CLA-2 RR:CR:GC 962142 EAB
Port Director
U.S. Customs Service
6269 Ace Industrial Drive
Cudahy, Wisconsin 53110
Re: Protest 3701-98-100018, Esprion 250
Dear Port Director:
This is our decision on Protest 3701-98-100018, timely filed May 13, 1998, against your decision in the classification under the Harmonized Tariff Schedule of the United States (HTSUS) of merchandise entered during calendar year 1997.
FACTS:
The merchandise, referred to as Esprion 250, was invoiced as demineralized whey powder and entered in subheading 0404.10.0500, HTSUS, the provision for whey protein concentrates.
Customs Laboratory Report 3-98-40060-001 dated December 17, 1997, concerning identical goods imported by the protestant, indicated that the sample of “pale yellow powder contains by weight 69 % lactose, 12 % protein and 4 % ash,” constituting “a modified whey of the reduced minerals type . . . not whey protein concentrate.”
Customs liquidated the protested entries in subheading 0404.10.1500, HTSUS, the residual provision for modified whey. Depending upon their value, goods entered in 1997 and so liquidated were subject to safeguard duties as provided for in subheading 9904.04.59 - .65, HTSUS.
ISSUE:
Whether Esprion 250, containing, among other constituent substances by weight, 69 % lactose and 12 % protein, is modified whey subject to safeguard duties, or whey protein concentrate.
LAW AND ANALYSIS:
Merchandise imported into the U.S. is classified under the HTSUS. The tariff classification of merchandise under the HTSUS 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 GRI's taken in order.
The following subheadings are under consideration:
0404 Whey, whether or not concentrated or containing added sugar or other sweetening matter; products consisting of natural milk constituents, whether or not containing added sugar or other sweetening matter, not elsewhere specified or included:
0404.10 Whey and modified whey, whether or not concentrated or containing added sugar or other sweetening matter:
Modified whey:
0404.10.0500 Whey protein concentrates
Other:
0404.10.0800 Described in general note 15 of the tariff schedule and entered pursuant to its provisions
0404.10.1100 Described in additional U.S. note 10 to this chapter and entered pursuant to its provisions
0404.10.1500 Other
Customs has consistently followed the specifications of the Food and Drug Administration (FDA) for determinations of whey protein concentrate. The FDA Regulations set forth those specifications (see 21 CFR 184.1979c). The key specifications are that whey protein concentrate, described in the regulations as "the substance obtained by the removal of sufficient nonprotein constituents from whey so that the finished dry product contains not less than 25 percent protein" are protein content (minimum 25 %) and lactose content (maximum 60 %).
We have reviewed the rulings cited in Exhibit F of the protest (New York Rulings (NYs) A80028 dated February 27, 1996; A80085 dated February 23, 1996; B80283 dated December 13, 1996; B89026 dated September 4, 1997; 800805 dated August 9, 1994; 802208 dated September 4, 1994; 811987 dated August 2, 1995; 813062 dated September 13, 1995; and 816343 dated November 9, 1995). With one possible exception, the rulings follow the protein content specification in the FDA regulations. That is, the protein content in NY A80028 is 33-37 %; that in NY A80085 is 34-38 %; that in NY B80283 is 34-39 % (this classified an "egg extender", so classification was in subheading 0404.90.70, HTSUS, not subheading 0404.10.05, HTSUS); that in NY B89026 was 27 %; that in NY 800805 was 23-25 % (the ruling held that if the protein content was 25 % or over, classification was in subheading 0404.10.05, HTSUS, and if less than 25 %, in subheading 0404.10.07, HTSUS); that in NY 802208 was 32.2 %; that in NY 811987 was 34-37 % or 34-38.8 % (the ruling did not classify the product with less than 25 %, stating that additional information was needed); and that in NY 816343 was 27.5-32 %.
In NY 813062, there was a protein content of 18.5-23 %, yet the product was held to be classifiable in subheading 0404.10.05, HTSUS. Thus, although this may be an exception to the FDA 25 % minimum protein content specification, it is clearly not precedent for the classification of the goods in this protest in which the protein content is 12 %, or considerably less than was the case in NY 813062.
The subject merchandise does not come close to meeting the FDA specifications for whey protein concentrate, and none of the rulings cited by the protestant or examined by this Office classifies merchandise such as that under consideration as whey protein concentrate. We are, therefore, of the opinion that classification in subheading 0404.10.05, HTSUS, is precluded. We find that the merchandise is not whey protein concentrate, but modified whey that is classified as other modified whey in subheading 0404.10.11 or 0404.10.15, HTSUS.
The protestant states, and we assume for purposes of this ruling, that the quota in Additional U.S. Note 10 to Chapter 4, HTSUS (for classification in subheading 0404.10.11, HTSUS, among other provisions) closed on September 3, 1997. Therefore, as an alternative argument, the protestant contends that all protested entries filed before that date should be subject to the in-tariff rate under subheading 0404.10.11, HTSUS, rather than the over-tariff rate under subheading 0404.10.15, HTSUS.
Additional U.S. Note 10 to Chapter 4, HTSUS, provides that:
The aggregate quantity of dairy products described in additional U.S. note 1 to chapter 4, entered under subheadings [0404.10.11, and others] in any calendar year shall not exceed 2,785,000 kilograms ....
The Customs Regulations governing quotas are in 19 CFR Part 132. Under 19 CFR 132.11(a), "[q]uota priority and status are determined as of the time of presentation of the entry summary for consumption, or withdrawal for consumption, in proper form in accordance with § 132.1(d) [§ 132.1(d) defines "[p]resentation" in terms of the delivery "in proper form" to the appropriate Customs officer of certain described entry papers]." Under 19 CFR 132.5(b), "[m]erchandise imported in excess of the quantity admissible at the reduced quota rate under a tariff-rate quota is permitted entry at the higher duty rate. ..."
Assuming, as stated by the protestant, that the 2,785,000 kilogram amount provided for in Additional U.S. Note 10 to Chapter 4, HTSUS, was not exceeded until September 3, 1997, entries presented "in proper form" before that date would be subject to the lower rate of duty in subheading 0404.10.11, HTSUS. In this case, however, the protestant filed the entries with an incorrect classification, a non-quota classification. In view of the responsibility of the importer of record to use reasonable care to enter, classify and value imported merchandise pursuant to 19 U.S.C. 1484 (as amended by section 637(a), Title VI (Customs Modernization), of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat. 2057, 2200), we conclude that the incorrectly classified entries were not presented "in proper form." This is particularly true when, as in this case, an examination of the rulings on similar merchandise in the data base Customs has made available to the public would have guided the protestant to the correct classification.
Additional U.S. Note 10 to Chapter 4, HTSUS, limits the quantity of dairy products entered under subheading 0404.10.11, HTSUS, and other listed subheadings in any calendar year to 2,785,000 kilograms. Quota priority and status are determined as of the time of presentation of entry papers "in proper form". The entry papers for the protested entries were not presented "in proper form" before the quantity of the dairy products had exceeded the stated amount; therefore, classification in subheading 0404.10.11, HTSUS, is precluded.
HOLDING:
“Esprion 250" is classifiable in subheading 0404.10.1500, HTSUS, the provision for modified whey, other, other.
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, your 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 in accordance with this decision must be accomplished prior to the mailing of this decision by your office.
Sixty days from the date of this 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,
[Marvin Amernick, for]
John A. Durant, Director
Commercial Rulings Division