CLA-2 RR:CR:GC 960494 JGB
Mark S. Zolno, Esq.
David M. Dunbar, Esq.
Katten Muchin & Zavis
Suite 1600
525 West Monroe Street
Chicago, IL 60661-3693
RE: Kerry Ingredients; Bakers’ Ware Butter Substitute from Canada or Mexico
Dear Messrs. Zolno and Dunbar:
This is in response to your letter of April 15, 1997, on behalf of Kerry Ingredients, to the Customs National Commodity Specialist Division, New York, requesting a ruling as to the classificatiion of a bakers’ ware butter substitute, under the Harmonized Tariff Schedule of the United States (HTSUS) Your letter was forwarded to this office for response. In preparing this decision, we also considered arguments in your letter of August 20, 1998, following your meeting at Headquarters on May 6, 1998.
FACTS:
The product is claimed to consist of 41 percent butterfat (milkfat), 40 percent partially hydrogenated soybean or canola oil, about 16 percent water, 2.5 percent milk proteins and less than 1 percent each of emulsifiers, flavor, salt, and color. It is to be sold to a U.S. food processor to use as a butter substitute in the manufacture of bakery products.
ISSUE:
Whether the phrase “milk solids” in subheading 2106.90, HTSUS, includes butterfat.
LAW AND ANALYSIS:
Merchandise imported into the U.S. 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 otherwise requires, 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 Explanatory Notes (ENs) to the Harmonized Commodity Description and Coding System, which represent the official interpretation of the tariff at the international level, facilitate classification of the HTSUS by offering guidance in understanding the scope of the headings and the GRIs.
Heading 2106, HTSUS, provides for “Food preparations not elsewhere specified or included.” Subheading 2106.90, HTSUS, provides in pertinent part as follows:
Butter substitutes, whether in
liquid or solid state, containing
over 15 percent by weight of butter
or other fats or oils derived from
milk:
Containing over 10 percent by
weight of milk solids:
Butter substitutes
containing over 45 percent
by weight of butterfat:
2106.90.22 Described in general
note 15 of the tariff
schedule and entered
pursuant to its
provisions....................
2106.90.24 Described in
additional U.S.
note 14 to chapter 4
and entered pursuant
to its provisions.............
2106.90.26 Other
2106.90.28 Other..............................
Other:
Butter substitutes
containing over 45 percent
by weight of butterfat:
2106.90.32 Described in general
note 15 of the tariff
schedule and entered
pursuant to its
provisions..................
2106.90.34 Described in
additional U.S.
note 14 to chapter 4
and entered pursuant
to its provisions..
2106.90.36 Other........
2106.90.38 Other.............
As noted above, the heading provides for “Food preparations not elsewhere specified or included.” It is agreed that the butter substitute is classified in this heading. It is also agreed that the most specific description of the product is within subheading 2106.90.22 through 2106.90.38, HTSUS, identifying “Butter substitutes, whether in liquid or solid state, containing over 15 percent by weight of butter or other fats or oils derived from milk:.” However, you argue that the phrase from the latter part of the text of subheading 2106.90, HTSUS, “by weight of milk solids” can only mean “milk solids non-fat” because to interpret it otherwise would make it technically impossible for a product to be classified in subheading 2106.90.32 through 2106.90.36, HTSUS.
In consultations with the U.S. Department of Agriculture, Customs is informed that this provision, subheading 2106.90, is intended to be interpreted according to the industry standards, that is, that “milk solids” is a reference to all the solid compontnts of milk, which would include butterfat. The industry standard does not require the restricted meaning of “milk solids, non-fat” that you propose here. Based on our understanding of the provision, the butter substitute would be classified in subheading 2106.90.28, not 2106.90.38. In
making the classification determination, the “38" provision cannot be reached, because the “28" already satisfies the standards.
With regard to the arguments presented, we are certainly mindful of the anomaly of a provision, the “32 through 36", which could accommodate no product and that such an inconsistency is sometimes an indication of a misinterpretation of tariff language. However, there was no indication that the drafters intended to substitute a restrictive standard, milk solids-non-fat, for what normally would be an inclusive one. Otherwise
stated, we must assume that the words “milk solids” mean what they say. If this tariff language is to remain in the tariff, it might be applied with less confusion if an additional U.S. note were inserted in the chapter, confirming the meaning of “milk solids.”
HOLDING:
The product is classified in subheading 2106.90.28, HTSUS,
the provision for “Food preparations not elsewhere specified or included: Other: Butter substitutes, whether in liquid or solid state, containing over 15 percent by weight of butter or other fats or oils derived from milk: Containing over 10 percent by weight of milk solids: Other.”
Sincerely,
John Durant, Director
Commercial Rulings Division