CLA-2 RR:CR:GC 965782ptl
Area Director
U.S. Customs Service
JFK International Airport Area
C/o Chief, Liquidation and Protest Branch
Building 77
JFK International Airport
Jamaica, NY 11430
RE: Protest 4701-01-100126; Microencapsulated beta-carotene
Dear Area Director:
This is our decision regarding protest 4701-01-100126, filed by counsel, on behalf of DSM Food Specialties, Inc., concerning your classification of a product referred to as "CaroCare® beta-carotene in 15% beadlet form," under the Harmonized Tariff Schedule of the United States (HTSUS).
FACTS:
The goods subject to protest were entered on November 7, 2000, in entry number 608-xxxx347-7, and classified by the importer in subheading 2936.10, HTSUS, which provides for provitamins and vitamins, natural or reproduced by synthesis (including natural concentrates), derivatives thereof used primarily as vitamins, and intermixtures of the foregoing, whether or not in any solvent. Customs liquidated the entry on August 31, 2001, and reclassified the goods into subheading 2106.90.9998, HTSUS, which provides for food preparations, not elsewhere specified or included, … other.
On October 19, 2001, a timely protest was filed pursuant to 19 U.S.C. 1514, in which protestant argues that the goods were correctly classified as claimed at entry. In the alternative, protestant claims that the goods could also be classified in subheading 2936.90.00, HTSUS.
In preparing this decision, we have considered all materials initially submitted by protestant as well as additional data submitted on September 24, 2002.
ISSUE:
What is the classification of CaroCare® Beta-Carotene in 15% beadlet form?
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.
In understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System Explanatory Notes may be utilized. The Explanatory Notes (ENs), although not dispositive or legally binding, provide a commentary on the scope of each heading of the HTSUS, and are the official interpretation of the Harmonized System at the international level. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The HTSUS headings under consideration are as follows:
2106 Food preparations not elsewhere specified or included
2106.90 Other:
Other:
Other:
Other:
Other:
2106.90.99 Other
2936 Provitamins and vitamins, natural or reproduced by synthesis (including natural concentrates), derivatives thereof used primarily as vitamins, and intermixtures of the foregoing, whether or not in any solvent:
2936.10 Provitamins, unmixed
* * *
2936.90.0000 Other, including natural concentrates
3204 Synthetic organic coloring matter, whether or not chemically defined; preparations as specified in note 3 to this chapter based on synthetic organic coloring matter; synthetic organic products of a kind used as fluorescent brightening agents or as luminophores, whether or not chemically defined:
Synthetic organic coloring matter and preparations based thereon as specified in note 3 to this chapter
3204.19 Other, including mixtures of coloring matter of two or more of the subheadings 3204.11 to 3204.19:
3204.19.3500 Beta-carotene and other carotenoid coloring matter
Protestant states that the CaroCare® is a natural beta-carotene product, that has been extracted from a natural fungus and processed into what is termed by the manufacturer as "natural beta-carotene beadlets (15%)." The manufacturer uses a gelatin medium to stabilize the product for transportation and preservation and a small amount of sugar and an emulsifier, "which are required to maintain the integrity of the beadlet."
The beadlets are used for the production of single beta-carotene tablets, multi-vitamin tablets, antioxidant tablets or (mixed) carotenoid tablets. The micro-spherical beadlets are said to be homogenized granulates, produced without preservatives and can easily resist high pressures during tabletting (approximately 10 metric tons per cm²). The product is incorporated into dietary supplements in three finished forms: soft gelatin capsules, 2-piece hard shell capsules, and tablets. Because of this processing, formulation and use as a provitamin, protestant states that the product cannot be classified in heading 3204 which provides for beta-carotene that is used as a colorant in food.
According to specifications provided by protestant, the Caro-Care® 15% beadlets are brick-red in appearance and contain 150 mg per gram beta-carotene per tablet. Each tablet is said to contain a minimum of 15% carotene, 70% gelatin, 7% sugar and 6% emulsifier (numbers provided by protestant do not add up to 100%).
Protestant has argued that because its product is a natural beta-carotene product that is used as an ingredient in food supplements and not as a colorant, it is not classifiable in heading 3204, HTSUS, which provides for synthetic organic coloring matter. We agree that the product is not properly classified in heading 3204, HTSUS.
However, we do not agree that the product is classified in heading 2936, HTSUS.
Chapter note 1(a) to Chapter 29 provides that "Except where the context otherwise requires, the headings of this chapter apply only to:
(a) Separate chemically defined organic compounds, whether or not containing impurities."
Caro-Care® 15% beadlets are not separately defined organic compounds, but mixtures of several ingredients, one of which is a provitamin. We also note that the principal ingredient of the Caro-Care® 15% beadlets is not the provitamin, beta-carotene, but gelatin. Protestant alleges that the gelatin is merely added to stabilize and preserve the product for transport and cites the ENs to heading 2936 which permit the coating of products of heading 2936 with gelatin. However, the ENs also limit the ingredients which are permitted to anti-oxidants, anti-caking agents, coatings, and adsorbing substances, and restrict the purposes for which they are used and the results which are obtained. The Caro-Care® 15% beadlets contain 7 percent sugar and 6 percent emulsifier. According to protestant, these ingredients "are required to maintain the integrity of the beadlet." This is not a function which falls within the ENs enumeration of allowable processes. Significantly, operations performed on or ingredients added to goods of heading 2936 are allowed only to the extent that the "processing in no case exceeds that necessary for their preservation or transport and that the addition or processing does not alter the character of the basic product and render it particularly suitable for specific use rather than for general use."
Clearly, the Caro-Care® 15% beadlets have been processed for a specific use. Protestant has provided much literature which shows how the Caro-Care® 15% beadlets are uniquely designed and prepared for use in the dietary supplement marketplace. Protestant uses his arguments to persuade that the product is not in heading 3204, HTSUS. The same arguments also preclude inclusion in heading 2936, HTSUS.
Customs has consistently ruled that formulations containing beta-carotene which are used as human food ingredients are classified in heading 2106. In New York Ruling Letters (NY) E88556, dated October 3, 2000, and F84454, dated September 26, 2000, products containing predominately vegetable or butter oil with a small amount of beta-carotene were classified in heading 2106, HTSUS. Similarly, in HQ 962766, dated January 23, 2001, Betavit powder, a provitamin powder used as an ingredient in human food products was classified in heading 2106, HTSUS.
Based on the above analysis, Caro-Care® 15% beadlets which contain 15% carotene, 70% gelatin, 7% sugar and 6% emulsifier and are used as ingredients in the manufacture of foodstuffs and dietary supplements are properly classified in heading 2106, HTSUS.
HOLDING:
Caro-Care® beta-carotene 15% beadlets are classified in subheading 2106.90.9998, HTSUS, which provides for food preparations not elsewhere specified or included ... other … other … other … other.
The protest should be DENIED. In accordance with Section 3A(11)(b) of Customs Directive 099 3550 065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.
Sixty days from the date of the decision, the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the 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 methods of public distribution.
Sincerely,
Myles B. Harmon, Acting Director
Commercial Rulings Division