CLA-2: RR:CTF:TCM 967488 ASM
TARIFF NO: 3302.10.9000
Port Director
Customs and Border Protection
#1 La Puntilla Street
Room 214
San Juan, Puerto Rico 00901
RE: Decision on Application for Further Review of
Protest No. 4909-04-100056, Concerning the classification
of “Blender No. 91343” and “Blender No. 91345”;
Beverage Mix for Human Consumption
Dear Port Director:
This is a decision on a request for Further Review of a protest timely filed on August 2, 2004, against your decision in the classification and liquidation under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) of two products identified as “Blender No. 91343” and “Blender No. 91345”. Please be advised that we have granted limited confidential treatment of information in accordance with the Protestant’s request under Section 177.2(b) of the Customs and Border Protection (CBP) Regulations.
FACTS:
The product identified as “Blender No. 91343” is composed of over 50 percent ethanol by weight. The remaining ingredients present in the product are treated water, propylene glycol, natural flavor (citrus essential oils), and sodium chloride. The product identified as “Blender 91345” is also composed of over 50 percent ethanol by weight and contains treated water, propylene glycol, and natural flavor (citrus essential oils). At the time of importation, neither product is intended for consumption as a beverage. Both products require further processing to produce complex beverage flavor concentrates, which are then incorporated in the manufacture of non-alcoholic beverages. The finished beverage concentrates, of which the Blenders are only a small component, are diluted more than 200 times with water and other beverage components such as sweeteners, acidulants and other flavors and stabilizers to produce the final beverage.
Upon liquidation of the subject entries of “Blender No. 91343” and “Blender No. 91345”, the CBP Port of San Juan, Puerto Rico, classified both products under subheading 3302.10.5000, HTSUSA, which provides for “Mixtures of odoriferous substances and mixtures (including alcoholic solutions) with a basis of one or more of these substances, of a kind used as raw materials in industry; other preparations based on odoriferous substances, of a kind used for the manufacture of beverages: Of a kind used in the food or drink industries: Containing alcohol: Containing over 20 percent of alcohol by weight: Preparations requiring only the addition of ethyl alcohol or water to produce a beverage suitable for human consumption: Containing over 50 percent of alcohol by weight.”
The Protestant disagrees with CBP’s classification and asserts that both products are properly classified under subheading 3302.10.9000, HTSUSA, which provides for “Mixtures of odoriferous substances and mixtures (including alcoholic solutions) with a basis of one or more of these substances, of a kind used as raw materials in industry; other preparations based on odoriferous substances, of a kind used for the manufacture of beverages: Of a kind used in the food or drink industries: Containing alcohol: Containing over 20 percent of alcohol by weight: Other.”
ISSUE:
What is the proper classification for the merchandise?
LAW AND ANALYSIS:
Classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) is made in accordance with the General Rules of Interpretation (GRI). GRI 1 provides that the classification of goods shall be determined 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 may then be applied. The Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”) constitute the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the ENs 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 HTSUSA provisions under consideration are as follows:
Mixtures of odoriferous substances and mixtures (including alcoholic solutions) with a basis of one or more of these substances, of a kind used as raw materials in industry; other preparations based on odoriferous substances, of a kind used for the manufacture of beverages:
Of a kind used in the food or drink industries:
* * *
Containing alcohol
Containing not over 20 percent of
alcohol by weight:
Containing over 20 percent of
alcohol by weight:
Preparations requiring only
the addition of ethyl
alcohol or water to produce a beverage suitable for human consumption:
* * *
3302.10.5000 Containing over 50
percent of alcohol by weight
Other
Chapter 33, Note 2, HTSUSA, provides the definition of odoriferous
substances as follows:
The expression “odoriferous substances” in heading 3302 refers only to the substances of heading 3301, to odoriferous constituents isolated from those substances or to synthetic aromatics.
In order to identify the odoriferous constituents that are provided for in heading 3302, we note that the EN to heading 3301 specifically provides for essential oils of the type used in the food industry. Clearly, this would include the citrus essential oils contained in both products now at issue. Furthermore, the
EN to heading 3302 identifies the following as mixtures of odoriferous substances:
Mixtures of essential oils.
Mixtures of resinoids.
Mixtures of extracted oleoresins.
Mixtures of synthetic aromatics.
Mixtures consisting of two or more odoriferous substances (essential oils, resinoids, extracted oleoresins or synthetic aromatics).
Mixtures of one or more odoriferous substances (essential oils, resinoids, extracted oleoresins or synthetic aromatics) combined with added diluents or carriers such as vegetable oil, dextrose or starch.
Mixtures, whether or not combined with a diluent or carrier or containing alcohol, of products of toher Chapters (e.g., spices) with one or more odoriferous substances (essential oils, resinoids, extracted oleoresins or synthetic aromatics), provided these substances form the basis of the mixture.
The ENs to heading 3302 explicitly state:
The heading also includes other preparations based on odoriferous substances, of a kind used for the manufacture of beverages. These preparations may be either alcoholic or non-alcoholic and may be used to produce either alcoholic or non-alcoholic beverages. They must have a basis of one or more odoriferous substances, as described in Note 2 to this Chapter, which are used primarily to impart a fragrance and secondarily to give a flavour to beverages. Such preparations generally contain a relatively small quantity of odoriferous substances which characterize a particular beverage; they may also contain juices, colouring matter, acidulants, sweeteners, etc., provided that they retain their character of odoriferous substances. As presented, these preparations are not intended for consumption as beverages and thus can be distinguished from the beverages of Chapter 22.
Finally, the ENs to heading 3302 specifically exclude compound alcoholic preparations of a kind used for the manufacture of beverages with a basis of substances other than odoriferous substances as described in Note 2 to this Chapter.
In view of the foregoing, we note that classification in heading 3302 is predicated on the presence of odoriferous substances which must form the basis of the mixtures. As such, there is no dispute that the products now at issue are classified within heading 3302, HTSUSA.
The classification dispute, which is the subject of this Protest, pertains to beverage components used as fragrance and flavor components in the production of non-alcoholic beverages for human consumption. Both Blenders contain natural flavors composed of citrus essential oils, as well as ethanol, propylene glycol, treated water, and in the case of Blender 91343 a small percentage of sodium chloride. However, the subject Blenders require further processing to produce complex beverage flavor concentrates.
At the time of importation, the products identified as “Blender 91343” and “Blender 91345” are only intended to comprise a small percentage of a finished beverage concentrate. According to the Protestant, after importation the Blenders at issue will be diluted more than 200 times with water, sweeteners, acidulants, and other flavors and stabilizers to produce a “non-alcoholic beverage” for retail and human consumption. Therefore, these products cannot be classified in subheading 3302.10.5000, HTSUSA, which covers preparations containing over 50 percent of alcohol by weight requiring only the addition of ethyl alcohol or water to produce a beverage suitable for human consumption (emphasis supplied). Accordingly, we find that “Blender 91343” and “Blender 91345” must be classified in the basket provision as an “Other” mixture used for the manufacture of beverages and is properly classified in subheading 3302.10.9000, HTSUSA.
HOLDING:
The subject merchandise, identified as “Blender 91343” and “Blender 91345”, is classified in subheading 3302.10.9000, HTSUSA, which provides for, “Mixtures of odoriferous substances and mixtures (including alcoholic solutions) with a basis of one or more of these substances, of a kind used as raw materials in industry; other preparations based on odoriferous substances, of a kind used for the manufacture of beverages: Of a kind used in the food or drink industries: Containing alcohol: Containing over 20 percent of alcohol by weight: Other.” The general column one duty rate is Free.
The protest should be ALLOWED. In accordance with the Protest/Petition Processing Handbook (CIS HB, January 2002, pp. 18 and 21), you 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 the decision must be accomplished prior to mailing of the decision. Sixty
days from the date of the decision the Office of Regulations and Rulings will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation