OT:RR:CTF:CPMM H291205 CKG
Port Director
U.S. Customs and Border Protection
1600 Airport Drive
Great Falls, MT 59404
RE: Application for Further Review of Protest No. 3304-2016-100020; classification of
soil supplement
Dear Port Director:
This is in reply to the Application for Further Review (AFR) of Protest No. 3304-2016-100020 dated July 01, 2016, on behalf of Raeburn & Associates, LTD (“Protestant”), contesting the classification and liquidation by U.S. Customs and Border Protection (CBP) of nine entries of a nutrient soil supplement for plants in heading 3824, HTSUS, as a chemical product not elsewhere specified or included.
The subject merchandise was entered between June 16, 2014, and April 16, 2015 in heading 3105, HTSUS, which provides for “Mineral or chemical fertilizers containing two or three of the fertilizing elements nitrogen, phosphorus and potassium; other fertilizers; goods of this chapter in tablets or similar forms or in packages of a gross weight not exceeding 10 kg.” The entries were liquidated between January 8, 2015, and February 5, 2016, in heading 3824, HTSUS. Protestant now claims classification in heading 3101, HTSUS, which provides for “Animal or vegetable fertilizers, whether or not mixed together or chemically treated; fertilizers produced by the mixing or chemical treatment of animal or vegetable products.”
FACTS:
The product at issue is identified as “Hibrix Soil Supplement”, which is applied to
soil to improve the transfer and uptake of nutrients to plants. It consists of a liquid
mixture of plant material, vitamins and salts, which is fermented to provide “a microbial
feed with a balance range of natural organic chelators, kelps, saccharides, proteins,
vitamins, plant hormones and organically bound elements that reduce the use of
fertilizers.”
Specifically, the typical components of Hibrix are either natural plant sources (possible species used include, Saccharurum officarum, S. babari, S. sincense and/or S. edule; Ascophyllum, Durvillea and/or Graciliaria species; Aloe barbadensis and Medicago sativa) and microbial factors derived from fermenting (not deliberately added) with various yeasts species such as Monilla, Mycotorurla, Saccharomyses, Torula, Torulaopsis and Zygososaccharomyces.
The manufacturing process starts with dissolving salts into water. While the solution is agitated, two kelps are added, then liquid molasses is added and then vitamins. The liquid product is then agitated for 2 hours before being filtered and decanted into 1000 or 20 litre containers. The final product contains trace amounts of potassium (2900 ppm), phosphorous (42 ppm) and nitrogen (670 ppm).
ISSUE:
Whether the Hibrix soil supplement is a fertilizer of heading 3101, HTSUS, or a chemical product not elsewhere specified or included 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. 3304-2016-100020 was properly accorded to protestant pursuant to 19 C.F.R. § 174.24(a) because the decision against which the protest was filed is alleged to involve questions of law or fact which have not been ruled upon by the Commissioner of Customs or his designee or by the Customs courts.
Merchandise is classifiable under the HTSUS in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that classification shall be determined according to the terms of the headings 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 or notes do not require otherwise, the remaining GRIs 2 through 6 may be applied.
The HTSUS provisions under consideration are as follows:
3101: Animal or vegetable fertilizers, whether or not mixed together or chemically treated; fertilizers produced by the mixing or chemical treatment of animal or vegetable products
3105: Mineral or chemical fertilizers containing two or three of the fertilizing elements
nitrogen, phosphorus and potassium; other fertilizers; goods of this chapter in tablets or similar forms or in packages of a gross weight not exceeding 10 kg:
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:
Note 6 to Chapter 31 provides:
For the purposes of heading 3105, the term "other fertilizers" applies only to products of kind used as fertilizers and containing, as an essential constituent, at least one of the fertilizing elements nitrogen, phosphorus or potassium.
The General EN to Chapter 31 provides, in pertinent part:
This Chapter covers most products in general use as natural or artificial fertilisers.
On the other hand, the Chapter does not cover products which improve rather than fertilise the soil, …
This Chapter also excludes micronutrient preparations which are applied to seeds, to foliage or to soil to assist in seed germination and plant growth. They may contain small amounts of the fertilising elements nitrogen, phosphorus and potassium, but not as essential constituents (e.g., heading 38.24).
It also excludes prepared plant growing media such as potting soils, based on peat or mixtures of peat and sand or of peat and clay (heading 27.03) and mixtures of earth, sand, clay, etc. (heading 38.24). All these products may contain small quantities of the fertilising elements nitrogen, phosphorus or potassium.
EN 38.24 further specifies, in pertinent part, that the heading covers:
(47) Mixtures used as plant growing media, such as potting soils,
consisting of products classifiable in Chapter 25 (earth, sand, clay), whether or not they contain small quantities of the fertilising elements nitrogen, phosphorus or potassium.
* * * *
Protestant claims classification of the instant product in heading 3101, HTSUS, as a vegetable fertilizer. Like fertilizers, the Hibrix solution supplements the nutrients naturally available in the soil to aid in plant growth. However, not all nutrient preparations aiding in plant growth are considered fertilizers for the purposes of classification in Chapter 31. In fact, the ENs and Chapter Notes make an important distinction between fertilizers and other nutrient preparations designed to aid in plant growth. The General Explanatory Note to Chapter 31 states that “the Chapter does not cover products which improve rather than fertilise the soil”, and specifically excludes “micronutrient preparations which are applied to seeds, to foliage or to soil to assist in seed germination and plant growth. They may contain small amounts of the fertilising elements nitrogen, phosphorus and potassium, but not as essential constituents.” Similarly, Note 6 to Chapter 31, in reference to heading 3105, states that “the term "other fertilizers" applies only to products of a kind used as fertilizers and containing, as an essential constituent, at least one of the fertilizing elements nitrogen, phosphorus or potassium.” (emphasis added). The reference to “essential constituents” in the General Explanatory Note ties it directly to Note 6. Moreover, the Explanatory Note to heading 38.24 specifies that heading covers “Mixtures used as plant growing media, such as potting soils, consisting of products classifiable in Chapter 25 (earth, sand, clay), whether or not they contain small quantities of the fertilising elements nitrogen, phosphorus or potassium.”
While the Explanatory Notes can neither expand nor limit the scope of a heading, they can and do define terms, and they constitute the official interpretation of the Harmonized System. In this case, they seek to define the term “fertilizer” for the purposes of Chapter 31. Reading the Explanatory and Chapter Notes together, it is clear that fertilizers of Chapter 31 are limited to those products which contain nitrogen, potassium or phosphorous as “essential constituents”. See e.g., New York Ruling Letter (NY) N257882, dated October 30, 2014.
In the instant case, the Hibrix Soil Supplement contains only trace amounts of potassium, nitrogen, or phosphorous; as these nutrients constitute only a small percentage of the overall composition of the Hibrix supplement, they are not “essential constituents.” The Hibrix supplement thus falls under the exclusion for “micronutrient preparations”, which are classified in heading 3824, HTSUS.
Classification in heading 3824 is also consistent with the conclusion reached by the World Customs Organization in two classification opinions concerning similar nutritional preparations for plants: CO 382499/13 (“Liquid micronutrient preparation for plants”) and CO 382499/17 (“Liquid nutrient preparation for plants”,) in which similar nutrient preparations for plants were classified in heading 3824, HTSUS by vote of a majority of member countries.
HOLDING:
By application of GRIs 1 and 6, the Hibrix Soil Supplement is classified in heading 3824, HTSUS, specifically subheading 3824.99.92, 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: Other: Other.” The 2016 column one, general rate of duty is 5% ad valorem.
You are instructed to deny the protest in full.
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 online 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