Federal Circuit Defines 'Vitamin' in Tariff Schedule, Reverses CIT Ruling on Carnitine
Products are classifiable as “vitamins” in the tariff schedule if they are organic chemical micronutrients that are essential to humans but inadequately produced by the human body, the U.S. Court of Appeals for the Federal Circuit said in a decision issued Sept. 26 (here). CAFC reversed a 2015 ruling from the Court of International Trade that found carnitine imported by Sigma-Tau HealthScience is classifiable as a quaternary aluminum salt rather than a vitamin, holding that classification as a vitamin is correct because carnitine, though produced in sufficient amounts by adults, must be obtained from outside sources in newborn babies under four weeks old.
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The lower court had also found carnitine is a vitamin, but classified it as a quaternary aluminum salt under heading 2923 because that heading more specifically describes the product under General Rule of Interpretation 3 (see 1509080055). On appeal, CAFC found classification according to GRI 3 was incorrect. Note 3 to Chapter 29 supersedes the general rule, directing that goods classifiable in two or more headings of Chapter 29 be classified in the heading that occurs last in numerical order. That means carnitine, which all agreed is a quaternary aluminum salt classifiable under heading 2923, would nonetheless be classified as a vitamin under heading 2936 if it qualifies as such.
CAFC held carnitine is a vitamin, though for different reasons than CIT. The trade court had said carnitine is a vitamin because it is alternatively referred to as “vitamin Bt.” CAFC found the fact that it is referred to as a vitamin is irrelevant because not all products referred to as vitamins are necessarily classifiable as such in the tariff schedule. For example, explanatory note 29.36 says vitamins H1, B4 and F are excluded from classification as a vitamin.
Turning to dictionary definitions and scientific literature, CAFC adopted a definition of vitamins as follows: “vitamins are organic chemical substances that are essential micronutrients because, in general, the body cannot produce them or produce sufficient amounts of them.” That does not include compounds required by individuals with abnormal function, because a vitamin is “a substance required for normal physiological function,” CAFC said. However, vitamins do include “compounds that children and infants require for normal, healthy function,” even if adults produce them in sufficient quantities, it said.
Carnitine, though synthesized by adults in quantities necessary for normal function, is not produced by infants, including neonates less than four weeks old, which require an outside source of carnitine for healthy growth. Carnitine is therefore a vitamin, classifiable in heading 2936, which occurs after heading 2923 in numerical order and supersedes it. Sigma-Tau’s carnitine importers are therefore eligible to enter duty free, rather than at the 6.2% duty rate decided by the lower court, CAFC said.
(Sigma-Tau HealthScience v. U.S., CAFC # 16-1125, appealed from CIT # 11-00093, dated Sept. 26, 2016, Judges Newman, Dyk and Reyna)
(Attorneys: John Monica of Porter Wright for plaintiff-appellant Sigma-Tau HealthScience, Inc.; Alexander Vanderweide for defendant-appellee U.S. government.)