CLA-2 OT:RR:CTF:TCM H008511 IDL
Mr. Bob Forbes
ROE Logistics
660 Bridge Street
Montreal, Quebec H3K 3K9
Canada
Re: Bittersweet Chocolate; Revocation of NY N005523
Dear Mr. Forbes:
This letter concerns New York Ruling Letter (NY) N005523, dated February 13, 2007, issued to you by the National Commodity Specialist Division, U.S. Customs and Border Protection (CBP). At issue in that ruling was the correct classification of bittersweet chocolate (Product No. CHD-F050100-15-105) under the Harmonized Tariff Schedule of the United States (HTSUS). We have reviewed NY N005523 and have found that it is incorrect.
Pursuant to section 625(c), Tariff Act of 1930 (19 U.S.C. § 1625(c)), 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), notice of the proposed revocation was published in the Customs Bulletin, Volume 42, No. 29, on July 9, 2008. No comments were received in response to the notice.
FACTS:
In NY N005523, CBP classified bittersweet chocolate from France “stated to contain 44.0 percent cocoa paste, 28.5 percent sugar, 11.5 percent cocoa butter, 9.0 percent inulin, 6.5 percent corn dextrin, 1.0 percent soya lecithin and 0.5 percent vanillin” under subheadings 1806.20.9500 or 1806.20.9800, HTSUSA, depending on whether the quantitative limits of Additional U.S. Note 8 to Chapter 17 had been reached. The bittersweet chocolate was shipped in 5-kilogram blocks and was intended for use in enrobing food items.
CBP is now taking the position that the bittersweet chocolate described in NY N005523 was classified incorrectly, and that the chocolate should be classified under subheading 1806.20.9900, HTSUSA.
ISSUE:
Whether the bittersweet chocolate described above is correctly classified under subheadings 1806.20.9500/9800, HTSUSA, or under subheading 1806.20.9900, HTSUSA?
LAW AND ANALYSIS:
Merchandise is classifiable under the HTSUS in accordance with the General Rules of Interpretation (GRIs). The systematic detail of the HTSUS is such that most 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. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs 2 through 6 may then be applied in order.
The HTSUSA provisions under consideration are as follows:
1806 Chocolate and other food preparations containing cocoa:
* * *
Other preparations in blocks, slabs or bars, weighing more than 2 kg or in liquid, paste powder, granular or other bulk form in containers or immediate packings, of a content exceeding 2 kg:
* * *
Other:
* * *
Other:
* * *
Other:
* * *
Other:
* * *
Articles containing over 10 percent by dry weight of sugar described in additional U.S. note 3 to chapter 17:
1806.20.9500 Described in additional U.S. note 8 to chapter 17 and entered pursuant to its provisions…..
1806.20.9800 Other 2/…..
1806.20.9900 Other…..
In understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System Explanatory Notes (ENs) may be utilized. The ENs, although not dispositive or legally binding, provide a commentary on the scope of each heading of the HTSUS, and are the official interpretation of the Harmonized System at the international level. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
EN 18.06 provides the following:
Chocolate is composed essentially of cocoa paste and sugar or other sweetening matter, usually with the addition of flavouring and cocoa butter….
Chocolate and chocolate goods may be put up either as blocks, slabs tablets, bars, pastilles, croquettes, granules or powder, or in the form of chocolate products filled with creams, fruits, liqueurs, etc.
The heading also includes all sugar confectionery containing cocoa in any proportion (including chocolate nougat), sweetened cocoa powder, chocolate powder, chocolate spreads, and, in general, all food preparations containing cocoa (other than those excluded in the General Explanatory Note to this Chapter).
As stated above, the bittersweet chocolate contains ingredients that
include cocoa paste, sugar, cocoa butter, and vanillin (flavoring). On that basis, we find that it meets the requirements of heading 1806, HTSUS, and the description of chocolate and chocolate goods provided in EN 18.06. As such, the bittersweet chocolate is properly classified in heading 1806, HTSUS. Further, we find that because the bittersweet chocolate is shipped in 5-kilogram blocks, it meets the requirements of subheading 1806.20, HTSUS.
According to the information submitted, the bittersweet chocolate contains over 10 percent by dry weight of sugar. However, subheadings 1806.20.9500 and 1806.20.9800, HTSUSA, require that articles containing over 10 percent by dry weight of sugar be described in Additional U.S. Note 3 to Chapter 17, which provides as follows:
For purposes of this schedule, the term “articles containing over 10 percent by dry weight of sugar described in additional U.S. note 3 to chapter 17” means articles containing over 10 percent by dry weight of sugars derived from sugar cane or sugar beets, whether or not mixed with other ingredients, except … (d) cake decorations and similar products to be used in the same condition as imported without any further processing other than the direct application to individual pastries or confections, finely ground or masticated coconut meat or juice thereof mixed with those sugars, and sauces and preparations therefor.
Although the bittersweet chocolate does contain over 10 percent by dry weight of sugar, when CBP previously classified this merchandise we failed to consider that the bittersweet chocolate was “intended for use in enrobing” and, therefore, fell under the exception listed in subsection (d) of Additional U.S. Note 3 to Chapter 17. As such, the bittersweet chocolate should have been precluded from classification under subheadings 1806.20.9500 and 1806.20.9800, HTSUSA. Accordingly, we now find that the bittersweet chocolate is classified under subheading 1806.20.9900, HTSUSA. CBP has previously classified chocolate products containing over 10 percent by dry weight of sugars and used for enrobing desserts under subheadings 1806.20.9900, HTSUSA. See NY I89145, dated January 9, 2003, and NY I89812, dated January 24, 2003.
HOLDING:
By application of GRI 1, the bittersweet chocolate is classified in heading 1806, HTSUS, and is specifically provided for under subheading 1806.20.9900, HTSUSA, as “Chocolate and other food preparations containing cocoa: Other preparations in blocks, slabs or bars, weighing more than 2 kg… Other … Other … Other … Other … Other.” The 2008 column one, general rate of duty is 8.5% ad valorem.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at http://www.usitc.gov/tata/hts/.
This merchandise is subject to the Public Health Security and Bioterrorism Preparedness and Response Act of 2002 (The Bioterrorism Act), which is regulated by the Food and Drug Administration (FDA). Information on the Bioterrorism Act can be obtained by calling the FDA, at (301) 575-0156, or from the World Wide Web at http://www.fda.gov/oc/bioterrorism/bioact.html.
EFFECT ON OTHER RULINGS:
NY N005523, dated February 13, 2007, is hereby revoked. In accordance with 19 U.S.C. § 1625(c), this ruling will become effective 60 days after publication in the Customs Bulletin.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division