CLA-2 RR:CR:GC 961150ptl
Mr. Robert J. Karpiuk
Fundco
3927 High Plains
Houston, TX 77068
RE: Various Peanut Products; Modification or Revocation of New York Ruling Letters (NYRL) A89415, A86915, A87658, A87802, A87890, A88071, A89417, and B81969; B88467; HQs 083352, 959816.
Dear Mr. Karpiuk:
This is in response to a letter of November 24, 1997, from Select Food Processing Corp., which asked Customs to clarify two ruling letters which had been issued to the Fundco Corporation. The two letters classified “Coarse Peanut Flour” in different headings of the Harmonized Tariff Schedule of the United States (HTSUS). Those rulings were A89415, issued on February 14, 1997, and B88467, issued on October 23, 1997.
Pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C. 1625(c)(1)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act (Pub.L. 103-182, 107 Stat. 2057), notice of proposed modification of A89415, issued February 14, 1997, and revocation of NY A86915, issued September 11, 1996, A87658, issued October 31, 1996, A87802, issued November 1, 1996, A87890, issued November 1, 1996, A88071, issued October 8, 1996, A89417, issued February 14, 1997 and B81969, issued February 21, 1997, was published on November 25, 1998, in the Customs Bulletin, Volume 32, No. 47. No comments were received in response to the notice.
FACTS:
NY A89415, issued on February 14, 1997, classified two products. The first, identified as “Sweetened P Flour II” was described as being a light-brown granular product composed of 92 percent “peanut flour” and 8 percent cane or beet sugar. The peanut flour ingredient is a product made by grinding the residue remaining after the partial extraction of oil from roasted peanuts. Laboratory analysis found over 95 percent of the sample was capable of passing through a wire sieve with a 1.25mm aperture. This “Sweetened P Flour II” was classified in subheading 1901.90.9095, HTSUS, which provides for food preparations of flour, meal, starch or malt extract ... other ... other ... other. The second product, called “Coarse Peanut Flour 36" was described as a light-brown granular material produced by grinding the residue from the partial extraction of oil from roasted peanuts. Laboratory analysis of this sample found 81.8 percent capable of passing through a 1.25mm wire sieve aperture. This product was classified in subheading 2106.90.9998, HTSUS, which provides for food preparations not elsewhere specified or included ... other ... other ... other.
NY B88467, issued on October 23, 1997, also concerned two products. The first, identified as “Sweetened Coarse Peanut Flour” contained 91.5 percent “Coarse Peanut Flour” and 8.5 percent sugar. Laboratory analysis found that 86.4 percent of this product passed through a 1.25mm wire sieve aperture. This product was classified in subheading 2008.11.4500, HTSUS, which provides for fruit, nuts and other edible parts of plants, otherwise prepared or preserved, whether or not containing added sugar or other sweetening matter or spirit, not elsewhere specified or included: nuts, peanuts (ground nuts) and other seeds, whether or not mixed together: other: described in additional U.S. note 2 to chapter 12 and entered pursuant to its provisions. The other product was the same “Coarse Peanut Flour 36" which had been classified in subheading 2106.90.9998, HTSUS, in NY A89415. However, in B88467, the product was classified in subheading 2008.11.4500, HTSUS.
Other rulings which have been issued to Fundco, and which address related products are as follows:
NY A86915, issued on September 11, 1996, classified “PB Flavored Filling Mix” which is a soft, brown oily product, composed of 62.9 percent “peanut flour” (with an oil content of 36 percent), 22.1 percent vegetable oil, and 15 percent sucrose, in subheading 1901.90.5600, HTSUS, which provides for food preparations of flour, meal, starch or malt extract ... other ... other ... articles containing over 10 percent by dry weight of sugar if imported in quantities that fall within the limits described in additional U.S. note 8 to chapter 17 and entered pursuant to its provisions. After those limits are reached, the product would be classified in subheading 1901.90.5800, HTSUS.
NY A87658, issued October 31, 1996, classified “Sweetened P Flour,” a light brown powder, said to be composed of 90.1 percent “peanut flour” (which had an oil content of about 36 percent) and 9.9 percent cane sugar (the Customs laboratory found a sample to contain 16 percent sugar) in subheading 2106.90.9500, HTSUS, which provides for food preparations not elsewhere specified or included ... other ... other ... other ... articles containing over 10 percent by dry weight of sugar described in additional U.S. note 3 to chapter 17 ... described in additional U.S. note 8 to chapter 17 and entered subject to its provisions. After those limits are reached, the product would be classified in subheading 2106.90.9700, HTSUS.
NY A87802, issued November 1, 1996, classified “P Bakery Mix,” a light brown powder composed of 40 percent “peanut flour” (which had an oil content of 36 percent) and 60 percent cane sugar in subheading 2106.90.9500, HTSUS, which provides for food preparations not elsewhere specified or included ... other ... other ... other ... articles containing over 10 percent by dry weight of sugar described in additional U.S. note 3 to chapter 17 and entered subject to its provisions. After those limits are reached, the product would be classified in subheading 2106.90.9700, HTSUS.
NY A87890, issued November 1, 1996, classified “Imitation PB Filling Mix 1,” a light brown paste said to be composed of 67.9 percent “peanut flour” (which has a 36 percent oil content), 9 percent cane sugar (the Customs Laboratory found a sample to contain 23.7 percent sugar), approximately 12.1 percent oil from rapeseed, soybean, corn, cottonseed, and/or peanut, and 6 percent partially hydrogenated fat from sunflower, palm, cottonseed or soybean oil, in subheading 2106.90.9500, HTSUS, which provides for food preparations not elsewhere specified or included ... other ... other ... other ... articles containing over 10 percent by dry weight of sugar when imported within limits described in additional U.S. note 3 to chapter 17 and entered subject to its provisions. After those limits are reached, the product would be classified in subheading 2106.90.9700, HTSUS.
NY A88071, issued October 8, 1996, classified “Imitation PB Filling Mix 2,” a soft, creamy brown paste composed of 67.9 percent “peanut flour” (which has a 36 oil content), 9 percent dextrose, and approximately 18 percent vegetable oil, in subheading 1901.90.9095, HTSUS, which provides for food preparations of flour, meal, starch or malt extract ... other ... other ... other.
NY A89417, issued February 14, 1997, classified “PB Filling IV,” a soft brown paste composed of 61.7 percent “peanut flour,” 26.8 percent rapeseed, soybean, corn, cottonseed and/or peanut oil, 8 percent sucrose, 4 percent partially hydrogenated fat, and 1 percent salt, in subheading 1901.90.9095, HTSUS, which provides for food preparations of flour, meal, starch or malt extract ... other ... other ... other.
NY B81969, issued February 21, 1997, classified “Dextrin Filling Base,” a soft
brown paste composed of 69 percent “peanut flour 36,” 20 percent vegetable oil, 7 percent maltodextrin or corn syrup solids, and 4 percent partially hydrogenated vegetable oil, in subheading 1901.90.9095, HTSUS, which provides for food preparations of flour, meal, starch or malt extract ... other ... other ... other.
The source of the peanut component of all the products classified in the rulings cited above was the residue which remained after a portion of the naturally occurring oil had been removed from the roasted peanuts.
ISSUE:
What is the classification of these peanut-based products?
LAW AND ANALYSIS:
Merchandise is classifiable under the Harmonized Tariff Schedule of the United States (HTSUS) in accordance with the General Rules of Interpretation (GRIs). The systematic detail of the HTSUS is such that virtually all 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 goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs may then be applied in order.
The headings under consideration are as follows:
1901 Malt extract; food preparations of flour, meal, starch or malt extract, not containing cocoa or containing less than 40 percent by weight of cocoa calculated on a totally defatted basis, not elsewhere specified or included; food preparations of goods of headings 0401 to 0404, not containing cocoa or containing less than 5 percent by weight of cocoa calculated on a totally defatted basis, not elsewhere specified or included:
1901.90 Other:
Other:
* * *
Other:
Other:
* * *
Articles containing over 10 percent by dry weight of sugar described in additional U.S. note 3 to chapter 17:
1901.90.5600 Described in additional U.S. note 8 to chapter 17 and entered pursuant to its provisions.
1901.90.5800 Other.
* * *
1901.90.9000 Other.
* * *
1901.90.9095 Other.
2008 Fruit, nuts and other edible parts of plants, otherwise prepared or preserved, whether or not containing added sugar or other sweetening matter or spirit, not elsewhere specified or included:
Nuts, peanuts (ground nuts) and other seeds, whether or not mixed together:
2008.11.00 Peanuts (ground nuts):
Peanut butter and paste:
* * *
2008.11.0500 Described in additional
U.S. note 5 to this
chapter and entered
pursuant to its provisions.
2008.11.1500 Other
* * *
Other:
* * *
2008.11.4500 Described in additional U.S. note 2 to chapter 12 and entered pursuant to its provisions.
2008.11.6000 Other.
2106 Food preparations not elsewhere specified or included:
2106.90 Other:
Other:
Other:
Other:
Articles containing over
10 percent by dry weight
of sugar described in
additional U.S. note 3
to chapter 17:
2106.90.9500 Described in additional U.S. note 8 to chapter 17 and entered pursuant to its provisions.
2106.90.9700 Other.
In the rulings under review, the products being classified were mixtures which had, as their distinguishing ingredient, either a peanut flour or a peanut paste. The source of the peanut ingredient was a cake residue which was the result of the partial extraction of oil from roasted peanuts. This cake residue was then ground into a powder. The consistency (powder or paste) of the actual product depended on other ingredients which had been added to the powder.
The peanut component of the products was determined to be a residue (a good of heading 2305, HTSUS). As a result of this initial determination, the product which resulted from further processing was classified as a processed residue, rather than a processed peanut. Because they were a product of vegetable origin intended for human consumption, samples were submitted to the Customs laboratories for particle size analysis to determine whether the product qualified for consideration as a “meal” of heading 1901. In HQ 083352, dated October 17, 1989, Customs stated that “since Chapter 19 does not set specific standards of what constitutes flour or meal, Customs has adopted the standards of Chapter 11, HTSUS.” Note 3 of Chapter 11, sets forth the particle size parameters for meal (other than corn) as a product that “at least 95 percent by weight passes through a woven metal wire cloth sieve with an aperture of 1.25 mm.” If the material passed through the sieve, then the product would be considered a “meal” for tariff classification purposes, and it or the product made from it, would be classified as a food preparation of a meal in heading 1901, HTSUS. If the product did not pass through the sieve and was not eligible for classification as a meal, it was then classified in heading 2106, HTSUS, the tariff provision for food preparations not elsewhere specified or included.
We have determined that the base component of the products is not an actual “residue” in the understanding of the peanut industry. When oil has been extracted from peanuts, the residue (or press cake) from the recovery typically has an oil content of between 7 and 1 percent depending on the method of oil recovery used (see, Peanuts: Production, Processing, Products, by Jasper G. Woodroof, The Avi Publishing Co, Inc. (1973)). The material we are considering has an oil content of approximately 36 percent. Thus, we are not considering a residue of heading 2305, HTSUS, but a partially processed peanut product in the form of either a paste or a powder.
The partial extraction of oil from the roasted peanuts and the addition of other ingredients may exclude the product from the standard of identity definition of peanut butter used by the U.S. Food and Drug Administration (FDA) in 21 CFR 164.150. However, such processing does not alter the fact that the article is still basically a peanut product for tariff purposes. This identity-retention is also recognized by the FDA which has provided for products which do not conform to the strict standard of identity requirements for peanut butter by creating a provision (21 CFR 102.23) for peanut spreads which may contain varying percentages of peanut product.
In HQ 959816, issued February 25, 1997, while ruling that peanut butter spread was properly classified in subheading 2008.11, HTSUS, which provides for “Peanuts (ground-nuts): peanut butter and paste,” Customs noted that the subheading was an eo nomine provision which includes all forms of the article. Accordingly, we hold that NY A86915, A87890, A88071, A89417 and B81969 which classified products properly described as “peanut paste” in subheading 1901, HTSUS, should be revoked. These products should be classified in subheading 2008.11, HTSUS.
The peanut products described as “Sweetened P Flour” in NY A87658, “P Bakery Mix” in A87802, and the “Coarse Peanut Flour” in A89415, are not eligible for classification as “meal” in spite of their granular composition because they do not meet
the standards of Note 3, Chapter 11, HTSUS, (see above). Accordingly, these
products should be classified in subheading 2008.11, HTSUS.
Insofar as the “Sweetened P Flour II” of NY A89415 is concerned, this article is eligible for classification as “meal” because it meets the test in Note 3, Chapter 11, HTSUS, (see above). In HQ 953322, dated April 21, 1993, Customs stated that products which are of vegetable origin and which are not excluded by Note 2 of Chapter 19, may be considered for classification as a “meal”. The “Sweetened P Flour II” is a product of vegetable origin, intended for human consumption, which meets the test of Note 3, Chapter 11. It also does not fall within the exceptions of Note 2(b) of Chapter 19. Accordingly, we conclude it was properly classified in subheading 1901.90.9095, HTSUS, which provides for food preparations of flour, meal, starch or malt extract ... other ... other ... other.
Accordingly, we are revoking the following NY Rulings:
NY A86915 which classified “PB Flavored Filling Mix”, NY A 87658, which classified “Sweetened P Flour”, NY A87802, which classified “P Bakery Mix”, NY A87890 which classified “Imitation PB Filling Mix 1”, NY A88071 which classified “Imitation PB Filling Mix 2", NY A89417, which classified “PB Filling IV” and NY B81969, which classified “Dextrin Filling Base”.
We are modifying NY A89415 insofar as the classification of “Coarse Peanut Flour 36" is concerned.
HOLDING:
The product identified as “PB Flavored Filling Mix” is classified in subheading 2008.11.0500, HTSUS, if imported within quantities that fall within the limits described in additional U.S. note 5 to chapter 20. If the quantitative limits of additional U.S. note 5 to chapter 20 have been reached, the product will be classified in subheading 2008.11.1500, HTSUS.
The product identified as “Sweetened P Flour” is classified in subheading 2008.11.4500, HTSUS, if imported within quantities that fall within the limits described in additional U.S. note 2 to chapter 12. If the quantitative limits of additional U.S. note 2 to chapter 12 have been reached, the product will be classified in subheading 2008.11.6000, HTSUS.
The product identified as “P Bakery Mix” is classified in subheading 2008.11.4500, HTSUS, if imported within quantities that fall within the limits described in additional U.S. note 2 to chapter 12. If the quantitative limits of additional U.S. note
2 to chapter 12 have been reached, the product will be classified in subheading 2008.11.6000, HTSUS.
The product identified as “Imitation PB Filling Mix 1" is classified in subheading 2008.11.0500, HTSUS, if imported within quantities that fall within the limits described in additional U.S. note 5 to chapter 20. If the quantitative limits of additional U.S. note 5 to chapter 20 have been reached, the product will be classified in subheading 2008.11.1500, HTSUS.
The product identified as “Imitation PB Filling Mix 2" is classified in subheading 2008.11.0500, HTSUS, if imported within quantities that fall within the limits described in additional U.S. note 5 to chapter 20. If the quantitative limits of additional U.S. note 5 to chapter 20 have been reached, the product will be classified in subheading 2008.11.1500.
The product identified as “Coarse Peanut Flour 36" is classified in subheading 2008.11.4500, HTSUS, if imported within quantities that fall within the limits described in additional U.S. note 2 to chapter 12. If the quantitative limits of additional U.S. note 2 to chapter 12 have been reached, the product will be classified in subheading 2008.11.6000, HTSUS.
The product identified as “PB Filling IV” is classified in subheading 2008.11.0500, HTSUS, if imported within quantities that fall within the limits described in additional U.S. note 5 to chapter 20. If the quantitative limits of additional U.S. note 5 to chapter 20 have been reached, the product will be classified in subheading 2008.11.1500, HTSUS.
The product identified as “Dextrin Filling Base” is classified in subheading 2008.11.0500, HTSUS, if imported within quantities that fall within the limits described in additional U.S. note 5 to chapter 20. If the quantitative limits of additional U.S. note 5 to chapter 20 have been reached, the product will be classified in subheading 2008.11.1500, HTSUS.
NY A86915, A87658, A87802, A87890, A88071, A89417, and B81969 are revoked.
NY A89415 is modified.
NY B88467 is affirmed.
In accordance with 19 U.S.C. 1625(c)(1), this ruling will become effective 60
days after its publication in the Customs Bulletin. Publication of rulings or decisions pursuant to 19 U.S.C. 1625 (c)(1) does not constitute a change of practice or position in accordance with section 177.10(c)(1), Customs Regulations (19 CFR 177.10(c)(1)).
Sincerely,
John Durant, Director
Commercial Rulings Division