HQ 954133: Decision on application for further review of Protest No. 3901-93-100510, filed March 25, 1993; Classification of raw cane sugar in 1701, HTSUS, as cane or beet sugar in solid form; Exempt from agricultural import fee under subheading 9904.40.20 for sugar not to be further refined or improved in quality; Note 4(b) to Chapter 99, Subchapter IV.

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 954133

                         March 23, 1994

CLA-2 CO:R:C:F 954133 LPF

CATEGORY: Classification

TARIFF NO.: 1701.11.01

District Director
U.S. Customs Service
610 S. Canal Street
Chicago, IL 60607

RE: Decision on application for further review of Protest No.    
    3901-93-100510, filed March 25, 1993; Classification of raw  
    cane sugar in 1701, HTSUS, as cane or beet sugar in solid    
    form; Exempt from agricultural import fee under subheading   
    9904.40.20 for sugar not to be further refined or improved in
    quality; Note 4(b) to Chapter 99, Subchapter IV.

Dear Sir:

     This is a decision on a protest filed March 23, 1993 against
your decision regarding the applicability of an agricultural import
fee concerning merchandise liquidated on January 8, 1993.

FACTS:

     The product at issue is raw cane sugar imported from Panama. 
Once imported into the U.S., the dry sugar initially is passed
through a magnet to remove metallic specks.  The sugar then is
melted together with corn syrup and water to form a syrup.  After
mixing, the syrup is passed through a 50 mesh screen and heated to
210-220 degrees Fahrenheit.  The heated syrup then is passed
through a 325 mesh screen, in-line ultra-violet (UV) process,
coolers, and in-line magnets before entering storage tanks equipped
with surface UV light devices.  After passing through a strainer
of 80 mesh baskets, the prepared sugar syrup is transferred to a
tank truck.  At the Tootsie Roll plant, the sugar syrup is passed
through another strainer of 80 mesh, placed into supply tanks with
UV light, and finally put into surge tanks.  The syrup is used to
make confectionery products.

     Customs and the protestant agree that the product is
classifiable in subheading 1701.11.01, Harmonized Tariff Schedule
of the United States Annotated (HTSUSA), as "Cane or beet sugar
and chemically pure sucrose, in solid form: Raw sugar not
containing added flavoring or coloring matter: Cane sugar: 



                               -2-

Described in paragraphs (a) and (b) of additional U.S. note 3 to
chapter 17 and entered pursuant to its provisions."

     However, you maintain that the product qualifies, under
subheading 9904.40.20, HTSUSA, as "Sugars, syrups and molasses
derived from sugar cane or sugar beets...: Principally of
crystalline structure or in dry amorphous form, provided for in
subheading 1701.11...: Not to be further refined or improved in
quality," requiring an additional agricultural import fee of 2.2
cents per kilogram.  The protestant disagrees.

ISSUE:

     Whether the raw cane sugar is further refined or improved in
quality, as provided for in subheading 9904.40.20, HTSUS. 

LAW AND ANALYSIS:

     The General Rules of Interpretation (GRIs) taken in their
appropriate order provide a framework for classification of
merchandise under the HTSUS.  In this case, Customs and the
protestant agree that the raw cane sugar is classifiable, pursuant
to GRI 1, in subheading 1701.11.01, HTSUSA.
 
     However, subheading 9904.40.20, HTSUSA, promulgated pursuant
to Section 22 of the Agricultural Adjustment Act, indicates that
an agricultural import fee will be assessed, in part, on sugars
and syrups derived from sugar cane, provided for in subheading
1701.11, not to be further refined or improved in quality.  In this
regard, Note 4(b) to Chapter 99, Subchapter IV, indicates that:

          Not to be further refined or improved in
          quality as used in subheading 9904.40.20
          means not to be further refined or improved
          in quality by being subjected substantially
          to the processes of (1) affination or
          defecation, (2) clarification or (3) further
          purification by absorption or crystallization.

     In general, cane sugar refining involves the specific
processes listed above.  Refining occurs when raw sugar (a mixture
of crystals of sucrose surrounded by a film of molasses) undergoes
affination, the process which softens and removes the molasses film
with a saturated sugar liquor.  In this step, the raw sugar is
mixed in a mingler with just enough heavy syrup to make a thick
paste or magma.  The magma is heated in a mixer to reduce the
viscosity of the syrup and molasses and then is centrifuged to
remove the liquid.  The crystalline sugar which remains in the
centrifugal basket is spray-washed with a small 



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amount of hot water.  It now is of a considerably higher purity
than the incoming raw sugar and is called "washed raw sugar."  The
Avi Publishing Company, Inc., Encyclopedia of Food Technology 872
(1974) and Rand McNally & Co., This Is Liquid Sugar 12, 13 (1955).

     During the next steps, defecation and clarification,
impurities such as pectins, gums, starches, and albumins are
removed.  The liquor is treated with lime and phosphoric acid which
combine to form a floc.  It then is aerated and passed into steam-
heated clarification tanks.  Here the air bubbles expand and slowly
rise to the surface, carrying with them the calcium phosphate floc
and other coagulated matter.  The mud is continuously scraped off
the top, and the clear liquor overflows into the clarified liquor
tank.  Encyclopedia of Food Technology, supra, and This is Liquid
Sugar, supra.

     The liquor then is passed through either char and/or vegetable
or granular carbon filtration, in which certain color bodies and
dissolved salts are absorbed on the char.  The char filters are
large vessels filled with coarse particles of this activated
granular absorbent.  Finally, the sucrose solution is heat-
sterilized, concentrated in an evaporator to 67 percent solids,
cooled, and pumped to storage tanks.  Encyclopedia of Food
Technology, supra, and This Is Liquid Sugar, supra.
               
     The process which the raw cane sugar undergoes does not
completely fit this description of "refining."  However, after
consulting with the Foreign Agricultural Service, Department of
Agriculture, we maintain that insofar as the raw cane sugar is
magnetically processed, heated, passed through mesh screens, and
UV treated, it is "improved in quality" by being subjected
"substantially" to the processes of clarification and purification. 
Pursuant to Note 4(b) to Chapter 99, Subchapter IV, the product
does not fall within subheading 9904.40.20 and is not subject to
the additional agricultural import fee.

HOLDING:

     The raw cane sugar is classifiable in subheading 1701.11.01,
HTSUSA, as "Cane or beet sugar and chemically pure sucrose, in
solid form: Raw sugar not containing added flavoring or coloring
matter: Cane sugar: Described in paragraphs (a) and (b) of
additional U.S. note 3 to chapter 17 and entered pursuant to its
provisions."  The general column one rate of duty is 1.4606 cents
per kilogram less 0.020668 cents per kilogram for each degree under
100 degrees (and fractions of a degree in proportion) but not less
than 0.943854 cents per kilogram.  We note that products classified
in 1701.11.01 are eligible for duty free treatment under the
Generalized System of Preferences (GSP) provided they meet the
requirements of General Note 4(c), HTSUSA.


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     As the product is improved in quality by being subjected
substantially to clarification and purification, it does not carry
an additional agricultural import fee.

     Because exemption from the agricultural import fee as
indicated above will result in the lower rate of duty as claimed,
you are instructed to allow the protest in full.  A copy of this
decision with the Form 19 should be sent to the protestant.

     In accordance with Section 3A(11)(b) of Customs Directive 099
3550-065, dated August 4, 1993, Subject: Revised Protest Directive,
this decision should be mailed by your office to the protestant no
later than 60 days from the date of this letter.  Any reliquidation
of the entry in accordance with the decision must be accomplished
prior to mailing of the decision.  Sixty days from the date of the
decision, the Office of Regulations and Rulings will take steps to
make the decision available to Customs personnel via the Customs
Rulings Module in ACS, and to the public via the Diskette
Subscription Service, Lexis, the Freedom of Information Act and
other public access channels. 

                                   Sincerely,



                                   John Durant, Director
                                   Commercial Rulings Division