HQ 0954133 - Decision on application for further review of Protest No. 3901-93-100510, filed March 25, 1993; Classification of raw cane sugar in 1701, HTSUS, as cane or beet sugar in solid form; Exempt from agricultural import fee under subheading 9904.40.20 for sugar not to be further refined or improved in quality; Note 4(b) to Chapter 99, Subchapter IV. - United States International Trade Commision Rulings

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HQ 954133

March 23, 1994

CLA-2 CO:R:C:F 954133 LPF

CATEGORY: CLASSIFICATION

TARIFF NO.: 1701.11.01

District Director
U.S. Customs Service
610 S. Canal Street
Chicago, IL 60607

RE: Decision on application for further review of Protest No. 3901-93-100510, filed March 25, 1993; Classification of raw cane sugar in 1701, HTSUS, as cane or beet sugar in solid form; Exempt from agricultural import fee under subheading 9904.40.20 for sugar not to be further refined or improved in quality; Note 4(b) to Chapter 99, Subchapter IV.

Dear Sir:

This is a decision on a protest filed March 23, 1993 against your decision regarding the applicability of an agricultural import fee concerning merchandise liquidated on January 8, 1993.

FACTS:

The product at issue is raw cane sugar imported from Panama. Once imported into the U.S., the dry sugar initially is passed through a magnet to remove metallic specks. The sugar then is melted together with corn syrup and water to form a syrup. After mixing, the syrup is passed through a 50 mesh screen and heated to 210-220 degrees Fahrenheit. The heated syrup then is passed through a 325 mesh screen, in-line ultra-violet (UV) process, coolers, and in-line magnets before entering storage tanks equipped with surface UV light devices. After passing through a strainer of 80 mesh baskets, the prepared sugar syrup is transferred to a tank truck. At the Tootsie Roll plant, the sugar syrup is passed through another strainer of 80 mesh, placed into supply tanks with UV light, and finally put into surge tanks. The syrup is used to make confectionery products.

Customs and the protestant agree that the product is classifiable in subheading 1701.11.01, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), as "Cane or beet sugar and chemically pure sucrose, in solid form: Raw sugar not containing added flavoring or coloring matter: Cane sugar:

Described in paragraphs (a) and (b) of additional U.S. note 3 to chapter 17 and entered pursuant to its provisions."

However, you maintain that the product qualifies, under subheading 9904.40.20, HTSUSA, as "Sugars, syrups and molasses derived from sugar cane or sugar beets...: Principally of crystalline structure or in dry amorphous form, provided for in subheading 1701.11...: Not to be further refined or improved in quality," requiring an additional agricultural import fee of 2.2 cents per kilogram. The protestant disagrees.

ISSUE:

Whether the raw cane sugar is further refined or improved in quality, as provided for in subheading 9904.40.20, HTSUS.

LAW AND ANALYSIS:

The General Rules of Interpretation (GRIs) taken in their appropriate order provide a framework for classification of merchandise under the HTSUS. In this case, Customs and the protestant agree that the raw cane sugar is classifiable, pursuant to GRI 1, in subheading 1701.11.01, HTSUSA.

However, subheading 9904.40.20, HTSUSA, promulgated pursuant to Section 22 of the Agricultural Adjustment Act, indicates that an agricultural import fee will be assessed, in part, on sugars and syrups derived from sugar cane, provided for in subheading 1701.11, not to be further refined or improved in quality. In this regard, Note 4(b) to Chapter 99, Subchapter IV, indicates that:

Not to be further refined or improved in quality as used in subheading 9904.40.20 means not to be further refined or improved in quality by being subjected substantially to the processes of (1) affination or defecation, (2) clarification or (3) further purification by absorption or crystallization.

In general, cane sugar refining involves the specific processes listed above. Refining occurs when raw sugar (a mixture of crystals of sucrose surrounded by a film of molasses) undergoes affination, the process which softens and removes the molasses film with a saturated sugar liquor. In this step, the raw sugar is mixed in a mingler with just enough heavy syrup to make a thick paste or magma. The magma is heated in a mixer to reduce the viscosity of the syrup and molasses and then is centrifuged to remove the liquid. The crystalline sugar which remains in the centrifugal basket is spray-washed with a small
amount of hot water. It now is of a considerably higher purity than the incoming raw sugar and is called "washed raw sugar." The Avi Publishing Company, Inc., Encyclopedia of Food Technology 872 (1974) and Rand McNally & Co., This Is Liquid Sugar 12, 13 (1955).

During the next steps, defecation and clarification, impurities such as pectins, gums, starches, and albumins are removed. The liquor is treated with lime and phosphoric acid which combine to form a floc. It then is aerated and passed into steam- heated clarification tanks. Here the air bubbles expand and slowly rise to the surface, carrying with them the calcium phosphate floc and other coagulated matter. The mud is continuously scraped off the top, and the clear liquor overflows into the clarified liquor tank. Encyclopedia of Food Technology, supra, and This is Liquid Sugar, supra.

The liquor then is passed through either char and/or vegetable or granular carbon filtration, in which certain color bodies and dissolved salts are absorbed on the char. The char filters are large vessels filled with coarse particles of this activated granular absorbent. Finally, the sucrose solution is heat- sterilized, concentrated in an evaporator to 67 percent solids, cooled, and pumped to storage tanks. Encyclopedia of Food Technology, supra, and This Is Liquid Sugar, supra.

The process which the raw cane sugar undergoes does not completely fit this description of "refining." However, after consulting with the Foreign Agricultural Service, Department of Agriculture, we maintain that insofar as the raw cane sugar is magnetically processed, heated, passed through mesh screens, and UV treated, it is "improved in quality" by being subjected "substantially" to the processes of clarification and purification. Pursuant to Note 4(b) to Chapter 99, Subchapter IV, the product does not fall within subheading 9904.40.20 and is not subject to the additional agricultural import fee.

HOLDING:

The raw cane sugar is classifiable in subheading 1701.11.01, HTSUSA, as "Cane or beet sugar and chemically pure sucrose, in solid form: Raw sugar not containing added flavoring or coloring matter: Cane sugar: Described in paragraphs (a) and (b) of additional U.S. note 3 to chapter 17 and entered pursuant to its provisions." The general column one rate of duty is 1.4606 cents per kilogram less 0.020668 cents per kilogram for each degree under 100 degrees (and fractions of a degree in proportion) but not less than 0.943854 cents per kilogram. We note that products classified in 1701.11.01 are eligible for duty free treatment under the Generalized System of Preferences (GSP) provided they meet the requirements of General Note 4(c), HTSUSA.

As the product is improved in quality by being subjected substantially to clarification and purification, it does not carry an additional agricultural import fee.

Because exemption from the agricultural import fee as indicated above will result in the lower rate of duty as claimed, you are instructed to allow the protest in full. A copy of this decision with the Form 19 should be sent to the protestant.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision should be mailed by your office to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision, the Office of Regulations and Rulings will take steps to make the decision available to Customs personnel via the Customs Rulings Module in ACS, and to the public via the Diskette Subscription Service, Lexis, the Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director
Commercial Rulings Division

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