CLA-2 OT:RR:CTF:EMAIN H256588 EGJ
TARIFF NO: 9013.80.70
Port Director
U.S Customs and Border Protection
605 W. 4th Ave., Suite 230
Anchorage, AK 99501
Attn: Debra Anderson, Import Specialist
RE: Application for Further Review of Protest No. 3195-13-100323; Tariff classification of a TFT LCD Panel for an Aircraft Instrument Display
Dear Port Director:
This letter is in response to the Application for Further Review (AFR) of Protest No. 3195-13-100323, filed on October 9, 2013, by counsel for L-3 Communications Corp. (Protestant). At issue is the tariff classification of a thin film transistor (TFT) liquid crystal display (LCD) panel designed for use in an aircraft instrument display by U.S. Customs and Border Protection (CBP) under the Harmonized Tariff Schedule of the United States (HTSUS).
This letter also addresses the issues raised in our office’s meeting with the Protestant and the Protestant’s counsel on September 6, 2018. This letter also takes into consideration the supplement submitted by the Protestant to our office dated October 5, 2018.
FACTS:
The instant LCD consists of a flat panel cell equipped with optical coatings, heater coatings, temperature sensors, polarizers, films and adhesives. It is also equipped with electrical contacts and connections, as well as row and column drive electronics and circuitry. The panel is made to military grade specifications for specific vibration resistances, heat tolerances, reflectance and other requirements for use in military aircraft. The panel is not equipped with touch screen technology. Pictures of the front and back sides of the panel are provided below:
After importation, the Protestant attaches the flat panel to a module assembly housed in a metal chassis. The chassis is specifically designed to fit into the cockpit of an airplane. Pictures of the assembled module and its location in the cockpit of the airplane are provided below:
According to the Protestant, each panel is made to meet stringent specifications for military cockpit requirements, although the panels are sold for use in both military and commercial aircraft. These panels are not used in any application other than avionics displays. For support, the Protestant notes that each panel is equipped with a heater to prevent the glass from fogging up or freezing at high altitudes. In addition, the panel is equipped with several connectors which line up directly with partner connectors attached to the chassis. After installation into the cockpit, the finished module will display different types of aircraft information to the pilot. This information includes navigation, global satellite positioning, speed, aircraft measurement and safety checks, as well as other data from the aircraft’s different systems.
Initially, the Protestant entered the subject merchandise under heading 8531, HTSUS, as indicator panels. However, the Port rate advanced the instant merchandise and reclassified it under subheading 9013.80.90, HTSUS, as “other” flat panel displays. The Protestant is claiming that the LCD panels should be classified under subheading 9013.80.70, HTSUS, which provides for flat panels for goods other than of heading 8528, except for subheadings 8528.51 and 8528.61, HTSUS.
ISSUE:
What is the tariff classification of the LCD panel designed for use in an aircraft instrument display?
LAW AND ANALYSIS:
The instant Protest and Application for Further Review (AFR) covers nine entries of the panels which were made between April 13, 2012, and July 31, 2012. All of the subject entries liquidated on April 12, 2013. The Protest and AFR were timely filed on October 9, 2013. The matter is protestable as a decision on classification. 19 U.S.C. §1514(a)(2). The Protestant’s AFR satisfies application criteria because the Protestant alleges that the AFR raises questions of law or fact which have not been ruled upon by CBP. 19 C.F.R. § 174.24(b). Namely, the Protestant alleges that the instant TFT LCD panels are designed for use with monitors for automatic data processing systems. In the alternative, the Protestant asserts that the panels are solely designed for use in a multifunction machine.
Classification under the Harmonized Tariff Schedule of the United States (HTSUS) is made in accordance with the General Rules of Interpretation (GRI). 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. Under GRI 6, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to GRIs 1 through 5.
The HTSUS provisions at issue are as follows:
8471 Automatic data processing machines and units thereof; (con.) 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:
* * *
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:
8528.51 Of a kind solely or principally used in an automatic data processing system of heading 8471.
8528.59 Other.
* * *
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:
9013.80.70 Flat panel displays other than for articles of heading 8528, except subheadings 8528.51 or 8528.61.
9013.80.90 Other.
* * *
Legal Note 3 to Section XVI (Chapters 84 - 85) states that:
Unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines designed for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that machine which performs the principal function.
Legal Note 3 to Chapter 90 states that:
The provisions of notes 3 and 4 to section XVI apply also to this chapter.
Note 5 to Chapter 84 provides, in pertinent part, that:
(A) For the purposes of heading 8471, the expression "automatic data processing machines" means machines capable of:
(i) Storing the processing program or programs and at least the data immediately necessary for the execution of the program;
(ii) Being freely programmed in accordance with the requirements of the user;
(iii) Performing arithmetical computations specified by the user; and
(iv) Executing, without human intervention, a processing program which requires them to modify their execution, by logical decision during the processing run.
(B) Automatic data processing machines may be in the form of systems consisting of a variable number of separate units.
* * *
It is undisputed that the LCD panel is properly classified at the six-digit level under subheading 9013.80, HTSUS. However, the question remains whether the LCD panel is properly classified as a flat panel display for certain devices under subheading 9013.80.70, HTSUS, or whether it falls to be classified as an “other” device of subheading 9013.80.90, HTSUS.
The Protestant has submitted two arguments. The first is that the LCD panel is solely designed for use with a monitor that is part of an automatic data processing (ADP) system. Note 5(A) to Chapter 84 defines an automatic data processing machine as a machine which stores processing programs, is freely programmable, performs mathematical computations, can run and execute programs without human intervention, and can make logical decisions based on those programs. Note 5(B) to Chapter 84 states that some ADP machines are presented in the form of systems, which consist of a variable number of separate units.
The Protestant takes the view that the aircraft’s operating system is an ADP system. Therefore, the instant display is designed for use solely with an ADP monitor of subheading 8528.51, HTSUS. Subheading 9013.80.70, HTSUS, provides for flat panels other than for goods of heading 8528, except for subheadings 8528.51 or 8528.61. Therefore, the Protestant asserts that the instant flat panel is properly classified under subheading 9013.80.70, HTSUS, because flat panels for monitors for ADP systems are specifically included in that subheading.
We do not agree that the aircraft’s instrument display system constitutes an ADP system of heading 8471, HTSUS. In the past, we have found that a flight computer does not rise to the level of meeting the “freely programmable” requirement set forth in Note 5(a)(ii) to Chapter 84. See Headquarters Ruling (HQ) 954788, dated December 1, 1993 (“To meet chapter 84, legal note 5, the ADP machine must be able to utilize all types of software … We are not aware of any commercial airline cockpit computers which are able to be so freely programmed.”) Therefore, we do not find that the instant LCD panel attaches to an ADP monitor.
In the alternative, the Protestant asserts that the LCD panel’s sole use is to be incorporated into an avionics display because it is made to strict specifications. Its electrical connectors line up as an exact match to connector on a metal chassis which houses an avionics module. The module can only be used in the cockpit of an aircraft; it cannot be used in other applications.
The Protestant asserts that an avionics display is a multifunction machine by application of Note 3 to Section XVI and Note 3 to Chapter 90, HTSUS. The Protestant notes that in the past, CBP has issued rulings on avionics systems, and has classified them according to the principal function which they perform. See, e.g. HQ 954788 (classified an avionics display as an indicator panel of heading 8531, HTSUS), HQ 952778, dated December 1, 1992 (classified a flight data entry panel as measuring and checking equipment of heading 9031, HTSUS), and HQ 954194, dated September 22, 1993 (classified a display management computer for aircraft under heading 9031, HTSUS).
We agree with the Protestant that the LCD panel is not designed for use with monitors of heading 8528, HTSUS. Rather, it is designed for use in an avionics system which is classifiable according to the principal function which it performs. As the LCD module will not be installed into an article classifiable under heading 8528, HTSUS, it is properly classified as a flat panel display of subheading 9013.80.70, HTSUS.
HOLDING:
By application of GRI 1 and GRI 6, the LCD panel for the aircraft instrument display is classified under subheading 9013.80.70, HTSUS. The 2012 column one, general rate of duty is free. You are instructed to GRANT the Protest.
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. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.
Sixty days from the date of the decision, the Office of International Trade, Regulations and Rulings, will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division