CLA-2 OT:RR:CTF:TCM H056377 CkG
Port Director
U.S. Customs and Border Protection
Port of Charlotte
1901 Crossbeam Drive
Charlotte, NC 28217
RE: Application for Further Review of Protest Number 1512-2008-100160;
classification of polyphenols from grape
Dear Port Director:
This is in response to the Application for Further Review of protest number 1512-2008-100160, filed on behalf of the importer, Lalilab Inc. (‘Protestant”), contesting U.S. Customs and Border Protection’s (CBP) classification on May 16, 2008, of the exGrape®TOTAL product in heading 3824 of the Harmonized Tariff Schedule of the United States (HTSUS).
The subject merchandise was entered between November 29, 2007, and February 12, 2008. CBP liquidated the entries on May 16, 2008, in heading 3824, HTSUS, which provides for chemical preparations, not elsewhere specified or included. Protestant contends that the correct classification of the merchandise is in heading 1302, HTSUS, as a vegetable extract.
FACTS:
The substance in question is known as exGrape®TOTAL. The protestant’s
submissions indicate that the exGrape®TOTAL product is produced from grape pomace, or the residue pf grape skin, seeds, flesh and stems which remains after pressing the juice from the grapes. The production process consists of soaking the
pomace in water, followed by centrifugation, microfiltration, vacuum concentration, pasteurization and finally, spray-drying. The protestant states that the resulting product has a polyphenol content of 55 percent to 90 percent, depending on the testing method. The laboratory test submitted by the protestant further indicates that the exGrape®TOTAL product is primarily a mixture of catechins, anthocyanins, resveratrol, and water.
The protestant indicates that the product can be used as a raw material for production of dietary supplements, and can also be added directly to beverages and confectionary.
ISSUE:
Whether the subject merchandise is a vegetable extract of heading 1302, HTSUS, or an “other” chemical product or preparation of heading 3824, HTSUS.
LAW AND ANALYSIS:
The matter protested is protestable under 19 U.S.C. §1514(a) (2) as a decision on classification. The protest was timely filed, within 180 days of liquidation of the first entry for entries made on or after December 18, 2004. (Miscellaneous Trade and Technical Corrections Act of 2004, Pub.L. 108-429, § 2103(2) (B) (ii), (iii) (codified as amended at 19 U.S.C. § 1514(c) (3) (2006)).
Further Review of Protest No. 3001-2008-100156 was properly accorded to protestant pursuant to 19 C.F.R. § 174.24 because the decision against which the protest was filed is alleged to be inconsistent with a prior CBP ruling with respect to the same or substantially similar merchandise, specifically New York Ruling Letters (NY) R04282, dated July 3, 2006, and R03419, dated March 20, 2006.
Classification of goods under the HTSUS is governed by the General Rules of Interpretation (GRI). GRI 1 provides that classification 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.
Due to the hierarchical structure of the HTSUS:
(1) merchandise must first be classified in the HTSUS in the 4-digit heading whose terms most specifically describe the merchandise (unless otherwise required or directed by the GRIs); and
(2) only 4-digit headings are comparable (i.e., no consideration should be given to the terms of any subheading within any 4-digit heading when considering the proper classification of merchandise at the 4-digit heading level).
The HTSUS provisions under consideration are as follows:
1302: Vegetable saps and extracts; pectic substances, pectinates and pectates; agar-agar and other mucilages and thickeners, whether or not modified, derived from vegetable products:
Vegetable saps and extracts:
1302.19: Other:
Ginseng; substances having anesthetic, prophylactic or therapeutic properties:
1302.19.40: Other . . . .
* * * * *
3824: Prepared binders for foundry molds or cores; chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included:
3824.90: Other:
Other:
Other:
Mixtures containing 5 percent or more by weight of one or more aromatic or modified aromatic substances:
3824.90.28: Other…..
* * * * *
The Harmonized Commodity Description and Coding System Explanatory Notes
(EN), constitute the official interpretation of the Harmonized System at the international level. While neither 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 the headings. It is CBP’s practice to follow, whenever possible, the terms of the ENs when interpreting the HTSUS. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The 2007 EN 13.02 provides, in pertinent part, as follows:
(A) Vegetable saps and extracts.
The heading covers saps and extracts (vegetable products usually obtained by natural exudation or by incision, or extracted by solvents), provided that they are not specified or included in more specific headings of the Nomenclature (see list of exclusions at the end of Part (A) of this Explanatory Note).
These saps and extracts differ from the essential oils, resinoids and extracted oleoresins of heading 33.01, in that, apart from volatile odoriferous constituents, they contain a far higher proportion of other plant substances (e.g., chlorophyll, tannins, bitter principles, carbohydrates and other extractive matter).
. . . . .
Solid extracts are obtained by evaporating the solvent. Inert substances are sometimes added to certain extracts so that they can be more easily reduced to powder (e.g., belladonna extract, to which powdered gum Arabic is added), or to obtain a standard strength (for instance, certain quantities of starch are added to opium in order to obtain a product containing a known portion of morphine). The addition of such substances does not affect the classification of these solid extracts.
The vegetable saps and extracts of this heading are generally raw materials for various manufactured products. They are excluded from the heading when, because of the addition of other substances, they have the character of food preparations, medicaments, etc.
Heading 3824, HTSUS, which provides for “other” chemical products and preparations, can only be used to classify a mixture of natural products as such if the product is not provided for in another heading of the HTSUS (as heading 3824 is a residual heading). Therefore, if it is determined that the merchandise is described by the terms of heading 1302, HTSUS, then heading 3824, HTSUS, cannot be considered for classification of the merchandise.
Heading 1302, HTSUS, describes vegetable extracts. The ENs provide that vegetable products are usually obtained by natural exudation or by incision, or extracted by solvents. Other recognized methods of extraction include percolation, maceration, digestion, or infusion. See United States Pharmacopeia (USP), (21st rev., p.1334), and Remington's Pharmaceutical Sciences, (18th ed., p. 1543). The protestant maintains that the method of extraction has not advanced the extract to a level of purity whereby it can no longer be considered an extract and thereby excluded from heading 1302, HTSUS. The protestant further compares the production process of the exGrape®TOTAL product to those discussed in NY R04282, dated July 3, 2006, and NY R03419, dated March 20, 2006. CBP held in both rulings that the extracts described therein were classified in heading 1203, HTSUS. Only NY R03419, however, describes the extraction process for the Jambolan seed extract classified therein:
The subject product, "JamboLean," consists of a brown powder obtained from the ground-up seeds of the Jambolan tree (Syzygium cumini Skeels) by extraction with an alcohol/water solvent. The liquid extract obtained from solvent extraction is then filtered, distilled, and concentrated, followed by spray-drying, grinding and sieving, to produce the powdered extract (the finished product).
The protestant claims that the extraction process described in NY R03419 is in fact more extensive than that used to produce the exGrape®TOTAL product. The description of the extraction process provided in NY R03419, however, is insufficient to provide a basis for comparison. As the details of the production process of extracts and chemicals are generally confidential, we cannot compare processes to each other.
In any case, the extraction method described by the protestant in the instant case for the merchandise under consideration is more complex than those discussed in the ENs, and appears designed to specifically target the polyphenol compounds in the grape pomace source material. Furthermore, the level of purity of the extract is also a determining factor for inclusion in heading 1302, and not solely the method of extraction. However processed, the extracts described by the ENs and the USP appear to be complex substances containing a large portion of the plant profile such that they are identifiable as an extract of a particular vegetable. Hence, substances obtained from a plant are not considered “vegetable extracts” of heading 1302, if they only contain one ingredient divorced from the composition of the vegetable source. In Headquarters Ruling Letter (HQ) 967972, dated March 2, 2006, CBP stated the following:
However, there appears to be a limit on the degree and extent of purification that can occur for the product to remain in heading 1302. For instance, EN 13.02, explicitly excludes certain refined extracts of opium, quassia amare, papaw juice, and cashew nut shell liquid, once the refining process concentrates a certain group of chemical compounds to a particular point. Hence, poppy straw concentrates containing more than 50% alkaloids are excluded from heading 1302…we note that the leucoanthocyanin consists of over 90% mixtures of oligomeric proanthocyanidins (OPCs) and the silymarin consists of at least 80% of isomers of silymarin. Therefore, silymarin andleucoanthocyanin are relatively pure chemical products and cannot be classified simply as extracts.
In HQ W968424, dated December 19, 2006, CBP also excluded pine bark extract from heading 1302, HTSUS, due to the level of purification. CBP stated in this case:
Here, with the product Enzogenol®, we have a product that has been highly extracted and standardized so that it contains the desired constituent of the raw pine bark, proanthocyanidin, in concentrations of 76% or greater to the exclusion of other constituents. The extraction procedure involves taking filtered liquor and then further processing it by either ultra-filtration, reverse osmosis, or a combination of both processes... The purpose of these steps is to allow you to create a product that contains a high concentration of the desired components of the starting material to the exclusion of unwanted components. This processing results in an article that does not include all constituents of the starting material in their relative proportions. Thus, the Enzogenol® has been processed to become a dietary supplement, clearly a specialized, not general, purpose. As such, it is not an extract classified in heading 1302, HTSUS.
In the instant case, the source material is highly purified and concentrated in the
extraction process. The laboratory results submitted by the importer show total polyphenol concentrations of 55 percent or 92 percent, depending on whether the optic density or Folin-Ciocalteau method was used. The protestant in this case contends that the test yielding the highest concentration of polyphenols (i.e., the optic density test) is the least accurate of the two. The website of the manufacturer of the merchandise in this case, however, lists the higher value (i.e., 92 percent) to indicate total polyphenol content in the exGrape®TOTAL product. A letter from the Executive VP of Lalilab, Inc. to CBP dated January 3, 2008, also asserts that the total amount of polyphenols in the exGrape®TOTAL product is standardized at not less than 92 percent. Total polyphenol content of 92 percent indicates a highly purified product with very little of the original vegetative matter remaining from the original source. As CBP has previously held, such a high concentration of a targeted substance results in a relatively pure chemical product that can no longer be considered a simple extract of heading 1302, HTSUS.
As the instant merchandise is not specifically provided for elsewhere in the HTSUS, it is classified in heading 3824, HTSUS, as a chemical product or preparation, not elsewhere specified or included.
HOLDING:
By application of GRI 1, the exGrape®TOTAL product is classified in heading 3824, HTSUS. It is specifically provided for in subheading 3824.90.28, HTSUS, which provides for “Prepared binders for foundry molds or cores; chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included: Other: Other: Other: Mixtures containing 5 percent or more by weight of one or more aromatic or modified aromatic substances: Other.” The 2008 column one, general rate of duty is 6.5 percent ad valorem.
You are instructed to DENY the protest.
In accordance with Sections IV and VI of the CBP Protest/Petition Processing Handbook (HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the CBP 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 International Trade, Regulations and Rulings, will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division