CLA-2 OT:RR:CTF:TCM H008515 IDL
Mr. Bob Forbes
ROE Logistics
660 Bridge Street
Montreal, Quebec H3K 3K9
Canada
Re: Milk Chocolate “Coating” (Slabs); Revocation of NY N006098
Dear Mr. Forbes:
This letter concerns New York Ruling Letter (NY) N006098, dated February 20, 2007, issued to you by U.S. Customs and Border Protection (CBP). At issue in that ruling was the classification of “milk chocolate coating (Product No. 0757180-400)” under the Harmonized Tariff Schedule of the United States (HTSUS). We have reviewed N006098 and have found that it is incorrect.
Pursuant to section 625(c), Tariff Act of 1930 (19 U.S.C. § 1625(c)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. 103-182, 107 Stat. 2057, 2186 (1993), notice of the proposed modification was published in the Customs Bulletin, Volume 42, No. 29, on July 9, 2008. No comments were received in response to the notice.
FACTS:
In NY N006098, CBP described the milk chocolate product as follows:
The subject merchandise is stated to contain 54.55 percent sugar, 18.85 percent cocoa butter, 13.40 percent chocolate liquor, 9.36 percent skim milk powder, 3.34 percent anhydrous milk fat, 0.48 percent soya lecithin and 0.01 percent vanillin. Total milk solids are 12.7 percent and total milk fat is 3.40
percent. It will be shipped in 10-pound slabs…. the product is ready for consumption; it just needs to be melted prior to coating and is intended for use in coating cakes, pastries and confectionery.
CBP classified the product under subheading 1806.20.3600, HTSUSA. However, it is now our position that the milk chocolate product described in NY N006098 was classified incorrectly, and that the chocolate should be classified under subheading 1806.20.20, HTSUS.
ISSUE:
Whether the milk chocolate product described above is correctly classified under subheading 1806.20.20 or under subheading 1806.20.3600, HTSUS?
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 2 through 6 may then be applied in order.
The HTSUS provisions under consideration are as follows:
1806 Chocolate and other food preparations containing cocoa:
* * *
Other preparations in blocks, slabs or bars, weighing more than 2kg or in liquid, paste, powder, granular or other bulk form in containers or immediate packings, of a content exceeding 2 kg:
Preparations consisting wholly of ground cocoa beans, with or without added cocoa fat, flavoring or emulsifying agents, and containing not more than 32 percent by weight of butterfat or other milk solids and not more than 60 percent by weight of sugar:
In blocks or slabs weighing 4.5 kg or more
each…..
* * *
Other:
Containing butterfat or other milk solids (excluding articles for consumption at retail as candy or confection):
Other:
* * *
Other:
1806.20.3600 Containing less than 21 percent by weight of milk solids 1/…..
In understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System Explanatory Notes (ENs) may be utilized. The 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).
EN 18.06 provides the following:
Chocolate is composed essentially of cocoa paste and sugar or other sweetening matter, usually with the addition of flavouring and cocoa butter; in some cases, cocoa powder and vegetable oil may be substituted for cocoa paste….
* * *
The heading also includes all sugar confectionery containing cocoa in any proportion (including chocolate nougat), sweetened cocoa powder, chocolate powder, chocolate spreads, and, in general, all food preparations containing cocoa (other than those excluded in the General Explanatory Note to this Chapter).
As an initial matter, we note that, although in N006098 CBP referred to
the product at issue as a “milk chocolate coating”, the product is actually entered in slab form and is melted and used as coating after importation; it is not imported in liquid form.
As stated above, the milk chocolate product contains ingredients that
include sugar, flavoring, and cocoa butter. We find that the milk chocolate product meets the requirements of heading 1806, HTSUS, as well as the description provided in EN 18.06. As such, the milk chocolate product is properly classified in heading 1806, HTSUS. Further, subheading 1806.20, HTSUS, provides for “other preparations in … slabs … weighing more than 2 kg”. As earlier described, the milk chocolate is imported in slab form and weighs in excess of 2 kg. On that basis, we find that it meets the requirements of subheading 1806.20, HTSUS.
Contrary to our previous decision, at the eight-digit level, we now find that the milk chocolate slabs meet the requirements of subheading 1806.20.20, HTSUS, because, at 10 pounds, they exceed the stated minimum weight requirement of 4.5 kg (1 kg = 2.2 lbs.; 4.5 kg = 9.9 lbs.). Further, they are not described by the terms of subheading 1806.20.3600, HTSUSA. Accordingly, the milk chocolate slabs are classified under subheading 1806.20.20, HTSUS.
HOLDING:
By application of GRI 1, the milk chocolate slabs are classified in heading 1806, HTSUS, and are specifically provided for under subheading 1806.20.20, HTSUS, as: “Chocolate and other food preparations containing cocoa:… Other preparations in … slabs … weighing more than 2 kg: Preparations consisting wholly of ground cocoa beans, with or without added cocoa fat, flavoring or emulsifying agents, and containing not more than 32 percent by weight of butterfat or other milk solids and not more than 60 percent by weight of sugar: In blocks or slabs weighing 4.5 kg or more each.” The 2008 column one, general rate of duty is “free”.
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 http://www.usitc.gov/tata/hts/.
This merchandise is subject to the Public Health Security and Bioterrorism Preparedness and Response Act of 2002 (The Bioterrorism Act), which is regulated by the Food and Drug Administration (FDA). Information on the Bioterrorism Act can be obtained by calling the FDA, at (301) 575-0156, or from the World Wide Web at http://www.fda.gov/oc/bioterrorism/bioact.html.
EFFECT ON OTHER RULINGS:
NY N006098, dated February 20, 2007, is hereby 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