CLA-2 OT:RR:CTF:TCM H303739 EKR
Center Director, Electronics Center of Excellence and Expertise
U.S. Customs and Border Protection
Los Angeles Service Port
301 E. Ocean Blvd.
Long Beach, CA 90802
ATTN: Merari Ortiz, Senior Import Specialist
RE: Application for Further Review of Protest No. 2720-19-100330; Classification of Displays to be installed into Automatic Data Processing Machines
Dear Center Director:
This is in response to the Application for Further Review (“AFR”) of Protest 2720-19-100330, dated January 17, 2019, filed on behalf of QCH, Inc. (“QCH”), in response to your classification of three models of displays featuring thin-film-transistor (“TFT”) liquid-crystal display (“LCD”) technology (“the displays”) under the Harmonized Tariff Schedule of the United States (“HTSUS”). The articles were entered between October 2, 2017 and July 26, 2018, and liquidated between October 12, 2018 and January 11, 2019. In reaching the determination below, we have considered information presented in QCH’s January 17, 2019 protest filing, as well as additional information provided by counsel on August 17, 2020.
FACTS:
According to the request, the displays are color active-matrix liquid-crystal displays with white light-emitting diode (“LED”) backlight systems. They are imported without a backlight driver. There are three display models at issue. The first model has a 27-inch active display area with a 5120 horizontal by 2880 vertical pixel array resolution, with a display pitch of 0.11625mm by 0.11625mm. The second model has a 21.5 inch active display area with a 1920 horizontal pixel by 1080 vertical pixel array, and a display pitch of 0.2475mm by 0.2475mm. The third model also has a 21.5 inch active display area with a 4096 horizontal pixel by 2304 vertical pixel array, and a display pitch of 0.11595mm by 0.11595mm. All three displays are designed to apply the 10-bit 8Lane display port interface, intended for applications requiring high brightness, wide viewing angle, high color saturation, and high color. All three display models are designed with glare-free surfaces and flicker-free displays.
Each display is designed to connect to an all-in-one automatic data processing (“ADP”) machine, in which the ADP machine and the display form a single unit. The instant displays are designed to be connected to an ADP machine via a 60 pin embedded DisplayPort (“eDP”) connector, which accepts the signal from the main logic board of the ADP machine to the timing controller integrated circuit (“TCON”) of the display, which in turn converts the signal into graphic images on the display. Because the displays are destined for an all-in-one ADP machine, they are imported without an external housing or a power cord. The displays do not contain a channel selector or video tuner, and cannot be operated by remote control.
ISSUE:
Whether the displays in question are classified under heading 8528, HTSUS, as “Monitors… not incorporating television reception apparatus…” or under heading 9013, HTSUS, as “Liquid crystal devices not constituting articles provided for more specifically in other headings…”
LAW AND ANALYSIS:
Initially, we note that the matters protested are protestable under 19 U.S.C. §1514(a)(2) as decisions on classification. The protest was timely filed, within 180 days of liquidation of the first entry. (Miscellaneous Trade and Technical Corrections Act of 2004, Pub.L. 108-429, § 2103(2) (B) (ii), (iii) (codified as amended at 19 U.S.C. § 1514(c) (3) (2006)). Further Review of Protest No. 2720-19-100330 is properly accorded to Protestant pursuant to 19 C.F.R. § 174.24(b) because the decision against which the protest was filed is alleged to involve questions of law or fact, which have not been ruled upon by the Commissioner of Customs or his designee, or by the courts.
Classification under the HTSUS is determined 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.
In addition, in interpreting the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System may be utilized. The ENs, although not dispositive or legally binding, provide a commentary on the scope of each heading, and are generally indicative of the proper interpretation of the HTSUS. See T.D. 89 80, 54 Fed. Reg. 35127 (August 23, 1989). The 2017 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:
8528.52.00 Capable of directly connecting to and designed for use with an automatic data processing machine of heading 8471.
* * * * *
9013 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:
9013.80 Other devices, appliances, and instruments:
9013.80.90 Other.
Note 1(m) to Section XVI, HTSUS, provides, in pertinent part, that “[t]his section does not cover… [a]rticles of chapter 90.”
Note 2 to chapter 90, HTSUS, provides, in pertinent part, as follows:
Subject to note 1 [to chapter 90], parts and accessories for machines, apparatus, instruments or articles of this chapter are to be classified according to the following rules:
(a) Parts and accessories which are goods included in any of the headings of this chapter or of chapter 84, 85 or 91 (other than heading 8487, 8548 or 9033) are in all cases to be classified in their respective headings….
EN 85.28 describes the scope of heading 8528, HTSUS, and includes the following description of monitors classified in heading 8528, HTSUS:
(A) MONITORS CAPABLE OF DIRECTLY CONNECTING TO AND DESIGNED FOR USE WITH AN AUTOMATIC DATA PROCESSING MACHINE OF HEADING 84.71
This group includes monitors which are capable of accepting a signal from the central processing unit of an automatic data processing machine and provide a graphical presentation of the data processed. These monitors are distinguishable from other types of monitors
(see (B) below) and from television receivers.
The monitors of this group may be characterized by the following features:
(i) They usually display signals of graphics adaptors (monochrome or colour) which are integrated in the central processing unit of the automatic data processing machine;
(ii) They do not incorporate a channel selector or video tuner;
(iii) They are fitted with connectors characteristic of data processing systems (e.g., RS-232C interface, DIN, D-SUB, VGA, DVI, HDMI or DP (display port) connectors);
(iv) The viewable image size of these monitors does not generally exceed 76 cm (30 inches);
(v) They have a display pitch size (usually smaller than 0.3 mm) suitable for close proximity viewing;
(vi) They may have an audio circuit and built-in speakers (generally, 2 watts or less in total);
(vii) They usually have control buttons situated in the front panel;
(viii) They usually cannot be operated by a remote control;
(ix) They may incorporate tilt, swivel and height adjusting mechanisms, glare-free surfaces, flicker-free display, and other ergonomic design characteristics to facilitate prolonged periods of viewing at close proximity to the monitor;
(x) They may utilize wireless communication protocol to display data from an automatic data processing machine of heading 84.71.
* * * * *
Per Note 1(m) to Section XVI, we begin by considering heading 9013, HTSUS, as articles classified in chapter 90, HTSUS are excluded from classification in the headings of Section XVI, which includes chapters 84 and 85, HTSUS. Heading 9013, HTSUS, covers “[l]iquid crystal devices not constituting articles provided for more specifically in other headings…” Therefore, and bearing in mind the terms of Note 2(a) to chapter 90, supra, we must first consider whether another heading, namely heading 8528, HTSUS, mores specifically provides for the articles at issue.
In considering whether the displays are “monitors” of heading 8528, HTSUS, we are guided by the Court of International Trade’s slip opinion in Prysm, Inc. v. United States, No. 18-00151, 2019 Ct. Int’l Trade LEXIS 150 (Ct. Int’l Trade Nov. 26, 2019). The court noted that neither the Section Notes for Section XVI, nor the Chapter Notes for Chapter 85, nor the EN for heading 8528 expressly define “monitors.” The court highlighted the language of EN 85.28, which describes a monitor as an apparatus “to display images,” and states that monitors “may be capable of receiving a variety of signals from different sources.” Finding no legislative intent to the contrary, the court construed the term “monitor” in accordance with its common and commercial meaning, stating:
[T]he court accepts the Oxford English Dictionary's definition of "monitor" as elucidated by the interpretative guidance of EN 85.28, and concludes that, for tariff purposes, the following definition of "monitor" applies: a monitor is a machine that receives data from an external source, and then processes and converts that data into physical output commands to display an image.”
Prysm, slip. op. at 16-17. Applying this definition to the displays at issue, we have determined that QCH’s displays are monitors. QCH’s displays are designed to receive data from a source external to the monitor, the ADP machine, using the eDP connection. The TCON then processes that data to display an image.
This conclusion is further bolstered by CBP rulings distinguishing monitors of heading 8528, HTSUS, from displays of heading 9013, HTSUS. For example, in Headquarters Ruling Letter (“HQ”) H252597 (July 1, 2017), CBP determined that TFT-LCDs imported without components such as a controller, inverter, OSD board, and cables were incapable of “receiving, amplifying or processing video signals.” As a result, the displays could not be classified as monitors of heading 8528, HTSUS, and were instead correctly classified in heading 9013, HTSUS. Similarly, in HQ H049555 (April 13, 2009), CBP considered the classification of TFT-LCDs imported with drive circuitry, but without a controller chip or card needed to process incoming signals. CBP determined that the displays at issue in HQ H0499555 could not be classified as monitors of heading 8528, HTSUS, because they did not contain the necessary circuitry to “accept, process, and transmit a video or ADP signal.” As a result, the displays were also correctly classified in heading 9013, HTSUS. Applying this standard, in New York Ruling (“NY”) N291842, CBP considered the classification of a virtual reality headset, comprised of goggles fitted with two small LCD displays and HDMI and USB connections. CBP determined that the displays, through the HDMI or USB connections, were capable of accepting, processing, and displaying an ADP signal, and, as a result, classified the headset in heading 8528, HTSUS. As noted above, QCH’s displays, as imported, are able to accept, process, and transmit a signal from the ADP machine with which they are designed to be paired.
To classify the instant displays at the subheading level, we are again guided by CBP rulings and EN 85.28, which provides a list of features commonly found in monitors “capable of directly connecting to and designed for use with an automatic data processing machine of heading 84.71,” as distinguished from other types of monitors. CBP has consistently considered the features listed in the EN when determining whether a monitor is appropriately classified in heading 8528.52.00, HTSUS, as a monitor”[c]apable of directly connecting to and designed for use with an automatic data processing machine of heading 8471.” QCH’s displays incorporate a number of these features. They “display signals of graphics adaptors … integrated in the central processing unit of the automatic data processing machine.” EN 85.28(A)(i). They do not include a channel selector or video tuner, but are instead fitted with “connectors characteristic of data processing systems,” namely an eDP connection. EN 85.28(A)(ii)-(iii). The viewable image size for each display model is less than 30 inches, and all three have a display pitch smaller than 0.3 mm. EN 85.28(A)(iv)-(v). The displays cannot be operated by a remote control, and incorporate glare-free and flicker-free features to facilitate prolonged periods of viewing at close proximity. EN 85.28(A)(viii)-(ix). As a result, the displays are classified in subheading 8528.52.00, HTSUS.
HOLDING:
The Protest is GRANTED. By application of GRI 1, the subject displays are classified under heading 8528, HTSUS, specifically in subheading 8528.52.00, which provides for: "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: Capable of directly connecting to and designed for use with an automatic data processing machine of heading 8471.” The 2017, column one, general rate of duty is free.
Duty rates are provided for convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the internet at www.usitc.gov/tata/hts/.
In accordance with Sections IV and VI of the CBP Protest/Petition Processing Handbook (HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the CBP Form 19, to the Protestant no later than 60 days from the date of this letter. Sixty days from the date of the decision, the Office International Trade, Regulations and Rulings, will make the decision available to CBP personnel, and to the public on the CBP Home Page at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Craig T. Clark, Director
Commercial and Trade Facilitation Division