CLA-2 RR:CTF:TCM 967742 AM
Mr. William D. Outman, II
Mr. Stuart Seidel
Baker & McKenzie LLP
815 Connecticut Ave., NW
Washington, DC 20006-4078
Re: Reconsideration of HQ 967515
Dear Messrs. Outman and Seidel:
This is in reference to your letter, dated May 10, 2005, requesting reconsideration of Headquarters Ruling Letter (HQ) 967515, dated March 21, 2005, concerning the classification, under the Harmonized Tariff Schedule of the United States, (HTSUS), of four varieties of tuna products packed in foil pouches with other ingredients. We have reviewed this ruling and believe it is correct.
FACTS:
The merchandise discussed in HQ 967515 consists of four varieties of imported tuna. These are Teriyaki B, Lemon Pepper YF Strips, Plain A and Mesquite MZ-2A packaged in airtight foil pouches with a mixture of flavoring ingredients in a sauce.
The Teriyaki B sauce does not contain any oil and thus was classified in subheading 1604.14.22, the provision for “Prepared or preserved fish; caviar and caviar substitutes prepared from fish eggs: Fish, whole or in pieces, but not minced: Tunas, skipjack and bonito (Sarda spp.) Tunas and skipjack: In airtight containers: Not in oil: In containers weighing with their contents not over 7 kg each, and not the product of any insular possession of the United States, for an aggregate quantity entered in any calendar year not to exceed 4.8 percent of apparent United States consumption of tuna in airtight containers during the immediately preceding year, as reported by the National Marine Fisheries Service” or in subheading1604.14.30, HTSUS, the provision for “Prepared or preserved fish; caviar and caviar substitutes prepared from fish eggs: Fish, whole or in pieces, but not minced: Tunas, skipjack and bonito (Sarda spp.) Tunas and skipjack: In airtight containers: Not in oil: Other,” as requested.
However, the sauce in the Lemon Pepper, Plain A and Mesquite varieties contains oil and was classified as such in subheading 1604.14.10, the provision for “Prepared or preserved fish; caviar and caviar substitutes prepared from fish eggs: Fish, whole or in pieces, but not minced: Tunas, skipjack and bonito (Sarda spp.) Tunas and skipjack: In airtight containers: In oil”.
The Lemon Pepper YF Strips consist of chunks of tuna in a sauce containing water, sunflower oil, distilled white vinegar, flavorants, sugar, salt, citric acid, guar gum, cracked pepper, lemon pepper seasoning and lemon flavor.
The Plain A variety consists of chunks of tuna in a sauce containing water, sunflower, oil, fresh garlic salt, xantham gum, broth, and parsley.
The Mesquite MZ-2A variety consists of large chunks of tuna in a sauce containing water, mesquite flavorant, xantham gum, caramel color, and sunflower oil.
ISSUE:
Is tuna packed in a sauce containing oil classified as “tuna, in oil” in subheading 1604.14.10?
LAW AND ANALYSIS:
Merchandise imported into the U.S. is classified under the HTSUS. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (GRIs) and, in the absence of special language or context that requires otherwise, 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.
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 GRIs taken in order. GRI 6 requires that the classification of goods in the subheadings of headings shall be determined according to the terms of those subheadings, any related subheading notes and mutatis mutandis, to the GRIs.
The dispute here arises at the 8-digit level. Therefore, the heading and six digit subheading are not at issue. The HTSUS subheadings under consideration are as follows:
1604 Prepared or preserved fish;
1604.14 Fish, whole or in pieces, but not minced:
Tunas, skipjack and bonita:
Tunas and skipjack:
In airtight containers:
1604.14.10 In oil
* * * * * * * *
Not in oil:
In containers weighing with their contents not over 7 kg each, and not the product of any insular possession of the United States, for an aggregate quantity entered in any calendar year not to exceed 4.8 percent of apparent United States consumption of tuna in airtight containers during the immediately preceding year, as reported by the National Marine Fisheries Service
1604.14.30 Other
Additional U.S. Note 1, to Chapter 16, HTSUS, states “For the purposes of this chapter, the term ‘in oil’ means packed in oil or fat, or in added oil or fat and other substances, whether such oil or fat was introduced at the time of packing or prior thereto.”
In HQ 967515, CBP classified the three tuna products at issue in subheading 1604.14.10, the provision for tuna in airtight containers, in oil. You disagree with our assessment that the tuna should be considered “in oil” for three reasons. You state that (1) CBP’s interpretation of Additional U.S. Note 1 to Chapter 16 is erroneous because it fails to consider the legislative history involved, (2) the Ruling disregarded regulations administered by the U.S. Food and Drug Administration (“FDA”), and (3) the ruling posture adopted is “wholly lacking in meaningful purpose” (May 10, 2005, submission, pp. 4-5).
As an initial matter, the ingredient percentages that you note in your request are not expressed in a consistent manner. For the water, the percentage given is by weight in comparison to the sauce. For the oil, the percentage given is by weight in comparison to the total weight of the product. The oil in each of the three products actually accounts for approximately 1-13% of the sauce, and the relative weight of tuna to sauce is about the same as that in canned products.(
The meaning of the term “in oil,” as set forth in Additional U.S. Note 1 to Chapter 16, is unambiguous. There is no exclusion for fish that is packed in oil and other ingredients. Moreover, the Additional U.S. Note includes within the definition of “in oil”, tuna with “added oil or fat and other substances” introduced “at the time of packing or prior thereto.”
Here the legal language of the tariff is clear, so “legislative history may not be resorted to when language of the statute is plain and unambiguous. C.J. Tower & Sons v. United States, 41 CCPA 195, C.A.D. 550 (1954)” Continental Manufacturing Co. et al. v. United States, 82 Cust. Ct. 187, 190 (1979) (emphasis in the original). However, we will consider your arguments in this regard as part of a comprehensive analysis.
The history of the tariff terms as you report them is as follows:
Tariff Act of 1890
Anchovies and sardines, packed in oil or otherwise, in tin boxes measuring not more than five inches long, four inches wide and three and one-half inched deep, ten cents per whole box . . . .
Tariff Act of 1909
Fish (except shellfish) by whatever name known, packed in oil, in bottles, jars, kegs, tin boxes, or cans, shall be dutiable as follows: . . .
Tariff Act of 1913
Fish, except shellfish, by whatever name known, packed in oil or in oil and other substances, in bottles, jars, kegs, tin boxes, or cans, 25 per centum ad valorem; . . . .
Tariff Act of 1930
718(a)Fish, prepared or preserved in any manner, when packed in oil or in oil and any other substance.
Tariff Schedules of the United States (1962)
Schedule 1,Part 3, headnotes
In subparts C and D of this part, the term “in oil” means packed in added oil or fat, or in added oil or fat and other substances, whether such oil or fat was introduced at the time of packing or prior thereto.
HTSUS 2005
Chapter 16, Additional U.S. Notes:
For the purposes of this chapter, the term “in oil” means packed in oil or fat, or in added oil or fat and other substances, whether such oil or fat was introduced at the time of packing or prior thereto.
You state that the language added through the years to clarify the term “in oil” “had but one purpose: protect the classic ‘packed in oil’ fish product from incursions designed to lower the rate of duty, but not the essential character, of the product” (May 10, 2005, submission, p. 13).
To bolster this claim, you review two cases you regard as in conflict with each other. In Treasury Decision (T.D.) 32680, 22 Treas. Dec. 1150 (1912), relying on Rosenstein v. United States, 71 Fed. Rep, 949 (1896), the Board of General Appraisers found that a small amount of tomato sauce added to smoked mackerel and a small amount of bullion added to pickled herring does not disqualify the products from classification in the item for smoked or pickled herring and mackerel. In T.D.32765, 13 Treas Dec. 98 (1912), however, the Assistant Secretary of the Treasury advised the port that a small amount of tomato sauce added to fish that was packed in oil, precluded it from classification as fish packed in oil. Hence, you suggest that the legislative addition of the terms “or in oil and other substances” was adopted to “resolve an apparent conflict in these cases.”
Whether or not the 1913 adoption of the language “in oil and other substances” was a “legislative fix” to “protect the classic ‘packed in oil’ fish product from incursions designed to lower the rate of duty, but not the essential character, of the product,” as you propose (May 10, 2005 submission, p. 11), we fail to see how your rendition of these cases opposes our conclusion in the case at hand. In T.D. 32680, fish that was smoked remained classified as smoked fish, even when a sauce or brine was added. No mention of the terms “in oil” is made in that case. In T.D. 32765, fish that was packed in the tomato sauce containing oil was not classified as being “in oil” and the legislature added language to make clear that fish packed in sauces containing oil should be classified as being packed “in oil.
The court then followed the new legislative language, from the Tariff Act of 1913, in Strohmeyer & Arpe Co. v. United States, T.D. 35175, 5 Ct. Cust. App. 527 (1915), where it found that fish cooked in oil, drained, and then packed in a tomato sauce was classified as fish “packed . . . in oil and other substances.” It was immaterial when the oil was added, whether before or during packing. It was likewise immaterial the percentage by weight of added oil in relation to the sauce as a whole. In fact, the court qualifies its 5.7% oil content figure with the statement “the major portion of which probably consists of vegetable oil.” Therefore, the amount of added oil was something less than the 5.7% by weight tested. The decision rested solely on the fact that added oil was present in the fish and sauce in which it was packed.
Since the language adopted in 1913 remains relatively unchanged in Additional U.S. Note 1 to Chapter 16, we fail to see how CBPs position on the instant case is contrary to tariff history. Here we have tuna, not smoked or pickled, in a sauce containing oil. It should be, and is, classified in just that subheading that names it thus. The language appears unambiguous on this point and Strohmeyer, supra, the only case on point on the topic, supports our ruling.
While no tariff language, court case or CBP ruling states as much, you also claim that there is, or should be, a “bright line” rule on the percentage of oil in the product before it can be considered “packed in oil.” For instance, you cite the FDA regulations that require tuna packed in 5% or more oil to be marked as such 21 C.F.R. §161.190(a)(5). The instant products, in compliance with the FDA regulations, are not marked as “packed in oil.” First, it has been well established law that other agency’s regulations are not determinative of the interpretation of tariff terms. Bestfoods v. The United States, 342 F. Supp. 2d 1312 (Ct. Intl. Trade, 2004).
In this specific instance, the FDA terms “packed in oil” and definitions attached thereto came after the tariff terms included those terms. As you note, the FDA has been charged with “establishing for any food, . . ., a reasonable definition and standard of identity . . . .” At that point, the term “packed in” under the FDA regulations was not tied to a specific amount of oil. It was not until October 31, 1990, that the FDA instituted regulations that require the specific 5% amount of oil to be labeled as “packed in oil.” Yet, the terms “packed in oil” in the tariff originated in 1913. Therefore, in this specific instance, the tariff terms are undisturbed by labeling laws regulated by the FDA.
Moreover, the tariff provision at issue is an eo nomine provision, not a use provision. While CBP has argued that FDA labeling regulations could help determine whether or not a particular principal use provision applies to a given product [see Inabata Specialty Chemicals v. U.S., 366 F. Supp. 2d 1358, (2005)], there is no case that holds that FDA regulations promulgated well after the establishment of a tariff term should be used to undermine the original meaning of a tariff term in an eo nomine provision.
Lastly, you state that there is no longer a domestic tuna product in need of duty rate protection and hence, CBP’s “ruling posture is wholly lacking in meaningful purpose.” As you know, these concerns are best remedied through legislation. CBP is not empowered to set duty rates, only to apply them according to the law.
Hence, we affirm HQ 967515. There is nothing contrary in the legislative history you provide to controvert the plain meaning of the legal language involved. The three products in dispute, Lemon Pepper YF Strips, Plain A and Mesquite MZ-2A, are classified in subheading 1604.14.10, HTSUS, the provision for “Prepared or preserved fish; caviar and caviar substitutes prepared from fish eggs: Fish, whole or in pieces, but not minced: Tunas, skipjack and bonito (Sarda spp.) Tunas and skipjack: In airtight containers: In oil:”
HOLDING:
HQ 967515 is affirmed. The three products in dispute, Lemon Pepper YF Strips, Plain A and Mesquite MZ-2A, are classified in subheading 1604.14.10, HTSUS, the provision for “Prepared or preserved fish; caviar and caviar substitutes prepared from fish eggs: Fish, whole or in pieces, but not minced: Tunas, skipjack and bonito (Sarda spp.) Tunas and skipjack: In airtight containers: In oil:”
Sincerely,
Sandra L. Bell
Deputy Assistant Commissioner
Office of Regulations and Rulings