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HQ 954847




September 12, 1997

CLA-2 RR:TC:FC 954847K

CATEGORY: CLASSIFICATION

TARIFF NO.: 2401.30.90 (Redesignated as 2401.30.09 in 1995)

Port Director
U.S. Customs Service
200 Granby Street
Norfolk, Virginia 23510

RE: Application For Further Review of Protest No 1404-93-100012; Fragments of Oriental
Tobacco Leaves

Dear Port Director:

The following is our response to the referral by your office, dated August 3, 1993, of the request for further review of the above-referenced protest.

FACTS:

The consumption entries covering the imported merchandise were liquidated on May 28 and June 11, 1993, under the provision for other unmanufactured tobacco, partly or wholly stemmed/stripped, threshed or similarly processed, in subheading 2401.20.80, Harmonized Tariff Schedule of the United States (HTSUS), with duty at the 1993 general rate of 44.1 cent per kg. A timely protest under 19 U.S.C. 1514 was received on July 1, 1993. The protestant requested reliquidation of the entry under the provision for other tobacco refuse (other than stems), in subheading 2401.30.90, HTSUS, with duty at the 1993 general rate of 35.5 cent per kg.
In the protest, the protestant referred to a pending court case involving similar merchandise and we granted the request to delay a decision pending the outcome of the court case. Counsel affirmed in a meeting on August 15, 1997, that no further submissions would be submitted.

The description of the tobacco is more fully described under Law and Analysis.

ISSUE:

The issue is whether the tobacco has been similarly processed as in a threshing process.

LAW AND ANALYSIS:

The tobacco which is the subject of this protest is similar to the tobacco which was the subject of the decision of the United States Court of International Trade, Philip Morris Incorporated v. the United States, Slip Op. 95-176, dated October 31, 1995. The decision described the processing of the tobacco before importation as follows.

Oriental leaf tobacco was transported in bales to a processing facility where it was manipulated to separate the "pads" of leaves which had dried together. Tobacco fragments dropped out of the machines involved in the manipulation process. Those fragments, as well as other floor sweepings and other residue, constitute the merchandise as imported. The fragments are smaller than « inch (1.3cm) in diameter.

The Court noted the facts that (unlike Flue-cured or Burley tobaccos) Oriental leaf tobacco characterized by a small leaf with no thick mid-rib, does not require stemming prior to use, it is not subjected to stemming/stripping of any kind, and that it is not subjected to a "threshing" process to separate the leaf from the stem. The Court further noted that subheading 2401.20.80, HTSUS (1992 & 1993), chosen by Customs, requires that the tobacco be either "partly" or "wholly" stemmed or stripped and the tobacco was not stemmed or stripped. The Court did not accept the position that the manipulation process was similar to a threshing process. The Court concluded that the Customs classification was incorrect and that the two competing tariff provision were subheadings 2401.30.90, which provides for other tobacco refuse, or 2401.10.40, which provides for Oriental or Turkish type of cigarette leaf, not stemmed/stripped and not over 21.6 cm in length.

The Government (Customs) agreed to stipulate that the tobacco was classified in subheading 2401.30.90, HTSUS, and, in accordance with the published stipulation, the decision represents the current Customs position for classification for similar merchandise.

We note for informational purposes that all three subheadings in the tariff discussed above have been changed and redesignated with free general rates of duties under Presidential Proclamation 6821, dated September 12, 1995 (effective on September 13, 1995).

HOLDING:

Imported fragments of Oriental tobacco leaves that dropped out of machines used to air dry and separate pads of Oriental tobacco leaves, in which the leaves are not stemmed/stripped or threshed, are classified as other tobacco refuse, in subheading 2401.30.90, HTSUS, subject to the 1992 general rate of duty of 35.5 cent kg.

You are directed to allow the protest in full.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, Revised Protest Directive, dated August 4, 1993, a copy of this decision attached to Customs Form 19, Notice of Action, should be provided by your office to the protestant no later than 60 days from the date of this decision and any reliquidations of entries in accordance with this decision must be accomplished prior thereto. Sixty days from the date of this decision the Office of Regulations and Rulings will take steps to make this 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
Tariff Classification
Appeals Division

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