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HQ 952147


September 17, 1992

CLA-2 CO:R:C:F 952147 LPF

CATEGORY: CLASSIFICATION

TARIFF NO.: 2008.11.0060, 9904.20.20

Ms. Tracey A. Ellman
C.J. Tower, Inc.
128 Dearborn Street
Buffalo, NY 14207-3198

RE: Chipnuts; Reconsideration of NYRL 874691; Heading 2008, HTSUSA; Fruits, nuts and other edible parts of plants, otherwise prepared or preserved; Subheading 9904.20.20; Not heading 2106 food preparation.

Dear Ms. Ellman:

This is in response to your letter dated July 2, 1992, submitted on behalf of Picard Peanuts Limited, requesting reconsideration of New York Ruling Letter (NYRL) 874691 (issued May 22, 1992). In that ruling "chipnuts" were classified under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) in subheading 2008.11.0060 as "Fruit, nuts and other edible parts of plants, otherwise prepared or preserved, whether or not containing added sugar or other sweetening matter or spirit, not elsewhere specified or included: Nuts, peanuts (ground-nuts) and other seeds, whether or not mixed together: Peanuts (ground-nuts), Other." In addition, the product was subject to quota limitations in subheading 9904.20.20. Subsequently, we have reviewed that ruling. The correct classification is as follows.

FACTS:

The product, imported from Canada, is known as chipnuts. According to your facsimile, received September 2, 1992, the ingredients are as follows: raw peanut, dehydrated potato and modified foodstarch, vegetable oil, maltodextrin, salt and flavor. You also have described the manufacturing process of the chipnuts which includes applying coatings of corn starch to the nutmeats, agglomerating these coatings, deep frying the coated nutmeats in oil for approximately eight minutes and then cooling, salting and seasoning the peanuts before packaging.

Customs has examined samples of the chipnuts. The peanut constitutes the greatest bulk of the product. In addition, the coating, which is less than one-sixteenth of an inch thick, is brittle and does not appear to add substantially to the size of the product nor obscure the taste or the basic shape of the nut. The predominant taste is that of the peanut.

ISSUE:

Whether the chipnuts are classifiable in heading 2008 as fruit, nuts and other edible parts of plants, otherwise prepared or preserved, or rather in heading 2106 as a food preparation not elsewhere specified or included.

LAW AND ANALYSIS:

The General Rules of Interpretation (GRI's) taken in their appropriate order provide a framework for classification of merchandise under the HTSUSA. The majority of imported goods are classified by application of GRI 1, that is, according to the terms of the headings of the tariff schedule and any relative section or chapter notes. The Explanatory Notes (EN's) to the Harmonized Commodity Description and Coding System, which represent the official interpretation of the tariff at the international level, facilitate classification under the HTSUSA by offering guidance in understanding the scope of the headings and GRI's.

Heading 2008 provides for fruit, nuts and other edible parts of plants, otherwise prepared or preserved. The EN's to 2008 indicate that the heading covers:

...fruit, nuts and other edible parts of plants, whether whole, in pieces or crushed, including mixtures thereof, prepared or preserved otherwise than by any of the processes specified in other Chapters or in the preceding headings of this Chapter.

It includes, inter alia:

(1) Almonds, ground-nuts, areca (or betel) nuts and other nuts, dry-roasted, oil-roasted or fat-roasted, whether or not containing or coated with vegetable oil, salt, flavours, spices or other additives.

You contend that 2008 is limited to peanuts subjected only to simple roasting procedures. Since the chipnuts are, in your opinion, coated to the extent that their shape is totally obscured, and are deep-fried, you submit that the product is classifiable in 2106 as a food preparation not elsewhere specified or included. Customs disagrees.

Customs interprets the language embodied in the EN's (e.g., prepared or preserved otherwise than by any of the processes specified) as terms of extension rather than of limitation. "Roasting" exemplifies just one manner in which nuts, and other products, classifiable within 2008 may be prepared. Accordingly, "frying" is another type of process included within heading 2008.

In addition, Headquarters' Ruling Letter (HRL) 089864 (issued July 16, 1991) explained that where the peanut is covered only with a thin coating, which easily crumbles and does not obscure the shape of the peanut, the product is classified as a prepared or preserved peanut in subheading 2008.11. However, where the baked coating on the peanut is as thick or thicker than the peanut, resulting in a product which is rather spherical in shape and not readily recognizable as a peanut, the product is classifiable under the provision for bread, pastry, cakes, biscuits and similar baked products, in subheading 1905.90.1060. An examination of the instant product reveals that the coating is not as thick as the peanut nor does it obscure the taste or the basic shape of the nut. In essence, the product has maintained the characteristics of a peanut. See also HRL 089650 (issued July 31, 1991) where "cracker nut" peanuts cooked with a coating of wheat flour, glucose, salt and sugar and "growers" peanuts prepared with salt, garlic, and coconut oil were classified in subheading 2008.11; Cf. HRL 082741 (issued October 18, 1989) where "peanut balls," whose thickness of batter coating was at least equal to the diameter of the peanut, were classified in subheading 2106.90 as food preparations.

HOLDING:

The chipnuts are classifiable in subheading 2008.11.0060, as "Fruit, nuts and other edible parts of plants, otherwise prepared or preserved, whether or not containing added sugar or other sweetening matter or spirit, not elsewhere specified or included: Nuts, peanuts (ground-nuts) and other seeds, whether or not mixed together: Peanuts (ground-nuts), Other." The general column one rate of duty is 6.6 cents per kilogram.

Assuming the product, manufactured in Canada, from Chinese peanuts, is an "originating good" as defined by General Note 3(c)(vii)(B), HTSUSA, it will enjoy certain tariff preferences under the United States - Canada Free Trade Agreement (CFTA). That rate of duty would be 3.9 cents per kilogram.

In addition, the chipnuts are subject to quota limitations of 775,189 kilograms in any 12 month period beginning August 1 in any year as provided for in subheading 9904.20.20.

New York Ruling letter 874691 is affirmed.

Sincerely,

John Durant, Director
Commercial Rulings Division

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