The Court of Appeals for the Federal Circuit has issued a precedential opinion reversing a Court of International Trade decision and holding that specialized baby formulas designed for children with chronic medical conditions qualify as duty-free medicaments under HTSUS heading 3004.
This case centered on five imported products classified by the Food and Drug Administration as medical foods. These formulas, intended for therapeutic use under medical supervision, were initially classified by U.S. Customs and Border Protection as miscellaneous edible preparations under HTSUS 2106.90.99 (6.4 percent duty). The plaintiff argued for classification under Chapter 30, which covers pharmaceutical products, or alternatively under HTSUS 9817.00.96 as articles for handicapped persons.
The Court of International Trade sided with CBP, citing Chapter 30 Note 1(a), which excludes foods or beverages, including dietetic foods, from classification under that chapter. However, the CAFC rejected this interpretation, emphasizing that Note 1(a) should be narrowly read to exclude foods marketed for general dietary use, not specialized formulations created from chemical-level substances for therapeutic purposes.
The court noted that the plaintiff’s products, though lacking active pharmaceutical ingredients, are mixed preparations for therapeutic or prophylactic uses that are sold in measured doses, aligning squarely with HTSUS heading 3004. The court found “substantial difficulties” in applying Note 1(a) to these products and concluded that heading 3004’s language “clearly applies.”
The case was remanded to the CIT to determine the precise subheading, though duty-free status is effectively confirmed.
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