles
manufactured or produced in the United States) may be entered
under subheading 9813.00.05, HTSUS.
From the detailed steps of the operation given, all
indications are that both a process and a test takes place.
Although the customs field office and nut company do not state
what the nut company will do with the nuts after acceptance of
the shipment, we assume that these pecans will be shelled and
exported within the bond period. We also assume that if the nut
company rejects the shipment of pecans, it will export, or
destroy as an article of commerce, the waste produced as a result
of the testing of the shipment in order to comply with subheading
9813.00.30, HTSUS. However, if the nut company accepts the pecan
shipment, the nominal waste incurred as a result of testing may
be treated in the same manner as the waste generated under the
processing provision of subheading 9813.00.05, HTSUS. Under
subheading 9813.00.05, HTSUS, duty can be tendered for the waste
(extracted pecan shells) resulting from the processing of the
pecans.
When an article is entitled to entry under multiple
provisions due to the uses that the article will be put to while
in the United States, there is no objection to entry under more
than one TIB provision on a single entry. See C.S.D. 83-45. The
total quantity of articles may, therefore, be entered duty-free
under the temporary importation provision in subheading
9813.00.30, HTSUS and in subheading 9813.00.05, HTSUS.
HOLDING:
Entry is permitted in this case under multiple provisions of
the Harmonized Tariff Schedule since the pecans involved here
will be processed under both subheading 9813.00.05, HTSUS, and
tested under subheading 9813.00.30, HTSUS.
Sincerely,
John Durant, Director
Commercial Rulings Division