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HQ 960395




September 15, 1998

CLA-2 RR:CR:GC 960395 RTR

CATEGORY: CLASSIFICATION

TARIFF NO.: 1704.90.58

Mr. Henry Kaplan
De Choix Specialty Foods Co.
58-25 52nd Avenue
Woodside, New York 11377-7402

RE: NY B82002 affirmed; white chocolate; butterfat; dairy products; heading 9904; Presidential Proclamation 6151

Dear Mr. Kaplan:

This is in reference to your letter of April 1, 1997, requesting reconsideration of New York Ruling Letter (NY) B82002, dated March 6, 1997, concerning the classification of white chocolate bars from Belgium.

In NY B82002, Customs classified three varieties of white chocolate bars in subheadings 1704.90.54, Harmonized Tariff Schedule of the United States (HTSUS), and 1704.90.58, HTSUS, as Sugar confectionary (including white chocolate), not containing cocoa: Other: Other: 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; Other. You claim that the merchandise is classifiable in subheading 1704.90.3550 (formerly 1704.90.3505), HTSUS, or, alternatively, in subheading 1704.90.3590 (formerly 1704.90.3510), HTSUS, the provisions for "confection ready for consumption" and "dairy products described under additional U.S. note 10 to chapter 4 and entered pursuant to its provisions; Other," respectively.

FACTS:

The merchandise consists of eleven pound bars of white chocolate, imported from Belgium for sale in gourmet and specialty food shops. The three products at issue are identified as AMA-W, W5, and W11NV. Their ingredients are described as follows:

Ingredients
AMA-W
W5
W11NV
cocoa butter
31.6%
30.8%
full cream milk powder
30.8%
17.8%
sugar
40.8%
46.6%
49.4%
lecithin traces traces traces
vanillin traces traces traces
butterfat
8.3%
4.8%
whey powder
X
3.7%
4.4%

ISSUES:

(1) Whether white chocolate in eleven pound blocks is a "confection ready for consumption" in the meaning of subheading 1704.90, HTSUS. (2) Whether the merchandise is subject to the provisions for dairy products under additional U.S. note 1 to chapter 4, HTSUS.

LAW AND ANALYSIS:

The provisions under consideration are as follows:

1704 Sugar confectionary (including white chocolate), not containing cocoa:

1704.90 Other:
Confections or sweetmeats ready for consumption: Other

1704.90.35 Other

Put up for retail sale

1704.90.3550 Other

1704.90.3590 Other:
Dairy products described in described in additional U.S. note 1 to chapter 4:

1704.90.54 Described in additional
U.S. note 10 to chapter
4 and entered pursuant to its provisions

1704.90.58 Other 1.

9904 Dairy products described in additional U.S. note 1 to chapter 4, provided for in subheadings... 1704.90.58...:

If entered during the effective period of safeguards based upon quantity announced by the Secretary of Agriculture:

9904.04.89 Provided for in subheading 1704.90.58.

Merchandise is classifiable under the HTSUS in accordance with the General Rules of Interpretation (GRIs). GRI 1 states in part that for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes, and provided the headings or notes do not require otherwise, according to GRIs 2 through 6.

The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System. While not legally binding on the contracting parties, and therefore not dispositive, the ENs provide a commentary on the scope of each heading of the Harmonized System and are thus useful in ascertaining the classification of merchandise under the System. Customs believes the ENs should always be consulted. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).

I. Tariff Classification of White Chocolate In a letter dated April 1, 1997, you indicate that the merchandise is ready for retail consumption as is, or is suitable for sale to bakers and pastry chefs for further melting into chocolate coating, fillings, or for white mousse as in desserts. For this reason, you claim that it is classified in either subheading 1704.90.3505, HTSUS, or subheading 1704.90.3510, HTSUS, which provide for "confections or sweetmeats ready for consumption." (Emphasis added).

In HQ 085206, dated February 23, 1990, which also dealt with the tariff classification of white chocolate from Belgium, Customs took the position that the phrase "confections ready for consumption" meant that merchandise as marketed, and in its condition as imported, must be ready for immediate consumption at retail as a confectionary. "Immediate consumption" is not, for example, merchandise which will be utilized as an ingredient in the baking industry. See also HQ 083700, dated June 7, 1989, HQ 072051, dated January 28, 1983, HQ 072073, dated April 28,1983, HQ 076100, dated August 29, 1985 which held that white chocolate was not a confectionary ready for consumption when in a form used by bakers or pastry chefs for melting, coating, filling, etc.

Also, Leaf Brands, Inc. v. United States, 70 Cust. Ct. 66 (1973), although decided under the Tariff Schedule of the United States (the precursor to the HTSUS), is instructive as to the classification of confections under the HTSUS. There the court held that the issue of whether an article is a confectionary is determined by its chief use, not by the fact that it is edible. "Chief use," was determined by the manner of sale, character and design of a particular good. The court also cited several cases which held in part that confectionaries are usually sold at confectionary stores, and found persuasive evidence that the merchandise was distributed through candy brokers.

The merchandise which is the subject of NY B82002 is imported in eleven pound blocks. There is no evidence that it is distributed through candy brokers or that it is sold at confectionary stores. Rather, by your own admission, the merchandise is suitable "for sale to bakers and pastry chefs for further melting into chocolate coating, fillings, or for white mousse as in desserts." Irrespective of the fact that it can be consumed in its imported form, it is clear that commercial purveyors of white chocolate, such as a bakeries, are more likely to purchase white chocolate in such large quantity than are individuals. Under HQ 085206, Leaf Brands and related cases, the merchandise is not a "confection ready for consumption." Rather, it is provided for in subheading 1704.90.5800, HTSUS, as "sugar confectionary (including white chocolate)... , products described in described in additional U.S. note 1 to chapter 4:...Other 1."

II. U.S. Legal Note Covering Dairy Products Additional U.S. note 1 to chapter 4, HTSUS, lists three provisions for dairy products: (1) Malted milk, and articles of mil k or cream (subheading 9904.10.60, HTSUS); (2) Articles containing over 5.5 percent by weight of butterfat (subheading 9904.10.81, HTSUS), and (3) Articles with dried milk, whey or but termilk, which contain not over 5.5 percent by weight of but terfat and contain over 16 percent milk solids by weight (subheading 9904.10.75, HTSUS). You claim that your merchandise is not subject any of these because the language of additional U.S. note 1 to chapter 4 specifically excludes white chocolate fro m consideration as a "dairy product." It provides:

(f)or 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 addition 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, 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.

As stated above, the white chocolate bars are classified in subheading 1704.90.58, HTSUS. Footnote 1 to that subheading directs us to consult subheading 9904.04.89, HTSUS, which covers "(d)airy products described in additional U.S. note 1 to chapter 4, provided for in subheadings... 1704.90.58... If entered during the effective period of safeguards based upon quantity announced by the Secretary of Agriculture: Provided for in subheading 1704.90.58." As subheading 9904.04.89, HTSUS, specifies merchandise of subheading 1704.90.58, HTSUS, which describes the white chocolate currently at issue, we conclude that it is subject to the following dairy provisions:

Merchandise
AMA-W
W5
W11NV
malted milk and articles of milk or cream exempt exempt exempt
articles containing over
5.5 percent by weight of butterfat subject to provision exempt exempt
articles with dried milk, whey or buttermilk, which contain not over 5.5 percent by weight of butterfat and contain over 16 percent milk solids by weight exempt subject to provision subject to provision

Accordingly, we affirm NY B82002.

HOLDING:

Under the authority of GRI 1 and Additional U.S. Rule of Interpretation 1, HTSUS, white chocolate from Belgium in eleven pound bars is classified in heading subheading 1704.90.58, HTSUS. Sincerely,

John Durant, Director
Commercial Rulings Division

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