CLA-2 OT:RR:CTF:TCM HQ H237599 NCD
Port Director, Service Port – Otay Mesa
U.S. Customs and Border Protection
9777 Via De La Amistad
San Diego, CA 92154
Attn: Joanne Mattingly, Import Specialist
Re: Protest and Application for Further Review No: 2506-12-100077; bergamot extract powder
Dear Port Director:
The following is our decision regarding Protest and Application for Further Review No. 2506-12-100077, timely filed on September 20, 2012, on behalf of Meri Cal, Inc., (“Protestant”) regarding the tariff classification of bergamot extract powder under the Harmonized Tariff Schedule of the United States (HTSUS).
FACTS:
The subject merchandise consists of a powdered extract obtained from the dried fruit of the Bergamot orange (“bergamot extract powder”). It is imported in the form of a light yellow amorphous powder to be used as a raw material in the formulation of dietary supplements.
According to the Protestant’s submissions, the subject bergamot extract powder is derived from the juice of fresh Bergamot oranges that have been peeled, pressed, and subjected to a number of processes. The production process is as follows:
After initial peeling and pressing, water is added to the Bergamot juice for the purpose of separating fiber from the fruit, in effect producing a cloudy juice that is rich in soluble polyphenol components and solid fiber material.
This juice then undergoes processing entailing separation of pulp content through centrifugation, reduction of microbial content through pasteurization, reduction of essential oils through a vacuum evaporation process, and clarification through natural sedimentation and ultrafiltration.
The juice is then subjected to “selective chromatographic absorption by membrane separation,” as part of an undefined “patented extraction process.”
The remaining clear juice is concentrated through use of a Thermally Accelerated Short Time Evaporator (“T.A.S.T.E.”) to a 40-50 brix concentrate.
The juice concentrate is diluted with ethanol at a 1:1 ratio to enable dehydration of the concentrate at a low temperature, and is spray dried with nitrogen.
The remaining dry extract is packaged in air-tight plastic bags.
Protestant’s submission included a statement certifying that the subject merchandise, as of its production in September 2011, boasts an active ingredient strength of 39.50% derived in part from 9.4% total neoeriocitrin content, 8.4% total naringin content, 10.7% total neohesperidin content, 1.5% total melitidine content, and 3.0% total bruteridine content. Protestant also proffered product specifications stating that the product contains 25% total bioflavonoids, of which 23% is neoeriocetrin (i.e., 5.75% of product), 25% is naringin (i.e., 6.25% of product), and 29% is neohesperidin (7.25% of product), and equating this 25% bioflavonoid content to 25% active strength. Notably, neither of these submissions reported polyphenol content in the subject merchandise.
The merchandise was also analyzed by a U.S. Customs and Border Protection (“CBP”) laboratory, which found that the merchandise, in dry form, is comprised 16.22% of polyphenols (although the actual polyphenol content may be as high as 40% due to overlap with other compounds), 33.90% of bioflavonoids (including 9.32% neoeriocitrin, 12.42% naringin, and 12.16% neohesperidin), and of a number of other compounds, including flavor and fragrance compounds, essential oils, fatty acids, and sugars. Such high levels of bioflavonoids were not attained through extraction, and other citric extracts contain significantly lower levels of bioflavonoids. By way of example, an orange extract referenced by the lab contains 0.025% hesperidin, while a grapefruit extract contains 0.042% naringin. The laboratory has accordingly found that the principal character of the subject merchandise is that of an “extract enriched in bioflavonoids and polyphenols.”
The subject merchandise was entered on April 4, 2012 in subheading 1106.20.90, HTSUS, as “Flour, meal and powder of the dried leguminous vegetables of heading 0713, of sago or of roots or tubers of heading 0714 or of the products of chapter 8: Of sago or of roots or tubers of heading 0714: Other.” It was liquidated on May 25, 2012, 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.” Protestant now claims classification in subheading 1302.19.91, HTSUS, which provides for “Vegetable saps and extracts; pectic substances, pectinates and pectates; agar-agar and other mucilages and thickeners, whether or not modified, derived from vegetable products: Other: Other.”
ISSUE:
Whether the subject merchandise is properly classified as an extract under heading 1302, HTSUS, or as a chemical product under heading 3824, HTSUS?
LAW AND ANALYSIS:
As a threshold matter, we note that 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. (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. 2506-12-100077 is properly accorded to Protestant pursuant to 19 C.F.R. § 174.24(b) because Protestant alleges that the specific circumstances of this protest have not been ruled by the Commissioner of Customs or his designee or the Customs courts.
Merchandise imported into the United States 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 which 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 for all purposes.
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 their appropriate order.
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:
1302.19.91 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:
3824.90.28 Other
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 these headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
At the outset, we note that the subject merchandise can only be classified under 3824, HTSUS, if it is not more specifically classifiable elsewhere in the Nomenclature. See Cargill, Inc. v. United States, 318 F. Supp. 2d 1279, 1278-88 (Ct. Int’l. Trade 2004). Accordingly, we first consider whether the bergamot extract powder falls under the scope of heading 1302, HTSUS.
Heading 1302, HTSUS, covers vegetable extracts. EN 13.02 provides, in relevant part, as follows:
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).
In multiple rulings, CBP has summarized its long-standing interpretation of EN 13.02 as follows:
[T]here 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. Likewise, quassin, a chemical compound extracted and refined from the quassia amara shrub is classified in Chapter 29. Papain enzyme, once purified from the extraction process of papaw juice, is classified as an enzyme of Chapter 37. And polymers extracted and refined from cashew nut shell liquid are classified in Chapter 39 as polymers.
HQ W968424, dated December 19, 2006, and HQ W967214, dated April 4, 2006; see also HQ H106785, dated October 14, 2010 (“CBP has determined that extensive processing can exclude a product from 1302.”); and HQ 965030, dated May 20, 2002 (“Substances obtained from a plant are not considered ‘vegetable extracts’ if they only contain one ingredient divorced from the composition of the vegetable source.”).
Consistent with this interpretation, we have regularly excluded from heading 1302 products that, owing to the application of one or more purification processes that extend beyond traditional extraction methods, are inordinately pure in chemical content. For example, in HQ W967214, we ruled that a powder comprised 80% of mogroside was not covered by 1302 where the powder had undergone cation exchange resin and centrifugation. Similarly, in HQ 966566, dated October 21, 2003, we excluded from 1302 a beige powder whose subjection to re-dissolution in ethyl acetate and precipitation in chloroform resulted in 90% oligomeric proanthocyanidin (OPC) content. See also HQ 966448, dated July 9, 2004 and HQ 965030, dated May 20, 2002. Key in this line of rulings is that the inordinately high purity in the various merchandise at issue was indicative of the use of purification methods to target certain compounds. See, e.g., HQ H061203, dated August 12, 2010 (“It is thus the opinion of this office that phenolic compounds are targeted and further concentrated in the extraction and purification process, resulting in a relatively pure chemical product that can no longer be considered a simple extract of heading 1302, HTSUS.”); see also HQ W968424 (“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.”).
In the present case, analysis by the CBP laboratory reveals that the merchandise contains 33.90% total bioflavonoid content and up to 40% polyphenol content, while Protestant has variously reported 25% and 28.5% bioflavonoid content in its submissions. These discrepancies among the CBP laboratory analysis, Protestant’s certifications, and Protestant’s “Confidential Products Specification” remain unexplained. It is “well settled that the methods of weighing, measuring, and testing merchandise used by customs officers and the results obtained are presumed to be correct.” Aluminum Company of America v. United States, 60 C.C.P.A. 148, 151, 477 F.2d 1396, 1398 (1973) (“Alcoa”). Absent a conclusive showing that the testing method used by the CBP laboratory is in error, or that the Customs’ laboratory results are erroneous, there is a presumption that the results are correct. See Exxon Corp. v. United States, 462 F. Supp. 378, 81 Cust. Ct. 87, C.D. 4772 (1978). “If a prima facie case is made out, the presumption is destroyed, and the Government has the burden of going forward with the evidence.” Alcoa, 477 F.2d at 1399; American Sporting Goods, 27 C.I.T. 450, 456 (Ct. Int'I Trade 2003). Protestant has not submitted evidence indicating that the methodology employed or the results obtained by the CBP laboratory in its analysis were erroneous. Accordingly, we accept as accurate the description of the subject merchandise contained in the laboratory report.
By any measure, however, the subject merchandise contains inordinately high levels of bioflavonoids and, according to the CBP laboratory, polyphenols. While 25-33.90% bioflavonoid content is lower than that of the mogroside and OPCs in the aforementioned rulings, it is nevertheless exceptionally high compared to the levels of bioflavonoids in normal citric extracts. For example, assuming arguendo that the product contains only 6.25% naringin, this represents a near 150-fold increase over the trace amounts of the compound present in the CBP’s laboratory representative grapefruit extract. Similarly, the 7.35% neohesperidin content reported by Protestant in its certification is nearly 300 times higher than the content of hesperidin in the CBP laboratory’s orange extract sample.
In addition to this high degree of purity, the nature of the merchandise’s “extraction” is highly indicative of purification. Among processes such as centrifugation, ultrafiltration, and concentration that are far removed from traditional extraction methods, the subject merchandise has undergone a “patented extraction process” consisting of “chromatographic adsorption by membrane separation.” We have previously deemed chromatography a method used solely for purification whose application to a product supports exclusion of the product from heading 1302. See HQ H061203; and HQ 966448, dated July 9, 2004. Our recent research reinforces this position, insofar as it confirms that chromatography is used to separate organic material for the purpose of obtaining a high degree of purity in the final product. See Biopolymer Engineering in Food Processing 219-20 (Vania Regina Nicoletti Telis, ed., CRC Press 2012); Robert J. Hurtubise, Encyclopedia of Chromatography 21 (Jack Cazes, ed., Taylor & Francis Group 2d. ed. 2005). Moreover, other extraction processes that incorporate a chromatography stage do so strictly for purification purposes. See, e.g., U.S. Patent No. 8,968,811 (describing hydroxytrosol containing extract obtained from olives and solids containing residues of olive oil extraction).
This use of chromatography, a purification step, coupled with the aforementioned high degree of bioflavonoid purity in the subject merchandise, leads us to conclude that the merchandise has undergone the type of compound “targeting” that renders it unclassifiable under heading 1302. Protestant’s own submissions support this conclusion, insofar as they describe bioflavonoids as constitutive of the active ingredients in the product. We have previously found that an inordinately high content of the exact compound(s) that impart the commercial value of a product is indicative of targeting of these compounds. See HQ H061203. Accordingly, we find that the subject merchandise is not prima facie classifiable under heading 1302.
In asserting classification of the subject merchandise under 1302, Protestant cites New York Ruling Letter (NY) R02537, dated September 19, 2005, in which CBP classified a powdered product used as a raw material in dietary supplements under heading 1302. However, that case is distinguishable from the present one, insofar as the product in R02537 was not subjected to chromatography or other purification processes, and was comprised only 6% of active ingredient synephrine.
Having excluded the subject merchandise from heading 1302, we now consider whether it is classifiable under heading 3824. Heading 3824 provides for “chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included.” General Note 1 to Chapter 38 provides, in relevant part, that “[t]his Chapter…does not cover chemically defined elements or compounds (usually classified in Chapter 28 or 29…” Additionally, EN 38.24 states, in pertinent part, as follows:
(B) CHEMICAL PRODUCTS AND CHEMICAL OR OTHER PREPARATIONS
With only three exceptions… this heading does not apply to separate chemically defined elements or compounds.
The chemical products classified here are therefore products whose composition is not chemically defined, whether they are obtained as by-products of the manufacture of other substances (this applies, for example, to naphthenic acids) or prepared directly.
The chemical or other preparations are either mixtures (of which emulsions and dispersions are special forms) or occasionally solutions…
In practice, CBP has designated only products consisting predominately, if not entirely, of single organic compounds as “separate chemically defined compounds.” Compare HQ 966448, dated July 9, 2004 (excluding extracts containing between 6% and 30% alkaloids as well as maltodextrin and ash from heading 2939) with HQ 967971, dated March 2, 2006 (classifying extract with 80% silymarin content in heading 2932 on the grounds that remaining 20% content, comprised of starting material and solvent, constituted permissible impurities); see also HQ W968424, dated December 19, 2006. Where a product lacks the requisite purity of a separate chemically defined compound for purposes of classification in Chapter 29, and is not described by heading 1302 or any other provision of the HTSUS, it is properly classified in heading 3824. See HQ W968424 (“We consider this the correct classification for Enzogenol® because that product is purified from the plant matter well beyond that of an extract, yet it does not contain a separate chemically defined compound, or isomers of such a compound, as necessary for classification in Chapter 29, HTSUS.”); see also HQ 966566; and HQ 959099.
In the instant case, the subject merchandise is, at most, comprised 40% of various polyphenols and 33.90% of various bioflavonoids, with possible overlap among these contents. Thus, as in in HQ 966448 and unlike in HQ 967971, no single compound predominates the composition of the merchandise to the extent that the remaining compounds can be considered impurities. Instead, the merchandise contains a relatively heterogeneous mixture of various compounds that lacks chemical definition. Accordingly, it is not a “separate chemically defined compound” for Chapter 29 purposes; rather, it is correctly described as a chemical product “whose composition is not chemically defined.” As the merchandise is not described more specifically by heading 1302, as discussed above, or by any other provision of the HTSUS, it is consequently classified in heading 3824 as a chemical product of the allied industries consisting of a mixture of natural products.
In contesting classification under 3824, Protestant repeatedly states that “[t]he relevant portion of Heading 3824, HTSUS, referring to 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.” Protestant concludes that because “there is no additional substance added to this product to give it the characteristics of a finished food preparation or medicament,” it is not excluded from heading 1302 and therefore cannot be classified in heading 3824 as “not elsewhere specified or included.” However, we disagree with Protestant’s narrow interpretation of heading 3824, as the heading, by all indications, applies equally to chemically engineered mixtures and naturally-occurring ones.
By its own terms, Heading 3824 indisputably covers chemical preparations and products consisting of “mixtures of natural products.” Because the term “mixture” is not defined in the Nomenclature, section notes, or chapter notes, it must be construed in accordance with its common meaning. Mita Copystar Am. v. United States, 21 F.3d 1079, 1082 (Fed. Cir. 1994). Hawley’s Condensed Chemical Dictionary defines “mixture” as follows:
Mixture. A heterogeneous association of substances that cannot be represented by a chemical formula. Its components may or may not be uniformly dispersed and can usually be separated by mechanical means. Liquids that are uniformly dispersed are called solutions. Mixtures may be natural or artificial...
852 (15th ed. 2007). Put another way, mixtures may occur either naturally or by design, so long as they are so heterogeneous as to lack chemical definition. Consistent with this, both CBP and the Court of International Trade have held naturally-occurring mixtures and engineered mixtures alike to be within the ambit of heading 3824 as chemically heterogeneous, and thus chemically “undefined,” products. See, e.g., Rhodia, Inc. v. United States, 441 F. Supp. 2d 1368, 1372, 1379 (Ct. Int'l Trade 2006) (holding that mixture of rare earth carbonates was classified in heading 3824 where production of the mixture did not include the addition of non-naturally-occurring compounds); see also HQ W968424 (classifying un-augmented pine bark extract in heading 3824). We see no reason to break with this well-founded CBP and CIT precedent in classifying the instant merchandise, and are accordingly unconvinced that the merchandise falls outside the scope of heading 3824.
HOLDING:
By application of GRI 1, the subject bergamot extract is classified in heading 3824, HTSUS. Specifically, it is 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: Mixtures containing 5 percent or more by weight of one or more aromatic or modified aromatic substances: Other.” The general column one rate of duty is 6.5% 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 internet at www.usitc.gov/tata/hts/.
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 website 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