CLA-2 RR:CR:GC 960607 ptl
Port Director
U.S. Customs Service
300 South Ferry Street
Terminal Island, CA 90731
RE: Protest 2702-97-100345, Encapsulated Ginseng Extract; HQs
084981, 086744, 953679, 085492.
Dear Port Director:
The following is our decision regarding protest 2702-97-100345 which concerns the classification of ginseng extract in
encapsulated form under the Harmonized Tariff Schedule of the
United States (HTSUS).
FACTS:
The merchandise is a product of England described by the
names "Koregin" and "Sibergin." The articles are produced from
ginseng roots. Korean grown roots in the case of "Koregin", and
Siberian roots for "Sibergin". In England, the ginseng roots are
crushed into powder and mixed with alcohol. The alcohol serves
to extract the "active ginseng" from the powder and, after
evaporation, results in a thick paste. Soybean oil,
lecithin, and beeswax are then added to this paste. The
resulting mixture is then packed into gelatin capsules. The
invoice indicates the capsules are imported in bulk and in
containers holding 30 capsules. The merchandise was entered on
October 29, 1996, under subheading 1302.19.4020, HTSUS, as other
vegetable saps and extracts ... ginseng. The articles were
classified by Customs as other food preparations not elsewhere
specified or included, in subheading 2106.90.9998, HTSUS. The
importer, through counsel, claims that neither the addition of
the extra ingredients nor the encapsulation preclude
classification in heading 1302. The entry was liquidated on
December 27, 1996, and this protest was timely filed on March 27,
1997.
ISSUE:
What is the proper classification of encapsulated ginseng
extract?
LAW AND ANALYSIS:
Merchandise is classifiable under the Harmonized Tariff
Schedule of the United States (HTSUS) in accordance with the
General Rules of Interpretation (GRIs). 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 GRIs may then be applied
in order.
The headings under consideration are as follows:
1302 Vegetable saps and extracts; pectic substances,
pectinates and pectates; agar-agar and other
mucilages and thickeners, whether or not
modified, derived from vegetable products:
Vegetable saps and extracts:
* * *
1302.19 Other:
Ginseng; substances having anes-
thetic, prophylactic or therapeutic
properties:
* * *
1302.19.40 Other.
1302.19.4020 Ginseng.
2106 Food preparations not elsewhere specified or
included:
* * *
2106.90 Other :
Other :
Other :
Other :
Other :
* * *
2106.90.9900 Other.
2106.90.9998 Other.
In understanding the language of the HTSUS, the Harmonized
Commodity Description and Coding System Explanatory Notes may be
utilized. The Explanatory Notes (ENs), although not dispositive
or legally binding, provide a commentary on the scope of each
heading of the HTSUS, and are generally indicative of the proper
interpretation of these headings. See T.D. 89-80, 54 Fed. Reg.
35127, 35128 (August 23, 1989).
Counsel for the importer contends that the merchandise
should be classified in heading 1302, HTSUS, and cites, in
support, the language of EN 13.02 which states, in part, "The
saps and extracts classified here include: ... (7) Ginseng
extract, obtained by water or alcohol extraction, whether or not
put up for retail sale." Counsel's position is that the
encapsulated ginseng is composed of ginseng extract obtained by
alcohol extraction to which certain materials have been added to
enable the product to be processed into capsules. Counsel
asserts these additives do not alter the identity of the ginseng,
but are merely used to facilitate the flow of the ginseng paste
through the capsuling equipment.
Counsel concedes that the ENs state that "The vegetable saps
and extracts of this heading [1302] are generally raw materials
for various manufactured products. They are excluded from the
heading when, because of the addition of other substances, they
have the character of food preparations, medicaments, etc."
(Emphasis in original). However, counsel contends that the
tariff "anticipates that ginseng extracts are to be treated
differently than other products which fall under the same
chapter" because the ENs contain the statement about retail sale.
Customs does not disagree with counsel's position that
ginseng, which has been put up for retail sale may be classified
in heading 1302, HTSUS. However, in order to be classified in
that heading, the product would still need to retain its
character as a raw material. Customs has consistently held that,
when mixed with other materials and offered for sale as a
finished product to be used as a food supplement, ginseng extract
is properly classified in heading 2106, HTSUS.
Several Customs rulings are cited to support counsel's
position. Counsel attempts to distinguish the additives in HQ
084981, dated June 19, 1990, (honey, royal jelly, almond essence
and other items), and HQ 086744, dated June 19, 1990, (water,
royal jelly and honey), from those in protestant's product
(soybean oil, lecithin and beeswax). In both of these rulings
which classified products containing ginseng extract as food
supplements in heading 2106, HTSUS, other extracts or ingredients
had been added to the ginseng. However, in these rulings, it is
not solely the nature of the additive upon which the
classification was determined. Rather, it was the character of
the resulting article. In these instances, the resulting article
was a finished good which was to be marketed as a food
supplement.
In HQ 953679, dated February 3, 1994, Customs noted that
"[A]lthough the ENs to heading 2106 mention that many food
supplements are often based on plant extracts containing added
vitamins and sometimes minute quantities of iron compounds',
such products do not have to contain vitamins and/or minerals to
be considered food supplements; the very nature of these products
- herb extracts mixed with other substances, even without the
promotional literature, are considered food supplements.
Essentially chapters 12 and 13 cover raw vegetable materials;
products to be further processed. Here, in contrast, the
extracts are encapsulated, usually with an added excipients such
as natural cellulose, roots, or berries; and, what is apparent
from the promotional literature, the intent is to have finished
food products which are marketed as food supplements. Such
products are classifiable in heading 2106." In HQ 085492, dated
October 20, 1989, Customs ruled that the powdered root of
Brazilian ginseng which was free of additives and imported in
gelatin capsule form for use as a food supplement was classified
in heading 2106, HTSUS.
The products here are capsules which contain ginseng
extract, which has been obtained by alcohol extraction, to which
soybean oil, beeswax and lecithin have been added. Customs
believes that these encapsulated ginseng extracts are a
manufactured, finished product intended for use as a food
supplement and are classifiable in subheading 2106.90.9998,
HTSUS, as food preparations not elsewhere specified or included:
other: other: other: other: other: other: other.
HOLDING:
Encapsulated ginseng extracts are classified in subheading
2106.90.9998, HTSUS.
The protest should be DENIED.
In accordance with Section 3A(11)(b) of Customs Directive
099 3550-065, Revised Protest Directive, dated August 4, 1993, a
copy of this decision attached to Customs Form 19, Notice of
Action, should be provided by your office to the protestant no
later than 60 days from the date of this decision and any
reliquidations of entries in accordance with this decision must
be accomplished prior thereto. Sixty days from the date of this
decision the Office of Regulations and Rulings will take steps to
make this decision available to Customs personnel via the Customs
Rulings Module in ACS and the public via the Diskette
Subscription Service, Freedom of Information Act and other public
access channels.
Sincerely,
John Durant, Director
Commercial Rulings Division