HQ 0952502 - Toshiba America Electronic Components, Inc.; Liquid Crystal Display; LCD; ADP Output Display; 8531; 8471; 9013; HQ 952246; HQ 951609; HQ 951288; HQ 952360; E.M. Chemicals v. United States - United States International Trade Commision Rulings

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HQ 952502

March 18, 1993

CLA-2 CO:R:C:M 952502 MBR

CATEGORY: CLASSIFICATION

TARIFF NO.: 8471.92.30

Mr. Donald Alford Weadon, Jr.
Dickstein, Shapiro & Morin
2101 L Street, N.W.
Washington, D.C. 20037-1526

RE: Toshiba America Electronic Components, Inc.; Liquid Crystal Display; LCD; ADP Output Display; 8531; 8471; 9013; HQ 952246; HQ 951609; HQ 951288; HQ 952360; E.M. Chemicals v. United States

Dear Mr. Weadon:

This is our reply to your letter of August 31, 1992, on behalf of Toshiba America Electronic Components, Inc. (TAEC), requesting classification of Liquid Crystal Displays (LCDs) for ADP output displays, under the Harmonized Tariff Schedule of the United States (HTSUS).

FACTS:

You state that the instant Toshiba ADP LCD Modules consist of super-twisted nematic liquid crystal material in a dot matrix LCD sandwich installed upon and connected to a printed circuit board (PCB) populated with row and column LCD driver integrated circuits. These circuits take the industry-standard display output signal from an ADP device (such as a personal computer (PC), lap-top computer, or a notebook computer) and electronically address specific areas on the dot matrix of the LCD sandwich through a multiplex drive time sharing sequence. When electronically addressed and stimulated, the molecules in the normally transparent liquid crystal medium within the LCD sandwich uniformly align and become opaque, creating a visible dot.

The LCD sandwich/PCB assembly also incorporates a rectangular frame (a "bezel") which is specifically designed to aid its physical incorporation into the ADP device. Back-lighting is either built-in to the ADP LCD Module or is offered as an option, depending upon the ADP display color or type desired by the ADP
manufacturer. These ADP LCD Modules are powered by specifically calibrated voltage/current inputs received through the device output connector for the specific industry standard computer output standard [e.g., Video Graphics Array ("VGA"), Color Graphics Adapter ("CGA") or Enhanced Graphics Adapter ("EGA")].

Toshiba imports approximately seventeen different models of ADP LCD Modules, all having a column configuration (Y axis) of 640 pixels and a row configuration (X axis) of 200 to 480 pixels. The unit numbers are as follows: TLX-5152S-XXX, TLX-1751A-XXX, TLX- 1554-XXX, TLX-1832S-XXX, TLX-1702S-XXX, TLX-1551A-XXX, TLX-8052S- XXX, TLX-1601-XXX, TLX-1841-XXX, TLX-1642S-XXX, TLX-1722S-XXX, TLX- 1181-XXX, TLX-1332A-XXX, TLX-1771-XXX, TLX-932-XXX, TLX-561-XXX, TLX-562-XXX, TLX-1342-XXX, TLX-1341-XXX.

ISSUE:

Are the instant LCD ADP output modules 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 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.

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 apparatus."

Due to the specific ADP design and principal use of these Toshiba LCD modules for ADP output, they cannot be classified under heading 8531, which provides for "signalling apparatus." 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). Based on these parameters, the instant Toshiba ADP display subassemblies (LCD modules) are a complete ADP flat panel display, missing only the exterior housing and/or back-lighting. Therefore, pursuant to GRI 2(a), these models have the essential character of finished ADP displays, classifiable under subheading 8471.92.30, HTSUS, which provides for ADP output display units without cathode-ray tube (CRT), having a visual display diagonal not exceeding 30.5 cm. 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 952246, dated November 10, 1992, HQ 951868, dated October 31, 1992, HQ 952360, dated October 15, 1992, 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, since the Toshiba ADP LCD Modules are provided for more specifically in another heading, they are not to be classifiable in heading 9013, HTSUS.

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."

HOLDING:

The Toshiba America Electronic Components, Inc., liquid crystal display modules for ADP output displays are classifiable in subheading 8471.92.30, HTSUS, which provides for: "[a]utomatic data processing machines and units thereof: [o]ther: [i]nput or output
units, whether or not entered with the rest of a system and whether or not containing storage units in the same housing: [o]ther: [d]isplay units: [w]ithout cathode-ray tube (CRT), having a visual display diagonal not exceeding 30.5 cm." The rate of duty is Free.

Sincerely,

John Durant, Director

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