CLA-2 RR:CR:GC 960017K
Mr. Beat Herrman
Max Felchlin Inc., Schwyz
Banhofstrasse 63
6430 Schwyz, Switzerland
RE: Tariff Classification of Confectioners Coating; FE51E Ultra
White; Modification of New
York Ruling Letter (NYRL) A80434
Dear Sir:
In response to your letter dated February 13, 1996, the
Customs Service issued NYRL A80434, dated March 6, 1996, which
held that one of the articles, a certain confectioners coating
from Switzerland known as FE51E Ultra White, was classified in
subheading 2106.90.8200, Harmonized Tariff Schedule of the United
States (HTSUS) (1996), as food preparations not elsewhere
specified or included...other...containing over 10 percent by
weight of other milk solids...other...other, with duty at the
general rate of 8.8 percent ad valorem.
This letter is to inform you that NYRL A80434 no longer
reflects the views of the Customs Service and is modified in
accordance with section 177.9(d) of the Customs Regulations (19
CFR 177.9(d)). Pursuant to section 625, Tariff Act of 1930 (19
U.S.C. 1625), as amended by section 623 of Title VI (Customs
Modernization) of the North American Free Trade Agreement
Implementation Act, Pub. L. 103-182, 107 Stat. 2057, 2186 (1993),
notice of the proposed modification of NYRL A80434 was published
on June 17, 1998, in the Customs Bulletin, in Volume 32, No. 24.
No comments were received in response to the notice.
FACTS:
FE51E Ultra White is described as a pale white solid
material, composed of 40 percent sugar, 37 percent vegetable fat,
12 percent skimmed milk powder, 6 percent dextrose, 5 percent
whole milk powder, and trace amounts of lecithin and vanillin.
The product was put up in 2-kilogram bars, and sold to pastry
chefs and confectioners, to be used as a coating for their wares.
ISSUE:
Whether a confectioners coating, FE5IE Ultra White, is
more specifically provided for in subheadings 2106.90.64 and
2106.90.66, HTSUS, rather than in subheading 2106.90.8200, HTSUS.
LAW AND ANALYSIS:
Additional U.S. Note 1 of Chapter 4, HTSUS, states that:
For the purposes of this schedule, the term "dairy
products described in additional U.S. note 1 to chapter 4"
means any of the following goods: malted milk, and articles
of milk or cream (except (a) white chocolate and (b)
inedible dried milk powders certified to be used for
calibrating infrared milk analyzers); articles containing
over 5.5 percent by weight of butterfat which are suitable
for use as ingredients in the commercial production of
edible articles (except articles within the scope of other
import quotas provided for in additional U.S. notes 2 and 3
to chapter 18); or, dried milk, whey or buttermilk (of the
type provided for in subheadings 0402.10, 0402.21, 0403.90
or 0404.10) which contains not over 5.5 percent by weight of
butterfat and which is mixed with other ingredients,
including but not limited to sugar, if such mixtures contain
over 16 percent milk solids by weight, are capable of being
further processed or mixed with similar or other ingredients
and are not prepared for marketing to the ultimate consumer
in the identical form and package in which imported.
Subheadings 2106.90.64 and 2106.90.66, HTSUS, provide for
food preparations not elsewhere specified or provided for, other
dairy products described in Additional U.S. Note 1 to Chapter 4.
A "dairy product described in Additional U.S. Note 1 to Chapter
4" may be an article falling into any of three classes of
merchandise described therein: malted milk and articles of milk
or cream, certain articles containing over 5.5 percent butterfat,
and, what is relevant here, "dried milk, whey or buttermilk (of
the type provided for in subheadings 0402.10, 0402.21, 0403.90,
or 0404.10) which contains not over 5.5 percent by weight of
butterfat and which is mixed with other ingredients, including
but not limited to sugar, if such mixtures contain over 16
percent milk solids by weight, are capable of being further
processed or mixed with similar or other ingredients and are not
prepared for marketing to the ultimate consumer in the identical
form and package in which imported." FE51E Ultra White falls
into this third category of articles.
FE51E Ultra White is composed of dried skimmed milk powder,
a product of subheading 0402.10, that is mixed with other
ingredients. It contains over 16 percent milk solids by weight
(12 percent skimmed milk powder and 5 percent whole milk powder),
is capable of being further processed or mixed with similar or
other ingredients, and is not prepared for marketing to the
ultimate consumer in the identical form and package in which
imported. The terms "capable of being further processed...",
"prepared for marketing to the ultimate consumer...", and
"ultimate consumer", are defined in Section IV, Additional U.S.
Notes 2(b), (c), and (d), HTSUS. Those definitions are
applicable for FE51E Ultra White. The product is "capable of
being further processed..." because it is a solid material, and
must be heated to change it to a fluid consistency before it be
used. It is, therefore, "in such condition...as to be subject to
any additional preparation, treatment or manufacture...". It is
not prepared for marketing to the ultimate consumer because it
will be sold to pastry chefs and confectioners, neither of which
are considered an "ultimate consumer" by Section IV, Additional
U.S. Note 2(d), HTSUS.
Subheadings 2106.90.64 and 2106.90.66 fall under the
superior heading for "other, dairy products described in
Additional U.S. Note 1 to Chapter 4." In contrast, 2106.90.82,
is the residual subheading under an "other...other" subheading.
Clearly, 2106.90.64 and 2106.90.66 are the more demanding, and
therefore more specific tariff provisions. If the product meets
the requirements for classification in either of these two
subheadings, it must be classified there and we believe that it
does.
HOLDING:
FE51E Ultra White, as described, is classified as other food
preparations not elsewhere specified or included, other dairy
products containing over 10 percent by weight of milk solids, in
subheading 2106.90.64, HTSUS, if within the quantitative
limitations of Additional U.S. Note 10 to Chapter 4, with a 1998
general rate of duty of 10 percent ad valorem. If the
quantitative limitations of the Note have been reached, the
product is classified in subheading 2106.90.66,
HTSUS, with duty at the general rate of 78.7 cents per kg, plus
9.5 percent ad valorem.
NYRL A80434 is modified.
In accordance with 19 U.S.C. 1625, this ruling will become
effective 60 days after its publication in the Customs Bulletin.
Publication of rulings or decisions pursuant to 19 U.S.C. 1625
does not constitute a change of practice or position in
accordance with section 177.10(c)(1), of the Customs Regulations
(19 CFR 177.10(c)(1)).
Sincerely,
John Durant, Director
Commercial Rulings Division
Office of Regulations and Rulings