Protest and Application for Further Review No 2704-12-102956; Citrus Extract Powders

HQ H238484 October 21, 2015 CLA-2 OT:RR:CTF:TCM HQ H238484 NCD CATEGORY: Classification TARIFF NO.: 3824.90.9290 Port Director, Service Port-Los Angeles/Long Beach Seaport U.S. Customs and Border Protection 301 E. Ocean Blvd. Suite 1400 Long Beach, CA 90802 Attn: William Recker, Senior Import Specialist Re: Protest and Application for Further Review No: 2704-12-102956; Citrus Extract Powders Dear Port Director: The following is our decision regarding Protest and Application for Further Review No. 2704-12-102956, timely filed on August 22, 2012, on behalf of Syntech (SSPF) International, Inc. (“Syntech” or “Protestant”) regarding the tariff classification of four types of citrus extracts in powder form – citrus bioflavonoid powder, citrus polymethoxy flavone (citrus PMF) powder, citrus eriocitrin powder, and hesperidin powder – under the Harmonized Tariff Schedule of the United States (HTSUS). The instant protest pertains to three entries of the subject merchandise entered at the Port of Los Angeles on January 11, 2012, January 18, 2012, and March 8, 2012 in subheading 1302.19.40, HTSUS, as “Vegetable saps and extracts; pectic substances, pectinates and pectates; agar-agar and other mucilages and thickeners, whether or not modified, derived from vegetable products: Vegetable saps and extracts: Other: Ginseng; substances having anesthetic, prophylactic or therapeutic properties: Other.” On August 12, 2012, CBP at the Port of Los Angeles (‘the Port”) liquidated the citrus bioflavonoid powder, citrus eriocitrin powder, and hesperidin powder in subheading 2938.90.00, HTSUS, which provides for “Glycosides, natural or reproduced by synthesis, and their salts, ethers, esters and other derivatives: Other.” The Port liquidated the subject citrus PMF powders in subheading 2932.99.61, HTSUS, as “Heterocyclic compounds with oxygen hetero-atom(s) only: Other: Other: Aromatic: Other: Products described in additional U.S. note 3 to section VI.” Protestant now claims classification as entered. FACTS: Each of the subject products is created through initial extraction of the juices of various citrus fruits followed by further processing and eventual drying and milling. Prior to filing the instant protest, Protestant provided the Port with flowcharts detailing the production processes of the citrus eriocitrin, citrus PMF, and hesperidin powders. After a subsequent meeting between Protestant and the Port at which the Port attributed the products’ classification changes from heading 1302, HTSUS, to heading 2938, HTSUS, to the products’ elaborate manufacturing processes and resulting purified product, Protestant submitted a new set of flowcharts depicting the production processes for the citrus eriocitrin, citrus bioflavonoid, and hesperidin powders. Notably, the processes for production of the citrus eriocitrin and hesperidin powders depicted on the later flowcharts differ from those displayed on the original flowcharts. In addition, samples of the subject products were submitted for analysis to a CBP laboratory (the “laboratory”), which issued an initial report analyzing the chemical compositions of the citrus eriocitrin, citrus bioflavonoid, and hesperidin powders and a subsequent report analyzing the composition of the citrus PMF powder. The hesperidin powder, according to both flowcharts detailing the product’s manufacture, is derived from the immature fruit of the variety Citrus sinensis, i.e., the sweet orange. Initially the fruit is smashed to a particle size of about one millimeter. The earlier flowchart indicates that the residual material subsequently undergoes diacolation, filtration, spray drying, pulverization, and, finally, packaging for shipment. The later flowchart indicates that, after the initial smashing, the material is washed, heated to 78 degrees Celsius along with the solvent, supplemented with sodium hydroxide and periodically stirred, filtered with paper, condensed to 2/3 volume, cooled to room temperature, deposited, flushed, spray dried at 55 degrees Celsius, and finally milled. According to the initial laboratory report, the hesperidin powder contains, on a dry basis, 48.91 percent hesperidin, 13.93 percent polyphenols, 6.74 percent protein, 1.17 percent citric acid, and 4.62 percent ash in the form of potassium and calcium, the high content of which is indicative of a natural composition. The laboratory also observed numerous natural compounds in the sample, including fatty acids, quinic acid, oleamide, beta sitosterol, and naringenin, all of which collectively comprise 25% of the product. However, the laboratory did not detect any starches or flavor or fragrance compounds. Based on its analysis, the laboratory concluded that the principal character of the hesperidin powder is that of bioflavonoids and polyphenols purified from a citrus extract. The citrus bioflavonoid powder, like the hesperidin powder, is derived from the immature fruit of the Citrus sinensis. CBP did not receive a flowchart for production of the citrus bioflavonoid prior to the filing of the protest. The flowchart submitted after the filing indicates that, following the initial smashing of the fruit to a particle size of one millimeter, the residual material is washed, heated to 50 degrees Celsius along with the solvent, and supplemented with sodium hydroxide and periodically stirred, after which the process is repeated so as to produce a separate extract solution. Following this, the two extract solutions are mixed, filtered with paper, condensed to 2/3 volume, cooled to room temperature, deposited, flushed, spray dried at 55 degrees Celsius, and, finally, milled. The initial laboratory report describes the composition of the citrus bioflavonoid powder as made up, on a dry basis, of 12.83 percent hesperidin, 10.83 percent crude fiber, 6.29 percent polyphenols, 2.61 percent citric acid, 0.31 percent extractable fat, 10.79 percent total sugars, of which 4.03 percent is fructose, 2.50 percent is glucose, 3.33 percent is sucrose, and 0.93 percent is maltose, and 5.14 percent ash in the form of potassium and calcium. The laboratory also reported that the powder is comprised 41 percent of various naturally-occurring compounds, which include ten different flavor and fragrance compounds and the essential oil limonene, as well as fatty acids, organic acids, and beta sitosterol, but that starch is absent from the powder. The eriocitrin powder is derived from the immature fruit of Citrus limon, i.e., the lemon. Initially the fruit is smashed to a particle size of about one millimeter. According to the earlier flowchart, the material is then extracted, dissolved, subjected to an undefined process involving the use of resin, eluted, concentrated, “purified” by unspecified means, dried, pulverized, and packaged. The later flowchart indicates that, after the initial smashing of the lemon fruit, the residual material is washed, heated to 50 degrees Celsius along with the solvent, supplemented with sodium hydroxide and periodically stirred, after which the process is repeated so as to produce a separate extract solution. Following this, the two extract solutions are mixed, filtered with paper, condensed to 2/3 volume, cooled to room temperature, deposited, flushed, spray dried at 55 degrees Celsius, and finally milled. According to the initial laboratory report, the eriocitrin powder contains, on a dry basis, 56.95 percent eriocitrin, 33.33 percent protein, 22.68 percent polyphenols, 10.91 percent citric acid, and 8.37 percent ash in the form of sodium chloride, which is not reflective of a natural composition. The laboratory also reported that various natural compounds are present in the powder, including twelve different flavor and fragrance compounds and the essential oils limonene, terpinene, terpineol, and terpin hydrate, as well as levoglucosenone, sugar-related compounds, naringenin, hesperidin, eriodictyol, and claposporide A, but that starch is absent from the powder. Based on its analysis, the laboratory concluded that the principal character of the hesperidin powder is that of bioflavonoids and polyphenols purified from a citrus extract. The citrus PMF powder is derived from dried fruit peels or from dried fruits themselves. According to the earlier (and only) flowchart for production of the citrus PMF powder, the fruit or peels are first ground, after which the resulting material undergoes reflux extraction, separation and washing, and condensation. At that stage, the material is either dried and ground to produce the low-concentration “PMF A”, or, alternatively, subjected to further processing to create the high-concentration “PMF B.” This further processing includes dissolution, placement onto a resin-filled column, elution by organic solvent, further condensation, recrystallization, filtration, washing, and, lastly, drying and grinding. According to the second laboratory report, the citrus PMF powder contains, on a dry basis, 61 percent total flavonoids, 14.55 percent total polyphenols, 0.77 percent protein, 0.16 percent citric acid, 0.38 percent ash, and less than 1 percent starch or dextrin, which is most likely naturally-occurring. The laboratory noted that the polyphenolic content overlaps with the total bioflavonoid content, but does not overlap with the PMF content, and that the total flavonoid content overlaps with both the polyphenol content and the PMF content. The laboratory further noted that the PMF content consists of naringin, hesperidin, tangeretin, and nobiletin. Based on its analysis, the laboratory concluded that the principal character of the subject citrus polymethoxylated bioflavonoids is that of bioflavonoids and polyphenols purified from a citrus extract. In both reports, the laboratory states as follows with regard to the use of resin and relatively low sugar, starch, and protein contents: It has been our observation that the selective chromatographic absorption processes using either resins or membranes may tend to produce a product that is enriched in natural compounds that are either or both less hydrophilic and contain a more hydrophobic character in their structure, such as the flavonoids. These extracts are usually very low in the highly water soluble sugars, starches, and water soluble protein content. Also, in subsequent communications between our office and the laboratory, the laboratory has stated that eriocitrin and hesperidin are glycosides, and that a simple orange extract typically contains 0.025 percent hesperidin. ISSUE: Whether the subject products are properly classified in heading 1302, HTSUS, as vegetable extracts, in heading 2932, HTSUS, as heterocyclic compounds, in heading 2938, HTSUS, as glycosides, or in heading 3824, HTSUS, as chemical preparations? LAW AND ANALYSIS: Initially, we note that the matter protested is protestable under 19 U.S.C. §1514(a) (2) as a decision on classification. The protest was timely filed, within 180 days of liquidation of the first entry. (Miscellaneous Trade and Technical Corrections Act of 2004, Pub.L. 108-429, § 2103(2) (B) (ii), (iii) (codified as amended at 19 U.S.C. § 1514(c) (3) (2006)). Further Review of Protest No. 2704-12-102956 is properly accorded to Protestant pursuant to 19 C.F.R. § 174.24(a) because Protestant alleges that the decision against which the protest was filed is inconsistent with a prior CBP ruling concerning substantially similar merchandise. Merchandise imported into the United States is classified under the HTSUS. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (GRIs) and, in the absence of special language or context which requires otherwise, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUS and are to be considered statutory provisions of law for all purposes. GRI 1 requires that classification be determined first according to the terms of the headings of the tariff schedule and any relative section or chapter notes and, unless otherwise required, according to the remaining GRIs taken in their appropriate order. The Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”) constitute the official interpretation of the Harmonized System at the international level. 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 T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989). The HTSUS provisions under consideration are as follows: 1302 Vegetable saps and extracts; pectic substances, pectinates and pectates; agar-agar and other mucilages and thickeners, whether or not modified, derived from vegetable products: Vegetable saps and extracts: 1302.19 Other: 1302.19.91 Other 2932 Heterocyclic compounds with oxygen hetero-atom(s) only: Other: 2932.99 Other: Other: 2932.99.61 Products described in additional U.S. note 3 to section VI 2938 Glycosides, natural or reproduced by synthesis, and their salts, ethers, esters and other derivatives: 2938.90.00 Other 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: 3824.90 Other: Other: 3824.90.92 Other At the outset, we note that the subject citrus extract powders can only be classified in heading 3824, HTSUS, if they are not classifiable in heading 2932 or heading 2938, or more specifically classifiable in heading 1302. See Cargill, Inc. v. United States, 318 F. Supp. 2d 1279, 1278-88 (Ct. Int’l. Trade 2004) (characterizing heading 3824 as a basket provision). Moreover, the subject products can only be classified in heading 1302, HTSUS, if they are not classifiable in heading 2938. See Chapter 13, Note 2, HTSUS (“The heading does not apply to…Camphor, glycyrrhizin or other products of heading 2914 or 2938.”). Consequently, we first consider whether the subject products are classifiable in heading 2932 or heading 2938. Interpretation of heading 2932 and heading 2938 is governed by Note 1 to Chapter 29, which provides, in relevant part, as follows: Except where the context otherwise requires, the headings of this chapter apply only to: Separate chemically defined organic compounds, whether or not containing impurities; … (c) The products of headings 2936 to 2939 or the sugar ethers, sugar acetals and sugar esters, and their salts, of heading 2940, or the products of heading 2941, whether or not chemically defined… With regard to “chemically defined” and “impurities” as referenced in Note 1(a) to Chapter 29, the EN to Chapter 29 states as follows: 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. … 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. EN 29.38 states, in pertinent part, as follows: This heading also covers natural mixtures of glycosides and of their derivatives (e.g., a natural mixture of digitalis glycosides containing purpurea glycosides A and B, digitoxin, gitoxin, gitaloxin, etc.); but deliberate intermixtures or preparations are excluded. As explicated by the EN to Chapter 29, Note 1(a) establishes that substances comprised predominantly of single molecular structures are classifiable in headings of Chapter 29. See also Richard J. Lewis, Sr., Hawley’s Condensed Chemical Dictionary 324 (15th ed. 2007) (similarly defining compound as “a homogeneous entity where the elements have definite proportions by weight and are represented by a chemical formula”). These substances may include impurities, defined as deviations from the defining molecular structure, so long as any such impurities result incidentally from the production process and are present in relatively minor proportional quantities. See EN to Chapter 29; Headquarters Ruling Letter (“HQ”) H026004, dated December 2, 2009 (classifying substance consisting at least 93% of a mixture of isomers of a separate chemically defined organic compound in heading 2921, HTSUS, on the grounds that remaining content consisted of impurities); HQ 967971, dated March 2, 2006; HQ 967972, dated March 2, 2006. In addition to separate chemically defined glycosides with minor, incidental impurities, heading 2938 also includes, pursuant to Note 1(c) to Chapter 29, chemically heterogeneous mixtures of two or more such glycosides. See EN 29.38. As with other products covered by Note 1(c), such glycoside mixtures must be made up predominantly of glycosidic compounds. See, e.g., HQ 966448, dated July 9, 2004 (“Because Advantra Z® does not consist solely of the naturally occurring alkaloids found in the fruit of Citrus aurantium, but contains a great deal of other plant constituents, heading 2939, HTSUS, does not apply.”). Here, none of the instant products’ chemical compositions can be described as a single organic compound with minor impurities or as a glycosidic mixture. The citrus eriocitrin powder is comprised 56.95 percent of eriocitrin, a known glycoside, and 58.11 percent of total defined glycosides, with no other single compound bearing such a high molecular weight. The most ubiquitous compound in both the hesperidin powder and citrus bioflavonoid powder is hesperidin, which constitutes 48.91 percent of the former and 11.76 percent of the latter. The citrus PMF powder contains 62.9 percent total flavonoids, but in the form of a chemical patchwork of structurally distinct flavones and glycosides, such as naringin, hesperidin, tangeretin, and nobiletin, in unspecified concentrations. Moreover, each powder contains numerous other substances, such as proteins, acids, and various other naturally-occurring compounds, which, in light of their relative abundance, cannot be considered mere impurities. Therefore, all four powders are accurately described as heterogeneous mixtures of various compounds, both glycosidic and non-glycosidic, that are neither separate chemically defined compounds nor mixtures of glycosides for purposes of Note 1 to Chapter 29. They are consequently excluded from heading 2932 and heading 2938. We next consider whether the powders are, as Protestant asserts, classified in heading 1302, HTSUS, which covers vegetable extracts. EN 13.02 provides, in relevant part, as follows: The heading covers saps and extracts (vegetable products usually obtained by natural exudation or by incision, or extracted by solvents)… The saps and extracts classified here include: Opium, the dried sap of the unripe capsules of the poppy (Papaver somniferum) obtained by incision of, or by extraction from, the stems or seed pods. It is generally in the form of balls or cakes of varying size and shape. However, concentrates of poppy st