OT:RR:CTF:FTM H308893 PJG
Center Director
Agriculture & Prepared Products Center
Port of Los Angeles – Long Beach Seaport
U.S. Customs and Border Protection
301 East Ocean Boulevard, Suite 1400
Long Beach, CA 90802
ATTN: Mr. David K. Shaw, Supervisory Import Specialist
RE: Internal Advice; Tariff Classification of Instant Coffee Mixes with Sugar
Dear Center Director:
This is in response to the internal advice request, initiated by the law firm of Junker & Nakachi, on behalf of their client, LA Lucky Import & Export, Inc. (“LA Lucky”), dated March 12, 2019, and transmitted to our office on February 12, 2020, concerning the tariff classification of a 2-in-1 instant coffee mix with sugar, called “G7 2-in-1 Instant Coffee gu manh,” under the Harmonized Tariff Schedule of the United States (“HTSUS”). This decision also addresses the tariff classification of the “Nescafe: CAFÉ Viet,” for which the port provided us with two reports from the U.S. Customs and Border Protection Laboratories and Scientific Services Directorate (“CBP Laboratory”). Pursuant to the request indicated by the law firm of Junker & Nakachi, we extended two opportunities for a telephone conference, however, the requester failed to avail themselves of either opportunity. Our decision is set forth below.
FACTS:
The merchandise for which an internal advice was requested by LA Lucky is called “G7 2-in-1 Instant Coffee gu manh.” LA Lucky explains that the Vietnamese phrase “gu manh” means “extra strength” and is intended to describe the flavor of the coffee. LA Lucky listed the ingredient breakdown as the following (by dry weight): 9.5 percent sugar; 13 percent soluble coffee; and 77.5 percent maltodextrin. The subject merchandise is sold as a powder mix housed in a sachet, and there are numerous sachets in each retail box. The consumer adds water to the 2-in-1 instant coffee mix to produce a coffee beverage.
In the course of a routine merchandise inspection at the warehouse, CBP obtained a sample of the 2-in-1 instant coffee mix and sent it to the CBP Laboratory in Long Beach, California. CBP also obtained two samples of a product named “Nescafe: CAFÉ Viet.” The “Nescafe: CAFÉ Viet” is unrelated to the internal advice request submitted by LA Lucky, however, we are addressing it in this decision for the port.
The CBP Laboratory results of the three samples are as follows:
Sample 1: five individually sealed, red and black colored packets printed with the words “Nescafe: CAFÉ Viet”
Lab Report LA20171300, dated July 3, 2018
54.4% total sugar (sucrose) by dry weight
5.4% caffeine
3.1% moisture
Sample 2: five individually sealed packets with black flakes
Lab Report LA20171301, dated September 27, 2018
43.8% total sugar (glucose, sucrose and maltose) by dry weight (37.3% sucrose)
9.3% caffeine
4.7% moisture
Sample 3: six individually sealed, brown and black colored packets printed with the words “Nescafe: CAFÉ Viet”
Lab Report LA20171302, dated July 5, 2018
47.4% total sugar (glucose and sucrose) by dry weight (46.3 % of that is sucrose)
12.3% caffeine
1.2% moisture
ISSUE:
What is the proper tariff classification of the two subject instant coffee mixes, specifically, the “G7 2-in-1 Instant Coffee gu manh” and the “Nescafe: CAFÉ Viet,” both of which contain sugar?
LAW AND ANALYSIS:
Classification under the Harmonized Tariff Schedule of the United States (“HTSUS”) is determined 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 GRIs may then be applied.
The 2017 HTSUS provisions under consideration are as follows:
2101 Extracts, essences and concentrates, of coffee, tea or mate and preparations with a basis of these products or with a basis of coffee, tea or mate; roasted chicory and other roasted coffee substitutes, and extracts, essences and concentrates thereof:
Extracts, essences and concentrates of coffee, and preparations with a basis of these extracts, essences or concentrates or with a basis of coffee:
2101.11 Extracts, essences and concentrates:
2101.11.21 Instant coffee, not flavored
* * *
2101.12 Preparations with a basis of extracts, essences or concentrates or with a
basis of coffee:
2101.12.32 Described in general note 15 of the tariff schedule and entered pursuant to its provisions:
Other:
Blended syrups described in additional U.S. note 4 to chapter 17:
2101.12.34 Described in additional U.S. note 9 to chapter 17 and entered pursuant to its provisions
2101.12.38 Other
Articles containing over 65 percent by dry weight of sugar described in additional U.S. note 2 to chapter 17:
2101.12.44 Described in additional U.S. note 7 to chapter 17 and entered pursuant to its provisions
2101.12.48 Other
* * *
Articles containing over 10 percent by dry weight of sugar described in additional U.S. note 3 to chapter 17:
2101.12.54 Described in additional U.S. note 8 to chapter 17 and entered pursuant to its provisions
2101.12.58 Other
The Harmonized Commodity Description and Coding System Explanatory Notes
(“ENs”) constitute the “official interpretation of the Harmonized System” at the international level. See 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989). 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 id.
The EN to 21.01 states, in pertinent part:
This heading covers:
(1) Coffee extracts, essences and concentrates. These may be made from real coffee (whether or not caffeine has been removed) or from a mixture of real coffee and coffee substitutes in any proportion. They may be in liquid or powder form, usually highly concentrated. This group includes products known as instant coffee. This is coffee which has been brewed and dehydrated or brewed and then frozen and dried by vacuum.
* * *
(3) Preparations with a basis of the coffee, tea or maté extracts, essences or concentrates of paragraphs (1) and (2) above. These are preparations based on extracts, essences or concentrates of coffee, tea or maté (and not on coffee, tea or maté themselves), and include extracts, etc., with added starches or other carbohydrates.
(4) Preparations with a basis of coffee, tea or maté. These preparations include, inter alia:
“coffee pastes” consisting of mixtures of ground, roasted coffee with vegetable fats and sometimes other ingredients, and
tea preparations consisting of a mixture of tea, milk powder and sugar.
* * *
There is no dispute that the “G7 2-in-1 Instant Coffee gu manh” and “Nescafe: CAFÉ Viet” are classifiable under heading 2101, HTSUS, as preparations with a basis of extracts, essences and concentrates of coffee. The internal advice requester, however, incorrectly claims that “G7 2-in-1 Instant Coffee gu manh” is a preparation because it is a “ground coffee paste.” The “G7 2-in-1 Instant Coffee gu manh” is not a “coffee paste” because such products must contain vegetable fats, which the subject product does not contain. See New York Ruling Letter (“NY”) 807887 (March 22, 1995) and NY B89186 (Sept. 24, 1997); see also EN 21.01(4) (stating that ‘coffee pastes’ consist[] of mixtures of ground, roasted coffee with vegetable fats and sometimes other ingredients”). The “G7 2-in-1 Instant Coffee gu manh” and “Nescafe: CAFÉ Viet” are preparations because they are instant coffee that contains sugar. See Headquarters Ruling Letter (“HQ”) 952589 (June 10, 1993). In HQ 952589, CBP found that “the term ‘preparation’ [of heading 2101, HTSUS] covers coffee or tea products which include sugar, milk, etc. regardless of changes in the finished products’ physical characteristics.” Moreover, EN to 21.01(3) indicates that the heading includes “preparations based on extracts, essences or concentrates of coffee…with added starches or other carbohydrates.” As sugars are carbohydrates, the two products are classifiable in heading 2101, HTSUS, consistent with EN to 21.01(3). In NY K87929, dated August 5, 2004, CBP determined that an instant coffee mix consisting of sugar and coffee was classified in subheading 2101.12, HTSUS, as a preparation.
In this case, the dispute starts at the six-digit level. Specifically, CBP must determine whether the “G7 2-in-1 Instant Coffee gu manh” and “Nescafe: CAFÉ Viet” are properly classified as “[e]xtracts, essences and concentrates” under subheading 2101.11, HTSUS, or “[p]reparations with a basis of extracts, essences or concentrates or with a basis of coffee,” under subheading 2101.12, HTSUS. As explained above, the two subject products are preparations with a basis of extracts, essences or concentrates of coffee because they contain coffee and sugar, like the product in NY K87929. Accordingly, they are classifiable under subheading 2101.12, HTSUS.
Next, we determine the proper eight-digit classification under subheading 2101.12, HTSUS. Subheading 2101.12.32, HTSUS, is not applicable because the “G7 2-in-1 Instant Coffee gu manh” and “Nescafe: CAFÉ Viet” do not fall under any of the exclusions listed in General Note 15, HTSUS. Also, subheadings 2101.12.34 and 2101.12.38, HTSUS, are not applicable because the two subject products are not blended syrups.
Classification in the remainder of the eight-digit preparations subheadings is dependent on the sugar content of the two subject products. The ingredient list and percentage breakdown differ between the internal advice request from LA Lucky and the CBP Laboratory report for the “G7 2-in-1 Instant Coffee gu manh.” Where there is a conflict between the information submitted to CBP and the results of the CBP lab, then CBP will use the ingredient breakdown of the CBP Laboratory reports to classify the subject merchandise. The presumption of correctness for CBP laboratory results is reflected in Exxon Corp v. U.S., 462 F.Supp. 381, 81 Cust. Ct. 87, C.D. 4772 (1978) (quoting Consolidated Cork Corp. v. United States, 54 Cust. Ct. 83, C.D. 2512 (1965)) (citations omitted), which stated the following:
It is well settled that the methods of weighing, measuring, and testing merchandise used by customs officers and the results obtained are presumed to be correct. However, this presumption may be rebutted by showing that such methods or results are erroneous. Furthermore, the presumption does not have evidentiary value and may not be weighed against relevant and material proof offered by the plaintiffs. If a prima facie case is made out, the presumption is destroyed and the Government has the burden of going forward with the evidence.
We note that LA Lucky in this case has not met its burden of rebutting the CBP laboratory’s presumption of correctness.
According to the CBP Laboratory, the two subject products have three ingredients: sugar, caffeine, and moisture. The sample of the “G7 2-in-1 Instant Coffee gu manh” contained 43.8 percent sugar by dry weight. Accordingly, the “G7 2-in-1 Instant Coffee gu manh” is classifiable in subheading 2101.12.54, HTSUS, which provides for “[a]rticles containing over 10 percent by dry weight of sugar” as long as the sugar contained in the subject merchandise is described in Additional U.S. Note 3 to Chapter 17, HTSUS, and the merchandise is described in Additional U.S. Note 8 to Chapter 17, HTSUS, and entered pursuant to its provisions. Additional U.S. Note 3 to Chapter 17, HTSUS, states, in relevant part, that “the term ‘articles containing over 10 percent by dry weight of sugar described in additional U.S. note 3 to chapter 17’ means articles containing over 10 percent by dry weight of sugars derived from sugar cane or sugar beets.” The CBP Laboratory has informed us that the sucrose contained in the subject merchandise is most likely derived from sugar cane or sugar beets. The CBP Laboratory found that sucrose comprised more than 10 percent by dry weight of the “G7 2-in-1 Instant Coffee gu manh” sample. Therefore, the “G7 2-in-1 Instant Coffee gu manh” is classified in subheading 2101.12.54, HTSUS. If the quantitative limits of additional U.S. Note 8 to Chapter 17, HTSUS, have been reached, the subject merchandise is classified in subheading 2101.12.58, HTSUS.
Similarly, based on the sugar content findings in the CBP Laboratory report and the reasons provided above, the “Nescafe: CAFÉ Viet” is classified in subheading 2101.12.58, HTSUS.
HOLDING:
Under the authority of GRIs 1 and 6, the “G7 2-in-1 Instant Coffee gu manh” and the “Nescafe: CAFÉ Viet” are classified under heading 2101, HTSUS, specifically, in subheading 2101.12.54, HTSUS, which provides for “Extracts, essences and concentrates, of coffee, tea or mate and preparations with a basis of these products or with a basis of coffee, tea or mate; roasted chicory and other roasted coffee substitutes, and extracts, essences and concentrates thereof: Extracts, essences and concentrates of coffee, and preparations with a basis of these extracts, essences or concentrates or with a basis of coffee: Preparations with a basis of extracts, essences or concentrates or with a basis of coffee: Other: Articles containing over 10 percent by dry weight of sugar described in additional U.S. note 3 to chapter 17: Described in additional U.S. note 8 to chapter 17 and entered pursuant to its provisions.” The 2017 column one, general rate of duty is 10 percent ad valorem.
If the quantitative limits of Additional U.S. Note 8 to Chapter 17, HTSUS, have been reached, then the “G7 2-in-1 Instant Coffee gu manh” and the “Nescafe: CAFÉ Viet” are classified in subheading 2101.12.58, HTSUS, which provides for “Extracts, essences and concentrates, of coffee, tea or mate and preparations with a basis of these products or with a basis of coffee, tea or mate; roasted chicory and other roasted coffee substitutes, and extracts, essences and concentrates thereof: Extracts, essences and concentrates of coffee, and preparations with a basis of these extracts, essences or concentrates or with a basis of coffee: Preparations with a basis of extracts, essences or concentrates or with a basis of coffee: Other: Articles containing over 10 percent by dry weight of sugar described in additional U.S. note 3 to chapter 17: Other.” The 2017 column one, general rate of duty is 30.5 cents per kilogram plus 8.5 percent ad valorem.
Duty rates are provided for 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 to mail this decision to the requester no later than 60 days from the date of the decision. At that time, the Office of Trade, Regulations and Rulings will make the decision available to CBP personnel and to the public on the Customs Rulings Online Search System (“CROSS”), at https://rulings.cbp.gov/, and other methods of public distribution.
Sincerely,
For Craig T. Clark, Director
Commercial and Trade Facilitation Division