CLA-2 OT:RR:CTF:TCM HQ H225004 NCD
Port Director
Port of Los Angeles
U.S. Customs and Border Protection
301 E. Ocean Blvd., Suite 1400
Long Beach, CA 90802
Attn: Gino Cerreta, Import Specialist
Re: Protest and Application for Further Review No. 2704-12-101630; jujube seed/magnolia bark extract blend
Dear Port Director:
The following is our decision regarding Protest and Application for Further Review No. 2704-12-101630, timely filed on April 16, 2012, on behalf of Cortex Scientific Botanicals, (“Cortex” or “Protestant”) regarding the tariff classification of a jujube seed/magnolia bark extract blend under the Harmonized Tariff Schedule of the United States (HTSUS).
FACTS:
The subject merchandise consists of a date seed/magnolia bark extract blend in powder form. According to Protestant’s various submissions, the merchandise is a mixture of a jujube seed extract and magnolia bark extract, each of which has been produced by means of water and solvent extraction. Following initial extractions, the jujube seed extract is supplemented with microcrystalline cellulose and silicon dioxide (silica). The two extracts are subsequently compounded through dry blending, during which additional microcrystalline cellulose and silica, as well as dextrin, are added to the product. Protestant asserts that at all stages of production, the microcrystalline cellulose functions as an anticaking agent, the silica functions as a flow agent, and the dextrin adjusts the strength of the extract. A material safety data sheet (“MSDS”) submitted by Protestant states that the subject merchandise contains jujube seed extractives, magnolia bark extractives, silica, cellulose, corn dextrin, and various naturally-occurring compounds.
A sample of the subject merchandise was sent to a U.S. Customs and Border Protection (CBP) laboratory for analysis. The laboratory found that the subject merchandise is composed primarily of dextrin, and that it also contains ash and various naturally-occurring compounds. Based on its analysis, the laboratory concluded that the principal character of the subject merchandise is that of a blend of jujube seed extract and magnolia bark extract. In subsequent communications between the laboratory and this office, the laboratory reported that the ash content corresponds to the content of silica in the merchandise. The laboratory also confirmed that starch functions as a binding agent and diluent and that silica functions as a flow agent.
The Protestant states that, although the merchandise is in powder form at the time of importation, it undergoes several post-importation processes that result in its ultimate transformation into saleable dietary supplements. These include the following: (1) combining of the material with other excipients or dietary ingredients; (2) milling, granulating, or other size control steps; (3) micro-encapsulating of the material to adjust the flavor, solubility, and/or particle size; (4) re-suspension of the material into liquid form with the help of various solvents, flavors, etc.; and (5) conversion into finished dosage forms such as tablets, hard-shell capsules, or soft-gel capsules.
The subject merchandise entered on November 30, 2011 in subheading 1302.19.91, HTSUS, as “Vegetable saps and extracts; pectic substances, pectinates and pectates; agar-agar and other mucilages and thickeners, whether or not modified, derived from vegetable products: Other: Other.” CBP liquidated the subject merchandise on February 24, 2012, in subheading 2106.90.99, HTSUS, which provides for “Food preparations not elsewhere specified or included: Other: Other: Other: Other: Other: Other.” Protestant now claims classification as entered.
ISSUE:
Whether the subject merchandise is classified as an extract under heading 1302, HTSUS, or as a food preparation under heading 2106, HTSUS?
LAW AND ANALYSIS:
As a threshold matter, we note that 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. (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. 2704-12-101630 is properly accorded to Protestant pursuant to 19 C.F.R. § 174.24(a) because Protestant alleges that the decision protested is inconsistent with prior CBP rulings concerning substantially similar merchandise.
Merchandise imported into the United States 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 which 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 for all purposes.
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 their appropriate 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:
1302.19.91 Other
2106 Food preparations not elsewhere specified or included:
2106.90 Other:
Other:
Other:
Other:
Other:
2106.90.99 Other
The Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”) 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 these headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
As an initial matter, we agree with Protestant’s assertion that “[h]eading 2106 is a generic, catch-all category covering miscellaneous edible preparations,” and that, consequently, “[h]eading 2106 is inappropriate when a more specific classification exists.” Heading 2106 is a basket provision under which merchandise is classifiable only if it is not more specifically described elsewhere in the Nomenclature. R.T. Foods, Inc. v. United States, 757 F.3d 1349, 1354 (Fed. Cir. 2014). Accordingly, we first consider whether the subject merchandise is more specifically classified under heading 1302 and turn to heading 2106 only if it is not.
Heading 1302 provides for, among other things, vegetable extracts. EN 13.02 provides, in relevant part, as follows:
The heading covers saps and extracts (vegetable products usually obtained by natural exudation or by incision, or extracted by solvents)…
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 (e.g., belladonna extract, to which powdered gum Arabic is added), 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.
Extracts may be simple or compound. Simple extracts are obtained by the treatment of only one variety of plant. Compound extracts are obtained either by mixing simple extracts or by treating mixtures of different varieties of plants. Compound extracts (whether in the form of alcoholic tinctures or in any other forms) therefore contain the constituents of several kinds of plant; they include compound jalap extract, compound extract of aloes, compound extract of cinchona, etc.
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.
In applying this EN, CBP has consistently distinguished between “raw materials” that have undergone only minimal, if any, processing from products that have been so extensively processed so as to fall outside the scope of heading 1302. To this effect, we have construed the first paragraph of the EN as confining the range of permissible extraction methods to “traditional” processes akin to those listed. See Headquarters Ruling Letter (HQ) H023701, dated May 29, 2009 (listing decoction, percolation, maceration, digestion, or infusion as permissible extraction methods); and HQ 966566, dated October 21, 2003 (holding that precipitation, filtration, and re-dissolution cannot be considered basic extraction as described by EN 13.02). The application of processes that go beyond simple extraction to encompass – for example, purification, tabletization, or encapsulation – generally disqualifies a product from classification in heading 1302. See HQ 966448, dated July 9, 2004 (excluding extract from heading 1302 where it had undergone purification through liquid chromatography following extraction); and HQ 962719, dated May 2, 2000 (classifying valerian root and passionflower extracts in heading 2106 where they had been supplemented with natural cellulose, roots, and berries, encapsulated or tabletized, and presented for retail sale).
However, we note that the EN carves out exceptions for products that, after simple extraction, have been mixed with other simple extracts to form so-called compound extracts or have been supplemented with inert materials. With regard to the latter, moreover, the EN does not cap the quantity of inert materials that may be added to a particular extract. It instead states simply that “the addition of such substances does not affect the classification of these solid extracts.” Accordingly, CBP has allowed classification of mixtures containing extracts and inert substances in heading 1302 even where the inert components predominate the chemical composition of the mixture. See New York Ruling Letter (NY) N243060, dated July 2, 2013 (classifying product containing 2 percent Sophora Japonica Leaf Extract and 98 percent maltodextrin, the latter of which was used as a filler, in heading 1302); NY N015474, dated August 27, 2007 (classifying product comprised 86 percent of maltodextrin, 8 percent of gum, and 6 percent of vanilla extract in heading 1302); and NY N009379, dated May 9, 2007 (classifying products comprised 60 percent of cocoa extract and 40 percent of a starch carrier in heading 1302).
Here, the instant merchandise is in powder form. According to Protestant’s submissions, initial extraction of the jujube seeds and magnolia bark is accomplished by water and solvent extraction, both of which are ordinary methods of producing simple extracts for purposes of heading 1302. See HQ 966566. Protestant asserts that because both extracts qualify as simple extracts, their subsequent blending results in a compound extract as defined by EN 13.02. Protestant further contends that, while this compound extract has been supplemented with extraneous materials, these additions are no more than “various inert ingredients” whose addition is permitted by EN 13.02. Protestant identifies these added ingredients as cellulose, silica, and dextrin, all of which are also listed on the submitted MSDS as constituents of the extract powder. Consistent with Protestant’s description and the MSDS, the CBP laboratory reported that the merchandise contains dextrin and silica, in addition to various naturally-occurring compounds. Neither the MSDS nor the CBP laboratory report lists any other non-naturally-occurring substances in the subject merchandise.
Our research indicates that, when added to extracts, dextrin, cellulose, and silica each function as an excipient, which Hawley’s Chemical Dictionary defines as “a natural, inert, and somewhat tacky material used in the pharmaceutical industry as a binder in tablets, etc.” 545 (15th ed. 2007) (emphasis added); see also U.S. Dep’t of Agric. Nat’l Organic Program, Technical Servs. Branch, Technical Evaluation Report: Dextrin (2011) (describing dextrin as an excipient); U.S. Dep’t of Agric. Nat’l Organic Program, Technical Servs. Branch, Technical Evaluation Report: Silicon Dioxide (2010); and Mark Lesney, More Than Just the Sugar in the Pill, 10 Today’s Chemist at Work 1, ¶¶ 1, 7, 11 (2001) (describing excipients, including dextrin, cellulose, and silica, as inert). Specifically, dextrin and cellulose are employed variously as binders for the cementing of ingredient portions into tablet or pill form and as fillers for the dilution of active chemical ingredients throughout the tablet or pill, while silica facilitates the flow of powders during their conversion into tablets. Mark Lesney, More Than Just the Sugar in the Pill, 10 Today’s Chemist at Work 1, ¶¶ 7, 11 (2001); see also HQ 966366, dated June 19, 2003 (characterizing dextrin as a binder and silicon dioxide as a glidant). To this extent, the inert ingredients that have been added to the instant merchandise accord with the exemplars provided in EN 13.02, in that they are used to promote the product’s pulverization and the adjustment of its chemical strength. Moreover, as discussed above, while these ingredients predominate the chemical composition of the merchandise, they do not exclude the extract from the terms of the heading. See EN 13.02. We accordingly accept Protestant’s description of the subject merchandise as a compound extract whose supplementation with extraneous inert substances is permissible for purposes of classification in heading 1302.
Finally, Protestant asserts that the subject merchandise is properly classified in heading 1302 because, aside from the mixing permitted by EN 13.02, it remains a raw material that lacks the character of a food preparation. Specifically, Protestant contends that, at the time of importation, the merchandise has not yet undergone the planned post-importation mixing, granulating, milling, encapsulation, and tabletization, or any other kind of processing that we have previously deemed a basis for exclusion from heading 1302. We observe that the merchandise clearly has not been encapsulated or tabletized, as it remains in powder form. Moreover, Protestant’s assertion is consistent with the CBP laboratory’s conclusion that the merchandise exudes the principal character of a compound extract mixture.
In light of the foregoing, we conclude that the subject merchandise is classifiable in heading 1302 as a vegetable extract. Because heading 1302 provides a more specific description of the merchandise than does heading 2106, it is properly classified in the former heading.
HOLDING:
By application of GRI 1, the subject jujube seed/magnolia bark extract blend is classified in heading 1302, HTSUS. Specifically, it is provided for in subheading 1302.19.9140, HTSUS (Annotated), as “Vegetable saps and extracts; pectic substances, pectinates and pectates; agar-agar and other mucilages and thickeners, whether or not modified, derived from vegetable products: Other: Other: Other.” The general column one 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 internet at www.usitc.gov/tata/hts/.
You are instructed to ALLOW the protest.
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 CBP Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.
Sixty days from the date of the decision, the Office International Trade, Regulations and Rulings, will make the decision available to CBP personnel, and to the public on the CBP website at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Joanne Roman Stump
Acting Director, Commercial & Trade Facilitation Division