CLA-2 RR:CTF:TCM 967900ptl
Ms. Andrea Miller
Costco Wholesale
999 Lake Drive
Issaquah, WA 98027
RE: Microwave Buttered Popcorn; Revocation of NY H83710
Dear Ms. Miller:
On July 16, 2001, the Customs and Border Protection (CBP) National Commodity Specialist Division, in New York, issued New York Ruling Letter (NY) H83710 to you classifying “Act II” brand microwave buttered popcorn under the Harmonized Tariff Schedule of the United States (HTSUS), in subheading 1005.90.4040, HTSUS, which provides for corn (maize), other, other, popcorn. CBP has had occasion to review that ruling and, for the reasons stated below, has determined that it is in error. This letter revokes NY H83710 and provides the correct classification for microwave buttered popcorn.
Pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C. 1625(c)(1)), as amended by Title VI, a notice was published in the January 4, 2006, CUSTOMS BULLETIN, Volume 40, Number 2, proposing to modify NY H83710, and to revoke any treatment accorded to substantially identical transactions. One comment was received in response to the notice. Points raised in that comment are discussed below.
FACTS:
The “Act II” brand popcorn products under consideration in NY H83710 are available in three flavors. “Butter” popcorn contains popcorn (maize), partially hydrogenated vegetable oil, salt, natural flavoring, and achiote (coloring). “Extra butter” popcorn contains popcorn (maize), partially hydrogenated vegetable oil, salt, natural and artificial flavoring, and achiote. “Natural” popcorn contains popcorn (maize), partially hydrogenated vegetable oil, and salt. The flavorings and seasonings are packaged together with the popcorn in individual 99 gram packages that are designed to be heated in a microwave. The individual packages will be sold in boxes containing 28 packages.
ISSUE:
Whether individual packages of popcorn mixed with other ingredients for use in microwave ovens are preparations for purposes of heading 2008?
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:
1005 Corn (maize):
* * *
Other:
* * *
Other
1005.90.4040 Popcorn
2008 Fruit, nuts and other edible parts of plants, otherwise prepared or preserved, whether or not containing added sugar or other sweetening matter or spirit, not elsewhere specified or included:
Nuts, peanuts (ground-nuts) and other seeds, whether or not mixed together:
* * *
2008.19 Other, including mixtures:
* * *
Other, including mixtures:
2008.90.90 Other
2008.19.9090 Other
As imported, the packages of microwave popcorn consist of kernels of corn (maize) that have been mixed with specific proportions of partially hydrogenated vegetable oil, salt, natural or artificial flavoring, and, in some, achiote (coloring). These packages are marketed to consumers who will purchase and use the products as offered, without any further preparation on their part other than cooking in the microwave.
According to Note 1 (b) to Chapter 10, grains which have been hulled or otherwise worked are excluded from Chapter 10. Additionally, the General Explanatory Notes to Chapter 10 provide, in relevant part, that “This Chapter covers cereal grains only, .…” Since the popcorn at issue has been prepared by being mixed with partially hydrogenated vegetable oil, salt, and other ingredients, they are excluded from Chapter 10 and they should not be classified in subheading 1005.90.4040, HTSUS.
It is CBP’s opinion that the specific ingredient composition of these products has advanced the popcorn from being mixtures of popcorn kernels and other ingredients to products that are preparations consisting of popcorn kernels with specific additional ingredients which are designed to impart a specific taste or flavor to the finished product.
CBP received a comment in response to the Notice of Proposed Revocation published in the Customs Bulletin which argues for the correctness of the original ruling. The commenter asserts that the products have been put up for the convenience of the consumer. He argues that the products should be classified by virtue of the essential character of the product, which, it is claimed to be imparted by the popcorn kernels. The commenter claims that the popcorn kernels have not been “prepared or preserved” but have simply “been packed with other ingredients.”
In support of this position, the commenter refers to several CBP rulings. However, the cited rulings do not support his position. One ruling, NY H88884, dated March 6, 2002, classified tuna products packed with marinade in pouches. The commenter correctly points out that the product was classified in “the HTS Heading 1604 provisions covering fish.” Chapter 16 covers prepared foodstuffs. The fish that has not been prepared is classified in chapter 3.
Similarly, other rulings cited cover pasta or noodles packaged with either a cheese sauce mix (NY K81125, dated November 19, 2003), tomato sauce and cheese (NY I84166, dated August 2, 2002), or a sauce preparation (NY G81337, dated September 13, 2000). In all these rulings, the products constituted “sets” in which the ingredients were packaged for use together, but were not mixed together as are the subject popcorn kernels and the oil, salt and flavorings inside the microwave package. In HQ 950891, dated March 26, 1992, CBP conducted a similar analysis classifying three varieties of rice soup meals as sets. Each variety consisted of three separate packets of rice, soup stock, and either an eel, mushroom or bamboo shoot packet. CBP held that the products were sets consisting of separate items put up together to meet a particular need, with the rice component imparting the essential character. Here, again, the ingredients were not mixed at importation, but were mixed by the consumer during final preparation.
For instances where CBP has ruled that, because of the mixing of ingredients and seasonings, a preparation has been created for tariff purposes, see HQ 953651, dated June 16, 1993, concerning jambalaya and curry preparations consisting of rice, spices and vegetables. Also, NY L80537, dated November 8, 2004, concerning mixtures of dry ingredients for soup packaged together in sealed pouches, and NY D80053, dated August 10, 1998, a dry lentil soup mix. Both of these rulings classified the products in chapter 21 as preparations, in spite of the fact that each “soup” contained a specific, identifiable ingredient that characterized that particular soup.
A further rationale supporting CBP’s classification of packages of microwave popcorn as a preparation can be found in the opinions of the Court of International Trade and the U.S. Court of Appeals for the Federal Circuit. See Orlando Food Corp. v. United States, 21 Ct. Int’l Trade 187 (1997); aff’d 140 F.3d 1437 (Fed. Cir. 1998). In Orlando Foods, the addition of salt, citric acid and a basil leaf caused canned tomato products to be classified as goods that have the character of preparations for sauces, rather than tomatoes. In the instant situation, the addition of oil, salt and flavorings to the popcorn kernels has changed the character of the product to one that is more than kernels of popcorn. Also, the added ingredients distinguish the different styles from each other.
In the microwave popcorn, the popcorn kernels have been prepared for use by the consumer by having been combined and packaged with oil, salt and flavorings. Even if the kernels were to be removed before being popped, which is not how they are intended to be used, they would retain some of the oil, salt and flavorings. The instant popcorn kernels in the microwave packages are not the same popcorn kernels found in jars or plastic bags of popcorn.
Based on this analysis, we disagree with the commenter’s proposition and conclude that the microwave popcorn packages are preparations provided for in heading 2008, HTSUS, which provides for “fruit, nuts and other edible parts of plants, otherwise prepared or preserved, whether or not containing added sugar or other sweetening matter or spirit, not elsewhere specified or included.”
HOLDING:
Microwave popcorn packages consisting of popcorn (maize), partially hydrogenated vegetable oil, natural and/or artificial flavor and, possibly, coloring, and salt, and designed for use with microwave ovens are classified in subheading 2008.19.9090, HTSUS, which provides for “Fruit, nuts and other edible parts of plants, otherwise prepared or preserved, whether or not containing added sugar or other sweetening matter or spirit, not elsewhere specified or included: Nuts, peanuts (ground-nuts) and other seeds, whether or not mixed together: Other, including mixtures: Other, including mixtures: Other, Other.” The 2006 duty rate is 17.9% 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 H83710, dated July 16, 2001, is revoked.
In accordance with 19 U.S.C. 1625(c), this ruling will become effective
60 days after publication in the CUSTOMS BULLETIN.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division