16 July 2004 Excise Ruling 53307 - Cooking Wines

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 letter XXXXX concerning the excise duty status of several types of bulk cooking wines that you import for packaging and sale under private brand labels.

The following information is taken from your letter and from your telephone conversations with Steve Mosher XXXXX. Other information was obtained in conjunction with our earlier rulings XXXXX on a number of cooking wine brands that are imported for packaging and sale by your company.

Statement of Facts

Our understandings of the facts are as follows:

1. XXXXX is a corporation registered under Business Number (BN) XXXXX.

2. XXXXX is a wine licensee and also holds a specially denatured alcohol registration under the Excise Act, 2001 ("Act"). Prior to July 1, 2003, wine was administered under the Excise Tax Act ("ETA"); under that legislation XXXXX held an excise tax licence for the purposes of bottling cooking wines that it imported in bulk.

3. Under the ETA, XXXXX paid excise tax on its cooking wine, either at the time of importation when it entered Canada already packaged, or at the time of delivery to your customers where the cooking wine was imported in bulk for packaging prior to resale. Under section 27 of the ETA, "wines of all kinds" were subject to excise tax.

4. XXXXX imports in bulk the XXXXX, and XXXXX cooking wines that are packaged and marketed by your company under the XXXXX, and XXXXX labels. The salt and alcohol contents of these cooking wines, as determined by the Laboratory and Scientific Services Directorate of the Canada Border Services Agency (our laboratory) from the samples you submitted with your previous letters, are set out in our letters XXXXX.

5. Salted cooking wine is imported under customs tariff item 2103.90.20, which covers "mixed condiments and mixed seasonings". Beverage wine is covered by various tariff items under chapter 22 of the List of Tariff Provisions under the Customs Tariff.

6. The same imported bulk cooking wines that are packaged by your company under its own above-named brands are also packaged and sold under private brand labels. In the past, those labels have included ones such as XXXXX.

7. The samples of cooking wines that are packaged and sold by your company under its XXXXX, and XXXXX labels, and which are listed in our letters XXXXX, have all been found by our laboratory to be non-potable alcoholic formulations. Thus, they were found to fall within the parameters of paragraph (b) of the definition of "approved formulation" under section 2 of the Act. Accordingly, they are not considered to be beverage wines under the Excise Act, 2001.

8. XXXXX must receive approval from the XXXXX Liquor Control Board for each importation of cooking wine and must otherwise comply with their regulations, as well as any other provincial liquor authority in the province in which these products are distributed.

Ruling Requested

You have asked that the same bulk cooking wines that are imported by your company for packaging and sale under the XXXXX labels also be relieved of excise duty at the time of importation where they are intended for packaging and sale under private brand labels.

Ruling Given

Based on the facts set out above and from the information and recommendation we have previously received from our laboratory, we consider all bulk importations of the XXXXX, and XXXXX cooking wines, whether intended for packaging under your XXXXX and XXXXX labels or under private brand labels, to be non-potable alcoholic formulations. Thus, we consider the aforementioned cooking wines to fall within the parameters of paragraph (b) of the definition of "approved formulation" under section 2 of the Act, and not under the definition for "wine". As a result, they will not be subject to additional duty equal to excise at the time of 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.

Explanation

Under section 2 of the Act, paragraph (b) of the definition of "approved formulation" covers:

"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."

Paragraph (a) of the definition of "wine" under the same section of the Act provides for a beverage, containing more than 0.5% absolute ethyl alcohol by volume, that is produced without distillation, other than distillation to reduce the absolute ethyl alcohol content, by the alcoholic fermentation of

(i) an agricultural product other than grain,

(ii) a plant or plant product, other than grain, that is not an agricultural product, or

(iii) a product wholly or partially derived from an agricultural product or plant or plant product other than grain;

The cooking wines listed in our letters XXXXX were all determined to be non-potable alcoholic formulations, and therefore are not considered to fall within the Act's definition of "wine". Accordingly, based on the understanding that the same cooking wines which we ruled upon in those letters are imported in bulk for packaging and sale under both your company's labels, as listed in those letters, and also under private brand labels, they will remain not subject to additional duty equal to excise at the time of importation.

If at any time you plan to import other types of cooking wines not described by this letter or by our letters XXXXX, we recommend that you submit to our office samples of such products for analysis by our laboratory, along with a request for an application ruling.

Should you have any further questions or require any clarification of the above matter, please call me at (613) 954-4208, or Steve Mosher, at (613) 941-1497.

Sincerely,

Ron Hagmann, CGA
A/Manager
Excise Duty Operations - Alcohol

2004/06/10 — RITS 42264 — Eligibility for an Excise Duty Drawback