CLA-2 OT:RR:CTF:TCM H209838 GC
JFK Service Port
John F. Kennedy International Airport, Building 77
Jamaice, New York 11430
Attn: Joseph DiSalvo, Import Specialist
RE: Internal Advice; Tariff classification of certain malt beverages
Dear Port Director:
This letter is in reply to your request for Internal Advice, dated September 11, 2012, which pertains to the tariff classification under the Harmonized Tariff Schedule of the United States (HTSUS), of certain “Sparkletini” malt beverages imported by Carriage House Imports, Inc. (Carriage House) and produced by Bosca S.p.A. of Canelli, Italy. Specifically, your request pertains to Entry Entry 312-02740259, dated May 28, 2012. Through correspondence with Carriage House, we have identified four different varieties of malt beverages at issue herein that will be subject to this letter.
FACTS:
The merchandise at issue consists of four different malt beverages: “Green Apple Sparkletini Italian Spumante”; “Raspberry Sparkletini Italian Spumante”; “Peach Sparkletini Italian Spumante; and “Verdi Spumante”. Carriage House states that all four products are manufactured by adding different flavoring to a “beer base” that is produced from a mash of malted barley. Each bottle is labeled with the item’s flavor and the product name.
ISSUE:
Whether the instant malt beverages are classified under heading 2203, HTSUS, as beer made from malt, or under heading 2206, HTSUS, as other fermented beverages?
LAW AND ANALYSIS:
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRI’s). GRI 1 provides that the classification of goods shall be determined 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 may then be applied. The HTSUS provisions under consideration are as follows:
2203 Beer made from malt:
* * *
2206 Other fermented beverages (for example, cider, perry, mead); mixtures of fermented beverages and mixtures of fermented beverages and non-alcoholic beverages, not elsewhere specified or included:
In communication with this office, in which Carriage House argues that the subject merchandise is properly classified under heading 2203, HTSUS, counsel claims that the instant malt beverages satisfy the definition of “beer” set forth in the regulations of the Alcohol and Tobacco Tax and Trade Bureau of the U.S. Department of the Treasury (TTB). As an initial matter, we note that the above referenced TTB regulation pertains to the collection of federal excise taxes on alcoholic products, not as guidance for classification of imported merchandise. Accordingly, it has limited utility with respect to the analysis of the scopes of heading 2203, HTSUS. See Amersham Corp. v. United States, 5 C.I.T. 49, 56, 564 F.Supp. 813, 817 (1983) (Noting that “statutes, regulations and administrative interpretations relating to ‘other than tariff purposes’ are not determinative of [CBP] classification disputes.”).
Heading 2203, HTSUS, is an eo nomine provision, which “describes a commodity by a specific name, usually one well known to commerce." See Ruth F. Sturm, Customs Law & Administration § 53.2 at 2 (Supp. 1995) (citing United States v. Bruckmann, 65 C.C.P.A. 90, C.A.D. 1211, 582 F.2d 622, 625 n.8 (1978)). “The clear weight of the authorities on the subject is that an eo nomine statutory designation of an article, without limitations or a shown contrary legislative intent, judicial decision, or administrative practice to the contrary, and without proof of commercial designation, will include all forms of said article.” Nootka Packing Co. v. United States, 22 C.C.P.A. 464, 470, T.D. 47464 (1935); see also Lynteq, Inc. v. United States, 976 F.2d 693, 697 (Fed. Cir. 1992) ("Tariff terms contained in the statutory language "are to be construed in accordance with their common and popular meaning, in the absence of contrary legislative intent.'") (Citation omitted).
The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System at the international level. While not legally binding, and therefore not dispositive, the ENs provide a commentary on the scope of each heading of the Harmonized System and are thus useful in ascertaining the classification of merchandise under the System. See T.D. 89-80, 54 Fed. Reg. 35127 (Aug. 23, 1989).
In its discussion of the scope of heading 2203, HTSUS, EN 22.03 states, in pertinent part, that beer is “…obtained by fermenting a liquor (wort) prepared from malted barley or wheat, water and (usually) hops”. Notably, EN 22.03 indicates that flavoring matter may be added to the beer product, stating, in pertinent part that, “[c]herries or other flavouring substances are sometimes added during fermentation. Sugar (particularly glucose), colouring matter, carbon dioxide and other substances may also be added.” (Emphasis added).
A reading of EN 22.03 invariably leads to the conclusion that flavoring can be added during the fermentation process without causing the beverage to fall outside the scope of the heading. This is in keeping with the fact that beer comes in many varieties, ranging with respect to color (pale to dark), taste (sweet to bitter), and degree of flavor (mild to strong). See EN 22.03. However, in the instant case, the product information provided by you and the importer indicates that the flavoring is added to the “beer base” in steps subsequent to the fermentation process.
As noted by counsel to Carriage House, CBP addressed a case where malt-based products were subjected to post fermentation flavoring in Headquarters Ruling Letter (HQ) 084708, dated July 21, 1989. In HQ 084708, CBP classified the “Wildberry French Sparkler” and “Raspberry French Sparkler” beverages under heading 2206, HTSUS, as other fermented beverages. In so doing, we pointed out that the beverages subject to HQ 084708 were distinguishable from “beer” of heading 2203, HTSUS, because they were produced using malt cereals and hops that were “not normally used in manufacturing beer”, and because the flavoring was added after fermentation.
We disagree with Carriage House’s conclusion that HQ 084708 is inapposite due to the fact that the instant merchandise is produced from a different type of malt than that used in manufacturing the “Wildberry French Sparkler” and “Raspberry French Sparkler”. While the type of malt used to produce the beverages subject to HQ 084708 may differ from the subject malt beverages, this does not change the fact that flavoring is added after fermentation to produce a beverage that is entirely distinct from beer of heading 2203, HTSUS.
Regarding counsel’s claims that the subject malt beverages are intended to compete in the “beer market”, we note that many beverage products, both alcoholic and non-alcoholic, compete with beer in the marketplace. Likewise, many of these products do not fall under the scope of heading 2203, HTSUS. To that end, we discovered through our independent research that the instant malt beverages are sold in a variety of channels, many of which sell wine and other alcoholic beverages. Accordingly, assuming arguendo that the instant malt beverages do compete with beer in the marketplace, this does not lead to the conclusion that they are any more similar to beer than to wine and other beverages that also compete for market share in the alcoholic beverage industry.
The fact that the instant merchandise is flavored after fermentation and thus is not described by EN 22.03, along with the fact that the instant malt beverages are advertised and sold with wine and various other alcoholic beverages, leads to the conclusion the instant merchandise, like the beverages subject to HQ 084708, is not a form of “beer made from malt” covered by heading 2203, HTSUS. As such, it is classified under heading 2206, HTSUS, which provides for “other fermented beverages”.
HOLDING:
In accordance with GRI 1, the instant “Green Apple Sparkletini Italian Spumante”; “Raspberry Sparkletini Italian Spumante”; “Peach Sparkletini Italian Spumante; and “Verdi Spumante” malt beverages, are classified under heading 2206, HTSUS, and specifically provided for under subheading 2206.00.90, HTSUS, which provides for, in pertinent part: “[o]ther fermented beverages…: Other: Other….” The general, column one rate of duty is 4.2¢ per liter.
Duty rates are provided for convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at http://www.usitc.gov/tata/hts/.
You are to mail this decision to the internal advice requester no later than 60 days from the date of the decision. At that time, the Office of International Trade, Regulations and Rulings, will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division