OT:RR:CTF:FTM H322361 MJD
Mr. Richard Mojica
Miller & Chevalier Chartered
900 16th Street NW
Washington, DC 20006
Re: Reconsideration of NY N307210; Classification of Processed Brewer's Saved Grains
Dear Mr. Mojica:
This is in reference to your correspondence, dated December 14, 2021, requesting reconsideration of New York Ruling Letter ("NY") N307210, dated October 9, 2020, on behalf of your client, EverGrain Ingredients LLC (hereinafter "EverGrain") of two types of products made from processed Brewer's Saved Grains ("BSG") under the Harmonized Tariff Schedule of the United States ("HTSUS"). After reviewing NY N307210, we have found that ruling to be in error. For the reasons set forth below, we are revoking NY N307210.
You have asked that certain information submitted in connection with this request be treated as confidential, pursuant to 19 C.F.R. 177.2(b)(7). Your request for confidentiality is approved. Specifically, the images and exhibits included in your submission will not be released to the public.
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 (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. No. 103-182, 107 Stat. 2057, 2186 (1993), notice of the proposed action was published on September 13, 2023, in Volume 57, Number 33, of the Customs Bulletin. No comments were received in response to this notice.
FACTS:
In NY N307210, the products were described as follows:
The subject merchandise are BarleyVita Fibra and BarleyVita Pro. You have stated that both products are derived from brewing spent grains, barley and corn, respectively. The products, which are in powder form, are produced from drying and milling brewing or distilling dregs and waste. The products are separated into finer and coarser particles. BarleyVita Pro represents the former, and BarleyVita Fibra characterizes the latter. Both products will be sold for use as fiber and/or protein ingredients in baked goods and other food applications.
NY N307210 also details U.S. Customs and Border Protection ("CBP") New York laboratory findings on samples of the products via laboratory report # NY20191820, dated October 1, 2020, which provides as follows:
Based on the laboratory review, the samples fail to meet the Chapter 11, Note 2(A) starch/ash content requirements for classification within that chapter of the Harmonized Tariff Schedule of the United States (HTSUS). However, the samples meet the Note 2(B) sieve-test requirement for flours of heading 1102.
In your request for reconsideration, you explain that at the time the ruling request for NY N307210 was made, the products were named "BarleyVita Pro" and "BarleyVita Fibra," and now they are named "EverVita Prima" and "EverVita Fibra," respectively, (or "the EverVita products"). The EverVita products are made from BSG, specifically the BSG of barley and corn. BSG are the by-product of the beer brewing process. To create the EverVita Prima and EverVita Fibra, the BSG are dried using a ring drying technology during which hot air gets passed through the BSG and removes moisture so that the moisture content is less than 10 percent. Then the BSG are milled using a pin mill technology which helps to make a non-homogenous particle size distribution. Lastly the BSG are fractionated using air classification which separates the milled product into two fractions, one with smaller and lighter particles ("EverVita Prima") and one with larger and heavier particles ("EverVita Fibra"). Afterwards the two products are packed into 20kg bags and palatalized.
The EverVita Prima consist of more than 33 percent protein and more than 35 percent natural dietary fiber. It can be used as a fiber/protein additive and used in baking and other food applications. The EverVita Fibra contain as least 55 percent natural dietary fiber and 15 percent protein. It is used a fiber/protein additive in snacks and other food applications. Neither the EverVita Prima nor the EverVita Fibra can be consumed as is and must be added to other ingredients and cooked to be edible.
In NY N307210, CBP classified the EverVita products under heading 1102, HTSUS. Specifically, the BarleyVita Fibra (now "EverVita Fibra") was classified in subheading 1102.20.0000, HTSUS Annotated ("HTSUSA"), which provides for "Cereal flours other than of wheat or meslin: Corn (maize) flour," and the BarleyVita Pro (now the "EverVita Prima") was classified in subheading 1102.90.6000, HTSUSA, which provides for "Cereal flours other than of wheat or meslin: Other: Other: Other."
According to your submission, you argue that the EverVita products are classified in subheading 2303.30.0000, HTSUSA, which provides for "Residues of starch manufacture and similar residues, beet-pulp, bagasse and other waste of sugar manufacture, brewing or distilling dregs and waste, whether or not in the form of pellets: Brewing or distilling dregs and waste."
ISSUE:
What is the tariff classification of the EverVita Prima and the EverVita Fibra?
LAW AND ANALYSIS:
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRI's). 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 2023 HTSUS provisions under consideration are as follows:
1102 Cereal flours other than of wheat or meslin:
* * *
2106 Food preparations not elsewhere specified or included:
* * *
2302 Bran, sharps (middlings) and other residues, whether or not in the form of pellets, derived from the sifting, milling or other working of cereals or of leguminous plants:
* * *
2303 Residues of starch manufacture and similar residues, beet-pulp, bagasse and other waste of sugar manufacture, brewing or distilling dregs and waste, whether or not in the form of pellets:
* * *
Note 2 to Chapter 11, HTSUS, provides in pertinent part:
(A) Products from the milling of the cereals listed in the table below fall within this chapter if they have, by weight on the dry product:
a) A starch content (determined by the modified Ewers polarimetric method) exceeding that indicated in column (2); and
b) An ash content (after deduction of any added minerals) not exceeding that indicated in column (3).
Otherwise, they fall in heading 2302. However, germ of cereals, whole, rolled, flaked or ground is always classified in heading 1104.
(B) Products falling within this chapter under the above provisions shall be classified in heading 1101 or 1102 if the percentage passing through a woven metal wire cloth sieve with the aperture indicated in column (4) or (5) is not less, by weight, than that shown against the cereal concerned.
Otherwise, they fall in heading 1103 or 1104.
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, and therefore not dispositive, the ENs provide a commentary on the scope of each heading of the Harmonized System and are thus useful in ascertaining the classification of merchandise under the System. See T.D. 89-80, 54 Fed. Reg. 35127 (Aug. 23, 1989).
The ENs to heading 2106, HTSUS, provides in pertinent part as follows:
Provided that they are not covered by any other heading of the Nomenclature, this heading covers:
(A) Preparations for use, either directly or after processing (such as cooking, dissolving or boiling in water, milk, etc.), for human consumption.
(B) Preparations consisting wholly or partly of foodstuffs, used in the making of beverages or food preparations for human consumption. The heading includes preparations consisting of mixtures of chemicals (organic acids, calcium salts, etc.) with foodstuffs (flour, sugar, milk powder, etc.), for incorporation in food preparations either as ingredients or to improve some of their characteristics (appearance, keeping qualities, etc.) (see the General Explanatory Note to Chapter 38).
* * *
The ENs to heading 2302, HTSUS, provides in pertinent part as follows:
This heading covers:
(A) Bran, sharps and other residues from the milling of cereal grains. This category essentially comprises by-products from the milling of wheat, rye, barley, oats, maize (corn), rice, grain sorghum or buckwheat, which do not comply with the requirements of Note 2 (A) to Chapter 11 as regards starch content and ash content.
...
(B) Residues from the sifting or other working of cereal grains. Sifting residues, obtained during pre-milling operations, consist essentially of:
...
(C) Residues and waste of a similar kind resulting from the grinding or other working of leguminous plants.
The ENs to heading 2303, HTSUS, provides in pertinent part as follows:
. . .
(E) Brewing or distilling dregs and waste comprise in particular:
(1) Dregs of cereals (barley, rye, etc.), obtained in the manufacture of beer and consisting of the exhausted grains remaining after the wort has been drawn off.
. . .
* * *
In NY N307210, CBP classified the EverVita products in heading 1102, HTSUS, which provides for "Cereal flours other than of wheat or meslin." CBP stated that based on the results in the CBP laboratory report, tested samples of the EverVita products "faile[d] to meet the Chapter 11, Note 2(A) starch/ash content requirements for classification within that chapter of the Harmonized Tariff Schedule of the United States (HTSUS)." However, CBP opined that while the samples did not meet the specifications for Note 2(A) to Chapter 11, HTSUS, they did meet the "Note 2(B) sieve-test requirement for flours of heading 1102." Note 2(B) to Chapter 11, HTSUS, provides that "Products falling within this chapter under the above provisions shall be classified in heading 1101 or 1102 if the percentage passing through a woven metal wire cloth sieve with the aperture indicated in column (4) or (5) is not less, by weight, than that shown against the cereal concerned." (Emphasis added). Thus, to meet the requirements of Note 2(B) to Chapter 11, HTSUS, a product must first meet the requirements of Note 2(A) to Chapter 11, HTSUS. As a result, because the EverVita products failed to meet the starch and ash requirements of Note 2(A) to Chapter 11, HTSUS, resorting to Note 2(B) to Chapter 11, HTSUS, is incorrect. Therefore, we find that the EverVita products are not classified in Chapter 11, HTSUS, because they are excluded from classification therein because of Note 2(A) to Chapter 11, HTSUS.
Note 2(A) to Chapter 11, HTSUS, however, directs classification to heading 2302, HTSUS, when products from the milling of cereals fail to meet the starch and ash requirement of Note 2(A) to Chapter 11, HTSUS. Specifically, Note 2(A) to Chapter 11, HTSUS, provides, in pertinent part, that "Products from the milling of the cereals listed in the table below fall within this chapter if they have [a specific starch and ash content] ... Otherwise, they fall in heading 2302." Heading 2302, HTSUS, provides for "Bran, sharps (middlings) and other residues, whether or not in the form of pellets, derived from the sifting, milling or other working of cereals or of leguminous plants." The ENs to heading 2302, HTSUS, provide that the heading covers primarily three types of products, "bran, sharps and other residues from the milling of cereal grains," "residue from the sifting or other working of cereal grains," and "residues and waste of a similar kind resulting from the grinding or other working of leguminous plants." None of these categories, however, describe the EverVita products at issue here. Therefore, we find that the EverVita products are also not classified in heading 2302, HTSUS.
Next, we turn to heading 2303, HTSUS, which provides for "Residues of starch manufacture and similar residues, beet-pulp, bagasse and other waste of sugar manufacture, brewing or distilling dregs and waste, whether or not in the form of pellets." The ENs to heading 2303, HTSUS, provide that the "Brewing or distilling dregs and waste" comprise of "Dregs of cereals (barley, rye, etc.), obtained in the manufacture of beer and consisting of the exhausted grains remaining after the wort has been drawn off." See EN 23.03(E). In the instant case, the BSG produced as a result of the beer making process are precisely described by heading 2303, HTSUS, and the ENs to heading 2303, HTSUS, as they are the left-over remnants from the beer brewing process. However, while the BSG is properly described by heading 2303, HTSUS, the EverVita products are not. The EverVita products are processed BSG and while you explain that the products are minimally processed, we find that the processing of the BSG, i.e. the drying, milling, and fractionation, further advances the BSG to a different product. Thus, we find that the EverVita products are also not classified in heading 2303, HTSUS.
You argue that the EverVita products are classified in heading 2303, HTSUS and that minimally processing the BSG through drying, milling, and the fractionation that sorts the BSG by particle size does not advance the EverVita products into a different product. You cite to NY L81574, dated February 2, 2005, where CBP determined that Fibrex, a dietary fiber derived from sugar beets, was classified in heading 2303, HTSUS. Fibrex is produced by drying sugar beet pulp under pressure with overheated steam, and milling the dried pulp to different particle sizes. The Fibrex is "sold as a fiber additive for use in bakery products, in other food applications and as a vegetable fiber in health food products." However, in that case the product was dried with overheated steam, and milled to different particle sizes, whereas the EverVita products are not only dried and milled, but also fractionated to achieve different particle size. This fractionation process for the EverVita products yields products are further advanced into a different product unlike the Fibrex in NY L81574.
You also cite to Headquarters Ruling Letter ("HQ") H311471, dated March 11, 2021, where CBP found that a pea protein product that "results as a side stream product from the production of pea starch," and is further processed by separating the starch from the product which results in a fruit water that is "coagulated, separated, and dried," was classified as a "vegetable waste" or "vegetable product in heading 2308, HTSUS. However, in that ruling, CBP specifically mentioned that the pea protein was not a product of heading 2303, HTSUS, because it was not a "residue within the meaning of heading 2303, HTSUS," and that the product was "further advanced into a different product by coagulation and drying." Similarly, we find that the EverVita products are advanced from BSG into a different product by the drying, milling, and fractionation process, and as a result are not classified in heading 2303, HTSUS.
Likewise, in HQ H039339, dated November 18, 2009, which you cite to, CBP found that two oat bran products, OatWell 14 and OatWell 22, were classified in heading 2306, HTSUS, as "oilcake and other solid residues." In reaching that decision, CBP first excluded the products from heading 2302, HTSUS, which provides for "Bran, sharps (middlings) and other residues . . ." CBP stated that heading 2302, HTSUS, does not cover the "by-products that result from the milling process and that have undergone 'further processing." Similarly, we find that heading 2303, HTSUS, does not provide for the by-products of heading 2303, HTSUS, that have undergone further processing, including a drying, milling, and fractionation process such as the process used to produce the EverVita products.
Instead, we find that that the EverVita products are properly classified in heading 2106, HTSUS, which provides for "Food preparations not elsewhere specified or included." Classification in heading 2106, HTSUS, depends on the product being a food preparation and a failure to find any prior tariff provision which meets the characteristics and use of the product. EN 21.06 provides two definitions for the phrase "food preparation". See EN (A) and EN (B) to 21.06. One of the definitions for the phrase "food preparation" is "Preparations consisting wholly or partly of foodstuffs, used in the making of beverages or food preparations for human consumption." See EN (B) 21.06. The EverVita products at issue are not classified under any other tariff provision and are made wholly of foodstuffs used in the making of food preparations like baked goods and other food applications for human consumption. Therefore, we find that the EverVita products at issue are food preparations within the meaning of EN 21.06, and are properly classified in heading 2106, HTSUS.
Accordingly, we find that the EverVita Prima and EverVita Fibra are classified in heading 2106, HTSUS, specifically, these products are classified in subheading 2106.90.9998, HTSUSA, which provides "Food preparations not elsewhere specified or included: Other: Other: Other: Other: Other: Other: Other: Other: Other: Other."
HOLDING:
In accordance with GRI 1, the EverVita Prima and EverVita Fibra are classified in heading 2106, HTSUS, specifically, they are classified in subheading 2106.90.9998, HTSUSA, which provides "Food preparations not elsewhere specified or included: Other: Other: Other: Other: Other: Other: Other: Other: Other: Other." The column one general rate of duty is 6.4%.
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 online at: www.usitc.gov.
EFFECT ON OTHER RULINGS:
NY N307210, dated October 9, 2020, 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,
Yuliya A. Gulis, Director
Commercial and Trade Facilitation Division