Appeal from the United States Court of International Trade in No. 04-CV-0175, Judge Richard K. Eaton.
ERIK D. SMITHWEISS, Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, of New York, New York, argued for plaintiff-appellee. With him on the brief were ROBERT B. SILVERMAN and JOSEPH M. SPRARAGEN.
PATRICIA M. MCCARTHY, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for defendant-appellant. With her on the brief were STUART F. DELERY, Assistant Attorney General, and JEANNE E. DAVIDSON, Director. Of counsel on the brief were EDWARD N. MAURER and SHERYL A. FRENCH, Office of Assistant Chief Counsel, International Trade Litigation, United States Customs & Border Protection, of New York, New York. Of counsel was SAUL DAVIS, Attorney, Appellate Section, International Trade Litigation, International Trade Field Office, United States Department of Justice, of New York, New York.
Before PROST, Chief Judge, LOURIE and DYK, Circuit Judges.
Lourie, Circuit Judge
The United States (" the government" ) appeals from the decision of the United States Court of International Trade reclassifying Roche Vitamin Inc.'s (" Roche" ) product BetaTab 20% (" BetaTab" ) as " Provitamins, unmixed" under subheading 2936.10.00 of the Harmonized Tariff Schedule of the United States (" HTSUS" ). See Roche Vitamins, Inc. v. United States, 922 F.Supp.2d 1353 (Ct. Int'l Trade 2013) (" Opinion " ). Because the Court of International Trade correctly classified BetaTab under heading 2936, we affirm.
Roche imported BetaTab, which is a mixture containing beta-carotene, antioxidants, gelatin, sucrose, and corn starch, and can be used as a source of Vitamin A in foods, beverages, and vitamin products. Beta-carotene crystalline makes up twenty percent of the mixture and is an organic colorant with provitamin A activity. Whether used as a colorant or provitamin A, beta-carotene must first be combined with other ingredients.
The United States Customs and Border Protection (" Customs" ) classified BetaTab under HTSUS subheading 2106.90.97 as " [f]ood preparations not elsewhere specified or included." Id. at 1356. Roche filed a protest to the liquidation of BetaTab, which Customs denied. Id. Roche then filed suit in the Court of International Trade and moved for summary judgment.
Roche argued that BetaTab was classifiable either as a " coloring matter" under HTSUS subheading 3204.19.35, and eligible for duty-free entry pursuant to the Pharmaceutical Appendix, or, alternatively, as a provitamin under HTSUS heading 2936. The Court of International Trade denied Roche's motion for summary judgment. Roche Vitamins, Inc. v. United States, 750 F.Supp.2d 1367, 1382 (Ct. Int'l Trade 2010). The court concluded that genuine issues of material fact as to the principal use of BetaTab and the functionality of BetaTab's ingredients other than beta-carotene precluded summary judgment. Id.
Following trial, the Court of International Trade first determined that the principal use of BetaTab was as a source of provitamin A in foods or vitamin products, rather than as a coloring matter. Opinion at 1360. As part of the principal use analysis, the court found that " BetaTab was developed for use in vitamin products and its actual use during the relevant time period was predominantly as a source of Provitamin A for vitamin products." Id. The court explained that the " high concentration and high bioavailability of beta-carotene in the merchandise [made] it preferable for use in dietary supplement tablets." Id. at 1361. The court also noted that BetaTab was developed specifically " for use in high potency and anti-oxidative vitamin tablets." Id.
The court then considered whether BetaTab was properly classified under HTSUS heading 2936 as a provitamin. Citing Note 1 to Chapter 29 and the Explanatory Notes to Chapter 29, the court explained that a product would not properly be classified under heading 2936 " if the quantity of a stabilizing agent added to an item of [heading 2936] is more than is necessary for transport or preservation, or
the nature of the stabilizing agent alters the character of the basic product so as to render it 'particularly suitable for specific use.'" Id. at 1358-59. The court noted that " [a]dded ingredients that make a chemical highly capable of a use that is not an ordinary use of chemicals of the heading . . . will render the item 'particularly suitable for specific use rather than for general use' and exclude it from classification in the headings of Chapter 29." Id. at 1359 (emphasis in original).
Based on the evidence presented at trial, the court found that a stabilizing matrix of some kind is necessary for any beta-carotene product, and beta-carotene must be processed and combined with other ingredients to be commercially useable as either a provitamin A or colorant. Id. at 1362. The court found that Roche's manufacturing process did not change BetaTab's functionality as a provitamin or change the character of beta-carotene as a source of provitamin A. Id. According to the court, there was " no evidence that the merchandise's non-betacarotene ingredients enhance absorption or bioavailablity of the beta-carotene in a manner greater than any other stabilizing matrix." Id. The court found that although BetaTab was highly suitable for tableting, BetaTab itself contained no ingredients " specifically prepared for tableting." Id. ...