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HQ 967055




June 14, 2004

CLA-2 RR:CR:GC 967055ptl

CATEGORY: CLASSIFICATION

TARIFF NO.: 2001.90.3800; 2001.90.6000

Peter W. Klestadt, Esq.
Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP 245 Park Avenue
New York, New York 10167-3397

RE: Fruits and Vegetables in Vinegar

Dear Mr. Klestadt:

This is in response to your letter dated October 7, 2003, to the National Commodity Specialists Division, New York, on behalf of Shonfeld's (U.S.A.), Inc., in which you requested a ruling on the classification under the Harmonized Tariff Schedule of the United States (HTSUS), of several products which are essentially bottles of fruit and vegetables with distilled white vinegar with other ingredients. Your letter was forwarded to this office for response. You also provided samples of the products which have been considered in preparing this response.

FACTS:

The goods in question consist of three versions of the basic product; which is a clear, tall (14 inches), thin (interior diameter approximately 2 inches) bottle, with a 1 inch neck, that has been densely packed with colorful fruit and vegetables and filled with a diluted vinegar solution to which salt and preservatives have been added. The bottles are colorfully labeled to identify the contents. The label provides nutrition information and a listing of the bottle's ingredients. Although each of the three bottles contains different ingredients, the labels all provide the same recipe for "Shak's Vinagrette (sic)". The label also contains the instruction: "When empty refill with vinegar. Use Vinegar only." In your letter, you state the approximate composition of the ingredients by weight of the three products is as follows:

"Red Chili Infused Vinegar"
- Red Chili - 67 percent
- Vinegar - 33 percent

"Mango and Red Chili Infused Vinegar"
- Mango - 54 percent
- Vinegar - 41 percent
- Red Chili - 5 percent

"Orange Peel Cranberry Infused Vinegar"
- Vinegar - 68 percent
- Orange Peel - 24 percent
- Cranberry - 8 percent

According to the product labels, each bottle also contains the following additional ingredients (together with the reason for inclusion): Salt, citric acid (to prevent discoloration), sodium sulfite (to promote color retention), sodium benzoate (as a preservative), and potassium sorbate (a mold inhibitor). The labels on each sample provided states "net fl oz 00 (000ml)". We assume this is an oversight.

In your letter, you propose classification of the products in subheading 2209, HTSUS, which provides for vinegar and substitutes for vinegar obtained from acetic acid.

ISSUE:

What is the classification of bottles containing fruits and vegetables and vinegar?

LAW AND ANALYSIS:

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 2004 HTSUS subheadings under consideration are as follows:

2001 Vegetables, fruit, nuts and other edible parts of plants, prepared or preserved by vinegar or acetic acid:

2001.90 Other:

Other:
Vegetables:

2001.90.3800 Other

2001.90.6000 Other

2209.00.0000 Vinegar and substitutes for vinegar obtained from acetic acid

The product under consideration, a bottle, filled with fruit, vegetables or a combination thereof, in a vinegar solution can be considered, for tariff purposes, a good consisting of two or more materials or substances. Accordingly, pursuant to GRI 2(b), which states, in relevant part, the classification of goods consisting of more than one material or substance shall be according to the principles of rule 3, it must be classified pursuant to GRI 3.

GRI 3(a) provides that the heading which provides the more specific description shall be preferred to headings providing a more general description. When comparing headings and subheadings, it is established that comparisons be made at the same level.

The headings we are comparing are heading 2001, HTSUS, which provides for vegetables, fruit, nuts and other edible parts of plants, prepared or preserved by vinegar or acetic acid, and heading 2009, HTSUS, which provides for vinegar and substitutes for vinegar obtained from acetic acid. The CBP laboratories have examined the contents of samples provided with the original classification request and the analysis indicates that the fruits and vegetables in the bottles have all been prepared or preserved by acetic acid well beyond the CBP threshold level of 0.5 percent acetic acid. (CBP Laboratory Reports NY20032187, NY20032189 and NY 2003 2190, all dated November 20, 2003) Accordingly, the solid contents of the bottles are classified in heading 2001, HTSUS. The liquid in the bottle is distilled white vinegar diluted to 6 percent acid strength, plus some additional ingredients. The vinegar is classified in heading 2009, HTSUS. At the heading level, neither heading provides a more specific description of the good to be classified.

GRI 3(b) provides that goods which are composite goods of different materials or made up of different components, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character. The EN’s provide that, if this rule applies, goods shall be classified as if they consisted of the material or component which gives them their essential character. EN Rule 3(b)(VIII) lists as factors to help determine the essential character of such goods the nature of the materials or components, their bulk, quantity, weight or value, and the role of a constituent material in relation to the use of the goods.

There have been several Court decisions on "essential character" for purposes of GRI 3(b). These cases have looked primarily to the role of the constituent materials or components in relation to the use of the goods to determine essential character. See, Better Home Plastics Corp. v. United States, 916 F. Supp. 1265 (CIT 1996), affirmed 119 F.3d 969 (Fed. Cir. 1997); Mita Copystar America, Inc. v. United States, 966 F. Supp. 1245 (CIT 1997), motion for rehearing and reconsideration denied, 994 F. Supp. 393 (CIT 1998), and Vista International Packaging Co., v. United States, 19 CIT 868, 890 F. Supp. 1095 (1995). See also, Pillowtex Corp. v. United States, 983 F. Supp. 188 (CIT 1997), affirmed CAFC No. 98-1227 (March 16, 1999). Based on the foregoing, we conclude that in an essential character analysis for purposes of GRI 3(b), the role of the constituent materials or components in relation to the use of the goods is generally of primary importance, but the other factors listed in EN Rule 3(b)(VIII) should also be considered, as applicable.

In order to classify the goods, we must determine whether it is the preserved fruits and vegetables or the vinegar that imparts the essential character to the goods. In the ruling request, it is claimed that "these goods will only be purchased by customers interested in a flavored vinegar product " From research, which has provided information about the marketing of the products, as well as information from the product labeling, we disagree with that assertion. These products, as well as similar goods by the same manufacturer, are advertised and offered to retail consumers as "decorative accents" in kitchen or housewares departments of stores such as Macy's, Bed Bath and Beyond and Pier 1, not in the food or grocery departments. The labels of the products indicate that the additives, citric acid, sodium sulfate, sodium benzoate and potassium sorbate are added to retain the color of the fruit and vegetables which have been carefully arranged in the bottles for maximum visual impact and attractiveness. In other words, these additives are to keep the product looking nice. Their purpose is not flavor retention. A further indication that the flavoring of the vinegar is not as significant as the visual impact of the fruits and vegetables is the fact that the "Shak's Vinagrette" (sic) recipe instructions printed on the labels of the three different versions of the product is identical regardless of the flavor which may have been imparted to the vinegar. The recipe is: "1 cup infused vinegar, ½ cup salad oil, juice from 1 lemon, Pepper to taste, Shake in salad shaker. enjoy (sic)."

It is difficult to agree that the vinegar imparts the essential character of the product when in two of the three products being classified the fruit or vegetable component comprises 59 and 67 percent of the product by weight. In all three samples, the fruit and vegetables take up nearly all the space in the bottle. CBP has consistently classified tightly packed fruits and vegetables in vinegar in heading 2001, HTSUS. For examples, see: NY 862666, dated May 10, 1991; NY A80522, dated May 20, 1996; NY F85379, dated June 22, 2000; NY F89618, dated September 18, 2000; NY H80728, dated July 18, 2001; NY I88982, dated February 3, 2003; NY I89598, dated February 12, 2003; NY J87546, dated October 29, 2003.

HOLDING:

For the reasons stated above, the three products are classified in heading 2001, HTSUS, as vegetables, fruit, nuts and other edible parts of plants, prepared or preserved by vinegar or acetic acid. Because of the actual ingredients; the products labeled " Cranberry & Orange Infused Vinegar" and "Mango Chili Infused Vinegar" which are composed of fruits and fruit peel and fruits and vegetables are classified in subheading 2001.90.6000, HTSUSA, with a 2004 duty rate of 14 percent ad valorem. The product labeled "Red Chili Infused Vinegar" containing only vegetables is classified in subheading 2001.90.3800, HTSUSA, with a 2004 duty rate of 9.6 percent ad valorem.

Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at www.usitc.gov.

Sincerely,

Myles B. Harmon, Director

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