Applicability of alterations provision in subheading 9802.00.50, HTSUS, to isomerized hop extract

HQ 555429 November 7, 1989 CLA-2-CO:R:C 555429 RA CATEGORY: Classification TARIFF NO.: 9802.00.50, HTSUS Mr. G. H. Salazar S. S. Steiner, Inc. 655 Madison Avenue New York, New York 10021-8078 RE: Applicability of alterations provision in subheading 9802.00.50, HTSUS, to isomerized hop extract Dear Mr. Salazar: This is in response to your letter of June 22, 1989, regarding the dutiable status of isomerized hop extract processed in the United Kingdom from a different form of extract. FACTS: Hop extract produced in the United States is sent abroad for processing into isomerized hop extract. The operations employed consist of boiling the extract with a 1.54% solution of potassium carbonate for 60 to 90 minutes, cooling, removal of waxy materials containing hop oils, treatment with sulfuric acid to clarify, and reaction with potassium carbonate and hydroxide to obtain the imported finished product. ISSUE: Can the processing in the foreign country be considered an alteration under subheading 9802.00.50, Harmonized Tariff Schedule of the U.S. (HTSUS)? LAW AND ANALYSIS: Subheading 9802.00.50, HTSUS, provides for a partial exemption from duty for articles returned after having been exported for alterations. The articles must be completely finished when exported from the U.S. and not undergo any intermediate processing operations to finish them while abroad. Application of the exemption is precluded where the processing results in completing the manufacture begun in the U.S. Dolliff & Company, Inc. v. U.S., 66 CCPA 77, C.A.D. 1225, 599 F.2d 1015 (1971). The information you have provided indicates that the hop extract exported from the U.S. must be subjected to extensive foreign processing in order to change it into the desired end product known as isomerized hop extract. Therefore, the operations required to achieve the finished imported material exceeds an alteration thereby precluding tariff treatment under the provisions of subheading 9802.00.50, HTSUS. HOLDING: Hop extract exported and subjected to extensive chemical and physical treatment abroad to change it into a product called isomerized hop extract cannot be considered as merely altered under the provisions of subheading 9802.00.50, HTSUS. Sincerely, John Durant, Director Commercial Rulings Division