HQ 0088672 - Reconsideration of New York Ruling Letter (NYRL) 858279 - United States International Trade Commision Rulings

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HQ 088672

June 18, 1991

CLA-2 CO:R:C:F 088672 RFC

CATEGORY: CLASSIFICATION

TARIFF NO.: 0404.90.2000

Mr. P. Robin Flockton
Glengarry Biotech
850 Boundary Road
Cornwall, Ontario K6H 5R5
Canada

RE: Reconsideration of New York Ruling Letter (NYRL) 858279

Dear Mr. Flockton:

This letter is in response to your letter of January 17, 1991, on behalf of Glengarry Biotech (a division of Flockton Analytical Management Inc.), requesting a reconsideration of NYRL 858279, dated December 18, 1990. NYRL 858279 concerns the tariff classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) of certain milk products used in the calibration of infrared milk analyzers.

FACTS:

The product is identified as a "CAL-EZE Regular Kit." It consists of 6 or 12 containers filled with dry milk powder and 6 or 12 empty plastic containers. The product will be used in the calibration of infrared milk analyzers.

ISSUE:

What is the proper tariff classification under the HTSUSA of a product consisting of containers of dry milk powder and empty plastic containers for use in the calibration of infrared milk analyzers?

LAW AND ANALYSIS:

Merchandise imported into the United States is classified under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA). The tariff classification of merchandise under the HTSUSA is governed by the principles set forth in the General Rules of Interpretation (GRIs) and, in the absence of special language or context which otherwise requires, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUSA and are to be considered statutory provisions of law for all purposes. See Sections 1204(a) and 1204(c) of the Omnibus Trade and Competitiveness Act of 1988 (19 U.S.C. 1204(a) and 1204(c)).

GRI 1 requires that classification be determined first according to the terms of the headings of the tariff schedule (i.e., (1) merchandise is to be classified under the 4-digit heading that most specifically describes the merchandise; (2) only 4-digit headings are comparable; and (3) merchandise must first satisfy the provisions of a 4-digit heading before consideration is given to classification under a subheading within this 4-digit heading) and any relative section or chapter notes and, provided such headings or notes do not otherwise require, then according to the other GRIs.

GRI 6 prescribes that, for legal purposes, GRIs 1 to 5 shall govern, mutatis mutandis, classification at subheading levels within the same heading. Therefore, merchandise is to be classified at equal subheading levels (i.e., at the same digit level) within the same 4-digit heading under the subheading that most specifically describes or identifies the merchandise.

When goods are, prima facie, classifiable under two or more headings, classification is to be effected pursuant to the provisions of GRI 3. GRI 3(b) states, in part, that "[m]ixtures [and] composite goods consisting of different materials or made up of different components...which cannot be classified by reference to 3(a)...[(i.e., there exists no heading that provides the most specific description among headings providing a more general description)], shall be classified as if they consisted of the material or component which gives them their essential character...." The Explanatory Notes to GRI 3(b) state, in part, that "[t]he factor which determines essential character will vary as between different kinds of goods. It may, for example, be determined by the nature of the material or component, its bulk, quantity, weight or value, or the role of a constituent material in relation to the use of the goods." See Explanatory Notes to the Harmonized Commodity Description and Coding System to General Rule of Interpretation No. 3(b).

The Explanatory Notes to the Harmonized Commodity Description and Coding System (hereinafter "Harmonized System") represent the official interpretation of the Customs Cooperation Council on the scope of each heading. See H.R. Conf. Rep. No. 100-576, 100th Cong., 2d Sess. 549 (1988); 23 Customs Bulletin No. 36, 3 (T.D. 89-90, September 6, 1989), 59 F.R. 35127 (August 23, 1989). Although not binding on the contracting parties to the Harmonized System Convention or considered to be dispositive in the interpretation of the Harmonized System, the Explanatory Notes should be consulted on the proper scope of the Harmonized System. Id.

In the instant case, the product is a composite good composed of containers filled with dry milk powder and empty plastic containers. As the product is a composite good, it is to be classified, pursuant to GRI 3(b), based on the component that gives the product its "essential character."

The dry milk powder, as imported, is classified under heading 0404 as "products consisting of natural milk constituents, whether or not containing added sugar or other sweetening matter, not elsewhere specified or included." On the other hand, the plastic containers, as imported, are classified under heading 3923 as "articles for the conveyance or packing of goods, of plastic." It is from these two competing headings that the essential character of the product is to be determined.

A review of the instant product shows that it is the milk powder that provides the commercial appeal of the product because it is the powder that is used in the calibration of infrared milk analyzers. On the other hand, the plastic containers are merely used to store the milk powder after it has been reconstituted. Accordingly, the role of the milk powder in relation to the use of the product gives the product its essential character. The instant product, therefore, must be classified as if consisting of the milk powder, pursuant to GRI 3(b).

HOLDING:

The above-described product is classified under subheading 0404.90.2000, HTSUSA, which provides for, among other things, products consisting of natural milk constituents, whether or not containing added sugar or other sweetening matter, not elsewhere specified or included, other, articles of milk or cream.

The general rate of duty for goods classified under the above-listed subheading is 17.5 percent ad valorem. Goods qualifying for special-tariff treatment under the U.S.-Canada Free-Trade Agreement for this same subheading have a rate of duty of 12.2 percent ad valorem.

Articles of milk or cream provided for in subheading 0404.90.20 are subject to the quota-quantity restrictions set forth in subheading 9904.10.60. Under this subheading, there is a quota-quantity limitation of 2,721 kilograms that may be imported into the United States in any 12-month period beginning January 1 in any year.

In light of the above, NYRL 858279 is hereby affirmed.

Sincerely,

John Durant, Director
Commercial Rulings Division

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