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HQ 229912




May 28, 2003

CON-9-04 RR:CR:DR

229912 LLB

FedEx Trade Networks
Attn: Vance McFarland
850 SW 7th Street, #100
Renton, Washington 98055

RE: Ruling request; Batelle Pacific Northwest Labs; 9813.00.30, HTSUS

Dear Mr. McFarland:

This is in response to your March 6, 2003, letter, which was forwarded to this office by the Chief, Special Products Branch, National Commodity Specialist Division. In your letter, you request a classification ruling on cigarettes imported by your client, Batelle Pacific Northwest Labs.

FACTS

You assert the following facts. The merchandise is comprised of cigarettes that will be imported solely for the purpose of toxicology testing. The test cigarettes will be consumed during the toxicity studies using mechanical smoking machines. Thereafter, the test cigarette butts and filters will be dumped into plastic bags for disposal. Excess test cigarettes will be broken and soaked in water, bagged, and discarded. These measures will ensure that test cigarettes are solely used for testing and experimental purposes. The test cigarettes will be used solely for scientific studies, will not be smoked by humans, or resold. The test cigarettes will be stored under controlled access with inventory procedures that assure the ultimate destruction of all materials.

ISSUE

1. Whether the cigarettes are eligible for duty-free entry under 9813.00.30, HTSUS a. If so, whether internal revenue taxes may be assessed thereon

LAW and ANALYSIS

Subheading 9813.00.30, HTSUS, provides for the temporary duty free entry, under bond, of “articles intended solely for testing, experimental or review purposes . . .”. Articles may not be imported for sale or sale on approval and may remain in this country, without the payment of duty, for a period of one year from the date of importation. However, upon application to the district director at the port where the entry is filed, this period may be extended for one or more further periods which, when added to the initial one year, shall not exceed a total of three years. See U.S. Note 1(a) of Subchapter XIII, HTSUS.

Articles may be entered under subheading 9813.00.30, HTSUS, when there is an intention to test the article itself, or when the imported articles or merchandise are imported to be used as the raw material in testing another domestic or imported article. However, free entry is not available for importation of articles which, rather than being tested themselves, are imported to measure the performance of other articles. HQ 228619 (September 12, 2001). Insofar as you state that the imported cigarettes will be tested on mechanical smoking machines to determine the toxicity of the cigarettes, the cigarettes would be admissible under 9813.00.30, HTSUS.

“Upon satisfactory proof that any article admitted under heading 9813.00.30 has been destroyed because of its use for any purpose provided therein, the obligation under the bond to export such article shall be treated as satisfied." U.S. Note 3, Subchapter XIII, HTSUS; see 19 C.F.R. § 10.39. You state that the cigarettes are consumed during the testing and that the butts and excess cigarettes are soaked in water then bagged for disposal. This ruling is being issued with the understanding the importer will be able to provide certification to the satisfaction of the port director that the cigarettes are destroyed in the foregoing manner within time period specified for the bond.

With regard to internal revenue tax, “Duty” is defined by the Customs Regulations as “Customs duties and any internal revenue taxes which attach upon importation.” 19 C.F.R. § 101.1. Pursuant to 26 U.S.C. § 5703(b)(2)(B)(i)-(iii), payment of IR tax on tobacco products that are imported into the United States is not due until the 14th day after the last day of the semi-monthly period the article is entered into the Customs territory of the United States, removed from a warehouse, or removed from a foreign trade zone. If none of the foregoing events occur prior to the destruction or exportation of the cigarettes, IR taxes will not be assessed on the cigarettes.

HOLDING

The cigarettes that are tested and destroyed, as described herein, may be entered under a Temporary Importation Bond pursuant to 9813.00.30. Certification of the destruction proposed must be provided to the district director to validate the cancellation of the bond.

Internal revenue taxes will be assessed if the cigarettes are entered into the Customs territory of the United States prior to destruction.

Sincerely,

Myles Harmon, Director
Commercial Rulings Division


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