Application for Further Review of Protest No. 1803-23-102495; Milky Ghee

H336525 February 10, 2026 OT:RR:CTF:FTM H336525 MJD CATEGORY: Classification TARIFF NO.: 2106.90.64; 2106.90.66 Center Director Agriculture & Prepared Products CEE U.S. Customs and Border Protection 6601 N.W. 25 St. Miami, FL 33122 ATTN: Mercedes Jacobs, Import Specialist Re: Application for Further Review of Protest No. 1803-23-102495; Milky Ghee Dear Center Director: This is reference to the Application for Further Review (“AFR”) of Protest No. 1803-23- 102495, timely filed on November 21, 2023, by Venable LLP on behalf of [Tambo Trading LLC.], (“Protestant”), regarding the tariff classification of Milky Ghee under the Harmonized Tariff Schedule of the United States (“HTSUS”). Venable LLP requested that certain information submitted in connection with this request be treated as confidential. Inasmuch as this request conforms to the requirements of 19 C.F.R. § 177.2(b)(7), the request for confidentiality is approved. The items specified will not be released to the public and will be withheld from the published version of this decision. FACTS: The merchandise at issue is Milky Ghee. According to Protestant, Milky Ghee is “a versatile, easy and tasty swap for butter or oils. It is a type of clarified butter, with a more lactic flavor.” The production process of the Milky Ghee consists of manufacturing 900.1 kilos of ghee from 1200.133 kilos of butter then blending 900.1 kilos ghee with 9.1 kilos skimmed powder milk which results in a final product consisting of 99 percent ghee and 1 percent skimmed powder milk. Specifically, the composition breakdown of the Milky Ghee is as follows: 1. Fat (Butter fat) min. 99.7% 2. Humidity max. 0.2 % 3. Raw protein < 0.2 % 4. Ashes < 0.1% 5. Carbohydrates < 0.1% The subject merchandise covers one entry, entry no. XXXXXXXX131, entered on May 19, 2023, under subheading 2106.90.66, HTSUS, which provides for “[f]ood preparations not elsewhere specified or included: Other: Other: Other: Containing over 10 percent by weight of milk solids: Other, dairy products described in additional U.S. note 1 to chapter 4: Other.” U.S. Customs and Border Protection (“CBP”) liquidated this entry on October 16, 2023, under subheading 0405.90.20, HTSUS, which provides for “[b]utter and other fats and oils derived from milk; dairy spreads: Other: Other,” stating that “… ghee is specifically provided for in subheading 0405.90 per subheading note 2. CBP does not consider skim milk a non-milk ingredient/additive.” On November 21, 2023, Protestant filed a protest and AFR regarding the tariff classification of the Milky Ghee claiming that the product is classified under subheading 2106.90.66, HTSUS, as entered. ISSUE: What is the tariff classification of the Milky Ghee? 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. 1803-23-102495 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. Classification under the HTSUS is determined in accordance with the General Rules of Interpretation (“GRIs”). 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 2 through 6 may then be applied in order. The 2023 HTSUS provisions under consideration are as follows: 0405 Butter and other fats and oils derived from milk; dairy spreads: 2106 Food preparations not elsewhere specified or included: 2 * * * Subheading Note 2 to Chapter 4, HTSUS, provides the following: For the purposes of subheading 0405.10 the term “butter” does not include dehydrated butter or ghee (subheading 0405.90). * * * 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). The General ENs to Chapter 4, HTSUS, provides, in pertinent, the following: This Chapter covers: (I) Dairy products: (A) Milk, i.e., full cream milk and partially or completely skimmed milk. (B) Cream. (C) Buttermilk, curdled milk and cream, yogurt, kephir and other fermented or acidified milk and cream. (D) Whey. (E) Products consisting of natural milk constituents, not elsewhere specified or included. (F) Butter and other fats and oils derived from milk; dairy spreads. (G) Cheese and curd. The products mentioned at Items (A) to (E) above may contain, in addition to natural milk constituents (e.g., milk enriched in vitamins or mineral salts), small quantities of stabilising agents which serve to maintain the natural consistency of the product during transport in liquid state (disodium phosphate, trisodium citrate and calcium chloride, for instance) as well as very small quantities of anti-oxidants or of vitamins not normally found in the product. Certain of these products may also contain small quantities of chemicals (e.g., sodium bicarbonate) necessary for their processing; products in the form of powder or granules may contain anticaking agents (for example, phospholipids, amorphous silicon dioxide) * * * The ENs to heading 04.05, HTSUS, provides the following: This heading covers: (A) Butter. 3 This group covers natural butter, whey butter and recombined butter (fresh, salted or rancid, including canned butter). Butter must be derived exclusively from milk and must have a milkfat content of 80 % or more but not more than 95 % by weight, a maximum milk solids-not-fat content of 2 % by weight and a maximum water content of 16 % by weight. Butter contains no added emulsifiers, but may contain sodium chloride, food colours, neutralising salts and cultures of harmless lactic-acid-producing bacteria. (See Note 3 (a) to this Chapter). Butter obtained from goat’s or sheep’s milk is also covered by this group. (B) Dairy spreads. This group covers dairy spreads, i.e., spreadable emulsions of the water-in-oil type, containing milkfat as the only fat in the product, and having a milkfat content of 39 % or more but less than 80 % by weight (see Note 3 (b) to this Chapter). Dairy spreads may contain optional ingredients such as cultures of harmless lactic-acid-producing bacteria, vitamins, sodium chloride, sugars, gelatine, starches; food colours; flavours; emulsifiers; thickening agents and preservatives. (C) Other fats and oils derived from milk. This group covers fats and oils derived from milk (e.g., milkfat, butterfat and butteroil). Butteroil is the product obtained by extracting the water and non-fat content from butter or cream. This group further includes dehydrated butter and ghee (a kind of butter made most commonly from the milk of buffaloes or cows), as well as products consisting of a mixture of butter and small quantities of herbs, spices, flavourings, garlic, etc. (provided they retain the character of the products falling in this heading). The heading does not cover fat spreads containing fats other than milkfats or containing less than 39 % by weight of milkfat (generally heading 15.17 or 21.06). * * * The ENs to Heading 21.06, HTSUS, provide, in pertinent part, the following: Provided that they are not covered by any other heading of the Nomenclature, this heading covers: … (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 heading includes, inter alia: … (3) Preparations based on butter or other fats or oils derived from milk and used, e.g., in bakers’ wares. 4 * * * The product at issue is Milky Ghee consisting of 99 percent ghee and 1 percent skimmed powder milk. CBP liquidated the Milky Ghee under heading 0405, HTSUS, which provides for “[b]utter and other fats and oils derived from milk; dairy spreads.” CBP justified its reclassification of the Milky Ghee in heading 0405, HTSUS, by stating that “…ghee is specifically provided for in subheading 0405.90 per subheading note 2. CBP does not consider skim milk a non-milk ingredient/additive.” However, Protestant asserts that the Milky Ghee is classified in heading 2106, HTSUS, which provides for “[f]ood preparations not elsewhere specified or included,” because it is a blend of ghee and skimmed powder milk. In order for a product to be classified in heading 2106, HTSUS, a basket provision, it must first be ruled out of other tariff provisions. Thus, we begin our tariff classification analysis of the Milky Ghee in heading 0405, HTSUS. Subheading Note 2 to Chapter 4, HTSUS, states that “[f]or the purposes of subheading 0405.10 the term ‘butter’ does not include dehydrated butter or ghee (subheading 0405.90).” Thus, ghee is classified in heading 0405, HTSUS. The ENs to heading 04.05, HTSUS, provides for three types of products covered by the heading, the first of which is “butter” which the ENs to heading 04.05, HTSUS, state “must be derived exclusively from milk and must have a milkfat content of 80% or more but not more than 95% by weight, a maximum milk solids-not-fat content of 2% by weight and a maximum water content of 16% by weight.” Butter may include “sodium chloride, food colours, neutralising salts and cultures of harmless lactic-acid-producing bacteria. (See Note 3 (a) to this Chapter).” The second category is “Dairy spreads,” which the ENs state are “spreadable emulsions of the water-in-oil type, containing milkfat as the only fat in the product, and having a milkfat content of 39% or more but less than 80% by weight (see Note 3 (b) to this Chapter).” The ENs note that dairy spreads may contain “optional ingredients such as cultures of harmless lactic-acid-producing bacteria, vitamins, sodium chloride, sugars, gelatine, starches; food colours; flavours; emulsifiers; thickening agents and preservatives.” The third category is “Other fats and oils derived from milk.” In particular, the ENs provide that this group “… further includes dehydrated butter and ghee (a kind of butter made most commonly from the milk of buffaloes or cows), as well as products consisting of a mixture of butter and small quantities of herbs, spices, flavourings, garlic, etc. (provided they retain the character of the products falling in this heading).” This third category of dairy products covered by heading 0405, HTSUS, specifically mentions ghee and unlike the previous categories of “butter” and “dairy spreads,” does not specify any amount or limit of milkfat required nor any permissible additives allowed in ghee. Moreover, the General ENs to Chapter 4, HTSUS, provide for a list of dairy products, items (A) through (G), that the chapter covers, one of which is item (f) “butter and other fats and oils derived from milk; dairy spreads.” The General ENs to Chapter 4, HTSUS, provide that “the products mentioned at item (A) to (E)” may contain certain additives, and item (f) “[b]utter and other fats and oil derived from milk; dairy spreads,” which as discussed above includes ghee, is specifically excluded from this list. As a result, pure ghee has been classified in heading 0405, HTSUS. For example, in New York Ruling Letter (“NY”) N329400, dated December 2, 2022, CBP classified ghee clarified butter composed of 100 percent sheep’s milk with a moisture content of less than one percent 5 and a fat content that exceeds 99 percent in heading 0405, HTSUS. Similarly, in NY 812810, dated August 16, 1995, CBP classified pure butter ghee made from cow’s milk in heading 0405, HTSUS. Likewise, in Headquarter Ruling Letter (“HQ”) 085580, dated January 16, 1990, CBP classified pure butter ghee made from pure dairy butter of the milk of “Dairy Cows,” having 99.9 percent butter fat with no salts or moisture in heading 0405, HTSUS. Also, in HQ 084975, dated October 25, 1989, CBP classified “Linda” pure butter ghee in heading 0405, HTSUS. That ghee contained more than 99 percent by weight of butter fat, with no salts or moisture and was made from pure dairy butter of the milk of “Dairy Cows.” Protestant, however, asserts that the Milky Ghee at issue is not classified in heading 0405, HTSUS, but rather is classified in heading 2106, HTSUS, as a food preparation because it is not pure ghee, but a blend of ghee and skimmed powder milk. In support of its argument, Protestant cites to NY J89220, dated October 2, 2003, where CBP classified several blends of anhydrous milk fat (“AMF”) and one other ingredient, which may be salt, sugar, vegetable oil, beta carotene, skim milk powder, butter milk powder, lactose, or caseinate, in heading 2106, HTSUS. Specifically, the blends consisted of the following: Blend 1: 96 percent AMF and four percent of the second ingredient. Blend 2: 98 percent AMF and two percent of the other material. Blend 3: 99 percent AMF and one percent of the second substance According to Protestant, blend 3 is similar to the subject Milky Ghee because it is 99 percent AMF and one percent of the second material, which could be skim milk powder. Protestant also cites to HQ 964707, dated April 30, 2001, which revoked NY B82737, dated March 7, 1997. Specifically in NY B82737, CBP classified the following anhydrous milkfat and butterfat mixtures in heading 0405, HTSUS: Confectionery AMF 95S – 95% anhydrous milkfat or butteroil, 5% sucrose. Confectionery AMF 95L – 95% anhydrous milkfat or butteroil, 5% lactose. Salted AMF 95N – 95% anhydrous milkfat or butteroil, 5% salt. Milky AMF 95/5 – 95% anhydrous milkfat or butteroil, 5% non-fat dry milk. AMF-PRO 95/5 – 95% anhydrous milkfat or butteroil, 5% caseinate. In making the determination that the aforementioned products were no longer classified in heading 0405, HTSUS, but were instead classified in heading 2106, HTSUS, CBP stated the following with respect to heading 0405, HTSUS, and the ENs to heading 04.05, HTSUS: In summary, heading 0405, HTSUS, … includes “butter,” a spreadable emulsion which may contain a small number of permitted additives; “dairy spreads,” which are spreadable water-in-oil type emulsions containing a larger range of permitted additive ingredients; and “other fats and oils derived from milk,” which – except for flavored butter -- are virtually pure milkfat substances. Thus, it appears that within heading 0405, HTSUS, only certain additives are permitted and those additives are permitted only in spreadable emulsions such as butter, dairy spreads, and flavored butter. The requisite purity of the fat content precludes any additives in anhydrous milkfat, butterfat, butteroil, or ghee. … Accordingly, mixtures of anhydrous milkfat or butteroil with salts, sweeteners, or other non- milkfat ingredients are precluded from classification within heading 0405, HTSUS. 6 Based on the above discussion, we agree with Protestant that the Milky Ghee at issue is not classified in heading 0405, HTSUS. Although ghee is classified in heading 0405, HTSUS, and the Milky Ghee is 99 percent ghee and only contains 1 percent of skimmed powder milk, heading 0405, HTSUS, is clear in that additives are precluded from ghee. See General ENs to Chapter 4, HTSUS, and the ENs to heading 04.05, HTSUS. This principle was also emphasized in HQ 964707, where CBP stated that “it appears that within heading 0405, HTSUS, only certain additives are permitted and those additives are permitted only in spreadable emulsions such as butter, dairy spreads, and flavored butter. The requisite purity of the fat content precludes any additives in anhydrous milkfat, butterfat, butteroil, or ghee.” (emphasis added). Moreover, skim milk is milk from which the fat has been removed and is considered a non-milk ingredient or additive. As stated in HQ 964707, “…mixtures of anhydrous milkfat or butteroil with salts, sweeteners, or other non-milkfat ingredients are precluded from classification within heading 0405, HTSUS.” (See HQ 964707 stating that ghee is considered an anhydrous milkfat). Thus, ghee cannot contain a non-milkfat ingredient such as skimmed powder milk and be classified in heading 0405, HTSUS. Furthermore, we note that only pure ghee has been classified in heading 0405, HTSUS. See NY N329400 classifying Ghee Clarified Butter made of 100 percent sheep’s milk in heading 0405, HTSUS; NY 812810 classifying pure butter ghee in heading 0405, HTSUS; HQ 085580 classifying pure butter ghee in heading 0405, HTSUS; and HQ 084975 classifying “Linda” pure butter ghee with more than 99 percent by weight of butter fat in heading 0405, HTSUS. These cases all had products that contained one ingredient, ghee, and nothing else, unlike the Milky Ghee at issue, which is made of ghee and skimmed powder milk. Therefore, the Milky Ghee is precluded from classification in heading 0405, HTSUS, because it contains an additive, skimmed powder milk. Instead, we find that the Milky Ghee is classified in heading 2106, HTSUS, as a food preparation that is not classified elsewhere in the HTSUS. Food preparations of heading 2106, HTSUS, are generally considered to be mixtures of food ingredients to be used in or with other foods intended for human consumption. This description of food preparations is further illustrated by EN 21.06, HTSUS, which lists several examples of goods composed of a mixture of ingredients. Specifically, the Milky Ghee at issue is illustrated in paragraph 3 to EN 21.06, which describes “[p]reparations based on butter or other fats or oils derived from milk and used, e.g., in bakers’ wares.” EN 21.06 (3). Since the Milky Ghee is made of ghee and skimmed powder milk and is intended to be used as an alternative to butter or oil, and is not classified elsewhere in the HTSUS, we find that it is a food preparation classified in heading 2106, HTSUS. Moreover, the Milky Ghee made of 99 percent ghee and 1 percent skimmed powder milk is like the anhydrous milk fats in NY J89220, specifically blend 3 made of 99 percent AMF and one percent of a second ingredient that could be skim milk that was classified in heading 2106, HTSUS. Therefore, the subject Milky Ghee is a food preparation classified under heading 2106, HTSUS, and specifically under heading 2106.90.64, HTSUS, which provides for “[f]ood preparations not elsewhere specified or included: Other: Other: Other: Containing over 10 percent by weight of milk solids: Other, dairy products described in additional U.S. note 1 to 7 chapter 4: Described in additional U.S. note 10 to chapter 4 and entered pursuant to its provisions.” HOLDING: By application of GRI 1, the subject Milky Ghee is classified in heading 2106, HTSUS. Specifically, it is provided for in subheading 2106.90.64, HTSUS, which provides for “[f]ood preparations not elsewhere specified or included: Other: Other: Other: Containing over 10 percent by weight of milk solids: Other, dairy products described in additional U.S. note 1 to chapter 4: Described in additional U.S. note 10 to chapter 4 and entered pursuant to its provisions.” The column one general rate of duty is 10% ad valorem. If entered after the quantity limitations of the tariff rate have been reached, the Milky Ghee is classified in subheading 2106.90.66, HTSUS, which provides for “[f]ood preparations not elsewhere specified or included: Other: Other: Other: Containing over 10 percent by weight of milk solids: Other, dairy products described in additional U.S. note 1 to chapter 4: Other.” The column one general rate of duty is 70.4¢/kg + 8.5% ad valorem. You are instructed to GRANT the protest. You are instructed to notify the protestant of this decision no later than 60 days from the date of this decision. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to this notification. Sixty days from the date of the decision, 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/, which can be found on the U.S. Customs and Border Protection website at http://www.cbp.gov and other methods of public distribution. Sincerely, Yuliya A. Gulis, Director Commercial and Trade Facilitation Division 8