- Type : • HTSUS :
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Related:
562175
OT:RR:CTF:VS H235546 KSG
Joseph M. Spraragen, Esq.
Grunfeld Desiderio Lebowitz Silverman Klestadt LLP
399 Park Avenue 25th Floor
New York, NY 10022-4877
Re: Saw palmetto oil
Dear Mr. Spraragen:
This is in response to your letter, dated October 3, 2012, to the New York office requesting a binding ruling as to the eligibility of imported saw palmetto oil for a partial duty exemption under subheading 9802.00.50, of the Harmonized Tariff Schedule of the United States (“HTSUS”). Your letter was forwarded to our office for a response.
FACTS:
Whole saw palmetto berries are grown, harvested, dried, and cleaned in Florida. In North Carolina, the berries are milled to create saw palmetto powder, which is packed into sacks of 500 kg. The sacks of saw palmetto powder are shipped to Germany where supercritcical CO2 extraction process is applied which separates the oil content from the saw palmetto powder. The oil is filtered, packed in drums and shipped to the U.S. for importation.
Saw palmetto oil and powder are both sold commercially as dietary supplement products to promote prostate health. The powder is used to produce tablets, powders or hard shell capsules while the oil is used to produce a gel capsule.
ISSUE:
Whether the imported saw palmetto oil is eligible for a partial duty exemption under subheading 9802.00.50, HTSUS?
LAW AND ANALYSIS:
Subheading 9802.00.50, HTSUS, provides a partial duty exemption for articles returned to the U.S. after having been exported to be advanced in value or improved in condition by means of a repair or alteration. Duty is assessed only on the cost or value of the repair or alteration abroad, provided that the documentary requirements of 19 CFR §10.8 are met. Classification under subheading 9802.00.50, HTSUS, is precluded where: (1) the exported articles are not complete for their intended use and the foreign processing operation is a necessary step in the preparation or manufacture of finished articles; or (2) the operations performed abroad destroy the identity of the exported articles or create new or commercially different articles through a process of manufacture.
You cited to Headquarters Ruling Letter (“HRL”) HQ 562175, dated October 29, 2001, in which CBP ruled that U.S.-origin chondroitin sulfate in liquid form processed in Spain into powder form was eligible for a partial duty exemption under subheading 9802.00.50, HTSUS. The U.S.-origin liquid was diluted, filtered, purified, dried, sieved and milled into powder. Both the powdered and liquid forms are sold to the health food supplement industry.
We concur that the imported saw palmetto oil, processed as described above, from U.S.-origin saw palmetto powder undergoes an alteration abroad and is eligible for the partial duty exemption under subheading 9802.00.50, HTSUS. The CBP Office of Laboratories and Scientific Services stated that the supercritical extraction process used is not a chemical reaction but a mechanical extraction process which does not change the chemical structures of the extracted components. Both the powder and oil are used in the health food industry for the same purposes. Based on the facts presented above, we conclude that there is no change in name, use or character as a result of the foreign processing. The exported powder is not incomplete for its intended use, and no new and commercially different article is created as a result of the foreign processing. Assuming the documentary requirements of 19 CFR §10.8 are satisfied, the imported saw palmetto oil is eligible for classification in subheading 9802.00.50, HTSUS.
HOLDING:
Assuming the documentary requirements of 19 CFR §10.8 are satisfied, the imported saw palmetto oil, processed as described above, is eligible for classification in subheading 9802.00.50, HTSUS.
A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been field without a copy, this ruling should be brought to the attention of the CBP officer handling the transaction.
Sincerely,
Monika R. Brenner, Chief
Valuation & Special Programs Branch