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HQ 088409

May 3, 1991

CLA-2 CO:R:C:G 088409 RFC


TARIFF NO.: 2401.20.80

Mr. C.R. Piercy, Jr.
Philip Morris Inc.
P.O. Box 26603
Richmond, VA 23261

RE: Modification of Headquarters Ruling Letter (HRL) 087135; tobacco

Dear Mr. Piercy:

In HRL 087135, dated December 3, 1990, you were issued, on behalf of Philip Morris Inc., a tariff classification ruling under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) for certain tobacco products. Upon review and reconsideration, we have determined that the classification analysis set forth in HRL 087135 is, in part, not appropriate. Accordingly, by this letter, we are modifying HRL 087135 to correct the inappropriateness of the classification analysis.


The tobacco products are identified and described as follows:

1. fines (small, broken bits of tobacco)

2. dust (minute tobacco particles)

3. winnowers (filler clumps, veins and stems)

These tobacco products are generated (through an extraction process) during both the primary processing operation phase (stemmed tobacco--i.e., unmanufactured tobacco that has been threshed or similarly processed--is conditioned, blended, flavored, cut and dried) and the cigarette-manufacturing operation phase (tobacco that has gone through a primary processing operation is fed into cigarette-making machines) of the cigarette-manufacturing process. The tobacco products are then used in the manufacture of reconstituted or homogenized tobacco.


What is the proper classification under the HTSUSA of small, broken bits of tobacco, minute tobacco particles, and tobacco filler clumps, veins and stems generated during either the primary processing operation phase or the cigarette- manufacturing operation phase of the cigarette-manufacturing process for use in the manufacture of reconstituted or homogenized tobacco?


Merchandise imported into the United States is classified under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA). The tariff classification of merchandise under the HTSUSA is governed by the principles set forth in the General Rules of Interpretation (GRIs) and, in the absence of special language or context which otherwise requires, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUSA and are to be considered statutory provisions of law for all purposes. See Sections 1204(a) and 1204(c) of the Omnibus Trade and Competitiveness Act of 1988 (19 U.S.C. 1204(a) and 1204(c)).

GRI 1 requires that classification be determined first according to the terms of the headings of the tariff (i.e., (1) merchandise is to be classified under the 4-digit heading that most specifically describes the merchandise; (2) only 4-digit headings are comparable; and (3) merchandise must first satisfy the provisions of a 4-digit heading before consideration is given to classification under a subheading within this 4-digit heading) and any relative section or chapter notes and, provided such headings or notes do not otherwise require, then according to the other GRIs.

GRI 1 prescribes that, for legal purposes, GRIs 1 to 5 shall govern, mutatis mutandis, classification at subheading levels within the same heading. Therefore, merchandise is to be classified at equal subheading levels (i.e., at the same digit level) within the same 4-digit heading under the subheading that most specifically describes or identifies the merchandise.

The Explanatory Notes to the Harmonized Commodity Description and Coding System (hereinafter "Harmonized System") represent the official interpretation of the Customs Cooperation Council on the scope of each heading. See H.R. Conf. Rep. No. 100-576, 100th Cong., 2d Sess. 549 (1988); 23 Customs Bulletin No. 36, 3 (T.D. 89-90, September 6, 1989), 59 F.R. 35127 (August 23, 1989). Although not binding on the contracting parties to the Harmonized System Convention or considered to be dispositive in the interpretation of the Harmonized System, the Explanatory Notes should be consulted on the proper scope of the Harmonized System. Id.

In the instant classification analysis, the chapter in which the goods are classified is chapter 24. This chapter covers tobacco and manufactured tobacco substitutes. Within chapter 24, there are two headings under which the goods may be potentially classified: heading 2401 and heading 2403.

Heading 2403 provides for, among other things, manufactured tobacco not provided for earlier in chapter 24. In the memorandum submitted with your request and entitled "Tobacco Processing: Purchase to Products," it states that "[f]ines, dust, and winnowers may be captured in both the primary processing operation and the cigarette making operation. The H.S. classification most accurately describing these by-products is 2403.99.00653 `other manufactured tobacco-partially manufactured, blended or mixed tobacco.'" For a tobacco product to be considered manufactured tobacco, either entirely or partially, it must, of course, have first gone through some manufacturing process. Guidance concerning what constitutes a "tobacco-manufacturing process" can be found in the U.S. Department of Agriculture's regulations set forth in 7 CFR 30.2. In this regulation, which was cited by the U.S. Court of International Trade as authority and with approval in Kuehne & Nagel, Inc. v. United States, 10 CIT 814, 818 (1986), the acts of stemming, sweating, fermenting, and conditioning are identified as non-manufacturing tobacco processes. In the instant case, the processes that the tobacco products go through essentially involve these same processes. Therefore, the tobacco products do not go through a manufacturing process. They are, then, not properly classified under heading 2403.

The second heading in chapter 24 under which the instant tobacco products may be potentially classified is heading 2401. This heading provides for "unmanufactured tobacco (whether or not threshed or similarly processed)" and "tobacco refuse." Of course, in order to be classified under this heading, pursuant to GRI 1, the instant products must fit the description of either of the two, above-mentioned article descriptions. The article description "tobacco refuse" is not discussed in the schedule. Guidance concerning what constitutes tobacco refuse for purposes of classification under heading 2401 can be found in the Explanatory Notes to this heading. By way of example, the Explanatory Notes to heading 2401 identify tobacco refuse as "waste resulting from the manipulation of tobacco leaves, or from the manufacture of tobacco products (stalks, stems, midribs, trimmings, dust, etc.)" (emphasis added). In the instant case, the tobacco products are not "refuse" or "waste" as described above. Rather, each of the products consists of tobacco intentionally extracted from other tobacco, and then used to make a usable tobacco product (i.e., reconstituted or homogenized tobacco in sheet form). These products, then, do not fit the article description of "tobacco refuse" of heading 2401. Therefore, they are not properly classified as tobacco refuse under heading 2401.

The alternative article description in heading 2401, as discussed above, is "unmanufactured tobacco (whether or not threshed or similarly processed)." Guidance concerning what constitutes "unmanufactured tobacco" for purposes for classification under heading 2401 can be found in the Explanatory Notes to this heading. Explanatory Note 2401(1) states, in part, that heading 2401 covers "[u]nmanufactured tobacco in...stemmed/stripped, trimmed or untrimmed, broken or cut [form]...." In view of the above discussion and analysis, each of the instant tobacco products simply consists of tobacco that has been extracted (through whatever method and at various phases of tobacco processing) from threshed or similarly processed, unmanufactured tobacco. Quite logically, then, these tobacco products themselves simply consist of threshed or similarly processed, unmanufactured tobacco. Moreover, in Headquarters Ruling Letters (HRL) 083651 and 084808 (which was affirmed in HRL 085970), all threshed or similarly processed cigarette leaf tobacco reduced to particles of 1/16 or less was classified under subheading 2401.20.80 as threshed or similarly processed, unmanufactured tobacco. Accordingly, the above-described tobacco products fit the article description of "unmanufactured tobacco" of heading 2401. Each of them is properly classified under subheading 2401.20.80 as threshed or similarly processed, unmanufactured tobacco.


The above-described tobacco products are properly classified under subheading 2401.20.80, HTSUSA, which provides for unmanufactured tobacco (whether or not threshed or similarly processed), tobacco, partly or wholly stemmed/stripped, threshed or similarly processed, other. The general rate of duty is 44.1 cents per kilogram.

Please note that, as indicated above, only the classification analysis set forth in HRL 087135 has been changed, in part, by this modification. The article description and the 8-digit subheading numerical code set forth in HRL 087135 for each of the products classified therein remains unchanged.


John Durant, Director

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