CLA-2 RR:CR:GC 961890K
Port Director
U.S. Customs Service
700 Doug Davis Drive
Atlanta, Georgia 30354
RE: Protest 1704-98-100033; Tobaccos; Actual Use in the United
States
Dear Port Director:
The following is our decision regarding Protest 1704-98-100033, concerning your action in classifying and appraising duty
on tobaccos under the Harmonized Tariff Schedule of the United
States (HTSUS).
FACTS:
The consumption entry covering the imported merchandise is
reported to have been liquidated on December 29, 1997, and a
timely protest under 19 U.S.C. 1514 was received on March 27,
1998. Two line items in the consumption entry covered certain
tobaccos that were liquidated under provisions of the HTSUS, for
tobaccos to be used in the manufacture of cigarettes and subject
to tariff rate quotas. The protestant requested reliquidation of
the entry covering the two line items under provisions in the
HTSUS, for tobaccos to be used in products other than cigarettes,
not subject to tariff rate quotas. The protestant asserts that
the tobaccos from Greece were shipped from England to the United
States, for blending, casing, and flavoring processes and then
return to England for testing and in the manufacture of
cigarettes.
.
ISSUE:
The issue is whether the intended use of merchandise under
an actual use provision of the HTSUS, is governed by the intended
use in a foreign country as well as in the United States.
LAW AND ANALYSIS:
Unmanufactured flue-cured tobacco, threshed or similarly
processed, to be used in products other than cigarettes, is
classified in subheading 2401.20.83, HTSUS (1997), with a general
rate of duty of 39.7 cents per kg. Such tobacco to be used in
the manufacture of cigarettes, is classified in subheading
2401.20.85, HTSUS (1997), with a general rate of duty at 40.8
cents per kg, if within the quantitative limitation as described
in additional U.S. note 5 to Chapter 24, and, if the quantitative
limitation has been reached, the tobacco is classified in
subheading 2401.20.87, HTSUS, with a general rate of 350 percent
ad valorem.
Tobacco refuse, from flue-cured stems, not cut, not ground
and not pulverized, to be used in products other than cigarettes,
is classified in subheading 2401.30.23, HTSUS (1997), with a
general free rate of duty. Such tobacco to be used in the
manufacture of cigarettes, is classified in subheading
2401.30.33, HTSUS (1997), if within the quantitative limitation
as described in additional U.S. note 5 to Chapter 24, HTSUS
(1997), with a general free rate of duty, and if the quantitative
limitation has been reached, the tobacco is classified in
subheading 2401.30.70, HTSUS (1997), with a general rate of 350
percent ad valorem.
These provisions of the tariff are actual use provisions.
See Customs Headquarters Ruling 959492, dated August 13, 1996.
Additional U.S. Rule of Interpretation, 1(b), HTSUS, defines the
term "actual use" as follows;
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. (Emphasis added.)
The protestant is correct in the claim that it is the
intended use of the imported goods in the United States and not
the intended use of the goods in a foreign country that is
required for an actual use provision of the tariff. The imported
tobaccos were entered by the importer under the applicable
provisions for tobaccos to be used in products other than
cigarettes and thereby satisfied the intent requirement under the
applicable Customs Regulations, sections 10.131-139, for actual
use provisions. However, the port did not accept the claim
because the tobaccos would be used ultimately, albeit, in a
foreign country, in the production of cigarettes, and liquidated
the entry of the tobaccos in provisions subject to the tariff
quota rates.
The protestant has not filed with the port the appropriate
proof of use certificates within three years after the entry of
the tobaccos. The protestant requests reliquidation of the entry
under non tariff quota rate provisions and the opportunity to
timely submit certificates of actual use within the three year
time limitation after the date the goods were entered as required
by law and regulations.
HOLDING:
An actual use provision of the HTSUS, is controlled by the
intended use of the goods at the time of importation and the
actual use the imported goods are put in the United States and
not the intended and actual use of the goods in a foreign
country.
The protestant filed a timely protest. Therefore, you are
instructed to withhold action on the protest pending the receipt
of satisfactory certificates of actual use of the goods in the
United States timely filed within the three year time limitation.
If the satisfactory certificates are timely filed, you are
further instructed to allow the protest and reliquidate the entry
of the tobaccos under the provisions not subject to tariff rate
quotas, and, if timely certificates are not filed, you are
instructed to deny the protest.
Comment 1. An actual use provision concerns the actual use
to which the imported goods are put in the United States, and
does not require the exportation of the processed product.
However, you may want to consider, if necessary, proof of
exportation with the filing of the certificates of actual use
that the imported tobaccos processed in the United States for the
manufacture of cigarettes in a foreign country were, in fact,
exported.
Comment 2. Due to the unusual circumstances in this case,
Section 3A(11)(b) of Customs Directive 099 3550-065, Revised
Protest Directive, dated August 4, 1993, is not applicable, in
part, and a copy of this decision should be immediately provided
to the protestant to allow for the opportunity to submit timely
certificates of actual use. However, we will take steps within
60 days to make this conditional decision available to Customs
personnel via the Customs Rulings Module in ACS and the public
via the Diskette Subscription Service, Freedom of Information Act
and other public access channels.
Sincerely,
John Durant, Director
Commercial Rulings Division
Office of Regulations and Rulings