Ruling of the Week 2016.11: Seriously?

Calling this post a "Ruling of the Week" is a little disingenuous. It has been many weeks since I was able to make a "weekly" post. Nevertheless, this is my effort to get back on that self-imposed horse.

Today, we look at HQ H264891(Apr. 5, 2016), primarily because before I read this ruling I had never heard of "tendu leaf cones." I bet most you had not.

A tendu turns out to be the East Indian Ebony tree, diospyros melanoxylon. Someone decided to import leaves of the tendu tree rolled into a tapered cone and secured with threads and a band. You might reasonably be wondering why anyone would need this product. It turns out that these cones are commonly used as wrappers for bidis, which are an alternative to cigars and can be packed with tobacco or "other smoking mixtures." This image should help illustrate what we are talking about.

Keep in mind that as imported the cones were empty. They were, however, packaged with a plastic tool designed to facilitate filling and packing the cones with whatever smoking material the consumer chooses.

The potential HTSUS headings for this product are 1404, Vegetable products not elsewhere specified or included; 3926, Other articles of plastic; or 4813, Cigarette papers.

Because 1404 is a basket provision, it will only apply if one of the other two more specific headings does not apply. As between 3926 and 4813, it seems clear that cigarette paper is the more specific of the two headings. So, we should start there.

The obvious problem is that a leaf is not, in any ordinary sense of the word, "paper." According to the Explanatory Notes, "Paper consists essentially of the cellulosic fibres of the pulps of Chapter 47 felted together in sheet form." Because of this, Customs has previously ruled that tobacco wrappers made of tobacco leaves are not classified as cigarette papers. That would apply to the unprocessed tendu leaves, and exclude them from Heading 4813.

Customs then determined that the cones and plastic stick constitute a retail set to be classified on the basis of the single product that imparts the essential character. Here, Customs focused on the single item without which the set could not meet its particular need or carry out its specific activity. Customs concluded, reasonably enough, that the tendu leaves impart the essential character.

That, of course, leads to the question of where to classify the leaves. The only remaining option is Heading 1404 as other vegetable products and the applicable rate of duty is free.

So far so good. But, Customs is a law enforcement agency and is responsible for border enforcement for both the Food & Drug Administration and the Alcohol and Tobacco Tax Bureau. One has to wonder whether the importer contemplated that its classification ruling request may end up raising issues of admissibility. Customs specifically warned the importer that it did not rule on the admissibility of the merchandise. It may be subject to additional regulations under the Food, Drug, and Cosmetic Act as amended by the Family Smoking Prevention and Tobacco Control Act. Moreover, the tendu cones may be subject to federal excise taxes. Now that those issues have been raised, the prospective importer should be certain to confirm admissibility and tax status before investing much effort in trying to import these products.


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