CLA-2 CO:R:C:F 955641 LPF
Mr. Bruce Shulman
Stein Shostak Shostak & O'Hara
Suite 807
1620 L Street, NW
Washington, D.C. 20036-5605
RE: Revocation of NYRL 863718; Classification of drink premix in
1702, HTSUS as other sugars, sugar syrups not containing
added flavoring or coloring matter; Not 2106 food preparation
Dear Mr. Shulman:
In New York Ruling Letter (NYRL) 863718, issued June 19, 1991,
a drink premix, imported from Canada, was classified in subheading
2106.90.5050, Harmonized Tariff Schedule of the United States
Annotated (HTSUSA), as food preparations not elsewhere specified
or included, other, subject to quota in subheading 9904.60.60,
HTSUSA. In your letter, dated November 15, 1993, it was stated
that you have been retained as counsel by Cando Apple Ltd., the
party on whose behalf NYRL 863718 was issued. We have reviewed
that ruling and have found it to be in error. The correct
classification is as follows. Pursuant to section 625, Tariff Act
of 1930 (19 U.S.C. 1625), as amended by section 623 of Title VI
(Customs Modernization) of the North American Free Trade Agreement
Implementation Act, Pub. L. 103-182, 107 Stat. 2057, 2186 (1993)
(hereinafter section 625), notice of the proposed revocation of
NYRL 863718 was published January 26, 1994, in the Customs
Bulletin, Volume 28, Number 4.
FACTS:
The product, described as a drink premix, is imported in bulk
tanks and used as the base ingredient in the production of a
beverage mix. It is our current understanding, from information
submitted by the importer, that the product typically includes
approximately 50% water, 50% beet or cane sugar, and 0.00345%
natural apple flavor. A Customs Laboratory Report, dated April 6,
1993, found four samples of the product to contain 0.002, 0.0012,
0.0015, and 0.0017% volatile components by weight. The lab was
unable to confirm the identities of these components as apple
flavor.
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ISSUE:
Whether the drink premix is classifiable within heading 2106
as a food preparation not elsewhere specified or included or within
heading 1702 as a sugar syrup not containing added flavoring or
coloring matter.
LAW AND ANALYSIS:
The General Rules of Interpretation (GRIs) taken in their
appropriate order provide a framework for classification of
merchandise under the HTSUS. Most imported goods are classified
by application of GRI 1, that is, according to the terms of the
headings of the tariff schedule and any relative section or chapter
notes. The Explanatory Notes (ENs) to the Harmonized Commodity
Description and Coding System, which represent the official
interpretation of the tariff at the international level, facilitate
classification under the HTSUS by offering guidance in
understanding the scope of the headings and GRIs.
Heading 2106 provides for food preparations not elsewhere
specified or included, while heading 1702 provides for sugar syrups
not containing added flavoring or coloring matter. EN(12) to 2106
indicates that the heading includes:
[p]reparations for the manufacture of lemonades
or other beverages, consisting, for example, of:
flavoured or coloured syrups, being sugar solutions
with natural or artificial substances added to give
them the flavour of, for example, certain fruits
or plants (raspberry, blackcurrant, lemon, mint,
etc.), whether or not containing added citric acid
and preservatives....
In contrast, the EN to 1702 indicates that the heading includes:
[s]yrups of all sugars...provided they do not contain
added flavouring or colouring matter....
Customs maintains that in order to be considered a flavored
syrup, an imported article must contain an added flavoring
substance and that substance should be in sufficient quantity to
impart the flavor's unique organoleptic characteristics. In this
case, inspection of the product by Customs officials, including
laboratory analysis as well as information from the importer
indicating that the product typically contains 0.00345% natural
apple flavor, has revealed that the added flavoring material is in
such small quantity as to impart no viable organoleptic
characteristics such as aroma and flavor. Its presence is viewed
as de minimis. See General Note 16, HTSUSA, stating that the
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term "containing," when used between the description of an article
and a material, means that the goods contain a significant quantity
of the named material and that with regard to the application of
such quantitative concepts, the de minimis rule applies. The
product does not qualify as a "flavored" syrup for the preparation
of beverages and consequently is not classifiable as a food
preparation.
Pursuant to a GRI 1 analysis, the terms of the headings and
relevant EN indicate that the drink premix is appropriately
classified within heading 1702 as a sugar syrup not containing
added flavoring or coloring matter. The appropriate subheadings
are 1702.90.31 and 1702.90.32, HTSUSA, dependent on whether the
product is described in paragraphs (a) and (b) of additional U.S.
note 3 to chapter 17, HTSUSA.
HOLDING:
The drink premix, entered pursuant to Notes 3(a) and 3(b), is
classifiable in subheading 1702.90.3100, HTSUSA. The general
column one rate of duty is 1.4606 cents per kilogram less 0.020668
cent per kilogram for each degree under 100 degrees (and fractions
of a degree in proportion) but not less than 0.943854 cent per
kilogram.
If not entered pursuant to Notes 3(a) and 3(b), the drink
premix is classifiable in subheading 1702.90.3200, HTSUSA. The
general column one rate of duty is 37.386 cents per kilogram.
In addition, subheading 9904.40.60, HTSUSA, provides that, in
any event, if the product is classifiable in either subheading, it
carries a supplemental agricultural import fee of 2.2 cents per
kilogram of the total sugars, but not in excess of 50 percent.
Products entering the United States under subheading 1702.90.31
or 1702.90.32 must be accompanied by a Certificate of Quota
Eligibility (CQE) executed by an official of a designated
certifying authority (e.g., either a government authority or a
designated commercial authority) in the country of origin. This
instrument requires that the product originate in the country of
export and that it not merely be a product transhipped through the
country issuing the CQE.
NYRL 863718 hereby is revoked.
In accordance with section 625, this ruling will become
effective 60 days after its publication in the Customs Bulletin.
Publication of rulings or decisions pursuant to section 625 does
not constitute a change of practice or position in accordance
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with section 177.10.(c)(1), Customs Regulations (19 CFR
177.10(c)(1)).
Sincerely,
John Durant, Director
Commercial Rulings Division