OT:RR:CTF:FTM: H308080 PJG

Ms. Hazel Ing
Flegenheimer International Inc.
227 W. Grand Ave
El Segundo, CA 90245

RE: Revocation of NY N303841 (classification of instant coffee mixes from Malaysia)

Dear Ms. Ing:

On May 2, 2019, U.S. Customs and Border Protection (“CBP”) issued New York Ruling Letter (“NY”) N303841 to you, filed on behalf of your client, Seasons Service Inc. DBA The Swallow. The ruling pertained to the tariff classification under the Harmonized Tariff Schedule of the United States (“HTSUS”) of three instant coffee mixes: LUWAK “Coffee Global Original,” LUWAK “Coffee Global Non-Sweet,” and LUWAK “Coffee Global Mixed Nuts.”

In NY N303841, CBP classified LUWAK “Coffee Global Original” and LUWAK “Coffee Global Non-Sweet” in subheading 2101.11.2126, Harmonized Tariff Schedule of the United States Annotated (“HTSUSA”), which provides for “Extracts, essences and concentrates, of coffee, tea or maté and preparations with a basis of these products or with a basis of coffee, tea or maté; roasted chicory and other roasted coffee substitutes, and extracts, essences and concentrates thereof: Extracts, essences and concentrates of coffee, and preparations with a basis of these extracts, essences or concentrates or with a basis of coffee: Extracts, essences and concentrates: Instant Coffee, not flavored: Not decaffeinated: Packaged for retail sale.” CBP classified LUWAK “Coffee Global Mixed Nuts” in subheading 2101.11.2941, HTSUSA, which provides for “Extracts, essences and concentrates, of coffee, tea or maté and preparations with a basis of these products or with a basis of coffee, tea or maté; roasted chicory and other roasted coffee substitutes, and extracts, essences and concentrates thereof: Extracts, essences and concentrates of coffee, and preparations with a basis of these extracts, essences or concentrates or with a basis of coffee: Extracts, essences and concentrates: Other: Packaged for retail sale.”

We have reviewed NY N303841 and found it to be in error with regard to the tariff classifications of the instant coffee mixes. For the reasons set forth below, we hereby revoke NY N303841.

Pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C. § 1625(c)(1)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. No. 103-182, 107 Stat. 2057, 2186 (1993), notice of the proposed action was published on April 22, 2020, in Volume 54, Number 15, of the Customs Bulletin. No comments were received in response to this notice.

FACTS:

In NY N303841, there were three products at issue: LUWAK “Coffee Global Original,” LUWAK “Coffee Global Non-Sweet,” and LUWAK “Coffee Global Mixed Nuts.” The ingredient breakdown for LUWAK “Coffee Global Original” is described as:

47 percent Creamer, 25 percent Sugar, 11 percent Cane Sugar, 9 percent Instant Soluble Coffee Powder, 6 percent Maltodextrin, 1 percent Colostrum, 1 percent Luwak Coffee Powder

The ingredient breakdown for LUWAK “Coffee Global Non-Sweet” is described as:

79 percent Creamer, 12 percent Instant Soluble Coffee Powder, 4 percent Maltodextrin, 3 percent Skimmed Milk Powder, 1 percent Colostrum, 1 percent Luwak Coffee Powder

The ingredient breakdown for LUWAK “Coffee Global Mixed Nuts” is described as: 47 percent Creamer, 25 percent Sugar, 11 percent Cane Sugar, 7 percent Instant Soluble Coffee Powder, 3 percent Mixed Nuts Powder (Almond Powder, Walnut Powder and Hazelnut Powder), 5 percent Maltodextrin, 1 percent Colostrum, 1 percent Luwak Coffee Powder

All these instant coffee mixes are packaged in 18 single serving sachets per box put up for retail sale.

ISSUE:

What is the proper classification of instant coffee mixes?

LAW AND ANALYSIS:

Classification under the HTSUSA is made in accordance with the General Rules of Interpretation (“GRI”). 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. There is no issue that heading 2101, HTSUS, which covers “Extracts, essences and concentrates, of coffee, tea or mate and preparations with a basis of these products or with a basis of coffee, tea or maté; roasted chicory and other roasted coffee substitutes, and extracts, essences and concentrates thereof,” is the proper heading. The question lies at the HTSUS subheading levels.

The HTSUS subheadings under consideration are as follows:

2101 Extracts, essences and concentrates, of coffee, tea or mate and preparations with a basis of these products or with a basis of coffee, tea or maté; roasted chicory and other roasted coffee substitutes, and extracts, essences and concentrates thereof:

Extracts, essences and concentrates of coffee, and preparations with a basis of these extracts, essences or concentrates or with a basis of coffee:

2101.11 Extracts, essences and concentrates: 2101.11.21 Instant coffee, not flavored

2101.12 Preparations with a basis of extracts, essences or concentrates or with a basis of coffee: Other: Articles containing over 65 percent by dry weight of sugar described in additional U.S. note 2 to chapter 17: 2101.12.44 Described in additional U.S. note 7 to chapter 17 and entered pursuant to its provisions 2101.12.48 Other (See 9904.17.17-9904.17.48)

Articles containing over 10 percent by dry weight of sugar described in additional U.S. note 3 to chapter 17: 2101.12.54 Described in additional U.S. note 8 to chapter 17 and entered pursuant to its provisions 2101.12.58 Other (See 9904.17.49-9904.17.65) Other 2101.12.90 Other

The Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”) constitute the official interpretation of the Harmonized System. While not legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the Harmonized System at the international level and are generally indicative of the proper interpretation of these headings. See Treas. Dec. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989). The EN for heading 2101, HTSUS, provides, in pertinent part:

(1) Coffee extracts, essences and concentrates. These may be made from real coffee (whether or not caffeine has been removed) or from a mixture of real coffee and coffee substitutes in any proportion. They may be in liquid or powder form, usually highly concentrated. This group includes products known as instant coffee. This is coffee which has been brewed and dehydrated or brewed and then frozen and dried by vacuum.   (2) Tea or maté extracts, essences and concentrates. These products correspond, mutatis mutandis, to those referred to in paragraph (1).

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(4) Preparations with a basis of coffee, tea or maté. These preparations include, inter alia :

(a) “coffee pastes” consisting of mixtures of ground, roasted coffee with vegetable fats and sometimes other ingredients, and

tea preparations consisting of a mixture of tea, milk powder and sugar.

First, we determine the proper six-digit classification, whether instant coffee mixes are properly classified as “instant coffee” under subheading 2101.11, HTSUS, or “preparations with a basis of coffee,” under subheading 2101.12, HTSUS. In Headquarters Ruling Letter (“HQ”) 952589, dated June 10, 1993, CBP found that “the term ‘preparation’ [of heading 2101, HTSUS] covers coffee or tea products which include sugar, milk, etc. regardless of changes in the finished products’ physical characteristics.” Thus, in HQ 952589, CBP has classified coffee flavoring mixes as “preparations” under heading 2101, HTSUS. This ruling is consistent with the EN for heading 2101, HTSUS, which describes preparations as coffee pastes as “ground, roasted coffee with vegetable fats and sometimes other ingredients” and “tea preparations consisting of a mixture of tea, milk powder and sugar.” CBP has interpreted the EN to heading 2101, HTSUS, which provides for tea mixtures, to also apply to instant coffee mixtures and mixes. See NY K87929, dated August 5, 2004 (instant coffee blends from Mexico classified as preparations); HQ 951238, dated July 7, 1992 (instant coffee mixes from Canada classified as preparations). Therefore, it is well-established that instant coffee mixes which include milk and/or sugar are classified as preparations because they include other ingredients besides coffee. As such, the subject merchandise is classifiable as a preparation with a coffee basis in subheading 2101.12, HTSUS.

Next, we determine the proper eight-digit classification under subheading 2101.12, HTSUS. Subheadings 2101.12.32, 2101.12.34, 2101.12.38, HTSUS, are not applicable as the instant coffee mixes neither fall under any of these exclusions nor are blended syrups. Classification in the remainder of the eight-digit preparations subheadings is dependent on the sugar content. If the instant coffee mix has over 65 percent by dry weight of sugar content then subheading 2101.12.44, HTSUS, is contemplated, and if the instant coffee mix has over 10 percent by dry weight of sugar content then subheading 2101.12.54, HTSUS, is contemplated. Since none of the three products at issue have over 65 percent by dry weight of sugar content, subheading 2101.12.44, HTSUS, is not applicable. The next preparations provision to consider is subheading 2101.12.54, HTSUS, which implicates additional U.S. notes to chapter 17, which covers sugars and sugar confectionery. The relevant additional U.S. notes 3 and 8 to chapter 17 are as follows:

3. For the 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 (a) articles not principally of crystalline structure or not in dry amorphous form, the foregoing that are prepared for marketing to the ultimate consumer in the identical form and package in which imported; (b) blended syrups containing sugars derived from sugar cane or sugar beets, capable of being further processed or mixed with similar or other ingredients, and not prepared for marketing to the ultimate consumer in the identical form and package in which imported; (c) articles containing over 65 percent by dry weight of sugars derived from sugar cane or sugar beets, whether or not mixed with other ingredients, capable of being further processed or mixed with similar or other ingredients, and not prepared for marketing to the ultimate consumer in the identical form and package in which imported; or (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.

* * *

8. The aggregate quantity of articles containing over 10 percent by dry weight of sugars described in additional U.S. note 3 to chapter 17, entered under subheadings 1701.91.54, 1704.90.74, 1806.20.75, 1806.20.95, 1806.90.55, 1901.10.74, 1901.90.69, 2101.12.54, 2101.20.54, 2106.90.78 and 2106.90.95 during the 12-month period from October 1 in any year to the following September 30, inclusive, shall not exceed 64,709 metric tons (articles the product of Mexico shall not be permitted or included under this quantitative limitation and no such articles shall be classifiable therein).

Specifically, additional U.S. note 3 to chapter 17 requires that to be classified in subheading 2101.12.54, HTSUS, the sugar content of the product must be: (1) over 10 percent by dry weight of sugar; (2) derived from sugar cane or sugar beets; and, (3) principally of crystalline structure and in dry amorphous form. If there is no sugar content in the product, then the last preparations subheading 2101.12.90, HTSUS, which covers other, applies. We analyze these requirements to each of the products.

In NY N303841, two of the products at issue, LUWAK “Coffee Global Original” and LUWAK “Coffee Global Mixed Nuts,” contain 25 percent of sugar which could place them in subheading 2101.12.54, HTSUS, if the sugar content is over 10 percent by dry weight of sugar, derived sugar cane or beets, and principally of crystalline structure and in dry amorphous form. See U.S. Additional Notes 2 to Chapter 17. Requester indicated in the underlying ruling request that the sugar content of 25 percent in these two products is by dry weight of sugar, thereby meeting the first requirement of subheading 2101.12.54, HTSUS. Requester also indicated in the underlying ruling request that the sugar is derived from sugar cane, thereby meeting the second requirement of subheading 2101.12.54, HTSUS. Finally, the sugar content is principally of crystalline structure and in dry amorphous form since the sugar is described by the requester as “cane sugar” which is crystalline in structure, dry, and amorphous, thereby meeting the third requirement of subheading 2101.12.54, HTSUS. Therefore, LUWAK “Coffee Global Original” and LUWAK “Coffee Global Mixed Nuts” are properly classified in subheading 2101.12.54, HTSUS, as preparations with a basis of coffee containing over 10 percent by dry weight of sugar. If the quantitative limits of additional U.S. note 8 to chapter 17 have been reached, the product is classified in subheading 2101.12.58, HTSUS. The third product at issue in NY N303841, LUWAK “Coffee Global Non-Sweet,” however, contains no sugar content, and therefore it is properly classified in subheading 2101.12.90, HTSUS, as other preparations with a basis of coffee.

HOLDING:

Under the authority of GRI 1, instant coffee mixes are classified under subheading 2101.12, HTSUS. Specifically, LUWAK “Coffee Global Original” and LUWAK “Coffee Global Mixed Nuts” are classified in subheading 2101.12.5400, HTSUSA, which provides for “Extracts, essences and concentrates, of coffee, tea or mate and preparations with a basis of these products or with a basis of coffee, tea or mate; roasted chicory and other roasted coffee substitutes, and extracts, essences and concentrates thereof: Extracts, essences and concentrates of coffee, and preparations with a basis of these extracts, essences or concentrates or with a basis of coffee: Preparations with a basis of extracts, essences or concentrates or with a basis of coffee: Other: Articles containing over 10 percent by dry weight of sugar described in additional U.S. note 3 to chapter 17: Described in additional U.S. note 8 to chapter 17 and entered pursuant to its provisions.” The general rate of duty is 10 percent ad valorem. If the quantitative limits of additional U.S. note 8 to chapter 17 have been reached, then LUWAK “Coffee Global Original” and LUWAK “Coffee Global Mixed Nuts” are classified in subheading 2101.12.5800, HTSUSA, and dutiable at the rate of 30.5 cents per kilogram plus 8.5 percent ad valorem. LUWAK “Coffee Global Non-Sweet” is classified in subheading 2101.12.9000, HTSUSA, which provides for “Extracts, essences and concentrates of coffee, tea or maté and preparations with a basis of these products or with a basis of coffee, tea or maté; roasted chicory and other roasted coffee substitutes, and extracts, essences and concentrates thereof: Extracts, essences and concentrates of coffee, and preparations with a basis of these extracts, essences or concentrates or with a basis of coffee: Preparations with a basis of extracts, essences or concentrates or with a basis of coffee: Other: Other.” The rate of duty is 8.5 percent 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 https://hts.usitc.gov/current.

EFFECT ON OTHER RULINGS: NY N303841, dated May 2, 2019, is REVOKED.

In accordance with 19 U.S.C. § 1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin.


Sincerely,

For Craig T. Clark, Director
Commercial and Trade Facilitation Division