CLA-2 R:C:M 956870 KCC

Mr. David C. Soto
Alexander & Co., Inc.
P.O. Box 291929
Nashville, Tennessee 37229-1929

RE: Liquid Crystal Diode Display Panels; LCDs; Additional U.S. Note 1(a); principal use; signaling apparatus; units suitable for physical incorporation into ADP machines or units thereof; EN 85.31; HRLs 951288, 954788, 953115, 952502, 951868, 952360, and 952973; LCDs not constituting articles provided for more specifically in other headings

Dear Mr. Soto:

This is in response to your letter dated August 10, 1994, on behalf of Brother Industries (USA), Inc., concerning the tariff classification of Liquid Crystal Diode Display Panels under the Harmonized Tariff Schedule of the United States (HTSUS). Copies of the design contracts and engineering blue prints were submitted for our examination. We regret the delay in responding to your request.

FACTS:

The models of Liquid Crystal Diode Display Panels (LCDs) at issue are: 1. #UG-483-001BP: 480 (wide) x 36 (high) dots per viewing area - part code US0148-001 2. #UG-48B-004BP: 480 (wide) x 64 (high) dots per viewing area - part code US0149-001 3. #UG-48D-005BP: 480 (wide) x 128 (high) dots per viewing area - part code US0150-001.

You state that the LCDs typically exhibit the following characteristics: a pixel configuration of 36 to 640 x 480, a dot pitch of from .27 to .50 mm, a thin profile, light weight, a specific liquid crystal mix (150 to 200 milliseconds response time signal to signal), and low power consumption (+5V). You state that these models are specifically produced for the Brother Industries' line of word processors as per the submitted design contracts and engineering blue prints. They are custom designed and dedicated to specific instrumental functions which limit their operational capabilities. Therefore, due to the design limitations dedicating their use specifically for automatic data processing machines (word processors), you contend that the LCDs are properly classified under subheading 8471.92.80, HTSUS, as "...[u]nits suitable for physical incorporation into automatic data processing machines or units thereof...."

ISSUE:

Are the LCDs classified under subheading 8531.20.00, HTSUS, as "[e]lectric sound or visual signaling apparatus...[i]ndicator panels incorporating liquid crystal devices (LCD's)...", or under subheading 8471.92.80, HTSUS, as "...[u]nits suitable for physical incorporation into automatic data processing machines or units thereof....", or under subheading 9013.80.60, HTSUS, as "[l]iquid crystal devices not constituting articles provided for more specifically in other headings..."?

LAW AND ANALYSIS:

The classification of merchandise under the HTSUS is governed by the General Rules of Interpretation (GRI's). GRI 1, HTSUS, states, in part, that "for legal purposes, classification shall be determined according to terms of the headings and any relative section or chapter notes...." The subheadings at issue are as follows:

8471.92.80 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...Other...Input or output units, whether or not entered with the rest of a system and whether or not containing storage units in the same housing...Other...Other...Units suitable for physical incorporation into automatic data processing machines or units thereof....

8531.20.00 Electric sound or visual signaling apparatus (for example, bells, sirens, indicator panels, burglar or fire alarms), other than those of heading 8512 or 8530; parts thereof...Indicator panels incorporating liquid crystal devices (LCD's) or light emitting diodes (LED's)....

9013.80.60 Liquid crystal devices not constituting articles provided for more specifically in other headings; lasers, other than laser diodes; other optical appliances and instruments, not specified or included elsewhere in this chapter; parts and accessories thereof...Other devices, appliances and instruments...Other.

Heading 8471, HTSUS, and heading 8531, HTSUS, have been held to be use provisions subject to Additional U.S. Note 1(a), HTSUS. See, Headquarters Ruling Letter (HRL) 951288 dated July 7, 1992. Additional U.S. Note 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.

Therefore, unless a principal use for ADP output (heading 8471, HTSUS) or signaling (heading 8531), HTSUS) can be established satisfactorily either by design limitation or other reliable means, LCDs are classifiable under subheading 9013.80.60, HTSUS.

You contend that the LCDs are classified under subheading 8471.92.80, HTSUS, as "...[u]nits suitable for physical incorporation into automatic data processing machines or units thereof...." There is a class of LCDs that are principally used for ADP display. Automatic Data Processing machine LCD flat panel displays (laptop and notebook computer displays) typically exhibit the following characteristics: pixel configuration (640 x 480), dot pitch (.27 to .30mm), thin profile, light weight, liquid crystal material mix (150 to 200 milliseconds response time signal to signal), and low power consumption (5V). See, Headquarters Ruling Letter (HRL) 952973 dated August 5, 1993, and HRL 952502 dated March 18, 1993. None of the LCDs at issue will be utilized as automatic data processing machine output devices. As stated above, ADP LCD flat panel displays are characteristically significantly larger and contain numerous lines of characters. See, HRL 951288 and HRL 952973. Therefore, the LCDs at issue are not classifiable under subheading 8471.92.80, HTSUS.

Subheading 8531.20.00, HTSUS, provides for "[e]lectric sound or visual signaling apparatus...[i]ndicator panels incorporating liquid crystal devices (LCD's)...." Therefore, to be classified in this subheading, the LCDs must be designed for "signaling."

In understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System (HCDCS) Explanatory Notes (ENs) may be consulted. The ENs, although not dispositive, provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of the HTSUS. See, T.D. 89-90, 54 Fed. Reg. 35127, 35128 (August 23, 1989). EN 85.31 (pg. 1381) is fairly descriptive and restrictive as to the types of "signaling" indicator panels and the function they must perform in order to be classifiable in heading 8531, HTSUS. EN 85.31 states indicator panels and the like: "[a]re used (e.g., in offices, hotels and factories) for calling personnel, indicating where a certain person or service is required, indicating whether a room is free or not. They include:

(1) Room indicators. There are large panels with numbers corresponding to a number of rooms. When a button is pressed in the room concerned the corresponding number is either lit up or exposed by the falling away of a shutter or flap.

(2) Number indicators. The signals appear to illuminated figures on the face of a small box; in some apparatus of this kind the calling mechanism is operated by the dial of a telephone. Also clock type indicators in which the numbers are indicated by a hand moving round a dial.

(3) Office indicators, for example, those used to indicate whether the occupant of a particular office is free or not. Some types are merely a simple "come in" or "engaged" sign illuminated at will by the occupant of the office.

(4) Lift indicators. These indicate, on an illuminated board, where the lift is and whether it is going up or down.

(5) Engine room telegraph apparatus for ships.

(6) Station indicating panels for showing the times and platforms of trains.

(7) Indicators for race course, football stadiums, bowling alleys, etc.

Certain of these indicator panels, etc., also incorporate bells or other sound signaling devices (emphasis in original).

Therefore, only those LCD's which are principally used and/or limited by design to "signaling" are classifiable under subheading 8531.20.00, HTSUS. See, HRL 954788 dated December 1, 1993, HRL 953115 dated May 10, 1993, HRL 952502, HRL 951868 dated October 31, 1992, HRL 952360 dated October 15, 1992, and HRL 951288. The LCDs at issue are designed and used for word processor displays. They are not principally used or designed as signaling indicator panels. The LCDs classifiable under subheading 8531.20.00, HTSUS, display limited indication information to a user, i.e., measurement, coordinates, flow rate, etc. The LCDs display more information than typical indicator panels. Therefore, the instant LCDs are not principally used or designed for visual signaling.

Since the LCDs at issue are not principally used or designed for signaling under subheading 8531.20.00, HTSUS, or as an ADP output under subheading 8471.92.80, HTSUS, they are classified under subheading 9013.80.60, HTSUS, which provides for "[l]iquid crystal devices not constituting articles provided for more specifically in other headings...."

HOLDING:

The LCDs, model #UG-483-001BP, model #UG-48B-004BP, and model #UG-48D-005BP, are classified under subheading 9013.80.60, HTSUS, as "[l]iquid crystal devices not constituting articles provided for more specifically in other headings.... The corresponding duty rate for articles of this subheading is 8.1 percent ad valorem.

Sincerely,


John Durant, Director
Commercial Rulings Division