Lynteq, Inc. v. US

• Citation: 768 F. Supp. 350
• Decision Date: 17 June 1991
• Docket Number: Court No. 90-04-00175.
• Parties: LYNTEQ, INC., Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

768 F. Supp. 350

LYNTEQ, INC., Plaintiff, v. UNITED STATES, Defendant.

Court No. 90-04-00175.

United States Court of, International Trade.

June 17, 1991.

Wilkinson, Barker, Knauer & Quinn, Paul A. Lenzini, Washington, D.C., for plaintiff.

Stuart E. Gerson, Asst. Atty. Gen., Joseph I. Liebman, Atty. in Charge, International Trade Field Office, Civil Div., Commercial Litigation Branch, U.S. Dept. of Justice, Carla Garcia-Benitez (Ann M. Roesch, Atty., Office of Asst. Chief Counsel, U.S. Customs Service, of counsel), Washington, D.C., for defendant.

OPINION

TSOUCALAS, Judge:

The instant action, designated a test case, comes before the Court pursuant to 28 U.S.C. § 1581(a) (1988), seeking reclassification of certain imported merchandise. Plaintiff, Lynteq, Inc. ("Lynteq"), challenges the United States Customs Service's ("Customs") classification of its imports of Cromophyl-L, a natural coloring agent obtained from ground marigold flower petals, under subheading 3203.00.50 of the Harmonized Tariff Schedules of the United States ("HTSUS"), a basket provision covering coloring matter of vegetable or animal origin not specially provided for, carrying a duty of 3.1% ad val.

The parties agree that there is no genuine issue of material fact in dispute, and have cross-moved for summary judgment pursuant to Rule 56 of the Rules of this Court. The Court concurs and, therefore, renders the following decision upon stipulated facts.

Lynteq contends that its product, imported from Mexico, should not have been encompassed by the basket provision because it is specifically provided for, under subheading 3203.00.10, HTSUS. Alternatively, plaintiff asserts classification under this subheading as a "preparation" based on one of the coloring matters specifically enumerated therein. Memorandum of Points and Authorities in Support of Plaintiff's Motion for Summary Judgment at 19.

Defendant, while conceding that Cromophyl-L is a derivative of marigold meal, nonetheless maintains that "subheading 3203.00.10 was only intended to include crude marigold meal, and not all coloring matter derived from the marigold plant." Defendant's Memorandum in Opposition to Plaintiff's Motion for Summary Judgment and in Support of Cross-Motion for Summary Judgment at 10. Hence, Customs insists that Cromophyl-L is properly classified under item 3203.00.50, HTSUS, as coloring matter of vegetable origin not specially provided for. Id.

Upon consideration of the arguments advanced by the parties and review of the relevant caselaw, the Court finds that the imported merchandise constitutes a preparation based on a colorant enumerated in subheading 3203.00.10, HTSUS, and is therefore entitled to duty-free treatment as provided under that provision.

BACKGROUND

The merchandise at issue, commercially known as "Cromophyl-L," is an aqueous natural coloring agent used exclusively by feed mills for incorporation into poultry feed to promote yellow pigmentation in chicken skin and egg yolks. Affidavit of Robert M. Gibson in Support of Plaintiff's Motion for Summary Judgment. Cromophyl-L is derived, through a series of chemical reactions, from the Aztec marigold flower (Tagetes erecta L.), which is naturally rich in xanthophyll, an active coloring agent. Although traditionally ground marigold petals (marigold meal) were also used as a poultry feed additive to augment the yellow coloring of chicken skin, Cromophyl-L is apparently preferred by the feed industry because it is more readily dispersed in the poultry feed. Additionally, due to the higher concentration of xanthophyll in Cromophyl-L, significantly lesser amounts are required to produce the same level of pigmentation. Plaintiff's Statement of Material Facts as to Which No Genuine Issue Exists.

Marigold petals are the primary component in the production of Cromophyl-L. The marigold petals are dried and ground into marigold meal. This meal then undergoes solvent extraction, a process by which marigold oleoresin is produced. Marigold oleoresin is a semi-solid substance containing, inter alia, xanthophyll esters, the active coloring agent in the marigold meal. Marigold oleoresin is simply a highly concentrated marigold meal extract, i.e., the molecular structure of the product remains intact. Affidavit of Pat B. Hamilton in Support of Defendant's Motion for Summary Judgment ("Hamilton Affidavit") at 2.

By contrast, the production of Cromophyl-L requires further processing. The molecular structure of marigold oleoresin must be altered through a process known as "saponification." "Saponification is a chemical reaction in which potassium hydroxide or sodium hydroxide is added to the oleoresin containing the xanthophyll esters, and heat is applied." Hamilton Affidavit at 3. This process releases the xanthophyll into its free alcohol form and separates it from the fatty acids. Once saponified, the Cromophyl-L can be made into a stable, water soluble solution that is easily dispersed into the poultry feed and is more readily absorbed by the poultry. Id.

DISCUSSION

Customs' classification of imported merchandise is presumed to be correct. 28 U.S.C. § 2639(a)(1) (1988). The party challenging the classification must therefore shoulder the burden of proving otherwise. Id.; Brookside Veneers, Ltd. v. United States, 847 F.2d 786, 787 (Fed.Cir.1988), cert. denied, 488 U.S. 943, 109 S.Ct. 369, 102 L.Ed.2d 358 (1988). Nevertheless, once a classification is put in question, the Court must consider Customs' determination independently as well as in relation to the alternatives advanced by plaintiff. Jarvis Clark Co. v. United States, 733 F.2d 873, 878, reh'g denied, 739 F.2d 628 (Fed.Cir. 1984).

As plaintiff states, prior to enactment of the HTSUS,¹ Cromophyl-L imports, along with other chemically derived extracts, were classified under item 470.85 of the Tariff Schedules of the United States, Annotated (TSUSA), as products of vegetable origin used chiefly for coloring or tanning, not specially provided for, other than crude or processed. Conversely, marigold meal was classified under item 470.80, TSUSA, as products of vegetable origin used chiefly for coloring or tanning, not specially provided for, in crude or processed form. See Joseph F. Hendrix a/c Productos Deshidratados de Mexico v. United States, 82 Cust.Ct. 264 (1979).

Conversion to the HTSUS, however, modified the tariff treatment of marigold meal and other natural colorants. In various instances, as plaintiff notes, TSUS provisions encompassing crude materials and those covering further processed forms of the same materials were consolidated into a single HTSUS subheading in an attempt to streamline the tariff schedules. E.g., Brazil wood, cutch, fustic, henna and safflower which were classified under item 470.10, TSUS, in crude or processed form, and under item 470.18, TSUS, in extract or further processed form, are all currently classifiable under subheading 3203.00.50, HTSUS.

As a result of the conversion to HTSUS, coloring matter of either vegetable or animal origin are now provided for in Chapter 32 of the HTSUS. The applicable provisions appear as follows:

                    3203.00     Coloring matter of vegetable or animal origin (including dying
                                extracts but excluding animal black), whether or not chemically

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