CLA-2 OT:RR:CTF:FTM H292207 JER
Valerie Holtrop
Schreiber Foods, Inc.
400 North Washington St.
Green Bay, WI 54301
RE: Affirmation of NY N262510; Enzyme Modified Cheese
Dear Ms. Holtrop:
This is in response to your request of October 30, 2017 for reconsideration of New York Ruling Letter (“NY”) N262510 issued on March 25, 2015 concerning the classification of certain enzyme-modified cheese under the Harmonized Tariff Schedule of the United States (“HTSUS”). In NY N262510 U.S. Customs and Border Protection (“CBP”) classified the imported enzyme-modified cheese product under heading 0406, HTSUS. In particular, under subheading 0406.30, HTSUS, as, “Cheese and curd, Processed (process) cheese, not grated or powdered.” Although you did not assert an alternative HTSUS heading, we considered the information presented in your October 30, 2017 submission. For the reasons set forth below, we hereby affirm NY N262510.
FACTS:
NY N262510 described the product, an enzyme-modified cheese (“EMC”) as follows:
The product starts as a slurry of ground cheeses, water and emulsifying agents. The blend is heat treated and cooled. Enzymes are added to promote flavor development. After the desired amount of flavor development is achieved, the mixture is heated to deactivate the enzymes. The product is then packaged for storage and future sale.
Two versions of the EMC will be offered: Cheddar flavor and Swiss flavor. In the production of the former, a Cheddar-type cheese will be used in the slurry, whereas in the production of the latter, a characterizing Swiss-type cheese mixed with various bland, non-characterizing cheeses will be used in the slurry. The finished EMCs, which are said to have a pungent, salty flavor, will be used as ingredients in other food products to adjust fat content and provide cheese flavor.
It is your contention that the subject product is not a processed cheese as you state it “is not in any manner a suitable aroma or flavor to be eaten by any consumer in the current state.” Accordingly, you question whether NY N262510 correctly classified the subject product in heading 0406, HTSUS.
ISSUE:
Whether the subject enzyme-modified cheese product is classifiable under heading 0406, HTSUS, as processed cheese.
LAW AND ANALYSIS
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRIs). 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 GRIs 2 through 6 may then be applied in order.
The 2018 HTSUS provisions under consideration are as follows:
0406 Cheese and curd:
0406.30 Processed (process) cheese, not grated or powdered:
Other, including mixtures of the above:
Other:
Containing, or processed from, Cheddar cheese:
Containing, or processed from, Swiss, Emmentaler or Gruyere-process cheeses:
* * *
The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System at the international level. While not legally binding or 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 (August 23, 1989).
The ENs to 04.06 state, in relevant part, that:
This heading covers all kinds of cheese, viz.:
Fresh cheese (including cheese made from whey or buttermilk) and curd. Fresh cheese is an unripened or uncured cheese which is ready for consumption shortly after manufacture (e.g., Ricotta, Broccio, cottage cheese, cream cheese, Mozzarella).
Grated or powdered cheese.
Processed cheese, also known as process cheese. It is manufactured by comminuting, mixing, melting and emulsifying, with the aid of heat and emulsifying or acidifying agents (including melting salts), one or more varieties of cheese and one or more of the following: cream or other dairy products, salt, spices, flavouring, colouring and water.
* * *
Fundamental to the decision in NY N262510 is whether the finished EMC was a cheese product of 0406, HTSUS or whether it was classified outside of the heading for cheeses and curds. According to the description provided, the manufacturing process of the EMC does not involve the separation or concentration of fluid milk to develop a protein concentrate which is then fermented into a cheese product. This aspect of the manufacturing process suggests that the EMC end-product is merely an ingredient used to adjust fat content and add cheese flavor as asserted by Schreiber Foods. Likewise, Schreiber Foods contends that because the EMC product “is not in any manner a suitable aroma or flavor to be eaten by any consumer in the current state,” that it is not classifiable as cheese under heading 0406, HTSUS.
In NY D89139, dated September 23, 1999, CBP determined that an enzyme-modified cheese ingredient was not a cheese product of heading 0406, HTSUS, but rather a fat-based ingredient product of heading 0405, HTSUS. In this regard, NY D89139 did not find that the enzyme-modified cheese ingredient was a cheese product primarily because the manufacturing process of the enzyme-modified cheese ingredient did not involve any fermentation from lactic acid producing cultures nor any subsequent curd formation from the enzyme or acidic activity (processes that are essential in the development of cheese).
Under our facts, however, the foundational ingredients for the EMC end-product are unspecified ground cheeses. The fact that the subject product starts with ground cheeses, confirms that fermentation, acidic activity, whey separation and curd formation must have taken place prior to the enzyme modification process. In short, the EMC product originates from cheese. The subsequent heating, flavor development and enzyme activation does not negate the product’s fundamental nature as being a cheese product. Instead, the subsequent enzyme modification process only distinguishes the subject EMC as a cheese product that has been further processed into a processed cheese product.
Moreover, the subject EMC product need not be suitable for consumption in order to be classifiable as a cheese product under heading 0406, HTSUS. Heading 0406, HTSUS, provides for broad range of cheese and curd products that include “fresh cheese” “which is ready for consumption shortly after manufacture” (0406.10, HTSUS), powdered cheese of all kinds (0406.20, HTSUS) and “other cheese” (0406.90, HTSUS); not all of which are ready for consumption. In NY N216717, dated May 24, 2012 CBP determined that a product described as “cheese scrap”, which was not suitable for human consumption, was nevertheless classifiable as cheese in heading 0406, HTSUS.
Lastly, the enzyme modification process itself is a manufacturing process that adheres to the process described in the ENs to 04.06, HTSUS. In particular, the subject EMC product starts as a slurry of “one or more varieties of cheese” mixed with water and emulsifying agents. The processing of the slurry is done “with the aid of heat and emulsifying agents.” Each step in the manufacturing process along with the presence of ground cheese as a core ingredient, place this product squarely within the terms of heading 0406, HTSUS, and specifically subheading 0406.30, HTSUS.
HOLDING:
By application of GRI 1, we find that the imported enzyme-modified cheese is provided for in heading 0406, HTSUS. In particular, the Cheddar flavored version of the enzyme-modified cheese is classified under subheading 0406.30, HTSUS, which provides for: “Cheese and curd: Processed (process) cheese, not grated or powdered: Other, including mixtures of the above: Other: Containing, or processed from, Cheddar cheese.”
Similarly, the Swiss flavored version of the enzyme-modified cheese is classified under subheading 0406, HTSUS, as: “Cheese and curd: Processed (process) cheese, not grated or powdered: Other, including mixtures of the above: Other: Containing, or processed from, Swiss, Emmentaler or Gruyere-process cheeses.”
EFFECT ON OTHER RULINGS:
NY N262510, dated March 25, 2015, is hereby Affirmed.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division