CLA-2 RR:CR:GC 963175ptl
David O. Elliott, Esq.
Barnes, Richardson & Colburn
465 Park Avenue South
New York, NY 10016
RE: Battered Cheese Products; HQ 081515 revoked.
Dear Mr. Elliott:
This is in reference to HQ 081515, issued to you on behalf of Olmstead Foods Limited, on March 22, 1989, which classified battered cheddar cheese balls or cubes and battered mozzarella cheese sticks in subheading 2106.90.40, Harmonized Tariff Schedule of the United States (HTSUS) which provides for other food preparations not elsewhere specified or included: containing over 5.5% by weight of butterfat and not packaged for retail sale.
We have reviewed HQ 081515 and have determined that an error was made in the classification of the products. A notice of proposed revocation of HQ 081515 was published in Vol. 33, No. 44 of the Customs Bulletin, dated November 3, 1999. The only comment received in response to the notice did not address the substantive issue. This ruling revokes HQ 081515 and sets forth the correct classification for battered cheddar cheese balls or cubes and battered mozzarella cheese sticks.
FACTS:
The products are battered cheddar cheese balls or cubes and battered mozzarella cheese sticks. The cheese balls are said to be about one inch in diameter, 55.6% by weight of batter and 44.4% by weight cheddar cheese. The mozzarella sticks are said to be about 3 inches in length and 3/4 inch in diameter and to consist of 54.5% by weight of batter and 45.5% by weight mozzarella cheese. A Customs laboratory examination of samples of the products described the cheese balls as consisting of 59% coating by weight and 41% cheese, and the sticks to consist of 52.5% cheese and 47.5% coating (Lab. No. 2-86-12274-001, dated 10/10/86). It is asserted that the manufacturer is employing quality control measures to insure that the batter content is more than 50% by weight. The coating is said to consist of wheat flour, toasted wheat crumbs, soya flour, corn flour, grated romano cheese, seasonings, and preservatives. The products are said to be wrapped in a "tempura lite" batter and then oil blanched and frozen. They are prepared by pan frying, deep frying or oven baking. They will be imported in non retail size packages for sale to the institutional trade.
ISSUE:
What is the classification of battered cheese products?
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.
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).
The HTSUS headings under consideration are as follows:
0406 Cheese and curd
* * *
0406.90 Other cheese
* * *
Cheddar cheese:
* * *
0406.90.08 Described in additional U.S. note 18 to this chapter and entered pursuant to its
provisions.
* * *
0406.90.0890 Other.
0406.90.1200 Other
* * *
Other cheeses, and substitutes for cheese, including mixtures of the above (con.):
Other, including mixtures of the above (excluding goods containing mixtures of subheadings 0406.90.61 or 0406.90.63)
Other:
Containing cow’s milk (except soft-ripened cow’s milk cheese):
0406.90.9500 Described in additional U.S. note 16 to this chapter and entered pursuant to its provisions.
0406.90.9700 Other.
* * * * *
2106 Food preparations not elsewhere specified or included:
2106.90 Other:
* * *
Other:
2106.90. Containing over 10 percent by weight of milk solids:
* * *
Other dairy products described in additional U.S. note 1 to chapter 4:
2106.90.6400 Described in additional U.S. note 10 to chapter 4 and entered pursuant to its provisions.
2106.90.6600 Other.
In HQ 081515, Customs discussed prior rulings issued under the Tariff Schedules of the United States, the predecessor to the HTSUS, in which factors such as butterfat content and the thickness of a coating of an article were found to be controlling reasons for not classifying articles under cheese provisions. HQ 081515 concluded by stating that the battered cheese products were “something more than a seasoned cheese” and thus should be classified in heading 2106, HTSUS.
We believe that the rationale followed in HQ 081515 is flawed. Because the battered cheddar cheese balls or cubes and battered mozzarella cheese sticks are goods consisting partly of cheese and partly of other food components they may not be classified solely on the basis of GRI 1. The cheese and batter products under consideration are described in GRI 2(b) which covers mixtures and combinations of materials and substances and goods consisting of two or more materials and substances. According to GRI 2(b), “The classification of goods consisting or more than one material or substance shall be according to the principles of Rule 3.”
GRI 3(a) states that the heading which provides the most specific description shall be preferred to headings providing a more general description. GRI 3(b) states mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.
The EN’s provide that, if this rule applies, goods shall be classified as if they consisted of the material or component which gives them their essential character.
EN Rule 3(b)(VIII) lists as factors to help determine the essential character of such goods the nature of the materials or components, their bulk, quantity, weight or value, and the role of a constituent material in relation to the use of the goods. Therefore, under GRI 3(b), classification of the battered cheddar cheese balls or cubes and battered mozzarella cheese sticks is to be determined on the basis of the component which gives them their essential character.
Recently, there have been several Court decisions on "essential character" for purposes of GRI 3(b). These cases have looked primarily to the role of the constituent materials or components in relation to the use of the goods to determine essential character. See, Better Home Plastics Corp. v. United States, 916 F. Supp. 1265 (CIT 1996), affirmed 119 F.3d 969 (Fed. Cir. 1997); Mita Copystar America, Inc. v. United States, 966 F. Supp. 1245 (CIT 1997), motion for rehearing and reconsideration denied, 994 F. Supp. 393 (CIT 1998), and Vista International Packaging Co., v. United States, 19 CIT 868, 890 F. Supp. 1095 (1995). See also, Pillowtex Corp. v. United States, 983 F. Supp. 188 (CIT 1997), affirmed CAFC No. 98-1227 (March 16, 1999).
Based on the foregoing, we conclude that in an essential character analysis for purposes of GRI 3(b), the role of the constituent materials or components in relation to the use of the goods is generally of primary importance, but the other factors listed in EN Rule 3(b)(VIII) should also be considered, as applicable. In this case, the "indispensable function" (Better Home Plastics, supra) of the battered cheddar cheese balls or cubes and battered mozzarella cheese stick product is that they are served as a food product appetizer. The cheese is the component that distinguishes this breaded product from other breaded products. This criterion indicates that the essential character of the good is provided by the cheese component. Insofar as the other factors (quantity, bulk, weight, and value) are concerned, the value aspect of the cheese relative to the value of the other components, appears to support the position that the cheese component provides the essential character of the article. We conclude that the essential character of the product is provided by the cheese component so that, under GRI 3(b), the battered cheddar cheese balls or cubes and battered mozzarella cheese sticks are classifiable in heading 0406, HTSUS.
This result is reinforced by EN 04.06 which states that: “Cheeses which have been coated with batter or bread crumbs remain classified in this heading whether or not they have been pre cooked, provided that the goods retain the character of cheese.” Although the specific language of this EN was adopted after HQ 081515 was issued, the premise underlying the EN existed and was actually cited in the ruling.
HOLDING:
Battered Mozzarella cheese sticks are classified in subheading 0406.90.9500, HTSUS, which provides for Other cheeses, and substitutes for cheese, including mixtures of the above: other, including mixtures of the above (excluding goods containing mixtures of subheadings 0406.90.61 or 0406.90.63): other: other: containing cow’s milk (except soft-ripened cow’s milk cheese): described in additional U.S. note 16 to this chapter and entered pursuant to its provisions. If entered without an appropriate import license, issued to the importer by the U.S. Department of Agriculture, the product is classifiable in subheading 0406.90.9700, HTSUS, which provides for such cheese entered outside of the quota described in additional U.S. note 16 to this chapter.
The battered cheddar cheese balls or cubes are classified in subheading 0406.90.0890 which provides for Other cheese: Cheddar cheese: described in additional U.S. note 18 to this chapter and entered pursuant to its provisions, other. If entered without an appropriate import license, issued to the importer by the U.S. Department of Agriculture, the product is classifiable in subheading 0406.90.1200, HTSUS, which provides for such cheese entered outside of the quota described in additional U.S. note 18 to this chapter.
HQ 081515, issued March 22, 1989 is revoked.
In accordance with 19 U.S.C. 1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin.
Sincerely,
John Durant, Director
Commercial Rulings Division