CLA-2 RR:CR:GC 965805 AM
Mr. John Pellegrini
Ross & Hardies
65 East 55th Street
New York, NY 10022-3219
Re: Ruling Request for a sweetener additive, Formula Number 239(SUP)
Dear Mr. Pellegrini:
This is in response to your letter, dated April 4, 2002, to the Director, National Commodity Specialist Division, on behalf of your clients, Diageo North America, Inc., and Joseph E. Seagram & Sons, Inc., requesting the classification of a beverage sweetener, Formula Number 239(SUP) under the Harmonized Tariff Schedule of the United States, (HTSUS). Your letter was referred to our office for reply.
FACTS:
The product is a liquid sweetener additive composed of ethyl alcohol, a sweetening agent, and water. The additive will be produced in three different versions. Version -1A contains, by weight, approximately 75% sucrose syrup (67.5 Bx), 17% demineralized water, and 8% neutral grain spirits. Version 1-B consists of approximately 66% high fructose corn syrup, 25% demineralized water, and 8% neutral grain spirits. Version 1-C consists of approximately 72% high fructose corn syrup, 20% demineralized water, and 8% neutral grain spirits. Customs Laboratory Report 20020510, dated June 6, 2002, analyzing version 1-A, found the product contained 96.8% sucrose (cane sugar) on a dry weight basis. The sweetener additive will by imported in bulk in tanks containing up to 25,000 gallons, and will be used in the manufacture of distilled spirits, wine specialty products, malt specialty products and flavorings.
ISSUE:
What is the classification of a beverage sweetener additive, Formula Number 239(SUP)?
LAW AND ANALYSIS:
Merchandise imported into the U.S. is classified under the HTSUS. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (GRIs) and, in the absence of special language or context that requires otherwise, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUS and are to be considered statutory provisions of law.
GRI 1 requires that classification be determined first according to the terms of the headings of the tariff schedule and any relative section or chapter notes and, unless otherwise required, according to the remaining GRIs taken in order. GRI 6 requires that the classification of goods in the subheadings of headings shall be determined according to the terms of those subheadings, any related subheading notes and mutatis mutandis, to the GRIs.
In interpreting the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System may be utilized. The ENs, although not dispositive or legally binding, provide a commentary on the scope of each heading, and are generally indicative of the proper interpretation of the HTSUSA. See T.D. 89 80, 54 Fed. Reg. 35127 (August 23, 1989).
The competing provisions occur at the eighth digit. The following sub-headings are relevant to the classification of this product:
2106 Food preparations not elsewhere specified or included:
Other
2106.90.12 Compound alcoholic preparations of an alcoholic strength by volume exceeding 0.5 percent vol., of a kind used for the manufacture of beverages: Containing not over 20 percent of alcohol by weight.
* * * * * * *
Other
Other
Other
Other
Articles containing over 65 percent by dry weight of sugar described in additional U.S. note 2 to chapter 17:
Other
* * * * * * *
2106.90.99 Other
EN 21.06 states, in pertinent part, the following:
The heading includes, inter alia:
(7) Non-alcoholic or alcoholic preparations (not based on odoriferous substances) of a kind used in the manufacture of various non-alcoholic or alcoholic beverages. These preparations can be obtained by compounding vegetable extracts of heading 13.02 with lactic acid, tartaric acid, citric acid, phosphoric acid, preserving agents, foaming agents, fruit juices, etc. The preparations contain (in whole or in part) the flavouring ingredients which characterize a particular beverage. As a result, the beverage in question can usually be obtained simply by diluting the preparation with water, wine or alcohol, with or without the addition, for example, of sugar or carbon dioxide gas. Some of these products are specially prepared for domestic use; they are also widely used in industry in order to avoid the unnecessary transport of large quantities of water, alcohol, etc. As presented, these preparations are not intended for consumption as beverages and thus can be distinguished from the beverages of Chapter 22.
Subheadings 2106.90.12, 15, and 18, HTSUS, were created in 1996, when, as part of amendments to the tariff schedule, heading 2208, HTSUS, was modified, removing compound alcoholic preparation from its purview. The text to EN 21.06 (7), supra, is virtually identical to the EN to heading 2208 prior to the amendments. As such, administrative rulings related to the previous heading 2208, HTSUS, which construe the phrase "compound alcoholic preparations," are instructive.
For instance, in HQ 955265, dated February 9, 1994, we held that a citric acid additive was not classified in heading 2208, HTSUS. The product contained 89 percent ethyl alcohol, 10 percent citric acid, and water and was blended with a wine or malt base, water, sugar, preservatives, flavorings, colorings and a carbonating agent after entry to produce a wine cooler. The citric acid additive comprised only 1.5 to 2.5 percent of the finished product. We stated in that ruling that “the citric acid additive, rather than being a complex preparation, is essentially an alcohol flavored with the acid used to impart a tang to a wine or malt base, which is processed further to produce the cooler; it only accounts for, at most, 2.5 percent of the finished product. Thus, the additive would not be a complex preparation of a type classifiable in heading 2208.”
By contrast, HQ 953327, dated June 4, 1993, held that a non-fat dairy base rum liqueur was classified in heading 2208, HTSUS. The product consisted of milk protein concentrate, skim milk concentrate, sucrose, water, rum and maltodextrins. After entry it was mixed with additional distilled spirits, sugar, flavors and color. We stated that “the beverage is substantially complete as imported; the ingredients added subsequent to importation do not change the basic composition of the imported product, which is that of an almost completed alcoholic beverage, but merely enhance it.”
Following this reasoning, NY H82685, dated August 1, 2001, classified a Natural Tequila/Agave flavoring containing agave spirits, alcohol, agave wine, natural orange flavor, tequila, anhydrous citric acid and water in subheading 2106.90.15, HTSUS, as a compound alcoholic preparation. The contents of the merchandise appear substantially complete albeit not suitable as a beverage in themselves.
Likewise, in NY C87981, dated May 29, 1998, we classified concentrated fermented apple cider and pear cider as compound alcoholic preparations because they need only be diluted, sweetened and carbonated to transform into the final products, apple and pear ciders. They, too, are substantially complete.
Like the citric acid additive of HQ 955265, a mixture of three ingredients added to impart a tang to the finished beverage, the instant merchandise also contains just three ingredients added to impart a sweetness to the finished beverage. Unlike the non-fat dairy base rum liqueur, tequila/agave flavoring and apple and pear ciders, the instant merchandise is not a “substantially complete” beverage in itself that need only be diluted and further flavored. Therefore, we do not believe the instant mixture falls within the scope of the terms "compound alcoholic preparations of a kind used for the manufacture of beverages.
HOLDING:
The beverage sweetener additive, Formula Number 239(SUP), version 1-A, is classified in subheading 2106.90.94, HTSUS, the provision for "[f]ood preparations not elsewhere specified or included: [o]ther: [o]ther: [o]ther: [o]ther: [o]ther: [a]rticles containing over 65 percent by dry weight of sugar described in additional U.S. note 2 to chapter 17: [o]ther." Version 1-A would be subject to the the "over" tariff rate quota provision for articles containing over 65% by dry weight of sugar described in additional U.S. note 2 to Chapter 17. Sweetener additive version 1-B and 1-C do not contain cane or beet sugar and are therefore classified in subheading 2106.90.99, HTSUS, the provision for "[f]ood preparations not elsewhere specified or included: [o]ther: [o]ther: [o]ther: [o]ther: [o]ther."
Sincerely,
Myles B. Harmon, Acting Director
Commercial Rulings Division