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HQ 963203




April 25, 2000

CLA-2 RR:CR:GC 963203K

CATEGORY: CLASSIFICATION

TARIFF NO.: 2106.90.6400; 2106.90.6600

Mr. Claude Schellenberger
Max Felchin, Inc.
Bahnhostrasse 63
CH-6431 Schwyz, Switzerland

RE: Modification of New York Ruling Letter (NYRL) D82864; FE52E Ultra White Confectioner’s Coating

Dear Sir:

In response to your letter dated September 23, 1998, on October 23, 1998, Customs issued NYRL D82864, concerning the classification of several products, one of which was described as FE52E Ultra White Confectioner’s Coating that was classified in subheading 2106.90.8200, HTSUS, as other food preparations not elsewhere specified or included, containing over 10 percent by weight of milk solids. This letter is to inform you that NYRL D82864 no longer reflects the views of the Customs Service concerning the classification of FE52E Ultra White Confectioner’s Coating. Pursuant to section 625(c), Tariff Act of 1930, as amended (19 U.S.C. 1625(c)), notice of proposed modification of NYRL D82864 was published in the Customs Bulletin, Vol. 34, No. 12, dated March 22, 2000. No comments were received. The following reflects our position for this product.

FACTS:

Ultra White, White Coating FE52E, is described in NYRL D82864 as containing 40 percent sugar, 37 percent hardened vegetable fat, 12 percent skimmed milk powder, 6 percent dextrose, 5 percent whole milk powder with a milk fat content of 1.4 percent, and traces of vanillin and lecithin.

ISSUE:

What is the proper classification of the product described as FE52E?

LAW AND ANALYSIS:

In Headquarters Ruling Letter (HRL) 960017, dated July 23, 1998, published pursuant to 19 USC 1625 in Customs Bulletin Vol. 32, No. 32, dated August 12, 1998, Customs modified NYRL A80434 for a similar product (FE51E) and classified the product, in subheadings 2106.90.64, and 2106.90.66, HTSUS, as other food preparations not elsewhere specified or included, other dairy products containing over 10 percent by weight of milk solids, subject to tariff rate quotas. This ruling did not specifically modify or revoke treatment previously accorded by Customs to substantially identical merchandise or covered by other rulings that were not specifically modified or revoked by HRL 960017. Accordingly, this decision specifically modifies NYRL D82864, and effectively modifies or revokes any prior rulings or prior treatment extended to identical merchandise covered by HRL 960017 and this ruling letter.

For purposes of clarity, we repeat the LAW AND ANALYSIS of HRL 960017 as follows:

Additional U.S. Note 1 of Chapter 4, HTSUS, states that:

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.

Subheadings 2106.90.64 and 2106.90.66, HTSUS, provide for food preparations not elsewhere specified or provided for, other dairy products described in Additional U.S. Note 1 to Chapter 4. A "dairy product described in Additional U.S. Note 1 to Chapter 4" may be an article falling into any of three classes of merchandise described therein: malted milk and articles of milk or cream, certain articles containing over 5.5 percent butterfat, and, what is relevant here, "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." FE51E Ultra White falls into this third category of articles.

FE51E Ultra White is composed of dried skimmed milk powder, a product of subheading 0402.10, that is mixed with other ingredients. It contains over 16 percent milk solids by weight (12 percent skimmed milk powder and 5 percent whole milk powder), is capable of being further processed or mixed with similar or other ingredients, and is not prepared for marketing to the ultimate consumer in the identical form and package in which imported. The terms "capable of being further processed...", "prepared for marketing to the ultimate consumer...", and "ultimate consumer", are defined in Section IV, Additional U.S. Notes 2(b), (c), and (d), HTSUS. Those definitions are applicable for FE51E Ultra White. The product is "capable of being further processed..." because it is a solid material, and must be heated to change it to a fluid consistency before it be used. It is, therefore, "in such condition...as to be subject to any additional preparation, treatment or manufacture...". It is not prepared for marketing to the ultimate consumer because it will be sold to pastry chefs and confectioners, neither of which are considered an "ultimate consumer" by Section IV, Additional U.S. Note 2(d), HTSUS.

Subheadings 2106.90.64 and 2106.90.66 fall under the superior heading for "other, dairy products described in Additional U.S. Note 1 to Chapter 4." In contrast, 2106.90.82, is the residual subheading under an "other...other" subheading. Clearly, 2106.90.64 and 2106.90.66 are the more demanding, and therefore more specific tariff provisions. If the product meets the requirements for classification in either of these two subheadings, it must be classified there and we believe that it does.

HOLDING:

FE52E Ultra White is substantially identical to the product FE51E, as described in HRL 960017, and it is classified as other food preparations not elsewhere specified or included, other dairy products containing over 10 percent by weight of milk solids, in subheading 2106.90.64, HTSUS, if within the quantitative limitations of Additional U.S. Note 10 to Chapter 4. If the quantitative limitations of the Note have been reached, the product is classified in subheading 2106.90.66, HTSUS.

NYRL D82864, dated October 23, 1998, is modified. HRL 960017 is followed.

In accordance with 19 U.S.C. 1625, this ruling will become effective 60 days after its publication in the Customs Bulletin.

Sincerely,

John Durant, Director
Commercial Rulings Division

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