H250329

HQ H250329 August 21, 2020 OT:RR:CTF:FTM H250329 TJS CATEGORY: Classification TARIFF NO.: 1517.90.90 Port Director Port of Newark, New York U.S. Customs and Border Protection 1100 Raymond Blvd. Newark, NJ 07102 Attn: Tarra Speaks, Import Specialist RE: Application for Further Review of Protest No. 4601-13-100047; Tariff Classification of Donut Fry from Malaysia Dear Port Director: This is in reference to the Application for Further Review (“AFR”) of Protest No. 4601-13-100047, timely filed on January 11, 2013 by George R. Tuttle, P.C., on behalf of Western Pacific Oils LLC (“WPO” or “Protestant”), concerning U.S. Customs and Border Protection’s (“CBP”) tariff classification of Donut Fry under subheading 1517.90.90 of the Harmonized Tariff Schedule of the United States (“HTSUS”). WPO claims that the Donut Fry is properly classified under subheading 1511.90.00, HTSUS. In reviewing the AFR, we have also considered a supplemental submission, dated April 15, 2014. Our decision is set forth below. FACTS: This AFR concerns the classification of an edible palm oil product known as Donut Fry, which is used as a frying fat to fry donuts or biscuits. Donut Fry is comprised of approximately 90% RBD (Refined, Bleached, and Deodorized) palm oil and 10% palm stearin. RBD palm oil results once crude palm oil is refined, bleached, and deodorized. Palm stearin is the solid fraction of palm oil. Palm stearin is obtained by fractionation, which entails physically separating RBD palm oil into its hard component (stearin) and liquid component (olein). Palm stearin is added to increase the melting point of the palm oil. According to Protestant’s submission, the subject Donut Fry is manufactured by blending the RBD palm oil and palm stearin in a tank that is heated to approximately 70°C. The tank is heated to ensure that the oil and stearin are fully melted and mixed homogenously. No additives, preservatives, or other chemicals are added to the blend. The oil blend is then crystallized in a “scraped surface heat exchanger” (“SSHE”), sometimes referred to the commercial brand names “Votator” or “Perfector.” In the SSHE, the blend is fed through stainless steel tubes, which are cooled by liquid ammonium. The reduction in temperature results in the crystallization of a substantial portion of the fats in the blend. Scrapers in the tubes remove the crystals from the inside surface of the tubes. Inert nitrogen gas is incorporated during the SSHE process. Protestant states that this is to further enhance the physical appearance of the product and indirectly help preserve product quality by replacing oxygen in the solids with nitrogen. According to Protestant, palm oil consists of about 1,000 different molecules, each of which crystallizes at different temperatures. During the crystallization in the SSHE, the temperature of the palm oil mixture is reduced to about 17-28°C, which results in approximately 70% of the Donut Fry being crystallized. The remaining portion is liquid, made up of the molecules that need lower temperatures to crystallize. After the SSHE, the mixture is fed into a kneading unit called a “Pin Rotor” where additional minor crystallization takes place and where the mixture is texturized to blend the crystals and liquid together for a homogenized appearance. According to Protestant’s supplemental submission, at the end of the manufacturing process, the texturized blend resembles solid fats such as butter. The finished blend is mechanically extruded into polyethylene bags and placed in 50-lb boxes. The boxes are stored for about two days in a cold warehouse (25°C-30°C) to allow the Donut Fry to stabilize and achieve the required texture and plasticity. The boxes are then shipped to the United States. The subject Donut Fry was entered on October 4, 2011 under subheading 1511.90.00, HTSUS, which provides for “Palm oil and its fractions, whether or not refined, but not chemically modified: Other.” On November 22, 2011, CBP issued a Customs Form 28 to WPO, requesting a sample and information describing the complete manufacturing process of the Donut Fry. On January 10, 2012, WPO provided responses and a representative sample of the Donut Fry, which were sent to CBP’s Laboratory and Scientific Services (“LSS”). The LSS was unable to issue a complete report without a detailed description of the process by which the liquid oil was cooled and solidified. WPO provided responses on March 16, 2012, March 23, 2012, and May 4, 2012. Based on the additional manufacturing information provided by WPO, the LSS reported that the Donut Fry underwent a process known as texturization using a scraped-surface heat exchanger and was therefore a shortening, classified in heading 1517, HTSUS. As a result, the Donut Fry entries were rate advanced on June 15, 2012 and liquidated on August 3, 2012 under subheading 1517.90.90, HTSUS, which provides for “Margarine; edible mixtures or preparations of animal or vegetable fats or oils or of fractions of different fats or oils of this chapter, other than edible fats or oils or their fractions of heading 1516: Other: Other: Other.” WPO filed the protest and requested the AFR on January 11, 2013. We have also considered a supplemental submission filed by Protestant on April 15, 2014. ISSUE: What is the tariff classification of the Donut Fry? LAW AND ANALYSIS: Initially, we note that the matter is protestable under 19 U.S.C. § 1514(a)(2) as a decision on classification. The protest was timely filed on January 11, 2013, within 180 days of liquidation of the entry pursuant to 19 U.S.C. § 1514(c)(3). Classification of goods under the HTSUS is made in accordance with the General Rules of Interpretation (“GRI”). GRI 1 provides that the classification of goods shall be determined 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 GRI may then be applied in order. Pursuant to GRI 6, classification at the subheading level uses the same rules, mutatis mutandis, as classification at the heading level. The 2011 HTSUS headings under consideration are the following: 1511: Palm oil and its fractions, whether or not refined, but not chemically modified 1517: Margarine; edible mixtures or preparations of animal or vegetable fats or oils or of fractions of different fats or oils of this chapter, other than edible fats or oils or their fractions of heading 1516 * * * * * In addition, the Explanatory Notes (“EN”) to the Harmonized Commodity Description and Coding System represent the official interpretation of the tariff at the international level. While neither legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989). The EN to Chapter 15 provides, in relevant part: With the exception of sperm oil and jojoba oil, animal or vegetable fats and oils are esters of glycerol with fatty acids (such as palmitic, stearic and oleic acids). They may be either solid or fluid, but are all lighter than water. On fairly long exposure to air they become rancid due to hydrolysis and oxidation. When heated they decompose, giving off an acrid, irritant odour. They are all insoluble in water, but completely soluble in diethyl ether, carbon disulphide, carbon tetrachloride, benzene, etc. Castor oil is soluble in alcohol but the other animal or vegetable fats and oils are only slightly soluble in alcohol. They all leave a persistent greasy stain on paper. . . . (B) Headings 15.07 to 15.15 of this Chapter cover the single (i.e., not mixed with fats or oils of another nature), fixed vegetable fats and oils mentioned in the headings, together with their fractions, whether or not refined, but not chemically 

Initially, we note that the matter is protestable under 19 U.S.C. § 1514(a)(2) as a decision on classification. The protest was timely filed on January 11, 2013, within 180 days of liquidation of the entry pursuant to 19 U.S.C. § 1514(c)(3). Classification of goods under the HTSUS is made in accordance with the General Rules of Interpretation (“GRI”). GRI 1 provides that the classification of goods shall be determined 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 GRI may then be applied in order. Pursuant to GRI 6, classification at the subheading level uses the same rules, mutatis mutandis, as classification at the heading level. The 2011 HTSUS headings under consideration are the following: 1511: Palm oil and its fractions, whether or not refined, but not chemically modified1517: Margarine; edible mixtures or preparations of animal or vegetable fats or oils or of fractions of different fats or oils of this chapter, other than edible fats or oils or their fractions of heading 1516* * * * *In addition, the Explanatory Notes (“EN”) to the Harmonized Commodity Description and Coding System represent the official interpretation of the tariff at the international level. While neither legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989). The EN to Chapter 15 provides, in relevant part:With the exception of sperm oil and jojoba oil, animal or vegetable fats and oils are esters of glycerol with fatty acids (such as palmitic, stearic and oleic acids).They may be either solid or fluid, but are all lighter than water. On fairly long exposure to air they become rancid due to hydrolysi