CLA-2 OT: RR: CTF: TCM H014783 RM
John Peterson, Esq.
Neville Peterson, LLP
Counselors at Law
17 State Street, 19th Floor
New York, NY 10004
RE: Revocation of New York Ruling Letter N009017, dated June 5, 2007; Classification of Marbits
Dear Mr. Peterson:
This letter is in response to your request of July 25, 2007, for reconsideration of New York Ruling Letter (NY) N009017, issued to you on behalf of your client, General Mills, Inc., on June 5, 2007. In that ruling, noting the product’s imported condition and use, U.S. Customs and Border Protection (CBP) classified the subject “marbits” under heading 2106, Harmonized Tariff Schedule of the United States (HTSUS), as food preparations not elsewhere specified or included. It is your contention that the proper classification for marbits is under heading 1704, HTSUS, as sugar confectionery. We have reviewed NY N009017 and found it to be in error.
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 on June 25, 2008, in the Customs Bulletin, Volume 42, No. 27. No comments were received in response to this notice.
FACTS:
“Marbits” are extruded marshmallow products used as toppings in breakfast cereals. They are imported into the U.S. in bulk. The samples provided are in the form of dry, brittle, multi-colored pieces shaped like hearts, half-moons, hats, and other objects. Each is approximately ½-inch wide and ¼-inch thick. A CBP laboratory analysis found the samples contained 66.2 percent sucrose and 14.8 percent glucose on a dry weight basis.
ISSUE:
What is the proper tariff classification of the marbits under the HTSUS?
LAW AND ANALYSIS:
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that the classification of goods shall be determined 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:
1704 Sugar confectionery (including white chocolate), not containing cocoa:
Other:
Confections or sweetmeats ready for consumption:
Other:
Other …
1704.90. 3590 Other …
2106 Food preparations not elsewhere specified or included:
Other:
Other:
Other:
Other:
Other:
Articles containing over 65 percent by dry weight of sugar described in additional U.S. note 2 to chapter 17:
2106.90.94 Other 2/
In your submission, you argue that marbits are classifiable in heading 1704, HTSUS, as sugar confectionery. You contend that the product is “ready for consumption to be used as candy toppings in retail-packed cereal,” a use analogous to the marshmallow products used as toppings which have traditionally been classified in heading 1704, HTSUS. Moreover, you state that heading 1704, HTSUS, is not a “use provision,” but an eo nomine provision for confectionery, and that the marbits fit within the common meaning of the term. Finally, you assert that the goods in question are more specifically described in heading 1704, HTSUS, than in heading 2106, HTSUS, and therefore, the former should prevail in accordance with GRI 3(a).
CBP previously classified the marbits in heading 2106, HTSUS, as food preparations not elsewhere specified or included. By the terms of this heading, the marbits can only be classified here if they are not provided for elsewhere in the tariff.
The main issue to be resolved is whether the merchandise is a sugar confectionery of heading 1704, HTSUS. The HTSUS does not contain a statutory definition for the term “confectionery.” However, CBP has adopted the meaning of the term given by the Court of International Trade (CIT) in Leaf Brands, Inc. v. United States, (“Leaf Brands”) 70 Cust. Ct. 66 (1973). The Court defined “confectionery” as the “many kinds of sweet-tasting articles which are eaten as such for their taste and flavor without further preparation and which are usually sold in confectionery outlets.” Id. at 71. Further, the Court found that whether an article is confectionery is determined by its chief use as a confection, which may be evidenced by its character and design and the manner in which it is sold (i.e., through candy brokers, in confectionery outlets), rather than by its shape and texture. Id. at 72. Following Leaf Brands, CBP has consistently taken the position that a confection is a product that, in its condition as imported, is ready for consumption at retail as a confectionery and is marketed as such; it is not an ingredient of another food product. See, for example, HQ 086101, dated February 27, 1990 (peanut flavored chips), HQ 085206, dated February 23, 1990 (white chocolate in 5 kg blocks), HQ 955580, dated July 30, 2002, and HQ 965211, dated August 1, 2002 (chocolate fish).
Contrary to your assertion that heading 1704, HTSUS, is an eo nomine provision for confectionery and is not a use provision, CBP has consistently found that heading 1704, HTSUS, is a “principal use” provision. The Leaf Brands Court affirmed this understanding when it construed the terms of the heading in accordance with General Interpretative Rule 10(e)(i), TSUS (now, U.S. Additional Rule of Interpretation 1(a)). U.S. Additional Rule of Interpretation 1(a) provides for classification of goods governed by principal use and states:
In the absence of special language or context which otherwise requires -- a tariff classification controlled by use (other than actual use) is to be determined in accordance with the use in the United States at, or immediately prior to, the date of importation, of goods of that class or kind to which the imported goods belong, and the controlling use is the principal use.
Generally, the Courts have provided several factors which are indicative but not conclusive, to apply when determining whether merchandise falls within a particular class or kind. They include: (1) general physical characteristics, (2) expectation of the ultimate purchaser, (3) channels of trade, (4) environment of sale (accompanying accessories, manner of advertisement and display), (5) use in the same manner as merchandise which defines the class, (6) economic practicality of so using the import, and (7) recognition in the trade of this use. See Lennox Collections v. United States, 20 CIT 194, 196 (1996). See also United States v. Carborundum Co., 63 CCPA 98, 102, 536 F.2d 373, 377 (1976), cert denied, 429 U.S. 979 (1976). In Leaf Brands, the court considered the physical characteristics, channels of trade and environment of sale, and the actual use of the product at issue.
In this instance, it is undisputed that marbits are small marshmallows (they are composed of the standard ingredients of marshmallows, specifically, sugar, water, corn syrup, dextrose, corn starch, gelatin, artificial flavoring, and sodium hexamet, and have a similar consistency). Further, they are recognized and used as marshmallows (e.g., they are advertised on the box of a popular cereal as “marshmallow bits”). Moreover, in the condition as imported, they are ready for consumption without further preparation, as marshmallows. That they are packaged with cereal after they are imported is of no moment, as they are goods of the kind usually sold in confectionery outlets.
CBP has previously established that marshmallows meet the definition of confectionery of heading 1704, HTSUS, because they are eaten for their sweet taste without further preparation and are usually sold at confectionery outlets. See, e.g., NY 817105, dated December 8, 1995, NY M84135, dated July 3, 2006, and NY M86169, dated September 27, 2006. Because marbits are marshmallows, we find that they belong to the same class or kind as the goods classified as confectioneries. Indeed, marbits are analogous to the mini marshmallows used as toppings for hot chocolate mixes, which CBP has classified as confectioneries of heading 1704, HTSUS. See HQ N010617, dated June 1, 2007, NYM86167, dated September 27, 2006, NY M85240, dated July 26, 2006, and NY M84135, dated July 3, 2006. Accordingly, marbits are classified in subheading 1704.90.9590, HTSUS. We note that, contrary to your suggestion, the marbits are not classified in subheading 1704.90.3550, HTSUS, because they are not imported “put up for retail sale,” but are imported in bulk.
Based on the foregoing, we now find that the merchandise does not meet the terms of heading 2106, HTSUS, because it is “elsewhere included” in the tariff -- in heading 1704, HTSUS, as sugar confectionery.
HOLDING:
By application of GRI 1, the marbits are correctly classified under heading 1704, HTSUS, in subheading 1704.90.3590, as “Sugar confectionery (including white chocolate), not containing cocoa: Other: Confections or sweetmeats ready for consumption: Other: Other: Other.” The 2007 column one, general rate of duty is 5.6 percent ad valorem.
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 FDA at 301-575-0156, or at the Web site www.fda.gov/oc/bioterrorism/bioact.html.
Duty rates are provided for convenience only 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 www.usitc.gov/tata/hts/.
EFFECT ON OTHER RULINGS:
NY N009017, dated June 5, 2007, is hereby revoked.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division