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HQ 960138




November 25, 1997

CLA-2 RR:CR:GC 960138 RTR

CATEGORY: CLASSIFICATION

TARIFF NO.: 1901.90.90

Port Director of Customs
11099 South La Cienega Blvd.
Los Angeles, California 90045

RE: PRD 2704-96-101948; Starch-based sweet potato vermicelli; Headings 1901, 1902; Subheadings 1901.90.90, 1902.19.20; Explanatory Notes to heading 1902.

Dear Port Director:

This is our decision on Protest 2704-96-101948 filed against your classification of sweet potato vermicelli.

FACTS:

The merchandise consists of a form of pasta known as vermicelli, and is made from 100% sweet potato starch. On May 19, 1995, an entry was filed for the merchandise under a provision for pasta in subheading 1902.19.20 of the Harmonized Tariff Schedule of the United States (HTSUS), which covers pastas made from unfermented semolinas or flours of wheat, maize, rice, potatoes, etc.

At that time, the broker certified on the entry documents that a Food & Drug Administration (FDA) entry had been filed, and that the cargo would not be released until FDA certification was received. After examination of a sample taken on May 22, 1995, by notice of July 19, 1995, the FDA advised the broker that the FDA refused to allow the entry because the merchandise included a filthy substance, and ordered that the merchandise be re-exported or destroyed under Customs supervision within ninety days from the date of the notice. A notice to redeliver was issued by Customs to the broker on October 12, 1995, advising that FDA had refused entry, and ordering the goods to be redelivered into Customs custody for either re-export or destruction. A deadline for redelivery of November 16, 1995 was imposed. The protest claims that the goods were subsequently exported to China in October, 1995. By notice of December 20, 1995, demand was made on the importer for $23,547 as liquidated damages for failure to redeliver the merchandise to Customs as ordered.

To properly classify the goods, on June 9, 1995, Customs requested further information from the importer regarding the composition of the vermicelli. In its response of June 13, 1995, the importer stated that the vermicelli was made not from semolinas or flours, but from 100% sweet potato starch. Thus, the entry was liquidated on January 12, 1996 not under subheading 1902.19.20, HTSUS, but under subheading 1901.90.90, HTSUS, as food preparations with a basis of starch, dutiable at 9.4% ad valorem.

On April 1, 1996, a Formal Demand on Surety for Payment of Delinquent Amounts Due was issued by Customs on the surety for the protested entry. The amount of the demand was the principal due on the entry ($779.87), plus interest (According to Customs records, the principal and interest may have been paid.). On May 31, 1996, the surety filed the protest under consideration, specifically citing the April 1, 1996, Formal Demand on Surety described above.

The provisions under consideration are as follows:

1901 Malt extract; food preparations of flour, meal, starch or malt extract, not containing cocoa or containing 40% or less by weight of cocoa calculated on a totally defatted basis, not elsewhere specified or included; food preparations of foods of headings 0401 to 0404, not containing cocoa or containing less than 5% by weight of cocoa calculated on a totally defatted basis, not elsewhere specified or included: other: other: other: other: other:
1901.90.90 other.

1902 Pasta, whether or not cooked or stuffed (with meat or other substances) or otherwise prepared, such as spaghetti, macaroni, noodles, lasagna, gnocchi, ravioli, canneloni, couscous, whether or not prepared: uncooked pasta, not stuffed or otherwise prepared:
1902.19 other:
1902.19.20 exclusively pasta

ISSUES:

(1) Whether Customs has the authority to assess duties against merchandise that has been refused entry by an agency of the federal government; (2) whether the subject vermicelli, made from 100% sweet potato starch, is classifiable under subheading 1901.90.90, HTSUS, or under subheading 1902.19.20, HTSUS?

LAW AND ANALYSIS:
Duties on Goods Denied Entry

19 U.S.C. ? 1558 (a) prohibits remission, abatement, refund, or drawback of estimated or liquidated duty because of the exportation or destruction of any merchandise after its release from the custody of the Government, except in the following cases: (1) when articles are exported with respect to which a drawback of duties is expressly provided for by law; (2) when prohibited articles have been regularly entered in good faith and are subsequently exported or destroyed pursuant to a law of the United States and under such regulations as the Secretary of the Treasury may prescribe; and (3) when articles entered under bond, under any provision of law, are destroyed within the bonded period as provided for in ?1557 of this title, or are destroyed within the bonded period by death, accidental fire, or other casualty, and proof of such destruction is furnished which shall be satisfactory to the Secretary of the Treasury, in which case any accrued duties shall be remitted or refunded and any condition in the bond that the articles shall be exported shall be deemed to have been satisfied.

19 U.S.C. ? 1558(b) provides that exportation or destruction under Customs supervision of articles which have been released from Customs custody shall not exempt the articles from the payment of duties, except for marking duties under 19 U.S.C. supervision after once having been released from Customs custody.

Section 158.41, Customs Regulations (19 CFR 158.41) provides that merchandise regularly entered or withdrawn from consumption in good faith and denied admission by any Government agency after its release from Customs custody... may be destroyed under Government supervision... In lieu of destruction, the merchandise may be exported under Customs supervision in accordance with ?158.45(c). Specifically, ?158.45 (c) provides that where merchandise regularly entered and withdrawn from consumption in good faith is... prohibited entry under any law of the U.S., it may be exported under Customs supervision..., with refund of any duties paid... Here, the goods were claimed to have been exported, but even if they were exported as claimed, there is no evidence that the merchandise was exported under Customs supervision. Therefore, under the authority of CFR subject sweet potato vermicelli.

Classification

Merchandise is classifiable under the HTSUS in accordance with the General Rules of Interpretation (GRIs). GRI 1 states in part that for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes, and provided the headings or notes do not require otherwise, according to GRIs 2 through 6.

The Harmonized Commodity Description And Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System. While not legally binding on the contracting parties, and therefore not dispositive, the ENs provide a commentary on the scope of each heading of the Harmonized System and are thus useful in ascertaining the classification of merchandise under the System. Customs believes the ENs should always be consulted. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).

The protestant-surety contends that the merchandise is classifiable in heading 1902, HTSUS, covering exclusively pasta, specifically in subheading 1902.19.20, HTSUS, providing for pasta, whether or not cooked or prepared...; uncooked; other.

The claimed classification is erroneous because heading 1902 covers pasta made directly from meal or flour, such as spaghetti, macaroni, noodles, lasagna, gnocchi, ravioli and canneloni. While the ENs for heading 19.02 (at page 148) do not exclude starch-based pasta, they limit pastas includable within chapter 1902 to "unfermented products made from semolinas or flours of wheat, maize, rice, potatoes, etc. These semolinas or flours... are first mixed with water and kneaded into a dough which may also incorporate other ingredients...." The ENs indicate that heading 1902 pastas may be derived from a variety of vegetable matter or grains, and may be fashioned into any shape. However, there is no latitude regarding the intermediary ingredient: the pasta must be made from a pre-existing semolina or flour.

The merchandise in question was made from 100% sweet potato starch. Where sweet potatoes are processed into starch and subsequently pasta is made from the resulting starch, heading 1902 does not apply.

Under the authority of GRI 1, the sweet potato vermicelli is classifiable in subheading 1901.90.90, HTSUS, as malt extract; food preparations of flour, meal, starch or malt extract... other: other: other: other: other: other. The rate of duty is 8.2% ad valorem.

[Although the substance of the protest regarding the classification of the merchandise and duties on the goods denied entry is denied and, therefore, the protest is denied, if duties, fees and interest on the same have been paid to Customs, this denial is moot. Furthermore, this ruling does not address the December 20, 1995 Notice of Penalty of Liquidated Damages Incurred and Demand for Payment for failure to redeliver into Customs custody the merchandise under consideration.]

HOLDING:

We conclude that under GRI 1 the 100% sweet potato vermicelli is properly classified in 1901.90.90, HTSUS. This protest should be DENIED (However, if duties, fees and interest on the same have been paid to Customs, this denial is moot.). In accordance with ?3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, you should mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing 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, the Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director
Commercial Rulings Division

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