CLA-2 RR:CR:GC 959798K
Port Director
U.S. Customs Service
610 S. Canal Street
Chicago, Illinois 60607
RE: Protest 3901-96-101621; Henkel Corp.; Deodorizer Distillate; Tocopherols
Dear Port Director:
The following is our response to the referral by your office, dated September 25, 1996, of the request for further review of the above-referenced protest. We regret the delay. In preparing this decision consideration was given to the arguments presented by counsel for the protestant at a meeting held on March 4, 1999, and a further submission submitted on March 18, 1999.
FACTS:
The ten consumption entries covering the imported merchandise, deodorizer distillate, were reported as being liquidated and/or timely reliquidated on April 5, 1996, under the provision for prepared binders for foundry molds or cores; chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included; residual products of the chemical or allied industries, not elsewhere specified or included:...other...other...mixtures containing 5 percent or more by weight of one or more aromatic or modified aromatic substances:...other, in subheading 3823.90.28, Harmonized Tariff Schedule of the United States (HTSUS), with duty at the 1995 general rate of 3.3¢ per kg, plus 12.9 % ad valorem. Subheading 3823.90.28, was redesignated in 1996 as subheading 3824.90.28, HTSUS. A timely protest under 19 U.S.C. 1514 was received on July 3, 1996.
The protestant requested reliquidation of the entries under the provision for vitamin E (Tocopherols and related compounds with Vitamin E activity ) and its derivatives, in subheading 2936.28.00, HTSUS (1995), with a general free rate of duty. Alternative requests are under the provision for other animal or vegetable fats and oils and their fractions, in subheading 1518.00.40, HTSUS (1995), with a general rate of duty of 9.7 % ad valorem, or, under the provision for other industrial monocarboxylic fatty acids; acid oils from refining, in subheading 1519.19.40 HTSUS, with a 1995 general rate of duty at 4.7 % ad valorem. Subheading 1519.19.40, HTSUS was redesignated in 1996, as subheading 3823.19.40, HTSUS.
The deodorizer distillate is a by-product resulting from the manufacture (refining) of vegetable oils, primarily soybean oil. “Deodorization” is a step in the refining process when certain volatile constituents, which are considered impurities in the oils (for example, oxidizers and substances which affect the smell or taste of the oils), are removed from the oils by steam distillation under vacuum. Generally, the imported deodorizer distillate is described as primarily containing free fatty acids, sterols, tocopherols (2.7 to 15 %), and small amounts of other materials. After importation, the deodorizer distillate is further processed to obtain its commercially desired components such as tocopherols.
ISSUE:
The issue is whether the deodorizer distillate is classified in subheading 3824.90.28, HTSUS.
LAW AND ANALYSIS:
The classification of imported merchandise under the HTSUS is governed by the principles set forth in the General Rules of Interpretation (GRI). GRI 1 requires that classification be
determined first according to the terms of the headings of the tariff schedule and any relative section and chapter notes and, unless otherwise required, according to the remaining GRI, taken in their appropriate order. Accordingly, we first have to determine whether the articles are classified under GRI 1.
Further, 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 HTSUS by offering guidance in understanding the scope of the headings and General Rules of Interpretation of the HTSUS.
Heading 3824, HTSUS, provides for prepared binders for foundry molds or cores; chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included; residual products of the chemical or allied industries, not elsewhere specified or included. A product may be classified under heading 3824 by virtue of GRI 1, provided that the product is not specified or included in other provisions of the HTSUS. In applying the principles of the GRI, we must determine whether the product is specified or included in provisions of the HTSUS, other than heading 3824, that is, is the product classified by GRI 1, in other provisions of the HTSUS? The protestant suggests three possibilities.
Heading 2936, HTSUS, covers, in part, concentrates of vitamins. We note that the mixtures are stated to contain a range of 2.7 to 15 % of tocopherols. The Dispensatory of the United States of America 25th Ed. allows that “mixed tocopherols concentrate” contains not less than 34 % of total tocopherols, at least 50 % of which must be D-a tocopherol. Additionally, whereas “mixtures of two or more isomers of the same organic compound (whether or not containing impurities)” would be covered by the applicable heading of chapter 29 of the HTSUS, the headings of chapter 29 apply only to “separate chemically defined organic compounds, whether or not containing impurities.” See Legal Note 1, Chapter 29, HTSUS. Regardless of what, if anything, constitutes an impurity in the vegetable oil distillate, we find that the product is not a concentrate of vitamin E, nor a mixture of only isomers of “tocopherol”, but a mixture of fatty acids and other substances, thereby excluded from classification under heading 2936, HTSUS.
Subheading 1518.00.40, HTSUS, provides for other inedible mixtures or preparations of animal or vegetable fats or oils or of fractions of different fats or oils, not elsewhere specified or included. The Protestant asserts that the deodorizer distillate is, in fact, a fraction of a vegetable oil as described in the subheading, having been distilled from the oil in the refining process,--that is, as stated in the protest, "the crude oil having been fractionated into refined vegetable oil as one fraction and the deodorizer distillate as a second fraction (and free fatty acids as a third fraction if the chemical refining method is used)." We disagree with the basic assertion that the deodorizer distillate is a "fraction" of a vegetable fat or oil provided for in this subheading.
The EN’s to chapter 15, at page 108 define the term animal or vegetable fats and oils as "esters of glycerol with fatty acids (such as palmitic, stearic and oleic acids)." These esters of glycerol with fatty acids are also called "glycerides". "Fractions" of animal or vegetable fats or oils are concentrations of certain glycerides which are separated from the other glycerides on the basis of physical characteristics, (e.g., on the basis of different melting points). Thus, edible oils might be separated into a fluid fraction and a solid fraction by the differences in the degree of unsaturation and by carbon chain length. These "fractions" are, essentially, no more than concentrations of different glycerides that are themselves animal or vegetable fats or oils, as defined in the EN’s above. As stated in the EN’s, "fractionation does not cause any changes in the chemical structure of the fats or oils.” For this reason, perhaps (that is, the fact that fractions of fats and oils retain their identity as glycerides), the EN’s observe that--
Headings 15.04 and 15.06 to 15.15 [these headings cover specific types of fats and oils,--e.g., soybean (15.07), peanut (15.08), olive (15.09), and other fats and oils, whether or not re fined, but not chemically modified] also cover fractions of the fats and oils mentioned in those headings, provided they are not more specifically described elsewhere in the Nomen clature (e.g., spermaceti, heading 15.21). The main methods used for fractionation are as follows:
(a) dry fractionation which includes pressing, decantation, winterisation and filtration;
(b) solvent fractionation; and
(c) fractionation with the assistance of a surface-active agent.
Fractionation does not cause any changes in the chemical structure of the fats or oils.
(Underlining and italics provided above.)
In a similar vein, the booklet, Food Fats and Oils, 6th ed., (The Institute of Shortening and Edible Oils, Inc., Washington, D.C., 1988) describes these same processes on page 13 in its treatment of the fractionation of food fats and oils as follows:
E. Fractionation (including Winterization)
Fractionation is the removal of solids at selected temperatures. The most widely practiced form of fractionation is that of crystallization wherein a mixture of triglycerides is separated into two or more different melting fractions based on solubility at a given temperature. The term "dry fractionation" frequently is used to describe fractionation processes such as winterization or pressing. Winterization is a process whereby a small quantity of material is crystallized and removed from edible oils by filtration to avoid clouding of the liquid fractions at refrigeration temperatures. Originally this processing was applied to cottonseed oil by subjecting the oil to ambient winter temperatures, hence the term "winterization." Today many oils, including cottonseed and partially hydrogenated soybean oils, are winterized. A similar process called "dewaxing" can be utilized to clarify oils containing trace amounts of clouding constituents.
Pressing is also a fractionation process sometimes used to separate liquid oil from solid fat. The process squeezes or “presses" the liquid oil from the solid fat by means of hydraulic pressure. This process is used commercially to produce hard butters and specialty fats from such oils as palm kernel and coconut.
Solvent fractionation is the term used to describe a process for the crystallization of a desired fraction from a mixture of triglycerides dissolved in a suitable solvent. Fractions may be selectively crystallized at different temperatures after which the fractions are separated and the solvent removed Solvent fractionation is practiced commercially to produce hard butters, speciality oils, and some salad oils from a wide array of edible oils.
All of the processes described above relate to the manipulation of the glycerides (mainly, triglycerides) which constitute the fats and oils undergoing fractionation.
Based on the foregoing, the "fractions" described in the various headings of chapter 15 include only glycerides of similar composition, which products are included by the term animal or vegetable fats or oils, as defined in the General EN’s to that chapter. The instant deodorizer distillate, which consists primarily of free fatty acids, sterols, tocopherols, hydrocarbons and small amounts of other constituents, does not meet that definition. This distillate is, instead, a by-product removed during the refining process to further purify the vegetable oil from substances (e.g., from free fatty acids, peroxide, etc.) which are the source of disagreeable flavors and odors, and which cause rancidity.
We conclude that the instant deodorizer is neither an animal or vegetable fat nor a fraction thereof and therefor is not included within the scope of the descriptive language in heading 1518, HTSUS.
Subheading 1519.19.40, HTSUS redesignated in 1996 as subheading 3823.19.40, HTSUS,
provides for other industrial monocarboxylic fatty acids. This heading limits the scope of coverage specifically and exclusively to industrial monocarboxylic fatty acids. The heading covers fatty acids or mixtures of fatty acids, but it does not cover fatty acids or mixtures of fatty acids that are mixed with other substances (such as tocopherols).
We conclude that the deodorizer distillate is not specified or included in subheadings 2936.28.00, 1518.00.40, and 3823.19.40, HTSUS, and cannot be classified under these headings by virtue of GRI 1. Thus consideration may be given to classification by virtue of GRI 1 to heading 3824, HTSUS.
Heading 3824 provides in part, for chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products) not elsewhere specified or included; residual products of the chemical or allied industries, not elsewhere specified or included. The deodorizer distillate is of the type of product described in the EN’s for heading 3824 as a residual product covered by that heading. Thus, for example, the EN’s to heading 3824 state, on page 581, that the “chemical products classified here are therefore products whose composition is not chemically defined, whether they are obtained as by-products of the manufacture of other substances (this applies, for example, to naphthenic acids) or prepared directly.” The deodorizer distillate is a chemical product, a by-product of the manufacture of refined vegetable oil. Note (C) of the EN’s, page 585, provides examples of several products described as residual products of the chemical or allied industries not elsewhere specified or included, which are, in fact, waste materials imported for use in the manufacture of other materials or products. The instant product, obtained as a by-product from a refining process, contains a mixture of substances which, after importation, are employed in the manufacture of other materials or products. The deodorizer distillate is, similarly, a residual product of the chemical or allied industries. We conclude that the deodorizer distillate is not elsewhere specified or included in the tariff and therefore, classified by virtue of GRI 1 in heading 3824, HTSUS.
Note that Headquarters Ruling Letter (HRL) 958779, dated April 26, 1996, held that a soy oil distillate was classified in subheading 1519.20.40, HTSUS (1995), the predecessor for subheading 3823.70.60, HTSUS, as other industrial fatty alcohols. However, as stated in that decision, it was found that the total of fatty acids contained in the distillate was between 85 and 90%, and that the product was lacking any or a commercially significant amount of tocopherols. In other words, the amount of tocopherols was lacking (none). In HRL 958780, also dated April 26, 1996, a soya deodorized distillate, containing a mixture of fatty acids and over 5% tocopherols, was classified in subheading 3823.90.28 (1995), the predecessor of subheading 3824.90.28, HTSUS (1996-1999).
HOLDING:
A mixture of fatty acids that contains 5% or more of tocopherols, is classified as prepared binders for foundry molds or cores; chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included; residual products of the chemical or allied industries, not elsewhere specified or included:...other...other...mixtures containing 5 percent or more by weight of one or more aromatic or modified aromatic substances:...other, in subheading 3824.90.28, HTSUS.
A mixture of fatty acids that contains less than 5% by weight of tocopherols, is classified under the provision for other residual products of the chemical or allied industries, not elsewhere specified or included, in subheading 3824.90.9050, HTSUS.
You are directed to deny the protest in full for claims of classification in subheadings 2936.28.00, 1518.00.40, and 3823.19.40, HTSUS.
The protestant indicates that the deodorizer distillates contain from 2.7 to 15% of tocopherols. Accordingly, the final liquidations should reflect the above holdings.
In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, Revised Protest Directive, dated August 4, 1993, a copy of this decision attached to Customs Form 19, Notice of Action, should be provided by your office to the protestant no later than 60 days from the date of this decision and any reliquidations of entries in accordance with this decision must be accomplished prior thereto.
Sixty days from the date of this decision the Office of Regulations and Rulings will take steps to make this decision available to Customs personnel, and to the general public on the Customs Home Page on the World Wide Web at www.customs.gov, by means of the Freedom of Information Act and other public access channels.
.
Sincerely,
John Durant, Director
Commercial Rulings Division