CLA-2 CO:R:C:V 555148 KAC
Mr. Donald J. Kennedy
Norman G. Jensen, Inc.
P.O. Box 146
Sweetgrass, Montana 59484
RE: Applicability of duty exemption under HTSUS subheading
9801.00.10 to imported soybean and corn oils
Dear Mr. Kennedy:
This is in response to your letter dated July 29, 1988, on
behalf of Prairie Margarine, to the Regional Commissioner of
Customs, New York, in which you request a ruling concerning the
applicability of item 800.00, Tariff Schedules of the United
States (TSUS) (now known as subheading 9801.00.10, Harmonized
Tariff Schedule of the United States (HTSUS)), to soybean and
corn oils to be imported into the U.S. Your letter has been
referred to this office for review and the preparation of a
ruling. We regret the delay in responding to your request.
FACTS:
Prairie Margarine will ship U.S. origin soybean and corn oil
separately by rail car or tank truck to Canada. In Canada the
oils will be transferred from the rail car or tank truck and
packaged into consumer size bottles and then labelled. The oils
will not undergo any further processing, such as blending or
mixing, in Canada, except for the above described packaging
operations. The oils will then be returned to the U.S. in cases
of bottled 100% soybean oil and 100% corn oil.
ISSUE:
Whether the soybean and corn oils to be exported will
qualify for the duty exemption available under HTSUS subheading
9801.00.10 when returned to the U.S.
LAW AND ANALYSIS:
As you know, the HTSUS replaced the TSUS on January 1,
1989. Item 800.00, TSUS, was carried over without change into
the HTSUS as subheading 9801.00.10.
HTSUS subheading 9801.00.10 provides for the free entry of
U.S. products that are exported and returned without having been
advanced in value or improved in condition by any means while
abroad, provided the documentary requirements of section 10.1,
Customs Regulations (19 CFR 10.1), are met. While some change
in the condition of the product while it is abroad is
permissible, operations which either advance the value or improve
the condition of the exported product render it ineligible for
duty free entry upon return to the U.S. See, Border Brokerage
Company Inc. v. United States, 65 Cust.Ct. 50, C.D. 4052, 314
F.Supp. 788 (1970), appeal dismissed, 58 CCPA 165 (1970).
We have previously held in Headquarters Ruling Letter
555072 dated October 17, 1988, that U.S. origin rapeseed and
soybean oils exported in tank trucks to Canada for repackaging
into five-gallon containers for institutional use have not been
advanced in value or improved in condition. Therefore, we
determined that the rapeseed and soybean oils were entitled to
the duty exemption available under item 800.00, TSUS.
In the present case, soybean and corn oils will be exported
in a finished condition to Canada to be packaged in consumer size
bottles, and will not be subjected to any other operations prior
to their return. The oils will not be advanced in value or
improved in condition while abroad. Accordingly, the oils will
qualify for treatment under HTSUS subheading 9801.00.10.
HOLDING:
On the basis of the information submitted, and in
accordance with our previous administrative ruling, we are of the
opinion that the packaging performed abroad does not advance in
value or improve in condition the soybean and corn oils.
Therefore, the oils will qualify for the duty exemption under
HTSUS subheading 9801.00.10, upon compliance with the
documentation requirements of 19 CFR 10.1.
Sincerely,
John Durant, Director
Commercial Rulings Division
CC: Ass't Area Dir, NIS
831503