CLA-2 RR:CR:GC 959191 RC/JGB
Port Director of Customs
1000 2nd Avenue, Room 2200
Seattle, Washington 98104
RE: Protest 3004-96-100122, seafood extract powders
Dear Sir:
This is our decision on Protest 3004-96-100122 timely filed February 14, 1996, against your decision in the classification of various seafood extract powders under the Harmonized Tariff Schedule of the United States (HTSUS). The products were entered in 1994. On June 10, 1997, counsel for the protestant met with headquarters personnel to discuss this matter. On August 28, 1997, counsel submitted additional information.
FACTS:
The natural seafood extract powder products consist of Codfish Extract Powder, Anchovy Extract Powder, Lobster Extract Powder, Crab Extract Powder, Shrimp Extract Powder, Plankton Extract Powder, and Baby Clam Extract Powder. The extract powders were entered under various subheadings in chapter 3, HTSUS, as other flours, meals and pellets of aquatic invertebrates other than crustaceans, fit for human consumption. Customs liquidated the entries as edible preparations, not elsewhere specified or included in subheading 2106.90.6999, HTSUS. The protestant claims that the seafood extract powders are all classifiable in subheading 1603.00.9090, HTSUS, the provision for other extracts and juices of meat, fish, or crustaceans, molluscs, or other aquatic invertebrates or, in the alternative, in chapter 3, HTSUS,
The products are described by the protestant in the aggregate as seafood and are claimed to contain approximately 40 percent by weight of seafood, approximately 30 percent by weight
of salt, and 35 percent by weight of cornstarch. In addition, rather elaborate explanations have been provided to account for the preservative qualities of the added salt and the use of the cornstarch. The stated preservative function of the salt is not disputed here. The cornstarch is said to “function as an encapsulator and to reduce viscosity in order to avoid stick water, oil/fat, salt and water to separate during the continuation of the production process.” Protestant’s memorandum of August 28, 1997. This function is also not in dispute; however, there is a dispute as to whether, as the protestant states, “[I]n combination with the salt, the cornstarch preserves the seafood extract from getting decomposed and spoiled by decomposition.” Id. The function of these ingredients will determine in part in which chapter the powders will be classified.
ISSUE:
Whether the seafood extract powders are properly classifiable in chapter 3, 16, or 21 under the HTSUS.
LAW AND ANALYSIS:
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRI's). The systematic detail of the HTSUS is such that virtually all goods are classified by application of GRI 1, that is, 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's may then be applied. The Harmonized Commodity Description and Coding System Explanatory Notes (EN’s), which represent the official interpretation of the tariff at the international level, facilitate classification under the HTSUS by offering guidance in understanding the scope of the headings and GRI's. See, T.D. 89 80, 54 Fed.Reg. 35127 (August 23, 1989).
With regard to the Chapter 16, HTSUS, claim, Note 2 to chapter 16 states:
(2) Food preparations fall in this chapter provided that they contain more than 20 percent by weight of sausage, meat, meat offal, blood, fish or crustaceans, molluscs or other aquatic invertebrates, or any combination thereof. In cases where the preparation contains two or more of the products mentioned above, it is classified in the heading of chapter 16 corresponding to the component or components which predominate by weight.
The ENs to heading 1603 in defining fish extracts note that they may “contain salt or other substances added in sufficient quantities to ensure their preservation.” Fish extracts are prepared by concentrating water extracts of fish flesh and using salt as a preservative. However, the ENs to heading 1603 state that the heading does not cover:
(a) Soups and broths and preparations therefor and homogenised composite food preparations containing meat, fish, etc., extract (including soups and broths in the form of tablets or cubes) which in addition to such products contain other substances such as fat, gelatin and usually a large proportion of salt (heading 21.04).
In considering the appropriateness of classification in either chapter 16 or 21, we look primarily to the content of the various seafood extracts. The initial question is whether the product is truly an extract. The Court of International Trade in Marcor Development Corporation v. U.S., 20 CIT __, Court No. 94-08-00456, Slip Op. 96-71 (May 3, 1996), dealt with the question what constitutes an extract and concluded that “an extract must maintain the essence of the main source.” Id. Slip Opinion at 13. While Marcor clearly involved a different product (52 to 60 percent shark cartilage and 40 to 48 percent dextrin), there are also some instructive parallels. The court found that the product was not an extract, because even with the predominance of shark cartilage, the added dextrin rendered the product as something that did not maintain the essence of the main source. The persuasive sense from Marcor is that the product failed as an extract first because it had gone beyond the purity required of an extract and second because the product was used as a food supplement and not as a flavoring. With respect to the product under consideration here, they fail as extracts due to their additional ingredients; although they are claimed to be used as flavorings.
We note that all of the extracts contain significant amounts of salt (approximately 30 percent) and varied amounts of cornstarch. While the protestant’s counsel submitted that the
crab extract, in fact, contains 27 percent salt, we consider the variance of 3 percent to be inconsequential. Furthermore, it is immaterial what the salt content is during processing prior to the time of importation. At the time of importation, the extracts contain approximately 30 percent salt. Classification is based upon the condition of an article at the time of importation. See, U.S. v. Citroen, 223 U.S. 407 (1911).
We find that a salt content of approximately 30 percent is a large proportion, far in excess of an amount needed to “ensure preservation.” Counsel for the protestant indicates that similar seafood extracts, used for the same commercial purposes, generally have a shelf life of about 18 months. The protestant’s company processes the seafood extracts in such a way as to increase the shelf life to 40 months. We find that any endeavor to extend the standard retail shelf life (from 1-1/2 year to almost 3-1/2 years) by, among other things, increasing the salt content up to approximately 30 percent, goes beyond what is necessary to ensure preservation of these products by measure of prevailing commercial practices.
In noting that the amount of salt is in excess of what is expected for this type of product, we are not doubting that the salt operates as a preservative or questioning whether longer shelf life may be desirable in some circumstances. In most cases, how an importer makes his product is only of concern to Customs in order to confirm a correct classification. Here we are presented with an EN that addresses a relatively pure product, an extract, and sets forth those limited conditions under which another substance may be combined with the essential product and still retain its identity as an extract. The EN to heading 1603 sets out the types of products included and then states, “[a]ll these products may contain salt of other substances added in sufficient quantities to ensure their preservation.” The only interpretation that can be made from this note in context is that “salt and other substances” do not disqualify a pure product from classification as an extract, provided that the amount present is reasonably sufficient to ensure preservation. Here, because the salt present far exceeds what would be expected for preservation, the products fail to qualify for classification in Chapter 16.
With respect to the claim that the significant amounts of cornstarch (on average approximately 30 percent) is important to the preservation process, we find that it serves principally as a thickening agent, rather than as a preservative. We also do not dispute the description of the usefulness of the cornstarch; however, the cornstarch serves to hold the mixture together so that it will not lose its desired consistency. While it may “preserve” the condition of the material and keep it from falling out, preserve in the food context generally means to delay or retard spoilage.
As food preparations precluded from classification as extracts, proper classification is in the residual provision of heading 2106, “Food Preparations Not Elsewhere Specified or Included.” Customs has consistently ruled that similar products are classifiable in chapter 21, based upon their content at the time of importation. See, Headquarters Ruling Letter (HRL) 959149, dated August 9, 1996; HRL 954142, dated October 5, 1993; New York Ruling Letter (NYRL) 893280, dated January 19, 1994; NYRL 857248, dated December 24, 1990. We find, given the substantial amount of salt and the various amounts of cornstarch, that these products fail to meet the standards of extracts as provided by the Court of International Trade and the EN’s and are properly classified in chapter 21.
While the protestant submitted information to support the claim that these products would be properly classified in chapter 16, none was submitted to support the claim that these products would be properly classified in chapter 3. There is no evidence that the products are either agglomerated or ground. Lastly, the products are not marketed as either fish flour or meal. Therefore, we find no basis for considering these products in chapter 3. See, Nadel & Sons Toy Corp. v. U.S., 4 CIT 20, 22 (1982)(manner of a product’s marketing is a factor to be considered in determining proper classification).
HOLDING:
The seafood extract powders are classifiable as other food preparations not elsewhere specified or included, in subheading 2106.90.6999, HTSUS.
The protest should be DENIED. In accordance with Section
3A(11)(b) of Customs Directive 099 3550 065, dated August 4,1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs 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 of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.ustreas.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
John Durant, Director
Commercial Rulings Division