CLA-2 OT:RR:CTF:TCM H284810 CkG
TARIFF NO: 2309.90.95
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: Revocation of HQ H262551, dated May 9, 2016; classification of MetaSmart Dry
Dear Port Director:
This letter is to inform you that U.S. Customs and Border Protection (“CBP”) has
reconsidered Headquarters Ruling Letter (HQ) H262551, dated May 09, 2016, in which
we granted Protest No. 2809-14-100777, filed on behalf of Adisseo USA, Inc.,
concerning the classification of MetaSmart Dry under the Harmonized Tariff Schedule of
the United States (HTSUS).
In HQ H262551, we classified MetaSmart Dry in heading 2930, HTSUS, which provides for “Organo-sulfur compounds.” We have reviewed HQ H262551 and
found it to be incorrect with respect to the classification of MetaSmart Dry. For the
reasons set forth below, we are revoking this ruling.
As an initial matter, we note that under San Francisco Newspaper Printing Co. v. United States, 620 F. Supp. 738 (Ct. Int’l Trade 1985), the decision on the merchandise which was the subject of Protest No. 2809-14-100777 was final and binding on both the protestant and CBP. Therefore, while we may review the law and analysis of HQ H262551, any decision taken herein would not impact the entries subject to that ruling.
Pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C. §1625(c)(1)), as
amended by section 623 of Title VI, notice proposing to revoke HQ H262551 was
published on November 28, 2018, in Volume 52, Number 48, of the Customs Bulletin.
No comments were received in response to this Notice.
FACTS:
The subject merchandise was described in HQ H262551 as follows:
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.
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 the subject merchandise is classified in heading 2309, HTSUS, as a preparation of a kind used in animal feeding; heading 2930, HTSUS, as an organo-sulfur compound; or in heading 3824, HTSUS, as a chemical preparation not elsewhere specified or included.
LAW AND ANALYSIS:
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 at issue are as follows:
2309: Preparations of a kind used in animal feeding:
2930: Organo-sulfur compounds:
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:
* * * * * *
Note 1 to Chapter 23, HTSUS, provides as follows:
Heading 2309 includes products of a kind used in animal feeding, not elsewhere specified or included, obtained by processing vegetable or animal materials to such an extent that they have lost the essential characteristics of the original material, other than vegetable waste, vegetable residues and byproducts of such processing.
Note 1 to Chapter 29 provides:
Except where the context otherwise requires, the headings of this Chapter apply only to:
Separate chemically defined organic compounds, whether or not containing impurities;
....
(f) The products mentioned in (a), (b), (c), (d) or (e) above with an added stabiliser
(including an anti-caking agent) necessary for their preservation or transport;
* * * * * *
The Harmonized Commodity Description and Coding System (HS) Explanatory Notes (“ENs”) constitute the official interpretation of the HS. While not legally binding or
dispositive, the ENs provide a commentary on the scope of each heading of the HS at the international level, and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127 (August 23, 1989).
EN 23.09 provides, in pertinent part, as follows:
This heading covers sweetened forage and prepared animal feeding stuffs consisting of a mixture of several nutrients designed :
(1) to provide the animal with a rational and balanced daily diet (complete feed);
(2) to achieve a suitable daily diet by supplementing the basic farmproduced feed with organic or inorganic substances (supplementary feed); or
(3) for use in making complete or supplementary feeds.
…
(II) OTHER PREPARATIONS
(A) PREPARATIONS DESIGNED TO PROVIDE THE ANIMAL WITH ALL THE NUTRIENT ELEMENTS REQUIRED TO ENSURE A RATIONAL AND BALANCED DAILY DIET (COMPLETE FEEDS)
…
(B) PREPARATIONS FOR SUPPLEMENTING (BALANCING) FARMPRODUCED FEED (FEED SUPPLEMENTS)
…
(C) PREPARATIONS FOR USE IN MAKING THE COMPLETE FEEDS OR SUPPLEMENTARY FEEDS DESCRIBED IN (A) AND (B) ABOVE
These preparations, known in trade as “ premixes ”, are, generally speaking, compound compositions consisting of a number of substances (sometimes called additives) the nature and proportions of which vary according to the animal production required. These substances are of three types:
Those which improve digestion and, more generally, ensure that the animal makes good use of the feeds and safeguard its health: vitamins or provitamins, aminoacids, antibiotics, coccidiostats, trace elements, emulsifiers, flavourings and appetisers, etc.
Those designed to preserve the feeding stuffs (particularly the fatty components) until consumption by the animal: stabilisers, antioxidants, etc.
Those which serve as carriers and which may consist either of one or more
organic nutritive substances (manioc or soya flour or meal, middlings, yeast, various residues of the food industries, etc.) or of inorganic substances (e.g., magnesite, chalk, kaolin, salt, phosphates).
The concentration of the substances described in (1) above and the nature of the carrier are determined so as to ensure, in particular, homogeneous dispersion and mixing of these substances in the compound feeds to which the preparations are added
Provided they are of a kind used in animal feeding, this group also includes :
(a) Preparations consisting of several mineral substances.
(b) Preparations consisting of an active substance of the type described in (1) above with a carrier, for example products of the antibiotics manufacturing process obtained by simply drying the mass, i.e. the entire contents of the fermentation vessel (essentially mycelium, the culture medium and the antibiotic)…
* * * *
The General EN to Chapter 29 provides, in pertinent part, as follows:
GENERAL
As a general rule, this Chapter is restricted to separate chemically defined compounds, subject to the provisions of Note 1 to the Chapter.
(A) Chemically defined compounds
A separate chemically defined compound is a substance which consists of one molecular species (e.g., covalent or ionic) whose composition is defined by a constant ratio of elements and can be represented by a definitive structural diagram. In a crystal lattice, the molecular species corresponds to the repeating unit cell.
Separate chemically defined compounds containing other substances deliberately added during or after theirmanufacture (including purification) are excluded from this Chapter. Accordingly, a product consisting of saccharin mixed with lactose, for example, to render the product suitable for use as a sweetening agent is excluded (see Explanatory Note to heading 29.25).
The separate chemically defined compounds of this Chapter may contain impurities (Note 1 (a)). An exception to this rule is created by the wording of heading 29.40 which, with regard to sugars, restricts the scope of the heading to chemically pure sugars.
The term “impurities” applies exclusively to substances whose presence in the single chemical compound results solely and directly from the manufacturing process (including purification). These substances may result from any of the factors involved in the process and are principally the following :
(a) Unconverted starting materials.
(b) Impurities present in the starting materials.
(c) Reagents used in the manufacturing process (including purification).
(d) By-products.
It should be noted, however, that such substances are not in all cases regarded as “impurities” permitted under Note 1 (a). When such substances are deliberately left in the product with a view to rendering it particularly suitable for specific use rather than for general use, they are not regarded as permissible impurities. For example, a product consisting of methyl acetate with methanol deliberately left in with a view to improving its suitability as a solvent is excluded (heading 38.14). For certain compounds (e.g., ethane, benzene, phenol, pyridine), there are specific purity criteria, indicated in Explanatory Notes to headings 29.01, 29.02, 29.07 and 29.33.
* * * *
The EN to heading 2930 provides, in pertinent part:
(C) SULPHIDES (OR THIOETHERS)*
These may be regarded as ethers in which the oxygen atom is replaced by one of sulphur
(ROR1) ....................................................................................... (RSR1)
ether sulphide
Methionine*. White platelets or powder. An amino acid. Essential
component in human nutrition, not synthesised by the body.
* * * * * *
In HQ H262551, CBP determined that the subject merchandise was classified in heading 2930, HTSUS, as an organo-sulfur compound. In so holding, CBP concluded that the 40% of silica in the MetaSmart Dry did not alter the character of the product as a source of methionine for ruminant animals, and that it was therefore a permissible stabilizer pursuant to Note 1 to Chapter 29.
Heading 2930, HTSUS, covers the merchandise only if its composition is within the scope of Note 1 to Chapter 29. Like methionine, HMBi is an organo-sulfur compound classifiable in heading 2930. The issue is whether a product which contains only 60 % HMBi, with the remainder consisting of a silica adsorbent, is still a separately defined compound for the purposes of Note 1 to Chapter 29.
As stated in the General EN to Chapter 29, Chapter 29 is restricted to separate chemically defined compounds, subject to the provisions of Note 1 to the Chapter. Note 1(f) to Chapter 29, in turn, 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.
Contrary to our conclusion in H262551, the silica encapsulation of the Metasmart Dry is not a stabilizer necessary for the preservation or transport of the HMBi. At cooler temperatures, the HMBi crystallizes into a solid; however, it reverts back to a liquid state when heated, and it is not in any way rendered unusable by crystallization. To the contrary, the MetaSmart User’s Guide specifically indicates that “[t]he physical, chemical and nutritional characteristics of MetaSmart are not affected by crystallization.” The User’s Guide further states that simply reheating the MetaSmart Dry will return it to the liquid phase if it does crystallize. Pursuant to Adisseo’s submissions to CBP in connection with H262551, the encapsulation of the HMBi was simply a more cost-effective option than investing in a heated room to store the HMBi above 52 degrees. We further note that MetaSmart is also sold directly in liquid form, with no apparent drawbacks to the liquid form as regards transport, handling or administration (“there is a savings of 25% when the liquid form of MetaSmart is used, making it the least-cost source of metabolizable methionine for ruminants… Adding MetaSmart Liquid to the mixer is achieved by using an injection system … Tests have confirmed that liquid and dry forms of MetaSmart mix equally well, delivering similar Coefficient of Variation (CV) with MetaSmart Liquid delivering the added benefit of dust control.”)
Thus, the silica adsorbent allows for ease and convenience in handling and transport, but it is not necessary for either. It also follows that the silica is not acting as an anti-caking or anti-dusting agent in this case; as HMBi is a liquid under normal conditions, it is not subject to caking or creating dust.
In HQ H262551, CBP also relied on Roche Vitamins, Inc. v. United States, 772 F.3d 728 (Fed. Cir. 2014), in concluding that the MetaSmart Dry was classified in heading 2930 because the silica adsorbent did not alter the character of the good beyond the scope of the heading at issue and did not render the product particularly suitable for specific use rather than for general use.
However, we find that in the instant case, the silica adsorbent does render the HMBi suitable only for specific use as an animal feed, particularly dry feed. The dry formulation of MetaSmart is designed for incorporation into animal feeds “where liquid dispersion is not a feasible option.” It is also designed to be metabolized in a specific manner, where 50% of the MetaSmart is absorbed through the rumen wall to be hydrolyzed into methionine by the liver, and 50% remains in the rumen for utilization therein, “which promotes increased numbers of protozoa, increased forage and fiber digestion and promotes rumen bacterial protein synthesis and efficiency.”
Pursuant to the above discussion, MetaSmart Dry is precluded from classification in Chapter 29 by Note 1 to that Chapter, and is therefore not classified in heading 2930, HTSUS.
As an alternative to classification in heading 2930, Protestant requests classification of the MetaSmart Dry in heading 2309, HTSUS, as a preparation of a kind used in animal feeding. In Group Italglass U.S.A. v. United States, 17 C.I.T. 226, 228 (1993), the CIT held that “the language in heading 7010 ‘of a kind used for’ explicitly invokes use as a criterion for classification”. Classification under such a provision is controlled by the principal use of goods of that class or kind to which the imported goods belong in the United States at or immediately prior to the date of the importation. A tariff classification controlled by use, other than actual use, is to be determined by the principal use in the United States at, or immediately prior to, the date of importation, of goods of the same class or kind of merchandise. See Additional U.S. Rule of Interpretation 1(a). In other words, the actual use of the specific product at issue is not controlling. In determining the principal use of a product, CBP considers a variety of factors including general physical characteristics, the expectation of the ultimate purchaser, channels of trade, and the environment of sale (accompanying accessories, manner of advertisement and display). See United States v. Carborundum Company, 63 C.C.P.A. 98, C.A.D. 1172, 536 F.2d 373 (1976), cert. denied, 429 U.S. 979.
We agree that the principal use of the MetaSmart Dry preparation is as an animal feed. Adisseo itself provides only products and services related to animal feed and nutrition MetaSmart is marketed, advertised, sold and used as an animal feed. The MetaSmart User’s Guide instructs customers on the incorporation of MetaSmart into complete feeds for ruminants, and Adisseo further provided a letter from the Director of the Division of Animal Feeds of the FDA defining HMBi as “a product…for use as a source of methionine activity in cattle diets.”
Preparations of heading 2309, HTSUS, fall into several categories: complete feeds, supplementary feeds and premixes. Supplementary feeds consist of proteins, minerals or vitamins plus additional energy feeds (carbohydrates) which serve as a carrier for the other ingredients. Supplementary feeds have much the same composition as complete feeds, but they are distinguished by a relatively high content of one particular nutrient. Premixes include preparations consisting of an active substance such as vitamins or provitamins, aminoacids, antibiotics, etc., with a carrier. MetaSmart Dry is described as a premix by Adisseo.
Classification in heading 2309, HTSUS, generally requires that products of that heading consist of a mixture of several nutrients. See EN 23.09; HQ 966456, dated October 25, 2004; HQ 966679, dated September 15, 2003; HQ 964944, dated February 08, 2002; HQ 964600, dated June 21, 2001; NY L89318, dated January 17, 2006; and NY I83322, dated June 19, 2002. However, we note that EN 23.09 specifically covers premixes which consist of “either of one or more organic nutritive substances”, and includes “preparations consisting of an active substance with a carrier”. EN 23.09 further describes merchandise tantamount to Metasmart Dry. EN 23.09 includes in the heading compounds which “ensure that the animal makes good use of the feeds and safeguards its health.” Methionine is an amino acid essential to the health of the cow and the ability to produce milk. It is an active substance, which is combined with one other ingredient, suitable for use only as a premix for animal feed. We consider these to constitute specific exceptions to the general requirement that feed preparations must consist of a mixture of several nutrients.
A nutrient is a food substance that is utilized or consumed by the body to create tissue or energy. See e.g., HQ 966456, dated October 25, 2004. Methionine is an essential amino acid for all animals, but it is not naturally produced in the body; it must be ingested. Among other functions, methionine is necessary for metabolism in the body, and plays a role in the growth of new blood vessels. Methionine is thus unquestionably a nutrient. As the HMBi is converted into methionine in the body, HMBi will play the same nutritional role as methionine. Silicon dioxide itself potentially has nutritional value for animals. In general, silicon plays an important role in skeletal formation and the growth of connective tissue. While silicon dioxide was thought to be an inert substance that could not be used by the body as a bioavailable source of silicon, studies suggest that silicon dioxide may be hydrolyzed in the digestive tract to release orthosilcic acid, the most biovavailable form of silicon.
Pursuant to the above analysis, MetaSmart Dry is classifiable in heading 2309, HTSUS, as a preparation consisting of one or more nutritive substances for use in animal feed.
HOLDING:
By application of GRIs 1 and 6, the subject MetaSmart Dry is classified in heading 2309, HTSUS, specifically subheading 2309.90.95, HTSUS, which provides for “Preparations of a kind used in animal feeding: Other: Other: Other: Other: Other." The 2018 column one, general rate of duty is 1.4% ad valorem.
Duty rates are provided for your convenience and subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided at www.usitc.gov.
EFFECT ON OTHER RULLINGS:
HQ H262551, dated May 09, 2016, 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