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HQ 960419




February 25, 1998

CLA-2 RR:CR:GC 960419 RC

CATEGORY: CLASSIFICATION

TARIFF NO.: 1901.90.5600, 1901.90.5800

Scott M. Deutchman, Esq.
Hogan & Hartson L.L.P.
555 Thirteenth Street, N.W.
Washington, DC 20004-1109

RE: Frozen Unbaked Pies; PCR A84931 Affirmed

Dear Mr. Deutchman:

This is in reference to your letter of March 18, 1997, on behalf of your client, Ready Bake Foods, Inc. (Ready Bake), and its wholly-owned subsidiaries, Sarsfield Foods, Inc. (Sarsfield), and Maplehurst Bakeries, Inc. (Maplehurst), requesting a prospective binding tariff classification ruling for frozen pies imported from Canada under the Harmonized Tariff Schedule of the United States (HTSUS). The facts are substantially the same as those presented in Pre-entry Classification Ruling (PCR) A84931, issued to the importer on August 19, 1996. The importer disagrees with the Customs holding in PCR A84931. We have reviewed the submitted facts and considered the additional arguments made by counsel, on behalf of the importer, in a meeting with Customs Headquarters personnel on July 31, 1997, and in a supplemental submission of September 4, 1997.

FACTS:

The merchandise, frozen, unbaked pies, consisting of over 10 percent by dry weight of sugars derived from sugar cane or sugar beets, in addition to other ingredients, are composed of an upper and lower dough crust, with a variety of fillings, in an aluminum pie tin, individually packed in cardboard boxes. The unbaked frozen pies will be produced and boxed by Sarsfield in Canada. Maplehurst will import the pies for sale to a variety of independent and chain supermarkets throughout the United States. It is our understanding that the pies will be imported unbaked. A sample of the submitted "retail" packaging indicates, rather generically, "Peach Pie, Homestyle Peach Pie" and does not include a brand name, store name, or a trademark. The box lists the ingredients, "Nutrition Facts", and "Baking/Handling Instructions" that, among other things, direct one to "[a]llow to cool thoroughly before packaging." In this connection, you have advised us that after importation, the various supermarkets intend to unbox some of the pies, bake, and perhaps glaze or otherwise top the pies in their bakery sections, before repackaging them for sale to purchasers who will buy them at retail. You further advise that some, if not all, of the baked pies will be either re-packaged in the same boxes (perhaps with additional labels indicating the name of the supermarket) or in different boxes, before actual retail sales.

ISSUE:

What is the proper tariff classification for the above-described frozen unbaked pies?

LAW AND ANALYSIS:

Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRI's). The systematic detail of the HTSUS is such that virtually all 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. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRI's may then be applied. GRI 6 provides that the GRI's apply in the same fashion to subheadings within the same heading.

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

In reviewing the possible headings under which the articles may be classified, we note that heading 1901, HTSUS, deals with various food preparations, and heading 1905, HTSUS, deals with bakers' wares, etc. In deciding whether an article is classifiable in either heading 1901, HTSUS, or 1905, HTSUS, we look to the EN's for guidance. The EN's to Chapter 19 state that heading 1901, HTSUS, includes: "Ready-mixed doughs, consisting essentially of cereal flour with sugar, fat, eggs or fruit (including those put up in moulds or formed into final shape)." In further reference to heading 1901, HTSUS, the EN's state that "[a]part from the preparations excluded by the General Explanatory Note to this Chapter, this heading also excludes : . . . (e) [f]ully or partially cooked bakers' wares, the latter requiring further cooking before consumption (heading 19.05)." The inference is clear that uncooked bakers' wares are not classified in heading 1905. Customs has consistently classified unbaked bakers' wares, including pies, in heading 1901. See, NYRL's 837636, 837637, 837638, 837639, 837640, 837734, 839615, 839632, 839633, 839634, 839636, 841727, 859548, 889991, 895892, 806681, 808970, B82426, DD's 874259 and 891302.

Subheading 1901.20.00, HTSUS, provides for mixes and doughs for the preparation of bakers' wares of heading 1905, HTSUS. Analyzing subheading 1901.20.00, HTSUS, we conclude that it does not apply to the articles under consideration. The unbaked pies are advanced beyond the point where they can be considered doughs and they are not mixes as specified in the subheading. Also, since the fruit and confectionery preparations are used to fill the dough products rather than being incorporated into the flour mixture, they would not be ready- mixed doughs, as described in EN 19.01. As such, we conclude that the unbaked pies are classifiable, at the six-digit level, in subheading 1901.90, HTSUS, as other food preparations. With regard to classification at the eight-digit level, we must refer to the relevant section and chapter notes.

Chapter 17, Additional U.S. Note 3, in relevant part, and Chapter 17, Additional U.S. Notes 8, as amended and adopted in 1995, state:

3. For the purposes of this schedule, the term "articles containing over 10 percent by dry weight of sugar described in additional U.S. note 3 to chapter 17" means 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, the foregoing that are prepared for marketing to the ultimate consumer in the identical form and package in which imported. . . .

8. The aggregate quantity of articles containing over 10 percent by dry weight of sugars described in additional U.S. note 3 to chapter 17, entered under subheadings
1701.91.54, 1704.90.74, 1806.20.75,
1806.20.95, 1806.90.55, 1901.90.56,
2101.12.54, 2101.20.54, 2106.90.78 and
2106.90.95 during the 12-month period from October 1 in any year to the following
September 30, inclusive, shall not exceed 64,709 metric tons (articles the product of Mexico shall not be permitted or included under this quantitative limitation and no such articles shall be classifiable therein).

Additional U.S. Note 2, Section IV, HTSUS, which includes chapters 16 through 24, states, in pertinent part:

For the purposes of this section, unless the context otherwise requires . . .

(c) the term "prepared for marketing to the ultimate consumer in the identical form and package in which imported" means that the product is imported in packaging of such sizes and labeling as to be readily identifiable as being intended for retail sale to the ultimate consumer without any alteration in the form of the product or its packaging; and

(d) the term "ultimate consumer" does not include institutions such as hospitals, prisons and military establishments or food service establishments such as restaurants, hotels, bars or bakeries.

Accordingly, if the frozen unbaked pies are "prepared for marketing to the ultimate consumer in the identical form and package in which imported," then pursuant to exception (a) of Chapter 17, Additional U.S. Note 3, they will not be considered to be articles defined by the note (which are subject to quota-based duties). However, as noted in Additional U.S. Note 2 to Section IV, the term "ultimate consumer" does not include institutions or food service establishments such as bakeries (which we interpret as including the bakery departments of supermarkets).

There is no "retail package exception" in the HTSUS applicable to the frozen pies at issue, in the context of the quota-based duties, other than that discussed in the above-quoted Notes. Although the information submitted states that the pies will be imported individually packaged and labeled in a manner consistent with applicable Food and Drug Administration (FDA) requirements for retail sale, it has not been established that the pies are intended for sale to the ultimate consumer without any alteration in their form. A capability of sale to the ultimate consumer in the imported frozen condition does not establish that the pies are intended for such sale.

The imported frozen pies at issue are unbranded, a significant omission for a food item intended for retail sale in a competitive supermarket environment. The pies at issue also contain "Baking/Handling Instructions" which, although characterized in the information submitted as "standard" handling instructions, are instructions more appropriate for bakeries, than retail purchasers. The convection vs. conventional oven instructions and the instructions to remove pies from freezer, to place frozen pies on baking sheet, and to allow thorough cooling before packaging are consistent with instructions to a bakery that will receive the pies in frozen condition, keep them frozen until they are baked, and bake many pies at one time prior to repackaging them for sale to the ultimate consumer. Consumer-oriented instructions such as "Keep frozen until use," "Do not microwave," "Do not allow to thaw" (or "Bake immediately if thawed"), all of which instructions would be appropriate for a consumer buying a frozen pie at the supermarket for later baking at home, but unnecessary for commercial bakeries, are not included on the packaging. An examination of the packaging (box) also reveals that it is of the temporary-closure, tuck-flap type, as opposed to a permanent closure intended to protect the integrity of the contents until delivery to the ultimate purchaser.

The information submitted states that the supermarkets purchasing the pies from the importer --

. . . may choose to bake some pies prior to sale. We assume that the pies typically are removed temporarily from the box prior to baking [as opposed to baking them in the plastic-windowed, paper box?]. After baking, the pies would be re-boxed. It is conceivable that the supermarket may add a supermarket sticker logo [i.e., a brand name] to Sarsfield's box, or in some cases, re-box the pies in a different box bearing the supermarket logo and the Sarsfield ingredient list and product handling instructions [the latter, it is assumed, changed to reflect the handling of a baked pie and the former changed to reflect any toppings or other ingredients added by the supermarket bakery] . . .

The information submitted does not include any information regarding the proportion of the imported, unbranded frozen pies that are sold at retail as imported, as opposed to the proportion that are baked by the supermarket bakeries and thereafter sold to the ultimate consumer in either new packaging or the Sarsfield packaging with appropriate additions and alterations. In the absence of such information, we must assume an intended disposition of the imported pies that is most consistent with its packaging: baking by the supermarket bakery prior to delivery to the ultimate consumer. Accordingly, we find that an "alteration in the form of the product or its packaging" prior to marketing to the ultimate consumer is contemplated with respect to the imported pies and that, therefore, they are not subject to any of the exceptions set forth in Chapter 17, Additional U.S. Note 3, HTSUS.

HOLDING:

The unbaked, frozen pies, containing over 10 percent, but not over 65 percent, by dry weight of sugars derived from sugar cane or sugar beets, are properly classified in subheading 1901.90.5600, HTSUS, the provision for food preparations of flour, not elsewhere specified or included, not containing cocoa or containing less than 5 percent by weight of cocoa which contain over 10 percent by dry weight of sugar and are described in Additional U.S. Note 3 to chapter 17 and Additional U.S. Note 8 to chapter 17, or in subheading 1901.90.5800, HTSUS, where the quantitative limitations of Additional U.S. Note 8 to chapter 17 have been reached. PCR A84931 is affirmed.

Sincerely,

John Durant, Director,
Commercial Rulings Division

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