Roasted Sunflower Seeds Classifiable as Food Preparation, Not 'Sunflower Seeds,' CIT Says
Roasted sunflower seeds are classifiable as food preparations, not as seeds, the Court of International Trade said in a decision issued Feb. 15 (here). Well Luck, the importer of the seeds, argued that a tariff provision for “sunflower seeds” includes all forms, including roasted and flavored seeds for snacking. CIT found that tariff provision only applies to sunflower seeds suitable for “general use,” excluding roasted seeds because they are unsuitable for planting.
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The difference in duty rates between the tariff provisions is substantial. The subheading favored by Well Luck, 1206.00.00 for “sunflower seeds, whether or not broken, is duty free. CIT agreed with CBP’s liquidation of the roasted sunflower seeds in subheading 2008.19.90, which covers nuts, peanuts and other seeds “otherwise prepared or preserved” and is dutiable at 17.9%.
According to the court decision, the general explanatory note to Chapter 12 says that headings 1201 through 1207 may undergo heat treatment but “only if it does not alter the character of the seeds and fruits as natural products and does not make them suitable for a specific use rather than for general use.” Well Luck’s seeds are heated in an oven at 302 degrees Fahrenheit, well above temperatures that render the seeds unsuitable for planting, CIT said. “Sunflower seeds suitable for general use must be suitable for sowing and oil extraction, not just suitable for snacking,” it said.
Classification in heading 2008 is supported by the structure of the tariff schedule, CIT said. In general, the tariff schedule is drafted in order of their degree of manufacture, so that raw products, such as lightly processed sunflower seeds, are classifiable in subheadings that come before provision for more processed products, like roasted sunflower seeds ready for snacking, CIT said.
Well Luck pointed to the language of 1202 for peanuts, which specifically excludes roasted peanuts, noting that heading 1206 for sunflower seeds has no such exclusion. But “the fact that another provision has exclusionary language does not undermine the court’s conclusion that the term 'sunflower seeds' could encompass both minimally processed and further processed seeds,” CIT said. The explanatory notes, “which reflect the intent of the drafters, clarify that the tariff term is meant to refer to sunflower seeds that are only minimally processed.”
(Well Luck Co. v. U.S., Slip Op. 17-16, CIT # 13-00064, dated 02/15/17, Judge Kelly)
(Attorneys: Luis Arandia of Givens & Johnston for plaintiff Well Luck Co., Inc.; Alexander Vanderweide for defendant U.S. government)