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HQ 555519

March 12, 1990

CLA-2 CO:R:C:V 555519 KAC


TARIFF NO.: 9801.00.10

Jonathon R. Moore, Esq.
Windels, Marx, Davies & Ives
1701 Pennsylvania Avenue, N.W.
Washington, D.C. 20006

RE: Applicability of HTSUS subheading 9801.00.10 to Uncle Ben's Long Grain & Wild Rice to be imported from Canada

Dear Mr. Moore:

This is in response to your letters of October 5, 1989, and February 7, 1990, on behalf of Effem Foods Ltd., requesting a ruling on the applicability of subheading 9801.00.10, Harmonized Tariff Schedule of the United States (HTSUS), to Uncle Ben's Long Grain & Wild Rice to be imported from Canada. A sample was submitted for examination.


All of the ingredients of Uncle Ben's Long Grain & Wild Rice are of U.S. growth or manufacture except for approximately .67 percent of the seasonings mix. The packaging materials, consisting of the ingredient pouches and exterior boxes, will be of Canadian origin. In the U.S., long grain white rice and wild rice will undergo various processes, including parboiling, enrichment, cleaning and drying. Certain vegetables will be deydrated in the U.S. and blended according to Uncle Ben's recipe, and other flavorings, comprising the remainder of the seasonings mix, also will be blended in the U.S. according to the recipe.

The proposed Canadian operations consist of receiving separate bulk commodities of long grain white rice, wild rice, dehydrated vegetables (including onion, parsley, spinach, and celery), and seasonings (including natural flavorings, sugar, salt, smoked yeast, spices, sunflower oil and tumeric) from the U.S. vendors. Your client will then combine the long grain white and wild rice together in a pouch, and combine the dehydrated vegetables and seasonings together in a second pouch. The operation involves the use of a conveyor belt with two hoppers above. A pouch forming machine will feed pre-printed rolls of paper into a device which will form the pouch, fill it with the proper premeasured amounts of each rice from two separate nozzles, and then seal the pouch. A similar operation will be utilized to fill the seasonings/vegetables pouch. Further down the conveyor belt a cartoning machine will form exterior boxes from pre-printed cardboard forms, and place a rice pouch and a seasonings/vegetables pouch in each box. After the carton is sealed, the product continues down the conveyor belt where approximately 24 boxes will be placed in a shipping container for shipment to the U.S.


Whether the Uncle Ben's Long Grain & Wild Rice will qualify for the duty exemption available under HTSUS subheading 9801.00.10 when returned to the U.S.


HTSUS subheading 9801.00.10 provides for the free entry of U.S. products that are exported and returned without having been advanced in value or improved in condition by any means while abroad, provided the documentary requirements of section 10.1, Customs Regulations (19 CFR 10.1), are met. While some change in the condition of the product while it is abroad is permissible, operations which either advance the value or improve the condition of the exported product render it ineligible for duty free entry upon return to the U.S. See, Border Brokerage Company Inc. v. United States, 65 Cust.Ct. 50, C.D. 4052, 314 F.Supp. 788, (1970), appeal dismissed, 58 CCPA 165 (1970).

We have previously held in Headquarters Ruling Letter 553080 dated November 15, 1984, that the addition abroad of U.S. sugar to already prepared cocktail mix concentrate of U.S. origin establishes a new product, different from each of the mixes which make up the whole. The identity of each component mix is lost and merged in a new marketable product, having its own commercial identity and use. Accordingly, we concluded that the operations which combine the exported ingredients into a new product advance in value and improve in condition these ingredients and, therefore, they do not qualify for the duty exemption of item 800.00, Tariff Schedules of the United States (TSUS) (now subheading 9801.00.10, HTSUS).

You contend that the holding in HQ 553080 should not apply to the facts presented here since that ruling involved the blending of various ingredients, while the ingredients in the instant case will not be blended or mixed but merely "dispensed" into pouches. We are not persuaded that there is any significant difference between the facts in HQ 553080 and those under consideration here. It is stated in the "Facts" portion of HQ 553080 that "most blending operations merely involved the addition of sugar to already prepared concentrate." Moreover, the ruling concluded that "combining the exported mixes into a new product is contrary to the free entry provisions of item 800.00, TSUS." The foreign operations in the instant case clearly involve the combining of two types of rice and the combining of dehyrated vegetables and seasonings.

Accordingly, consistent with Headquarters Ruling Letter 553080, we find that the foreign operations performed in Canada advance in value and improve in condition the exported U.S. ingredients. Combining, according to Uncle Ben's recipe, premeasured amounts of the long grain white and wild rice together, and the vegetables and seasonings together create a new and different commercial article, Uncle Ben's Long Grain & Wild Rice. The new marketable product is sold for consumer convenience, as the consumer need only add water and margarine to the premeasured packets to create a side dish or meal. Otherwise, the consumer would have to purchase all the necessary ingredients separately, and measure and mix them together to obtain the desired product.


On the basis of the information and sample submitted, as the U.S. components will be advanced in value and improved in condition abroad as a result of the foreign operations, Uncle Ben's Long Grain and Wild Rice will not qualify for the duty exemption under HTSUS subheading 9801.00.10.


John Durant, Director
Commercial Rulings Division

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