OT:RR:CTF:EMAIN H303926 TPB
Area Port Director Customs and Border Protection
Electronics Center of Excellence and Expertise Port of NY/NWK
Attn: John Tremblay, Import Specialist
Re: Application for Further Review of Protest No. 270419102130; Classification of certain LCD modules
Dear Port Director:
The following is our decision as to Protest 2704-19-102130, which was filed on behalf of InnoLux Corporation (InnoLux/Protestant). The protest pertains to the classification of certain liquid crystal display (LCD) modules under the Harmonized Tariff Schedule of the United States (HTSUS). This decision takes into account information provided during our meeting with InnoLux on January 28, 2021, and Protestant’s additional submissions, dated March 21, 2021, and March 9, 2022.
FACTS:
The protested entries include five models of modules that are used in automotive applications: models GD0800EA00N40, GDJ080EA1030S, GD0800EA00340, and GD0800PA00440, and GD0420PA00240. All five models are manufactured by Innolux or its subsidiaries to the specifications provided by the ultimate customer motor vehicle manufacturer, and are produced and sold exclusively to automotive electronics suppliers approved by the ultimate customer motor vehicle manufacturer.
Protestant indicates that models GD0800EA00N40, GD0800EA00340, GD0800PA00440 and GDJ080EA1030S are said to be functionally identical, and are referred to as “the subject 8” monitors” in reference to the diagonal dimensions of the LCD screen. According to Attachment 1, included with Protestant’s submission, these are active-matrix color TFT LCD modules, which have 8-inch diagonal active area containing 800xRGB x 480 pixels and has an 8-bits (x3) colors capability. The subject modules further include an LED backlight, electronics, and an LED driver on a PCBA. The typical applications for this merchandise are automotive driver information, infotainment, navigation, and telematics systems.
After importation, the subject 8” LCD modules will be used for different applications in the manufacturer’s vehicles. They can be used to only display vehicle information including speed, mileage, battery power, gas levels, fuel, and oil levels. In addition, they can be used as the center information panel to display information regarding audio source, volume, settings, outside temperature, vehicle climate control information (temperature, fan speed, etc.), map information if the vehicle is equipped with navigation, and rear backup camera footage when the vehicle is in reverse. However, the information provided indicates that the subject LCD modules, as imported do not contain any controls.
Model GD0420PA00240 contains a 4.2-inch diagonal TFT-LCD screen and is used in electronic instrument cluster applications. After installation, this model will displays vehicle information including mileage, fuel economy, speed, trip odometer, tire pressure, navigation information, radio stations, and volume information.
ISSUE:
Whether the subject LCD modules are classified under heading 8531, HTSUS, as signaling apparatus, heading 8528, HTSUS, as monitors, or heading 9013, HTSUS, as other liquid crystal devices.
LAW AND ANALYSIS:
Initially, we note that the matters presently before us may be protested 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 2704-19-102130 is properly accorded to Protestant pursuant to 19 C.F.R. § 174.24(a) because the decision against which the protest was filed is alleged to alleged ot be inconsistent with a ruling by the Commissioner or CBP or his designee, or with a decision made by CBP with respect to the same or substantially similar merchandise.
Merchandise imported into the United States is classified under the HTSUS. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (“GRIs”) and, in the absence of special language or context which requires otherwise, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUS and are to be considered statutory provisions of law for all purposes.
GRI 1 requires that classification be determined first 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 heading and legal notes do not otherwise require, the remaining GRIs 2 through 6 may then be applied in order.
The 2017 HTSUS headings 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:
Other:
8528.59.25 With a video display diagonal not exceeding 34.29 cm
8531 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:
8531.20.00 Indicator panels incorporating liquid crystal devices (LCD's)
or light emitting diodes (LED)
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 8528.52 or 8528.62
9013.80.90 Other
As an initial matter, Protestant notes that the subject goods cannot be classified under heading 9013 if they are “provided for more specifically in other headings.” See
Sharp Microelectronics Technology, Inc. v. United States, 932 F. Supp. 1499 (CIT 1996), aff’d, 122 F.3d 1446 (Fed. Cir. 1997). Therefore, if the subject modules are described in heading 8531 or heading 8528, they cannot be classified in heading 9013. Further, Note 1(m) of Section XVI of the HTSUS provides that “this section [which includes chapter 85] does not cover . . . Articles of Chapter 90.” Note 1(m) thus states a rule of interpretation that articles, which are described in Chapter 90, cannot be classified in Chapter 85.
Heading 8531.
We will first examine the Protestant’s principal argument that the goods are specifically provided for under heading 8531 as signaling apparatus. Heading 8531, HTSUS, provides, in relevant part, for “Electric sound or visual signaling apparatus … other than those of heading 8512 or 8530.” The heading is a “use provision” subject to Additional U.S. Rule of Interpretation 1(a), which 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.” See Headquarters Ruling Letter (HQ) 951288, dated July 7, 1992. Protestant claims that because the subject monitors are of a class or kind of merchandise principally used for signaling, they are prima facie classifiable under heading 8531 as signaling apparatus.
Protestant notes that in the years following the introduction of subheading 9013.80 into the tariff schedule, CBP issued a series of rulings considering the circumstances under which LCD screens could be considered to be “signaling apparatus” of heading 8531 versus “other LCDs” of heading 9013. See, e.g., HQ 954788, dated March 18, 1993. CBP found that LCD indicator panels covered by heading 8531 are “limited by design, function or principal use to that of “signaling”; this test is still cited by CBP in classification rulings today. See New York Ruling Letter N239369, dated March 20, 2013, and HQ 954788, dated December 1, 1993.
CBP has consistently held that that only those LCDs, which are limited by design and/or principal use to “signaling” are classifiable in heading 8531, HTSUS. See Optrex America, Inc. v. United States, 427 F. Supp. 2d 1177 (Ct. Int’l Trade 2006), aff’d, 475 F.3d 1367 (Fed. Cir. 2007) (“Optrex”). See also HQ H02661, dated July 8, 2008, HQ H012694, dated August 31, 2007, and HQ H003880, dated March 27, 2007. In Optrex, the Court of International Trade (“CIT”) explained that to be classified as an indicator panel incorporating LCDs under heading 8531, HTSUS, “the article must belong to the class or kind of merchandise that is principally used to display limited information that is easily understood by the person viewing it.” Optrex, 427 F. Supp. 2d at 1198. Further, the CIT accorded the “80 character rule” – guidance developed by CBP to determine whether a character display module is principally used for signaling – “some deference” under Skidmore v. Swift & Co., 323 U.S. 134 (1944), as a reasonable interpretation. According to the 80-character rule, if a character display module can display no more than 80 characters, then, in the absence of any information to the contrary, it is deemed to belong to the class or kind of merchandise that is principally used for signaling. Optrex, at 1199.
With respect to signaling apparatus of subheading 8531.20.00, which covers indicator panels incorporating LCDs or LEDs, a determination of whether the kinds of information displayed are considered to be “limited” is informed by the exemplars provided for in the Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”). The ENs constitute the official interpretation of the Harmonized System at the international level. While not legally binding, the ENs provide a commentary on the scope of each heading and are thus useful in ascertaining the proper classification of merchandise. It is CBP’s practice to follow, whenever possible, the terms of the ENs when interpreting the HTSUS. See T.D. 89-80.
The ENs to heading 8531 provides, in relevant part, the following guidelines for identifying “indicator panels:”
(D) Indicator panels and the like. These are 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:
Room indicators. These 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.
Number indicators. The signals appear as 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.
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.
Lift indicators. These indicate, on an illuminated board, where the lift is and whether it is going up or down.
Engine room telegraph apparatus for ships.
Station indicating panels for showing the times and platforms of trains.
Indicators for race courses, football stadiums, bowling alleys, etc.
See ENs to Heading 8531, Section (D).
As Protestant notes, the examples listed in the EN have not been updated since the EN was drafted and are not intended to capture the universe of goods in this heading. However, they do provide an indication of the scope of the goods that are classified within heading 8531.
In the view of the Protestant, whether information displayed by an LCD monitor is “limited” is defined by the nature or substance of the information, not the quantity.
However, in their condition as imported, they do not provide any signaling functions nor are there any inherit limitations incorporated into these modules, either in quantity or substance. These types of panels are used to display video, maps, GPS, radio, control info, etc. Protestant acknowledges that as imported, the modules could be used for purposes other than those proffered by the importer, although it would be unlikely. Our concern, however, is the condition of the goods as imported – and as imported, the LCD modules do not meet the terms of heading 8531. This is consistent with CBP’s established reasoning on the kinds of goods classified under heading 8531. The rulings cited by Protestant all stressed the limited capabilities of the goods at issue. The products at issue here are LCD panels comprised of TFT panels, PCBAs with drive circuits, backlights, and frames and are not limited in their ability to display information in terms of substance or quantity.
Heading 8528.
In the alternative, Protestant argues that if CBP is of the view that the products at issue can be described by more than one heading, then they should be classified under heading 8528 as an LCD monitor by application of GRI 3(c). Protestant claims that a product incorporating an LCD display is considered to be a monitor of heading 8528 when it is capable of “accepting, processing, and transmitting video or ADP signals.” In Protestant’s view, because the protested products possess all of the technical characteristics identified by CBP as required for monitors of heading 8528, they are prima facie classified as articles of heading 8528.
As an initial matter, there seems to be no disagreement that the subject displays are not capable of directly connecting to and designed for use with an automatic data processing machine of heading 8471.
The Explanatory Notes to heading 8471 state, in pertinent part:
(B) MONITORS OTHER THAN THOSE 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 receiving signals when connected directly to the video camera or recorder by means of composite video, s-video or co axial cables, so that all the radio-frequency circuits are eliminated. They are typically used by television companies or for closed-circuit television (airports, railway stations, factories, hospitals, etc.). They can, moreover, have separate inputs for red (R), green (G) and blue (B), or be coded in accordance with a particular standard (NTSC, SECAM, PAL, D-MAC, etc.). For reception of coded signals, the monitor must be equipped with a decoding device covering (the separation of) the R, G and B signals. They are not fitted with connectors characteristic of data processing systems, and they do not 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. They do not incorporate a channel selector or video tuner.
U.S. Customs and Border Protection has defined “monitors” of heading 8528, HTSUS, as devices that must be capable of accepting, processing, and transmitting a video or an ADP signal. See, e.g., HQ H049555, dated April 13, 2009. However, the provided documents do not substantiate that the subject LCD modules, in their imported condition, can accept, process, and display/transmit an ADP or video signal. They are intermediate devices that may potentially be used for a number of possible applications. They do not contain components that convert video signals, such as a scaler IC, decoder IC, or application processer. In short, these panels are not advanced to the point where they are monitors or incomplete monitors waiting to be incorporated into an article of another heading. As such, they are not prima facie classifiable under heading 8528.
On May 27, 2020, Protestant made a supplemental submission to CBP, citing a decision of the U.S. Court of International Trade (CIT), Prysm, Inc. v. United States, Slip Op. 19-149 (Ct. Int’l Trade, Nov. 26, 2019). In that submission, Protestant summarizes that in Prysm, the court was asked to rule upon whether certain imported laser phosphor displays (“LPDs”) are classifiable as monitors of heading 8528, HTSUS. The LPDs at issue in Prysm consisted of tile displays. These tile displays, when combined with other, separate components, comprised a Display Wall System. The individual tile displays were designed to be stacked in groups onto metal frame walls. The court was asked whether the LPD was classifiable as a monitor of heading 8528, HTSUS, even though it lacked a processor to receive image data and convert that image data into signal data for display. Prysm argued that the LPD was only a part of a monitor, classifiable under heading 8529, because it required the separate Image Processor in order to receive and convert video signals. The government argued that the LPD was, itself, a monitor classifiable under heading 8528. Based upon lexicographic sources and expert testimony, the court determined that a “monitor” within the meaning of HTSUS heading 8528 is “a machine that receives data from an external source, and then processes and converts the data into physical output commands to display an image.” Applying this definition to the LPD, the court held that the LPD was a monitor capable of displaying an image and was therefore properly classifiable under heading 8528. The LPD’s received RBG signal data and processed that signal data to light up pixels on the array and thereby display an image.
In Protestant’s view, this decision supports their alternative classification position that the goods in question are classified under heading 8528. However, notwithstanding the physical differences between the subject merchandise and the LPD at issue in Prysm, we find that the subject merchandise does not fall under the definition of “monitor” articulated by the CIT, i.e., a machine that receives data from an external source, and then processes and converts that data into physical output commands to display an image. There is no information on the record to establish that the subject modules can perform this function. To the contrary, the record shows that the subject articles are equipped with a display screen and are designed to be incorporated into articles of other headings. While they may include intermediate assemblies designed for incorporation into other apparatus to eventually reproduce visual information, they do not feature components that convert video signals to images (e.g., scaler ICs, decoder ICs, or application processors) in their condition as imported. Taking the above into consideration, CBP is of the view that these modules are not goods of heading 8528, HTSUS.
Heading 9013.
As we have determined that headings 8531 and 8528, HTSUS, do not describe the goods at issue, we examine heading 9013, HTSUS. As noted, the port classified the subject LCD modules in subheading 9013.80.9000, HTSUS, which provides for “Liquid crystal devices not constituting articles provided for more specifically in other headings; laser, 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.”
As per the EN’s, heading 9013 provides for:
(1) Liquid crystal devices consisting of a liquid crystal layer sandwiched between two sheets or plates of glass or plastics, whether or not fitted with electrical connections, presented in the piece or cut to special shapes and not constituting articles described more specifically in other headings of the Nomenclature.
The information provided in the protest details that these items are, indeed, LCD modules consisting of liquid crystal layer that is backlit by an LED and driven by a thin film technology (TFT). As such, it is an LCD device covered by the text of heading 9013, HTSUS, and described in the above EN. At the six-digit subheading level, the instant LCD modules are clearly not covered by the provisions super to subheading 9013.80, which covers “Liquid crystal devices not constituting articles provided for more specifically in other headings…; Other devices, appliances and instruments”. We must next determine whether the TFT-LCD module is properly classified as a flat panel display “other than for articles of heading 8528…” under subheading 9013.80.70 or under 9013.80.90 as an “other” device.
HQ H252597, dated July 1, 2017, considered a TFT-LCD device that has been designed for use in industrial applications, including corporate financial data displays, industrial machine control displays, GPS displays, etc. Likewise, HQ H256543, dated July 8, 2016, HQ H255861, dated August 29, 2016, and HQ H255860, dated June 28, 2016, considered similar devices. In each of these rulings, it was determined that the LCD panels at issue were fungible in that they could be used in any number of devices, interchangeably. As such, they were classified under 9013.80.90, HTSUS.
HQ H256544, dated June 13, 2016, addresses a TFT-LCD module that was specifically manufactured to the customer’s specifications for use only with an automobile instrument cluster. Due to the fact that the module was manufactured in this way and could not be used in conjunction with any other device, they were found to be classified under 9013.80.70, HTSUS.
With regard to the instant LCD modules, we must determine whether they are for an article other than monitors of heading 8528, HTSUS, as described in the previous rulings. Based on the information provided, these displays are manufactured to be used in conjunction with multiple General Motors branded vehicles. The displays are used in either the center console or the instrument panel in the dashboard in order to allow the driver to see various vehicle information including speed, mileage, fuel economy, audio source, volume, temperature, and climate control, among others. Although they are stated to be specifically manufactured for GM vehicles, they can be used in multiple applications with multiple vehicles within the brand line. As such, they are similar to the TFT-LCD modules described in HQ H252597.
Based on the foregoing, CBP finds that the LCD modules at issue are specifically described by the text of heading 9013, HTSUS. Likewise, in their condition as imported, they are not identifiable as being for use with an article other than a monitor of heading 8528, HTSUS, i.e., they can be used in any display application. The subject LCD modules are therefore classified under subheading 9013.80.90, HTSUS, which provides for “Liquid crystal devices not constituting articles provided for more specifically in other headings…: Other devices, appliances and instruments: Other.”
HOLDING:
By application of GRIs 1 and 6, the subject LCD modules are classified in subheading 9013.80.90, HTSUS, which provides for “Liquid crystal devices not constituting articles provided for more specifically in other headings…: Other devices, appliances and instruments: Other.” The column one rate of duty is 4.5% ad valorem.
Duty rates are provided for your 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/.
You are instructed to DENY the Protest.
You are instructed to notify the protestant of this decision no later than 60 days from the date of this decision. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to this notification. Sixty days from the date of the decision, the Office of Trade, Regulations and Rulings will make the decision available to CBP personnel, and to the public on the Customs Rulings Online Search System (“CROSS”) at https://rulings.cbp.gov/, which can be found on the U.S. Customs and Border Protection website at http://www.cbp.gov and other methods of public distribution.
Sincerely,
Yulia A. Gulis, Director
Commercial and Trade Facilitation Division