HQ 223703: Ruling request concerning the manipulation and commingling ofdomestic and imported distilled spirits in a bonded warehouse; 19U.S.C. 1562; 19 CFR 19.11(d); 19 CFR 144.15; Customs BondedWarehouse Manual.

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 223703

                          July 2, 1992


WAR-3-01 CO:R:C:E 223703  TLS

CATEGORY: Entry

Mr. Daniel Femniak
Heublein Inc.
16 Munson Road
P.O. Box 388
Farmington, Connecticut  06034-0388

RE: Ruling request concerning the manipulation and commingling of
domestic and imported distilled spirits in a bonded warehouse; 19
U.S.C. 1562; 19 CFR 19.11(d); 19 CFR 144.15; Customs Bonded
Warehouse Manual.


Dear Mr. Femniak:

     The above-referenced ruling request has been received by
this office for consideration.  We have considered the points
raised in the request and our decision follows.

FACTS:

     The requester proposes to import into a Customs bonded
warehouse two different kinds of distilled spirits.  These
imports are to be commingled with domestically-produced distilled
spirits which are to be entered from a Bureau of Alcohol,
Tobacco, and Firearms (ATF) bonded warehouse.  The commingled
stock would be manipulated into one package which will be sold in
duty-free shops.

ISSUE:

     Whether the requester may legally enter domestically-
produced distilled spirits into a bonded warehouse for
manipulation with imported distilled spirits.

LAW AND ANALYSIS:

     Section 5214(a)(9) of 26 U.S.C. provides that distilled
spirits on which the internal revenue tax has not been paid or
determined may be withdrawn from the bonded premises of any
distilled spirits plant in approved containers without payment of
tax, for transfer (for the purpose of storage pending
exportation) to any customs bonded warehouse from which distilled
spirits may be exported.  Distilled spirits transferred under
this provision may not withdrawn for domestic consumption.  See
also 19 CFR 144.15(c).

     Section 1555 of 19 U.S.C. provides in pertinent part that
bonded warehouses may be utilized to store imported merchandise,
manufacture merchandise in bond, or repack, sort, or clean
imported merchandise by permission and under Customs supervision. 
Section 1562 of 19 U.S.C. provides in part the following:

     All merchandise [withdrawn from bonded warehouses]
     shall be withdrawn in the original packages in which
     imported unless, upon the application of the importer,
     it appears to the appropriate customs officer that it
     is necessary to the safety or preservation of the
     merchandise to repack or transfer the same: Provided,
     That upon permission therefor being granted by the
     Secretary of the Treasury, and under customs
     supervision, at the expense of the proprietor,
     merchandise may be cleaned, sorted, repacked, or
     otherwise changed in condition, but not manufactured,
     in bonded warehouses established for that purpose and
     be withdrawn for exportation to a foreign country... 
     (Emphasis in original.)

     Section 4.2 of the Customs Bonded Warehouse Manual also
covers eligibility of merchandise for bonded warehouse entry. 
Under section 4.2(a)(2), domestic distilled spirits may entered
into bonded warehouses if it is transferred directly from an ATF
bonded warehouse.

     In the present case, it is clear that the importer's
proposal to enter domestic distilled spirits into a customs
bonded warehouse from an ATF bonded warehouse is permissible.  It
is even more clear that imported distilled spirits may be entered
pursuant to 19 U.S.C. 1557.  The repacking procedure described
herein falls squarely within what may be authorized under 19
U.S.C. 1562.  Whether the procedure is to be authorized or not is
the responsibility of the director of the Customs district that
will be supervising the manipulation.  See Customs Bonded
Warehouse Manual, Parts 6.2 and 1.5.

     To the extent that the domestic distilled spirits may be
entered into a customs bonded warehouse, if the repacking with
imported distilled spirits is authorized, the repacked
merchandise may not be withdrawn for domestic consumption.  The
importer proposes to withdraw the manipulated merchandise for
sale in duty-free stores.  This activity is also discussed in the
Customs Bonded Warehouse Manual.  Any domestic distilled spirits
transferred to a customs bonded warehouse under the authority of
26 U.S.C. 5214(a)(9) may be withdrawn for sale by duty-free
stores to individuals departing the United States.  Customs
Bonded Warehouse Manual, Part 11.5(a).  It is clear that 
the non-taxed domestic distilled spirits in this case may be
entered into a customs bonded warehouse under 26 
U.S.C. 5214(a)(9) as long as they are transferred from an ATF
bonded warehouse in approved containers.


     Therefore, based on the foregoing, we find that the proposed
transaction is permissible under Customs laws and regulations to
the extent that the director of the Customs district supervising
the bonded warehouse authorizes the type of manipulation proposed
by the importer.
     
HOLDING:

     The importer may transfer non-taxed domestic distilled
spirits from a Bureau of Alcohol, Tobacco, and Firearms bonded
warehouse to a Customs bonded warehouse in approved containers. 
To the extent that the proposed repacking of the domestic
merchandise with imported distilled spirits is authorized by the
director of the Customs district supervising the bonded
warehouse, the importer may also withdraw the manipulated
merchandise for sale in duty-free stores to individuals departing
the United States.  (Note to importer:  The Customs Bonded
Warehouse Manual for Proprietors, Importers, and Customs Officers
may be purchased from the Superintendent of Documents, U.S.
Government Printing Office, Washington, D.C. 20402.)

                               Sincerely,




                               John Durant, Director