CLA-2 RR: CR: GC 963152 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: LCD Rear Projectors; Reconsideration of NY E82322
Dear Mr. Swierupski:
This is in response to a letter dated August 13, 1999, filed by counsel on behalf of Toshiba America Consumer Products, Inc. (“Toshiba”), requesting reconsideration of NY E82322, dated June 4, 1999. Counsel subsequently withdrew the request for reconsideration. Nonetheless, we felt it beneficial to issue the ruling for future clarification. NY E82322 classified Toshiba’s Digital Information Display (DID) LCD Rear Projector Model P401LC in subheading 8528.30.6800, Harmonized Tariff Schedule of the United States (“HTSUS”), which provides for video projectors, color, with a flat panel screen, other, other, and Model P400LC under subheading 9013.80.7000, HTSUS, which provides for liquid crystal devices not constituting articles provided for more specifically in other headings. We have reviewed this ruling in light of the original submission and a further submission of January 21, 2000. Upon further review, for the reasons set forth below, NY E8237 is deemed to be correct and is affirmed.
FACTS:
The items in question are Toshiba’s DID LCD Rear Projector Models P400LC and P401LC which, according to the literature, are designed for signage applications in shops, showrooms, public spaces and other locations where high-impact information displays are essential. Each model is a 40-inch rear projection unit, which projects on to a screen which is 813mm wide and 890mm high. Several units can be arranged side-by-side to create a signboard.
Each model is a multi-media projection unit with a pixel resolution of 800 x 600 dots per inch (dpi). Model P400LC is capable of accepting various signals, including Video Graphics Array (“VGA”), Super Video Graphics Array
(“SVGA”) and Extended Graphics Array (“XGA”). There is no video input or output available for this unit. Model P401LC is also capable of receiving various signals, including VGA, SVGA and XGA. This unit, however, is equipped with video inputs that permit it to carry a video signal (NTSC/PAL).
ISSUE:
Are the DID’s properly classified in heading 8471 as automatic data processing (“ADP”) monitors, heading 8528 as video monitors, or in heading 9013 as other liquid crystal devices?
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 projectors:
Color:
With a flat panel screen:
Other:
8528.30.6800 Other.
Liquid crystal devices not constituting articles provided for more specifically in other headings…:
Other devices, appliances and instruments:
9013.80.7000 Flat panel displays other than for articles of heading 8528.
We will first consider the proper classification of Toshiba’s DID LCD Rear Projector Model P401LC, which is capable of receiving various signals, including computer (i.e., VGA, SVGA, XGA) and video (NTSC/PAL).
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 projectors. Accordingly, Legal Note 3 to Section XVI does not resolve the classification of the displays. As a result, we are of the view that the projectors 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 (7). There is no essential character to the display because both functions (use as an automatic data processing monitor and as a video projector) 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.
Toshiba’s DID LCD Rear Projector Model P401LC contains video input and video output. It is capable of accepting VGA, SVGA, XGA and video (NTSC/PAL) signals. This would be considered a “multi-media” device. Therefore, based upon the foregoing reasoning, this unit is properly classified at GRI 3(c) under subheading 8528.30.6800, HTSUS, which provides for color video projectors with a flat panel screen.
We now turn our focus to Toshiba’s DID LCD Rear Projector Model P400LC, which is capable of accepting VGA, SVGA, and XGA signals, but not video signals.
We note initially that the displays are excluded from consideration for classification in heading 8528, HTSUS, as reception apparatus for television, because, as imported, they cannot receive video signals.
Heading 8471, HTSUS, is governed by the terms of Legal Note 5 to Chapter 84, HTSUS, which provides, in relevant part:
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 of the following conditions:
It is of a kind solely or principally used in an automatic data processing system;
It is connectable to the central processing unit wither directly or through one or more other units; and
It is able to accept or deliver data in a form (codes or signals) which can by used by the system.
(D) Printers, keyboards, X-Y coordinate input devices and disk storage units which satisfy the conditions of paragraphs (B)(b) and (B)(c) above, are in all cases to be classified as units of heading 8471.
(E) Machines performing a specific function other than data processing and incorporating or working in conjunction with an automatic data processing machine are to be classified in the headings appropriate to their respective functions or, failing that, in residual headings.
We find that the displays are not described in heading 8471, HTSUS, because they are not solely or principally used in an automatic data processing system (Note 5 (B)(a)). Furthermore, these devices perform a specific function other than data processing, i.e. the display of retail advertising (Note 5 (E)). See also HQ 964848, dated May 2, 2001.
For the reasons above, we find the displays are described in heading 9013, HTSUS, as liquid crystal devices not constituting articles provided for more specifically in other headings, and are classified in subheading 9013.80.7000, HTSUS, as: “Liquid crystal devices not constituting articles provided for more specifically in other headings… Other devices, appliances and instruments: Flat panel displays other than for articles of heading 8528.”
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 for both machines. Counsel indicated that he believed NY E82322 was in error because several factors were not taken into consideration when Custom’s classified these items. Among the factors that counsel mentioned in the letter of August 13, 1999, are the following:
The fact that the projectors do not contain a television receiver, tuner, or transformer;
The merchandise is sophisticated and expensive and not practical for use as a television;
3. The merchandise was designed to be used solely as displays for data generated on the computers to which it is connected.
In addition to the reasons set forth above, we do not accept counsel’s arguments for the following reasons:
Heading 8528 does not restrict itself only to displays that contain television receivers, tuners or transformers. The terms of the heading indicate that heading 8528 provides for reception apparatus for television, whether or not incorporating radio-broadcast receivers, as well as video monitors and video projectors. The fact that the Model P401LC display does not come with a receiver, tuner or transformer does not preclude it from classification under this heading, since it is capable of displaying video signals. The Model P400LC display, which is not capable of displaying video signals, is, in fact, precluded from classification in heading 8528, HTSUS, but is properly classified under heading 9013, HTSUS, per Legal Note 5 to Chapter 84, HTSUS.
While cost is one factor that should be taken into consideration when determining principal function, it is not itself determinative. The fact that the displays are sophisticated and expensive does not mean that they cannot be classified under headings 8528 or 9013. The terms of heading 8528 include video projectors and the terms of heading 9013 include liquid crystal devices not constituting articles provided for more specifically in other headings. Thus, both headings merit consideration.
Although it is counsels contention that the projectors are solely used as displays for data generated on the computers to which they are connected, there is no indication in the provided literature, specifications, nor the company’s website that would indicate that.
The sales literature, in fact, describes a variety of signals that the two models of projectors will accept, including VGA, SVGA, XGA and video (NTSC/PAL), with the appropriate interface connector. This contradicts counsel’s claim that ADP’s are the sole input source.
HOLDING:
For the reasons stated above Toshiba’s DID LCD Rear Projector Model P401LC is to be classified under subheading 8528.30.6800, HTSUS, as: “Reception apparatus for television, whether or not incorporating radiobroadcast receivers…; video monitors and video projectors: Video projectors: Color: With a flat panel screen: Other: Other.” Toshiba’s DID LCD Rear Projector Model P400LC is to be classified under subheading 9013.80.7000, HTSUS, as: “Liquid crystal devices not constituting articles provided for more specifically in other headings… Other devices, appliances and instruments: Flat panel displays other than for articles of heading 8528.”
NY E82322, dated June 4, 1999, is affirmed.
Sincerely,
John Durant, Director
Commercial Rulings Division