CLA-2 RR:CR:GC 960419 RC
Scott M. Deutchman, Esq.
Hogan & Hartson L.L.P.
555 Thirteenth Street, N.W.
Washington, DC 20004-1109
RE: Frozen Unbaked Pies; PCR A84931 Affirmed
Dear Mr. Deutchman:
This is in reference to your letter of March 18, 1997, on
behalf of your client, Ready Bake Foods, Inc. (Ready Bake), and
its wholly-owned subsidiaries, Sarsfield Foods, Inc. (Sarsfield),
and Maplehurst Bakeries, Inc. (Maplehurst), requesting a
prospective binding tariff classification ruling for frozen pies
imported from Canada under the Harmonized Tariff Schedule of the
United States (HTSUS). The facts are substantially the same as
those presented in Pre-entry Classification Ruling (PCR) A84931,
issued to the importer on August 19, 1996. The importer
disagrees with the Customs holding in PCR A84931. We have
reviewed the submitted facts and considered the additional
arguments made by counsel, on behalf of the importer, in a
meeting with Customs Headquarters personnel on July 31, 1997, and
in a supplemental submission of September 4, 1997.
FACTS:
The merchandise, frozen, unbaked pies, consisting of over 10
percent by dry weight of sugars derived from sugar cane or sugar
beets, in addition to other ingredients, are composed of an upper
and lower dough crust, with a variety of fillings, in an aluminum
pie tin, individually packed in cardboard boxes. The unbaked
frozen pies will be produced and boxed by Sarsfield in Canada.
Maplehurst will import the pies for sale to a variety of
independent and chain supermarkets throughout the United States.
It is our understanding that the pies will be imported unbaked.
A sample of the submitted "retail" packaging indicates, rather
generically, "Peach Pie, Homestyle Peach Pie" and does not
include a brand name, store name, or a trademark. The box lists
the ingredients, "Nutrition Facts", and "Baking/Handling
Instructions" that, among other things, direct one to "[a]llow to
cool thoroughly before packaging." In this connection, you have
advised us that after importation, the various supermarkets
intend to unbox some of the pies, bake, and perhaps glaze or
otherwise top the pies in their bakery sections, before
repackaging them for sale to purchasers who will buy them at
retail. You further advise that some, if not all, of the baked
pies will be either re-packaged in the same boxes (perhaps with
additional labels indicating the name of the supermarket) or in
different boxes, before actual retail sales.
ISSUE:
What is the proper tariff classification for the above-described frozen unbaked pies?
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. GRI 6 provides that the GRI's apply in the same
fashion to subheadings within the same heading.
The Harmonized Commodity Description and Coding System
Explanatory Notes (EN's) constitute the official interpretation
of the HTSUS. While not legally binding, and therefore not
dispositive, the EN's provide a commentary on the scope of each
heading of the HTSUS and are thus useful in ascertaining the
proper classification of merchandise under the HTSUS. Customs
believes the EN's should always be consulted. See, T.D. 89-80,
54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).
In reviewing the possible headings under which the articles
may be classified, we note that heading 1901, HTSUS, deals with
various food preparations, and heading 1905, HTSUS, deals with
bakers' wares, etc. In deciding whether an article is
classifiable in either heading 1901, HTSUS, or 1905, HTSUS, we
look to the EN's for guidance. The EN's to Chapter 19 state that
heading 1901, HTSUS, includes: "Ready-mixed doughs, consisting
essentially of cereal flour with sugar, fat, eggs or fruit
(including those put up in moulds or formed into final shape)."
In further reference to heading 1901, HTSUS, the EN's state that
"[a]part from the preparations excluded by the General
Explanatory Note to this Chapter, this heading also excludes : .
. . (e) [f]ully or partially cooked bakers' wares, the latter
requiring further cooking before consumption (heading 19.05)."
The inference is clear that uncooked bakers' wares are not
classified in heading 1905. Customs has consistently classified
unbaked bakers' wares, including pies, in heading 1901. See,
NYRL's 837636, 837637, 837638, 837639, 837640, 837734, 839615,
839632, 839633, 839634, 839636, 841727, 859548, 889991, 895892,
806681, 808970, B82426, DD's 874259 and 891302.
Subheading 1901.20.00, HTSUS, provides for mixes and doughs
for the preparation of bakers' wares of heading 1905, HTSUS.
Analyzing subheading 1901.20.00, HTSUS, we conclude that it does
not apply to the articles under consideration. The unbaked pies
are advanced beyond the point where they can be considered doughs
and they are not mixes as specified in the subheading. Also,
since the fruit and confectionery preparations are used to fill
the dough products rather than being incorporated into the flour
mixture, they would not be ready- mixed doughs, as described in
EN 19.01. As such, we conclude that the unbaked pies are
classifiable, at the six-digit level, in subheading 1901.90,
HTSUS, as other food preparations. With regard to classification
at the eight-digit level, we must refer to the relevant section
and chapter notes.
Chapter 17, Additional U.S. Note 3, in relevant part, and
Chapter 17, Additional U.S. Notes 8, as amended and adopted in
1995, state:
3. For the purposes of this schedule, the term
"articles containing over 10 percent by dry weight
of sugar described in additional U.S. note 3 to
chapter 17" means articles containing over 10
percent by dry weight of sugars derived from sugar
cane or sugar beets, whether or not mixed with
other ingredients, except (a) articles not
principally of crystalline structure or not in dry
amorphous form, the foregoing that are prepared
for marketing to the ultimate consumer in the
identical form and package in which imported. . .
.
* * * * *
8. The aggregate quantity of articles containing
over 10 percent by dry weight of sugars
described in additional U.S. note 3 to
chapter 17, entered under subheadings
1701.91.54, 1704.90.74, 1806.20.75,
1806.20.95, 1806.90.55, 1901.90.56,
2101.12.54, 2101.20.54, 2106.90.78 and
2106.90.95 during the 12-month period from
October 1 in any year to the following
September 30, inclusive, shall not exceed
64,709 metric tons (articles the product of
Mexico shall not be permitted or included
under this quantitative limitation and no
such articles shall be classifiable therein).
Additional U.S. Note 2, Section IV, HTSUS, which includes
chapters 16 through 24, states, in pertinent part:
For the purposes of this section, unless the context
otherwise requires . . .
(c) the term "prepared for marketing to the ultimate
consumer in the identical form and package in
which imported" means that the product is imported
in packaging of such sizes and labeling as to be
readily identifiable as being intended for retail
sale to the ultimate consumer without any
alteration in the form of the product or its
packaging; and
(d) the term "ultimate consumer" does not include
institutions such as hospitals, prisons and
military establishments or food service
establishments such as restaurants, hotels, bars
or bakeries.
Accordingly, if the frozen unbaked pies are "prepared for
marketing to the ultimate consumer in the identical form and
package in which imported," then pursuant to exception (a) of
Chapter 17, Additional U.S. Note 3, they will not be considered
to be articles defined by the note (which are subject to quota-based duties). However, as noted in Additional U.S. Note 2 to
Section IV, the term "ultimate consumer" does not include
institutions or food service establishments such as bakeries
(which we interpret as including the bakery departments of
supermarkets).
There is no "retail package exception" in the HTSUS
applicable to the frozen pies at issue, in the context of the
quota-based duties, other than that discussed in the above-quoted
Notes. Although the information submitted states that the pies
will be imported individually packaged and labeled in a manner
consistent with applicable Food and Drug Administration (FDA)
requirements for retail sale, it has not been established that
the pies are intended for sale to the ultimate consumer without
any alteration in their form. A capability of sale to the
ultimate consumer in the imported frozen condition does not
establish that the pies are intended for such sale.
The imported frozen pies at issue are unbranded, a
significant omission for a food item intended for retail sale in
a competitive supermarket environment. The pies at issue also
contain "Baking/Handling Instructions" which, although
characterized in the information submitted as "standard" handling
instructions, are instructions more appropriate for bakeries,
than retail purchasers. The convection vs. conventional oven
instructions and the instructions to remove pies from freezer, to
place frozen pies on baking sheet, and to allow thorough cooling
before packaging are consistent with instructions to a bakery
that will receive the pies in frozen condition, keep them frozen
until they are baked, and bake many pies at one time prior to
repackaging them for sale to the ultimate consumer. Consumer-oriented instructions such as "Keep frozen until use," "Do not
microwave," "Do not allow to thaw" (or "Bake immediately if
thawed"), all of which instructions would be appropriate for a
consumer buying a frozen pie at the supermarket for later baking
at home, but unnecessary for commercial bakeries, are not
included on the packaging. An examination of the packaging (box)
also reveals that it is of the temporary-closure, tuck-flap type,
as opposed to a permanent closure intended to protect the
integrity of the contents until delivery to the ultimate
purchaser.
The information submitted states that the supermarkets
purchasing the pies from the importer --
. . . may choose to bake some pies prior to sale. We
assume that the pies typically are removed temporarily
from the box prior to baking [as opposed to baking them
in the plastic-windowed, paper box?]. After baking,
the pies would be re-boxed. It is conceivable that the
supermarket may add a supermarket sticker logo [i.e., a
brand name] to Sarsfield's box, or in some cases, re-box the pies in a different box bearing the supermarket
logo and the Sarsfield ingredient list and product
handling instructions [the latter, it is assumed,
changed to reflect the handling of a baked pie and the
former changed to reflect any toppings or other
ingredients added by the supermarket bakery] . . .
The information submitted does not include any information
regarding the proportion of the imported, unbranded frozen pies
that are sold at retail as imported, as opposed to the proportion
that are baked by the supermarket bakeries and thereafter sold to
the ultimate consumer in either new packaging or the Sarsfield
packaging with appropriate additions and alterations. In the
absence of such information, we must assume an intended
disposition of the imported pies that is most consistent with its
packaging: baking by the supermarket bakery prior to delivery to
the ultimate consumer. Accordingly, we find that an "alteration
in the form of the product or its packaging" prior to marketing
to the ultimate consumer is contemplated with respect to the
imported pies and that, therefore, they are not subject to any of
the exceptions set forth in Chapter 17, Additional U.S. Note 3,
HTSUS.
HOLDING:
The unbaked, frozen pies, containing over 10 percent, but
not over 65 percent, by dry weight of sugars derived from sugar
cane or sugar beets, are properly classified in subheading
1901.90.5600, HTSUS, the provision for food preparations of
flour, not elsewhere specified or included, not containing cocoa
or containing less than 5 percent by weight of cocoa which
contain over 10 percent by dry weight of sugar and are described
in Additional U.S. Note 3 to chapter 17 and Additional U.S. Note
8 to chapter 17, or in subheading 1901.90.5800, HTSUS, where the
quantitative limitations of Additional U.S. Note 8 to chapter 17
have been reached. PCR A84931 is affirmed.
Sincerely,
John Durant, Director,
Commercial Rulings Division