CIT Rules BASF's Challenge on Classification of Beta-Carotene Needs Trial
The Court of International Trade has denied BASF Corp.'s motion for summary judgment in a case concerning the classification of Betavits, mixtures containing synthetic beta-carotene. The CIT states that there are genuine issues of material facts as to whether such mixtures belong to the class of goods principally used as coloring matter, as argued by BASF, or provitamins, as classified by Customs.
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Customs Classified Imports in HTS 1206, BASF Says Should be HTS K3204
U.S. Customs and Border Protection classified BASF's imports of Betavit® 10% and Betavit® 20% in subheading 2106.90.99 as other food preparations not elsewhere specified or included (6.4%). BASF filed a protest, asking Customs to reclassify the goods under subheading K3204.19.35 as duty-free beta-carotene and other carotenoid coloring matter, or alternatively in heading 2936 as a provitamin or heading 3003 as a certain medicament. CBP denied the protest and BASF initiated action in the CIT.
CIT Denied BASF's Motion for Summary Judgment for Three Reasons
The CIT has denied BASF's motion for summary judgment, ruling that there are still outstanding issues to address:
Principal use as colorant vs. vitamin. Whether Betavits belongs to the class or kind of goods principally used as coloring matter1must be determined. While the products at issue were marketed for use as provitamin A, they can also be used for effective coloration in food and beverages.
Classification criteria for beta-carotene in HTS 3204. While there is an eo nomine subheading for beta-carotene to direct classification in heading 3204 as a colorant, there is also an associated "K" designator to 3204.19.35 to provide duty-free treatment to beta-carotene formulations used as a provitamin. The CIT stated that it must examine whether, in order to be classifiable in this "beta-carotene" subheading, a good must first be coloring matter to meet the criteria of the main heading.
Use of HTS 2936 or 3003. Any argument that Betavit should be classified under heading 2936 as a provitamin due to its specific use is a fact-intensive argument, suitable for trial. Additionally, BASF has not demonstrated that its merchandise is classifiable as a medicament under principal use heading 3003.
1The term "coloring matter" in heading 3204 is a principal use provision under which merchandise must be classified according to its ordinary use, even if it may be put to some atypical use. Traditionally, courts using the principal use analysis examine multiple factors, such as the merchandise's general physical characteristics, the environment of the sale (the manner in which it is advertised and displayed), the expectation of the ultimate purchasers, etc.
(Slip Op. 11-131, dated 10/19/11)