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HQ H024310




March 27, 2008

CLA-02 OT:RR:CTF:VS H024310 NL

CATEGORY: CLASSIFICATION

Barry E. Powell, Esq.
Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP 707 Wilshire Blvd, Suite 4150
Los Angeles, CA 90017

RE: Applicability of subheading 9802.00.80, HTSUS, Component of Instant Dry Coffee Mix; 19 CFR 10.16(c);

Dear Mr. Powell:

This is in reply to your letter dated January 29, 2008 requesting a prospective ruling on behalf of your client, Mr. Dat Huynh of Los Angeles, CA, concerning eligibility for a partial duty exemption under subheading 9802.00.80, HTSUS. The imported product is a dry instant coffee mix produced in Vietnam that contains a U.S. origin non-dairy creamer. This office conducted an oral conference with you on March 12, 2008.

FACTS:

The dry instant coffee mix will be produced by Vinacafe B.H. in Vietnam. The ingredients consist of dry coffee powder that is produced entirely in Vietnam from beans grown in Vietnam, and a U.S. origin non-dairy creamer. The creamer is produced in the U.S. entirely from U.S. origin components, including cane sugar, syrup solids, vegetable fat, lactose, stabilizers and emulsifiers. In Vietnam the creamer is mixed with the dry instant coffee in a machine that uses air to agitate the dry ingredients.

ISSUE:

Is the dry instant coffee mix eligible for a partial duty exemption under subheading 9802.00.80, HTSUS by reason of the use of U.S. origin non-dairy creamer as an ingredient?

LAW & ANALYSIS:

Subheading 9802.00.80, HTSUS, provides a partial duty exemption for:

Articles, except goods of heading 9802.00.90 and goods imported under provisions of subchapter XIX of this chapter and goods imported under provisions of subchapter XX, assembled abroad in whole or in part of fabricated components, the product of the United States, which (a) were exported in condition ready for assembly without further fabrication, (b) have not lost their physical identity in such articles by change in form, shape, or otherwise, and (c) have not been advanced in value or improved in condition abroad except by being assembled and except by operations incidental to the assembly process, such as cleaning, lubricating and painting.

All three requirements of subheading 9802.00.80, HTSUS, must be satisfied before a component may receive a duty allowance. An article entered under this tariff provision is subject to duty upon the full appraised value of the imported assembled article, less the cost or value of the U.S. components assembled therein, upon compliance with the documentation requirements of section 10.24, Customs Regulations (19 CFR 10.24).           

Section 10.16(a), Customs Regulations (19 CFR 10.16(a)), provides that the assembly operation performed abroad may consist of any method used to join or fit together solid components, such as welding, soldering, riveting, force fitting, gluing, laminating, sewing, or the use of fasteners. Section 10.16(a) further provides that:

[T]he mixing or combining of liquids, gases, chemicals, food ingredients, and amorphous solids with each other or with solid components is not regarded as an assembly.

The mixing of the above-referenced ingredients is explicitly excluded from the scope of assemblies of fabricated U.S. components that will qualify a good for the partial duty exemption under subheading 9802.00.80, HTSUS.

With regard to the operations that are the subject of this requested ruling, we find that the non-dairy creamer must be treated as a chemical, food ingredient, or amorphous solid that is mixed with the dry instant coffee in Vietnam. This mixing or combining is specifically excluded from eligibility for subheading 9802.00.80 treatment of articles assembled abroad in whole or in part from fabricated components produced in the United States. We also believe that the non-dairy creamer clearly is not within the class of solid components assembled by any method used to join or fit together solid components, as provided in Section 10.16(a), CBP Regulations. Therefore, we conclude that the mixing of the coffee creamer with coffee ingredients in Vietnam does not qualify as an assembly for the purposes of subheading 9802.00.80, HTSUS.

The ruling cited in the submission on behalf of the importer, HQ 561683 (December 6, 2000), is readily distinguishable. The product under consideration was a confectionary item which was assembled by encapsulating a U.S. origin confectionary component in an outside chocolate shell. There was no mixing of ingredients, and clearly the U.S. components were solid in nature. Thus we do not believe the holding in HQ 561683 is applicable here.

HOLDING:

The dry instant coffee mix produced in Vietnam using U.S. origin non-dairy coffee creamer will not be eligible for a partial duty exemption under subheading 9802.00.80, HTSUS.

A copy of this ruling letter should be attached to the entry documents filed at the time the goods are entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the CBP officer handling the transaction

Sincerely,

Monika R. Brenner, Chief
Valuation & Special

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