CLA-2 RR:CR:GC 959945 RFA
Mr. Peter J. Gartland
Ms. Fusae Nara
Donovan, Leisure, Newton & Irvine
30 Rockefeller Plaza
New York, NY 10112
RE: Liquid Crystal Displays (LCDs); Flat Panel Displays; Output units for Automatic Data Processing (ADP) Machines; Signaling Apparatus; Principal Use; Headings 8471, 8531, and 9013; HQ 959175, 955062, 952502
Dear Mr. Gartland and Ms. Nara:
This is in response to your letter dated October 22, 1996, to Customs in New York, on behalf of Sharp Electronics Corporation, concerning the tariff classification of liquid crystal displays under the Harmonized Tariff Schedule of the United States (HTSUS). In preparing this ruling, we also considered the information provided with your letter of November 19, 1996, and March 18, 1997.
FACTS:
The merchandise consists of several types of liquid crystal displays (LCDs), labeled as XGA [Extended Graphics Array], S-VGA [Super Video Graphics Array], Standard VGA, Half-VGA, and Quarter-VGA. Each consist of the display glass, printed circuit boards (PCBs), large-scale integrated circuits, and tab interconnections, all of which are housed in bezel. The following chart lists the various types based upon certain characteristics, as well as specific model numbers for each type.
Display ³Pixel ³Number of ³Representative Type ³Configuration ³Pixels ³Part Numbers
ÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
XGA ³1028 x 768 ³786,432 ³LM18X74* ³ ³ ³LQ10PX22 ³ ³ ³LQ12DX01* ³ ³ ³LQ12X02* ³ ³ ³LQ14X01*
ÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
S-VGA ³800 x 600 ³480,000 ³LM80C032 ³ ³ ³LM80C27 ³ ³ ³LQ11S44T ³ ³ ³LQ12S31C* ³ ³ ³LQ10PS21 ³ ³ ³LQ64SP1
ÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
VGA ³640 x 480 ³307,200 ³LM64C35P ³ ³ ³LM64P839 ³ ³ ³LM64K83 ³ ³ ³LQ10D131 ³ ³ ³LQ9P161 ³ ³ ³LQ64D142
ÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
Half-VGA ³480 x 320 ³153,600 ³LM48014F ³ ³ ³LM48171
ÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
Quarter- ³320 x 240 ³76,800 ³LM32P10 VGA ³ ³ ³LM32K072 ³ ³ ³LM320045 ³ ³ ³LM32007P ³ ³ ³LM32K102 ³ ³ ³LM32C04P
The asterisk (*) next to the part numbers indicate that the diagonal measurement of the display is equal to or more than 30.5 cm.
ISSUE:
Are the subject LCDs classifiable as display units for automatic data processing (ADP) machines, or as signaling apparatus, or as liquid crystal devices not constituting articles provided for elsewhere under the HTSUS?
LAW AND ANALYSIS:
Classification of merchandise under the HTSUS is in accordance with the General Rules of Interpretation (GRI's). GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes.
LCDs are prima facie classifiable in the following HTSUS headings: 8471, which provides for ADP machines and units thereof; 8531, which provides for electric sound or visual signaling apparatus; and, 9013, which provides for liquid crystal devices not constituting articles provided for in other headings. Legal Note 1(m) to Section XVI, HTSUS (which includes chapter 84), states that: “[t]his section does not cover: [a]rticles of chapter 90.” Because of the wording of heading 9013, if the subject merchandise is provided for more specifically in another heading, it would not be classifiable in heading 9013. See Sharp Microelectronics Technology, Inc. v. United States, 932 F.Supp. 1499 (CIT 1996), aff’d., 122 F.3d 1446, CAFC Slip Op. 97-1013 (September 2, 1997). See also HQ 959175, dated November 25, 1996. Therefore, if an LCD does not meet the terms of either headings 8471 or 8531, then it is classifiable under heading 9013.
You claim that all of the subject LCDs are ADP output units under heading 8471. To be classified as an ADP unit, the subject displays must meet the terms of Legal Note 5(B) to chapter 84, HTSUS, which provides that:
Automatic data processing machines may be in the form of systems consisting of a variable number of separate units. Subject to paragraph (E) below, a unit is to be regarded as being a part of a complete system if it meets all the following conditions:
(a) It is of a kind solely or principally used in an automatic data processing system;
(b) It is connectable to the central processing unit [CPU] either directly or through one or more other units; and
(c) It is able to accept or deliver data in a form (codes or signals) which can be used by the system.
Customs has held that headings 8471 and 8531, are use provisions subject to Additional U.S. Rule 1(a), HTSUS. See HQ 956870 (July 27, 1995) and HQ 951288 (July 7, 1992). Additional U.S. Rule 1(a), HTSUS, states that: “[a] tariff classification controlled by use (other than actual use) is to be determined in accordance with the use in the United States at, or immediately prior to, the date of importation, of goods of that class or kind to which the imported goods belong, and the controlling use is the principal use.”
In HQ 952502, dated March 18, 1993, Customs determined the classification of certain LCD modules with a column configuration (Y axis) of 640 pixels and a row configuration (X axis) of 200 to 480 pixels which were connected to printed circuit boards (PCBs) populated with row and column driver integrated circuits, output connectors, backlighting, and bezel. In that ruling, Customs found that these modules met specific computer industry standards [e.g., “VGA”, Enhanced Graphics Adapter (“EGA”), or Color Graphics Adapter (“CGA”)] and, therefore, were principally used as ADP output units, classifiable under heading 8471. These industry standards are consistent with our information from VESA (Video Electronics Standards Association), an organization of major personal computer (PC) graphics vendors devoted to improving graphics standards by setting and supporting industry- wide standards for the PC, workstation, and computing environments.
Since that ruling was prepared, Customs has issued several rulings involving the classification of VGA LCD modules under heading 8471. See HQ 957163 (February 14, 1995), HQ 952973 (August 5, 1993), and HQ 953313 (May 10, 1993). In HQ 959175, dated November 25, 1996, Customs stated that:
[i]t has come to our attention that advances in technology has resulted in the computer industry adopting a new flat panel display standard referred to as Super VGA or “SVGA” for laptop and notebook computers. According to the information provided and our own on-going research in this industry, we find that the subject SVGA LCD module meets the terms of Legal Note 5(B) to chapter 84, HTSUS, because it is connectable to the CPU, capable of receiving data from an ADP system, and it is a type of display that is principally or solely used in an ADP system. Therefore, the SVGA LCD module is classifiable under heading 8471, as an ADP output unit.
Based upon HQ 952502 and HQ 959175, we find that the groups labeled as “Standard VGA” and “S-VGA” meet the terms of Legal Note 5(B) to chapter 84 and are classifiable under heading 8471, as ADP output units.
Our own continuing research has brought to our attention that the computer industry has also adopted the XGA standard for its laptop computer displays. We have found sufficient evidence to support the claim that finished XGA displays meet the terms of Legal Note 5(B) to chapter 84, HTSUS, because they are connectable to the CPU, capable of receiving data from an ADP system, and they are a type of display that is principally or
solely used in an ADP system. Therefore, the XGA displays are classifiable under heading 8471, as ADP output units.
You also state that all of the above listed LCDs can only perform their display function when connected to and, driven by, a display controller that receives coded signals from a CPU of an ADP machine. In support of this claim, you supplied literature of a typical ADP display controller. The literature states that the Chips 65520/530 High Performance Flat Panel/CRT VGA Controllers are “[f]ully compatible with IBM VGA and Enhanced backward compatibility with EGA, CGA, Hercules, and MDA without using NMIs.” This literature verifies what Customs has previously stated in its earlier rulings that VGA, EGA, and CGA type displays are principally used with ADP machines. This information does not support the claim that the LCDs which you have labeled as Half-VGA and Quarter-VGA are principally used as ADP displays.
In regards to the classification of the class of goods labeled as “Quarter-VGA”, information previously obtained from Sharp indicates that this group of LCDs have a variety of uses as displays for such things as portable data terminals, telephone consoles (indicating phone numbers, messages, etc.), digital scale (weight/price indication), and global positioning (indicates location information). In HQ 955062, dated March 21, 1994, Customs determined that LCD modules which have a principal use as global positioning, lottery system, portable data collector, medical instrument, and gasoline pump indicator meet the terms of heading 8531, as signaling apparatus, because they provide certain limited indication information to the user. Based upon HQ 955062, we find that the class of LCDs labeled as Quarter-VGA are principally used for indicating limited information to the user. Therefore, the Quarter-VGA LCDs are classifiable under heading 8531, as signaling apparatus. Because the principal use of the class and kind of Quarter-VGA LCDs is for signaling, they do not meet the terms of Legal Note 5(B)(a) and cannot be classified as an ADP output unit under heading 8471.
The remaining group, labeled as Half-VGA, consists of only two models. Both of these models are being used in portable personal computer (PC) communicators, sometimes referred to as personal digital assistants (PDAs). Because PC communicators meet the terms of an ADP machine as set out by Legal Note 5(A) to chapter 84, we find that the subject LCD models listed as Half- VGA above are ADP output units, classifiable under heading 8471. However, we note that information on this group is sparse. Customs will continue to monitor and gather information on this class of FPDs. If it is later determined that the Half-VGA class
of goods are not principally used with PC communicators or PDAs, then this portion of the ruling may be modified at a later date.
HOLDING:
The subject XGA and S-VGA model LCDs, with a display diagonal exceeding 30.5 cm, are classifiable under subheading 8471.60.45, HTSUS, which provides for: “[a]utomatic data processing machines and units thereof . . . : [i]nput or output units, whether or not containing storage units in the same housing: [o]ther: [d]isplay units: [o]ther: [o]ther . . . .” The general, column one rate of duty is 1 percent ad valorem.
The subject XGA, S-VGA, and VGA model LCDs, with a display diagonal not exceeding 30.5 cm, are classifiable under subheading 8471.60.30, HTSUS, which provides for: “[a]utomatic data processing machines and units thereof. . .: [i]nput or output units, whether or not containing storage units in the same housing: [o]ther: [d]isplay units: [w]ithout cathode-ray tube (CRT), having a visual display diagonal not exceeding 30.5 cm
. . . .” The general, column one rate of duty is free.
The subject Half-VGA model LCDs with a display diagonal not exceeding 30.5 cm, are classifiable under subheading 8471.60.30, HTSUS, which provides for: “[a]utomatic data processing machines and units thereof. . .: [i]nput or output units, whether or not containing storage units in the same housing: [o]ther: [d]isplay units: [w]ithout cathode-ray tube (CRT), having a visual display diagonal not exceeding 30.5 cm . . . .” The general, column one rate of duty is free.
The subject Quarter-VGA model LCDs are classifiable under subheading 8531.20.00, HTSUS, which provides for: “[e]lectric sound or visual signaling apparatus (for example, bells, sirens, indicator panels, burglar or fire alarms). . .: [i]ndicator panels incorporating liquid crystal devices (LCD's) or light emitting diodes (LED's). . . .” The general, column one rate of duty is 1.4 percent ad valorem.
Sincerely,
John Durant, Director
Commercial Rulings Division