CLA-2 OT:RR:CTF:TCM H238926 LWF
Port Director
Service Port – San Francisco
555 Battery Street
San Francisco, CA 94111-2316
Attn: Frank Djeng, Import Specialist
RE: Internal Advice Request; Tariff Classification of frozen gelato from Italy
Dear Port Director:
This is in reference to your request for Internal Advice, initiated by counsel for Sinco, Inc. (“Sinco”) via letter, dated December 2, 2012. At issue is the proper classification of Sinco’s frozen gelato (the “Gelato”) under the Harmonized Tariff Schedule of the United States (HTSUS). The request for Internal Advice is sought based on Sinco’s assertion that the Gelato is classified in subheading 2105.00.10, HTSUS, which provides for “Ice cream and other edible ice, whether or not containing cocoa: Ice cream.”
FACTS:
This request for Internal Advice concerns merchandise described as varieties of gelato frozen desserts from Italy, packaged for retail sale and labeled as “Gelato.” The Gelato is produced by freezing, while stirring, a pasteurized mixture of nonfat milk, cream, other dairy ingredients, and other flavoring ingredients. The varieties of Gelato may contain various flavoring sauces, such as swirls of fruit or chocolate, and toppings, such as nuts or chocolate chips. The finished Gelato varieties contain varying amounts of milk fat, but in every instance, consist of no less than 10% milk fat and an amount of nonfat milk solids, whose percentage, when added to the percentage of milk fat, is never less than 20%. Additionally, the Gelato contains small amounts of mono- and diglycerdes, used in the product for emulsification purposes.
Sinco entered the Gelato at the Port of San Francisco on June 14, 2012, under subheading 2105.00.10, HTSUS, which provides for ice cream. On June 26, 2012, the Port informed Sinco that the merchandise was properly classified under subheading 2105.00.40, HTSUS, as dairy products described in additional U.S. Note 1 to Chapter 4, and instructed Sinco to submit a revised CBP Form 7501. In response to the Port of San Francisco’s communication, Sinco filed a revised entry with the Port and submitted an electronic ruling request to the U.S. Customs and Border Protection (CBP) National Commodity Specialist Division (NCSD) in New York, asserting that the Gelato was properly classified under subheading 2105.00.10, HTSUS. The NCSD declined to issue a ruling in response to Sinco’s request, and in a letter dated November 21, 2012, it suggested that Sinco request that the Port Director having jurisdiction over the entry of the Gelato to seek Internal Advice from CBP Headquarters. Sinco petitioned the Port of San Francisco to seek Internal Advice as to the proper classification of the Gelato, and on January 7, 2013, the Port submitted its Request, stating its position that the Gelato should not be classified as ice cream under subheading 2105.00.10, HTSUS.
ISSUE:
Whether the Gelato is classified under subheading 2105.00.10, HTSUS, HTSUS, as ice cream, or subheading 2105.00.40, HTSUS, as other edible ice?
LAW AND ANALYSIS:
Merchandise imported into the United States is classified under the HTSUS. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (GRIs) and, in the absence of special language or context which requires otherwise, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUS and are to be considered statutory provision of law for all purposes.
GRI 1 requires that classification be determined first according to the terms of the headings of the tariff schedule and any relative section or chapter notes and, unless otherwise required, according to the remaining GRIs taken in their appropriate order. GRI 6 requires that the classification of goods in the subheadings of the same heading shall be determined according to the terms of those subheadings, any related subheading notes and, mutatis mutandis, to GRIs 1 through 5.
The HTSUS subheadings under consideration are the following:
2105.00 Ice cream and other edible ice, whether or not containing cocoa:
Ice cream:
2105.00.10 Described in additional U.S. note 5 to this chapter and entered pursuant to its provisions.
2105.00.20 Other.
Other:
Dairy products described in additional U.S. note 1 to chapter 4:
2105.00.40 Other.
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Additional U.S. Note 1 to Chapter 4 states, in pertinent part, the following:
For the purposes of this schedule, the term "dairy products described in additional U.S. note 1 to chapter 4" means any of the following goods: malted milk, and articles of milk or cream (except (a) white chocolate and (b) inedible dried milk powders certified to be used for calibrating infrared milk analyzers); articles containing over 5.5 percent by weight of butterfat which are suitable for use as ingredients in the commercial production of edible articles (except articles within the scope of other import quotas provided for in additional U.S. notes 2 and 3 to chapter 18); or, dried milk, whey or buttermilk (of the type provided for in subheadings 0402.10, 0402.21, 0403.90 or 0404.10) which contains not over 5.5 percent by weight of butterfat and which is mixed with other ingredients, including but not limited to sugar, if such mixtures contain over 16 percent milk solids by weight, are capable of being further processed or mixed with similar or other ingredients and are not prepared for marketing to the ultimate consumer in the identical form and package in which imported.
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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, the ENs provide a commentary on the scope of each heading of the HTS and are thus useful in ascertaining the proper classification of merchandise. It is CBP’s practice to follow, whenever possible the terms of the ENs when interpreting the HTSUS. See T.D. 89-90, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
EN 21.05 provides, in pertinent part, the following:
This heading covers ice cream, which is usually prepared with a basis of milk or cream, and other edible ice (e.g., sherbet, iced lollipops), whether or not containing cocoa in any proportion. However, the heading excludes mixes and bases for ice cream which are classified according to their essential constituents (e.g., heading 18.06, 19.01 or 21.06).
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Insomuch as the instant Gelato varieties are frozen desserts consisting, in part, of milk fat and nonfat milk solids, the merchandise is fully described in heading 2105, HTSUS, which provides for “Ice cream and other edible ice, whether or not containing cocoa.” Therefore, there is no dispute that the Gelato is classified in heading 2105, HTSUS. Consequently, because this request for Internal Advice concerns the proper tariff classification of merchandise in the subheadings of the same heading, GRI 6 applies.
As an initial matter, we note that because Sinco does not identify or sell the Gelato as “ice cream,” the Port concluded that the merchandise could not be classified as such. However, the Court of International Trade (CIT) has stated that, “the name under which merchandise is marketed is not dispositive for classification purposes.” Pillsbury Co. v. United States, 28 C.I.T. 1418, 1426 (Ct. Int'l Trade 2004) (citing United States v. Andrew Fisher Cycle, Inc., 57 CCPA 102, 426 F.2d 1308 (1970); Washington Int'l Ins. Co. v. United States, 24 F.3d 224 (1994)), aff’d, 431 F.3d 1377 (Fed. Cir. 2005). Thus, evidence that Sinco identifies the instant merchandise as “gelato” and markets the frozen desserts as such is not sufficient to establish that the Gelato cannot be classified as “ice cream” for purposes of tariff classification. Id.
The term “ice cream” is not fully defined within the Nomenclature or the ENs. Where, as in this case, a tariff term is not defined by the HTSUS or the legislative history, the courts have instructed that a term’s correct meaning is its common, or commercial, meaning. Rocknel Fastener, Inc. v. United States, 267 F.3d 1354, 1356 (Fed. Cir. 2001) (“To ascertain the common meaning of a term, a court may consult ‘dictionaries, scientific authorities, and other reliable information sources’ and ‘lexicographic and other materials.” (quoting C.J. Tower & Sons of Buffalo, Inc. v. United States, 673 F.2d 1268, 1271 (Fed. Cir. 1982))).
In this case, a good indication of the commercial meaning of the term “ice cream” can be obtained from regulations promulgated by the U.S. Food and Drug Administration (FDA) that provide descriptions and content requirements for standardized articles of food, including products identified as “ice cream.” See 21 C.F.R. § 135 (2013). Consequently, in order for “ice cream” to be labeled and offered for sale as such in the United States, it must conform to the “standard of identity” set out by FDA regulations in 21 C.F.R. § 135.110. Specifically, 21 C.F.R. § 135.110(a) provides a detailed description of the characteristics of ice cream and frozen custard and indicates that products identified as “ice cream” are articles of frozen desserts that consist of specific ratios of milk fat and nonfat milk solids. 21 C.F.R. § 135.110(a) states, in relevant part, that:
(a) Description. (1) Ice cream is a food produced by freezing, while stirring, a pasteurized mix consisting of one or more of the optional dairy ingredients specified in paragraph (b) of this section, and may contain one or more of the optional caseinates specified in paragraph (c) of this section subject to the conditions hereinafter set forth, one or more of the optional hydrolyzed milk proteins as provided for in paragraph (d) of this section subject to the conditions hereinafter set forth, and other safe and suitable nonmilk-derived ingredients; and excluding other food fats, except such as are natural components of flavoring ingredients used or are added in incidental amounts to accomplish specific functions. Ice cream is sweetened with safe and suitable sweeteners and may be characterized by the addition of flavoring ingredients.
(2) Ice cream contains not less than1.6 pounds of total solids to the gallon, and weighs not less than 4.5 pounds to the gallon. Ice cream contains not less than 10 percent milkfat, nor less than 10 percent nonfat milk solids, except that when it contains milkfat at 1 percent increments above the 10 percent minimum, it may contain the following milkfat-to-nonfat milk solids levels:
Percent milkfat
Minimum percent nonfat milk solids
10
10
11
9
12
8
13
7
14
6
Except that when one or more bulky flavors are used, the weights of milkfat and total milk solids are not less than 10 percent and 20 percent, respectively, of the remainder obtained by subtracting the weight of the bulky flavors from the weight of the finished food; but in no case is the weight of milkfat or total milk solids less than 8 percent and 16 percent, respectively, of the weight of the finished food.
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Here, upon examination of the ingredients and characteristics of the instant Gelato, we find that the products at issue satisfy the “standard of identity” of “ice cream” set out in 21 C.F.R. § 135.110. Consistent with the description provided in 21 C.F.R. § 135.110(a), the Gelato is produced by freezing, while stirring, a pasteurized mixture of nonfat milk, cream, other dairy ingredients, and other flavoring ingredients. The Gelato contains incidental percentages of mono- and diglycerides used for emulsification purposes, and each variety of the Gelato is characterized by the addition of flavoring ingredients. Similarly, each of the Gelato varieties contains no less than 10% milk fat and satisfies the standards, under 21 C.F.R. § 135.110(a)(2), for milkfat-to-nonfat milk solid levels. Consequently, we find that the Gelato milkfat and nonfat milk ratios are similar to the “standard of identity” for “ice cream” set out by FDA regulations.
It is important to note, however, that the milkfat-to-nonfat milk solid levels of the instant Gelato are substantially higher than those of other gelato products that CBP has previously classified. For example, in New York Ruling Letter (“NY”) N087676, dated January 6, 2010, CBP classified a product identified as “green-tea gelato” under subheading 2105.00.30, HTSUS, as other edible ice, because it possessed a total milk solid content of approximately 12% by weight. See also NY N067144, dated July 16, 2009 (classifying “gelato-type frozen desserts,” consisting of 6.9-9.4% nonfat milk solids and 0.1-4.1% milk fat, in subheading 2105.00.30, HTSUS); NY N009128, dated April 16, 2007 (classifying “gelato ice cream,” consisting of 7.5-10.5% total milk solids by weight and 7-8.5% vegetable oil, in subheading 2105.00.30, HTSUS); NY L83934, dated April 18, 2005, (classifying “frozen gelato desserts,” consisting of 10.2% total milk solids by weight, in subheading 2105.00.30, HTSUS. In each of the prior rulings, the composition of the gelato product did not meet the milkfat-to-nonfat milk solid levels identified by 21 C.F.R. § 135.110(a)(2), and thus, could not be described as “ice cream” under the standards of identity set forth by FDA regulations. Consequently, those gelato products were classified in subheading 2105.00.30, HTSUS, as other edible ices.
By contrast, for the reasons identified above, we find that the instant Gelato is properly described as “ice cream,” pursuant to the “standard of identity” set out in 21 C.F.R. § 135.110. As such, the Gelato is within the scope of what is commercially known as “ice cream” and is properly classified as ice cream of subheading 2105.00.10, HTSUS, if entered under quota, or subheading 2105.0020, HTSUS, if entered outside the quota.
HOLDING:
By application of GRI 6 and GRI 1, the Gelato is classified in heading 2105, HTSUS. Specifically, it is classifiable, if entered under quota, in subheading 2105.00.10, HTSUS, which provides for “Ice cream and other edible ice, whether or not containing cocoa: Ice cream: Described in additional U.S. note 5 to this chapter and entered pursuant to its provisions.” The column one, general rate of duty is 20% ad valorem.
The applicable subheading for the Gelato, if entered outside the quota, 2105.00.20, HTSUS, which provides for “Ice cream and other edible ice, whether or not containing cocoa: Ice cream: Other.” The column one, general rate of duty is 50.2¢/kg + 17% ad valorem.
You are to mail this decision to counsel for the internal advice requester no later than sixty days from the date of this 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 at http://www.cbp.gov, by means of the Freedom of Information Act, and other methods of publication.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division