Applicability of duty exemption available under HTSUS subheading 9801.00.10 to infant formulas packaged abroad.Packaging;John V. Carr;C.S.D. 79-184;555624

HQ 555685 August 15, 1990 CLA-2 CO:R:C:V 555685 KAC CATEGORY: CLASSIFICATION TARIFF NO.: 9801.00.10 Sandra L. Friedman, Esq. Barnes, Richardson & Colburn 475 Park Avenue South New York, New York 10016 RE: Applicability of duty exemption available under HTSUS subheading 9801.00.10 to infant formulas packaged abroad.Packaging;John V. Carr;C.S.D. 79-184;555624 Dear Ms. Friedman: This is in response to your letter dated June 27, 1990, on behalf of Bristol-Myers Company, requesting a ruling concerning the applicability of subheading 9801.00.10, Harmonized Tariff Schedule of the United States (HTSUS), to infant formulas imported from Canada. Samples were submitted for examination. FACTS: Bristol-Myers will ship U.S. origin powder infant formulas, "Enfamil", "Enfamil With Iron", and "ProSobee", in drums to Canada. In Canada, the infant formulas will be packaged into consumer size cans. The infant formulas will not undergo any further processing, such as blending or mixing, in Canada, except for the above described packaging operations. Upon completion of the packaging operation, the infant formulas will be imported into the U.S. ISSUE: Whether the infant formulas are eligible for the duty exemption available under HTSUS subheading 9801.00.10 when imported into the U.S. LAW AND ANALYSIS: Subheading 9801.00.10, HTSUS, provides for duty-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. Articles satisfying the above conditions of the statute will be afforded duty-free treatment, provided the documentary requirements of section 10.1, Customs Regulations (19 CFR 10.1), are met. The packaging abroad of U.S.-made products will not preclude classification under this tariff provision when there is no improvement in condition or advancement in value of the products themselves, apart from their containers. See, United States v. John V. Carr & Sons, Inc., 69 Cust.Ct. 78, C.D. 4377 (1972), aff'd 61 CCPA 52, C.A.D. 1118 (1974), in which the court stated that absent some alteration or change in the item itself, the mere repackaging of the item, even for the purpose of resale to the ultimate consumer, is not sufficient to preclude the merchandise from being classified under item 800.00, Tariff Schedules of the United States (TSUS) (the precursor to subheading 9801.00.10, HTSUS). We have consistently held that packaging a finished product from large containers into smaller containers for retail sale is permissible under subheading 9801.00.10, HTSUS. See, C.S.D. 79- 184, 13 Cust.Bull. 1250 (1979), which held that the transfer of brake fluid from large tanks to 12-ounce cans did not advance the value or improve the condition of the brake fluid; and Headquarters Ruling Letter 555624 dated May 1, 1990, which held that U.S. perfumes packaged into sample pouches qualified for HTSUS subheading 9801.00.10 treatment. In the present case, the infant formulas will be exported in a finished condition to Canada to be packaged into consumer size cans, and will not be subjected to any other operations prior to their return. The infant formulas will not be advanced in value or improved in condition while abroad. Accordingly, the infant formulas will qualify for treatment under HTSUS subheading 9801.00.10. HOLDING: On the basis of the information and samples submitted, as the infant formulas will not be advanced in value or improved in condition abroad as a result of the packaging operation, they will qualify for the duty exemption available under HTSUS subheading 9801.00.10, upon compliance with the documentary requirements of 19 CFR 10.1. Sincerely, John Durant, Director Commercial Rulings Division