CLA-2 OT:RR:CTF:TCM H061203 CkG
Port Director
Customs and Border Protection
3150 Tchulahoma Road Suite 1 Memphis, TN 38118
RE: Application for Further Review of Protest Number 2006-09-100061;
classification of rosemary extract with ethanol
Dear Port Director,
This is in response to the Application for Further Review of Protest Number 2006-2009-100061, filed on February 2, 2009, by the importer, Naturex, Inc. (‘Protestant”), contesting Customs and Border Protection’s (CBP) classification and liquidation of StabilEnhance® WSR” under subheading 3824.90.28 of the Harmonized Tariff Schedule of the United States (HTSUS).
FACTS:
The substance in question is called StabilEnhance® WSR. Identified by the importer as a rosemary extract, it is produced from ground rosemary leaves. The production process consists of water extraction from rosemary leaves, followed by separation of solid and liquid components, acidification, purification by adsorption column (a method used to purify individual chemical compounds from mixtures of compounds), formulation in an ethanol carrier, then further concentration, standardization, and filtration. The extraction enhances the phenols in the rosmarinic acid via a selective process. The phenols possess antioxidant properties, and StabilEnhance® WSR is used as an antioxidant supplement in the food industry. The product is stated to be composed of 60-75% rosemary extract and 25-40% ethanol, standardized to 4-4.5% rosmarinic acid.
The subject merchandise was entered on June 21, 2008. CBP liquidated the entries on August 8, 2008, in heading 3824, HTSUS. The Protestant claims classification in heading 1302, HTSUS.
ISSUE:
Whether the subject article is a vegetable extract of heading 1302, HTSUS, or an “other” chemical product or preparation of heading 3824, HTSUS.
LAW AND ANALYSIS:
The matter protested is protestable under 19 U.S.C. §1514(a) (2) as a decision on classification. The protest was timely filed, within 180 days of liquidation of the first entry for entries made on or after December 18, 2004. (Miscellaneous Trade and Technical Corrections Act of 2004, Pub.L. 108-429, § 2103(2) (B) (ii), (iii) (codified as amended at 19 U.S.C. § 1514(c) (3) (2006)).
Further Review of Protest No. 2006-09-100061 was properly accorded to Protestant pursuant to 19 C.F.R. § 174.24(a) because the decision against which the protest was filed is alleged to be inconsistent with a prior CBP ruling with respect to the same or substantially similar merchandise. Specifically, the protestant cites New York Ruling Letters (NY) N009379, dated May 9, 2007, M85247, dated July 28, 2006, and L8095, dated December 10, 2004.
Classification of goods under the HTSUS is governed by the General Rules of Interpretation (GRI). GRI 1 provides that classification 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 GRIs 2 through 6 may then be applied in order.
The HTSUS provisions under consideration are as follows:
1302: Vegetable saps and extracts; pectic substances, pectinates and pectates; agar-agar and other mucilages and thickeners, whether or not modified, derived from vegetable products:
Vegetable saps and extracts:
1302.19: Other:
Ginseng; substances having anesthetic, prophylactic or therapeutic properties:
1302.19.40: Other . . . .
* * * * *
3824: Prepared binders for foundry molds or cores; chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included:
3824.90: Other:
Other:
Mixtures containing 5 percent or more by weight of one or more aromatic or modified aromatic substances:
3824.90.28: Other…..
Other:
Other:
3824.90.92: Other . .
* * * * *
The Harmonized Commodity Description and Coding System Explanatory Notes
(EN), 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 the headings. It is CBP’s practice to follow, whenever possible, the terms of the ENs when interpreting the HTSUS. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
EN 13.02 provides, in pertinent part, as follows:
(A) Vegetable saps and extracts.
The heading covers saps and extracts (vegetable products usually obtained by natural exudation or by incision, or extracted by solvents), provided that they are not specified or included in more specific headings of the Nomenclature (see list of exclusions at the end of Part (A) of this Explanatory Note).
These saps and extracts differ from the essential oils, resinoids and extracted oleoresins of heading 33.01, in that, apart from volatile odoriferous constituents, they contain a far higher proportion of other plant substances (e.g., chlorophyll, tannins, bitter principles, carbohydrates and other extractive matter).
Tinctures " are extracts still dissolved in the alcohol by means of which they are extracted; the so called " fluid extracts " are solutions of extracts in, for example, alcohol, glycerol or mineral oil…Solid extracts are obtained by evaporating the solvent. Inert substances are sometimes added to certain extracts so that they can be more easily reduced to powder, or to obtain a standard strength (for instance, certain quantities of starch are added to opium in order to obtain a product containing a known portion of morphine). The addition of such substances does not affect the classification of these solid extracts.
The vegetable saps and extracts of this heading are generally raw materials for various manufactured products. They are excluded from the heading when, because of the addition of other substances, they have the character of food preparations, medicaments, etc.
* * * * *
Heading 3824, HTSUS, which provides for “other” chemical products and preparations, not elsewhere specified in the HTSUS. Therefore, if we find that the merchandise is described by the terms of heading 1302, HTSUS, then heading 3824, HTSUS, can not be considered.
Heading 1302, HTSUS, describes vegetable extracts. The EN’s provide that vegetable products are usually obtained by natural exudation or by incision, or extracted by solvents. Other recognized methods of extraction include percolation, maceration, digestion, or infusion. See United States Pharmacopeia (USP), (21st rev., p.1334), and Remington's Pharmaceutical Sciences, (18th ed., p. 1543). The extraction method described by the importer is more elaborate and complex than those listed above, and is designed to specifically target the antioxidant compounds in the source material.
Substances obtained from a plant are not considered “vegetable extracts” of heading 1302, if they only contain one ingredient divorced from the composition of the vegetable source. In Headquarters Ruling Letter (HQ) 967972, dated March 2, 2006, we stated the following:
However, there appears to be a limit on the degree and extent of purification that can occur for the product to remain in heading 1302. For instance, EN 13.02, explicitly excludes certain refined extracts of opium, quassia amare, papaw juice, and cashew nut shell liquid, once the refining process concentrates a certain group of chemical compounds to a particular point. Hence, poppy straw concentrates containing more than 50% alkaloids are excluded from heading 1302…we note that the leucoanthocyanin consists of over 90% mixtures of oligomeric proanthocyanidins (OPCs) and the silymarin consists of at least 80% of isomers of silymarin. Therefore, silymarin andleucoanthocyanin are relatively pure chemical products and cannot be classified simply as extracts.
In HQ W968424, dated December 19, 2006, CBP also excluded pine bark extract from heading 1302, HTSUS, due to the level of purification. CBP stated in this case:
Here, with the product Enzogenol®, we have a product that has been highly extracted and standardized so that it contains the desired constituent of the raw pine bark, proanthocyanidin, in concentrations of 76% or greater to the exclusion of other constituents. The extraction procedure involves taking filtered liquor and then further processing it by either ultra-filtration, reverse osmosis, or a combination of both processes... The purpose of these steps is to allow you to create a product that contains a high concentration of the desired components of the starting material to the exclusion of unwanted components. This processing results in an article that does not include all constituents of the starting material in their relative proportions. Thus, the Enzogenol® has been processed to become a dietary supplement, clearly a specialized, not general, purpose. As such, it is not an extract classified in heading 1302, HTSUS.
In the instant case, the source material is highly purified and concentrated in
the extraction process. The protestant maintains that the method of extraction has not advanced the extract to a level of purity whereby it can no longer be considered an extract and thereby excluded from heading 1302, HTSUS. The protestant contends that StabilEnhance® WSR requires no more processing than other extracts classified by CBP in heading 1302, HTSUS, in New York Ruling Letters (NY) N009379, dated May 9, 2007, NY M85247, dated July 28, 2006, and NY L8095, dated December 10, 2004.
These decisions, however, make no mention of the additional steps involved in the processing of StabilEnhance®, such as acidification, purification by adsorption column, sieving, etc, which indicate that the StabilEnhance® WSR has been processed beyond a simple extract of heading 1302, HTSUS, by enhancing the polyphenol content in the product via a selective process. The use of column chromatography is particularly indicative of a highly processed substance. An adsorption column uses a resin to isolate a particular chemical compound—in this case, polyphenols—from the extract. In addition, the flow chart provided by the Protestant indicates further concentration and separation of components after the column purification. It is thus the opinion of this office that phenolic compunds are targeted and further concentrated in the extraction and purification process, resulting in a relatively pure chemical product that can no longer be considered a simple extract of heading 1302, HTSUS. The description of the product on the importer’s website supports this conclusion. Naturex notes in its product brochure that the extracted material is standardized to rosmarinic acid, “the most potent water soluble antioxidant compound from rosemary.” Naturex also markets its StabilEnhance® products for their antioxidant properties, noting that StabilEnhance® WSR “contains the most polar part of rosemary leaves in which many different phenolic compounds are found.”
Because the StabilEnhance® WSR is not provided for elsewhere in the tariff, it is classified in heading 3824, HTSUS, as an “other” chemical product or preparation. However, the total content by weight of the rosmarinic acid in the “StabilEnhance WSR” solution is stated to be 4-4.5% (i.e., less than 5%). The solution is also stated to contain low levels of carnosic acid, which is also an aromatic compound, but only in trace quantities (less than 100 ppm). The solution is therefore not classifiable in subheading 3824.90.28, HTSUS, as a mixture containing 5% or more by weight of an aromatic substance. It is instead provided for in subheading 3824.90.92, HTSUS.
HOLDING:
By application of GRIs 1 and 6, the instant merchandise is classified in
subheading 3824.90.92, HTSUS, which provides for “Prepared binders for foundry
molds or cores; chemical products and preparations of the chemical or allied industries
(including those consisting of mixtures of natural products), not elsewhere specified or
included: Other: Other: Other: Other: Other.” The 2008 column one, general rate of
duty is 5% ad valorem.
Since reclassification will result in a lower duty rate, you are instructed to allow the protest in full. In accordance with Sections IV and VI of the CBP Protest/Petition Processing Handbook (HB 3500-08A, December 2007, pp. 24 and 26), 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, Regulations and Rulings, Office of International Trade, 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 Division