Nutritious Substances Classifiable as Food Only if Meant for Nutrition, CIT Says
Substances may be classified as food preparations if they are "valued for" their nutrition, but the mere presence of nutritious ingredients is not enough, the Court of International Trade said in a decision issued July 25. In a dispute over the classification of gum base, the court declined to issue a definitive ruling until the question is resolved of whether the gum base's nutrition is a "valuable aspect" or "incidental."
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CBP had in a 2008 ruling found Cadbury's gum base -- a product comprising fillers, plasticizers, softeners, emulsifiers, antioxidants and other chemicals that forms the primary ingredient of chewing gum -- classifiable as a "food preparation" under subheading 2106.90.99. Cadbury, a division of Mondelez, imported the gum base and protested CBP's classification. Cadbury argued the gum base should instead be classified as a "preparation ... of the chemical or allied industries" in subheading 3824.90.92.
The dispute turned on the definition of "food preparation" in heading 2106. The government argued the term refers to a substance prepared for use in food. The gum base is classifiable as a food preparation because it is used for manufacturing chewing gum, which is a food, it said. CIT disagreed, holding that a substance should not be classified as a food preparation simply because it is used in a food. Instead, the food preparation must itself be "food."
Food is a substance "that is intended to be ingested," but a "preparation that itself is not ingested in the classic sense is nonetheless a food if its purpose is to impart flavor or nutrition into a substance that is ingested," CIT said. The gum base is not intended to be ingested or provide flavor, so it may only be considered a food -- and classifiable as a food preparation -- if it is intended to provide nutrition, it said. Similarly, "substances with nutritive value" are excluded from classification in Chapter 38, but not if that "nutritive value ... is merely incidental to their function as chemical products," CIT said.
CIT found it does not yet have enough information to rule either way. First, it still must be determined whether chewing the gum base releases its nutritive ingredients, including hydrogenated oil, calcium carbonate, triacetin and lecithen. But "whether the chewing process releases nutrients is a necessary but not sufficient fact to sustain the government’s classification," CIT said. "The government must establish that gum base is valued for its nutritive properties or that the nutritive value is not incidental. Given the government’s approach to this litigation it may decide against trying to prove that nutrition is not incidental or that nutrition is a valuable aspect of the gum base. The bare existence of nutritive properties will not win the day," CIT said.
(Mondelez Global LLC v. U.S., Slip Op. 17-92, CIT # 12-00076, dated 07/25/17, Judge Restani)
(Attorneys: Craig Lewis of Hogan Lovells for plaintiff Mondelez Global LLC; Jamie Shookman for defendant U.S. government)