CLA-2 RR:CR:GC 960311K
Port Director
U.S. Customs Service
610 Canal Street
Chicago, Illinois 60607
RE: Protest 3901-96-102265; Cargill Inc.; Deodorizer Distillate
Dear Port Director:
The following is our response to the referral by your office (PRO-2-06:TC:R JD), received on March 11, 1997, of the request for further review of the above-referenced protest. We regret the delay. In preparing this decision consideration was given to supplemental submissions from counsel for the protestant on July 21 and August 19, 1997, as well as a meeting on August 13, 1998.
FACTS:
The 13 consumption entries covering the imported merchandise, deodorizer distillate, were reported as being liquidated between June 28 and August 23, 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 3824.90.28, Harmonized Tariff Schedule of the United States (HTSUS) (1996), with duty at the general rate of 3¢ per kg, plus 12.2 % ad valorem. A timely protest under 19 U.S.C. 1514 was reported as received on September 26, 1996. The protestant requested reliquidation of the entries under the provision for other industrial monocarboxylic fatty acids in subheading 3823.19.40, HTSUS (1996), with duty at the general rate of 4.4 % ad valorem.
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 deodorizer distillate contains the components of free fatty acids (30 to 50%), tocopherols (5 to 12 %), phytosterols & sterol esters (10 to 15%), tri-, di-, mono-glycerides (10 to 30%) and hydrocarbons and others (5 to 12%). 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.
Heading 3823, HTSUS, provides for industrial monocarboxylic fatty acids; acid oils from refining; industrial fatty alcohols. The protestant notes that the product contains more than one material, that the fatty acids constitute 30 to 50 % of the product and that such acids are classified in heading 3823. The protestant opines that the distillate is classified in subheading 3823.19.40, HTSUS, as other fatty acids, by virtue GRI 2(b) and that GRI 3(b) (essential character) is not applicable because the product is not prima facie classified under two or more headings, that is, headings 3823 and 3824. Heading 3823 covers, among other products, 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 agree that the deodorizer distillate is not prima facie classified in heading 3823, and it is not classified in heading 3823 by virtue of GRI 1. However, we disagree with the protestant’s opinion concerning heading 3824.
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 in this heading under 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?
We have already concluded that the deodorizer distillate is not, by virtue of GRI 1, classified in heading 3823 because it is not a mixture of fatty acids. It is a mixture of fatty acids and other materials (tocopherols). Since it is not elsewhere specified or included in the tariff, the product is properly classified by virtue of GRI 1, in heading 3824. We need not consider the other GRI.
The protestant refers to Headquarters Ruling Letter (HRL) 958779, dated April 26, 1996, which 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.
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