CLA-2 OT:RR:CTF:TCM W968432 ARM
Port Director
Port of Philadelphia
U.S. Customs and Border Protection
2nd and Chestnut Streets, Room 102
Philadelphia, PA 19106
RE: Sula “imitation butter”; AFR of Protest no.1101-06-100183
Dear Port Director:
The following is our decision regarding Application for Further Review of Protest no. 1101-06-100183, timely filed on July 21, 2006, regarding the classification of Sula brand “imitation butter” under the Harmonized Tariff Schedule of the United States (HTSUS).
FACTS:
The instant merchandise is described by Protestant as a spreadable emulsion containing approximately 81.2% milk, 10.8% soybean and/or palm oil, 4.8% butter, 1.3% powder skim milk, 1.14% salt, 0.12% disodium phosphate, 0.01% potassium sorbate, 0.01% sodium benzoate, 0.001% lactic culture, and 0.005% natural color.
CBP Laboratory report SV20050997, dated October 6, 2005, describes the constituents in the merchandise differently. It states, in pertinent part, the following:
The sample is a yellow colored material in a plastic bag marked “Sula”. The sample is an oil in water type emulsion which contains some hydrogenated fats and has the following approximate composition by weight:
Moisture----------------74%
Lactose-----------------14%
Total Fat----------------11%
Butterfat------------------3%
The protest covers twelve entries made from November 2004, through September 2005, classified under subheading 0405.20.40, HTSUS. U.S. Customs and Border Protection (“CBP”) liquidated the merchandise on February 10, 2006, in subheading 1901.90.43, HTSUS, as a food preparation of the goods of heading 0401 to 0404, HTSUS. Protestant now claims that the correct classification is under subheading 2106.90.99, HTSUS, as a food preparation not elsewhere specified or included, and not subheading 0405.20.40, HTSUS, as entered.
ISSUE:
What is the correct classification of “Sula” brand imitation butter under the HTSUS?
LAW AND ANALYSIS:
Initially, we note that the matter protested is protestable under 19 U.S.C. §1514(a)(2) as a decision on classification. The protest was timely filed, within 90 days of liquidation of the first entry for entries made before December 18, 2004, and within 180 days of liquidation of the first entry 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. 1101-06-100183 was properly accorded to Protestant pursuant to 19 C.F.R. § 174.24 because the decision against which the protest was filed is alleged to involve questions of law or fact which have not been ruled upon by CBP or the courts. Specifically, it is alleged that CBP has previously classified products with the same brand name as the instant product but not consisting of the same constituents, but has not issued a classification decision on the instant product.
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 order.
The HTSUS subheadings under consideration are as follows:
1901 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:
* * *
1901.90 Other:
* * *
Other:
Dairy products described in additional U.S. note 1 to chapter 4:
Dairy preparations containing over 10 percent by weight of milk solids:
* * *
1901.90.42 Described in additional U.S. note 10 to chapter 4 and entered pursuant to its provisions . . . .
1901.90.43 Other . . . .
* * * * * *
2106 Food preparations not elsewhere specified or included:
* * *
2106.90 Other:
Other:
Other:
Other:
Other:
2106.90.99 Other.
In understanding the language of the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System should 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 at the international level. See T.D. 89-80, 54 Fed. Reg. 35127 (August 23, 1989).
The ENs to heading 19.01 state in pertinent part, the following:
(III) Food preparations of goods of headings 04.01 to 04.04, not containing cocoa or containing less than 5% by weight of cocoa calculated on a totally defatted basis, not elsewhere specified or included.
The preparations of this heading may be distinguished from the products of headings 04.01 to 04.04, in that they contain, in addition to natural milk constituents, other ingredients not permitted in the products of those earlier headings. . . .
EN 21.06 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.
* * * * *
The heading includes, inter alia:
* * * * *
Preparations based on butter or other fats or oils derived from milk and used, e.g., in bakers’ wares.
As an initial matter, we note that the instant merchandise is described in two ways in the FACTS section above. Both descriptions are factually correct. The total fat figure in the laboratory report is approximately the same as the hydrogenated oils listed by protestant. We find that the ingredient breakdown provided by plaintiff is more helpful in determining the classification of the merchandise; we will use it in our analysis rather than the constituent breakdown provided by CBP laboratory.
Protestant agrees with CBP that the merchandise is “not prima facie classified in heading 0405, HTSUS.” As such the provisions of heading 0405, HTSUS, are not at issue and will not be discussed. With regard to protestant’s argument that “the quantitative restrictions to heading 0405, HTSUS, seem outdated” and request that CBP “consider the scope of heading 0405, HTSUS, as it relates to low fat mixtures derived from milk” (Protestant submission, p. 4), we note that CBP is empowered only to administer the tariff as it is written. Protestant’s argument in this regard may be better directed toward Congress.
Protestant argues that the ENs to heading 0405, HTSUS, excludes fat spreads containing fats other than milkfats or containing less than 39% by weight of milkfat (Id., p. 3), and require classification of the instant merchandise in heading 2106, HTSUS. We disagree. First, an exclusion implies that a product could be covered in a particular heading, but is specifically excluded. The instant product is not, by protestant’s own admission, covered by the terms of heading 0405, HTSUS. Therefore, any exclusionary language pertaining to that heading cannot be applied to the instant merchandise. Second, even if the product were subject to the exclusionary language in EN 04.05, the term “generally” connotes that classification in headings 15.17 or 21.06 may not always be appropriate. Furthermore, heading 2106, HTSUS, the provision for “Food preparations not elsewhere specified or included,” can only be the correct classification for the instant merchandise if it is not specifically described elsewhere in the tariff.
Heading 1901, HTSUS, covers food preparations containing products of headings 0401 through 0404, HTSUS. Headings 0401 through 0404, HTSUS, cover milk, cream, yogurt, fermented milk products, whey and other milk constituents. The instant merchandise consists of considerable amounts of milk, cream, and other milk constituents. Therefore, this product is a food preparation based on a good of heading 0401, HTSUS, and is described by the terms of heading 1901, HTSUS. Hence, under GRI 1, classification of the merchandise in heading 2106, HTSUS, is precluded.
Protestant states that CBP has classified products similar to the instant merchandise in heading 2106, HTSUS. Protestant cites NY 888347, dated July 28, 1993, NY 869837, dated January 13, 1992, and NY 889109, dated September 2, 1993, in support of this position. Given that the merchandise in those rulings consist of cheese spreads based on cheese of heading 0406, HTSUS, or based on cheese and oil, the merchandise in those rulings is not substantially similar to the Sula “imitation butter” at issue here. Accordingly, those rulings do not aid in the classification of the instant product. We find that Protestant’s reliance on NY 818809, dated February 26, 1996, is similarly unhelpful because there is not enough information in that ruling to dispute its classification or to determine that it is substantially similar to the instant merchandise.
In NY K82926, dated February 11, 2004, CBP classified “Butter Blend Sula”, a creamy, white-colored liquid composed of 64 percent water, 13 percent fluid cream, 13 percent vegetable oil, 8 percent skim milk solids, one percent sodium chloride, and less than one percent each of stabilizers, lactic cultures, potassium sorbate, sodium benzoate, and color, packed for retail sale, in subheading 1901.90.42/43, HTSUS. The product described in that ruling is similar to the instant merchandise. While Protestant argues that NY K82926 should not control our decision in this case, the ruling indicates that CBP has been consistent in classifying food preparations based on milk in heading 1901, HTSUS, and not in heading 2106, HTSUS.
In short, the instant merchandise, containing over 81% milk in a spreadable emulsion, is comprised chiefly of milk and has the distinct character of a milk product. Therefore, the instant merchandise is specifically provided for in heading 1901, HTSUS, and is precluded from classification in heading 2106, HTSUS, by the terms of that heading.
HOLDING:
At GRI 1, the instant Sula “imitation butter” is classified in heading 1901, HTSUS. Specifically, it is classified in subheading 1901.90.42/43, HTSUS, which provide for, in pertinent part: “ . . . 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: Other: Other: Dairy products described in additional U.S. note 1 to chapter 4: Dairy preparations containing over 10 percent by weight of milk solids: Described in additional U.S. note 10 to chapter 4 and entered pursuant to its provisions/ Other.” Subheading 1901.90.42, HTSUS is subject to the quota restrictions found in Additional U.S. Note 10 to Chapter 4. Subheading 1901.90.43 is subject to safeguards pursuant to subheadings 9904.04.05 through 9904.05.01, HTSUS.
Since the rate of duty under the classification indicated above is the same as the liquidated rate, you are instructed to deny the protest in full. 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 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 this letter, the Office of International Trade will make this letter 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