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HQ 960606




August 6, 1998

CLA-2 RR:CR:GC 960606ptl

CATEGORY: CLASSIFICATION

TARIFF NO.: 2710.00

Port Director
U.S. Customs Service
112 W. Stutsman Street
Pembina, ND 58271-4102

RE: Protest 3401-97-100015; Barbecue lighter fluid.

Dear Port Director:

The following is our decision on Protest 3401-97-100015, against your classification under the Harmonized Tariff Schedule of the United States (HTSUS) of barbecue lighter fluid (BBQ Fluid).

FACTS:

The merchandise which is the subject of the protest was entered on June 4, 1996, and consisted of 1914 cases of "Schunck BBQ Fluid" (858 cases of 12/32 ounce containers and 1056 cases of 6/64 ounce cases) totaling 5742 gallons, or 21,819.6 liters.

The merchandise had been entered in CA2710.00.25, HTSUS, as being a Canadian product, eligible for preferential tariff treatment under the North American Free Trade Agreement (NAFTA). The entry was liquidated on January 3, 1997, under the provision for Petroleum oils and oils obtained from bituminous minerals, other than crude; preparations not elsewhere specified or included, containing by weight 70 percent or more of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations: Naphthas (except motor fuel or motor fuel blending stock) in subheading 2710.00.2500, HTSUS, with duty at the column 1 general rate of 10.5 cents per barrel. A timely protest under 19 U.S.C. 1514 was received on January 13, 1997.

The protest claim, in Section III of Customs Form 19, reads, in pertinent part, as follows:

"RE: Barbecue Lighter Fluid (Ashland Chemical & Shell Canada)
We hereby respectfully request that you review the attached NAFTA Cert. from RW Packaging along with the required supporting documents from suppliers for the above referenced BBQ Fluid. The ingredients used in the production come from Canada or the USA. The ingredients are then processed in Canada, and then sold in bulk to RW Packaging. RW Pkg then bottles this product for retail sales."

ISSUE:

Is the barbecue lighter fluid eligible for duty-free treatment under the NAFTA?

LAW AND ANALYSIS:

There is no disagreement over the proper heading in which the imported article is classified. Both Customs and the importer agree that the merchandise is classified in heading 2710, HTSUS. There is evidence that the correct subheading for this product may be in a subheading other than that which was used at the time of entry; however, tariff classification is not the protest issue. The protest was filed because Customs disallowed the protestant's claim that the merchandise should be allowed preferential tariff treatment under the provisions of the NAFTA.

General Note 12 of the Harmonized Tariff Schedule of the United States (HTSUS), which provides rules for determining whether merchandise is eligible for preferential tariff treatment under the NAFTA, provides as follows:

"12(b) For the purposes of this note, goods imported into the customs territory of the United States are eligible for the tariff treatment and quantitative limitations set forth in the tariff schedule as "goods originating in the territory of a NAFTA party" only if--

(i) they are goods wholly obtained or produced entirely in the territory of Canada, Mexico and/or the United States; or

(ii) they have been transformed in the territory of Canada,
Mexico and/or the United States so that--

(A) except as provided in subdivision (f) of this note, each of the non-originating materials used in the production of such goods undergoes a change in tariff classification described in subdivisions (r), (s) and (t) of this note or the rules set forth therein, ..."

The protestant has provided Customs many documents to support its assertion that the merchandise qualifies for preferential treatment under the NAFTA. However, because these documents have been submitted in an unorganized manner and without any narrative to relate one to another, they have tended to confuse, rather than clarify, the issue.

The basis of the protest involves the question of the country of origin of the BBQ Fluid. BBQ Fluid is a petroleum distillate processed by the distillation of crude oil and is classified in heading 2710, HTSUS. Crude oil is classified in heading 2709, HTSUS.

The protestant has submitted several NAFTA Certificate of Origin documents which show that the BBQ Fluid was produced either in Canada by Shell, Canada, or in the United States by Basis Petroleum, Inc. (Formerly Phibro Energy USA). Other documents indicate that this BBQ Fluid was then supplied in bulk to RW Packaging Ltd. (in Canada) where it was packaged for shipment to the United States. While none of these documents completely address the issue, and some actually complicate it, they do allow us to reach the following determinations.

The tariff shift required for NAFTA origination, as stated in General Note 12(t)/27.4, HTSUS, is "a change to headings 2710 through 2715 from any heading outside that group." Non-originating crude oil, as entered into the territory of a NAFTA party, is classifiable in heading 2709, which is outside the range of headings 2710 through 2715, and, so, qualifies as an originating product in its manufactured form as a petroleum distillate of heading 2710. Based on all the information provided, the BBQ Lighter Fluid appears to be a good originating in the territory of a NAFTA party, as described under General Note 12(b)(i), HTSUS, if made from Canadian crude oil, or under General Note 12(b)(ii)(A), HTSUS, if made from a non-originating crude oil. If the product were manufactured by Shell Canada, that certificate, with its accompanying correspondence, would appear to document its NAFTA eligibility; if produced by Phibro Energy, that certificate, with its accompanying correspondence, would appear to document its NAFTA eligibility.

We find that the protestant has provided sufficient information to determine that the BBQ Lighter Fluid is an originating good which meets the requirements of General Note 12, HTSUS, and should be accorded the NAFTA preferential tariff treatment. The subheading classification of the merchandise under the HTSUS will depend on a chemical analysis of the product.

HOLDING:

The protest should be GRANTED.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, Revised Protest Directive, dated August 4, 1993, a copy of this decision attached to Customs Form 19, Notice of Action, should be provided by your office to the protestant no later than 60 days from the date of this decision and any reliquidations of entries in accordance with this decision must be accomplished prior thereto. Sixty days from the date of this decision the Office of Regulations and Rulings will take steps to make this decision available to Customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director
Commercial Rulings Division


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