CLA-2 RR:CTF:TCM 967962ptl
TARIFF No.: 1901.10.3500; 1901.10.4000
U.S. Customs and Border Protection
Area Port of Jacksonville
2831 Talleyrand Avenue
Jacksonville, FL 32206
RE: Protest 1803-05-100005; Cerelac
Dear Port Director:
The following is our decision on the above-referenced protest filed by counsel against your classification, under the Harmonized Tariff Schedule of the United States, (HTSUS), of a product identified as Cerelac in subheadings 1901.10.3500 and 1901.10.4000, HTSUS, which are the in-quota and over-quota subheadings that provide for “food preparations of goods of headings 0401 to 0404, not containing cocoa or containing less than 5 percent by weight of cocoa calculated on a totally defatted basis, not elsewhere specified or included: preparations for infant use, put up for retail sale: containing over 10 percent by weight of milk solids.” Counsel contends that the products should be classified in 1901.90.4200, HTSUS, which provides for “food preparations of flour, groats, meal, starch or malt extract, not containing cocoa … food preparations of goods of headings 0401 to 0404 … described in additional U.S. note 10 to chapter 4.” The entries were made on January 20, 2004, and the entries were liquidated on November 26, 2004. The protest was received by CBP on February 22, 2005.
The merchandise under protest is described by counsel as being a wheat cereal with milk. Its percentage ingredient composition is: wheat flour, 47%, nonfat milk and milk, 28%, sugar (refined), 13%, butter oil, caramel color (liquid), corn oil, vitamins, minerals, and flavor, 12%. The ingredients are combined in a simple mixing process. The product is sold to consumers in cylindrical canisters containing approximately 500 grams (17.6 ozs.), by weight, of powder. The product is intended to be consumed as a beverage. The preparation instructions on the can instruct the consumer to add 1 cup of cold milk to 3 tablespoons of Cerelac, plus optional fruit of preference to make a “Delicious Shake.” Counsel states Cerelac is intended to be consumed soon after being mixed with milk, that the mixed product is not designed to be stored. However, that information is not contained on the label. Information on the Cerelac label submitted by counsel is printed in both English and Spanish and reveals the merchandise is a product of Venezuela. The label contains the standard nutrition label and list of ingredients, along with a Nestle statement that the Cerelac is a cereal prepared with wheat flour, milk and vitamins and minerals and what benefits those ingredients are said to provide to the consumer, and the claim that “Nestle Cerelac shakes are ideal for the entire family at breakfast, lunch or as a nutrition supplement.” We note that the preparation instructions tell the consumer to use 3 tablespoons of Cerelac, while the nutrition information tells the consumer that the serving size is 2 tablespoons. On the front of the label, adjacent to the product name, there is a triangle with the number “12” and the words “meses en adelante/months or older” inside. The label depicts a smiling bear cub-like character, dressed in children’s shirt and overalls, holding a glass of what is presumed to be prepared Cerelac and offering it to the viewer.
The goods were entered on January 20, 2004, and classified by the importer as dairy products provided for in US Note 10 to Chapter 4, classified in subheading 1901.90.4200, HTSUS, and since they were a product of Venezuela, they were eligible for duty free treatment under the GSP. At liquidation on November 26, 2004, CBP reclassified the goods in subheadings 1901.10.3500 and 1901.10.4000, HTSUS, which are the in-quota and over-quota subheadings that provide for “food preparations of goods of headings 0401 to 0404, not containing cocoa or containing less than 5 percent by weight of cocoa calculated on a totally defatted basis, not elsewhere specified or included: preparations for infant use, put up for retail sale: containing over 10 percent by weight of milk solids … Dairy products described in additional U.S. note 1 to chapter 4.” Through counsel, the importer filed a protest against this reclassification on February 22, 2005. Counsel’s Application for Further Review was approved by the port in reliance of counsel’s claim that “facts are alleged and legal arguments presented which were not considered at the time of the original ruling” and the matter was referred to this office for decision.
Whether Nestle Cerelac is classified as a food preparation of goods of headings 0401 to 0404, for infant use, in subheading 1901.10, or in subheading 1901.90, the provision for “Other” articles.
LAW AND ANALYSIS:
Merchandise is classifiable under the HTSUS in accordance with the General Rules of Interpretation (GRIs). The systematic detail of the HTSUS is such that most 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. 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 in order.
In understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System Explanatory Notes may be utilized. The Explanatory Notes (ENs), although not dispositive or legally binding, provide a commentary on the scope of each heading of the HTSUS, and are the official interpretation of the Harmonized System at the international level. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The HTSUS subheadings under consideration are as follows:
Malt extract; food preparations of flour, groats, meal, starch or malt extract, not containing cocoa or containing less than 40 percent by weight of cocoa calculated on a totally defatted basis, not elsewhere specified or included; food preparations of goods of headings 0401 to 0404, not containing cocoa or containing less than 5 percent by weight of cocoa calculated on a totally defatted basis, not elsewhere specified or included:
1901.10 Preparations for infant use, put up for retail sale:
Containing over 10 percent by weight of milk solids:
* * *
Dairy products described in additional U.S. note 1 to chapter 4:
1901.10.3500 Described in additional U.S. note 10 to chapter 4 and entered pursuant to its provisions
1901.10.4000 Other 2/
* * *
* * *
Dairy products described in additional U.S. note 1 to chapter 4:
Dairy preparations containing over 10 percent by weight of milk solids:
* * *
1901.90.4200 Described in additional U.S. note 10 to chapter 4 and entered pursuant to its provisions
There are two outstanding rulings issued by CBP (then “Customs”) that classify Cerelac. HQ 955752, dated November 29, 1994, classified a product identified as “Nestle Cerelac” composed of 54% wheat flour, 23% sucrose, 21% milk, 1% salt, and 1% lisin. HQ 956315, also dated November 29, 1994, classified a product identified as “Nestle Cerelac Farinha Lactea” composed of 50% wheat flour, 26.5% milk solids, 13% sugar, with the balance consisting of corn oil, iron, calcium, vanillin, and vitamins. Both rulings classified the Cerelac product in subheading 1901.10, HTSUS.
Counsel attempts to distinguish the Cerelac under consideration from the Cerelac that was previously classified by CBP. He first states that because neither ruling was issued to Nestle USA, Nestle USA is not bound by them. He then contends that the earlier rulings “involved products from the Portuguese and Ecuadorian markets,” whereas the product under consideration “is made for the U.S. market.” Next, counsel argues that the earlier rulings “turned on whether the items were essentially wheat or essentially milk.” Counsel further argues that because the Cerelac does not contain the requisite nutrition to qualify it as a complete or partial substitute for human milk, it cannot be classified as an infant formula according to U.S. Food and Drug Administration (FDA) standards.
We do not agree with counsel’s contentions. While the instant Cerelac and that considered previously by CBP do not have the exact composition, they are all composed primarily of the same ingredients with slightly differing percentages. They are all packed for retail sale in canisters and all are intended to make a wheat and milk beverage/shake. All the products bear the name “Nestle Cerelac.” Although counsel claims the products classified in HQ 956315 and HQ 955752 were not formulated for the United States markets, pre-importation classification rulings were sought from CBP. Those rulings were issued for products that were going to be introduced into the United States market. It has been CBP policy to classify products with substantially similar ingredients in the same tariff subheadings.
Counsel’s statement that the earlier rulings turned on whether the items were of wheat or milk demonstrates a misreading of those rulings. Both rulings clearly state that CBP considered milk to be the essential character of the product. In both rulings, after discussing factors weighed in determining essential character of a product, CBP stated: “We are aware that milk is one of the basic food products for infants and that Cerelac provides this necessary food product for infants with the addition of wheat flour. We conclude that the milk solids constitutes [sic] the essential character of Cerelac.” These rulings also determined that although the product may “also be for use by adolescents and adults,” its principal use was as a food preparation for infants.
Counsel has provided portions of FDA regulations relating to infant formula and argues that because the instant product does not satisfy the criteria set forth therein, the Cerelac cannot be classified as an infant formula or a product for infant use.
We initially note that CBP is not classifying Cerelac as an infant formula, but as a preparation for infant use. This forces us to review how the term “infant” has been interpreted for tariff purposes. Despite its frequent use, the word is not defined in the tariff. The closest the tariff comes to defining the term is not by the age of the child, but by its size. In chapter 61, note 6(a), and chapter 62, note 4(a), “babies garments and clothing accessories” are defined by the child’s body height, e.g., “not exceeding 86 centimeters.” Although the application of these definitions is limited to headings 6111 and 6209, respectively, there are numerous CBP rulings which indicate that, for tariff purposes, the term “infant” is interpreted to mean children up to two years of age.
In HQ 088575, dated May 31, 1991, the tariff classification of a child’s hat and bib set was determined pursuant to GRI 3. However, in describing the product, the ruling stated that it was “sized for infants 0 to 24 months,” and was used “to form a costume for an infant.” HQ 952285, dated August 10, 1992, discussed the scope of the chapter 61 and 62 notes regarding babies’ garments, and declared that the height requirements of those notes “translated into the existing commercial size range of 0-24 months.” In HQ 959527, dated October 9, 1996, an article being classified was described as being “an infant’s pram suit [that] will fit young children not exceeding 86 cm in body length.” The ruling states, “Customs has interpreted and applied this based on age 0 to 24 months. We note that 2 years and up is the age range for children’s garments.” In New York Ruling NY I83817, dated July 29, 2002, the issue is whether “the hat is for ‘infants (babies)’ or ‘toddlers.’ … Hats are normally labeled and marketed from 0 to 24 months as infant’s hats, and from 2 years to 3 years as toddler hats.”
From commentary in the above rulings, it is clear that CBP has considered the term “infant” to include children up to 2 years of age as far as apparel is concerned. In prior rulings CBP has classified Cerelac with pictures of babies on the container as infant food. The instant container of Cerelac has a picture of a “cute” bear cub. Both pictures can be considered “appropriate” for products intended for the infant – young child market. In fact, when one considers that the preparation instructions on the subject product tell the customer to add milk and the instructions for the earlier classified Cerelac products tell the user to add water, one could say that the product under consideration is more appropriate for younger consumers in that it provides more fresh food nutrients.
Accordingly, we have determined that the product Nestle Cerelac cereal with milk has milk as its essential character, is a type of food product which is principally used as an infant food, and is properly classified in subheading 1901.10.35 and 1901.10.40, HTSUS.
Nestle Cerelac, cereal with milk, is classified in subheadings 1901.10.3500 and 1901.10.4000, HTSUS, which are the in-quota and over-quota subheadings that provide for “food preparations of goods of headings 0401 to 0404, not containing cocoa or containing less than 5 percent by weight of cocoa calculated on a totally defatted basis, not elsewhere specified or included: preparations for infant use, put up for retail sale: containing over 10 percent by weight of milk solids … Dairy products described in additional U.S. note 1 to chapter 4.” The 2004 duty rate for the product entered under quota was 17.5% per kilo. The over quota rate was $1.035/kg plus 14.9%.
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 www.usitc.gov.
The protest should be DENIED in accordance with the above decision. In accordance with the Protest/Petition Processing Handbook (CIS HB, January 2002, pp. 18 and 21), you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of 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