CLA-2- OT:RR:CTF:TCM H097660 TNA
Port Director, Los Angeles Service Port
U.S. Customs and Border Protection
11099 South La Cienega Blvd.Los Angeles, CA 90045
Re: Application for Further Review of Protest No: 2720-10-100054; Resveratrol Capsules
Dear Port Director:
The following is our decision regarding the Application for Further Review (“AFR”) of Protest No. 2720-10-100054, timely filed on February 5, 2010, on behalf of Biotivia, LLC (“Biotivia” or “Protestant”). The AFR concerns the classification of Resveratrol capsules under the Harmonized Tariff Schedule of the United States (HTSUS).
The subject merchandise consists of capsules of Biotivia’s products that are sold as “Bioforte” or “Transmax.” These products are different sized capsules of a concentrated form of resveratrol, a naturally occurring phytoalexin derived from the Japanese Knotweed (“Polygonum Cuspidatum”) plant.
The Transmax capsules contain 98% trans-Resveratrol, which is the more stable form of reservatrol and is therefore preferred for encapsulating. Transmax contains no fillers, chemicals or additives. The Bioforte capsules contain a less concentrated form of resveratrol. While Bioforte also contains no fillers, additives or inorganic expanders, it is composed of reveratrol glucosides, polydatin emodin, and other plant material. Furthermore, it is preserved in nitrogen gas.
This protest covers of 22 entries of resveratrol capsules entered from December 30, 2008, through August 13, 2009 in subheading 2936.90.01, HTSUS, as other vitamins, including proviatmins and natural concentrates. The port liquidated 21 of the entries on September 25, 2009, and the remaining entry on October 9, 2009 in subheading 2106.90.99, HTSUS, as food preparations not elsewhere specified or included: other: other: other: other: other: other. The protest was filed on February 5, 2010, claiming classification in subheading 2936.90.01, HTSUS.
Whether resveratrol capsules should be classified in heading 2106, HTSUS, as food preparations or in heading 2936, HTSUS, as vitamins or provitamins or concentrates thereof?
LAW AND ANALYSIS:
This protest is properly filed under 19 U.S.C. §1514(a)(2) as a decision on classification. The protest was timely filed, within 180 days of liquidation for entries made on or after December 18, 2004. (Miscellaneous Trade and Technical Corrections Act of 2004, Pub.L. 108-429, § 2103(2)(B)(ii), (iii) (codified as amended at 19 U.S.C. § 1514(c)(3) (2006)).
Further Review of Protest No. 2720-10-100054 is properly accorded to Protestant pursuant to 19 C.F.R. § 174.24(a) because the decision against which the protest was filed is alleged to be inconsistent with prior rulings of the Commissioner or Customs or his designee. Specifically, Protestant argues that CBP’s established and uniform practice is in accordance with Protestant’s claim.
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 provisions 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.
The HTSUS headings under consideration are the following:
2106 Food preparations not elsewhere specified or included:
2936 Provitamins and vitamins, natural or reproduced by synthesis (including natural concentrates), derivatives thereof used primarily as vitamins, and intermixtures of the foregoing, whether or not in any solvent:
2936.90.01 Other, including provitamins and natural concentrates
In understanding the language of the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System, which constitute the official interpretation of the HTSUS at the international level, may be utilized. The ENs, although not dispositive or legally binding, provide a commentary on the scope of each heading, and are generally indicative of the proper interpretation of the HTSUS. See T.D. 89-80, 54 Fed. Reg. 35127 (August 23, 1989).
The EN for heading 2106, HTSUS, states, in pertinent part, the following:
Provided that they are not covered by any other heading of the Nomenclature, this heading covers:
(A) Preparations for use, either directly or after processing (such as cooking, dissolving or boiling in water, milk, etc.), for human consumption.
(B) Preparations consisting wholly or partly of foodstuffs, used in the making of beverages or food preparations for human consumption. The heading includes preparations consisting of mixtures of chemicals (organic acids, calcium salts, etc.) with foodstuffs (flour, sugar, milk powder, etc.), for incorporation in food preparations either as ingredients or to improve some of their characteristics (appearance, keeping qualities, etc.) (see the General Explanatory Note to Chapter 38)…
The heading includes, inter alia:…
(16) Preparations, often referred to as food supplements, based on extracts from plants, fruit concentrates, honey, fructose, etc. and containing added vitamins and sometimes minute quantities of iron compounds. These preparations are often put up in packagings with indications that they maintain general health or wellbeing. Similar preparations, however, intended for the prevention or treatment of diseases or ailments are excluded (heading 30.03 or 30.04).
The EN for heading 2936, HTSUS, states, in pertinent part, the following:
Vitamins are active agents, usually of complex chemical composition, which are obtained from outside sources and are essential for the proper functioning of human or other animal organisms. They cannot be synthesised by the human body and must therefore be obtained in final or nearly final form (provitamins) from outside sources. They are effective in relatively minute amounts and may be regarded as exogenous biocatalysts, their absence or deficiency giving rise to metabolic disturbances or “deficiency diseases”.
This heading includes:
(a) Provitamins and vitamins, whether natural or reproduced by synthesis, and derivatives thereof used primarily as vitamins.
(b) Concentrates of natural vitamins (e.g., of vitamin A or of vitamin D); these are enriched forms of these vitamins. These concentrates may be used as such (e.g., for adding to animal feeding stuffs), or they may be worked up for the isolation of the vitamin.
Protestant argues for classification in subheading 2936.90.01, HTSUS, as other vitamins, including provitamins and natural concentrates. Protestant argues that the subject merchandise is a natural concentrate, and that as a result, it is covered by the terms of subheading 2936.90.01, HTSUS. This argument misconstrues the terms of the subheading. In order to be classified in subheading 2936.90.01, HTSUS, merchandise must meet the terms of heading 2936, HTSUS, which covers vitamins and provitamins. In order to be classified as a vitamin, merchandise must be an active agent that is essential for the proper functioning of human or other animal organisms, and whose absence from the body gives rise to metabolic disturbances or “deficiency diseases.” See EN 29.36. The concentrates that are classified in this heading are not simply concentrates of any material, but rather must be “concentrates of natural vitamins (e.g., of vitamin A or of vitamin D).” See EN 29.36.
While some research has shown that resveratrol may have health benefits, it certainly cannot be said that its absence from the body or diet causes metabolic disturbances or deficiency diseases. Thus, it does not fit the definition of “vitamin” within the meaning of heading 2936, HTSUS. Even Protestant notes that resveratrol is an organic chemical, and that the subject merchandise is a natural concentrate of that organic chemical. As such, the subject merchandise cannot be classified in subheading 2936.90.01, HTSUS, because products classified there must be concentrates of vitamins or provitamins.
The subject merchandise consists of capsules that are made from the extracts of plants- namely, the Japanese knotweed. They are put up in packaging with indications emphasizing the general health benefits of resveratrol, such as lower levels of heart disease, cancers, tumors, and so forth. It is not further processed from the capsules into another form. As such it is described by the terms of heading 2106, HTSUS. As a result, the subject resveratrol capsules are classified in subheading 2106.90.99, which provides for “[f]ood preparations not elsewhere specified or included: other: other: other: other: other: other.”
Protestant specifically argues against classification in heading 2106, HTSUS, first by arguing that resveratrol in a highly concentrated form, and, as such, is highly prone to oxidation. Thus, Protestant states, it must be encapsulated in order to retain its health benefits, and encapsulation alone should not automatically place the subject merchandise in heading 2106, HTSUS. In support of this argument, Protestant cites to prior CBP rulings where encapsulated merchandise was classified outside of heading 2106, HTSUS. See, e.g., HQ 964558, dated February 15, 2002; HQ 955754, dated August 22, 1994. Our research, however, shows that while there are factors that lead to resveratrol’s degradation, its form is not one of them. To the contrary, resveratrol can be in powder form and still remain viable as long as it is protected from light, oxygen, and a high pH environment. See, e.g., http://www.vinomis.com/. With respect to encapsulation, while Protestant’s cited rulings classify encapsulated merchandise in headings other than heading 2106, HTSUS, this is one factor among many that we consider in classifying merchandise. The merchandise, as imported, is advertised, marketed and sold as a dietary supplement. Encapsulated natural substances, such as the instant merchandise, are recognized as such. Therefore, encapsulation weighs in favor of classification in heading 2106, HTSUS.
Protestant further argues that merchandise can only be classified in heading 2106, HTSUS if it cannot be classified in any other heading. See, e.g., HQ 964594, dated January 30, 2002. Because heading 2106, HTSUS, includes “food preparations not elsewhere specified or included,” we agree that in order for merchandise to be classified here, it must not be described by any other heading. As heading 2936, HTSUS, is inapplicable, no other heading describes the merchandise. Hence, the subject merchandise is best described by the terms of heading 2106, HTSUS.
By application of GRI 1, the Bioforte and Transmax resveratrol capsules are classified in heading 2106, HTSUS, specifically under subheading 2106.90.99, HTSUS, which provides for: “Food preparations not elsewhere specified or included: other: other: other: other: other: other.” The 2010 general, column one duty rate is 6.4% ad valorem.
You are instructed to DENY the protest.
In accordance with Sections IV and VI of the CBP Protest/Petition Processing Handbook (HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the CBP Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.
Sixty days from the date of the decision, the Office 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.
Myles B. Harmon, Director
Commercial and Trade Facilitation Division