CLA-2 OT:RR:CTF:TCM H014019 CMR
Mr. Norman Sharp
President
Cigar Association of America
1707 H Street, N.W.
Suite 800
Washington, D.C. 20006
RE: Modification of Headquarters Ruling Letter (HQ) 083490 of May 25, 1989;
Classification of hand torn, broken or mangled cigar filler half leaves
Dear Mr. Sharp:
On May 25, 1989, the U.S. Customs Service, now known as U.S. Customs and Border Protection (CBP), issued Headquarters Ruling Letter (HQ) 083490 to McKenna, Conner & Cuneo, on your behalf, classifying cigar filler half leaves that had been hand torn, broken or mangled in subheading 2401.20.40 of the Harmonized Tariff Schedule of the United States (HTSUS). In 1989, subheading 2401.20.40, HTSUS, provided for "[u]nmanufactured tobacco . . .: [t]obacco, partly or wholly stemmed/stripped: [n]ot threshed or similarly processed: [o]ther: [n]ot containing wrapper tobacco, or not containing over 35 percent wrapper tobacco." The corresponding HTSUS provision in the 2007 tariff is subheading 2401.20.29, HTSUS, which is somewhat more specific in that it provides for "[u]nmanufactured tobacco . . .: [t]obacco, partly or wholly stemmed/stripped: [n]ot threshed or similarly processed: [o]ther: [n]ot containing wrapper tobacco, or not containing over 35 percent wrapper tobacco: [c]igar binder and filler."
As a consequence of a ruling request on the classification of machine-threshed and hand-threshed tobacco, CBP reviewed its rulings on tobacco and determined that the classification decision in HQ 083490 with regard to the hand torn, broken or mangled cigar filler half leaves is incorrect. The decision therein appears to have been based upon a belief at the time that "threshed" refers only to mechanical threshing. For the reasons set forth below, CBP believes that hand torn, broken or mangled cigar filler half leaves are classifiable in subheading 2401.20.60, HTSUS, which provides for "[u]nmanufactured tobacco . . .: [t]obacco, partly or wholly stemmed/stripped: [t]hreshed or similarly processed: [f]rom cigar leaf."
The classification in HQ 083490 of the cigar wrapper tobacco which was cut to shape by die cutting and classified as partly or wholly stemmed/stripped tobacco, not threshed or similarly processed, containing over 35 percent wrapper tobacco (not consisting of leaf tobacco of two or more countries or dependencies mixed or packed together) in subheading 2401.20.20, HTSUS, (currently 2401.20.14, HTSUS) is not affected by this ruling.
Pursuant to section 625(c), Tariff Act of 1930 (19 U.S. C. 1625(c)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. 103-182, 107 Stat. 2057, 2186 (1993), notice of the proposed modification of HQ 083490 was published in the Customs Bulletin, Volume 41, Number 36, on August 29, 2007. Two comments were received supporting CBP's proposed action during the notice and comment period that closed on September 28, 2007.
FACTS:
The tobacco at issue in HQ 083490 was stemmed cigar filler half leaves (i.e., half leaves from which the midribs have been removed) that had been hand torn, broken or mangled.
ISSUE:
Is partly or wholly stemmed/stripped tobacco which is hand torn, broken or mangled, i.e., hand "threshed", classifiable as "threshed or similarly processed"? In other words, is hand "threshed" tobacco classified the same as or differently than machine threshed tobacco?
LAW AND ANALYSIS:
Classification of goods under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) is governed by the General Rules of Interpretation (GRIs). GRI 1 provides that "classification shall be determined according to the terms of the headings and any relative section or chapter notes and, provided such headings or notes do not otherwise require, according to [the remaining GRIs taken in order]."
In understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System Explanatory Notes may be utilized. The Explanatory Notes (ENs), although not dispositive or legally binding, provide a commentary on the scope of each heading of the HTSUS, and are the official interpretation of the Harmonized System at the international level. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The HTSUS subheadings under consideration are as follows:
2401 Unmanufactured tobacco (whether or not threshed or similarly processed); tobacco refuse:
2401.20 Tobacco, partly or wholly stemmed/stripped:
Not threshed or similarly processed:
* * *
Other:
* * *
Not containing wrapper tobacco, or not containing
over 35 percent wrapper tobacco:
* * *
2401.20.29 Cigar binder and filler
Threshed or similarly processed:
2401.20.60 From cigar leaf
There is no dispute that the merchandise at issue is classifiable at the six-digit (international) level as "[u]nmanufactured tobacco (whether or not threshed or similarly processed); . . .: Tobacco, partly or wholly stemmed/stripped." The language at issue does not appear at the international level of the tariff and thus, the ENs are of no assistance in this case.
The phrase "threshed or similarly processed" is used but not defined in the tariff. Because neither the tariff nor the ENs define "threshing," we turn to other sources.1 According to the Tobacco Dictionary, ed. by Raymond Jahn, (Philosophical Library, NY, 1954), the terms "threshing" or "grinding" are defined as:
The process of mechanically stemming cigar filler leaves, especially grades of seconds of Puerto Rican tobacco. Also called Threshing. The resulting tobacco is used for short filler.
Tobacco: Production, Chemistry and Technology, ed. by D. Layten Davis and Mark T. Nielsen, (Blackwell Science, Oxford, England, 1999) provides the following information on the processing of tobacco:
The first process step performed on tobacco after being purchased to prepare for cigarette manufacturing is that of removing the stem. . . . Once these stems are removed from the leaf, the resulting leaf product is called strip. . . . In the 1910's and 1920's, the stem was removed from the lamina by hand. . . . R.W. Coffee invented the first stemming machine in operation which replaced hand stripping of tobacco in the 1930s and was the first step in the mechanization of the stemmery. In order to properly clean the stems and the scrap from the stemming machines, the introduction of additional machinery was required such as threshers, air legs, pneumatic separators and dust collectors. This auxiliary equipment must be recognized as the forerunner of our current threshing equipment. In the early 1940s, experiments were conducted using this equipment to thresh whole leaf. The results of these trials were so successful,
green leaf threshing lines were installed in drying plants throughout the leaf growing areas in the United States.
The language used in these reference works suggest that "stemming" and "stripping" and "threshing" are interchangeable words when used in reference to the processing of tobacco leaves. However, in the Tobacco Encyclopedia, Verlagsgruppe Rhein Main Gmbh & Co. KG (Malnz, Germany, 2000), we find the following definitions:
Stemming: The removal of the midribs from tobacco leaves, leaving the halves of the leaf more or less intact. Cigar wrappers are stemmed individually, often by hand, though machines may be used for the cheaper types. Filler tobaccos and tobaccos intended for cigarettes may be either mechanically stemmed or threshed. Leaves are often stemmed green (i.e. unfermented), as their higher moisture content reduces the amount of dust produced; alternatively, they may be moistened before processing.
Threshing: The removal of the midrib and side veins of tobacco leaves by mechanical means.
Thresher: Machine which removes the midrib of the tobacco leaf, leaving relatively small pieces of lamina and veins. It is used mainly in the preparation of cigarette tobaccos, as well as for short cigar filler, and consists of a moveable bar grate and adjustable comb rollers. The stems and leaf are then separated pneumatically.
[Bolding added.]
We note the above definitions reveal that stemming and threshing are different processes; the first removing only the midribs of tobacco leaves, the latter removing the midrib and side veins (though note the omission of the removal of side veins in the definition of thresher). Threshing results in relatively small pieces of lamina and veins and, according to this particular definition, is done by mechanical means. However, the excerpt from Tobacco: Production, Chemistry and Technology above clearly indicates that but for the stemming machinery and threshers, tobacco is processed by hand. Thus, provision for hand processed tobacco remains necessary.
Based on the above definitions, it appears that threshing includes stemming. This would comport with the tariff schedule placing stemming as a superior provision under which tobacco may be divided into not threshed and threshed.2 While tobacco may be stemmed and not threshed, if it is threshed, it is also stemmed. In HQ 084808, dated September 12, 1989, CBP recognized that stemmed tobacco includes threshed tobacco. In that ruling CBP stated:
In describing the stemming of leaf tobacco, the U.S. Agricultural Marketing Service states that the bulk of stemming is done by "tipping and threshing". This is a process which involves the leaf tobacco passing through a series of rotary knives and separators which not only remove much of the stem but ultimately reduce the leaf to small pieces. The definition of stemmed cigarette leaf includes the product of the threshing process, and the fact that it has been greatly reduced in size does not change its identity as stemmed leaf.
In this case, the stemming is a separate operation from the tearing, breaking or mangling of the tobacco. The result of tearing, breaking or mangling the tobacco leaf is smaller pieces of lamina and veins, which is the same result one gets with mechanical threshing.
In Treasury Decision (T.D.) 83-148, 48 Fed. Reg. 31954 (1983), Customs (now CBP) considered the classification of tobacco that had been machine-threshed, i.e. "produced by adding moisture to leaf tobacco, mechanically removing the stems, and breaking the remaining tobacco into pieces ranging from 1/2 inch to 2 inches in size." In T.D. 83-148, Customs stated, in relevant part:
. . . While the tobacco at issue is smaller than the tobacco leaf that Customs has traditionally classified as stemmed tobacco leaf, the reduction in size is the result of the modern threshing process used to separate the stem from the more desirable portion of the whole leaf. . . . The fact that technological progress is utilized and a machine is employed in the separation process should not require a change in tariff classification merely because the resultant pieces of leaf are smaller in size. The fragmented tobacco produced by the mechanical operation is no different in quality, physical characteristics, or use than the old fashioned stemmed leaf accomplished by hand separation. * * *
See also HQ 073512, dated February 3, 1984.
Thus, stemmed tobacco includes machine-threshed tobacco. Modern threshing machinery normally combines the processes of stemming (removing the midribs from the tobacco leaves) and threshing (breaking the leaf into small pieces of lamina). See Kuehne & Nagel, Inc. v. United States, 10 C.I.T. 814 (1986). We need not determine whether commercially the term "threshing" includes both machine and hand threshed. Rather, we need only to construe whether the two processes fall within the phrase "threshed or similarly processed." Given that the resulting product looks the same and is used for the same purposes, the tariff phrase "threshed or similarly processed" includes both hand- and machine-threshed tobacco.
In a related matter, New York ruling letter (NY) B89949, dated October 2, 1997, dealt with the classification of stemmed wrapper tobacco. The ruling describes the processing of the tobacco leaves, in relevant part, as follows:
The individual leaves are cut into small, uniform pieces, and packaged into sealed, plastic containers. The product will be used for rolling cigars and cigarettes.
"Wrapper tobacco" is defined in Additional U.S. Note 1 of Chapter 24 of the HTSUS, as follows:
The term "wrapper tobacco", as used in this chapter, means that quality of leaf tobacco which has the requisite color, texture and burn, and is of sufficient size for cigar wrappers, and the term "filler tobacco" means all other leaf tobacco.
This definition is identical to the definition of wrapper tobacco under the prior tariff, i.e. the Tariff Schedules of the United States (TSUS). See Headnote 1, Part 13, Schedule 1, TSUS (1989).
Although NY B89949 states the leaves are cut into small, uniform pieces, it does not specify the size of these pieces. However, the ruling does clearly state the purpose of these cut pieces was for rolling cigars and cigarettes. The tobacco pieces were classifiable as wrapper tobacco under subheading 2401.20, which provides for unmanufactured tobacco, partly or wholly stemmed, not threshed or similarly processed. The classification of the tobacco pieces in NY B89949 as wrapper tobacco meant that the cut pieces met the definition of wrapper tobacco in Additional U.S. Note 1, Chapter 24, HTSUS. Cutting tobacco leaf for use as wrapper tobacco is distinguishable from threshing in that wrapper tobacco must be of sufficient size for use as cigar wrappers and threshed tobacco is for use as filler tobacco and, as such, need not be of a uniform size or shape as the tobacco described in NY B89949 apparently was. Threshed tobacco is defined as being cut into relatively small pieces. See prior cited definitions on threshing.
HOLDING:
The torn, broken or mangled stemmed cigar filler half leaves which were the subject of HQ 083490 are properly classified in subheading 2401.20.60, HTSUS, which provides for "Unmanufactured tobacco (whether or not threshed or similarly processed); tobacco refuse: Tobacco, partly or wholly stemmed/stripped: Threshed or similarly
processed: From cigar leaf. The column one, general rate of duty for goods classifiable in subheading 2401.20.60, HTSUS, is Free.
EFFECT ON OTHER RULINGS:
HQ 083490, dated May 25, 1989, is hereby modified to reflect the classification of the stemmed cigar filler half leaves which were torn, broken or mangled in subheading 2401.20.60, HTSUS. In accordance with 19 U.S.C. ยง 1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin.
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 filed without a copy, this ruling should be brought to the attention of the CBP officer handling the transaction.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division
1 See Lyntec, Inc. v. United States, 976 F.2d 693, 697 (1992) for the proposition that tariff terms are to be construed in accordance with their common meaning in the absence of contrary legislative intent and that it is proper to consult lexicographic and scientific authorities, dictionaries and other reliable sources in ascertaining the common meaning of tariff terms.
2 See Deckers Corporation v. United States, 414 F. Supp. 2d 1252, 1257 (2005) citing to Reiter v. Sonotone Corp., 442 U.S. 330, 339, 99 S. Ct. 2326, 60 L. Ed. 2d 931 (1979) ("In construing a statute we are obliged to give effect, if possible, to every word Congress used").
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