CLA-2 RR:CR:GC 965291 RFA
Mr. Rolf Munk
C.B. Lay Customs Brokers, Inc.
23609 South Cesar Chavez Street
P.O. Box 4685
San Luis, Arizona 85349
RE: Neemazal Technical; NY H81472, affirmed
Dear Mr. Munk:
This is response to your letter dated September 28, 2001, on behalf of Gowan Company, requesting reconsideration of NY H81472, dated June 12, 2001, in which the tariff classification of Neemazal Technical was determined under the Harmonized Tariff Schedule of the United States (HTSUS). In preparing this ruling, we also considered the information you provided in your facsimile of April 24, 2002.
FACTS:
The merchandise, labeled as Neemazal Technical, is a technical grade neem extract in the form of powder derived from neem kernels. The product contains 35-45% azadirachtin (CAS-11141-17-6) as well as several other compounds. It is used for preparing ready-to-use formulations for agricultural, textile, domestic and veterinary pest management. You state that the Neemazal Technical is manufactured from neem seeds, which are mixed with water. After solids are removed, an acetate (Ethyl) is used to separate the azadirachtin and water. The acetate is partially evaporated and an aromatic solvent (petroleum ether) is added to separate the azadirachtin from the solvent and acetate. The liquid solvent mixture (acetate and ether) is removed leaving solid azadirachtin (35-45%).
ISSUE:
Whether Neemazal Technical is classifiable as vegetable saps and extracts or as insecticides under the HTSUS?
LAW AND ANALYSIS:
Classification of merchandise under the HTSUS is in accordance with the General Rules of Interpretation (GRI's). GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes.
In NY H81472, issued to the Gowan Company on June 12, 2001, Customs classified the Neemazal Technical in subheading 3808.10.50, which provides for: “[i]nsecticides. . . , put up in forms or packings for retail sale or as preparations or articles . . . : [i]nsecticides: [o]ther: [o]ther: [o]ther. . . .” In that ruling, Customs excluded the subject merchandise from classification under heading 1302, HTSUS, as vegetable extracts because the Neemazal Technical possessed pesticidal properties that merely require further compounding to produce ready-to-use pesticides (e.g., Neemazal – T/S 1.2 EC). The ruling cites the Explanatory Notes to Heading 38.08(2) as a basis for this decision.
The Harmonized Commodity Description and Coding System Explanatory Notes (EN) constitute the official interpretation of the HTSUS. While not legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 FR 35127, 35128 (August 23, 1989). EN 38.08 (2), page 681, states in pertinent: “Intermediate preparations, requiring further compounding to produce the ready-for-use insecticides, fungicides, disinfectants, etc., are also classified here, provided they possess insecticidal, fungicidal, etc., properties.”
We find that the Neemazal Technical meets the definitions within EN 38.08 (2) as an intermediate preparation that possesses insecticidal properties. This position is further confirmed by EID Parry India LTD Directors’ Report (8 May 2000) which states that the “company has successfully obtained Environmental Protection Agency (EPA) registration for USA in respect of the Neem based pesticides “Neemazal”. See www.indiainfoline.com/comp/eipa/dr00.html 7/17/02. We further note that the manufacturer registered the subject merchandise as an insecticide with the EPA [see the EPA’s Office of Pesticide Programs website, www.epa.gov/opp ]. Based upon all these factors, we find that the Neemazal Technical is classifiable under heading 38.08, as an insecticide preparation. Therefore, we affirm NY H81472.
In your request for reconsideration, you claim that Customs decision in NY H81472 is inconsistent with its decisions in NY 870298, dated February 5, 1992, and NY 866330, dated October 8, 1991. In both rulings, Customs classified Neem Seed extract in heading 1302, HTSUS, as vegetable extracts. Unlike the Neemazal Technical, there is no evidence that the Neem Seed extracts in both rulings have been processed to the point that they constitute a preparation for an insecticide within the meaning of Heading 3808. Therefore, we find that the rulings are not inconsistent.
HOLDING:
The Neemazal Technical is classifiable under subheading 3808.10.50, HTSUS, which provides for: “[i]nsecticides. . . , put up in forms or packings for retail sale or as preparations or articles . . . : [i]nsecticides: [o]ther: [o]ther: [o]ther. . . .” The general, column one rate of duty is 5 percent ad valorem.
EFFECT ON OTHER RULINGS:
NY H81472, dated June 12, 2001, is affirmed.
Sincerely,
Myles B. Harmon, Acting Director
Commercial Rulings Division