CLA-2 RR:CTF:TCM 967563ptl
John B. Pellegrini, Esq.
McGuire Woods LLP
1345 Avenue of the Americas
New York, NY 10105-0106
RE: Reconsideration of NY R01312 and NY R01313.
Dear Mr. Pellegrini:
This is in response to your letter of February 21, 2005, on behalf of Commodity Specialists Company, requesting reconsideration of the classification under the Harmonized Tariff Schedule of the United States (HTSUS), of two rulings that had been issued to them for products which are described as isotonic drink mixes. The rulings also addressed the country of origin marking requirements and whether the mixes qualify as originating goods under the NAFTA. You are not seeking reconsideration of those portions of the rulings.
You have described the products under consideration as being isotonic drink mixes. New York Ruling Letters (NY) R01312, dated February 2, 2005, and NY R01313, dated February 9, 2005, classified nine varieties of the mixes in subheading 1701.91.48, HTSUS, which provides for “Cane or beet sugar and chemically pure sucrose, in solid form: … Containing added flavoring matter whether or not containing added coloring: Articles containing over 65 percent by dry weight of sugar described in additional U.S. note 2 to chapter 17: Other” when packaged for industrial or food service, and in subheading 1701.91.58, HTSUS, which provides for “Cane or beet sugar and chemically pure sucrose, in
solid form: … Containing added flavoring matter whether or not containing added coloring: Articles containing over 10 percent by dry weight of sugar described in additional U.S. note 3 to chapter 17: … Other”, when packaged for retail sale. In your request for reconsideration, you contend that the products should be classified in subheading 2106.90.99, HTSUS, which provides for “Food preparations not elsewhere specified or included: …Other, … Other: Preparations for the manufacture of beverages: Containing sugar derived from sugar cane and/or sugar beets.”
FACTS:
The goods being considered consist of nine varieties of “isotonic” drink mixes. According to information you provided, the mixes contain: 80 – 85 percent sugar; less than 8 percent dextrose; less than 1 percent each of potassium citrate, salt, sodium citrate, potassium phosphate, sodium phosphate calcium phosphate, natural and artificial color, natural and artificial flavor, and modified food starch. The sugar will be cane or beet of United States or Mexican origin. The product flavors classified in NY R01312 include lemonade, lemon-lime, tropical cooler, orange, and cool citrus. The product flavors classified in NY R01313 include mixed berry, fruit punch, cherry and grape. The mixes will be blended in Mexico and imported in 2,400 to 2,700 pound bulk bags. After importation into the United States, the mixes will be repackaged into various sizes for industrial, food service and retail sale.
LAW AND ANALYSIS:
Merchandise is classifiable under the HTSUS in accordance with the General Rules of Interpretation (GRIs). The systematic detail of the HTSUS is such that most 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 the official interpretation of the Harmonized System at the international level. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The HTSUS subheadings under consideration are as follows:
1701 Cane or beet sugar and chemically pure sucrose, in solid form:
Other:
1701.91 Containing added flavoring or coloring matter:
Containing added flavoring matter whether or not containing added coloring:
Articles containing over 65 percent by dry weight of sugar described in additional U.S. note 2 to chapter 17:
* * *
1701.91.4800 Other 1/
Articles containing over 10 percent by dry weight of sugar described in additional U.S. note 3 to chapter 17:
* * *
Other 2/
1/ See subheadings 9904.17.17-9904.17.48.
2/ See subheadings 9904.17.49-9904.17.65.
2106 Food preparations not elsewhere specified or included:
2106.90 Other:
Other:
Other:
Other:
Other:
2106.90.99 Other
Preparations for the manufacture of beverages:
* * *
2106.90.9972 Containing sugar derived from sugar cane and/or sugar beets
You contend that the drink mixes should be classified in subheading 2106.90.99, HTSUS, which provides for “Food preparations, not elsewhere specified or included, … Other.” Your reasoning is that the subheadings of Chapter 17 do not include articles that contain “electrolytes” which are intended to help the body maintain a balanced cellular activity during exercise. You state that these “electrolytes” are neither flavoring nor colored matter referred to in the subheading.
The drink mixes under consideration contain between 80% and 85% sugar plus “less than” 8% dextrose. The “electrolytes” are present in a minimal amount of less than 1% each. CBP has previously considered drink mixes which contain sugar and various quantities of additional ingredients such as vitamin C, sodium citrate, guar gum and acids that are in powdered form packaged for retail sale. In determining the classification of such products, CBP has referred to the ENs. The Courts have consistently followed the ENs for guidance in interpreting the HTSUS when the ENs are persuasive and specifically include or exclude an item from a tariff heading as it did in Bausch & Lomb, supra, and refused to do so when the EN’s are not persuasive. See also, Lynteq, Inc. v. U.S., 10 Fed. Cir. (T) 112 (1992), North American Processing Co. v. U.S., CIT, Slip OP. 98-13 (1998) and Sabritas, S.A. De C.V and Frito-Lay, Inc., v. U.S., CIT, Slip Op. 98-14 (1998).
In HQ 983668, dated June 23, 2000, a ruling covering six powdered flavored drink mixes marketed under the name “Klass Aguas Frescas”, Customs stated:
The EN’s [sic] for heading 2106 state that “powders which have the character of flavoured or coloured sugars used in the preparation of lemonade and the like fall in heading 17.01 or 17.02 as the case may be”. As noted above, heading 1702, unlike sugar syrups, does not exclude other sugars in solid forms (including powders) containing added flavoring or coloring matter. The EN's for heading 2106 further state that the heading includes “preparations for the manufacture of lemonades or other beverages, consisting, for example of; flavored or coloured syrups, being sugar solutions with natural or artificial substances added to give them the flavor of, for example, certain fruits or plants (raspberry, blackcurrant, lemon, mint, etc), whether or not containing added citric acid and preservatives.” We have consistently held in our rulings that the EN’s for heading 2106 are persuasive and specifically excludes from heading 2106 other sugars in solid form containing flavoring and colored matter that are classified in headings 1701 and 1702. See New York Ruling Letters (NYRL) A89697 dated 11/27/96, B86542 dated 6/11/97, D83345 dated 10/27/98, D80530 dated 8/7/98, A86301 dated 8/19/96, and DD870722 dated 2/4/92. See also, Headquarters Ruling Letters 083698 dated 6/1/89, 083940 dated 7/5/89, 084927 dated 10/3/89, 085590 dated 11/29/89, 955641 dated 3/8/94, and 956823 dated 8/8/94. These rulings also contained similar added ingredients as in the Klass Aguas Frescas drink mixes.
The ruling, HQ 983668, went on to state: “With the exception of the ‘Horchata’ drink mixes, all of the other drink mixes described above are classifiable in headings 1701 and 1702.” The “Horchata” drink mix happens to be the drink mix you have cited in your letter. Because it contained 14% condensed milk substitute that drink mix would be classified in subheading 2106.90.78, HTSUS, if the product contained over 10% by dry weight milk solids. If the product did not contain over 10% by dry weight milk solids, it would be classified in subheading 2106.90.95, HTSUS. The “Horchata” drink mix was classified in heading 2106, because of the milk ingredients, and not because of the flavoring or other substances.
In HQ 964497, dated January 23, 2001, CBP classified a variety of powdered drink mixes consisting primarily of sugar with such added ingredients as citric acid, tricalcium phosphate, ascorbic acid, sodium citrate, salt, xanthan gum, corn starch and corn syrup solid, artificial flavor and artificial color in heading 1701, HTSUS.
Despite your characterization of the ingredients as “electrolytes” which may aid in hydration and assist consumers in replacing mineral loss, the powder drink mix is still a product with an 80 to 85 percent sugar base, with additional sugar in the form of dextrose, marketed in nine different flavors. The ingredients termed “electrolytes” are not dissimilar enough from ingredients in other drink mixes CBP has considered in the past to warrant a different classification of these products. CBP has consistently classified such products in chapter 17. We are not persuaded that the marketing of the product as “isotonic drink mixes” should result in a different classification.
HOLDING:
For the reasons stated above, the nine isotonic drink mixes classified in
NY R01312, dated February 2, 2005, and NY R01313, dated February 9, 2005, are properly classified in subheading 1701.91.48, HTSUS, which provides for “Cane or beet sugar and chemically pure sucrose, in solid form: … Containing added flavoring matter whether or not containing added coloring: Articles containing over 65 percent by dry weight of sugar described in additional U.S. note 2 to chapter 17: … Other,” when they are repackaged for industrial and food service sale. The 2005 general duty rate will be 33.9 cents per kilogram plus 5.1 percent ad valorem.
When the isotonic drink mixes are repackaged for retail sale, the classification will be in subheading 1701.91.58, HTSUS, which provides for “Cane or beet sugar and chemically pure sucrose, in solid form: … Containing added flavoring matter whether or not containing added coloring: Articles containing over 10 percent by dry weight of sugar described in additional U.S. note 3 to chapter 17: Other.” The 2005 general duty rate will be 33.9 cents per kilogram plus 5.1 percent ad valorem.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at www.usitc.gov.
NY R01312, dated February 2, 2005 and NY R01313, dated February 9, 2005 are affirmed.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division