CLA-2 OT:RR:CTF:TCM H197914 GC
Otay Mesa Service Port
9777 Via De La Amistad
San Diego, California 92154
Attn: Barbara Land, Senior Import Specialist
RE: Internal Advice; Tariff classification of cane neutral spirits beverage
Dear Port Director:
This letter is in reply to your request for Internal Advice, dated December 21, 2011, which pertains to the tariff classification under the Harmonized Tariff Schedule of the United States (HTSUS), of a product named “Alcohol Victoria”, which is a beverage distilled from sugar cane.
FACTS:
The merchandise at issue is a potable cane neutral spirit named “Alcohol Victoria”. It is stated to be derived by the distillation of sugar cane, and thus consists of ethyl alcohol at a stated concentration of 99 proof or 49.5 percent alcohol by volume. The instant merchandise is imported in cases of bottles of 375 ml, 750 ml, or 1000 ml. You also included a certificate of label approval from the Alcohol and Tobacco Tax and Trade Bureau of the U.S. Department of the Treasury (TTB) indicating that the subject product is a distilled spirit.
ISSUE:
Whether the instant spirit derived from distilled sugar cane is classified under subheading 2208.40, HTSUS, as a spirit obtained by distilling fermented sugar cane products, subheading 2208.60, as vodka, subheading 2208.70, HTSUS, as a liqueur or cordial, or subheading 2208.90, HTSUS, as an other spirit, liqueur or spirituous beverage.
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 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).
It is undisputed that the subject cane neutral spirit is provided for under heading 2208, HTSUS, which covers “spirits, liqueurs and other spirituous beverages”. Because the case before us occurs beyond the heading level of the HTSUS, GRI 6 is implicated. GRI 6 states the following:
For legal purposes, the classification of goods in the subheading of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to the above rules, on the understanding that only subheadings at the same level are comparable. For the purposes of this rule, the relative section, chapter and subchapter notes also apply, unless the context otherwise requires.
Accordingly, the HTSUS provisions under consideration are as follows:
2208 Undenatured ethyl alcohol of an alcoholic strength by volume of less than 80 percent vol.; spirits, liqueurs and other spirituous beverages:
* * *
2208.40 Rum and other spirits obtained by distilling fermented sugar-cane products:
* * *
2208.60 Vodka:
* * *
2208.70 Liqueurs and cordials:
* * *
2208.90 Other:
That instant merchandise is “neutral”, which is to say that the fermented sugar-cane has been distilled to the point where the final product no longer possesses the secondary or organoleptic characteristics associated with the original raw material, does not alter the fact that it is a spirit obtained by distilling fermented sugar-cane products. It is thus prima facie classifiable under subheading 2208.40, HTSUS.
The instant cane neutral spirit is also prima facie classifiable under subheading 2208.60, HTSUS, as vodka. This is supported by EN 22.08, which indicates, in pertinent part, that:
In addition to undenatured ethyl alcohol of an alcoholic strength by volume of less than 80% vol, the heading includes, inter alia:
* * *
(5) Vodka obtained by distilling fermented mash of agricultural origin (e.g., cereals, potatoes) and sometimes treated with activated charcoal or carbon.
(Emphasis in original)
Further, we note that the standards of identity set forth by the Alcohol and Tobacco Tax and Trade Bureau of the U.S. Department of the Treasury (TTB) for “vodka” indicates that it consists of “…neutral spirits so distilled, or so treated after distillation with charcoal or other materials, as to be without distinctive character, aroma, taste, or color”. See Section 5.22(a)(1), TTB Regulations (27 CFR §5.22(a)(1)). As the instant product is manufactured from sugar cane, an agriculture product, and has been distilled to the point of being neutral, it fits within the relatively broad definition of vodka, and is thus prima facie classifiable under subheading 2208.60, HTSUS.
We find that the instant merchandise is not a liqueur or cordial of subheading 2208.70, HTSUS, because there is no flavoring added at the time of importation. For example, in New York Ruling Letter (NY) N017602, dated October 17, 2007, CBP classified four “Distilled Spirits Specialty” beverages under subheading 2208.70, HTSUS. All four products featured cane neutral spirits as an ingredient, but also included additional flavoring (e.g., rum flavor, agave spirits, etc.) to create the desired beverage. These products are all distinguishable from the subject merchandise, which fits only within the scope of subheading 2208.40, HTSUS.
Because the instant merchandise is prima facie classifiable under two HTSUS subheadings, GRI 3 applies via GRI 6. It provides, in pertinent part, as follows:
When, by application of rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows:
(a) The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods.
GRI 3(a) is known as the "rule of relative specificity." See Orlando Food Corp. v. United States, 140 F.3d 1437, 1441 (Fed. Cir. 1998) (Orlando Food). Where articles can be classified under two HTSUS headings, under GRI 3(a) the classification "turns on which of these two provisions are more specific." Orlando Food, 140 F.3d at 1441. Courts undertaking the GRI 3(a) comparison "look to the provision with requirements that are more difficult to satisfy and that describe the article with the greatest degree of accuracy and certainty." Faus Group, Inc. v. United States, 581 F.3d 1369 (Fed. Cir. 2009) (quoting Orlando Food, 140 F.3d at 1441).
In this particular case, we find that it is more difficult to satisfy the terms of the provision for “rum and other spirits obtained by distilling fermented sugar-cane products” than “vodka” because the former subheading provides the specific raw material from which the final product must be derived, whereas vodka can be manufactured from any agricultural product. Accordingly, the subject cane neutral spirit is classified under subheading 2208.40, HTSUS.
HOLDING:
In accordance with GRI 1, the instant cane neutral spirit is classified as a spirit of heading 2208, HTSUS. By application of GIRs 6 and 3(a), it is specifically provided for under subheading 2208.40, HTSUS, as “Undenatured ethyl alcohol of an alcoholic strength by volume of less than 80 percent vol.; spirits, liqueurs and other spirituous beverages: Rum and other spirits obtained by distilling fermented sugar-cane products”. Classification beyond the six-digit level is determined by the capacity of the container in which the product is imported. The column one, general rate of duty is free.
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 importer of record 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