CON-9-04-CO:R:C:E 223303 CB
Mr. Billy J. Gwin
Geo. S. Bush & Co., Inc.
1400 Exchange Building
821 Second Avenue
Seattle, WA 98104
RE: Request for binding ruling concerning a TIB entry of
raw hops
Dear Mr. Gwin:
This is in reply to your letter of June 19, 1991, wherein
you requested a binding ruling on a prospective shipment of raw
hops which are processed into hop pellets or hop extract.
FACTS:
According to your letter, the raw hops are made into pellets
or extract and there is four percent waste with the processing of
the raw pellets. Two percent is a weight loss from the packaging
material and there is no weight record kept of this loss. The
additional two percent loss is part evaporation of water and
waste consisting of stones, metals, and other impurities. This
waste is dumped automatically during processing into a dumpster,
which is then discarded by a disposal service. Your request
states that the loss in evaporation is impossible to measure.
The pellets leave the pelletizing press at a temperature of 120-
130 F and thereafter are cooled with refrigerated air, or in the
winter time, with cold outside air. The only way to prove this
loss is to see the steam fumes leaving the exhaust shaft during
cold winter days.
The importer proposes to enter the merchandise under a TIB
entry. You have posed specific questions which you would like
us to address.
ISSUE:
1) How will the Customs Service treat the loss during
manufacture?
2) Will the importer have to pay double duty on the waste
since duty is based on weight?
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3) Will Customs accept the importer's weight loss of four
percent?
4) If the loss has no value and is not recoverable does the
importer have to pay the penalty of double duty?
LAW AND ANALYSIS:
In order to qualify for a temporary importation under bond
(TIB) entry, an importer must meet all of the accountability
requirements under subchapter XIII, chapter 98, U.S. note 2(b),
HTSUSA, which provides that if any processing of merchandise
entered under a TIB results in an article (other than an article
described in (a) of this note) manufactured or produced in the
United States: (i) a complete accounting will be made to the
Customs Service for all articles; and (ii) all articles and
valuable wastes resulting from such processing will be exported
or destroyed under Customs supervision within the bonded period;
except that in lieu of the exportation or destruction of valuable
wastes, duties may be tendered on such wastes at rates of duties
in effect for such wastes at the time of importation.
Regarding question #1, your client states that no weight
record is kept of the loss during manufacture. The waste is
dumped into a dumpster, which is then discarded by a disposal
service. As we previously informed you, the Customs Service does
require that the manufacturer submit evidence regarding the
treatment of waste. Any evidence, satisfactory to the district
director, that is sufficient to identify the valuable waste and
show its description and quantity is adequate. Such evidence
might be a statement of the importer, or other person having
knowledge of the facts, setting forth the circumstances of the
production of the valuable waste.
Concerning question #2, the importer states that the waste
consists of stones, metals, and other impurities, as well as
evaporation of water during pelletizing. The importer will not
have to pay duty on the waste if the district director is
satisfied that the waste has been adequately identified and
measured. On question #3, the importer states that the loss in
evaporation is impossible to measure. The district director must
be satisfied of the claim of no value or irrecoverability.
Headquarters can not make such a determination.
Regarding question #4, if the district director is satisfied
that the "waste" is not an article and has no value or is
irrecoverable, then the importer does not have to pay duty on the
waste.
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HOLDING:
Entry can be permitted in this case under a temporary
importation under bond as a process under subheading 9813.00.05,
HTSUS. However, in order to gain the benefit of duty-free
treatment, the importer must meet all of the accountability
requirements under the U.S. Notes of Subchapter XIII to the
satisfaction of the District Director.
Sincerely,
William G. Rosoff
Chief, Entry Rulings Branch