Reconsideration of New York Ruling Letter (NYRL) C82975; Semper Almond Mix

HQ 961492 May 12, 1999 CLA-2 RR:CR:GC 961492K CATEGORY: Classification TARIFF NO.: 2106.90.95; 2106.90.97 T. Randolph Ferguson, Esq. Sandler, Travis & Rosenberg and Glad & Ferguson, P.C. 1 Sutter Street, 10th Floor San Francisco, CA 94104 RE: Reconsideration of New York Ruling Letter (NYRL) C82975; Semper Almond Mix Dear Mr. Ferguson: In your letter of February 27, 1998, on behalf of Semper-Arla Foods, you asked for reconsideration of NYRL C82975, dated January 5, 1998, for one of the products described as Semper Almond Mix. Our decision follows. FACTS: In a letter dated December 8, 1997, a customs broker, on behalf of Semper-Arla Foods, requested a ruling for the classification of food mixtures, one of which was described as Semper Almond Mix. Customs responded in NYRL C82975, dated January 5, 1998, that the Semper Almond Mix was classified in subheading 2106.90.95, Harmonized Tariff Schedule of the United States (HTSUS), as other food preparations not elsewhere specified or included, containing over 10 percent by dry weight of sugar as described in Additional U.S. Note 3 to Chapter 17, if within the quantitative limitations of Additional U.S. Note 8 to Chapter 17, and, entered pursuant to its provisions. If the quantitative limitations have been reached, the Semper Almond Mix is classified in subheading 2106.90.97, HTSUS, an over-quota-tariff rate provision. In addition, products classified in subheading 2106.90.97, HTSUS, are subject to additional duties based on their value, as described in subheadings 9904.17.49 through 9904.17.65, HTSUS. In your letter of February 27, 1998, you asked for reconsideration of NYRL C82975 and cited HRL 076487, dated August 30, 1985, which held that three products including an Almond Mix, a product similar to the Semper Almond Mix described in NYRL C82975, were “types of products not intended to be covered by the sugar Proclamation and should be permitted entry free of quota”. This file no longer exists at Customs Headquarters and the background information is not available. Although not stated in HRL 076487, we assume that the request for the ruling was made on behalf of Semper-Arla foods. Our comments are based on the information contained in HRL 076487. HRL 076487 indicated that the “Almond Mix” was used by bakeries to make cakes, franchipans (frangipanes), petits fours, and pastries with the addition of eggs and flour to the paste. HRL 076487 cited Presidential Proclamation 5340, dated May 17, 1985, which inserted an exception to the quota provision of item 958.18, TSUS, for articles imported that were classified in item 183.05, TSUS, by stating, in part, that Except cake decorations and similar products to be used in the same condition as imported without any further processing other than the direct application to individual pastries or confections ... HRL 076487, referred to an advisory opinion that the Department of Agriculture believed that the products covered by the ruling were not intended to be included in the quota and that the quota should be imposed on an article only if the sugar in that article would specifically substitute for domestically available sugar. You opine, based on HRL 076487, that the Semper Almond Mix is classified as other food preparations, not elsewhere specified or included containing sugar derived from sugar cane and/or sugar beets, in subheading 2106.90.997 [2106.90.9997], HTSUS, a provision not subject to a tariff rate quota. NYRL C82975 and descriptive literature, describes the Semper Almond Mix as a soft white paste consisting of 40 percent vegetable oil, 24 percent sugar, 16 percent almond and apricot kernels, 8 percent corn starch, 4 percent sorbitol, 3 percent glycerine, 3 percent water, and 2 percent sodium citrate, salt, mono and diglycerides, potassium sorbate, and flavor. After importation, the mix will be further processed by the addition of eggs and flour, and then used to make cakes, franchipans (frangipanes), petits fours, and pastries. ISSUE: The issue is whether the Semper Almond Mix, as described above, is exempt from the tariff rate quota provisions of subheadings 2106.90.95 and 2106.90.97, HTSUS, by virtue of Additional U.S. Note 3, Chapter 17, HTSUS. LAW AND ANALYSIS: Subheading 2106.90.95, HTSUS, provides for other food preparations not elsewhere specified or included, containing over 10 percent by dry weight of sugar as described in Additional U.S. Note 3 to Chapter 17, if within the quantitative limitations of Additional U.S. Note 8 to Chapter 17, and, entered pursuant to its provisions. If the quantitative limitations have been reached, subheading 2106.90.97, HTSUS, provides for an over-quota-tariff rate provision. In addition, products classified in subheading 2106.90.97, HTSUS, are subject to additional duties based on their value, as described in subheadings 9904.17.49 through 9904.17.65, HTSUS. Additional U.S. Note 3, Chapter 17, HTSUS, states that For the purposes of this schedule, 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, whether or not mixed with other ingredients, except (a) articles not principally of crystalline structure or not in dry amorphous form, the foregoing that are prepared for marketing to the ultimate consumer in the identical form and package in which imported; (b) blended syrups containing sugars derived from sugar cane or sugar beets, capable of being further processed or mixed with similar or other ingredients, and not prepared for marketing to the ultimate consumer in the identical form and package in which imported; (c) articles containing over 65 percent by dry weight of sugars derived from sugar cane or sugar beets, whether or not mixed with other ingredients, capable of being further processed or mixed with similar or other ingredients, and not prepared for marketing to the ultimate consumer in the identical form and package in which imported; or (d) cake decorations and similar products to be used in the same condition as imported without any further processing other than the direct application to individual pastries or confections, finely ground or masticated coconut meat or juice thereof mixed with those sugars, and sauces and preparations therefor. (Bold emphasis added). The bold sections cited above from Additional Note 3, Chapter 17, HTSUS, are identical with the similar sections in item 958.18, TSUS, and the superior heading thereto. The Semper Almond Mix contains over 10 percent by dry weight of sugar derived from sugar cane or sugar beets and as imported, is not used as cake decorations and similar products to be used in the same condition as imported without any further processing other than the direct application to individual pastries or confections. Rather, the mix has to be further processed by the addition of eggs and flour to be used by bakeries to make cakes, franchipans, (frangipanes), petits fours, and pastries and therefor it is not covered by the exception to the tariff rate quota provisions of Additional U.S. Note 3, Chapter 17, HTSUS, notwithstanding the USDA advisory opinion contained in HRL 076487. The HTSUS was implemented by Pub. L. 100-418 (1998). The legislative history contained in the House Conference Report, Number 100-576, at pages 549-550, states, in part, the following; In light of the significant number and nature of changes in nomenclature from the TSUS to the HTS, decisions by the Customs Service and the courts interpreting nomenclature under the TSUS are not to be deemed dispositive in interpreting the HTS. (Bold emphasis added.) Further, the advisory opinion of the USDA contained in HRL 076487 was clarified in HRL’s 956246, dated July 25, 1994, and 956100, dated February 7, 1995. Prior to the insertion of the exception in Additional U.S. Note 3 to Chapter 17 (1995), the exception was contained in subheading 9904.60.60, HTSUS (1994). In the clarifying rulings, Customs stated the following; We have consulted with the Foreign Agricultural Service of the Department of Agriculture, concerning the definition of "cake decorations and similar products" as provided for in subheading 9904.60.60 and, consistent with existing Customs ruling decisions, Customs understands the cake decoration exception to mean the following: For purposes of subheading 9904.60.60, the phrase "cake decorations and similar products to be used in the same condition as imported without any further processing other than the direct application to individual pastries or confections" means 1) products used in their imported condition to coat or fill pastries or confections, or 2) products used to coat or fill pastries or confections after a change in form (e.g., melting or heating, reduction in size), insofar as the product itself need not undergo a necessary, additional preparation, treatment, or manufacture nor a blending or combining with any ingredients, in order to become a finished product. As previously stated, the Semper Almond Mix does not fall within the exception of Additional U.S. Note 3, Chapter 17, HTSUS. HOLDING: The product described as Semper Almond Mix which is further processed after importation by the addition of other ingredients such as eggs and flour for use by bakeries to make cakes, franchipans (frangipanes), petits fours, and pastries, is classified in subheading 2106.90.95, HTSUS, as other food preparations not elsewhere specified or included, containing over 10 percent by dry weight of sugar as described in Additional U.S. Note 3 to Chapter 17, if within the quantitative limitations of Additional U.S. Note 8 to Chapter 17, and, entered pursuant to its provisions. If the quantitative limitations have been reached, the Semper Almond Mix is classified in subheading 2106.90.97, HTSUS, an over-quota-tariff rate provision. In addition, products classified in subheading 2106.90.97, HTSUS, are subject to additional duties based on their value, as described in subheadings 9904.17.49 through 9904.17.65, HTSUS. NYRL C82975, dated January 5, 1998, is affirmed. Sincerely, John Durant, Director Commercial Rulings Division