Dried Garlic packaged with U.S.-origin packaging materials; subheading 9801.00.10

HQ H242101 November 6, 2014 OT:RR:CTF:VS H242101 AJR CATEGORY: Classification TARIFF NO.: 9801.00.10 Mr. Brian Kavanaugh Trade Advisor Deringer Logistics Consulting Group 173 West Service Road Champlain, NY 12919 Re: Dried Garlic packaged with U.S.-origin packaging materials; subheading 9801.00.10 Dear Mr. Kavanaug: This is in response to your letter dated May 9, 2013, on behalf of Altius Spices and Seasoning Inc. (“Altius”), requesting a ruling concerning the applicability of subheading 9801.00.10, Harmonized Tariff Schedule of the United States (HTSUS), to U.S. origin bottles. Samples were submitted with your request. FACTS: This case concerns the packaging materials of three dried garlic products: a 2.5 ounce garlic powder; a 2.19 ounce chopped garlic; and a 3.17 ounce garlic powder. The Chinese-origin dried garlic contents of these products are packaged in Canada. In Canada, Altius tests, and if necessary, cleanses and sifts the dried garlic to ensure it meets the product specification and uniform size. Altius then packages the dried garlic in Canada using U.S.-origin packaging material (bottles, caps, and shrink wrap) and Canadian-origin packaging material (labels and cardboard trays). The packaging process includes filling the bottles with the dried garlic, capping and labeling the bottles, placing the bottles in a cardboard carton, and lastly shrink wrapping the carton. ISSUE: Whether the U.S.-origin packaging materials used to bottle, seal, and shrink wrap dried garlic products in Canada are eligible for the duty exemption under subheading 9801.00.10, HTSUS, when returned to the United States. LAW AND ANALYSIS: Subheading 9801.00.10, HTSUS, provides a full duty exemption for: Products of the United States when returned after having been exported, without having been advanced in value or improved in condition by any process of manufacture or other means while abroad. Articles satisfying the above conditions of the statute will be afforded duty-free treatment, provided the documentary requirements of section 10.1, U.S. Customs and Border Protection (CBP) Regulations (19 C.F.R. §10.1) are met. The act of filling U.S.-origin packaging containers with its contents is not considered to constitute an advancement or improvement of such containers. See Border Brokerage Company, Inc. v. United States, 314 F. Supp. 788 (1970); see also Headquarter Ruling (“HQ”) 145539 dated May 10, 2011; and see HQ 562469 dated October 16, 2002. In HQ 555806 dated January 14, 1991, thin-gauged plastic bags qualified for duty-free treatment under subheading 9801.00.10, HTSUS, because the bags were non-reusable U.S-origin packaging material that were exported in their finished condition and not subject to any other operation prior to their re-importation into the United States. In this case, the bottles, caps, and shrink wrap are U.S.-origin products that will be exported to Canada for the purpose of packaging dried garlic and importing the packaged dried garlic into the United States. Filling and sealing the U.S.-origin bottles with dried garlic does not constitute an advancement or improvement of the bottles. Therefore, we find that the bottles, caps, and shrink wrap may be classified separately and are eligible for duty-free treatment under the provisions of subheading 9801.00.10, HTSUS, provided the documentary requirements of 19 C.F.R. §10.1 are met. HOLDING: Based on the information provided, the U.S.-origin bottles, caps, and shrink wrap are eligible for duty-free treatment under subheading 9801.00.10, HTSUS, upon compliance with the documentation requirements set forth in 19 CFR §10.1. A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction. Sincerely, Monika R. Brenner, Chief Valuation and Special Programs Branch