CLA-1: OT: RR: CTF: TCM H262551 ERB
Port Director, Port of San Francisco
U.S. Customs and Border Protection
555 Battery Street, Suite 228
San Francisco, CA 94111
Attn: Tom Chan, Import Specialist
RE: Application for Further Review of Protest No. 2809-14-100777; Tariff classification of MetaSmart Dry
Dear Port Director:
The following is our decision regarding the Application for Further Review (AFR) of Protest Number 2809-14-100777, timely filed by counsel on January 26, 2015, on behalf of Adisseo USA, Inc. (Adisseo). The AFR concerns the tariff classification of MetaSmart Dry, under the Harmonized Tariff Schedule of the United States (HTSUS). In arriving at our conclusion, CBP considered extra information provided at its meeting with Adisseo and counsel on March 4, 2016.
FACTS:
This AFR regards one entry of the subject merchandise, entered on November 13, 2013, classified under subheading 2930.90.91, HTSUS, which provides for, “Organo-sulfur compounds: Other: Other: Other: Other.” CBP liquidated the entry on September 26, 2014, classified under 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.” Adisseo argues here that the subject merchandise is provided for in subheading 2930.90.91, HTSUS, as entered, or in the alternative, in subheading 2309.90.95, HTSUS, which provides for, “Preparations of a kind used in animal feeding: Other: Other: Other: Other.”
The subject merchandise is described as an isopropyl ester of 2-hydroxy-4-methylthiobutanoic acid. MetaSmart is not itself methionine, rather, it is the isopropyl ester of the acid dl-Hydroxy analogue of dl-methionine. It is referred to as HMBi for short and its CAS number is 57296-04-5. The acid form of the analog is dl-2-hydroxy-4-(methylmercapto) butyric acid, and it is also known as 2-Hydroxy-4-(methylthio) butyric (or butanoic) acid, or HMB or HMBa. The International Non-Proprietary Names (INN) of HMBa is imported and sold by Adiesso under the trade name Rhodimet AT88, and the CAS registry number of the product is 583-91-5.
In layman’s terms, when HMB (whether acid or ester) is ingested by a ruminant animal, in the instant case, that is a dairy cow, a chemical conversion occurs in the animal’s body whereby, in vivo, an amino group is substituted for the hydroxyl group of each form of HMB. Each undergoes a conversion and becomes identical to methionine. This results in an increased production of protein and also milk production of the dairy cow.
MetaSmart is available to customers in two forms; liquid and dry. The liquid form requires special equipment to be injected into the cow and is not at issue in this AFR. The subject merchandise here is only MetaSmart Dry.
To make the instant product, the HMBi is adsorbed onto silicon dioxide (silica). Silica has a CAS number 7631-86-9. Adsorption is a process, whereby the molecules of a gas or liquid adhere to the surface of a solid. This process creates a film of the adsorbate on the surface of the adsorbent. This process differs from absorption, in which a fluid permeates or is dissolved by a liquid or solid.
In its meeting with CBP, Adisseo stated that an adsorption process was chosen to manufacture MetaSmart Dry because the HMBi molecules adhere to the surface of the silica without changing the chemical properties of the HMBi. In other words, the adsorption process does not change the chemical nature of HMBi, or the effect it has in the animal, but it will change the HMBi’s physical state from a liquid into a free-flowing powder. In the adsorption process the silica is referred to as a “carrier” or the adsorbent. The HMBi is the adsorbate. Silica is very commonly chosen as a carrier or adsorbent. MetaSmart Dry is 57- 60% HMBi and approximately 40% silica. Adisseo stated that this ratio was chosen to ensure the product remains a free-flowing powder mixture. However, this ratio also ensures that the HMBi is completely adsorbed onto the silica and no extraneous HMBi molecules break free of the carrier and crystalize. HMBi crystallizes at a very high temperature, approximately 54 degrees Fahrenheit (12 degrees Celsius). If more than 60% of the HMBi were present, then the extra HMBi molecules would crystallize and/or solidify and cake and become difficult to use. If much less than 60% of the HMBi were used, then the product would not be as effective in the animal, or, the animal would need higher doses of the product.
MetaSmart Dry is mixed into cattle feed products, and the desired chemical reaction (protein building resulting in increased milk production) occurs in the cow’s digestive tract. Adiesso stated that dairy cow farms operating in consistently colder climates (such as the upper-mid-west of the United States) may prefer to use the dry version over the liquid version because the dry powder will not crystallize and become difficult or impossible to use.
Adisseo also stated in its meeting that HMBi has no uses outside of animal feed, specifically feed for dairy cows. It was designed specially to react in a dairy cow’s stomach because ruminant animals have multiple chambers. Adisseo also stated that silica was chosen as the carrier because it is an effective adsorbent and while the silica is not promoted as a nutritional component, it has been shown to provide some peripheral nutritional benefit, such as bone growth, in the animal.
ISSUE:
Whether a product described as an isopropyl ester of 2-hydroxy-4-methylthiobutanoic acid adsorbed onto silicon dioxide (silica), imported in powder form, is classified as a preparation for animal feed of heading 2309, HTSUS, or whether it is classified as an other organo-sulfur compound, of heading 2930, HTSUS, or whether it is a chemical preparation not elsewhere specified or included, in heading 3824, HTSUS.
LAW AND ANALYSIS:
Initially, we note that the matter 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 Number 2809-14-100777 is properly accorded to the Protestant pursuant to 19 C.F.R. § 174.26(b) because the protested decision involves questions which have not been the subject of a Headquarters, U.S. Customs Service ruling or court decisions and pursuant to § 174.26(c) because the protested decision involves novel legal questions or facts not previously considered by CBP or the Courts .
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRI). GRI 1 provides that the classification of goods 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 GRI may then be applied.
The HTSUs provisions under consideration are as follows:
2309 Preparations of a kind used in animal feeding:
2309.90 Other:
Other:
Other:
Other:
2309.90.95 Other
***
2930 Organo-sulfur compounds:
2930.90 Other:
Other:
Other:
Other:
2930.90.91 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:
Other:
Other:
3824.90.92 Other
Note 1(f) to Chapter 29, which covers organic chemicals, provides the following:
Except where the context otherwise requires, the headings of this chapter apply only to:
(f) The products mentioned in (a), (b), (c), (d) or (e) with an added stabilizer (including an anticaking agent) necessary for their preservation or transport.
The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System. While not 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 those headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
First and foremost, Note 1(f) specifically states that “stabilizers” are a permissible additive and do not alter the tariff classification, so long as the stabilizer is necessary for the preservation or transport of the product. The tariff does not define the term “stabilizer”. However, Note 1(f) specifically states that stabilizers are understood to include anticaking agents. See Note 1(f) which states: “The products…with an added stabilizer (including an anticaking agent)…” [Emphasis added].
That said, the EN to another heading of Chapter 29, specifically heading 2936, also clarifies the word “stabilizer”. Though 2936 is not a heading at issue for MetaSmart Dry in the instant case, it is helpful to understand the scope of the term as it is used elsewhere in the chapter. Words used repeatedly in a given Chapter are to be read consistently with one another. The relevant part of EN 29.36 states:
The products of this heading may be stabilised for the purposes of preservation or transport:
By adding anti-oxidants,
By adding anti-caking agents (e.g., carbohydrates),
By coating with appropriate substance (e.g. gelatin, waxes or fats), whether or not plasticized, or
By adsorbing on appropriate substance (e.g., silicic acid),
Provided that the quantity added or the processing in no case exceeds that necessary for their preservation or transport and that the addition or processing does not alter the character of the basic product and render it particularly suitable for specific use rather than for general use.
MetaSmart, in its liquid form, crystallizes at a very high temperature. Crystallization renders the product unusable unless the customer has invested in machinery to thaw the product and keep it in its liquid form. However, when the active ingredient, HMBi, is adsorbed onto an appropriate substance, (such as silica or silicon dioxide), it is stabilized in a powder form suitable for easy transportation. Specifically, when the HMBi is adsorbed onto silica at a ratio of approximately 60% HMBi and 40% silica, it maintains a free-flowing powder form that does not cake. This stabilization process is explicitly provided for in two places in the EN 39.26 which describes permissible stabilization processes for the purposes of transport as including (1) the addition of anti-caking agents, and (2) the addition of a carrier or adsorbent. See EN 29.36. Specifically, the adsorption of an adsorbate onto an appropriate substance (carrier or adsorbent). See EN 39.26, fourth dash. Since the adsorption process described by Adiesso is a suitable stabilization process for the purposes of transportation for products of one heading of Chapter 29 (heading 29.36), the process should be understood to be applicable to other headings of Chapter 29, which reference and utilize the same concepts, (i.e. permissible added stabilizers, including an anticaking agent, pursuant to Note 1(f)).
What is also useful and relevant here, is the analysis of stabilizer additives in Chapter 29 products provided by the Court of Appeals for the Federal Circuit in Roche Vitamins, Inc. v. United States, 772 F.3d 728 (Fed. Cir. 2014). Relevant to the instant case, the Federal Circuit determined that though the product at issue contained a very high concentration by weight of a stabilizer as compared to the underlying chemical (approximately 80%), this did not alter the character of the good beyond the scope of the heading at issue (there, heading 2936). Further, the addition of the stabilizer ingredient did not render the product particularly suitable for specific use rather than for general use. Id at 732-33.
Applying this analysis to MetaSmart Dry, the silica stabilizer does not alter the character of the product as a source of HMBi for ruminant animals. The HMBi monomer component comprises approximately 60% of the product and the silica stabilizer comprises about 40%. The silica upon which the HMBi is adsorbed, serves no marketable nutritional function for the animal. It is added to ensure that the product stays in a free-flowing powder form. The silica adsorbent does not render the product suitable for a specific use. The silica is a permissible stabilizer necessary to keep MetaSmart Dry in a suitable state, that of a free-flowing powder, for transportation.
CBP has previously found that silica (silicon dioxide) is a permissible stabilizing agent in accordance with Note 1(f) to Chapter 29. See HQ H065723, dated December 22, 2009, and see HQ W968389, dated February 5, 2009 (where the subject merchandise had 20% silicon dioxide, and was classified in chapter 29). There, the silicon dioxide comprised only 1% of the preparation. However, as was confirmed by the Federal Circuit in Roche Vitamins, Inc. supra, there exists no bright line rule regarding the percentage of the permissible stabilizer. So long as the stabilizer does not alter the character of the chemical, the product will remain classified in its respective heading. That is the case here, as the HMBi is adsorbed onto an appropriate substance, here silica, which ensures that the product stays in its form as a free-flowing agent, for transportation, and for easy mix with animal feed. However, the merchandise maintains its character as an HMBi monomer-based product. It is therefore classified as an other than aromatic, other than acid, organo-sulfur compound, of heading 2930, HTSUS. Specifically, subheading 2930.90.91, HTSUS.
As MetaSmart Dry is completely described by the tariff terms of heading 2930, HTSUS, specifically subheading 2930.90, HTSUS, an analysis of the product under heading 2309, HTSUS, which provides for preparations for animal feed is unnecessary. Similarly, as the product is described by the subheading text of 2930.90, HTSUS, it is not classified in the basket provision 3824, HTSUS, which provides for chemical preparations not elsewhere specified.
The Pharmaceutical Appendix was incorporated into the HTSUS by Presidential Proclamation 6763 of December 23, 1994. See 60 Fed. Reg. 1007 (1995). The Proclamation also added General Note 13 to the HTSUS. General Note 13 states:
Whenever a rate of duty of “Free” followed by the symbol “K” in parentheses appears in the “Special” subcolumn for a heading or subheading, any product *by whatever name known) classifiable in such provision which is the product of a country eligible for tariff treatment under column 1 shall be entered free of duty, provided that such product is included in the pharmaceutical appendix to the tariff schedule. Products in the pharmaceutical appendix include the salts, esters and hydrates of the International Non-Propriety Name (INN) products numerated in table 1 of the appendix that contain in their names any of the prefixes or suffices listed in table 2 of the appendix, provided that any such salt, ester or hydrate is classifiable in the same 6-difit tariff provisions as the relevant product enumerated in table 1.
Desmeninol, CAS Number 583-91-5 is 2-hydroxy-4-methylthiobutanoic acid, which is also called HMBa. As above, the active ingredient of MetaSmart Dry is the isopropyl ester of HMBa, which is also called HMBi. The Pharmaceutical Appendix Table 1 lists Desmeninol as classified thereunder. The Pharmaceutical Appendix Table 2 also lists “isopropyl” as an accepted prefix or suffix. Therefore, as the General Note 13 HTSUS makes clear, the ester versions of the INN products enumerated in Table 1 that contain in their names any of the prefixes or suffixes listed in Table 2 are included in the Pharmaceutical Appendix and are eligible for duty-free treatment, provided that the ester is classifiable in the same subheading, at the 6-digit level, as the relevant product listed in Table 1. As that is the case here, the subject MetaSmart Dry is eligible for duty-free treatment.
HOLDING:
By application of GRI 1, pursuant to Note 1(f) to Chapter 29, the subject MetaSmart Dry is classified in heading 2930, HTSUS. It is specifically provided for in subheading 2930.90.9190, HTSUSA (Annotated), which provides for, “Organo-sulfur compounds: Other: Other: Other: Other: Other.” The column one, general rate of duty is 3.7% ad valorem.
By operation of General Note 13, and pursuant to Tables 1 and 2 of the Pharmaceutical Appendix, the subject MetaSmart Dry, also known as HMBi or the isopropyl ester of 2-hydroxy-4-methylthiobutanoic acid adsorbed onto a permissible stabilizer (silica) is eligible for duty-free treatment under subheading 2930.90.9190(K), HTSUS.
You are instructed to ALLOW the protest.
In accordance with Sections IV and VI of the CBP Protest/Petition Processing Handbook, 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 of the Office of International Trade will make the decision available to CBP personnel, and to the public on the CBP Home Page, available 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