August 24, 2005 CBP Bulletin Notices on Yttria C and a White Sauce/Dairy Spread

CBP states that any party who has received a contrary ruling or decision on the merchandise that is subject to the proposed rulings, or any party involved with a substantially identical transaction, should advise CBP by September 23, 2005, the date that written comments on the proposed rulings are due. Furthermore, CBP states that an importer's failure to advise CBP of such rulings, decisions, or substantially identical transactions may raise issues of reasonable care on the part of the importer or its agent for importations subsequent to the effective date of the final decision in these notices.

CBP also states that its proposed revocation notices cover any rulings on the subject merchandise that may exist but have not been specifically identified.

Proposed Revocation of Two Classification Rulings

Yttria C. According to CBP, yttria C is a pale yellow powder consisting of more than 99% yttrium oxide and approximately .25% of a dopant that functions as a sintering aid. The sintering aid is used to create a larger particle yttrium oxide specifically for use in the metal casting industry. The sintering aid does not consist of a compound including yttrium, scandium, or rare-earth metals of HTS 2805.

CBP is proposing to issue HQ 967300 in order to revoke HQ 962804 and reclassify yttria C under HTS 3824.90.3900, which provides for other mixtures of two or more inorganic compounds rather than under HTS 2846.90.20, which provides for mixtures of rare-earth oxides or of rare-earth chlorides.

According to CBP, Explanatory Note (EN) 28.46 provides, in pertinent part, that HTS 2846 does not cover mixtures of compounds which could be conceived as having been made intentionally for special purposes, such mixtures would fall in HTS 38.24.

CBP had previously found that the miniscule amount of remaining sintering aid present in the yttrium oxide constituted an impurity. However, CBP now finds that because the sintering aid was added to the yttrium oxide intentionally, and cannot be removed once the large particle yttrium is formed, it cannot be considered an impurity. As the unique mixture found in yttria C has been made intentionally, the mixture falls in HTS 3824.

proposed: HTS 3824.90.3900, duty-free; current: HTS 2846.90.20, duty-free.

White sauce/Dairy spread. CBP states that the product at issue consists of 78% milk fat and 21% moisture with very small amounts of additives. At room temperature, the imported product has the appearance of butter and is capable of being spread in a fashion similar to soft butter or mayonnaise.

CBP is proposing to issue HQ 967780 in order to revoke NY D86228 and reclassify this product under HTS 0405.20.3000, which provides for other butter substitutes, whether in liquid or solid state, containing over 45% by weight of butterfat rather than under HTS 2103.90.9060 (1999), which provides for other sauces and preparations therefor.

CBP explains that the consistency, texture, fat content, and general physical characteristics of this product more closely resemble a dairy spread than the class or kind of products used as sauces or sauce preparations. CBP cites various rulings that have examined a number of "white sauce" products which demonstrate the physical characteristics of sauces and sauce preparations in contrast to the imported product.

According to CBP, the instant merchandise is fully described in HTS 0405.20.3000, which provides for goods which are subject to a tariff rate quota (TRQ) but must be entered under the high tier duty rate associated with this provision because they are entered without an import license.

(BP notes that on May 9, 2005, a civil action was commenced by the requestor of NY D86228, alleging that the ruling applied to certain shipments for which CBP had issued a Notice of Action (NOA) which rate advanced the merchandise. CBP believed that the product subject to the NOA was materially different from the product subject to NY D86228. However, the Court of International Trade (CIT) held that NY D86228 did cover to the merchandise in the entries subject to the NOA.

The CIT further held that the NOA was a "decision" and a "ruling revocation" and that CBP was required to formally modify or revoke the ruling. In light of the CIT's decision and the uncertainty of the final outcome of the matter, CBP has determined that revocation of the ruling is appropriate. However, CBP states that the U.S. does not concede that NY D86228 has to be revoked before CBP may liquidate entries of the subject merchandise as HTS 0405.20.3000.)

proposed: HTS 0405.20.3000, $1.996/kg; current: HTS 2103.90.9060 (1999), 6.6% (currently 6.4%)

August 24, 2005 CBP Bulletin (Vol. 39, No. 35) available athttp://www.cbp.gov/xp/cgov/toolbox/legal/bulletins_decisions/bulletins_2005/vol39_08242005_no35/