CLA-2 CO:R:C:F 088880 RFC/PH
District Director
U.S. Customs Service
101 East Main Street
Norfolk, VA 23510
RE: Decision on Application for Further Review of Protest No.
1401-90-000216, on the entry of certain chocolate products
Dear Sir:
This is a decision on application for further review of a
protest timely filed on behalf of Holland American Food Company,
on December 17, 1990, against your notice of redelivery and
decision in the tariff classification under the Harmonized Tariff
Schedule of the United States Annotated (HTSUSA) of certain
chocolate products. There were two entries of the products. The
first entry was on March 30, 1990. The second entry was on August
3, 1990. Neither of the two entries was liquidated.
NOTICE OF REDELIVERY
FACTS:
As indicated above, the protestant entered the merchandise on
March 30, 1990 and August 3, 1990. Immediate delivery was
authorized for the first entry on March 30, 1990, and, we
understand, for the second on August 6, 1990. Information and
samples with regard to the March 30, 1990, entry were requested by
Customs (on Customs' Form 28) on April 25, 1990. The information
and samples were provided to Customs by
communication dated May 11, 1990. We understand that the samples
were sent to the Customs' laboratory on July 9, 1990. According
to laboratory reports in the file, the laboratory received two of
the samples on July 12, 1990. The dates of the two laboratory
reports for these samples are August 29, 1990. Because of what it
believed to be a discrepancy in one of those laboratory reports,
re-analysis of one of the reports was requested. A supplemental
laboratory report in response to this request is dated October 10,
1990. No information or samples were requested by Customs with
regard to the August 3, 1990, entry, nor were any samples sent for
analysis with regard to this entry. A notice of redelivery for
certain of the merchandise entered in the March 30, 1990, entry was
sent to the importer of record on October 30, 1990. We understand
that on the same date a notice of redelivery for certain of the
merchandise entered in the August 3, 1990, entry was sent to the
importer of record on the same date. The protest under
consideration was filed on December 17, 1990. On December 24,
1990, a notice of liquidated damages for failure to redeliver the
merchandise was sent to the importer of record with regard to the
March 30, 1990, entry. We understand that such a notice was also
sent with regard to the August 3, 1990, entry on the same date.
According to Customs' records, the March 30, 1990, entry was
liquidated on May 17, 1991 (the August 3, 1990, entry has not been
liquidated, liquidation having been extended by notice dated May
4, 1991).
The protestant claims that the notices of redelivery involved
were untimely, in that they were not received until seven months
after the original entry. The protestant contends that because of
the time after the original entry which it took to issue the
notices of redelivery, the original importer was led to assume that
there were no more problems with these items. Further, the
protestant states that during this time period the original
importer of record was sold and the purchaser was unaware of any
"hold of any inventory" and sold the merchandise in the normal
course of business. Consequently, the protestant states, the
merchandise cannot be returned as ordered.
ISSUES:
Is a notice of redelivery timely when:
(a) It is issued more than 30 days after authorization
for immediate delivery and no request for information
(CF 28) is issued or any other action is taken to
establish a conditional release period?
(b) A request for information (CF 28) is issued within
30 days of entry and authorization for immediate
delivery, the information and samples requested are
timely provided to Customs, the samples are sent to the
Customs' laboratory for analysis more than 30 days after
receipt by Customs, laboratory reports are initially
issued for the merchandise more than 30 days after the
samples were sent to the Customs' laboratory, a second
analysis of the merchandise by the Customs' laboratory
is provided more than 30 days after the date of the first
laboratory report, and the notice of redelivery is issued
within 30 days of this last laboratory report (but 7
months after the date of entry and authorization for
immediate delivery and more than 5 months after the
information and samples requested were provided to
Customs)?
LAW AND ANALYSIS:
Initially, we note that the protest, with application for
further review, was timely filed under the statutory and regulatory
provisions for protests (see 19 U.S.C. 1514 and 19 CFR Part 174).
We also note that the decision to issue a notice of redelivery is
protestable under the Customs' protest statute (see 19 U.S.C.
1514(a)(4)).
The Customs' regulations governing this issue are found in 19
CFR 141.113 and 113.62. Under paragraph (b) of section 141.113:
If at any time after entry the district director finds
that any merchandise contained in an importation is not
entitled to admission into the commerce of the United
States for any reason not enumerated in paragraph (a) of
this section [relating to various marking and labeling
requirements], he shall promptly demand the return to
Customs' custody of any such merchandise which has been
released.
Paragraph (f) of section 141.113 contains a time limitation
for demands for the return of merchandise to Customs' custody under
section 141.113. Under this provision:
A demand for the return of merchandise to Customs'
custody shall not be made after the liquidation of the
entry covering such merchandise shall become final.
Section 113.62 contains the basic importation and entry bond
conditions. Under paragraph (c) of this provision:
It is understood that any demand for redelivery will be
made no later than 30 days after the date that the
merchandise was released or 30 days after the end of the
conditional release period (whichever is later).
Our interpretation of these provisions is that a notice of
redelivery must be "promptly" issued, that is, it must be issued
either: (1) no later than 30 days after the date the merchandise
is released if there is no occurrence establishing a conditional
release period; or (2) if there is an occurrence establishing a
conditional release period (e.g., see 19 CFR 12.80(e)(2), 19 CFR
134.3, and 19 CFR 151.11), no later than 30 days after the end of
that period (see Customs Service Decision (C.S.D.) 86-21). A
notice of redelivery may never be issued after liquidation becomes
final (United States v. Utex International Inc., 6 Fed. Cir. (T)
166 (1988)).
In the case of the August 3, 1990, entry, there was no
occurrence establishing a conditional release. The notice of
redelivery was issued more than 30 days after the date the
merchandise was released. Therefore, the protest against the
notice of redelivery for this entry must be granted (see C.S.D.
89-100).
In the case of the March 30, 1990, entry, there was an
occurrence establishing a conditional release (i.e., the issuance
of the request for information (CF 28)) and that occurrence was
within 30 days after the date the merchandise was released.
However, the notice of redelivery was not issued until more than
5 months after the date that the information and samples requested
in the request for information were provided. The samples were not
sent to the Customs' laboratory until more than 30 days after the
date the samples were provided and the final laboratory report was
not issued until more than 3 months after the samples were sent to
the Customs' laboratory. This does not meet the requirement in 19
CFR 141.113(b) that a notice of redelivery be "promptly" issued
(see C.S.D. 90-99). Therefore, the protest against the notice of
redelivery for this entry must be granted.
HOLDING:
A notice of redelivery is not timely when:
(a) It is issued more than 30 days after entry and
authorization for immediate delivery and no request for
information (CF 28) is issued or any other action is
taken to establish a conditional release period.
(b) A request for information (CF 28) is issued within
30 days of entry and authorization for immediate
delivery, the information and samples requested are
timely provided to Customs, the samples are sent to the
Customs' laboratory for analysis more than 30 days after
receipt by Customs, laboratory reports are initially
issued for the merchandise more than 30 days after the
samples were sent to the Customs' laboratory, a second
analysis of the merchandise by the Customs' laboratory
is provided more than 30 days after the date of the first
laboratory reports, and the notice of redelivery is
issued within 30 days of this last laboratory report (but
7 months after the date of entry and authorization for
immediate delivery and more than 5 months after the
information and samples requested were provided to
Customs).
In light of the above, the protest is granted as to the notice
of redelivery.
CLASSIFICATION
The foregoing determination moots the classification issue
presented in this protest. The following discussion, however, is
offered for your information and assistance in the classification
and liquidation of any open entries on the merchandise and in
ruling on any other open protests on the classification of the
merchandise.
FACTS:
Three products are identified: Ruyter Chocolate Hail-Milk,
Ruyter Chocolate Hail-Mocha, and Ruyter Chocolate Flakes-Milk.
The first two products are described as "chocolate sprinkles," and
the third product is described as "chocolate shavings." The two
chocolate-sprinkle products are said to contain the same
ingredients with the "mocha" chocolate-sprinkle product also
containing coffee flavoring.
Laboratory analysis of a sample of the chocolate sprinkles
shows that it contains, among other things, cocoa and 5.5 percent
or less by weight of butterfat. Similar analysis of a sample of
the chocolate shavings shows that it contains, among other things,
cocoa but no butterfat.
The protestant contends that the three products are classified
under the statistical-reporting numbers 1806.90.0075 or
1806.90.0078. On the other hand, Customs has classified all three
of the products under the statistical-reporting number
1806.90.0020.
ISSUES:
(1) What is the proper tariff classification under the HTSUSA
of "chocolate sprinkles" that contain, among other things, cocoa
and 5.5 percent or less by weight of butterfat?
(2) What is the proper tariff classification under the HTSUSA
of "chocolate shavings" that contain, among other things, cocoa but
no butterfat?
LAW AND ANALYSIS:
Merchandise imported into the United States is classified
under the Harmonized Tariff Schedule of the United States Annotated
(HTSUSA). The tariff classification of merchandise under the
HTSUSA is governed by the principles set forth in the General Rules
of Interpretation (GRIs) and, in the absence of special language
or context which otherwise requires, by the Additional U.S. Rules
of Interpretation. The GRIs and the Additional U.S. Rules of
Interpretation are part of the HTSUSA and are to be considered
statutory provisions of law for all purposes. See Sections 1204(a)
and 1204(c) of the Omnibus Trade and Competitiveness Act of 1988
(19 U.S.C. 1204(a) and 1204(c)).
GRI 1 requires that classification be determined first
according to the terms of the headings of the tariff schedule
(i.e., (1) merchandise is to be classified under the 4-digit
heading that most specifically describes the merchandise; (2) only
4-digit headings are comparable; and (3) merchandise must first
satisfy the provisions of a 4-digit heading before consideration
is given to classification under a subheading within this 4-digit
heading) and any relative section or chapter notes and, provided
such headings or notes do not otherwise require, then according to
the other GRIs.
GRI 6 prescribes that, for legal purposes, GRIs 1 to 5 shall
govern, mutatis mutandis, classification at subheading levels
within the same heading. Therefore, merchandise is to be
classified at equal subheading levels (i.e., at the same digit
level) within the same 4-digit heading under the subheading that
most specifically describes or identifies the merchandise.
A review of the schedule reveals that the instant products
may be classified in chapter 18. This chapter covers "cocoa and
cocoa preparations." Of special significance to the instant
classification analysis is note 2 to chapter 18. This note states
that:
Heading 1806 includes sugar confectionery containing cocoa,
and, subject to note 1 to this chapter, other food
preparations containing cocoa.
Turning to heading 1806, one finds that it provides for "chocolate
and other food preparations containing cocoa."
As the instant products are food preparations containing cocoa,
then the products are properly classified under heading 1806.
The instant products have been found to be properly classified
under heading 1806. Consideration must now be given to the proper
subheading in heading 1806 in which to classify the products. Of
significance to classification of the instant products in heading
1806, however, is the issue of whether any of the products is a
"confection" or "confectionery."
The terms "confection" and "confectionery" refer to and
describe products that are ready for consumption as an end product
(e.g., candy bars) and not for use in the production of another
product (e.g., decorations for cakes or pies). See Webster's Ninth
New Collegiate Dictionary 274 (1989) (confection is "a fancy dish
or sweetmeat; also: a sweet food" and confectionery are "sweet
foods (as candy or pastry)"); Webster's Third International
Dictionary 475 (1986) (confection is a "delicacy; usu: a
preparation of fruits, nuts, roots, or other morsels with sugar:
sweetmeat, preserve, candy" and confectionery are "sweet edibles
(as candy, cake, pastry, candied fruits, ice cream)..."); The
Random House Dictionary of the English Language 307 (1983)
(confection is "a sweet preparation of fruit or the like, as a
preserve or candy" or "a piece of candy; bonbon" and confectionery
are "confections or sweetmeats collectively"). The instant
products are all for use in the making of an end product (i.e.,
decorations for pies, cakes, etc.) rather than as an end product
in themselves. Accordingly, one can only conclude that none of the
instant products is either a "confection" or "confectionery."
In light of their ingredients and of the fact that they are
not considered to be a confection or confectionery, the instant
products are classified as follow: The "chocolate sprinkles" are
classified under the statistical-reporting number 1806.90.0020 and
the "chocolate shavings" are classified under the statistical-
reporting number 1806.90.0078.
HOLDING:
Ruyter Chocolate Hail-Milk
The product identified above as "Ruyter Chocolate Hail-Milk"
and described as "chocolate sprinkles" is properly classified under
the statistical-reporting number 1806.90.0020, which provides for
chocolate and other food preparations containing cocoa, other,
subject to quota established pursuant to section 22 of the
Agricultural Adjustment Act, as amended: provided for in subheading
9904.10.66. The general rate of duty for the year 1990 is 7
percent ad valorem.
Products provided for in the statistical-reporting number
1806.90.0020 are subject for the year 1990 to the quota
restrictions of 9904.10.66. Under this subheading, with the
exception of such goods originating from the United Kingdom,
Ireland, and New Zealand, there exists a total ban or embargo on
the importation of goods provided for in 1806.90.0020 into the
United States (i.e., none can be imported into the United States).
Ruyter Chocolate Hail-Mocha
The product identified above as "Ruyter Chocolate Hail-Mocha"
and described as "chocolate sprinkles" is properly classified under
the statistical-reporting number 1806.90.0020, which provides for
chocolate and other food preparations containing cocoa, other,
subject to quota established pursuant to section 22 of the
Agricultural Adjustment Act, as amended: provided for in subheading
9904.10.66. The general rate of duty for the year 1990 is 7
percent ad valorem.
Products provided for in the statistical-reporting number
1806.90.0020 are subject for the year 1990 to the quota
restrictions of 9904.10.66. Under this subheading, with the
exception of such goods originating from the United Kingdom,
Ireland, and New Zealand, there exists a total ban or embargo on
the importation of goods provided for in 1806.90.0020 into the
United States (i.e., none can be imported into the United States).
Ruyter Chocolate Flakes-Milk
The product identified above as "Ruyter Chocolate Flakes-
Milk" and described as "chocolate flakes" is properly classified
under the statistical-reporting number 1806.90.0078, which provides
for chocolate and other preparations containing cocoa, other,
other, other put up for retail sale, other. The general rate of
duty for the year 1990 is 7 percent ad valorem. Products
classified under the statistical-reporting number 1806.90.0078 for
the year 1990 are not subject to a quota restriction.
A copy of this decision should be furnished to the protestant
with the Form 19 notice of action.
Sincerely,
John Durant, Director
Commercial Rulings Division