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HQ 083221


February 6, 1990

CLA-2 CO:R:C:G 083221 LS

CATEGORY: CLASSIFICATION

TARIFF NO.: 2106.90.50

Robert W. Johnson, Esq.
McClure & Trotter
1100 Connecticut Avenue
Suite 600
Washington, D.C. 20036

RE: Tariff classification of lemon flavored syrup.

Dear Mr. Johnson:

This letter is in response to your letters, dated August 10, 1988, December 20, 1988, and April 10, 1989, requesting a classification ruling, on behalf of your client, Coca-Cola Company, regarding a flavored syrup.

FACTS:

The imported merchandise, known as lemon flavored syrup, consists of a blend of approximately 45 percent concentrated lemon juice and 55 percent refined cane sugar by dry weight. After importation from Mexico in steel drums, the flavored syrup will be further processed into a frozen concentrated lemonade by the addition of lemon concentrate, high fructose corn syrup, sucrose, natural lemon flavor and water. It will be sold at retail in 6 ounce and 12 ounce containers and is formulated to be further mixed by the consumer with water to prepare a finished beverage.

In your first letter, dated August 10, 1988, you contend that the lemon flavored syrup is properly classifiable under item 155.7540 and is not subject to the absolute quota restraints in items 958.10 and 958.15, Tariff Schedules of the United States Annotated (TSUSA). Since we are no longer issuing rulings on prospective importations under the TSUSA, you resubmitted your ruling request on December 20, 1988, and stated that the lemon flavored syrup is properly classifiable under subheading 2106.90.60, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for "Food preparations not elsewhere specified or included: Other: Other: Other: Other: Other." The items covered by subheading 2106.90.60, HTSUSA, are
not subject to quotas established pursuant to Section 22 of the Agricultural Adjustment Act, as amended. In a subsequent letter, dated April 10, 1989, you state your reasons for this position. Subheading 2106.90.50, HTSUSA, provides for "Food preparations not elsewhere specified or included: Other: Other: Other: Other: Subject to quotas established pursuant to Section 22 of the Agricultural Adjustment Act, as amended." Subheading 9904.60.60, HTSUSA is one of the quota provisions referred to in the footnote to item 2106.90.50, HTSUSA. You contend that the cross reference in subheading 9904.60.60, HTSUSA, to subheading 2106.90.50, HTSUSA, does not identify or describe any articles. In order to classify the subject product under subheading 2106.90.50, HTSUSA, you contend that the subheading must include specific article descriptions or must contain cross references to the Presidential Proclamation that imposed the import restrictions. You state that Presidential Proclamations 5294 and 5340, which concerned the imposition of Section 22 quotas in subheadings 958.16, 958.17, and 958.18, TSUSA (the quota provisions now found in subheadings 9904.60.20, 9904.60.40, and 9904.60.60, HTSUSA), are not directed at any articles classified under item 155.75, TSUSA. (The subject flavored syrup was classifiable in item 155.75 under the TSUSA.) Because no Section 22 quotas have been imposed since the HTSUSA replaced the TSUSA, and the quotas established by Presidential Proclamation 5294, as modified by Presidential Proclamation 5340, remain in force, you contend that flavored syrups containing less than 65 percent by dry weight of sugar cane or sugar beet are not affected by any Section 22 quota. In a letter, dated April 28, 1989, you state that the HTSUSA did not amend Section 22 of the Agricultural Adjustment Act, but only incorporates for convenience the actions taken by the President pursuant to his Section 22 authority.

ISSUE:

Whether the lemon flavored syrup is classifiable in subheading 2106.90.50, HTSUSA, and subject to quota restraints in subheading 9904.60.60, HTSUSA, or whether it is classifiable in subheading 2106.90.60, HTSUSA, and therefore not subject to quota restraints in subheading 9904.60.60, HTSUSA?

LAW AND ANALYSIS:

Classification of products under the HTSUSA is governed by the General Rules of Interpretation (GRI's). GRI 1 provides that classification is determined first in accordance with the terms of the headings and any relative section or chapter notes.

The lemon flavored syrup is not classifiable in heading 1702 because that provision specifically states that it only includes sugar syrups not containing added flavoring or coloring matter. The Explanatory Note to heading 2106, which provides for

"food preparations not elsewhere specified or included," states that flavored syrups are classifiable in heading 2106. Flavored syrups are more specifically classifiable in subheadings 2106.90.50 or 2106.90.60, HTSUSA, depending on whether they are subject to quotas established pursuant to section 22 of the Agricultural Adjustment Act, as amended. Subheading 2106.90.50, HTSUSA, provides for food preparations not elsewhere specified or included: Other: Other: Other: Other, which are subject to the section 22 quotas. Footnote 2 to subheading 2106.90.50, HTSUSA, refers to five quota provisions. Three of these provisions (subheadings 9904.50.20, 9904.50.40, and 9904.60.60, HTSUSA) cover sugar-containing products. Subheading 2106.90.60, HTSUSA, provides for food preparations not elsewhere specified or included: Other: Other: Other: Other: Other, which are not subject to quota.

In order to determine whether the lemon flavored syrup is classifiable in subheading 2106.90.50 or 2106.90.60, HTSUSA, we must first establish whether it is subject to quota. The flavored syrup is not covered by subheading 9904.50.20, HTSUSA, which is the quota provision for blended syrups. As noted in Headquarters Ruling Letter (HRL) 075049, which relied upon the International Trade Commission's Report to the President on Investigation No. 22-46 under section 22 of the Agricultural Adjustment Act (ITC Publication 1462, December 1983), "the term blended sirups includes all blends of sirups (two or more sweeteners), whether or not flavored." Flavored syrups are described in that report as being derived from a single sweetener base. Customs has ruled that in order for a product to be classified as a fruit syrup or flavored syrup it must contain more than 50 percent sugar solids. See HRL 079343, dated September 22, 1987. This position is based upon the Summary of Trade and Tariff Information, Sugars and Other Sweeteners, USITC Publication 841 (October 1984) at 43-44.

The lemon flavored syrup, which contains 55 percent cane sugar by dry weight, is also not covered by quota subheading 9904.50.40, HTSUSA, which provides for articles containing over 65 percent by dry weight of sugars derived from sugar cane or sugar beets.

The remaining applicable quota provision referred to in the footnote to subheading 2106.90.50 is subheading 9904.60.60, which provides for:

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 that are prepared for marketing to the retail consumer in the identical form and package in which imported, or (b) articles within the scope of subheadings 9904.50.20, 9904.50.40 or other import restrictions provided for in this subchapter:

Provided for in subheading 1704.90.60, 1806.20.70 1806.20.80, 1806.90, 1901.90.80, 2101.10.40, 2101.20.40, 2103.90.60 or 2106.90.50, 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 confec- tions; finely ground or masticated coconut meat or juice thereof mixed with those sugars; and minced seafood preparations within the scope of subheading 1604.20.05, 1605.10.05 or 1605.90.05 containing 20 percent or less by dry weight of those sugars.

We find that the lemon flavored syrup is subject to quota under subheading 9904.60.60, HTSUSA, for the following reasons: (1) the subject syrup contains over 10 percent by dry weight of sugars derived from sugar cane or sugar beets; and (2) the subject syrup does not fall within any of the exceptions set forth in subheading 9904.60.60, HTSUSA. Also, subheading 2106.90.50, HTSUSA, is one of the tariff provisions listed in quota subheading 9904.60.60, HTSUSA. Therefore, the subject merchandise is classifiable in subheading 2106.90.50, HTSUSA, dutiable at the rate of 10 percent ad valorem.

We recognize that the lemon flavored syrup is subject to an import quota restriction under the HTSUSA, whereas it was not previously subject to such a restriction under the HTSUSA. This change is a result of the conversion of import restrictions proclaimed under section 22 of the Agricultural Adjustment Act from Part 3 of the Appendix to the TSUSA to Subchapter IV of

Chapter 99 of the HTSUSA. 1/ The Omnibus Trade and Competitiveness Act of 1988, Public Law 100-418, specifically provides in Section 1211(c)(1) that, where the conversion of a Section 22 import restriction from the TSUSA to the HTSUSA results in an article not previously subject to the restriction being included within the restriction, "the President may proclaim changes in subchapter IV of chapter 99 of the Harmonized Tariff Schedule to conform that subchapter to the fullest extent possible to part 3 of the Appendix to the old Schedules." Such changes must be proclaimed before June 30, 1990. Since no Presidential Proclamation has been issued which changes the language of subheading 9904.60.60, HTSUSA, to exclude the subject merchandise, we find that the merchandise is encompassed by subheading 9904.60.60, HTSUSA, and is therefore subject to quota.

HOLDING:

For the foregoing reasons, the lemon flavored syrup is classifiable in subheading 2106.90.50, HTSUSA, dutiable at the rate of 10 percent ad valorem. It is subject to quota under subheading 9904.60.60, HTSUSA. The current quota quantity for subheading 9904.60.60, HTSUSA, is 76,203 metric tons in any 12 month period beginning October 1 in any year.

All prior rulings issued by Customs which are inconsistent with this ruling are hereby revoked.

Sincerely,

John Durant, Director
Commercial Rulings Division


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