CLA-2 RR: CR: GC 963314 TPB
Mr. Robert B. Swierupski
Director, National Commodity Specialist Division
U.S. Customs Service
6 World Trade Center, Room 423
New York, NY 10048
RE: Wide Screen Plasma Displays; Reconsideration of HQ 962677
Dear Mr. Swierupski:
This is in response to a letter dated December 9, 1999, filed by counsel on behalf of Toshiba America Consumer Products, Inc. (“Toshiba”), requesting reconsideration of HQ 962677, dated September 23, 1999. Counsel subsequently withdrew the request for reconsideration. Nonetheless, we felt it beneficial to issue the ruling for future clarification. HQ 962677 classified Toshiba’s Plasma Wide Screen Display, Model PD42W1, in subheading 8528.21.7000, Harmonized Tariff Schedule of the United States (“HTSUS”), which provides for video monitors, color, with a flat panel screen, other, other. We have reviewed this ruling in light of counsel’s original submission of March 15, 1999, and further submission of December 9, 1999. Upon further review, for the reasons set forth below, HQ 962677 is deemed to be correct and is affirmed.
FACTS:
The item at issue is Toshiba’s Plasma Wide Screen Display, Model PD42W1. It is a 42-inch color plasma display with an 852 x 480 dot configuration and a pixel pitch of 1.08mm. The display area is 920 x 518 mm. There are 16,770,000 colors and the contrast is 550:1 with brightness of 350 cd/sq. m (white peak). The product does not contain a video tuner or television receiver. The monitor is capable of displaying computer images through connections to a personal computer (PC) and can display video signals from various sources. The monitor has a depth of 3.5 inches, or 89 mm, and a weight of 72.8 pounds, or 33 kg. An infrared remote controller operates it. The technology allows viewing
images on the screen in a breadth of 160 degrees without seeing any image distortion.
ISSUE:
Is the Wide Screen Plasma Display properly classified under subheading 8471.60.4580, HTSUS, which provides for automatic data processing machines and units thereof…input or output units…other, display units, other, other, other; or, under subheading 8528.21.7000, Harmonized Tariff Schedule of the United States (“HTSUS”), which provides for video monitors, color, with a flat panel screen, other, other.
LAW AND ANALYSIS:
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (“GRIs”). GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative Section or Chapter Notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs may then be applied.
The Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”) constitute the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80.
The HTSUS provisions under consideration are as follows:
Automatic data processing machines and units thereof…
Input or output units, whether or not containing storage units in the same housing:
Other:
Display Units:
Other:
8471.60.45 Other:
8471.60.4580 Other.
Reception apparatus for television, whether or not incorporating radiobroadcast receivers…; video monitors and video projectors:
Video Monitors:
Color
With a flat panel screen
Other
8528.21.7000 Other
Legal Note 3 to Section XVI, HTSUS, which covers the goods of chapters 84 and 85, provides: “Unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines adapted for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function.”
General EN (VI) to Section XVI, provides the following guidelines:
In general, multi-function machines are classified according to the principal function of the machine.
Where it is not possible to determine the principal function, and where, as provided in Note 3 to the Section, the context does not otherwise require, it is necessary to apply General Interpretive Rule 3 (c)…
Customs has considered the uses of goods such as monitors and projectors and the evidentiary requirements of Legal Note 3 to Section XVI. The courts have provided factors, which are indicative but not conclusive, to apply when determining whether merchandise falls within a particular class or kind. They include: general physical characteristics, expectation of the ultimate purchaser, channels of trade, environment of sale (accompanying accessories, manner of advertisement and display), use in the same manner as merchandise which defines the class, economic practicality of so using the merchandise, and recognition in the trade of such use. See U.S. v. Carborundum Co., 63 CCPA 98, 102, 536 F. 2d 373, 377 (1976), cert denied, 429 U.S. 979 (1976). We note that in Lenox Collections v. U.S., 19 CIT 345, 347 (1995) and Kraft, Inc. v. U.S., 16 CIT 483, 489 (1992) the court applied the Carborundum factors to principal use. See also G. Heileman Brewing Co. v. U.S., 14 CIT 614, 620 (1990).
After a careful consideration of all of the available information, including that submitted by counsel and through our own research, we find that we are unable to determine the principal function of the subject display. Accordingly, Legal Note 3 to Section XVI does not resolve the classification of the display. As a result, we are of the view that the display cannot be classified based upon GRI 1. GRI 2 is not applicable here. GRI 3 provides as follows:
When, by application of rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows:
(a) The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods.
(b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.
When goods cannot be classified by reference to 3(a) or 3(b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration.
EN (VIII) for GRI 3(b) provides:
The factor which determines essential character will vary as between different kinds of goods. It may, for example, be determined by the nature of the material or component, its bulk, quantity, weight or value, or by the role of a constituent material in relation to the use of the goods.
At GRI 3(a), neither of the two competing headings provides a more specific description than the other. Pursuant to GRI 3(b), the displays are a composite good meeting technical specifications for use as goods of both headings. See EN 84.71 (I) (D) and EN 85.28 (6). There is no essential character to the display because both functions (use as an automatic data processing monitor and as a video monitor) are equally important. Accordingly, we proceed to GRI 3(c), i.e., the good shall be classified under the heading which occurs last in numerical order among those which equally merit consideration. See also the EN to Legal Note 3 to Section XVI, HTSUS (EN (VI)), excerpted above.
Counsel argued that subheading 8471.60.4580, HTSUS, which provides for automatic data processing machines and units thereof, display units was the sole correct provision. Counsel set forth the reasons believed that HQ 962677 was in error as follows:
The Plasma Wide Screen Display’s technology and specifications indicate that it is principally used as an ADP display, not as a TV or video monitor (emphasis original);
The Plasma Wide Screen Display’s applications indicate that it is principally used in group settings, not in individual recreational or home environments;
Toshiba’s marketing materials indicate that the product has been designed and will be marketed and sold with the idea that computers are the primary input device;
The projectors are properly classifiable under HTSUS subheading 8471.60.4580 by reference to GRI 1 only, because they perform only one function – that of display (emphasis original);
For the following reasons, we are not persuaded by counsel’s arguments:
Although it is counsel’s contention, there is no indication in the provided literature, or specifications that would indicate that the Plasma Wide Screen Display’s technology is principally used for ADP displays, rather than video monitors. To the contrary, all of the literature stresses the flexibility and versatility of the merchandise, in that it is adaptable to receive information from various feeds, including ADP and component video. Factors like the bandwidth of the display and its 16:9 aspect ratio reinforce the multi-functionality of the plasma display.
2. There is nothing to indicate that items classified in heading 8528, HTSUS, are to be limited to individual recreational or home environments. While the EN’s to heading 8528 list various types of machines covered by that heading, there is nothing in the language of the ENs that could lead one to extrapolate that the list is exhaustive or limits the environment of use.
Once again, nothing in the materials provided would indicate that the products would be marketed and sold with the idea that computers are the primary input devices. The marketing materials list several forms of input, including ADP’s, component video, DVD, laserdisc, videotape, PAL and NTSC.
As explained above, the merchandise at issue here performs two or more complementary or alternative functions (e.g., displaying computer images and displaying television/video images). These are separate and distinct functions that are described in two separate headings. Because the Plasma Wide Screen Display has been designed to accept input from various feeds, be it from an ADP, component video, DVD, laserdisc, videotape, HDTV, etc., all functions must be taken into consideration. It would be overly broad to combine these into that of a single function: display, when more specific descriptions exist under separate headings.
Therefore, Toshiba’s Plasma Wide Screen Display, Model PD42W1 is properly classified under subheading 8528.21.7000, HTSUS. This ruling is consistent with our determinations in HQ 960282, dated October 28, 1998, HQ 961466, dated April 6, 1999, and HQ 962557, dated October 12, 2000. In those rulings, Customs classified monitors in heading 8528, HTSUS, based upon GRI 3(c) where there was no satisfactory documentary evidence with respect to the principal function of the projectors.
HOLDING:
For the reasons stated above, Toshiba’s Plasma Wide Screen Display, Model PD42W1 is to be classified under subheading 8528.21.7000, HTSUS, as: video monitors, color, with a flat panel screen, other, other.
HQ 962677, dated September 23, 1999, is affirmed.
Sincerely,
John Durant, Director
Commercial Rulings Division