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HQ 952246


November 10, 1992

CLA-2 CO:R:C:M 952246 MBR

CATEGORY: CLASSIFICATION

TARIFF NO.: 8471.92.80; 8531.20.00; 9013.80.60

Mr. Dennis Heck
Tower Group International, Inc.
5420 West 104th Street
Los Angeles, CA 90045

RE: Epson America, Inc.; Liquid Crystal Display; LCD; Signaling; ADP Display; 8531; 8471; 9013; HQ 951609; HQ 951288; HQ 952360; E.M. Chemicals v. United States

Dear Mr. Heck:

This is our reply to your letter of July 16, 1992, requesting classification of Liquid Crystal Displays (LCDs), under the Harmonized Tariff Schedule of the United States (HTSUS).

FACTS:

EPSON's dot matrix LCD modules consist of a newly developed TN and STN positive/reflective type liquid crystal display with high-contrast, wide-viewing angle and wide operating temperature range, C-MOS LSI driver and controller. EPSON's easily installed LCD modules have a multiple instruction set, and a wide variety of applications. The provided literature delineates the following applications: portable computers, hand-held terminals, computer terminals, word processor/typewriters, instrument devices, POS terminals, telecommunications terminals, and synthesizers. The EA and EG-X Series have built-in DATA RAM for display data storage/refresh on board which provide for easy microprocessor interface with most CPUs.

The features of the EA Series are as follows: alphanumeric and special symbols, 5 x 7 dot matrix with cursor, 5 x 11 dot matrix without cursor, 5 x 12 dot matrix without cursor, and 16 to 80 character display.

The EG Series features are as follows: 1/64 to 1/242 multiplexing, graphics and characters, special controller. The EG- X Series provides easy connection to the bus line of most 4-bit/8- bit microcomputers, and has both graphics and characters.

The Test and Control Module (TCM) and the Epson Custom Module (ECM) contain row and column drivers and are utilized as ADP displays, fish finders, point of sale terminals, medical equipment, etc.

ISSUE:

Are liquid crystal displays classified under heading 8531, HTSUS, which provides for electric sound or visual signaling apparatus, or under heading 8471, HTSUS, which provides for ADP output devices, or under heading 9013, HTSUS, which provides for liquid crystal devices, under the Harmonized Tariff Schedule of the United States (HTSUS)?

LAW AND ANALYSIS:

The General Rules of Interpretation (GRI's) to the HTSUS govern the classification of goods in the tariff schedule. GRI 1 states, in pertinent part:

...classification shall be determined according to the terms of the headings and any relative section or chapter notes...

Liquid crystal displays (LCDs) are prima facie classifiable under the following subheadings:

8531 Electric sound or visual signaling apparatus (for example, bells, sirens, indicator panels...

8531.20.00 Indicator panels incorporating liquid crystal devices (LCD's) or light emitting diodes (LED's)

9013 Liquid crystal devices not constituting articles provided for more specifically in other headings

9013.80.60 Other devices, appliances and instruments: Other

8471 Automatic data processing machines and units thereof

8471.92.80 Other: Input or output units...: Other: Other: Units suitable for physical incorporation into automatic data processing machines or units thereof

Heading 8531, HTSUS, provides for electric sound or visual signaling apparatus. Therefore, to be classifiable in this heading, the apparatus must be designed for "signaling."

The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) to heading 8531, HTSUS, page 1381, are fairly descriptive and restrictive as to the types of "signaling" indicator panels and the like must perform in order to be classifiable in that provision. It states: "[t]hese 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:

(1) Room indicators. These are large panels with numbers corresponding to a number of rooms...

(2) 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.

(3) Office indicators, for example, those used to indicate whether the occupant of a particular office is free or not...

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

Therefore, only those LCDs which are limited by design and function to that of "signaling," are classifiable in heading 8531, HTSUS. In HQ 951288, dated July 7, 1992, we held that the Epson EA-D16125AR-S (2 lines of 16 characters) is restricted by its limited operational capabilities to that of signaling functions, and is classifiable under heading 8531, HTSUS.

E.M. Chemicals v. United States, Appeal No. 90-1141, Cust. Bul. Vol. 24, No. 51, (1990), 13 CIT 849, 728 F. Supp. 723 (1989), held that under the TSUS, liquid crystals were classifiable under item 685.70 (the predecessor provision to heading 8531, HTSUS). However, there has been a significant change in the relevant tariff provisions under the HTSUS. In fact, heading 9013, HTSUS, which provides for LCDs specifically, is a new provision under the HTSUS. Furthermore, LCDs have been technologically developed for a myriad of uses, many of which cannot be said to be for "signaling."

Due to the expansive character capabilities of the EG-2401S- ER-1 (1 line with 64 characters) and EG-7500B-NS-1 (1 line with 200 characters) a principal use of signaling cannot be supported. See HQ 951288, dated July 7, 1992, for a protest decision regarding Epson LCDs.

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). The Epson EG7009N-NS 8834COS ADP display subassembly is a complete ADP Flat Panel Display, missing only the exterior housing. Therefore, pursuant to GRI 2(a), this model has the essential character of a finished ADP display, classifiable under subheading 8471.92.80, HTSUS, which provides for ADP output units suitable for physical incorporation into ADP machines (notebook or laptop ADPs). See HQ 951609, dated October 20, 1992, for a decision regarding ADP LCD glass sandwiches, which were not classifiable as unfinished ADP output units because they lacked the essential character of the finished display. For other rulings regarding LCDs, see HQ 952360, and HQ 951288, dated July 7, 1992.

Section XVI, Legal Note 1(m) states that: "[t]his section does not cover: [a]rticles of chapter 90." Heading 9013, HTSUS, provides for: "[l]iquid crystal devices not constituting articles provided for more specifically in other headings." Therefore, if the Epson LCDs are provided for more specifically in another heading, they would not be classifiable in heading 9013, HTSUS.

Therefore, unless a principal use for signalling (heading 8531, HTSUS) or as an ADP output unit (heading 8471, HTSUS) can be established satisfactorily either by design limitation or other reliable means, LCD displays are classifiable in subheading 9013.80.60, HTSUS, which provides for: "[l]iquid crystal devices not constituting articles provided for more specifically in other headings: [o]ther devices, appliances and instruments: [o]ther."

The Test and Control Module (TCM) and the Epson Custom Module (ECM) contain row and column drivers and are utilized in numerous applications, such as ADP displays, fish finders, point of sale terminals, medical equipment, etc. Therefore, since there appears to be no principal use and no design limitations, the TCM and ECM are classifiable in subheading 9013.80.60, HTSUS.

HOLDING:

The Epson EA-D16125AR-S (2 lines of 16 characters) is restricted by its limited operational capabilities to that of signalling functions, therefore, it is classifiable in subheading 8531.20.00, HTSUS, which provides for: "[e]lectric sound or visual signaling apparatus (for example, bells, sirens, indicator panels...: [i]ndicator panels incorporating liquid crystal devices (LCD's) or light emitting diodes (LED's)."

Due to the expansive character capabilities of the EG-2401S- ER-1 (1 line with 64 characters) and EG-7500B-NS-1 (1 line with 200 characters) a principal use of signalling is not present. Therefore, they are classifiable in subheading 9013.80.60, HTSUS, which provides for: "[l]iquid crystal devices not constituting
articles provided for more specifically in other headings: [o]ther devices, appliances and instruments: [o]ther."

The Epson EG7009N-NS 8834COS ADP display subassembly is a complete ADP Flat Panel Display, missing only the exterior housing. Therefore, pursuant to GRI 2(a), this model has the essential character of a finished ADP display, and is classifiable under subheading 8471.92.80, HTSUS, which provides for ADP output units suitable for physical incorporation into ADP machines (notebook or laptop ADPs).

The Test and Control Module (TCM) and the Epson Custom Module (ECM) contain row and column drivers and are utilized in numerous applications, such as ADP displays, fish finders, point of sale terminals, medical equipment, etc. Therefore, since there appears to be no principal use and no design limitations, the TCM and ECM are classifiable in subheading 9013.80.60, HTSUS.

Sincerely,

John Durant, Director

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