CLA-2 RR:TC:FC 959492K
Peter Buck Feller, Esq.
Mc Kenna & Cuneo
1900 K. Street, N.W.
Washington, D.C. 20006
RE: Tobaccos and Tariff Rate Quota
Dear Mr. Feller:
This is in response to your request of July 19, 1996, on
behalf of the Pipe Tobacco Council, for a ruling concerning the
Tariff Rate Quota (TRQ) for tobaccos.
FACTS:
Leaf tobaccos from India will be imported to be used to
manufacture cigarette tobaccos which will be packaged in pouches
or cans for retail sale to permit the consumer to hand-roll
cigarettes. The manufactured cigarette tobaccos may be in a kit
which includes a roll or sheaf of cigarette paper. It is your
position that the tobaccos as briefly described are not subject
to TRQ. A meeting was requested and one was held at Customs
Headquarters on July 30, 1996.
ISSUE:
The issue is whether the tobaccos described above are
subject to the TRQ as outlined in Additional U.S. Note 5, Chapter
24, Harmonized Tariff Schedule of the United States (HTSUS).
LAW AND ANALYSIS:
Presidential Proclamation 6821, dated September 12, 1995,
effective September 13, 1995, established a TRQ for certain
tobaccos under actual use provisions. The Proclamation is
incorporated by reference as part of this decision. For purposes
of this decision, we will discuss subheadings 2401.10.61,
2401.10.63, and 2401.10.65, HTSUS. However, our response is
equally applicable for other subheadings in Chapter 24 covered by
the TRQ. The subheadings cover other unmanufactured flue-cured,
burley and other light air-cured leaf tobaccos as follows:
Subheading 2401.10.61, to be used in products other than
cigarettes (and excluded from the TRQ), dutiable at the
general rate of 26.7›/kg
Subheading 2401.10.63, other (to be used in cigarettes and
covered by TRQ) as described in Additional U.S.Note 5 to
Chapter 24 and entered pursuant to its provisions, dutiable
at the general rate of 26.7›/kg
Subheading 2401.10.65, other ( to be used in cigarettes but
quantities exceed the TRQ), dutiable at the general rate of
350% ad valorem
Additional U.S. Rule of Interpretation 1.(b), HTSUS,
provides that "a tariff classification controlled by the actual
use to which the imported goods are put in the United States is
satisfied only if such use is intended at the time of
importation, the goods are so used and proof thereof is furnished
within 3 years after the date the goods are entered". The
declaration of the intended use at the time of importation and
the certification of the actual use of the goods within 3 years
after the date of entry, are the responsibilities of the
importer. See sections 10.131-10.139, of the Customs
Regulations.
It is argued that the ultimate consumer uses the cigarette
tobaccos to make cigarettes, not the importer or the domestic
manufacturer and therefor, the cigarette tobaccos and/or kits are
not cigarette products. If we were to agree with this argument,
we would have to conclude that the manufactured cigarette
tobaccos are not used in cigarettes. It is conceded that the
imported tobaccos will be processed into manufactured cigarette
tobaccos and are dedicated for use and are used in cigarettes.
The manufacturer has done all that is necessary for the consumer
to finish the production of the cigarettes. It is similar to a
producer who uses oranges to make concentrated orange juice and
may then use it to make reconstituted orange juice for retail
sale, or the producer may sell the concentrated orange juice in
retail containers with instructions for the consumer to add
prescribed amounts of water to finished the production of
reconstituted single strength orange juice. We cannot say that
oranges were not used to make the reconstituted orange juice. In
the case before us, we cannot conclude that the imported tobaccos
were not used in cigarettes.
We believe that the tariff is clear that tobaccos to be used
in cigarettes are excluded from coverage in subheading
2401.10.61, HTSUS, and therefore are subject to Additional U.S.
Note 5. There is nothing in Additional U.S. Note 5 or the
Proclamation to indicate an intent to exclude cigarette kits from
the TRQ.
HOLDING:
Imported flue-cured, burley and other light air-cured leaf
tobaccos imported with the intent to manufacture cigarette
tobaccos for retail sale to be used by the consumer to hand-roll
cigarettes, are classified in subheading 2401.10.63, HTSUS,
subject to quota pursuant to Additional U.S. Note 5, Chapter 24,
and dutiable at the general rate of 26.7 cents per kg.
If the quota is filled, the tobaccos are classified in
subheading 2401.10.65, HTSUS, dutiable at 350 percent ad valorem.
If the quota is filled at the time of importation, the
tobaccos may be entered for warehouse (or a foreign trade zone)
and held for withdrawal for consumption at the opening of the
next quota period in accordance with section 132.5, of the
Customs Regulations.
Sincerely,
John Durant, Director
Tariff Classification
Appeals Division