8 September 2004 Excise Ruling 54004 - Imported Packaged Denatured Alcohol, Tariff Classification 2207.20.19.00

Please note that the following document, although correct at the time of issue, may not represent the current position of the Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'agence.

Dear XXXXX:

Thank you for your XXXXX e-mail, together with copies of Canada Border Services Agency (CBSA) rulings, requesting the excise duty implications of importing the packaged denatured alcohol products for which you received the CBSA rulings.

The following information is taken from your e-mail, the CBSA ruling letters, your previous e-mails and telephone conversations with the undersigned, your company's catalogue of products available on your company's website, the Canada Revenue Agency (the CRA) business number system and the Excise Act, 2001 (the Act).

Statement of Facts

Our understanding of the facts is as follows:

1. XXXXX imports into Canada packaged denatured alcohol.

2. XXXXX sells and distributes this product to various Canadian customers, including laboratories, without repackaging the product.

3. XXXXX requested and received a ruling from CBSA on the tariff classification of XXXXX specific denatured alcohol products.

4. The specific products were XXXXX.

5. The CBSA ruled that all XXXXX products are not specially denatured or denatured alcohol within the meaning of the Act and are considered "denatured ethyl alcohol (other) and should be classified 2207.20.19.00".

6. The CBSA also ruled that classification number 2207.20.19.00 is subject to an additional duty equivalent to excise duty of $11.066 per litre of absolute ethyl alcohol regardless of end use.

7. Section 2 of the Act defines "approved formulation" to mean

"(a) any product made with alcohol by a licensed user in accordance with a formula for which the user has approval from the Minister; and

(b) any imported product that, in the opinion of the Minister, would be a product under paragraph (a) if it were made in Canada by a licensed user."

8. Section 2 of the Act defines "packaged" to mean

"(b) in respect of alcohol, packaged

(i) in a container of a capacity of not more than 100 L that is ordinarily sold to consumers without the alcohol being repackaged;"

9. Section 2 of the Act defines "spirits" to mean "any material or substance containing more than 0.5% absolute ethyl alcohol by volume other than

(a) wine;

(b) beer;

(c) vinegar;

(d) denatured alcohol;

(e) specially denatured alcohol;

(f) an approved formulation;

(g) any product containing or manufactured from a material or substance referred to in paragraphs (b) to (f) that is not consumable as a beverage."

10. XXXXX are packaged in containers of less than 100 litres; XXXXX is packaged in containers of less than 100 litres and in containers of more than 100 litres. None of the products will be repackaged.

11. XXXXX does not hold a licence or registration issued under the Act.

12. The analysis of the samples submitted found the products to be non-potable and determined that they could meet paragraph (b) of the definition of "approved formulation".

Ruling Requested

You have asked for a ruling on the excise duty implications related to importing and selling, but not repackaging, the packaged denatured alcohol for which you received the Customs ruling, namely, XXXXX. That is, packaged denatured alcohol that is not specially denatured or denatured alcohol within the meaning of the Act and classified as 2207.20.19.00 under the Customs Tariff.

Ruling Given

Based on the facts set out above, for excise duty purposes the products in question, XXXXX, are not "spirits" as defined in section 2 of the Act. With the exception of the XXXXX product that is packaged in a container that exceeds 100 litres, the products meet the definition of "packaged" in section 2 of the Act.

The excise duty implications for XXXXX on the importation of the packaged denatured alcohol in question and reported under tariff classification 2207.20.19.00 are the following.

XXXXX may import these specific packaged denatured alcohol products classified under 2207.20.19.00 without the requirement of a licence under the Act and without the payment of the additional duty equivalent to excise duty. Upon importation, these specific imported packaged denatured alcohol products would not be subject to any excise control.

If XXXXX wished to import packaged denatured alcohol products other than XXXXX, and report them under tariff classification 2207.20.19.00, then XXXXX could do so provided that the products were packaged as defined in section 2 of the Act and the additional duty equivalent to excise duty was paid upon importation.

We are bound by this ruling provided that none of the above issues is currently under audit, objection, or appeal under the provisions of the Act; that there are no relevant changes in the future to the Act or to our interpretative policy; and that you have fully described all the necessary facts and the products for which you requested this ruling.

If you have any questions or require any clarification on the above matter, please contact me at (613) 954-5897.

Sincerely,

Joy Piepjohn, CMA
Senior Rulings Officer
Excise Duty Operations - Alcohol

2004/08 — RITS 52961 — Brand of Cigarettes