CLA-2 OT:RR:CTF:TCM H070634 HkP
Mr. Billy Gwin, President
Gwin Customs Consulting, Inc.
329 N. 80th Street
Seattle, WA 98103-4211
RE: Classification of Tuffline TV® display units
Dear Mr. Gwin:
This is in response to your letter dated July 23, 2009, on behalf of your client, BCR Australia Pty Ltd., and its client, Tuffline TV Pty Ltd., requesting a binding ruling on the classification of Tuffline TV® display units under the Harmonized Tariff Schedule of the United States (HTSUS).
FACTS:
The Tuffline TV® is a rectangular advertising display that can show both still images and video. It incorporates a LCD screen, loudspeakers, and an MPEG player, which is connected to the display by various cables, and has two removable and reusable color graphic panels to be applied to the front and back of the unit. The screen may have a video display diagonal of 19 inches (48.26 cm), 10.4 inches (26.41 cm), or may be custom-sized. The display unit does not incorporate a TV tuner or a CPU and cannot connect to a computer. Instead, it derives its content from a media card that has to be inserted into the MPEG player; however, the unit is not imported with the media card. The unit can be operated by either using buttons on the front control panel or by remote control and will be imported packaged together with the remote control, a power cord and transformer, and various cables.
ISSUE:
Whether the Tuffline TV® display unit is classified under subheading 8528.59.15, HTSUS, as a color monitor with a flat panel screen incorporating video recording or reproducing apparatus, with a video display diagonal not exceeding 34.29 cm, or in subheading 8528.59.20, HTSUS, as an “other” monitor.
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 2 through 6 may then be applied in order.
The HTSUS provisions under consideration are as follows:
8528 Monitors and projectors, not incorporating television reception apparatus; reception apparatus for television, whether or not incorporating radio-broadcast receivers or sound or video recording or reproducing apparatus:
Other monitors:
8528.59 Other:
Color:
With a flat panel screen:
Incorporating video recording or reproducing apparatus:
8528.59.1500 With a video display diagonal not exceeding 34.29 cm ….
8528.59.2000 Other ….
Note 4 to Section XVI, in which Chapter 85, HTSUS, is located provides:
Where a machine (including a combination of machines) consists of individual components (whether separate or interconnected by piping, by transmission devices, by electrical cables or by other devices) intended to contribute together to a clearly defined function covered by one of the headings in Chapter 84 or Chapter 85, then the whole falls to be classified in the heading appropriate to that function.
The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the HTSUS. While not 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 at the international level. See T.D. 89-80, 54 Fed. Reg. 35127 (Aug. 23, 1989). EN 85.28 provides, in relevant part:
This heading includes:
(1) Monitors and projectors, not incorporating television reception apparatus.
….
Monitors, projectors and television sets utilize different technologies, such as CRT (cathode-ray tube), LCD (liquid crystal display), DMD (digital micromirror device), OLED (organic light emitting diodes) and plasma, to display images.
Monitors and projectors may be capable of receiving a variety of signals from different sources….
Applying the provisions of Note 4 to Section XVI, we find that the Tuffline TV® is a functional unit, the clearly defined function of which is to display images stored on the media card. The display unit and MPEG player, connected together by cables, both contribute to this functionality. Furthermore, because the Tuffline TV® display unit incorporates an LCD screen, does not incorporate television reception apparatus and is capable of receiving signals from the media card, we find that it is provided for in heading 8528, HTSUS, as a monitor. The unit with the 10.4 inch video display diagonal is classified in subheading 8528.59.15, HTSUS, as a color monitor with a flat panel screen incorporating video recording or reproducing apparatus, with a video display diagonal not exceeding 34.29 cm. The unit with the 19 inch video display diagonal is classified in subheading 8529.59.20, HTSUS, as a flat screen color monitor with video recording or reproducing apparatus, “other” than with a video display diagonal not exceeding 34.29 cm.
The Tuffline TV® display units are imported packaged for retail sale with a remote control (heading 8526, HTSUS), various cables (heading 8544, HTSUS) and a transformer (heading 8504, HTSUS). All the items are classifiable in different headings and are “put up together” to enable a user to operate the display unit. Consequently, the items may not be classified separately under their respective headings but must be classified as a set pursuant to GRI 3(b), which states that goods put up in sets for retail sale shall be classified as if they consisted of the material or component which gives them their essential character. As stated by the Court of International Trade in Structural industries v. United States, 360 F. Supp. 2d 1330, 1336 (citations omitted) (2005), “the essential character of an article is that which is indispensable to the structure, core or condition of the article, i.e., what it is.” See also Conair Corporation v. United States, 29 Ct. Int’l Trade, 888, 895 (citations omitted) (2005), (discussing “the concept of ‘essential character’ found in GRI 3(b)”). CBP finds that the item which imparts the essential character of this set is the display unit (monitor). It is the dominant component, by use and cost in relation to the other constituent components of the set. It is also the reason why a consumer would purchase the set.
HOLDING:
By application of GRI 1 (Note 4 to Section XVI) and 3(b), the Tuffline TV® display unit is classified in heading 8528, HTSUS. The unit with the 10.4 inch (26.41 cm) video display diagonal is specifically classified in subheading 8528.59.15, HTSUS, which provides for: “Monitors and projectors, not incorporating reception apparatus;…: Other monitors: Other: Color: With a flat panel screen: Incorporating video recording or reproducing apparatus: With a video display diagonal not exceeding 34.29 cm.” The 2009 column one, general rate of duty is Free. The unit with the 19 inch (48.26 cm) video display diagonal is specifically classified in subheading 8528.59.20, HTSUS, which provides for: “Monitors and projectors, not incorporating reception apparatus;…: Other monitors: Other: Color: With a flat panel screen: Incorporating video recording or reproducing apparatus: Other.” The 2009 column one, general rate of duty is 3.9% ad valorem.
Duty rates are provided for your convenience and subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at www.usitc.gov.
A copy of this ruling letter should be attached to entry documents filed at the time the goods are entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the CBP officer handling the transaction.
Sincerely,
Gail A. Hamill, Chief
Tariff Classification and Marking Branch