CLA-2 CO:R:C:G 088409 RFC
Mr. C.R. Piercy, Jr.
Philip Morris Inc.
P.O. Box 26603
Richmond, VA 23261
RE: Modification of Headquarters Ruling Letter (HRL) 087135;
tobacco
Dear Mr. Piercy:
In HRL 087135, dated December 3, 1990, you were issued, on
behalf of Philip Morris Inc., a tariff classification ruling
under the Harmonized Tariff Schedule of the United States
Annotated (HTSUSA) for certain tobacco products. Upon review and
reconsideration, we have determined that the classification
analysis set forth in HRL 087135 is, in part, not appropriate.
Accordingly, by this letter, we are modifying HRL 087135 to
correct the inappropriateness of the classification analysis.
FACTS:
The tobacco products are identified and described as
follows:
1. fines (small, broken bits of tobacco)
2. dust (minute tobacco particles)
3. winnowers (filler clumps, veins and stems)
These tobacco products are generated (through an extraction
process) during both the primary processing operation phase
(stemmed tobacco--i.e., unmanufactured tobacco that has been
threshed or similarly processed--is conditioned, blended,
flavored, cut and dried) and the cigarette-manufacturing
operation phase (tobacco that has gone through a primary
processing operation is fed into cigarette-making machines) of
the cigarette-manufacturing process. The tobacco products are
then used in the manufacture of reconstituted or homogenized
tobacco.
ISSUE:
What is the proper classification under the HTSUSA of
small, broken bits of tobacco, minute tobacco particles, and
tobacco filler clumps, veins and stems generated during either
the primary processing operation phase or the cigarette-
manufacturing operation phase of the cigarette-manufacturing
process for use in the manufacture of reconstituted or
homogenized tobacco?
LAW AND ANALYSIS:
Merchandise imported into the United States is classified
under the Harmonized Tariff Schedule of the United States
Annotated (HTSUSA). The tariff classification of merchandise
under the HTSUSA is governed by the principles set forth in the
General Rules of Interpretation (GRIs) and, in the absence of
special language or context which otherwise requires, by the
Additional U.S. Rules of Interpretation. The GRIs and the
Additional U.S. Rules of Interpretation are part of the HTSUSA
and are to be considered statutory provisions of law for all
purposes. See Sections 1204(a) and 1204(c) of the Omnibus Trade
and Competitiveness Act of 1988 (19 U.S.C. 1204(a) and 1204(c)).
GRI 1 requires that classification be determined first
according to the terms of the headings of the tariff (i.e., (1)
merchandise is to be classified under the 4-digit heading that
most specifically describes the merchandise; (2) only 4-digit
headings are comparable; and (3) merchandise must first satisfy
the provisions of a 4-digit heading before consideration is
given to classification under a subheading within this 4-digit
heading) and any relative section or chapter notes and, provided
such headings or notes do not otherwise require, then according
to the other GRIs.
GRI 1 prescribes that, for legal purposes, GRIs 1 to 5 shall
govern, mutatis mutandis, classification at subheading levels
within the same heading. Therefore, merchandise is to be
classified at equal subheading levels (i.e., at the same digit
level) within the same 4-digit heading under the subheading that
most specifically describes or identifies the merchandise.
The Explanatory Notes to the Harmonized Commodity
Description and Coding System (hereinafter "Harmonized System")
represent the official interpretation of the Customs Cooperation
Council on the scope of each heading. See H.R. Conf. Rep. No.
100-576, 100th Cong., 2d Sess. 549 (1988); 23 Customs Bulletin
No. 36, 3 (T.D. 89-90, September 6, 1989), 59 F.R. 35127 (August
23, 1989). Although not binding on the contracting parties to
the Harmonized System Convention or considered to be dispositive
in the interpretation of the Harmonized System, the Explanatory
Notes should be consulted on the proper scope of the Harmonized
System. Id.
In the instant classification analysis, the chapter in which
the goods are classified is chapter 24. This chapter covers
tobacco and manufactured tobacco substitutes. Within chapter 24,
there are two headings under which the goods may be potentially
classified: heading 2401 and heading 2403.
Heading 2403 provides for, among other things, manufactured
tobacco not provided for earlier in chapter 24. In the
memorandum submitted with your request and entitled "Tobacco
Processing: Purchase to Products," it states that "[f]ines, dust,
and winnowers may be captured in both the primary processing
operation and the cigarette making operation. The H.S.
classification most accurately describing these by-products is
2403.99.00653 `other manufactured tobacco-partially
manufactured, blended or mixed tobacco.'" For a tobacco product
to be considered manufactured tobacco, either entirely or
partially, it must, of course, have first gone through some
manufacturing process. Guidance concerning what constitutes a
"tobacco-manufacturing process" can be found in the U.S.
Department of Agriculture's regulations set forth in 7 CFR 30.2.
In this regulation, which was cited by the U.S. Court of
International Trade as authority and with approval in Kuehne &
Nagel, Inc. v. United States, 10 CIT 814, 818 (1986), the acts
of stemming, sweating, fermenting, and conditioning are
identified as non-manufacturing tobacco processes. In the
instant case, the processes that the tobacco products go through
essentially involve these same processes. Therefore, the tobacco
products do not go through a manufacturing process. They are,
then, not properly classified under heading 2403.
The second heading in chapter 24 under which the instant
tobacco products may be potentially classified is heading 2401.
This heading provides for "unmanufactured tobacco (whether or not
threshed or similarly processed)" and "tobacco refuse." Of
course, in order to be classified under this heading, pursuant to
GRI 1, the instant products must fit the description of either of
the two, above-mentioned article descriptions. The article
description "tobacco refuse" is not discussed in the schedule.
Guidance concerning what constitutes tobacco refuse for purposes
of classification under heading 2401 can be found in the
Explanatory Notes to this heading. By way of example, the
Explanatory Notes to heading 2401 identify tobacco refuse as
"waste resulting from the manipulation of tobacco leaves, or from
the manufacture of tobacco products (stalks, stems, midribs,
trimmings, dust, etc.)" (emphasis added). In the instant case,
the tobacco products are not "refuse" or "waste" as described
above. Rather, each of the products consists of tobacco
intentionally extracted from other tobacco, and then used to make
a usable tobacco product (i.e., reconstituted or homogenized
tobacco in sheet form). These products, then, do not fit the
article description of "tobacco refuse" of heading 2401.
Therefore, they are not properly classified as tobacco refuse
under heading 2401.
The alternative article description in heading 2401, as
discussed above, is "unmanufactured tobacco (whether or not
threshed or similarly processed)." Guidance concerning what
constitutes "unmanufactured tobacco" for purposes for
classification under heading 2401 can be found in the Explanatory
Notes to this heading. Explanatory Note 2401(1) states, in part,
that heading 2401 covers "[u]nmanufactured tobacco
in...stemmed/stripped, trimmed or untrimmed, broken or cut
[form]...." In view of the above discussion and analysis, each
of the instant tobacco products simply consists of tobacco that
has been extracted (through whatever method and at various phases
of tobacco processing) from threshed or similarly processed,
unmanufactured tobacco. Quite logically, then, these tobacco
products themselves simply consist of threshed or similarly
processed, unmanufactured tobacco. Moreover, in Headquarters
Ruling Letters (HRL) 083651 and 084808 (which was affirmed in HRL
085970), all threshed or similarly processed cigarette leaf
tobacco reduced to particles of 1/16 or less was classified
under subheading 2401.20.80 as threshed or similarly processed,
unmanufactured tobacco. Accordingly, the above-described tobacco
products fit the article description of "unmanufactured tobacco"
of heading 2401. Each of them is properly classified under
subheading 2401.20.80 as threshed or similarly processed,
unmanufactured tobacco.
HOLDING:
The above-described tobacco products are properly classified
under subheading 2401.20.80, HTSUSA, which provides for
unmanufactured tobacco (whether or not threshed or similarly
processed), tobacco, partly or wholly stemmed/stripped, threshed
or similarly processed, other. The general rate of duty is 44.1
cents per kilogram.
Please note that, as indicated above, only the
classification analysis set forth in HRL 087135 has been changed,
in part, by this modification. The article description and the
8-digit subheading numerical code set forth in HRL 087135 for
each of the products classified therein remains unchanged.
Sincerely,
John Durant, Director
Commercial Rulings Division