CLA-2 CO:R:C:F 955641 LPF

Mr. Bruce Shulman
Stein Shostak Shostak & O'Hara
Suite 807
1620 L Street, NW
Washington, D.C. 20036-5605

RE: Revocation of NYRL 863718; Classification of drink premix in 1702, HTSUS as other sugars, sugar syrups not containing added flavoring or coloring matter; Not 2106 food preparation

Dear Mr. Shulman:

In New York Ruling Letter (NYRL) 863718, issued June 19, 1991, a drink premix, imported from Canada, was classified in subheading 2106.90.5050, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), as food preparations not elsewhere specified or included, other, subject to quota in subheading 9904.60.60, HTSUSA. In your letter, dated November 15, 1993, it was stated that you have been retained as counsel by Cando Apple Ltd., the party on whose behalf NYRL 863718 was issued. We have reviewed that ruling and have found it to be in error. The correct classification is as follows. Pursuant to section 625, Tariff Act of 1930 (19 U.S.C. 1625), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. 103-182, 107 Stat. 2057, 2186 (1993) (hereinafter section 625), notice of the proposed revocation of NYRL 863718 was published January 26, 1994, in the Customs Bulletin, Volume 28, Number 4.

FACTS:

The product, described as a drink premix, is imported in bulk tanks and used as the base ingredient in the production of a beverage mix. It is our current understanding, from information submitted by the importer, that the product typically includes approximately 50% water, 50% beet or cane sugar, and 0.00345% natural apple flavor. A Customs Laboratory Report, dated April 6, 1993, found four samples of the product to contain 0.002, 0.0012, 0.0015, and 0.0017% volatile components by weight. The lab was unable to confirm the identities of these components as apple flavor.

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ISSUE:

Whether the drink premix is classifiable within heading 2106 as a food preparation not elsewhere specified or included or within heading 1702 as a sugar syrup not containing added flavoring or coloring matter. LAW AND ANALYSIS:

The General Rules of Interpretation (GRIs) taken in their appropriate order provide a framework for classification of merchandise under the HTSUS. Most imported goods are classified by application of GRI 1, that is, according to the terms of the headings of the tariff schedule and any relative section or chapter notes. The Explanatory Notes (ENs) to the Harmonized Commodity Description and Coding System, which represent the official interpretation of the tariff at the international level, facilitate classification under the HTSUS by offering guidance in understanding the scope of the headings and GRIs.

Heading 2106 provides for food preparations not elsewhere specified or included, while heading 1702 provides for sugar syrups not containing added flavoring or coloring matter. EN(12) to 2106 indicates that the heading includes:

[p]reparations for the manufacture of lemonades or other beverages, consisting, for example, of:

flavoured or coloured syrups, being sugar solutions with natural or artificial substances added to give them the flavour of, for example, certain fruits or plants (raspberry, blackcurrant, lemon, mint, etc.), whether or not containing added citric acid and preservatives....

In contrast, the EN to 1702 indicates that the heading includes:

[s]yrups of all sugars...provided they do not contain added flavouring or colouring matter.... Customs maintains that in order to be considered a flavored syrup, an imported article must contain an added flavoring substance and that substance should be in sufficient quantity to impart the flavor's unique organoleptic characteristics. In this case, inspection of the product by Customs officials, including laboratory analysis as well as information from the importer indicating that the product typically contains 0.00345% natural apple flavor, has revealed that the added flavoring material is in such small quantity as to impart no viable organoleptic characteristics such as aroma and flavor. Its presence is viewed as de minimis. See General Note 16, HTSUSA, stating that the

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term "containing," when used between the description of an article and a material, means that the goods contain a significant quantity of the named material and that with regard to the application of such quantitative concepts, the de minimis rule applies. The product does not qualify as a "flavored" syrup for the preparation of beverages and consequently is not classifiable as a food preparation.

Pursuant to a GRI 1 analysis, the terms of the headings and relevant EN indicate that the drink premix is appropriately classified within heading 1702 as a sugar syrup not containing added flavoring or coloring matter. The appropriate subheadings are 1702.90.31 and 1702.90.32, HTSUSA, dependent on whether the product is described in paragraphs (a) and (b) of additional U.S. note 3 to chapter 17, HTSUSA.

HOLDING:

The drink premix, entered pursuant to Notes 3(a) and 3(b), is classifiable in subheading 1702.90.3100, HTSUSA. The general column one rate of duty is 1.4606 cents per kilogram less 0.020668 cent per kilogram for each degree under 100 degrees (and fractions of a degree in proportion) but not less than 0.943854 cent per kilogram.

If not entered pursuant to Notes 3(a) and 3(b), the drink premix is classifiable in subheading 1702.90.3200, HTSUSA. The general column one rate of duty is 37.386 cents per kilogram.

In addition, subheading 9904.40.60, HTSUSA, provides that, in any event, if the product is classifiable in either subheading, it carries a supplemental agricultural import fee of 2.2 cents per kilogram of the total sugars, but not in excess of 50 percent.

Products entering the United States under subheading 1702.90.31 or 1702.90.32 must be accompanied by a Certificate of Quota Eligibility (CQE) executed by an official of a designated certifying authority (e.g., either a government authority or a designated commercial authority) in the country of origin. This instrument requires that the product originate in the country of export and that it not merely be a product transhipped through the country issuing the CQE.

NYRL 863718 hereby is revoked.

In accordance with section 625, this ruling will become effective 60 days after its publication in the Customs Bulletin. Publication of rulings or decisions pursuant to section 625 does not constitute a change of practice or position in accordance

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with section 177.10.(c)(1), Customs Regulations (19 CFR 177.10(c)(1)).

Sincerely,

John Durant, Director
Commercial Rulings Division