The Tale of theTempura Tariff

R.T. Foods, Inc. v. United States involves the tariff classification of prepared tempura vegetables. Somehow, I was surprised to find out that this is an imported product, though a mental walk through the frozen food isle reminded me that just about any food product can be bagged, frozen, and shipped. In this case, the specific products were a tempura vegetable medley and tempura vegetable bird's nests. The medley consisted of a mix of sweet potato, carrot, something called "wing bean," green bean (or long bean), and eggplant. The bird's nests were julienned carrots, onion, and kale mixed together. Both products were dipped in tempura batter, frozen, packed and shipped.

Before it could get to the classification issue, the Court of International Trade had to deal with a jurisdictional issue. Remember that for the Court to have jurisdiction to hear a classification case, the importer must have filed a protest within 180 days after the date of liquidation and filed a summons in the Court within 180 days following the denial of the protest by Customs and Border Protection. In this case, the summons was filed about 200 days after the denial of the protest. That makes it appear to be untimely.

The plaintiff, apparently aware of the 180-day rule, noted in a footnote on the summons that it had requested that Customs set aside the denial of the protest. According to the plaintiff, that request tolled the running of the 180-day clock. The Court disagreed and held it lacked jurisdiction to review that protest. Although the Court did not reference it, this conclusion is consistent with an earlier case involving Sears.

On another protest, the Court of International Trade found it lacked jurisdiction to review Customs' decision because of the lack of a case or controversy. This is an important constitutional consideration for all federal courts. But, for our purposes here, it boils to the notion that if Customs liquidates your entries in a favorable provision and you have no injury, there is no jurisdiction by which the Court can review the protests. Such was the case here where Customs accidentally liquidated a number of entries under the plaintiff's proposed classification.

This decision left the Court with three entries on a single denied protest with which to consider the classification issue.

The classification proposed by Customs is 2004.90.85, "Other vegetables prepared or preserved otherwise than by vinegar or acetic acid, frozen . . . ." This carries an 11.2% rate of duty. Plaintiff asserted that the vegetables were properly classified in 2106.90.99, which covers "Food preparations not elsewhere specified or included . . . frozen." This is a duty-free provision for products of Thailand.

The Court wisely and clearly unpacked Heading 2004 to find that there are five elements that must be present for goods to be classified in that heading:
  1. The goods are vegetables,
  2. that are prepared or preserved,
  3. otherwise than by vinegar or acetic acid,
  4. that are frozen, and are
  5. not products of heading 2006.
The Court then found that both the medley and the nests satisfy these five requirements. That makes 2004 a contender.

To be classifiable in 2106, the products must be:
  1. a food preparation, that is
  2. not elsewhere specified or included.

Given the Court's conclusion that the goods are specified and included in 2004, this makes 2106 the dark horse. To bolster its case, the plaintiff noted prior Customs rulings addressing the classification of vegetable chips and hors d'oeuvres. But, the Court found these products to be distinct from tempura-coated vegetables, apparently because of the number of other ingredients. The Court also noted that Customs has often classified tempura products based on the nature of the coated food item. Thus, these rulings were unavailing. Of course, we might also note that a Customs ruling cannot bind the Court of International Trade and is only relevant to the degree it has the power to persuade the judge. Apparently, he was more persuaded, if at all, by the tempura rulings.

Lastly, there was a bit of a tussle over whether the sweet potatoes in the mix should force the mixture to be classified in the heading for tubers. The Court first found that the sweet potatoes were not sufficiently material to require that the mixture be classified as such. Without saying so, it appears the Court conducted a GRI 3(b) essential character analysis and found that the sweet potatoes were not the essential character of the mixture. Finally, assuming the sweet potatoes were relevant, the Court noted that the proposed alternative only applied to edible parts of plants "not elsewhere specified or included. Because this mixture is include in 2006, it cannot be classified in heading 2008.

As a result, the mixed vegetable products, dipped in tempura, fried, and frozen were found to be classifiable in Heading 2004.90.85.

And now, I am hungry for a shrimp tempura udon.


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