CAFC Rules on Beta-Carotene Product Not Intended for Pharmaceutical Use
The Court of Appeals for the Federal Circuit reviewed and affirmed the decision by the Court of International Trade in BASF Corporation (BASF) v. U.S. that Lucarotin 1%, a food colorant containing 1% beta-carotene, should be classified in HTS 3204.19.35 ("Beta-carotene and other carotene coloring matter").
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In reaching their decision as to the classification, the CAFC reiterated that "When a product is specifically described or named (eo nomine) in the HTS, the specific classification prevails over any more general listing that also includes the imported product, as set forth in Rule 3 of the General Rules of Interpretation."
The CAFC cited GRI 3 (a) which states, in part... "The heading which provides the most specific description shall be preferred to headings providing a more general description." Part (b) of this Rule, further states in part "Mixtures, composite goods.which can not be classified by reference to 3 (a), shall be classified as if they consisted of the material or component which gives them their essential character." The CAFC stated that "for the Lucarotin 1% formulation of beta-carotene as a food colorant, the eo nomine and specificity rules establish the tariff classification."
The parties agreed that (i) beta-carotene was the only active ingredient of Lucarotin and (ii) the product was not intended for pharmaceutical use.
Nevertheless, BASF argued that Lucarotin should be entitled to duty-free treatment, because beta-carotene is listed in the Pharmaceutical Appendix in the HTSUS.
In affirming the decision of the Court of International Trade, the CAFC noted that the CIT "applied the International Trade Commission's definition of a pharmaceutical product as 'used in the prevention, diagnosis, alleviation, treatment, or cure of disease in humans or animals' and held that Lucarotin 1% is not eligible for duty-free importation despite the listing of beta-carotene on the Pharmaceutical Appendix."
CAFC 05-1477 (dated 03/29/07) available at http://www.fedcir.gov/opinions/05-1477.pdf