December
5, 2007 CBP Bulletin Notice on
Low Fat Butter Substitutes
In the December 5, 2007 issue of the U.S. Customs and Border Protection
Bulletin (CBP Bulletin) (Vol.
41, No. 50), CBP published a notice withdrawing two proposed rulings and its
intent to revoke treatment as follows:
Withdrawl of proposed
revocation of rulings and treatment. CBP
is withdrawing its proposed rulings to revoke the classification of certain low
fat butter substitutes. CBP is also withdrawing its intent to revoke any
treatment previously accorded by CBP to substantially identical transactions.
Low fat butter substitutes. The product described in NYB80051 is 51–53%
water, 39–41% butterfat, 4.5% milk proteins, 2% modified starch, 0.6% emulsifier
(monodiglyceride), 0.3% lactic acid, 0.2% salt, 0.1% potassium sorbate, and
0.002% beta carotene from Belgium. The
product is packed in 227 gram cups. The
product described in NYB85495 is 48–51% water, 42–44% butterfat (milkfat), 4–5%
milk proteins, 2% lactose, 0.6% emulsifiers, 0.1% salt, and 0.001% flavoring
from Canada. The product is packed in 40 pound boxes with polyliners.
CBP was proposing to issue HQ 968239 and HQ 968240 in order to revoke NY B80051 and NY B85495, respectively, and reclassify the products
under 0405.20.6000 (10%, subject to
tariff rate quota) as “other dairy spreads,” rather than under 0405.20.4000
(13.1 cents/kg), as “butter substitutes containing less than 45% by weight of
butterfat.”
CBP's initial
position was that these products were not correctly classified in NY B80051 and
NY B85495 because under the court decision in Rudolph Faehndrich v. United
States, 49 Cust. Ct. 1 (1962), a butter substitute must be able to take the
place of butter in substantially all respects and substantially all conditions
and the low fat butter substitutes are not recommended for baking and frying.
However,
compelling arguments were made by two commenters. Citing the court in Bausch
& Lomb v.United States, 148 F.3d 1363 (1998) and in Lonza, Inc. v.
United States, 46 F3d 1098, it was argued that the 1962 Faehndrich case
does not control the meaning of the term “butter substitutes” under the HTS;
rather, the legal language of the tariff itself should be determinative. There
have been significant changes to the nomenclature from the Trade Act of 1930,
to the Tariff Schedule of the U.S. (TSUS), to the HTS, and the legal language
in the tariff now explicitly provides for butter substitutes containing less
than 45% butterfat. This brings the
issue back to whether the instant product can be considered a “substitute” or
not.
To ascertain the
common meaning of a tariff term, courts may refer to dictionaries, scientific
authorities, and similarly reliable resources (See, The Mead Corp. v. United
States, 283 F.3d 1342, 1346 (Fed. Cir. 2002)).
CBP cites the
Oxford English Dictionary, in which the word “substitute” when describing an
object, rather than a person, is defined as:
“A thing put in the place of another.”
Additional evidence was submitted by one commenter that their product
can be used in a one-to-one substitution with butter in the production of iced
confections and baked goods, and both commenters submitted evidence that the
light butter substitutes would fry eggs in butter’s stead, although these
products are not typically used commercially in this manner.
For these
reasons, CBP determined that the low fat butter substitutes at issue should
remain classified as ‘‘other butter substitutes’’ in subheading 0405.20.40.
No change in
classification: 0405.20.4000, 13.1
cents/kg
(See ITT's Online Archives or 02/21/07 news, (Ref:
07022145), for BP summary of proposed HQ
968239 and HQ 968240.)
December 5, 2007 CBP Bulletin (Vol. 41, No. 50) available at http://www.cbp.gov/xp/cgov/toolbox/legal/bulletins_decisions/bulletins_2007/
Published in ITT on December 12, 2007 | [Ref: 07121250] |
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