On December 22, 2009, the CIT issued its decision in Arko Foods International, Inc. v. United States in a dispute involving the correct classification of a frozen dessert known as mellorine imported by Plaintiff Arko Foods International, Inc. (Arko). The subject mellorine had a consistency and manner of consumption similar to ice cream, and was manufactured from various ingredients including water, refined sugar, vegetable oil, fruit puree or preserve, corn syrup, skim milk powder, whey, stabilizers, emulsifiers, artificial food flavors and maltodextrin. Depending on the variety, the mellorine could also contain cheese, whole milk powder, purple yam or pieces of fruit.
CBP classified the mellorine as “[i]ce cream and other edible ice” and a “dairy product described in additional US note 1 to chapter 4” within HTSUS subheading 2105.00.40 because it considered the mellorine an “article of milk or cream”—the first of three categories described in the additional note. Arko argued that the mellorine was not an article of milk or cream, and that it was properly classified as a composite good whose classification was controlled by the element imparting the mellorine’s essential character pursuant to General Rule of Interpretation (GRI) 3(b). In this regard, Arko claimed that the mellorine either fell within HTSUS heading 0811 as a fruit or nut or, alternatively, within HTSUS heading 2016 as a food preparation not elsewhere specified. The CIT ultimately rejected both Arko’s and the CBP’s classification, and determined that the mellorine was properly classified as “other edible ice” other than a dairy product within HTSUS subheading 2105.00.50, at a duty rate of 17 percent ad valorem.
In making its determination, the CIT explained that the GRIs are to be applied in order, noting that GRI 1 requires classifying a good according to the terms of the headings and any relative section or chapter notes. Applying GRI 1, and relying on dictionary definitions of the term “edible ice,” examples of edible ice listed in Explanatory Note (EN) 21.05, and items covered by a US Food and Drug Administration (FDA) regulation governing frozen desserts, the CIT found that the mellorine constituted “other edible ice” within the meaning of HTSUS heading 2105. Because the CIT found that mellorine could be classified by application of GRI 1, it rejected Arko’s claim that GRI 3(b) should dictate classification of the mellorine. The CIT agreed with Arko, however, that the subject mellorine did not constitute an article of milk or cream. Applying factors set forth in Wilsey Foods, Inc. v. United States, the CIT found that milk or cream was not an essential ingredient, an ingredient of chief value, or a preponderant ingredient, of the mellorine. Accordingly, the CIT concluded that the mellorine was properly classified within the provision of HTSUS heading 2105, covering edible ice that is not a dairy product—2105.00.50.