HQ 083882: Applicability of Federal Excise Tax to Fruit concentrates and essences.

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 083882

                                   APRIL 17,1990


            CLA -2 CO: R: C: G: 083882 JGH

            CATEGORY:  Classification

            TARIFF NO.: 450.30, TSUS

            District Director
            U.S. Customs Service
            511 N.W. Broadway Fed. Bldg.
            Suite 198
            Portland, Oregon

            RE:  Applicability of Federal Excise Tax to Fruit
                 concentrates and essences.

            Dear Sir:

                 The protest involves the assessment of a federal excise
            tax on fruit flavors and extracts from Austria.

            FACTS:

                 The merchandise, raspberry essence, was entered in
            November 1986.  The essence is described as a natural product
            produced during the concentration of raspberry juice by heat.
            When the juice is heated the volatile flavoring boils off,
            and is then trapped and added back to the concentrate when it
            is diluted to single strength for bottling.  The essence is
            said to be made up of dozens of flavor elements, such as
            alcohols, esters, aldehydes, and ketones.  The usual ethanol
            content of the raspberry product is said  to range from 2 to 4
            percent.  The imports are sold to juice bottlers who use them
            to restore the flavor lost during the concentration.  A
            statement from the Bureau of Alcohol, Tobacco and Firearms
            (BATF) is that a sample of raspberry ester had an ethanol
            content of 6.9 percent by volume and, further, it was concluded
            that the product was unfit for beverage use..

            ISSUE:

                 Whether the federal excise tax is applicable to these
            products.

















                                          -2-


             LAW AND ANALYSIS:

                  Essentially, it is the port's position that because the
            fruit essence or concentrates contain alcohol, they are subject
            to the federal excise taxes, unless it is proven that the
            alcohcol was not added.  BATF regulations recognize that fruit
            concentrates or essences of this type naturally contain some
            alcohol. The excise tax applies if these products are beverages
            or can be used for beverage purposes.  Since the imports are
            used as flavors for juices, they are not in themselves
            beverages, or fit for beverage use, and, therefore would not
            be subject to the excise tax.  It was BATF's, conclusion that
            the imports were not subject to the excise tax.

            HOLDING:

                 The protest should be allowed in full.

                 A copy of this decision should be provided the protestant
            along with the copy of Form 19 Notice of Action.

                                        Sincerely,




                                        Jerry Laderberg, Acting Director
                                        Commercial Rulings Division

































            6 cc A.D., N.Y. Seaport
            hurley library/peh
            083882