CLA-2 OT:RR:CTF:TCM H035835 EG
Port Director
U.S. Customs and Border Protection
Miami Service Port/Miami International Airport
6601 NW 25th Street, Room 272
Miami, FL 33122
RE: Internal Advice Request No. 08/019; Classification of tobacco by-products.
Dear Port Director:
This ruling is in response to your memorandum, dated August 6, 2008, which forwarded a request for Internal Advice initiated by General Cigar Company, Inc. (General Cigar). At issue is the classification, under the Harmonized Tariff Schedule of the United States (HTSUS), of two styles of tobacco by-products which are leftover from the production of premium cigars and are used to make mass market cigars.
FACTS:
The merchandise at issue is identified as tobacco by-product that is excess or scrap pieces of tobacco generated during the making of hand-rolled premium cigars. The components used in producing such cigars are described as binder, long filler, and wrapper, all of which consist of stemmed (de-veined) pieces of tobacco leaf. In production, a mass of long filler is placed within the binder to form a “bunch,” which is then placed into a mold to achieve the proper shape and size. Any parts of the bunch extending beyond the mold boundaries are cut off. These cuttings become known as the style T50111 by-product at issue.
The molded/pressed bunch is then rolled within the wrapper to form the cigar. The wrapper is trimmed before rolling, the rolled cigar is trimmed and cut a final time, and the trimmings and cuttings from the wrapper and the ends of the cigar become known as the style T50098 by-product at issue. Both of these styles of by-product tobacco are collected and shipped to the United States where they will be threshed and blended with other cured tobacco and rolled stems to make short filler blend. The short filler blend will be used mainly to produce machine-made, mass market cigars.
In February 2008, General Cigar entered the tobacco by-products under subheading 2401.30, HTSUS, as unmanufactured tobacco refuse. On August 6, 2008, your office submitted this request for internal advice on behalf of General Cigar. Specifically, you asked whether the tobacco by-products should be classified as unmanufactured tobacco products under heading 2401, HTSUS, or as manufactured tobacco products under heading 2403, HTSUS.
ISSUE:
Whether the imported tobacco by-products are classified as unmanufactured tobacco, partly or wholly stemmed/stripped under subheading 2401.20, HTSUS, unmanufactured tobacco refuse under subheading 2401.30, HTSUS, or as manufactured smoking tobacco, whether or not containing tobacco substitutes, under subheading 2403.10, HTSUS.
LAW AND ANALYSIS:
Merchandise imported into the United States is classified under the HTSUS. Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRIs). GRI 1 requires that classification be determined first according to the terms of the headings of the tariff schedule and any relative section or chapter notes and, unless otherwise required, according to the remaining GRIs taken in order. GRI 6 requires that the classification of goods in the subheadings of headings shall be determined according to the terms of those subheadings, any related subheading notes and mutatis mutandis, to the GRIs 1 through 5.
The 2008 HTSUS provisions under consideration are:
2401 Unmanufactured tobacco (whether or not threshed or similarly processed); tobacco refuse:
2401.20 Tobacco, partly or wholly stemmed/stripped . . .
* * *
2401.30 Tobacco refuse . . .
* * *
2403 Other manufactured tobacco and manufactured tobacco substitutes; “homogenized” or “reconstituted” tobacco; tobacco extracts and essences:
2403.10 Smoking tobacco, whether or not containing tobacco substitutes in any portion . . .
* * *
The Harmonized Commodity Description and Coding System Explanatory Notes (ENs), though not dispositive or legally binding, are the official interpretation of the Harmonized System at the international level and may provide commentary on the scope of each heading of the HTSUS. CBP believes the ENs should always be consulted. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).
EN 24.01 states that heading 2401 covers:
(1) Unmanufactured tobacco in the form of whole plants or leaves in the natural state or as cured or fermented leaves, whole or stemmed/stripped, trimmed or untrimmed, broken or cut (including pieces cut to shape, but not tobacco ready for smoking.
Tobacco leaves, blended, stemmed/stripped and “cased” (“sauced” or “liquored”) with a liquid of appropriate composition, mainly in order to prevent mould and drying and also to preserve the flavor, are also covered in this heading.
(2) Tobacco refuse, e.g. waste resulting from the manipulation of tobacco leaves, or from the manufacture of tobacco products (stalks, stems, midribs, trimmings, dust, etc.)
In pertinent part, the EN for heading 2403 states that the heading covers:
(1) Smoking tobacco, whether or not containing tobacco substitutes in any proportion, for example, manufactured tobacco for use in pipes or for making cigarettes . . .
The first issue is whether, by application of GRI 1, these tobacco by-products are “unmanufactured” tobacco products of heading 2401, HTSUS, or “manufactured” tobacco products of heading 2403, HTSUS. The terms “manufactured tobacco” and “unmanufactured tobacco” are not defined in the HTSUS. When a tariff term is not defined by the HTSUS or its legislative history, “the term’s correct meaning is its common meaning.” Mita Copystar Am. V. United States, 21 F.3d 1079, 1082 (Fed. Cir. 1994). The common meaning of a term used in commerce is presumed to be the same as its commercial meaning. Simod Am. Corp. v. United States, 872 F.2d 1572, 1576 (Fed. Cir. 1989). To ascertain the common meaning of a term, a court may consult “dictionaries, scientific authorities, and other reliable information sources” and “lexicographic and other materials.” C.J. Tower & Sons v. United States, 673 F.2d 1268, 1271 (C.C.P.A. 1982); Simod, 872 F.2d at 1576.
EN 24.01(1) states that “unmanufactured tobacco” includes “tobacco in the form of whole plants or leaves . . . whole or stemmed/stripped, trimmed or untrimmed, broken or cut (including pieces cut to shape, but not tobacco ready for smoking.” In HQ 088409, dated May 3, 1991, CBP discussed the term “manufactured tobacco” of heading 2403, HTSUS, and stated that tobacco must go through a manufacturing process to be considered an entirely or partially manufactured product. CBP referred to USDA regulations for guidance on what constitutes a “manufacturing process.” Under 7 C.F.R. § 30.2, “stemming, sweating or fermenting, and conditioning are not regarded as tobacco manufacturing processes.”
In the instant case, the premium cigars involved in the generation of the by-products are made with long filler, binder, and wrapper tobaccos, all of which are large, cured/fermented pieces of tobacco leaf, i.e., whole or half-leaves that have been stripped of stems. These components have not undergone any processing beyond that allowed by the scope of heading 2401, HTSUS, as set forth in the EN: curing, fermenting, stemming (stripping), trimming, breaking, or cutting; nor have the by-products generated from the production process at issue been so processed.
Thus, the components are unmanufactured and the by-products are unmanufactured. The by-products have not passed the threshold for becoming “manufactured tobacco” under heading 2403, HTSUS. Thus, the by-products at issue are classifiable as unmanufactured tobacco in heading 2401, HTSUS.
The remaining issue is whether the merchandise is classified under subheading 2401.20, HTSUS, which provides for unmanufactured tobacco which is wholly or partly stripped or stemmed, or 2401.30, HTSUS, which provides for unmanufactured tobacco refuse. Since two subheadings under the same heading are at issue, GRI 6 requires that the classification of the products be determined according to the terms of the subheadings.
EN 24.01(2) defines the term “tobacco refuse” of subheading 2401.30, HTSUS, as “waste resulting from . . . the manufacture of tobacco products.” In Headquarters Ruling Letter (HQ) 087135, dated December 3, 1990, CBP cited to U.S. Department of Agriculture (USDA) regulations to define the term “tobacco waste”. Under 7 C.F.R. § 29.1082, “tobacco waste” is defined as “the portion or portions of the web of tobacco leaves which have been lost or rendered less serviceable for use in tobacco products, including . . . (b) portions which are dead, lifeless, and do not have sufficient strength or stability to hold together in the normal manufacturing process due to excessive injury of any kind.” CBP further defined “waste” as “damaged, defective, or superfluous material produced by a manufacturing process” (citing Webster’s Ninth New Collegiate Dictionary 991, 1330 (1989)). In HQ 087135, CBP rejected the importer’s claim that the tobacco at issue was tobacco refuse because it was extracted from other tobacco, and later used to make a different finished tobacco product. As such, the tobacco by-product was not damaged, defective or superfluous.
The tobacco product description in HQ 087135 also applies accurately to the instant case. The subject tobacco by-products are recovered excess portions of stem-free tobacco leaf that will subsequently be used to make a finished tobacco product, i.e., short filler for mass-market cigars. Therefore, these tobacco by-products are not
damaged, defective or superfluous. As such, the subject tobacco by-products are not tobacco refuse and are not classifiable as tobacco refuse under subheading 2401.30, HTSUS. They are classifiable under subheading 2401.20, HTSUS, as unmanufactured tobacco which has been wholly or partly stripped or stemmed.
HOLDING:
By application of GRIs 1 and 6, both of the tobacco by-products at issue, styles T50111 and T50098, are classified under subheading 2401.20.60, HTSUS, as “Unmanufactured tobacco (whether or not threshed or similarly processed); tobacco, partly or wholly stemmed/stripped: threshed or similarly processed: from cigar leaf” under the 2008 HTSUS. The general, column one rate of duty is free.
You are to mail this decision to the internal advice requestor no later than sixty days from the date of the decision. At that time, Regulations and Rulings of the office of International Trade will make the decision available to CBP personnel, as well as to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division