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HQ 966849




April 26, 2004

CLA-2 RR:CR:GC 966849ptl

CATEGORY: CLASSIFICATION

TARIFF NO.: 2106.90.9998

Port Director
U.S. Customs and Border Protection
24735 E 75th Ave.
Suite 100
Denver, CO 80249

RE: Protest 330703100039; MetaBerry Dietary Supplement

Dear Port Director:

The following is our decision on Protest 330703100039, filed by counsel for MaxCell Biosciences, Inc. against your classification, under the Harmonized Tariff Schedule of the United States (HTSUS), of a product identified as "MetaBerry" in subheading 2106.90.9998. HTSUS, which provides for food preparations not elsewhere specified or included: other, other.

FACTS:

The goods that are the subject of this protest, 34 fluid ounce bottles of "MetaBerry," were entered under entry WLD-xxxx932-1 on July 23, 2003, and classified by the importer in subheading 2202.90.9090, HTSUS, as a beverage. The entry was initially liquidated by Customs on June 6, 2003, at "no change." The entry was reliquidated in September 5, 2003, and the product's classification was changed to subheading 2106.90.9998, HTSUS. Counsel for importer filed a timely protest on September 25, 2003, in which it challenged both Customs classification and the timeliness of the liquidation asserting that CBP did not liquidate the entry until September 5, 2003.

ISSUES:

Is "MetaBerry" classified as a beverage or as a food preparation, not elsewhere specified or included? Was Customs liquidation of the entry on September 5, 2003 untimely?

LAW AND ANALYSIS:

Claim of Incorrect Classification:

Merchandise is classifiable under the Harmonized Tariff Schedule of the United States (HTSUS) in accordance with the General Rules of Interpretation (GRIs). The systematic detail of the HTSUS is such that most 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 GRIs may then be applied in order.

In understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System Explanatory Notes may be utilized. The Explanatory Notes (ENs), although not dispositive or legally binding, provide a commentary on the scope of each heading of the HTSUS, and are the official interpretation of the Harmonized System at the international level. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).

The HTSUS subheadings under consideration are as follows:

2106 Food preparations not elsewhere specified or included

2106.90 Other:
Other:
Other:
Other:
Other:

2106.90.99 Other

2106.90.9998 Other

2202 Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavored, and other nonalcoholic beverages, not including fruit or vegetable juices of heading 2009:

2202.90 Other:

2202.90.90 Other:

2202.90.9010 Nonalcoholic beer
2202.90.9090 Other

The MetaBerry is imported in liquid form in a 34 ounce bottle. The product is described on its container as being a "dietary supplement," with a "serving size" of one ounce, the "Servings per Container" being shown as 34. Counsel has submitted product label instructions which suggest that the product be used as a "dietary supplement" and that the consumer should "drink one to two ounces before a meal, up to three times a day or as needed." Counsel states the product "consists of purified artesian water and is flavored with various berry juices plus other ingredients." Counsel further states "MetaBerry promotes: improved cerebral circulation, healthy blood sugar balance, healthy cholesterol in individuals with already normal levels, urinary tract health, healthy liver function, and healthy gums." Counsel has also submitted an ingredient breakdown of the product which indicates that the product is composed of approximately 39 percent aloe vera liquid, 17 percent grape juice concentrate, 13 percent cranberry juice concentrate, 11 percent cherry juice concentrate, 10 percent water, 9 percent blueberry juice concentrate, and less than one percent each of herb extracts and preservatives.

Counsel raises several arguments to support his claim that MetaBerry should be classified as a beverage. Counsel asserts that because the MetaBerry can be ingested by drinking, it should be classified as a beverage. In support of this contention, counsel refers to language in Strohmeyer & Arpe v. United States, 28 CCPA 34, C.A.D. 121 (1940), where the court determined that a beverage is a product which is drinkable in its condition as imported. He states that since MetaBerry is drinkable, the argument that it should be classified as a beverage is further supported by language in Cosmos International v. United States, 760 F. Supp. 914, 918 (USCIT 1991), which indicated that where a product is found to meet the fit for beverage standard under the Tariff Schedule, then chief use is not required. Should Customs not be convinced by these arguments, counsel argues that MetaBerry should be classified as a beverage by application of GRI 3(a) which provides that the heading which provides the more specific description of a product is preferable to one which provides a more general description. Counsel notes that "beverage" is more specific than "other food preparations."

The heading in which counsel would classify MetaBerry, heading 2202, provides for: "Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavored, and other nonalcoholic beverages, not including fruit or vegetable juices of heading 2009." The portion of the heading we must concentrate on is that which provides for "other non-alcoholic beverages." The ENs to heading 2202 state that this heading covers non-alcoholic beverages which include inter alia, "[b]everages such as lemonade, orangeade, cola, consisting of ordinary drinking water, sweetened or not, flavored with fruit juices or essences, or compound extracts, to which critic acid or tartaric acid are sometimes added. They are often aerated with carbon dioxide gas, and are generally presented in bottles or other airtight containers." The EN states the heading also covers "[c]ertain other beverages ready for consumption, such as those with a basis of milk and cocoa."

It is our opinion that counsel is reading the language of Strohmeyer too expansively. Customs has consistently held that all beverages may be potable products in liquid form, but for tariff classification, all potable liquids are not beverages. This proposition was stated in HQ 961909, dated March 29, 1999, which discussed the applicability of heading 2202 to a liquid children's vitamin and stated: "It is clear, however, that from a review of the HTSUS and the ENs thereto the terminology "nonalcoholic beverages" for purposes of classification of merchandise under heading 2202 is limited and not intended to include all drinkable liquids not having a certain alcoholic content."

Although MetaBerry is a drinkable liquid, the manufacturer's "suggested use" recommends drinking only small amounts at any one time. Customs considered similar products in HQ 084981 and HQ 086744, both dated June 19, 1990, and stated with regard to heading 2202, HTSUS, "It is evident, then, that beverages, as the term is contemplated by this heading, consist of drinkable liquid substances which are marketed, sold, or distributed in multi-ounce containers (e.g., bottles) for consumption in significant (i.e., multi-ounce) and non-measured (e.g., not marketed, sold, or distributed in dosage form or in vials) quantities, and not necessarily consumed for strictly health or nutritional purposes (e.g., colas). Accordingly, food preparations in liquid form, containing, among other things, honey and royal jelly (in whatever proportional amounts), marketed, sold, or distributed in vials or other like containers for consumption in small, measured, or dosage-form quantities, and taken for nutritional or health purposes would, most certainly, not be classified as "beverages" under heading 2202 of the HTSUS."

The MetaBerry is a liquid sold in a bottle containing 34 fluid ounces. The serving size is 1 ounce. The container describes the product as a dietary supplement. Based upon the recommended consumption rate and the product labeling and description, the MetaBerry is not eligible for classification in heading 2202, HTSUS.

Although the MetaBerry is not a product of heading 2202, HTSUS, it is intended for human consumption. Heading 2106, HTSUS, provides for food preparations not elsewhere specified or included. Accordingly, the MetaBerry is properly classified therein.

Claim of Untimely Reliquidation:

According to Customs Form (“CF”) 7501, MaxCell Bioscience, Inc. of Broomfield, Colorado (“MaxCell”), made entry number WLD-xxx932-1 on July 22, 2002.

According to Customs Automated Commercial System (“ACS”), this entry was made on July 23, 2002 and liquidated “no change” on June 6, 2003.

The entry papers show that CBP reliquidated pursuant to 19 U.S.C. §1501. This entry was reliquidated on September 5, 2003, with additional duties of $3,777.18 and interest of $226.74.

MaxCell filed protest number 3307-03-100039 on September 25, 2003, protesting both the timeliness of the liquidation and asserting that CBP did not liquidate the entry until September 5, 2003.

The relevant statute on liquidation, 19 U.S.C. §1504(a), states:

Unless an entry is extended under subsection (b) of this section or suspended as required by statute or court order, except as provided in section 1673(a)(3) of this title, an entry of merchandise not liquidated within one year from: (1) the date of entry of such merchandise; shall be deemed liquidated at the rate of duty, value, quantity, and amount of duties asserted at the time of entry by the importer of record.

MaxCell asserts that the entry deemed liquidated on July 23, 2003, one year after the date of entry. According to ACS, the merchandise was entered on July 23, 2002, and therefore, had there been no prior liquidation, a deemed liquidation would have occurred on July 23, 2003. However, ACS records indicate this entry was liquidated on June 6, 2003, and therefore a deemed liquidation did not occur. The action taken on September 5, 2003 was a reliquidation under 19 U.S.C. §1501.

The statute on voluntary reliquidation, 19 U.S.C. §1501, provides Customs and Border Protection with the authority to reliquidate the entry. It states:

A liquidation made in accordance with section 1500 of this title or any reliquidation thereof made in accordance with this section may be reliquidated in any respect by the Customs Service, notwithstanding the filing of a protest, within ninety days from the date on which notice of the original liquidation is given or transmitted to the importer, his consignee or agent.

The first liquidation occurred on June 6, 2003, CBP therefore had ninety days from the date of liquidation to voluntarily reliquidate under 19 U.S.C. §1501. The September 5, 2003, liquidation is ninety-one days from June 6, 2003, and is therefore untimely and voidable.

The protested entry did not deem liquidate per 19 U.S.C. §1504(a) as asserted by counsel, because it was liquidated within one year from the date of entry. However, the September 5, 2003 reliquidation was untimely and voidable. The only valid liquidation was the “no-change” liquidation of June 6, 2003. Accordingly, the protest against the reliquidation of September 5, 2003 should be granted.

HOLDING:

MetaBerry, a non-alcoholic dietary supplement, is classified in subheading 2106.90.9998, HTSUS, which provides for food preparations not elsewhere specified or included: other: other.

However, because CBP's reliquidation of the entry on September 5, 2003 was untimely, the change to protestant's classification in that reliquidation was invalid. For this reason, the protest should be GRANTED. In accordance with the Protest/Petition Processing Handbook (CIS HB, January 2002, pp. 18 and 21), you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

Myles B. Harmon, Director

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