CLA-2 CO:R:C:F 952589 LPF
Mr. William J. Maloney
Rode & Qualey
295 Madison Avenue
New York, NY 10017
RE: Powdered coffee beverage mixes; Subheading 2101.10.4060,
HTSUSA; Extracts, essences and concentrates, of coffee, and
preparations with a basis of these products or of coffee;
Import Restrictions under 9904.60.60; HRL 951238
Dear Mr. Maloney:
This is in response to your letter of August 21, 1992, on
behalf of Kraft General Foods, Inc. and, its subsidiary, General
Foods Corporation. Your inquiry requests the proper
classification of powdered coffee beverage mixes under the
Harmonized Tariff Schedule of the United States Annotated
(HTSUSA).
FACTS:
The powdered coffee beverage mixes are available in three
flavors and require only the addition of water to make a finished
beverage. The french vanilla and vienna flavors contain instant
coffee, sugar, non-dairy creamer and trisodium citrate, along
with other flavors and miscellaneous ingredients. In addition to
the ingredients listed above, the suisse mocha flavor also
contains cocoa and maltodextrin. The coffee mixes will be
packaged in one to two pound food service packages and in eight
to ten ounce retail packages. On April 14, 1993, you met with
Customs to discuss the matter.
ISSUE:
Whether the powdered coffee beverage mixes are classifiable
in subheading 2101.10.20 as extracts, essences and concentrates
of coffee or in subheading 2101.10.40 as other (than extracts,
essences and concentrates of coffee).
-2-
LAW AND ANALYSIS:
The General Rules of Interpretation (GRI's) taken in their
appropriate order provide a framework for classification of
merchandise under the HTSUSA. 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. In the event that the good cannot be classified
solely on the basis of GRI 1, and if the headings and legal notes
do not otherwise require, the remaining GRI's may then be
applied. According to GRI 6, the GRI's, section notes and
chapter notes pertain to subheadings in the same fashion. The
Explanatory Notes (EN's) to the Harmonized Commodity Description
and Coding System, which represent the official interpretation of
the tariff at the international level, facilitate classification
under the HTSUSA by offering guidance in understanding the scope
of the headings and GRI's.
It is agreed that the coffee mixes are classifiable within
heading 2101 and subheading 2101.10 as extracts, essences and
concentrates, of coffee and preparations with a basis of these
products or with a basis of coffee. However, at the eight digit
subheading level, 2101.10.20 provides for extracts, essences and
concentrates, while 2101.10.40 provides for other products. The
language in heading 2101 indicates that the latter subheading
includes preparations with a basis of coffee extracts, essences
or concentrates or with a basis of coffee.
It is your position that the coffee mixes are classifiable as
"extracts" rather than as "preparations." You cite the language
within GRI 2(b) stating that, "[a]ny reference in a heading to a
material or substance shall be taken to include a reference to
mixtures or combinations of that material or substance with other
materials or substances," as evidence that the subject coffee,
combined with sugars, dried skim milk and other additives, is
classifiable as an "extract." However, the EN's to GRI 2(b)
state that, "[m]ixtures being preparations described as such
in...a heading text are to be classified under the provisions of
Rule 1." Although GRI 2(b) indicates that a product combined
with other substances remains classified in the heading providing
for that product, it first must be determined whether the coffee,
mixed or combined with these other substances, is actually a
"preparation," provided for in another subheading. GRI 2(b) does
not necessarily indicate that products, such as the coffee mixes,
are classifiable as "extracts."
-3-
In Headquarters Ruling Letter (HRL) 951238, issued July 7,
1992, an instant coffee mix consisting of sugar (50%), milk
powder (42%), coffee (7.5%), and cocoa powder (0.5%) was
classified in 2101.10.40 as a coffee preparation. The decision
reached in that ruling is indicative of the classification of the
instant product.
As was the case in HRL 951238, we note that the EN's to 2101
indicate that these coffee mixes are classifiable as
"preparations." The EN's describe "extracts, essences and
concentrates" as products made from real coffee or from a mixture
of real coffee and coffee substitutes, in liquid or powder form.
However, the EN's indicate that "preparations" are based on
extracts, essences or concentrates of coffee or tea and may be
extracts with added starches or other carbohydrates. The EN's
also provide for tea preparations consisting of tea, milk powder
and sugar. The subject coffee mixes fit these descriptions and
similarly are classified as preparations. It is our position
that the EN's refer to the eight digit level subheadings and
provide important guidance as to the interpretation of those
provisions.
You draw a distinction between products in which the coffee
component of the finished product retains its identity and
physical characteristics and those products in which the
preparation of the coffee component and other ingredients results
in a combination of those ingredients at the molecular level
yielding a finished product whose physical characteristics have
been altered. Although the coffee and sugar components may have
a separate and separable existence in these finished products,
the fact that the ingredients have not combined at the molecular
level does not preclude the products' classification as
"preparations." We maintain that the term "preparation" covers
coffee or tea products which include sugar, milk, etc. regardless
of changes in the finished products' physical characteristics.
Contrary to your position, Customs does not maintain that the
tariff's reference to "soluble or instant coffee (containing no
admixture of sugar, cereal or other additive)" indicates that the
coffee mixes, combined with sugar, milk and other additives are
classifiable as "other extracts" in 2101.10.2040. Item 160.20,
Tariff Schedules of the United States (TSUS) provided for
"soluble or instant coffee (containing no admixture of sugar,
cereal, or other additive)." The Summaries of Trade and Tariff
Information (1969) stated that item 160.21, the TSUS provision
providing for "other extracts," primarily included liquid
concentrates used for flavoring and beverage purposes, while item
182.95, TSUS, providing for "edible preparations" included, inter
alia, small amounts of soluble or instant coffee mixed with
sweeteners and whitening agents.
-4-
The admixture exclusion at the ten digit subheading level is
not part of the legal text of the HTSUSA and should not be
interpreted as to restrict or broaden the scope of the legal text
at the eight digit subheading level. At the ten digit level, a
distinction appears to be made between soluble or instant coffee
extracts and liquid extracts rather than between extracts without
an admixture of sugar, milk, etc. and those containing such an
admixture. The latter distinction appears to be made at the
eight digit level (vis-a-vis subheadings 2101.10.20 and
2101.10.40). This interpretation does not "render the
statistical language meaningless and superfluous," as averred by
counsel. This evidence, indicating classification of coffee
mixed with sweeteners and whitening agents as "preparations"
under the TSUS, is instructive of the proper classification for
the coffee mixes under the HTSUSA.
HOLDING:
The powdered coffee beverage mixes are classifiable in
subheading 2101.10.4060 as, "Extracts, essences and concentrates,
of coffee, tea or mate and preparations with a basis of these
products or with a basis of coffee, tea or mate;...Extracts,
essences and concentrates, of coffee, and preparations with a
basis of these extracts, essences or concentrates or with a basis
of coffee: Other, Provided for in subheading 9904.60.60." The
general column one rate of duty is 10 percent ad valorem. At
present, subheading 9904.60.60 provides for a quota quantity
limitation of 76,203 metric tons.
Sincerely,
John Durant, Director
Commercial Rulings Division