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HQ 960017





July 23, 1998

CLA-2 RR:CR:GC 960017K

CATEGORY: CLASSIFICATION

TARIFF NO.: 2106.90.64; 2106.90.66

Mr. Beat Herrman
Max Felchlin Inc., Schwyz
Banhofstrasse 63
6430 Schwyz, Switzerland

RE: Tariff Classification of Confectioners Coating; FE51E Ultra White; Modification of New
York Ruling Letter (NYRL) A80434

Dear Sir:

In response to your letter dated February 13, 1996, the Customs Service issued NYRL A80434, dated March 6, 1996, which held that one of the articles, a certain confectioners coating from Switzerland known as FE51E Ultra White, was classified in subheading 2106.90.8200, Harmonized Tariff Schedule of the United States (HTSUS) (1996), as food preparations not elsewhere specified or included...other...containing over 10 percent by weight of other milk solids...other...other, with duty at the general rate of 8.8 percent ad valorem.

This letter is to inform you that NYRL A80434 no longer reflects the views of the Customs Service and is modified in accordance with section 177.9(d) of the Customs Regulations (19 CFR 177.9(d)). Pursuant to section 625, Tariff Act of 1930 (19 U.S.C. 1625), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. 103-182, 107 Stat. 2057, 2186 (1993), notice of the proposed modification of NYRL A80434 was published on June 17, 1998, in the Customs Bulletin, in Volume 32, No. 24. No comments were received in response to the notice.

FACTS:

FE51E Ultra White is described as a pale white solid material, composed of 40 percent sugar, 37 percent vegetable fat, 12 percent skimmed milk powder, 6 percent dextrose, 5 percent whole milk powder, and trace amounts of lecithin and vanillin. The product was put up in 2-kilogram bars, and sold to pastry chefs and confectioners, to be used as a coating for their wares.

ISSUE:

Whether a confectioners coating, FE5IE Ultra White, is more specifically provided for in subheadings 2106.90.64 and 2106.90.66, HTSUS, rather than in subheading 2106.90.8200, HTSUS.

LAW AND ANALYSIS:

Additional U.S. Note 1 of Chapter 4, HTSUS, states that:

For the purposes of this schedule, the term "dairy products described in additional U.S. note 1 to chapter 4" means any of the following goods: malted milk, and articles of milk or cream (except (a) white chocolate and (b) inedible dried milk powders certified to be used for calibrating infrared milk analyzers); articles containing over 5.5 percent by weight of butterfat which are suitable for use as ingredients in the commercial production of edible articles (except articles within the scope of other import quotas provided for in additional U.S. notes 2 and 3 to chapter 18); or, dried milk, whey or buttermilk (of the type provided for in subheadings 0402.10, 0402.21, 0403.90 or 0404.10) which contains not over 5.5 percent by weight of butterfat and which is mixed with other ingredients, including but not limited to sugar, if such mixtures contain over 16 percent milk solids by weight, are capable of being further processed or mixed with similar or other ingredients and are not prepared for marketing to the ultimate consumer in the identical form and package in which imported.

Subheadings 2106.90.64 and 2106.90.66, HTSUS, provide for food preparations not elsewhere specified or provided for, other dairy products described in Additional U.S. Note 1 to Chapter 4. A "dairy product described in Additional U.S. Note 1 to Chapter 4" may be an article falling into any of three classes of merchandise described therein: malted milk and articles of milk or cream, certain articles containing over 5.5 percent butterfat, and, what is relevant here, "dried milk, whey or buttermilk (of the type provided for in subheadings 0402.10, 0402.21, 0403.90, or 0404.10) which contains not over 5.5 percent by weight of butterfat and which is mixed with other ingredients, including but not limited to sugar, if such mixtures contain over 16 percent milk solids by weight, are capable of being further processed or mixed with similar or other ingredients and are not prepared for marketing to the ultimate consumer in the identical form and package in which imported." FE51E Ultra White falls into this third category of articles.

FE51E Ultra White is composed of dried skimmed milk powder, a product of subheading 0402.10, that is mixed with other ingredients. It contains over 16 percent milk solids by weight (12 percent skimmed milk powder and 5 percent whole milk powder), is capable of being further processed or mixed with similar or other ingredients, and is not prepared for marketing to the ultimate consumer in the identical form and package in which imported. The terms "capable of being further processed...", "prepared for marketing to the ultimate consumer...", and "ultimate consumer", are defined in Section IV, Additional U.S. Notes 2(b), (c), and (d), HTSUS. Those definitions are applicable for FE51E Ultra White. The product is "capable of being further processed..." because it is a solid material, and must be heated to change it to a fluid consistency before it be used. It is, therefore, "in such condition...as to be subject to any additional preparation, treatment or manufacture...". It is not prepared for marketing to the ultimate consumer because it will be sold to pastry chefs and confectioners, neither of which are considered an "ultimate consumer" by Section IV, Additional U.S. Note 2(d), HTSUS.

Subheadings 2106.90.64 and 2106.90.66 fall under the superior heading for "other, dairy products described in Additional U.S. Note 1 to Chapter 4." In contrast, 2106.90.82, is the residual subheading under an "other...other" subheading. Clearly, 2106.90.64 and 2106.90.66 are the more demanding, and therefore more specific tariff provisions. If the product meets the requirements for classification in either of these two subheadings, it must be classified there and we believe that it does.

HOLDING:

FE51E Ultra White, as described, is classified as other food preparations not elsewhere specified or included, other dairy products containing over 10 percent by weight of milk solids, in subheading 2106.90.64, HTSUS, if within the quantitative limitations of Additional U.S. Note 10 to Chapter 4, with a 1998 general rate of duty of 10 percent ad valorem. If the quantitative limitations of the Note have been reached, the product is classified in subheading 2106.90.66, HTSUS, with duty at the general rate of 78.7 cents per kg, plus 9.5 percent ad valorem.

NYRL A80434 is modified.

In accordance with 19 U.S.C. 1625, this ruling will become effective 60 days after its publication in the Customs Bulletin. Publication of rulings or decisions pursuant to 19 U.S.C. 1625 does not constitute a change of practice or position in accordance with section 177.10(c)(1), of the Customs Regulations

Sincerely,

John Durant, Director
Commercial Rulings Division
Office of Regulations and Rulings

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