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HQ W968353

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August 1, 2007

CLA-2 OT: RR: CTF: TCM W968353 ARM

CATEGORY: CLASSIFICATION

TARIFF NO.: 2103.90.9091

Mr. Stephen Waldman
Westhill Dairy Inc.
60 Brisbane Rd.
Downsview, Ontario M3J 2K2 Canada

RE: Tariff classification of “Tzatziki” Garlic Dip from Canada; Revocation of NY 812305

Dear Mr. Waldman:

This is in regard to New York Ruling Letter (NY) 812305, dated November 14, 1995, issued to you for the tariff classification of the above captioned product under the Harmonized Tariff Schedule of the United States (HTSUS). In that ruling letter, the U.S. Customs Service (now U.S. Customs and Border Protection “CBP”) determined that the product referred to as “Tzatziki” Garlic Dip was classified in heading 1901, HTSUS, specifically subheading 1901.90.4200, HTSUS, which provides, in relevant part, for food preparations of goods of 0401 to 0404... not elsewhere specified or included: Other: Other: dairy products described in Additional U.S. Note 1 to Chapter 4

Add’l U.S. Note 1 to Chapter 4 reads:

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.: dairy preparations containing
over 10 percent by weight of milk solids: described in Additional U.S. Note 10 to Chapter 4 Add’l U.S. Note 10 to Chapter 4 reads:

The aggregate quantity of dairy products described in additional U.S. note 1 to chapter 4, entered under subheadings 0402.29.10, 0402.99.70, 0403.10.10, 0403.90.90 0404.10.11, 0404.90.30, 0405.20.60, 1517.90.50, 1704.90.54, 1806.20.81, 1806.32.60, 1806.90.05, 1901.10.35, 1901.10.80, 1901.20.05, 1901.20.45, 1901.90.42, 1901.90.46, 2105.00.30, 2106.90.06, 2106.90.64, 2106.90.85 and 2202.90.24 in any calendar year shall not exceed 4,105,000 kilograms (articles the product of Mexico shall not be permitted or included under the aforementioned quantitative limitation and no such articles shall be classifiable therein). and entered pursuant to its provisions. This provision applied if the product was imported in quantities that fall within the limits described in additional U.S. Note 10 to Chapter 4, HTSUS. The ruling further stated that if the quantitative limits of additional U.S. Note 10 to Chapter 4 had been reached, the product would be classified in subheading 1901.90.4300, HTSUS, which provides, in relevant part, for food preparations of goods of 0401 to 0404: Other: Other: Other.

We have recently had an opportunity to revisit this issue and based upon our analysis and for the reasons set forth below, now consider “Tzatziki” Garlic Dip to be classified under heading 2103, HTSUS, specifically subheading 2103.90.9091, HTSUS, which provides for sauces and preparations therefor; mixed condiments and mixed seasonings; mustard flour and meal and prepared Mustard: Other: Other: Other: Other.

Pursuant to section 625(c), Tariff Act of 1930, (19 U.S.C. 1625(c)), 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 revocation was published on March 21, 2007, in Volume 41, Number 13 of the Customs Bulletin. One comment supporting the proposed action was received in response to this notice.

FACTS:

NY 812305 presents the facts of the merchandise as follows:

An ingredients breakdown and sample accompanied your letter. The sample was forwarded to the U.S. Customs laboratory for analysis. Tzatziki Garlic Dip is a thick, creamy product, white in color, composed of 85 percent cream, 10 percent cucumber, 4 percent vegetable oil, and less than one percent each of salt, bacterial culture, and fresh garlic. The product is made by adding a bacterial culture to pasteurized cream and allowing the cream to ferment until a desired P.H. is achieved, cooling the product until it thickens, mixing in cucumber, oil, garlic and salt, cooling to 40 degrees Fahrenheit, and packaging. Laboratory analysis determined the overall fat content to be 12.1 percent. The article is packed in 8-ounce plastic cups for retail sale, and in 5-pound plastic pails for food service use.

ISSUE:

What is the proper classification of the “Tzatziki” Garlic Dip under the HTSUS?

LAW AND ANALYSIS:

Classification under the HTSUS is made 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 2 through 6 may then be applied in order.

When the subheadings, rather than the headings are at issue, GRI 6 is applied. GRI 6 provides in pertinent part that: “the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes, and mutatis mutandis, to [rules 1 through 5] on the understanding that only subheadings at the same level are comparable for the purposes of this rule and the relative section and chapter notes also apply, unless the context otherwise requires.”

The headings and subheadings under consideration are as follows:

Malt extract; food preparations of flour, groats, meal, starch or malt extract, not containing cocoa or containing less than 40 percent by weight of cocoa calculated on a totally defatted basis, not elsewhere specified or included; food preparations of goods of headings 0401 to 0404, not containing cocoa or containing less than 5 percent by weight of cocoa calculated on a totally defatted basis, not elsewhere specified or included:

Other:

Other:

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

Dairy preparations containing over 10 percent by weight of milk solids:

1901.90.4200 Described in additional U.S. note 10 to chapter 4 and entered pursuant to its provisions

Other

Sauces and preparations therefor; mixed condiments and mixed seasonings; mustard flour and meal and prepared mustard:

Other:

Other:

Other

2103.90.9091 Other

NY 812305 based the classification of the “Tzatziki” Garlic Dip upon its identity as a food preparation based on cream, i.e., a good of heading 04.01 to 04.04, HTSUS. That provision, however, is qualified. It applies only if the good is “not elsewhere specified or included.” It is CBPs belief that “tzatziki” is provided for elsewhere in the HTSUS. Specifically, we find that “tzatziki” meets the parameters for classification as a sauce, in heading 2103, HTSUS. In Nestle Refrigerated Food Co v. United States, 18 C.I.T. 661, 668 (1994), the court concluded that the common meaning of "other tomato sauces" is based on the common meaning of the term "sauce." The Nestle court stated,

[i]n 1894, the U.S. Supreme Court reviewed the common meaning of the term "sauce" and determined that: ‘[t]he word "sauce," as commonly used, designates a condiment, generally but not always of liquid form, eaten as an addition to and together with a dish of food, to give it flavor and make it more palatable; and is not applied to anything which is eaten, alone or with a bit of bread, either for its own sake only, or to stimulate the appetite for other food to be eaten afterwards.’

Id. at 668 (citations omitted).

The court in Nestle, following the seminal Bogle v. Magone, 152 U.S. 623, 625-26 (1894) (subsequently followed by Del Gaizo Distrib. Corp. v. United States, 24 CCPA 64, T.D. 48,376 (1936)) and its progeny, determined that in ascertaining whether a product fits within the common meaning of sauce, the court will “examine a variety of key features, including its ingredients, flavor, aroma, texture, consistency, actual and intended use, and marketing.” See, e.g., Neuman & Schwiers Co., 18 CCPA at 3. The court further concluded that of these key features, actual and intended use are of paramount importance and that a product is a sauce if it can be used "as is," that is, if it may be eaten as an accompaniment to other foods to make such foods more flavorful and palatable. “Whether a product is fit for use as a sauce depends upon more than the mere possibility of use; rather, substantial actual use as a sauce must be demonstrated. See Wah Shang Co. v. United States, 44 CCPA 155, 159, C.A.D. 654 (1957). Also, according to Nestle, a product's physical features are also considered in light of their effect on the product's ability to be used as a sauce.

In this instance, we find that in its condition as imported, the product is ready for use principally as a dressing or dip.  These uses place it within the class or kind of goods used as a sauce.  See, e.g., NY H81014 (dated May 29, 2001); J81714 (dated March 20, 2003); M81138 (dated March 28, 2006).  See also HQ 962417 (dated March 3, 1999).

Subsequent to publishing the Proposed Notice of Revocation in the March 21, 2007 Customs Bulletin, CBP received one comment in support of the proposed action. That comment reiterated the line of case law cited above, as well as CBPs treatment of similar goods.

For the reasons set forth above, we find that the ready to use “Tzatziki” Garlic Dip falls within the scope of “sauces” of heading 2103, HTSUS. Because it meets the terms of that heading, it cannot fall to be classified under heading 1901, HTSUS, as it is elsewhere specified or included.

HOLDING:

For the reasons above by application of GRI 1, the subject “Tzatziki” Garlic Dip is classified under heading 2103, HTSUS, as a sauce. It is provided for under subheading 2103.90.9091, HTSUSA, as: “Sauces and preparations therefor; mixed condiments and mixed seasonings; mustard flour and meal and prepared mustard: Other: Other: Other: Other.” The 2007 column one, general rate of duty is 6.4%.

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 Internet at www.usitc.gov/tata/hts.

EFFECT ON OTHER RULINGS:

NY 812305, dated November 14, 1995 is hereby revoked. In accordance with 19 U.S.C. 1628(c), this ruling will be come effective 60 days after its publication in the Customs Bulletin.

Sincerely,

Myles B. Harmon, Director

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See also:

• Tariff No.: 0402.29.10 - Milk & cream, concen, sweetened, in powder, granules or other solid forms, w/fat content o/1.5%, subject to add. US note 10 to Ch.4
• Tariff No.: 0402.99.70 - Milk & cream (except condensed milk), concentrated in non-solid forms, sweetened, subject to add. US note 10 to Ch. 4
• Tariff No.: 0403.10.10 - Yogurt, in dry form, whether or not flavored or containing add fruit or cocoa, subject to add. US note 10 to Ch. 4
• Tariff No.: 0403.90.90 - Curdled milk/cream/kephir & other fermentd or acid. milk/cream subject to add US note 10 to Ch.4
• Tariff No.: 0404.10.11 - Modified whey (except protein conc.), wheth/not conc. or sweetened, subject to add US note 10 to Ch.4
• Tariff No.: 0404.90.30 - Dairy products of nat. milk constituents (except protein conc.), descr. in add. US nte 1 to Ch. 4 and sub to Ch4 US note 10
• Tariff No.: 0405.20.60 - Other dairy spreads of a type provided in ch. 4 add. US note 1, subject to quota pursuant to chapter 4 additional US note 10
• Tariff No.: 1517.90.50 - Edible mixt. & preps, dairy products described in add. US note 1 to Ch 4: subject to add. US note 10 to Ch. 4
• Tariff No.: 1704.90.54 - Sugar confectionery nesoi, w/o cocoa, dairy products subject to add. US note 1 to chap. 4: subject to add US note 10 to chapter 4
• Tariff No.: 1806.20.81 - Chocolate/oth preps with cocoa, ov 2kg but n/o 4.5 kg, (dairy prod. descr. in Ch.4 US note 1), n/o 65% sugar, subj to Ch.4 nte 10, not GN15
• Tariff No.: 1806.32.60 - Cocoa preps, (dairy prod. of Ch4 US note 1), not filled, in blocks, slabs or bars, w/wt 2 kg or less, subj. to add. US note 10 to Ch 4
• Tariff No.: 1806.90.05 - Cocoa preps, (dairy prod. descr. in add US note 1 to Ch.4), not in blocks, slabs or bars, subj. to add. US note 10 to Ch 4, not GN15
• Tariff No.: 1901.10.35 - Preps for infant use (dairy prod. of add US note 1 to Ch.4), for retail sale, o/10% milk solids, subject to Ch4 US note 10, not GN15
• Tariff No.: 1901.10.80 - Preps for infant use (dairy prod. of Ch4 US note 1), retail sale, n/o 10% milk solids, subject to add US note 10 to Ch. 4, not GN15
• Tariff No.: 1901.20.05 - Mixes for bakers wares (dairy prod. of Ch4 US note 1), o/25% by wt butterfat, not retail, subj. to add. US nte 10 to Ch.4, not GN15
• Tariff No.: 1901.20.45 - Mixes for bakers wares (dairy prod. of Ch4 US note 1), n/o 25% bf, not retail, subj. to add. US nte 10 to Ch.4, not GN15
• Tariff No.: 1901.90.42 - Dairy preps o/10% by wt of milk solids (descr. in add US note 1 to Ch. 4), neosi, subject to add US note 10 to Ch.4
• Tariff No.: 1901.90.43 - Dairy preps o/10% by wt of milk solids (descr. in add US note 1 to Ch. 4), neosi, not subject to gen note 15 or add US note 10 to Ch.4
• Tariff No.: 1901.90.46 - Dairy preps n/o 10% by wt of milk solids (descr. in add US note 1 to Ch. 4), neosi, subject to add US note 10 to Ch.4
• Tariff No.: 2103.90.90 - Sauces and preparations therefor, neosi
• Tariff No.: 2105.00.30 - Edible ice (dairy prod. described in add US note 1 to Ch. 4), subject to add US note 10 to Ch. 4, not GN15
• Tariff No.: 2106.90.06 - Food preps, nesoi, n/o 5.5% bf, mixed w/other ingred. if o/16% milk solids capable of being further proc., subj. to Ch4 US nte 10, not GN15
• Tariff No.: 2106.90.64 - Food preps, nesoi, o/10% by wt of milk solids, dairy prods, descr. in add US note 1 to Ch.4: subject to add US note 10 to Ch.4, not GN15
• Tariff No.: 2106.90.85 - Food preps, nesoi, n/o 10% by wt of milk solids, dairy prods, descr. in add US note 1 to Ch.4: subject to add US note 10 to Ch.4, not GN15
• Tariff No.: 2202.90.24 - Non-alcoholic milk-based drinks (except chocolate), subject to add US note 10 to Ch. 4, not GN15