CLA-2 RR:CR:GC 964159 GOB
Gail T. Cumins
Sharretts, Paley, Carter & Blauvelt, P.C.
75 Broad Street
26th Floor
New York, N.Y. 10004
RE: LCD projectors; NY 802874 revoked
Dear Ms. Cumins:
This is with respect to New York Ruling Letter (“NY”) 802874, issued to you by the Customs National Commodity Specialist Division, New York, on October 17, 1994, on behalf of Sanyo Fisher (USA) Corp. In that ruling, LCD projectors equipped with a data source and a video source were classified under subheading 8471.92.30, Harmonized Tariff Schedule of the United States (“HTSUS”). We have reviewed that classification and have determined that it is incorrect. This ruling sets forth the correct classification.
FACTS:
The LCD projectors (model PLC-300M and model PLC-320M Multimedia Data-Grade LCD Video Projectors) were described as follows in NY 802874:
The model PLC-300M employs three active matrix LCD panels, and a 640 pixel x 480 pixel multiple scanning system. This model is capable of generating computer video output in precise clear images ranging from 25 to 300 inches measured diagonally. The computer audio output is reproduced through an amplifier and speaker built into the projector’s housing. The model PLC-300M connects directly to IBM VGA, EGA, or Macintosh II computer systems. This model is equipped with a remote control, and it also features connections for other video sources such as video cassette recorders, television tuners, and camcorders.
The Model PLC-320M is a newer version of the Model PLC-300M. The primary difference between the two models is that the PLC-320M will have an even brighter display through the use of a brighter lamp, and improved LCD panels.
ISSUE:
Are the above-described LCD projectors provided for in heading 8471, HTSUS, as automatic data processing units, or in heading 8528, HTSUS, as video projectors?
LAW AND ANALYSIS:
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (“GRI’s”). 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 GRI may then be applied.
The Harmonized Commodity Description and Coding System Explanatory Notes (“EN’s”) constitute the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the EN’s 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.
Heading 8471 covers:
Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, not elsewhere specified or included[.]
Heading 8528 covers:
Reception apparatus for television, whether or not incorporating radiobroadcast receivers or sound or video recording or reproducing apparatus; video monitors and video projectors[.]
Legal Note 3 to Section XVI, HTSUS, 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.
The EN to Legal Note 3 to Section XVI, HTSUS (EN (VI)), provides in pertinent part:
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 is reconsidering the uses of 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); Lenox Collections v. U.S., 19 CIT 345, 347 (1995); Kraft, Inc. v. U.S., 16 CIT 483, 489 (1992); and G. Heileman Brewing Co. v. U.S., 14 CIT 614, 620 (1990).
The projectors at issue have two functions. They may be connected to a computer for the projection of computer-generated data images. They may also be connected directly to video devices for the projection of video images. In general, such projectors may be used to project video from a growing array of sources.
Legal Note 3 to Section XVI does not resolve the classification at issue because the projectors are composite machines and satisfactory documentary evidence has not been submitted with respect to the principal function of the projectors. As a result, we are now 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:
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.
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 projectors are composite goods. There is no essential character for the projectors because both functions are equally important. Accordingly, we proceed to GRI 3(c), i.e., the goods shall be classified under the heading which occurs last in numerical order among those which equally merit consideration.
Pursuant to GRI 3(c), we determine that the projectors are provided for in heading 8528, HTSUS. They are classified in subheading 8528.30.66, HTSUS as: “Video projectors: Color: With a flat panel screen: Other: With a video display diagonal not exceeding 34.29 cm.”
Our determination is consistent with a recent decision on similar merchandise published in the World Customs Organization (“WCO”) Compendium of Classification Opinions on the Harmonized Commodity Description and Coding System where the classification of a projector which received signals from an automatic data processing machine and a video source and whose principal function could not be determined was based upon GRI 3(c). See Opinion No. 8528.30/1 of the WCO Compendium of Classification Opinions, Amending Supplement No. 24 (August 1999). As we stated in T.D. 89-80, decisions in the Compendium of Classification Opinions should be treated in the same manner as the EN’s, i.e., while neither legally binding nor dispositive, the they provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. T.D. 89-80 further states that EN’s and decisions in the Compendium of Classification Opinions “should receive considerable weight.”
HOLDING:
The LCD projectors are provided for in heading 8528, HTSUS, and are classified in subheading 8528.30.66, HTSUS as “Video projectors: Color: With a flat panel screen: Other: With a video display diagonal not exceeding 34.29 cm.”
EFFECT on OTHER RULINGS:
NY 802874 is revoked.
Sincerely,
John Durant, Director
Commercial Rulings Division