HQ 555429: Applicability of alterations provision in subheading 9802.00.50, HTSUS, to isomerized hop extract

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                            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