U.S. rice industry officials Saturday begrudgingly took down their display on the last day of a major Japanese food exhibition outside Tokyo after being threatened with prosecution in what has been a continuing tug of war over 10 pounds of American rice.

To hear Japan's Food Agency officials tell the story, the government's warning of prosecution was the last in a series of attempts since last year to make U.S. rice industry officials understand the gravity of their violation of Japanese law.Japan bans rice imports and the government regards the display as an illegal action tantamount to a penalty of either paying some $22,000 or spending two years in jail.

U.S. rice industry officials, however, considered the government's action unwarranted and yet another example of the Japanese government's exaggerated obstinance toward rice imports, an issue that has been a source of bilateral trade friction for several years.

"This is a very clear signal that Japan has no intention of negotiating seriously in the GATT (General Agreement of Tariffs and Trade) negotiations. We intend to return to Washington and appeal to the administration and to Congress for help," said David Graves, president of the U.S. Rice Millers' Association.

Both Japan and the United States will be participating in a multilateral meeting of the Agriculutral Negotiating Group, under GATT, in Geneva this April where the issue of rice imports is expected to be discussed.