CLA-2 OT:RR:CTF:TCM H008518 IDL
Mr. Bob Forbes
ROE Logistics
660 Bridge Street
Montreal, Quebec H3K 3K9
Canada
Re: Chocolate Bars; “Neutral 5.5G Cupid”; “Xmas Flat 14G in Bulk”; Revocation of NY N005972 and NY N005974
Dear Mr. Forbes:
This letter concerns New York Ruling Letter (NY) N005972 and NY N005974, both dated February 20, 2007, issued to you by the National Commodity Specialist Division, U.S. Customs and Border Protection (CBP) on behalf of your client, Barry Callebaut Canada, Inc. At issue in NY N005972 was the correct classification of “Neutral 5.5G Cupid” (Product No. 0563920-500) chocolate bars under the Harmonized Tariff Schedule of the United States (HTSUS). At issue in NY N005974 was the correct classification of “Xmas Flat 14G in bulk (Product No. 0304020-500)” chocolate bars under the HTSUS. We have reviewed NY N005972 and NY N005974 and have found that they are incorrect.
Pursuant to section 625(c), Tariff Act of 1930 (19 U.S.C. § 1625(c)), 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, 2186 (1993), notice of the proposed modification was published in the Customs Bulletin, Volume 42, No. 29, on July 9, 2008. No comments were received in response to the notice.
FACTS:
In both NY N005972 and NY N005974, the merchandise at issue was
described as being “flat pieces of confectionery wrapped in foil ready for consumption as is.... [to] be shipped in 12-kilogram cases.” Both the “Neutral 5.5G Cupid” and the “Xmas Flat 14G in bulk” chocolate bars were further described as being composed of 59.39 percent sugar, 15.86 percent cocoa butter, 10.95 percent chocolate liquor, 10.01 percent skim milk powder, 0.43 percent soya lecithin and 0.01 percent vanillin, with a total milk solids content of 13.33 percent. In error, two percentage values, 3.31 and 3.39, were given in each ruling for the total milk fat content of each type of chocolate bar.
CBP classified the chocolate bars described in NY N005972 and in NY N005974 under subheading 1806.32.0600, HTSUSA, which provides for: “Chocolate and other food preparations containing cocoa: Other, in blocks, slabs or bars: Not filled: Preparations consisting wholly of ground cocoa beans, with or without added cocoa fat, flavoring or emulsifying agents, and containing not more than 32 percent by weight of butterfat or other milk solids and not more than 60 percent by weight of sugar: Containing butterfat or other milk solids (excluding articles for consumption at retail as candy or confection): Other, containing over 5.5 percent by weight of butterfat: Other: Containing less than 21 percent by weight of milk solids.”
CBP now takes the position that the chocolate bars were classified incorrectly and that the correct classification is under subheading 1806.32.3000, HTSUSA.
ISSUE:
Whether the chocolate bars described above are correctly classified under subheading 1806.32.0600 or subheading 1806.32.3000, HTSUSA?
LAW AND ANALYSIS:
Merchandise is classifiable under the HTSUS in accordance with the General Rules of Interpretation (GRIs). The systematic detail of the HTSUS is such that most 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 2 through 6 may then be applied in order.
The HTSUS provisions under consideration are as follows:
1806 Chocolate and other food preparations containing cocoa:
* * *
Other, in blocks, slabs or bars:
* * *
1806.32 Not filled:
Preparations consisting wholly of ground cocoa beans, with or without added cocoa fat, flavoring or emulsifying agents, and containing not more than 32 percent by weight of butterfat or other milk solids and not more than 60 percent by weight of sugar:
Containing butterfat or other milk solids (excluding articles for consumption at retail as candy or confection):
* * *
Other, containing over 5.5 percent by weight of butterfat:
* * *
Other:
1806.32.0600 Containing less than 21 percent by weight of milk solids 1/…..
* * *
1806.32.3000 Other…..
In understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System Explanatory Notes (ENs) may be utilized. The 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).
EN 18.06 provides the following:
Chocolate is composed essentially of cocoa paste and sugar or other sweetening matter, usually with the addition of flavouring and cocoa butter; in some cases, cocoa powder and vegetable oil may be substituted for cocoa paste….
Chocolate and chocolate goods may be put up either as blocks, slabs, tablets, bars, pastilles, croquettes, granules or powder, or in the form of chocolate products filled with creams, fruits, liqueurs, etc.
The heading also includes all sugar confectionery containing cocoa in any proportion (including chocolate nougat), sweetened cocoa powder, chocolate powder, chocolate spreads, and, in general, all food preparations containing cocoa (other than those excluded in the General Explanatory Note to this Chapter).
As stated above, the chocolate bars contain ingredients that include
sugar, cocoa butter, chocolate liquor, and vanillin (flavor). The chocolate bars meet the requirements of heading 1806, HTSUS, and the description provided in EN 18.06. As such, the chocolate bars are properly classified in heading 1806, HTSUS. At the six-digit level, we find that the chocolate bars meet the requirements of 1806.32, HTSUS, because they are in bar form and not filled.
CBP previously classified the bars in subheading 1806.32.0600, HTSUSA. However, the text superior to subheadings 1806.32.0100 through 1806.32.1800, HTSUSA, which governs classification in the range of subheadings in which subheading 1806.32.0600 falls, excludes “articles for consumption at retail as candy or confection.” The chocolate bars at issue were described as being “confectionery wrapped in foil ready for consumption as is.” On the basis of the condition in which they were to be imported, we now find that the chocolate bars are excluded from classification in subheading 1806.32.0600, HTSUSA, by the terms of that subheading. Consequently, CBP’s previous classification of the bars was incorrect.
We now find that the chocolate bars are classified under subheading 1806.32.3000, HTSUSA, because they consist wholly of ground cocoa and do not contain, by weight, more than 32 percent milk solids or more than 60 percent of sugar, and are articles for consumption at retail as candy or confection. We note that the discrepancy in the milk fat percentage found in NY N005972 and in NY N005974 is inconsequential to this classification analysis.
HOLDING:
By application of GRI 1, the chocolate bars are classified in heading 1806, HTSUS, and are specifically provided for under subheading 1806.32.3000, HTSUSA, as “Chocolate and other food preparations containing cocoa: Other, in blocks, slabs or bars: Not filled: Preparations consisting wholly of ground cocoa beans, with or without added cocoa fat, flavoring or emulsifying agents, and containing not more than 32 percent by weight of butterfat or other milk solids and not more than 60 percent by weight of sugar: Other.” The 2008 column one, general rate of duty is 4.3% ad valorem.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at http://www.usitc.gov/tata/hts/.
This merchandise is subject to the Public Health Security and Bioterrorism Preparedness and Response Act of 2002 (The Bioterrorism Act), which is regulated by the Food and Drug Administration (FDA). Information on the Bioterrorism Act can be obtained by calling the FDA, at (301) 575-0156, or from the World Wide Web at http://www.fda.gov/oc/bioterrorism/bioact.html.
EFFECT ON OTHER RULINGS:
NY N005972 and NY N005974, both dated February 20, 2007, are hereby revoked. In accordance with 19 U.S.C. § 1625(c), this ruling will become effective 60 days after publication in the Customs Bulletin.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division