• HQ H195716
• Feb 19, 2015

• Type : Classification • HTSUS : 2106.90.99; 2932.99.61; 3824.90.28
•  Related:   967972; 814027; 967971; 966566; 966448; 959099; R04280; 961704; 963034; 965479; W967214; W967653; W968370; H011012   

HQ H195716

February 19 2015

CLA-2 OT:RR:CTF:TCM H195716 AMM

Port Director
U.S. Customs and Border Protection
Service Port – Seattle
1000 Second Ave., Suite 2100
Seattle, WA 98104
Attn: Michelle Petrie

RE: Tariff classification of certain Leucoselect® and Silymarin products; Protest Number 3001-11-100172

Dear Port Director:

This is in reply to an application for further review (AFR) of protest number 3001-11-100172, dated April 20, 2011, filed on behalf of Indena USA, Inc. (Indena), against U.S. Customs and Border Protection’s (CBP) reclassification and subsequent liquidation of two entries at the Service Port of Seattle (the Port) of two Leucoselect® products and three Silymarin products, under the Harmonized Tariff Schedule of the United States (HTSUS). We have also considered nine (9) supplemental submissions, filed on September 6, 2011, September 22, 2011, December 22, 2011, August 16, 2012, September 11, 2012, February 28, 2013, March 26, 2013, May 16, 2013, and February 10, 2014. Furthermore, CBP met with representatives from Indena on December 4, 2012, pursuant to 19 C.F.R. §177.4.

FACTS:

In their submission dated May 16, 2013, Indena indicated that the instant products are manufactured for the dietary supplement market. They are imported in bulk form as powder, and are not encapsulated before entry in the United States.

The first product, “Leucoselect® (Leucocyanidin),” is a brownish powder consisting of polyphenols, namely oligomeric proanthocyanidins (OPCs). According to CBP Lab Report No. NY20112185, dated March 8, 2012, the sample submitted for testing consisted of approximately 100% total polyphenols (as gallic acid equivalents), on a dry basis. The sample did not contain starch, dextrins, glucose, fructose, sucrose, maltose, lactose, other flavonoids, or non-hydrolyzable condensed tannins. According to the material submitted by Indena, this product is extracted from dried grape seeds using an acetone/water mixture. After the extraction, it is purified with sodium chloride, ethyl acetate, water, and ethanol.

The second product, “Leucoselect Phytosome® (Leucocyanidin/Phospholipid),” is a light brown amorphous powder consisting of a mixture of polyphenols, namely OPCs, and phospholipids. According to CBP Lab Report No. NY 20112187, dated March 8, 2012, the sample submitted for testing consisted of approximately 26% total polyphenols (as gallic acid equivalents), and 74% phospholipids, on a dry basis. The sample did not contain starch, dextrins, glucose, fructose, sucrose, maltose, lactose, other flavonoids, or non-hydrolyzable condensed tannins. According to the material submitted by Indena, this product is manufactured by mixing purified “Leucoselect® (Leucocyanidin)” with “deoiled, powdered phosphatidylcholine, enriched soybean lecithin.” In their submission dated May 15, 2013, Indena indicated that this soy lecithin is added to improve the oral bioavailability of the polyphenols.

The third product, “Silymarin (Silybum Marianum),” is a brownish-yellow amorphous powder consisting of polyphenols, phospholipids, and other substances. According to CBP Lab Report No. NY20112188, dated March 23, 2012, the sample submitted for testing contained 58% total polyphenols (as gallic acid equivalents), which includes the six polyphenol isomers found in milk thistle extracts (namely, silybin A, silybin B, isosilybin A, isosilybin B, silychristin, and silydianin), and 1.37% of other flavonoids and non-hydrolyzable condensed tannins, on a dry basis. The sample also contained 6% phospholipids, on a dry basis. It did not contain starch, dextrins, glucose, fructose, sucrose, maltose, or lactose. According to the material submitted by Indena, this product is extracted from the milk thistle plant (Silybum marianum (L.) Gaertn.) with ethyl acetate. After extraction, it is purified with water, filtered, and dried. In their submission dated May 15, 2013, Indena indicated that the soy phospholipids are not added to the product during manufacturing, but are instead part of the natural composition.

The fourth product, identified as “Silymarin/ET,” is a brownish-yellow amorphous powder consisting of polyphenols, phospholipids, and other substances. According to CBP Lab Report No. NY20112189, dated March 22, 2012, the sample submitted for testing contained 58% total polyphenols (as gallic acid equivalents), which includes the six polyphenol isomers found in milk thistle extracts (namely, silybin A, silybin B, isosilybin A, isosilybin B, silychristin, and silydianin), and 1.37% of other flavonoids and non-hydrolyzable condensed tannins, on a dry basis. The sample also contained 5% phospholipids, 1.78% glucose, and 0.13% sucrose, on a dry basis. It did not contain starch, dextrins, fructose, maltose, or lactose. According to the material submitted by Indena, this product is extracted from the milk thistle plant (Silybum marianum (L.) Gaertn.) with ethanol. After extraction, it is concentrated, purified with water, filtered, and dried. In their submission dated May 15, 2013, Indena indicated that the soy phospholipids are not added to the product during manufacturing, but are instead part of the natural composition.

The fifth product, identified as “Silymarin Fitosoma® (Silymarin/Phospholipid),” is a light yellowish brown amorphous powder consisting of polyphenols, phospholipids, and other substances. According to CBP Lab Report No. NY20112186, dated March 22, 2012, the sample submitted for testing contained 17% total polyphenols (as gallic acid equivalents), which includes the six polyphenol isomers found in milk thistle extracts, and 0.18% of other flavonoids and non-hydrolyzable condensed tannins, on a dry basis. The sample also contained 52% phosopholipids, 0.27% fructose, 0.03% glucose, 1.72% sucrose, and 1.67% dietary fiber, on a dry basis. According to the material submitted by Indena, this product is extracted from the milk thistle plant (Silybum marianum (L.) Gaertn.) with ethyl acetate. After extraction, it is concentrated, purified with water, filtered, dried, and mixed with soy phospholipids to achieve the desired concentrations. In their submission dated May 15, 2013, Indena indicated that this soy phospholipid is added to improve the oral bioavailability of the polyphenols.

The first entry took place at the Port on December 7, 2009, and was liquidated on October 22, 2010. The second entry took place at the Port on December 21, 2009, and was liquidated on November 5, 2010. The merchandise was entered in heading 1302, HTSUS, which provides for vegetable extracts. The Port liquidated two products, namely “Leucoselect® (Leucocyanidin)” and “Leucoselect Phytosome® (Leucocyanidin/Phospholipid),” under heading 3824, HTSUS, which provides in pertinent part for “chemical products and preparations of the chemical or allied industries … not elsewhere specified or included.” The Port liquidated the other three products, namely “Silymarin (Silybum Marianum),” “Silymarin/ET,” and “Silymarin Fitosoma® (Silymarin/Phospholipid),” under heading 2932, HTSUS, which provides for “Heterocyclic compounds with oxygen hetero-atom(s) only”.

ISSUES:

I. What is the proper classification of the instant products under the HTSUS?

II. Are the products identified as “Silymarin (Silybum Marianum),” “Silymarin/ET,” and “Silymarin Fitosoma® (Silymarin/Phospholipid),” eligible for duty-free treatment, pursuant to General Note (GN) 13, HTSUS?

LAW AND ANALYSIS:

Initially we note that the matter is protestable under 19 U.S.C. §1514(a)(2) as a decision on classification and the rate and amount of duties chargeable. The protest was timely filed on April 20, 2011, within 180 days of liquidation, pursuant to 19 U.S.C. §1514(c)(3).

Further review of Protest No. 3001-11-100172 was properly accorded to protestant pursuant to 19 C.F.R. §174.24. Specifically, in accordance with Section 174.24(c), this protest involves matters previously ruled upon by the Commissioner of Customs or his designee, but facts are alleged or legal arguments presented which were not considered at the time of the original ruling. Indena presents additional arguments regarding the classification of the instant products that were not considered when CBP issued Headquarters Ruling Letter (HQ) 967972, dated March 2, 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 GRI may then be applied.

The 2011 HTSUS provisions at issue are:

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: 1302.19.91 Other --------------------------- 2106 Food preparations not elsewhere specified or included: 2106.90 Other: Other: Other: Other: Other: 2106.90.99 Other --------------------------- 2932 Heterocyclic compounds with oxygen hetero-atom(s) only: Other: 2932.99 Other: Aromatic: Other: 2932.99.61 Products described in additional U.S. note 3 to section VI --------------------------- 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: Mixtures containing 5 percent or more by weight of one or more aromatic or modified aromatic substances: 3824.90.28 Other

GN 13, HTSUS, states:

Pharmaceutical products. Whenever a rate of duty of “Free” followed by the symbol “K” in parentheses appears in the “Special” subcolumn for a heading or subheading, any product (by whatever name known) classifiable in such provision which is the product of a country eligible for tariff treatment under column 1 shall be entered free of duty, provided that such product is included in the pharmaceutical appendix to the tariff schedule. Products in the pharmaceutical appendix include the salts, esters and hydrates of the International Non-proprietary Name (INN) products enumerated in table 1 of the appendix that contain in their names any of the prefixes or suffixes listed in table 2 of the appendix, provided that any such salt, ester or hydrate is classifiable in the same 6-digit tariff provision as the relevant product enumerated in table 1.

Additional U.S. Note 2 to Section VI, HTSUS, states, in pertinent part:

For the purposes of the tariff schedule:

(a) The term “aromatic” as applied to any chemical compound refers to such compound containing one or more fused or unfused benzene rings; * * *

Additional U.S. Note 3 to Section VI, HTSUS, states:

The term “products described in additional U.S. note 3 to section VI” refers to any product not listed in the Chemical Appendix to the Tariff Schedule and—

(a) For which the importer furnishes the Chemical Abstracts Service (C.A.S.) registry number and certifies that such registry number is not listed in the Chemical Appendix to the Tariff Schedule; or

(b) Which the importer certifies not to have a C.A.S. registry number and not to be listed in the Chemical Appendix to the Tariff Schedule, either under the name used to make Customs entry or under any other name by which it may be known.

Note 1 to Chapter 29, HTSUS, states, in pertinent part:

Except where the context otherwise requires, the headings of this chapter apply only to: * * * (b) Mixtures of two or more isomers of the same organic compound (whether or not containing impurities), except mixtures of acyclic hydrocarbon isomers (other than stereoisomers), whether or not saturated (chapter 27); * * *

Note 1 to Chapter 38, HTSUS, states, in pertinent part: “This chapter does not cover: … (b) Mixtures of chemicals with foodstuffs or other substances with nutritive value, of a kind used in the preparation of human foodstuffs (generally, heading 2106); …”.

The Harmonized Commodity Description and Coding System Explanatory Notes (ENs), 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 consult, whenever possible, the terms of the ENs when interpreting the HTSUS. See T.D. 89–80, 54 Fed. Reg. 35127, 35128 (August 23, 1989). EN 13.02 states, in pertinent part:

(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). * * * The saps and extracts classified here include :

(1) Opium, the dried sap of the unripe capsules of the poppy (Papaver somniferum) obtained by incision of, or by extraction from, the stems or seed pods. It is generally in the form of balls or cakes of varying size and shape. However, concentrates of poppy straw containing not less than 50 % by weight of alkaloids are excluded from this heading (see Note 1 (f) to this Chapter). * * * (11) Quassia amara extract, obtained from the wood of the shrub of the same name (Simaroubaceae family), which grows in South America. Quassin, the principal bitter extract of the wood of the Quassia amara, is a heterocyclic compound of heading 29.32. * * * (18) Papaw juice, whether or not dried, but not purified as papain enzyme. (The agglomerated latex globules can still be observed on microscopic examination.) Papain is excluded (heading 35.07). * * * (20) Cashew nutshell extract. The polymers of cashew nutshell liquid extract are, however, excluded (generally heading 39.11). * * *

EN 21.06 states, in pertinent part:

Provided that they are not covered by any other heading of the Nomenclature, this heading covers:

(A) Preparations for use, either directly or after processing (such as cooking, dissolving or boiling in water, milk, etc.), for human consumption.

(B) Preparations consisting wholly or partly of foodstuffs, used in the making of beverages or food preparations for human consumption. The heading includes preparations consisting of mixtures of chemicals (organic acids, calcium salts, etc.) with foodstuffs (flour, sugar, milk powder, etc.), for incorporation in food preparations either as ingredients or to improve some of their characteristics (appearance, keeping qualities, etc.) (see the General Explanatory Note to Chapter 38). * * * The heading includes, inter alia: * * * (16) Preparations, often referred to as food supplements, based on extracts from plants, fruit concentrates, honey, fructose, etc. and containing added vitamins and sometimes minute quantities of iron compounds. These preparations are often put up in packagings with indications that they maintain general health or well-being. Similar preparations, however, intended for the prevention or treatment of diseases or ailments are excluded (heading 30.03 or 30.04). * * *

The General EN to Chapter 38 states, in pertinent part:

For the purposes of Note 1 (b) to the Chapter, the expression “foodstuffs or other substances with nutritive value” principally includes edible products of Sections I to IV. * * * The mere presence of “foodstuffs or other substances with nutritive value” in a mixture would not suffice to exclude the mixture from Chapter 38, by application of Note 1 (b). Substances having a nutritive value that is merely incidental to their function as chemical products, e.g., as food additives or processing aids, are not regarded as “foodstuffs or substances with nutritive value” for the purpose of this Note. The mixtures which are excluded from Chapter 38 by virtue of Note 1 (b) are those which are of a kind used in the preparation of human foodstuffs and which are valued for their nutritional qualities. EN 38.24 states, in pertinent part:

(B) CHEMICAL PRODUCTS AND CHEMICAL OR OTHER PREPARATIONS * * * The chemical or other preparations are either mixtures (of which emulsions and dispersions are special forms) or occasionally solutions. Aqueous solutions of the chemical products of Chapter 28 or 29 remain classified within those Chapters, but solutions of these products in solvents other than water are, apart from a few exceptions, excluded therefrom and accordingly fall to be treated as preparations of this heading. The preparations classified here may be either wholly or partly of chemical products (this is generally the case) or wholly of natural constituents (see, for example, paragraph (24) below). * * *

Indena entered the instant products under heading 1302, HTSUS, as vegetable extracts. The Port liquidated two products, namely “Leucoselect® (Leucocyanidin)” and “Leucoselect Phytosome® (Leucocyanidin/Phospholipid),” under heading 3824, HTSUS, which provides in pertinent part for “chemical products and preparations of the chemical or allied industries … not elsewhere specified or included.” The Port liquidated the other three products, namely “Silymarin (Silybum Marianum),” “Silymarin/ET,” and “Silymarin Fitosoma® (Silymarin/Phospholipid),” under heading 2932, HTSUS, which provides for “Heterocyclic compounds with oxygen hetero-atom(s) only”. Indena argues in their protest that the instant merchandise is properly classified under heading 1302, HTSUS. In the alternative, Indena argues that “Silymarin,” “Silymarin/ET,” and “Silymarin Fitosoma®” are entitled to duty free treatment pursuant to GN 13, HTSUS.

I. Classification of the Instant Products Under the HTSUS

A. Heading 1302, HTSUS: Vegetable Extracts

In New York Ruling Letter (NY) 814027, dated February 2, 1996, CBP classified four “standardized herbal extract” products under heading 1302, HTSUS. However, in HQ 967972, dated March 2, 2006, CBP modified NY 814027, with regard to the classification of “Milk Thistle (Silybum Marianum)” and “Leucoanthocyanins (Vitis vinifera).” CBP described these products in the following manner:

The silymarin here in issue is a yellow powder that contains 80% mixture of isomers of silymarin (silybin, silicristin and silidianin). Silymarin 80% is produced from milk thistle seeds. The seeds are milled into a cake, subjected to percolation in a solvent, filtered, and concentrated by distillation under vacuum to remove as much solvent as possible. This concentrate is then washed, defatted, and dried. The leucoanthocyanin here in issue is a brownish powder consisting of 90-95% oligomeric proanthocyanidin (OPC). OPC is a mixture of proanthocyanidin compounds in different degrees of polymerization. Some of the OPCs are catechins with a chemical formula of C15H14O6 (The Merck Index, 11th ed.), dimers (two degrees), trimers (three degrees), etc. Due to these varying states of polymerization, the OPCs are not comprised of a single chemical compound, although the main chemical structures are identical. Leucoanthocyanin can be produced from either pine bark or grape seed. According to flow charts submitted by Indena, all of the products are obtained through extraction and refining processes that target a particular family of chemicals in the plant such as isomers of silymarin or OPCs.

See HQ 967972. CBP found that these products were not properly classified under heading 1302, HTSUS, as vegetable extracts, because they were relatively pure chemical products. CBP found that “Leucoanthocyanins (Vitis vinifera)” was properly classified under heading 3824, HTSUS, and that “Milk Thistle (Silybum Marianum)” was properly classified under heading 2932, HTSUS. See also HQ 967971, dated March 2, 2006.

Heading 1302, HTSUS, describes vegetable extracts. The term “extracts” is not defined in the HTSUS. EN(A) to 13.02 states that: “The heading covers saps and extracts (vegetable products usually obtained by natural exudation or by incision, or extracted by solvents)[.]” CBP has found that, when a product reaches a certain level of purity, it is no longer considered an extract, stating that “substances obtained from a plant are not considered ‘vegetable extracts’ if they only contain one ingredient divorced from the composition of the vegetable source.” See HQ 966566, dated October 21, 2003. Specifically, CBP stated that:

While the process of extraction aids us in determining the content of the instant product, it is not determinative in finding that the instant merchandise is not vegetable extracts of heading 1302. However, here the process is very illuminating. After having been boiled, cooled, filtered, precipitated with salt, filtered and extracted with ethyl acetate, a solvent, the pine bark no longer appears in the description of extraction. Rather, the patent states, “the ethyl acetate collected is dried . . . . The proanthocyadins are precipitated. They are collected by filtration. They may be purified by redissolution in ethyl acetate and a new precipitation in chloroform. They are finally washed with chloroform and dried.” Thus, the ethyl acetate has removed the OPCs from the vegetable matter. The further processing is no longer the extraction from a vegetable, but rather the processing of a solvent mixed with OPCs. This is purely chemical processing ending in the creation of a chemical mixture.

See HQ 966566. See also HQ W967214, dated April 4, 2006 (“lo han guo powder” was found to be a relatively pure, extensively processed chemical product and could not be classified as an extract of 1302, HTSUS); HQ 966448, dated July 9, 2004 (use of cation resin isolation process for creating “Advantra Z®” excluded product from classification as a vegetable extract of heading 1302, HTSUS); HQ 959099, dated May 1, 1998 (finding that extensive processing can exclude a product from heading 1302, HTSUS).

CBP’s position is supported by the text of EN 13.02. For example, opium is the dried sap of the unripe capsules of the poppy (Papaver somniferum), obtained by incision of or extraction from the stems or seed pods. Opium contains about 10% morphine. However, concentrate of poppy straw is a different product. A procedure for obtaining concentrate of poppy straw was first patented in 1935, and describes a process of drying the stems and pods of the poppy plant, treating them with sodium bisulphite, concentrating the aqueous solution into a paste by application of a vacuum, treating the paste with alcohol, and then precipitating the morphine base by treating the solution with ammonium sulphate and benzene, to yield a product with over 50% morphine. EN(1) to 13.02 (and Note 1(f) to Chapter 13, HTSUS) excludes concentrates of poppy straw containing not less than 50% by weight of alkaloids. In another example, quassia amara extract obtained from the bark of the Quassia amara shrub. The extract is used in herbal medicine, and contains numerous compounds including both beta-carbonile and cantin-6 alkaloids as well as, primarily, the bitter compounds known as quassinoids. Quassin (2,12-dimethoxypicrasa-2,12-diene-1,11,16-trione, CAS No. 76-78-8) however, is a specific chemical compound contained in the Quassia amara shrub. A patented procedure for obtaining quassin describes a process which percolates first the gum or residue of the wood chips of the Quassia amara shrub in ethanol and evaporates the solvent, then dissolves the residue in water and washes it with hexane. The hexane fraction is discarded, and sodium chloride is added to the aqueous fraction. A residue is extracted using ethyl acetate and the crystallized into quassin and neoquassin. This process yields a crystal composed of 39% quassin. This chemical is one of the most bitter substances found in nature, and is used mainly as a food additive. EN(11) to 13.02 excludes quassin from classification under the heading, and directs it to be classified under heading 29.32. In these examples, EN 13.02 excludes products extracted from plants which undergo extensive further processing. See EN(1), (11), (18), and (20) to 13.02.

The extraction and purification procedures described by Indena lifts the manufacturing process beyond the scope of mere extraction, and into the realm of purely chemical processing. Each of the manufacturing processes described begins with a solvent extraction from either milk thistle or grape seed (depending on the final product). Indena then details the further procedures that are necessary to produce their purified products.

With regard to the first product, “Leucoselect® (Leucocyanidin),” Indena describes an acetone/water extraction, followed by various concentration procedures, filtrations, and secondary extractions with other solvents. This product consists of 100% polyphenols on a dry basis, and contains no starches, sugars, flavonoids, or tannins. See CBP Lab Report No. NY20112185. It is a relatively pure, extensively processed chemical product and is not properly classified as an extract of 1302, HTSUS. See, e.g., HQ 967972 and HQ 967971.

With regard to the second product, “Leucoselect Phytosome® (Leucocyanidin/ Phospholipid),” Indena states that it is made by diluting the first product, “Leucoselect® (Leucocyanidin),” with phospholipids. This means that it must undergo the exact same extraction, concentration, and filtration procedures as the first product, which was determined to be a relatively pure, extensively processed chemical product. As such, this product is not properly classified as an extract of 1302, HTSUS.

With regard to the third product, “Silymarin (Silybum Marianum)”, Indena describes the purification and filtration steps necessary to concentrate the product following the extraction with ethyl acetate. Indena indicated during the meeting with CBP officials held on December 4, 2012, that the initial ethyl acetate extraction yields a product composed of 50% silymarin isomers. Indena also indicated that their further processing steps increase the concentration from 50% to 70%. As such, the instant products have undergone extensive further processing, beyond the level of simple extraction, to concentrate the target compounds. Therefore, it is not properly classified under heading 1302, HTSUS. See HQ 966566; HQ W967214; HQ 966448; HQ 959099.

With regard to the fourth product, “Silymarin/ET,” Indena indicates that it is exactly the same as the third product, “Silymarin (Silybum Marianum)”, except that ethanol is used during the initial extraction step instead of ethyl acetate. The ethanol extraction yields a product composed of 50% silymarin isomers, and further processing by Indena increases this concentration to 70%. As such, the instant products have undergone extensive further processing, beyond the level of simple extraction, to concentrate the target compounds. Therefore, it is not properly classified under heading 1302, HTSUS.

Finally, with regard to the fifth product, “Silymarin Fitosoma® (Silymarin/ Phospholipid),” Indena states that it is made by diluting “Silymarin (Silybum Marianum)” with phospholipids, meaning that it must undergo the exact same extraction, purification, and filtration procedures as the third and fourth products. As such, this product is not properly classified as an extract of 1302, HTSUS.

Indena asserts that HQ W967653, dated July 31, 2008, supports their claim that the instant merchandise is properly classified under heading 1302, HTSUS. In HQ W967653, CBP considered the classification of a pine bark extract (Pycnogenol®), containing approximately 41.6% OPCs. The ethanol extraction process used on the pine bark considered here concentrated the OPCs, but “[left] intact a variety of naturally occurring phenolic and polyphenolic compounds and their derivatives as well as non-flavonol compounds.” See HQ W968370. There was no further processing once the extraction was completed. In fact, CBP specifically distinguished these products from those considered in HQ 966566, on that basis. As a result, these products were classified under heading 1302, HTSUS. See HQ W968370; See also HQ W968370, dated July 31, 2008. As discussed above, the instant merchandise is more like the products considered in HQ 966566, as there was considerable further processing performed to concentrate the target compounds. Therefore, Indena’s reliance on HQ W967653 is misplaced.

Indena also asserts, in their supplemental submission, dated December 22, 2011, that NY R04280, dated July 3, 2006, supports their claims. In NY R04280, CBP considered four herbal extracts, in powder form, obtained by extraction with an alcohol/water solvent, intended for use as ingredients in the formulation of other products. There was no discussion of further processing once the extraction was complete, and CBP found that these products were classifiable under heading 1302, HTSUS. As discussed above, the instant merchandise is more like the products considered in HQ 966566, as there was considerable further processing performed to concentrate the target compounds. Therefore, Indena’s reliance on NY R04280 is also misplaced.

B. Heading 2932, HTSUS: Heterocyclic compounds with oxygen hetero-atoms only

The Port classified the products “Silymarin (Silybum Marianum),” “Silymarin/ET,” and “Silymarin Fitosoma® (Silymarin/Phospholipid)” under heading 2932, HTSUS, which provides for “Heterocyclic compounds with oxygen hetero-atom(s) only”.

The headings of Chapter 29, HTSUS, cover “Mixtures of two or more isomers of the same organic compound (whether or not containing impurities).” See Note 1(b) to Chapter 29, HTSUS. According to CBP Lab testing, each of the three products identified above consists of a mixture of polyphenol hydrocarbons, sugars, and soy phospholipids. The “Silymarin Fitosoma® (Silymarin/ Phospholipid)” product also contains a small amount of dietary fiber. The majority of the polyphenol hydrocarbons are composed of a mixture of six isomers of the same compound, namely, silybin A, silybin B, isosilybin A, isosilybin B, silychristin, and silydianin. Furthermore, the sugars and “other flavonoids or non-hydrolyzable condensed tannins” contained in the three Silymarin products may be considered “impurities,” leftover from the extraction process.

The products “Silymarin (Silybum Marianum),”and “Silymarin/ET” contain 5% to 6% soy phospholipids. Indena asserts that these components are contained naturally in the plant, and are not removed during the extraction process. Therefore, these soy phospholipids would be considered “impurities” along with the other flavonoids and non-hydrolyzable condensed tannins. These two products satisfy Note 1(b) to Chapter 29, HTSUS, in that they consist of six isomers of the same compound and several impurities. Therefore, “Silymarin (Silybum Marianum),”and “Silymarin/ET” are properly classified under heading 2932, HTSUS.

The six isomers identified above, silybin A, silybin B, isosilybin A, isosilybin B, silychristin, and silydianin, are aromatic heterocyclic compounds for which the CAS registry number is not listed in the Chemical Appendix. Therefore, “Silymarin (Silybum Marianum),”and “Silymarin/ET” are properly classified under subheading 2932.91.61, HTSUS, which provides for “Heterocyclic compounds with oxygen hetero-atom(s) only: Other: Other: Aromatic: Other: Products described in additional U.S. note 3 to section VI”. See Additional U.S. Note 2(a) and 3 to Section VI, HTSUS.

The product “Silymarin Fitosoma® (Silymarin/Phospholipid)” contains 52% soy phospholipid, which is added to improve the oral bioavailability of the polyphenols. This is not an impurity, and as such, this product does not meet the requirements of Note 1(b) to Chapter 29, HTSUS. Therefore, “Silymarin Fitosoma® (Silymarin/Phospholipid)” is not properly classified under heading 2932, HTSUS.

C. Heading 2106, HTSUS: Food Preparations

Heading 2106, HTSUS, provides for “Food preparations, not elsewhere specified or included”. The terms “food,” “preparation,” and “food preparation” are not defined in the HTSUS. EN 21.06 provides two definitions for the phrase “food preparation”. See EN(A) and EN(B) to 21.06. The first definition for the phrase “food preparation” is “Preparations for use, either directly or after processing … for human consumption”. See EN(A) 21.06. Furthermore, the EN explicitly states that the heading includes “[F]ood supplements, based on extracts from plants …”. See EN(16) to 21.06.

In Orlando Food Corp. v. United States, 140 F.3d 1437, 1441 (Fed. Cir. 1994), the Court of Appeals for the Federal Circuit (CAFC) stated that:

Inherent in the term “preparation” is the notion that the object involved is destined for a specific use. The relevant definition from The Oxford English Dictionary defines “preparation” as “a substance specially prepared, or made up for its appropriate use or application, e.g. as food or medicine, or in the arts or sciences.” (internal citations omitted.)

In their submission dated May 16, 2013, Indena asserts that the instant products “are manufactured for the dietary supplement market.” Specifically, “Leucoselect® (Leucocyanidin)” is marketed as an antioxidant and capillarotropic. “Leucoselect Phytosome® (Leucocyanidin/Phospholipid)” is marketed as a cardiovascular protector, an ultraviolet (UV) protector, and antioxidant. “Silymarin (Silybum Marianum)” is marketed for the promotion of a healthy liver, and as a UV protector and antioxidant. Finally, “Silymarin/ET” and “Silymarin Fitosoma® (Silymarin/Phospholipid)” are both marketed as a UV protector and antioxidant. The products are imported as bulk powder, and encapsulated after importation.

As discussed above, “Silymarin (Silybum Marianum)” and “Silymarin/ET” are properly classified under heading 2932, HTSUS. Therefore, because they are “elsewhere specified or included,” they are excluded from heading 2106, HTSUS.

It is CBP’s position that the “Leucoselect Phytosome® (Leucocyanidin/ Phospholipid),” and “Silymarin Fitosoma® (Silymarin/Phospholipid)”) products are “food preparations.” Each one is a “preparation,” in that they are substances specifically prepared for their appropriate use, by the deliberate mixing with soy lecithin, a nutritive substance. See Orlando Food Corp., 140 F.3d at 1441. Furthermore, they satisfy the definition of “food preparation” in EN(A) to 21.06, because they are used, after encapsulation, directly for human consumption. See also EN(16) to 21.06. Therefore, these three products are classified under heading 2106, HTSUS, specifically under subheading 2106.90.99, HTSUS, which provides for “Food preparations not elsewhere specified or included: Other: Other: Other: Other: Other: Other”.

Furthermore, it is CBP’s position that the “Leucoselect® (Leucocyanidin)” product is not a “food preparation.” Although it is used, after encapsulation, directly for human consumption, it is not a “preparation” under the meaning given by Orlando Food Corp. The “Leucoselect® (Leucocyanidin)” product is a mixture of several purified chemicals. It is not “specially prepared, or made up for its appropriate use or application[.]” As such, it is not properly classified under heading 2106, HTSUS.

D. Heading 3824, HTSUS: Chemical Products and Preparations

The Port classified two products, namely “Leucoselect® (Leucocyanidin)” and “Leucoselect Phytosome® (Leucocyanidin/Phospholipid),” under heading 3824, HTSUS, which provides in pertinent part for “chemical products and preparations of the chemical or allied industries … not elsewhere specified or included.”

Note 1(b) to Chapter 38, HTSUS, specifically excludes “Mixtures of chemicals with foodstuffs or other substances with nutritive value, of a kind used in the preparation of human foodstuffs (generally, heading 2106)[.]” Therefore, if the Leucoselect products meet this definition, they cannot be properly classified under heading 3824, HTSUS.

The General EN to Chapter 38 clarifies this exclusionary note. Although the text of the EN is set out above, it bears repeating here:

The mere presence of “foodstuffs or other substances with nutritive value” in a mixture would not suffice to exclude the mixture from Chapter 38, by application of Note 1 (b). Substances having a nutritive value that is merely incidental to their function as chemical products, e.g., as food additives or processing aids, are not regarded as “foodstuffs or substances with nutritive value” for the purpose of this Note. The mixtures which are excluded from Chapter 38 by virtue of Note 1 (b) are those which are of a kind used in the preparation of human foodstuffs and which are valued for their nutritional qualities.

The “Leucoselect® (Leucocyanidin)” product is a mixture of several pure chemicals. It is not mixed with any foodstuffs or substances with nutritive value. As such, Note 1(b) to Chapter 38, HTSUS, does not operate to exclude this product from heading 3824, HTSUS, specifically under 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: Mixtures containing 5 percent or more by weight of one or more aromatic or modified aromatic substances: Other”. See HQ 967972.

The “Leucoselect Phytosome® (Leucocyanidin/Phospholipid),” product is a mixture of 26% polyphenols and 74% phospholipids. It is a mixture of chemicals and foodstuffs, of a kind used in the preparation of human foodstuffs, as discussed above. As such, it meets the definition contained in Note 1(b) to Chapter 38, HTSUS, and is excluded from heading 3824, HTSUS.

II. Eligibility for Duty-Free Treatment, Under GN 13, HTSUS

Indena argues, in the alternative, that the products the products “Silymarin (Silybum Marianum),” “Silymarin/ET,” and “Silymarin Fitosoma® (Silymarin/ Phospholipid),” are entitled to duty free treatment pursuant to GN 13, HTSUS. CBP notes that the rate of duty of “Free” followed by the symbol “K” in parentheses appears in the “Special” subcolumn for subheading 3824.90.28, HTSUS. Furthermore, CBP notes that the substances silibinin, silicristin, and silidianin are listed in the Pharmaceutical Appendix to the HTSUS.

In HQ 961704, dated October 14, 1998, CBP considered the classification of a mixture glycosides consisting of sennoside A, sennoside B, and their calcium salts. CBP found that the product was properly classified under heading 2938, HTSUS, specifically under subheading 2938.90.00, HTSUS, which includes the duty rate of “Free” followed by the symbol “K” in parentheses in the “Special” subcolumn. The importer asserted that, because Table 3 of the Pharmaceutical Appendix included all four of these chemicals, the mixture was entitled to duty free treatment under GN 13. CBP found that:

A product is not entitled to duty-free treatment unless it is actually listed in the Pharmaceutical Appendix. Despite having each of its component compounds included in the Appendix, this merchandise, a mixture of sennosides, is not itself listed in the Pharmaceutical Appendix. Customs has no statutory authority to expand the Pharmaceutical Appendix. The subject merchandise is therefore not covered by General Note 13 and is not eligible for duty-free entry.

See HQ 961704. See also HQ 963034, dated November 2, 2000; HQ 965479, dated June 24, 2002; BASF Corp. v. United States, 391 F.Supp.2d 1246, 1256 FN7 (Ct. Int’l. Trade 2005), aff’d 482 F.3d 1324 (Fed. Cir. 2007).

In HQ H011012, dated August 20, 2007, CBP again considered whether a mixture consisting of sennoside A, sennoside B, and their calcium salts was eligible for duty free treatment under GN 13. In accordance with Presidential Proclamation 8095, dated December 29, 2006, 72 Fed. Reg. 429 (2007), the Pharmaceutical Appendix was amended to include “mixture of sennoside A and B calcium salts”. See 72 Fed. Reg., at 442. Because the Pharmaceutical Appendix has been specifically modified by Presidential Proclamation (pursuant to 19 U.S.C. §2483) to include the mixture at issue in HQ H011012, CBP found that it was eligible for duty free treatment under GN 13.

Because the products identified in the Pharmaceutical Appendix for duty-free treatment are based on specific, ongoing international negotiations (See 19 U.S.C. §3521(b)), the list should be construed narrowly, as the conduct of foreign relations is committed by the U.S. Constitution to the political departments of the Federal Government. See BASF Corp., 391 F.Supp.2d, at 1256 FN7 (citing United States v. Pink, 315 U.S. 203, 222-23, 62 S.Ct. 552, 86 L.Ed. 796 (1942)). “It is a well-established principle that classification of an imported article must rest upon its condition as imported.” E. T. Horn Company v. United States, 27 C.I.T. 328, 338 (Ct. Int’l. Trade 2003), (citing Carrington Co. v. United States, 497 F.2d 902, 905 (C.C.P.A. 1974), United States v. Baker Perkins, Inc., 46 C.C.P.A. 128, 131 (1959)), aff’d 367 F.3d 1326 (Fed. Cir. 2004).

CBP agrees that the substances silibinin, silicristin, and silidianin are listed in the Pharmaceutical Appendix to the HTSUS. However, the mixture of these isomers, further combined with sugars, phospholipids, and other flavonoids and non-hydrolyzable condensed tannins, is not listed in the Pharmaceutical Appendix. Furthermore, there is no Presidential Proclamation of which CBP is aware that modified the Pharmaceutical Appendix to include mixtures of this type. Because the Pharmaceutical Appendix is meant to be construed narrowly, as discussed above, CBP finds that the products “Silymarin (Silybum Marianum),” “Silymarin/ET,” and “Silymarin Fitosoma® (Silymarin/Phospholipid),” are not entitled to duty free treatment pursuant to GN 13, HTSUS.

HOLDING:

The products identified as “Leucoselect Phytosome® (Leucocyanidin/ Phospholipid),” and “Silymarin Fitosoma® (Silymarin/Phospholipid),” are properly classified under heading 2106, HTSUS, specifically under subheading 2106.90.99, HTSUS, which provides for: ““Food preparations not elsewhere specified or included: Other: Other: Other: Other: Other: Other”. The column one, general rate of duty is 6.4% ad valorem. You are instructed to DENY the protest, except to the extent reclassification of the merchandise as indicated above results in a partial allowance.

The products identified as “Silymarin (Silybum Marianum)” and “Silymarin/ET” are properly classified under heading 2932, HTSUS, specifically under subheading 2932.99.61, HTSUS, which provides for: “Heterocyclic compounds with oxygen hetero-atom(s) only: Other: Other: Aromatic: Other: Products described in additional U.S. note 3 to section VI”. The column one, general rate of duty is 6.5% ad valorem. You are instructed to DENY the protest.

The product identified as “Leucoselect® (Leucocyanidin),” is properly classified under heading 3824, HTSUS, specifically under 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: Mixtures containing 5 percent or more by weight of one or more aromatic or modified aromatic substances: Other”. The column one, general rate of duty is 6.5% ad valorem. You are instructed to DENY the protest.

The products “Silymarin (Silybum Marianum),” “Silymarin/ET,” and “Silymarin Fitosoma® (Silymarin/Phospholipid),” are not eligible for duty-free treatment under GN 13, HTSUS.

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 in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision Regulations and Rulings of the Office of International Trade 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