HQ 953326: Decision on Application for Further Review of Protest No. 3304-92-100052, on the Merchandising Processing Fee Assessed on Juice Imported from Canada

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 953326

                           April 27,1993


CLA-2 CO:R:C:F  953326  JGH

CATEGORY: Classification

TARIFF NO.:  2009.70.000

District Director of Customs
300 Second Ave
Great  Falls, Montana  59401

RE:  Decision on Application for Further Review of Protest
     No. 3304-92-100052, on the Merchandising Processing Fee
     Assessed on Juice Imported from Canada

Dear Sir:

     This protest involves the amount of merchandise processing
fee imposed on certain entries in 1992 at Sweet Grass, Montana,
of reconstituted juice.

FACTS:

     Headquarters Ruling Letter (HRL) 556597 concerned the
classification of the merchandise in issue here: processed juice
concentrates.  The issue in that case was whether a juice
concentrate which was at least 83% U.S. origin could be returned
after processing in Canada as American Goods, under subheading
9801.00.10 or 9802.00.50, HTSUS.  However, it was concluded that
the processing in Canada, which consisted of diluting the
concentrate with water and packaging, was a finishing operation;
thus, beyond the scope of the claimed provisions.  Both the juice
concentrate and reconstituted juice are classifiable under the
provision for apple juice in subheading 2009.70.000, HTSUS.

     It is now claimed that under General Note 3(c)(vii) H,
United States-Canada Free-Trade Agreement Implementation Act of
1988 (CFTA), (Annex 301, CFTA), based on the value of the
originating goods and cost of assembly in Canada, the entries are
entitled to a lower merchandise processing fee. 
                              - 2 - 

ISSUE:

     Whether the entries are entitled to lower merchandise
processing fees by virtue of the CFTA.

LAW AND ANALYSIS:

     As previously stated, both the concentrated and
reconstituted juices are classifiable in subheading 2009.70.000,
HTSUS.  Under General Note 3(c)(vii)(4)(aa) a change from one
chapter to another is required for the provisions of the CFTA to
apply to products of this type classifiable in Chapter 20.  Thus,
the juice product is not a product of Canada for the purposes of
the CFTA.  Furthermore, the provisions of General Note 3(c)(vii)
G and H apply to assembly operations.  The reconstitution of the
juice was not an assembly operation.

     Section 203 of the United States-Canada Free-Trade Agreement
Act of 1988 (Act of Sept. 28, 1988, 102 Stat 1851, Pub.L. 100-
449) amended 19 U.S.C. 58c(b) by adding a new subparagraph (10)
which provided in pertinent part:

          The fee charged under subsection (a)(9) or
          (10) of this section with respect to goods
          of Canadian origin (as determined under
          section 202 of the United States-Canada
          Free-Trade Agreement Implementation Act of
          1988) shall be in accordance with Article 403
          of the United States-Canada Free-Trade Agreement.

     The merchandise that is the subject of this protest was
entered on October 6, and 8, 1992.  For that period of time
Article 403 of the Agreement provided that the user fee for
Canadian-origin goods was to be 40 percent of the user fee
otherwise applicable.  The provision applied only to goods
determined to originate in Canada under Section 202 of the
Implementation Act.  In this situation the Customs Service
determined that the apple juice which was imported after
reconsitution did not qualify as a Canadian article.  Therefore,
the reduction in the user fee does not apply. - 3 -

HOLDING:

     You are directed to deny the protest in full. 
 
     A copy of this decision should be provided to the protestant
with the Form 19 Notice of Action.

                              Sincerely, 





                              John Durant, Director