CLA-2 RR: CR: GC 966487 TPB
Robert A. Shapiro
Barnes, Richardson & Colburn
1225 Eye Street, N.W.
Suite 1150
Washington, DC 20005
RE: LCD Display Modules; Digital Sign Displays
Dear Mr. Shapiro:
This is in reference to your letter dated April 16, 2003 to the Director, National Commodity Specialist Division, New York, on behalf of your client, Mitsui Comtek Corp. (“Comtek”), requesting a binding ruling as to the classification of various LCD display modules under the Harmonized Tariff Schedule of the United States (“HTSUS”). That request was referred to this office for reply.
FACTS:
The merchandise at issue are two configurations of the Torisan LCD module. The first configuration, Model Nos. TM396WX-71N31, hereafter referred to as “TM396” and TM290WX-71N31, hereafter referred to as “TM290”, consists of a LCD module, without a system board, capable of XGA-wide resolution (1280 x 768 pixels) displaying 16,777,216 colors (8-bits) with an LVDC signal interface. The only difference between the two models is the size of the viewing area. The TM396 consists of a 39.6-inch diagonal screen while the TM 290 has a 29-inch screen.
The second configuration, Model Nos. TFM-040WX-01AA, hereafter referred to as “TFM-040”, and TFM-029WX-01AA, hereafter referred to as “TFM-029”, consists of a LCD module capable of XGA-wide resolution (1280 x 768 pixels) displaying 16,777,216 colors (8-bits) with LVDS (“Low Voltage Differential Signaling”, a high-speed, low-power data transmission standard), analog-RGB and DVI-D (“Digital Video Interface” – designed for Digital signals) signal interfaces. The TFM-040 consists of a 40-inch diagonal viewing area while the TFM-029 consists of a 29-inch diagonal viewing area.
Both configurations are capable of receiving computer signals and lack television or video receivers or interfaces. The Comtek monitors are not designed to process NTSC, PAL and SECAM standards. Neither configuration has its own computer functions. The LCD modules are intended for use as interactive advertising displays in various retail centers, banks, theatres, public buildings, etc. The monitors are capable of static signals as well as motion video, so long as the image is presented as an analog or digital signal that has been specifically pre-processed by a central processing unit.
ISSUE:
Whether the Comtek monitors are classifiable as automatic data processing (“ADP”) display units under heading 8471, HTSUS, or as other liquid crystal devices of heading 9013, HTSUS?
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:
Other:
Other:
8471.60.4580 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 note initially that in order to be classified under heading 8528 as video monitors, the monitor must be capable of accepting NTSC signals or displaying video signals. You have indicated that the Comtek monitors have been specifically engineered not to display these types of signals by not incorporating a system board (signal processing IC) for video chromatic processing. The inability to display or process video signals would preclude classification under heading 8528, HTSUS, as the devices would not meet the terms of the heading.
You claim that the displays, in their condition as imported, are similar to those used in notebook computers, although they lack any computing functions of their own. You indicate that they are units of ADP systems, and should therefore be classified under heading 8471, HTSUS. To be classified as an ADP output unit within heading 8471, HTSUS, the subject merchandise must meet the terms of Legal Note 5(B) to Chapter 84, HTSUS, which provides that:
5. (B) 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;
It is connectable to the central processing unit either
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 be used by the system.
…
(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.
In your submission, you have indicated to us that the LCD displays have a variety of ADP connectors, including LVDS, analog-RGB and DVI-D interfaces, which you indicate are for PC input only. This meets the requirements of Note 5(B)(b) to Chapter 84, above.
The specifications of the monitors included as exhibits in your submission indicate that the monitors are capable of accepting input signals from CPUs. This meets the terms of Note 5(B)(c) to Chapter 84.
The only question that we are left with is whether the monitors meet the terms of Note 5(B)(a), that they are “of a kind solely or principally used in an automatic data processing system.”
In order to determine the kind of goods to which an article belongs, we must examine all pertinent factors, which may include: (1) the general physical characteristics of the merchandise; (2) the expectation of the ultimate purchasers; (3) the channels of trade in which the merchandise moves; (4) the environment of the sale (e.g. the manner in which the merchandise is advertised and displayed). See United States v. Carborundum Co., 63 C.C.P.A. 98, 102, 536 F.2d 373, 377 (Fed. Cir 1976), cert denied, 429 U.S. 979, 50 L.Ed. 2d 587. 97 S.Ct. 490 (1976); Lenox Collections v. United States, 19 CIT 345, 347 (1995).
Generally, these LCD displays are similar to the types used in notebook computers, except for their large viewing area. These displays have no computing functions of their own, however. You indicate that the Comtek modules are intended for use as interactive advertising displays in various retail centers, banks, theatres, airports, public buildings, etc. and will be capable of quickly changing the display in accordance with the desired audience. The modules will be marketed and sold directly to PC and digital signage companies. The ultimate purchaser will expect to use these displays as digital signage.
Based on the information provided to Customs, there is insufficient evidence to show that the monitor is of a kind solely or principally used with an ADP system. Therefore, we do not believe that the monitors meet the terms of note 5(B) and cannot be classified under heading 8471, HTSUS. Furthermore, note 5(B) is subject to note 5(E). Customs has previously held that LCD monitors used in digital information displays that were not capable of displaying NTSC or video signals performed a function other than data processing and were classified under heading 9013, HTSUS as other liquid crystal devices. See NY E82322, dated June 4, 1999, aff’d by HQ 963152, dated July 30, 2001; HQ 964848, dated May 2, 2001.
Since the monitors are not classifiable in heading 8471, HTSUS, nor are they specifically provided for in any other heading, they fall to be classified under heading 9013, HTSUS, which is a residual heading for liquid crystal displays that are not classifiable in any other provision.
HOLDING:
For the reasons stated above, the Comtek Models TM396, TM290, TFM-040, and TFM-029 LCD displays are to be classified under subheading 9013.80.7000, HTSUS, which provides for: “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.”
Sincerely,
Myles B. Harmon, Director
Commercial Rulings Division