Application for Further Review of Protest No. 4701-21-102076; Granulated turmeric extract/standardized curcumin extract

HQ H322257 October 20, 2023 OT:RR:CTF:FTM H322257 JER CATEGORY: Classification TARIFF NO.: 2106.90.99 Center Director Pharmaceuticals, Health & Chemicals Center of Excellence and ExpertiseU.S. Customs and Border Protection 1100 Raymond Blvd. Newark, NJ 07102 ATTN: Rapgyal Tenzing, Import Specialist Re: Application for Further Review of Protest No. 4701-21-102076; Granulated turmeric extract/standardized curcumin extract Dear Center Director: This is reference to the Application for Further Review (“AFR”) of Protest No. 4701-21-102076, timely filed on June 7, 2021, and amended on July 20, 2021, by Bilgrey Cargo, Inc., on behalf of Aurea Biolabs LLC, (“Protestant”), regarding the tariff classification of a granulated turmeric extract under the Harmonized Tariff Schedule of the United States (“HTSUS”). FACTS: The merchandise at issue is described as curcumin 95% (granular) and is composed of Curcumin Extract Granules, which are produced from the roots of turmeric (i.e., a turmeric extract). The production process consists of grinding, solvent extraction, distillation of solvent, crystallization, filtration and vacuum drying, and granulation. The final composition of the subject product consists of granulated curcumin powder with a strength of 95% Curcuminoids with the remaining 5% consisting of natural non-curcuminoid turmeric extractives. The production process to obtain the 95% curcumin content involves the removal of volatile oils, crude fiber, dietary fiber, protein and carbohydrates. The granulated curcumin powder is imported in bulk within 25-kilogram drums and is not in consumer packaging. It is said to be used as a flavoring in food applications, coloring for cheese products, and for general health benefits in dietary supplements. According to Protestant’s submission, Turmeric [Curcuma longa] is a rhizome plant [Zingiberaceae] of the ginger family used as a culinary spice and a traditional medicine in Ayurveda and other Indian medical systems, as well as in Eastern Asian medical techniques such as traditional Chinese treatments. Curcumin is the primary component in turmeric. In its submission, Protestant provided a Certificate of Analysis dated July 13, 2021, and a Laboratory Report dated August 29, 2020, drafted by Plant Lipids Private Ltd. Protestant also provided the following records from Plant Lipids Private Ltd.: Ingredient Declaration (Exhibit 1); Technical Data Sheet (Exhibit 2); Manufacturing Process Flow Chart (Exhibit 3); and Process Description (Exhibit 4). The ingredient declaration provides the product code and describes the product as 95% Curcumin Granules. The technical data sheet describes the parameters, specifications, and the test methods for the product. In particular, this record states that curcumin granular is obtained by solvent extraction of dried root of longa and “subsequent repeated purification by crystallization followed by drying and granulation.” The manufacturing process flow chart (Exhibit 3) depicts the production steps used to produce curcumin granules from turmeric. The process description details the manufacturing steps, including grinding, extraction, distillation, crystallization, filtration and vacuum drying, and granulation. The subject merchandise covers four entries entered between August 30, 2020, and September 23, 2020, under subheading 3203.00.80, HTSUS, which provides for “Coloring matter of vegetable or animal origin…” U.S. Customs and Border Protection (“CBP”) liquidated these entries on January 22, 2021, under subheading 2106.90.99, HTSUS, which provides, in part, for “Food preparations not elsewhere specified or included: Other: Other: Other: Other: Other: Other.” On June 6, 2020, Protestant filed a protest and AFR regarding the tariff classification of the subject merchandise and claiming that the correct classification of the granulated turmeric extract/standardized curcumin extract should be in heading 1302, HTSUS. Specifically, Protestant believes that the product should be classified under subheading 1302.19, HTSUS, which provides for, “Vegetable saps and extracts; pectic substances, pectinates and pectates; agar-agar and other mucilages and thickeners, whether or not modified, derived from vegetable products: Other: Other.” On July 20, 2022, CBP held a meeting with Protestant to discuss the tariff classification of the subject merchandise. Following that meeting, Protestant submitted a supplemental letter, dated September 9, 2022. ISSUE: What is the tariff classification of granulated turmeric extract/standardized curcumin extract? LAW AND ANALYSIS: Initially, we note that the matter 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. 4701-21-102076 is properly accorded to Protestant pursuant to 19 C.F.R. § 174.24(a) because Protestant alleges that the decision protested is inconsistent with prior CBP rulings 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. 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. GRI 6 requires that the classification of goods in the subheadings of headings shall be determined according to the terms of those subheadings, any related subheading notes and, mutatis mutandis, to GRIs 1 through 5. The 2020 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: 1302.19.41 Other 1302.19.91 Other 2106 Food preparations not elsewhere specified or included: 2106.90 Other: Other: Other: Other: Other: 2106.90.99 Other 3203.00 Coloring matter of vegetable or animal origin (including dyeing extracts but excluding animal black), whether or not chemically defined; preparations as specified in note 3 to this chapter based on coloring matter of vegetable or animal origin: 3203.00.80 Other… * * * 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 in interpretation of these headings. See T.D. 89-90, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989). Heading 1302, HTSUS, provides for, among other things, 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, and extracted by solvents)… Solid extracts are obtained by evaporating the solvent. Inert substances are sometimes added to certain extracts so that they can be more easily reduced to powder (e.g., belladonna extract, to which powdered gum Arabic is added), or to obtain a standard strength (for instance, certain quantities of starch are added to opium in order to obtain a product containing a known portion of morphine). The addition of such substances does not affect the classification of these solid extracts. [. . . ] Extracts may be simple or compound. Simple extracts are obtained by the treatment of only one variety of plant. Compound extracts are obtained either by mixing simple extracts or by treating mixtures of different varieties of plants. Compound extracts (whether in the form of alcoholic tinctures or in any other forms) therefore contain the constituents of several kinds of plant; they include compound jalap extract, compound extract of aloes, compound extract of cinchona, etc. The vegetable saps and extracts of this heading are generally raw materials for various manufactured products. They are excluded from the heading when, because of the addition of other substances, they have the character of food preparations, medicaments, etc. * * * Protestant asserts that the subject curcumin 95% (granular) (hereinafter, “CUR 95”) should be classified under heading 1302, HTSUS, as a vegetable extract. Protestant argues that the subject turmeric extract is similar to other products that CBP classified under heading 1302, HTSUS, and relies on various rulings in support of its position. For example, Protestant cites to New York Ruling Letter (“NY”) R04282, dated July 3, 2006, in which CBP classified a “powdered herbal extract from the rhizome of Curcumin Longa” under heading 1302, HTSUS. Protestant argues that the product in NY R04282, referred to as RoxPlus Curcumin, is similar to the subject product and as such, the subject CUR 95 should be classified in heading 1302, HTSUS. Likewise, Protestant insists that the CUR 95 is a dissolved raw material obtained by solvent extract within the scope of heading 1302 similar to Headquarter Ruling Letters (“HQ”) rulings W967653 (dated July 31, 2008) and W968370 (dated July 31, 2008), in which CBP determined that pine bark extracts dissolved in ethanol are classified in heading 1302, HTSUS. In particular, Protestant contends that the subject CUR 95 is obtained by solvent extraction and is not subsequently enriched, purified, or otherwise refined and is therefore not precluded from classification under heading 1302, HTSUS. Similarly, Protestant asserts that the subject product is not excluded from heading 1302, HTSUS, because no substances are added that would give this product the character of a food preparation noting that EN 13.02 specifically states that extracts are excluded from the heading when substances are added that would give the raw material character of a preparation or medicament. However, CBP has consistently distinguished between raw materials that have undergone only minimal processing and those products which are extensively processed such that they fall outside the scope of heading 1302, HTSUS. See HQ H195716, dated February 19, 2015 (CBP determined that “extensive processing can exclude a product from 1302”); HQ 959099, dated May 1, 1998 (CBP noted that, “As pointed out in the ENs to heading 1302, what is covered in the heading are vegetable products obtained by natural exudation or by incision or by solvent extraction.”) Specifically, CBP has found that products that go through several extractions, refining processes, and even centrifugation are formulated products far advances them from the extracts which would be classified in chapter 13. See id. See also, HQ H106785, dated October 14, 2010 (CBP determined that extensive processing can exclude a product from heading 1302, HTSUS). Based on the record, the subject CUR 95 is not created solely by means of solvent extraction. Rather, the final curcumin product is subjected to a six-step process that goes beyond the initial solvent extraction. First, the raw turmeric material is grinded whereby the raw material is fed into a Hammer mill where it is reduced to powder. The turmeric powder is then fed into a pelletizer machine that converts the powder into pellets (making it more suitable for solvent extraction). Next, the product undergoes solvent extraction where the turmeric pellets feed to a perforated belt for continuous solvent extraction. The turmeric powdered pellets are subjected to an ethyl acetate solvent to remove any spent residue which then results in a miscella (extracted turmeric oil). The solvent extraction is sprayed to a bed and the miscella is collected. Distillation is next. In its September 2022 supplemental letter, Protestant states that the distillation stage is used to remove the solvent from the miscella (via batch desolventizer) to obtain the [crude] oleoresin turmeric. The collected miscella passes through the sequential rising film evaporator, which is then followed by batch disolventizer to get the crude turmeric into its oleoresin form. Crystallization is the next step and is where the crude oleoresin turmeric undergoes crystallization via ethyl acetate solvent. The Protestant states that the crude turmeric oleoresin is subjected to “repeated purification by crystallization.” During the crystallization stage, the crude turmeric oleoresin is mixed with the appropriate ratio of solvent and held for 7 days to crystallize the curcuminoids. Next is filtration and vacuum drying, wherein the crystallized slurry is fed into a basket centrifuge and the wet curcumin crystals are separated from the filtration media. The wet curcumin crystals are then charged through the rotary vacuum dryer to remove the residual solvent, followed by fine grinding by using the air classifier mill resulting a powder form. The final step is granulation, where the powder is granulated to form the final curcuminoid granules (CUR 95). The powdered curcumin crystals are passed through a roll compactor followed by grinding and sieving through a vibro-sifter to get the desired particle size and bulk density, without any additives or excipients. The manufacturing process results in a granulated curcumin powder with a strength of 95% curcuminoid and 5% non-curcuminoid compounds. EN 13.02 explicitly excludes certain extracts once the refining process concentrates a certain group of chemical compounds to a particular point. In other words, EN 13.02 excludes products that have undergone processes beyond simple extraction such as purification, tabletization or encapsulation. In HQ H195716, dated February 19, 2015, for example, CBP determined that silymarin powders subjected to concentration measures for the purpose of increasing their relative flavonolignan contents were not described by heading 1302, HTSUS. See HQ 966448, dated July 9, 2004 (CBP excluded an extract from heading 1302, in part, because it had undergone purification by alcohol precipitation and cation resin isolation and because it was a dietary supplement, which regulates appetite, body weight (weight loss), and improves athletic performance and increases muscle mass.). Likewise, CBP has held that a highly purified product resulting in an almost pure chemical compound was beyond the scope of heading 1302, HTSUS. For instance, in HQ H056377 (dated August 9, 2010), involving the classification of a certain grape seed extract, CBP determined that a total polyphenol content of 92% indicated a “highly purified product with very little of the original vegetive matter remaining from the original source.” Because of the resulting product, CBP reasoned that “such a high concentration of a targeted substance results in a relatively pure chemical product that can no longer be considered a simple extract of heading 1302, HTSUS.” In HQ H056377, the product was produced from grape pomace (i.e., or the residue of grape skin, seeds, flesh, and stems) that remained after pressing juice from grapes. The production process consisted of soaking, centrifuging, microfiltrating, vacuum concentrating, pasteurizing, and spray-drying. In HQ H056377, we stated the following: [T]he source material is highly purified and concentrated in the extraction process. The laboratory results submitted by the importer show total polyphenol concentrations of 55 percent or 92 percent, depending on whether the optic density or Folin-Ciocalteau method was used. The protestant in this case contends that the test yielding the highest concentration of polyphenols (i.e., the optic density test) is the least accurate of the two. The website of the manufacturer of the merchandise in this case, however, lists the higher value (i.e., 92 percent) to indicate total polyphenol content in the exGrapeTOTAL® product. A letter from the Executive VP of Lalilab, Inc. to CBP dated January 3, 2008, also asserts that the total amount of polyphenols in the exGrapeTOTAL® product is standardized at not less than 92 percent. The subject CUR 95 undergoes a purification process called crystallization, which purifies the curcuminoid and along with other processes, and concentrates the singular curcuminoid chemical compound into 95% strength. Protestant contends that the subject CUR 95 is not subjected to purification; asserting the 95% curcumin is achieved by filtration and vacuum drying. However, according to Protestant’s technical data sheet (Exhibit 2), the curcumin granular is obtained by solvent extraction of the dried root of longa and “subsequent repeated purification by crystallization followed by drying and granulation.” Moreover, crystallization itself is a purification process, which is used to isolate and obtain a purified solid. In this case, the highly purified polyphenol chemical compound is known as Curcumin 95 or Standardized Turmeric (95% Standardized Curcuminoid). Furthermore, crystallization is a chemical process that separates solid from liquid in which a pure solid crystalline phase takes place. It is a purification technique whereby major impurities are removed from the crude turmeric oleoresin using an ethyl acetate solvent to isolate and produce a solid concentrate of the targeted curcuminoid chemical compound. The crystallization of any chemical compound requires one of two different methods: (1) Single Solvent method; or (2) Mix Solvent method to form the curcuminoid crystals. In either method, the goal is to reduce or remove the two major impurities associated with curcumin, demethoxycurcumin (DMC) and bis (demethoxy) curcumin (BDMC). Unlike the pine bark extract in HQ W968370, the extraction, distillation, filtration, and crystallization (purification) process of the subject CUR 95 does not leave any original vegetative components other than the 95% curcuminoid compound and the 5% curcumin. Whereas in HQ W968370 the extraction process left intact a variety of naturally occurring phenolic and polyphenolic compounds and their derivatives as well as non-flavonol components. Likewise, the products in NY R04282 were in powder form, obtained by extraction with an alcohol/water solvent. The facts on NY R04282 do not discuss multiple extractions or the use of a purification step. According to the manufacturing flow chart and process description provided by Protestant in Exhibits 3 and 4, the crude turmeric oleoresin is “mixed with the appropriate ratio of [ethyl acetate] solvent and held for seven (7) days to crystallize the curcuminoids.” Purification by crystallization is repeated throughout this stage of production. As a result of the crystallization stage, the impurities are reduced to 17.36% demethoxycurcumin (“DMC”) (or Not Less Than (“NLT”) 15% and Not More Than (“NMT”) 19%) and 2.74% bisdemethoxycurcumin (“BDMC”) (or NLT 2.2% and NMT 6.5%). The technical data sheet included in Protestant’s laboratory test as Exhibit 2, indicate that the reduction of the DMC and BDMC impurities renders a highly purified curcuminoid chemical compound of 95.44% curcuminoid and 75.34% curcumin. The crystallization stage demonstrate