CLA-2 CO:R:C:G 088165 WAW
District Director of Customs
610 South Canal Street
Chicago, IL 60607
RE: Internal Advice Request 66/90 regarding classification of
Dog and Cat Treats, Snacks and Biscuits; Subheading 9903.23.35;
Subheading 2309.10.00; HRL 086640; HRL 087627; Retail Sale; Bulk
Shipments
Dear Sir:
This request for internal advice was initiated by the law
firm of Patton, Boggs & Blow, on behalf of their client Mardel
Laboratories, Inc., regarding the classification of dog and cat
treats, snacks and biscuits from England under the Harmonized
Tariff Schedule of the United States Annotated (HTSUSA). This
request was forwarded to our office for final determination. We
had the opportunity to meet with the importer, counsel for the
importer, and other representatives from DeAngelus & Schaffer to
discuss this matter on Friday, December 7, 1990.
FACTS:
The merchandise at issue is described as dog treats which
are imported in cartons of 22 and 27.5 pounds with plastic weigh
out bags in every fourth carton. The weigh out bags are used to
package the imported snacks into smaller quantities and are
marked with ingredients, analysis and a feeding guide. The
imported product consists of more than 6 percent by weight of
grain or grain products and is an admixture of grains and
feedstuffs. The accompanying literature advertising this product
shows a picture of an open container of pet treats with the
following statement: "New Marrowbone is now available in bulk
for your customers who prefer to buy this way. The 27.5 pound
case comes with free weigh-out bags and a colorful attention-
getting header card."
On July 17, 1990, the importer, Mardel Laboratories, Inc.,
received a reject slip requiring a 100 percent deposit of duties
on the dog and cat treats. This notice was subsequently followed
by a Form 29, Notice of Action, dated July 27, 1990, which was
applied to a number of 1989 and 1990 entries of the pet treats.
On August 30, 1990, counsel for the importer submitted a request
for internal advice to your office regarding the classification
of pet treats and snacks imported from England. The request was
forwarded to this office for our final determination in this
matter.
Counsel for the importer maintains that Customs has
erroneously classified the subject merchandise as dog and cat
food in subheading 2309.10.00, HTSUSA, based on the reasons set
forth below.
First, counsel argues that under subheading 9903.23.35,
HTSUSA, pet food products from the EEC may be subject to 100
percent rate of duty only if they would otherwise be classified
in subheading 2309.10, HTSUSA. Subheading 2309.10, HTSUSA,
applies generally to "dog or cat food, put up for retail sale."
However, counsel for the importer states that dog or cat food
must be classified under subheading 2309.90.10, HTSUSA, as "mixed
feeds or mixed feed ingredients," if it satisfies the definition
of "mixed feed or mixed feed ingredients" set forth in Additional
U.S. Note 1 to Chapter 23, HTSUSA. Additional U.S. Note 1 states
the following:
The term "mixed feed and mixed feed ingredients" in
subheading 2309.90.10 embraces products of heading
2309, which are admixtures of grains (or products,
including by-products, obtained in milling grains) with
molasses, . . ., and which consist of not less than 6
percent by weight of grain or grain products.
Based on Note 1, counsel for the importer claims that any product
of Heading 2309 which satisfies the definition of mixed feed or
mixed feed ingredients must be classified in subheading
2309.90.10, HTSUSA. Counsel maintains that this is true even of
dog food and cat food, since the definition of "mixed feed and
mixed feed ingredients" explicitly states that it embraces
products of Heading 2309. Dog food and cat food are both
included under Heading 2309. Thus, counsel for the importer
states that if a dog food or cat food put up for retail sale
fulfills the definition of "mixed feed and mixed feed
ingredients," it is properly classified in subheading 2309.90.10,
HTSUSA.
Finally, counsel for the importer maintains that if these
pet treats are classified in subheading 2309.10, HTSUSA, as pet
food they cannot be subject to the higher EEC duties under
subheading 9903.23.35, HTSUSA, since they are not "put up for
retail sale." Subheading 9903.23.35, HTSUSA, states the
following:
Pet food packaged for retail sale, of byproducts
obtained from the milling of grains, mixed feeds, and
mixed-feed ingredients (provided for in subheading
2309.10)
Counsel notes that subheading 9903.23.35, HTSUSA, only applies to
pet food which is packaged for retail sale. At issue are pet
snacks that are imported in cartons of 22 and 27.5 pounds with
plastic weigh out bags in every fourth carton. A survey
conducted by the importer detailing bulk product sales,
demonstrates that pet stores which purchase these treats
typically display a small quantity in a plastic bin or container,
while keeping the larger imported carton in storage. In
addition, counsel for the importer states that the 22 and 27.5
pound boxes do not qualify as intermediate retail products since
they are not packaged or marketed in the same manner as the
retail units. Counsel claims that the "finished retail
consumer-sized packaging" is the shelf-sized packages or the
smaller plastic bags filled from the 22 and 27.5 pound bulk
containers. Thus, it is counsel for the importer's position that
these pet treats are imported in bulk and not subject to the
higher EEC duties imposed by subheading 9903.23.35, HTSUSA.
Two of the competing provisions at issue in this case are
the following:
2309.10.00 Preparations of a kind used in animal
feeding: Dog or cat food, put up for retail sale
2309.90.10 Preparations of a king used in animal
feeding: Other: Mixed feeds or mixed feed ingredients
ISSUE:
Whether the dog and cat treats are classified in subheading
2309.10.00, HTSUSA, as dog or cat food, put up for retail sale,
or rather in subheading 2309.90.90, HTSUSA, as preparations of a
kind used in animal feeding: Other: Other: Other: Other.
LAW AND ANALYSIS:
The General Rules of Interpretation (GRI's) set forth the
manner in which merchandise is to be classified under the HTSUSA.
GRI 1 requires that classification be determined first according
to the terms of the headings of the tariff and any relative
section or chapter notes and, unless otherwise required,
according to the remaining GRI's, taken in order.
In a prior Headquarters Ruling Letter (HRL) 086640, dated
June 12, 1990, (modified in HRL 087627, dated August 6, 1990),
Customs issued a ruling classifying cat food and dog treats. In
HRL 086640, the dog treats were described as consisting of "high
energy meat flavored treat, made with vegetable grain products
and packed in 30 gram size airtight, cellophane packs." This
ruling held that pet food or pet treats which meet the
definition for mixed feeds and mixed feed ingredients, set out in
Additional U.S. Legal Note 1 to Chapter 23, should be covered by
the wording of subheading 9903.23.35, HTSUSA, if packaged for
retail sale. The ruling further stated that subheading
2309.10.00, HTSUSA, was intended to include not only complete
meals but also snacks. In HRL 086640, Customs concluded that the
dog treats did not meet the definition of "mixed feed and mixed
feed ingredients" and therefore, the EEC duties should not be
applied. However, in a decision modifying this ruling, (HRL
087627), Customs stated that the dog treats are an admixture of
grains combined with a feedstuff (meat meal) which consists of
over 6 percent by weight of grain thereby satisfying the
definition of mixed feed ingredients. Accordingly, Customs held
that the dog treat in HRL 086640, a product made of mixed feed
ingredients classifiable in subheading 2309.10, HTSUSA, should be
subject to the 100 percent duty rate as dictated by subheading
9903.23.35, HTSUSA.
Based on HRL 086640 and 087627, it is our position that dog
and cat treats, snacks and biscuits which meet the definition of
"mixed feed and mixed feed ingredients" should be classified in
subheading 2309.10.00, HTSUSA, if they are "put up for retail
sale." The products imported by Mardel satisfy this exacting
definition of "mixed feeds and mixed feed ingredients."
Specifically, based on information provided by the importer on
the component breakdown of the ingredients by weight, it is
clear that the dog treats consist of more than 6 percent by
weight of grain or grain products and is an admixture of grains
and feedstuffs. Thus, the dog treats will be classified in this
subheading only if they are also "put up for retail sale." Pet
treats, whether or not of mixed-feed ingredients, which do not
meet the definition of "put up for retail sale" will be
classified in subheading 2309.90.90, HTSUSA.
Subheading 9903.23.35, HTSUSA, indicates that pet food
packaged for retail sale, of byproducts obtained from the milling
of grains, mixed feeds, and mixed-feed ingredients (provided for
in 2309.10) which are the product of the European Economic
Community (Belgium, Denmark, France, the Federal Republic of
Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands,
Portugal, Spain, and the United Kingdom), are subject to a 100
percent duty rate. Thus, if the subject merchandise meets the
definition for "dog or cat food" in subheading 2309.10.00,
HTSUSA, it will be subject to 100 percent duty rate only if it is
found to be packaged for retail sale.
Absent a clear statement of congressional intent, tariff
terms are construed in accordance with their common and
commercial meanings, which are presumed to be the same. Nippon
Kogaku (USA) Inc. v. United States, 673 F.2d 380 (1982).
Congress is presumed to know the language of commerce and to have
framed tariff acts so as to classify commodities according to
general usage and denomination of the trade. Nylos Trading
Company v. United States, 37 CCPA 71, C.A.D. 422 (1949). To
ascertain the common [and commercial] meaning [of a tariff term],
in addition to relying upon its own understanding of the terms
used, the courts may consult dictionaries, lexicons, the
testimony of record, and other reliable sources of information as
an aid to its knowledge. Pistorino & Co., Inc. v. United States,
461 F. Supp. 331, 334 (1978).
After careful analysis by this office and the International
Nomenclature Staff, Office of Regulations and Rulings, we have
concluded that the term "retail sale" is not specifically defined
in either the Legal Notes or the Explanatory Notes to the tariff
schedule. Thus, we may consult representative dictionary
definitions to derive the common and commercial meaning of the
term "retail sale." Black's Law Dictionary, Fifth Edition, 1979,
defines the term "retail sale" as: "A sale in small quantities or
direct to consumer, as distinguished from sale at "wholesale" in
large quantity to one who intends to resell." The term
"retailer" is defined in Black's Law Dictionary, Fifth Edition,
1979, as follows: "A person engaged in making sales to ultimate
consumers." The term "retail" has been defined by the Customs
Court as "sales in small quantities to ultimate consumers." See
Ed Alexander v. United States, 78 Cust. Ct. 137, C.D. 4699
(1977).
It is a well settled principle of Customs law that, in the
absence of deception, disguise, or artifice resorted to for the
purpose of perpetrating a fraud upon the revenue, imported
merchandise must be classified with reference to its condition
when imported. See United States v. Citroen, 223 U.S. 407
(1911). The term "condition when imported" has been interpreted
by the courts to mean the condition of the goods when they are
brought within the jurisdiction of the United States with intent
to unlade. See Roser Customs Service, a/c Continental Ore
Corporation et al. v. United States, 64 Cust. Ct. 20, C.D. 3953
(1970). Here, the dog treats are being imported into the
jurisdiction of the United States in plain, unmarked, 22 and 27.5
pound cartons without plastic bags. These 22 and 27.5 pound
boxes of pet snacks each contain approximately 2,100 items. The
dog treats are not put up in individual packages. The
merchandise is later repackaged into marked boxes which are
shipped to pet stores. Most consumers do not purchase 22 or 27.5
pound cartons of pet treats, but rather, will buy much smaller
quantities of treats in the weigh out bags provided by the
importer. Thus, at the time of importation, the merchandise is
shipped in large, unmarked boxes which are intended to be the
source from which smaller quanitites of dog treats will be sold.
Based on the facts in this specific case, we have determined
that the condition of the merchandise when it enters the United
States constitutes bulk shipments, rather than retail packages.
Moreover, the fact that the ultimate consumer will purchase a
smaller quantity of the dog treats at the time of sale does not
affect classification of the merchandise when imported. These
goods, however, are distinguishable from those dog and cat treats
imported by Mardel which are already individually packaged in
small pouches suitable for retail sale when they enter the United
States. The latter dog and cat treats would be classified in
subheading 2309.10.00, HTSUSA, and subject to the 100 percent
rate of duty under subheading 9903.23.35, HTSUSA.
HOLDING:
Based on the foregoing analysis, the dog treats being
imported into the United States in 22 and 27.5 pound cartons are
considered bulk shipments, and should be classified in
subheading 2309.90.90, HTSUSA, as preparations of a kind used in
animal feeding: Other: Other: Other: Other. Merchandise
classified under this subheading is subject to a 3 percent rate
of duty.
Sincerely,
John Durant, Director
Commercial Rulings Division