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HQ 955448

February 23, 1994

CLA-2 CO:R:C:M 955448 DWS

CATEGORY: CLASSIFICATION

TARIFF NO.: 8543.80.95

Mr. Matthew A. Joseph
Mitsubishi Electric America, Inc.
Law Department
1050 East Arques Avenue
Sunnyvale, CA 94086

RE: Full-Color Outdoor Display System; HQs 088639, 086032, and 087547; Oxford International Corporation v. U.S.; Explanatory Notes 85.31 and 2(a)(VII); GRI 2(a); 8531.20.00

Dear Mr. Joseph:

This is in response to your letter of November 22, 1993, concerning the classification of a full-color outdoor display system under the Harmonized Tariff Schedule of the United States (HTSUS).

FACTS:

The merchandise consists of the Mitsubishi Diamond Vision Mark III HC full-color outdoor video display system (Mark III), designed for use in stadiums, race tracks, arenas, and coliseums. The Mark III is typically used as the video display component of a stadium scoreboard. It features modular construction, offering several different screen sizes ranging from 250 inches (3.84m x 5.12m) to 1000 inches (12.16m x 20.48m). It is our understanding that the Mark III is imported in a complete and disassembled form, and is constructed in the U.S. after importation.

Each lighting unit of the Mark III contains 16 flat matrix cathode ray tube (CRT) lighting elements. Each lighting element comprises 16 color dots in a 4 x 4 array. Each screen module consists of a 2 x 4 array of lighting units. Modules are stacked and placed side by side to achieve desired screen height and width.

Screen functions are divided into transmission control and display control. Transmission control is mediated by a module controller. Display control is implemented when stored information is processed to derive control signals for the lighting elements. The Mark III does not contain a receiver device. It has the ability to display data received from a number of different sources, including television cameras, video cassette recorders (VCRs), cable television, graphics generators, and computer generated data or images.

The subheadings under consideration are as follows:

8531.20.00: [e]lectric sound or visual signaling apparatus (for example, bells, sirens, indicator panels, burglar or fire alarms), other than those of heading 8512 or 8530 . . . : [i]ndicator panels incorporating liquid crystal devices (LCD's) or light emitting diodes (LED's).

The general, column one rate of duty for goods classifiable under this provision is 2.7 percent ad valorem.

8543.80.95: [e]lectrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter . . . : [o]ther machines and apparatus: [o]ther: [o]ther.

The general, column one rate of duty for goods classifiable under this provision is 3.9 percent ad valorem.

ISSUES:

Whether the Mark III is classifiable under subheading 8531.20.00, HTSUS, as an indicator panel, or under subheading 8543.80.95, HTSUS, as an other machine, having individual functions, not specified or included elsewhere in chapter 85, HTSUS.

Whether the Mark III, imported in a complete and disassembled form, is to be classifiable as if it were imported in a complete and assembled form.

LAW AND ANALYSIS:

Classification of merchandise under the HTSUS is in accordance with the General Rules of Interpretation (GRI's), taken in order. GRI 1 provides that classification is determined according to the terms of the headings and any relative section or chapter notes.

In HQ 088639, dated June 3, 1991, we held that merchandise similar to the Mark III [the Sunfire video display screen (Sunfire)] was classifiable under subheading 8543.80.90, HTSUS, the precursor provision to subheading 8543.80.95, HTSUS, under the 1991 HTSUS. In so classifying the Sunfire, HQ 088639 revoked HQ 087547, dated October 10, 1990, which held the Sunfire to be classifiable under subheading 8531.20.00, HTSUS.

You have requested that we revoke HQ 088639, because it is argued that the drafter of that ruling misapplied the holding in Oxford International Corporation v. U.S., 75 Cust. Ct. 58, C.D. 4608 (1975), a decision which interpreted provisions under the Tariff Schedules of the United States (TSUS), the precursor to the HTSUS, in coming to the decision that the Sunfire was classifiable under subheading 8543.80.90, HTSUS.

As you are aware, the holding in HQ 088639 also relied on the holding in HQ 086032, an HTSUS ruling. Consequently, because of precedence under the HTSUS on this issue, and the presence of sufficiently clear notes under the HTSUS concerning indicator panels, it is our position that a discussion of the relevance of a TSUS court case to the holding in HQ 088639 is not necessary in this instance.

As was stated in HQ 088639:

HQ 086032, dated January 17, 1990, held that a message display center which operated on a computer program to generate full color animation, graphics, and text, was properly classifiable under subheading 8543.80.90, [HTSUS] . . . In that decision, we stated that:

Nevertheless, the message display centers perform a function which is different than that of signalling equipment. Although the instant merchandise can flash graphics or animation to call attention to the display, its primary purpose is to convey a substantive message; this function is more than that of signalling equipment which is designed to provide a signal to a viewer who normally will instantaneously understand the meaning of the signal.

In understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System Explanatory Notes may be utilized. The Explanatory Notes, although not dispositive, are to be used to determine the proper interpretation of the HTSUS. 54 Fed. Reg. 35127, 35128 (August 23, 1989). In part, Explanatory Note 85.31 (pp. 1381 - 1382) states that:

[t]he heading includes, inter alia:

(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:

(1) 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.

(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. Some types are merely a simple "come in" or "engaged" sign illuminated at will by the occupant of the office.

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

(5) Engine room telegraph apparatus for ships.

(6) Station indicating panels for showing the times and platforms of trains.

(7) Indicators for race courses, football stadiums, bowling alleys, etc. . .

It is our position that the Mark III is not classifiable as an indicator panel under heading 8531, HTSUS. The primary purpose of the Mark III is to show such phenomena as live action or video images to an audience. This purpose goes far beyond mere signalling, in that the Mark III, in conveying a substantive message, entertains an audience rather than alerting it to a signal which the audience will immediately understand.

Also, the only exemplar listed under Explanatory Note 85.31 which may remotely describe the Mark III is that of exemplar (7) listed above. We contacted a representative of the International Trade Commission (ITC) to find out the intent of the drafters of Explanatory Note 85.31 as to the type of articles covered by note (7). We were advised that merchandise such as the Mark III was never intended to be classifiable under heading 8531, HTSUS. Note (7) covers articles such as scoreboards which show numbers in correspondence with such limited language as "time outs remaining", "quarter", "home" and "visitor", and "time remaining". The purpose of the Mark III is far different from that of the articles of note

Because the Mark III is not described elsewhere in the HTSUS, we find that it is classifiable under subheading 8543.80.95, HTSUS.

However, we must now determine whether the Mark III, imported in a complete and disassembled form, is classifiable as if it were imported in a complete and assembled form. GRI 2(a) states that:

[a]ny reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as entered, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), entered unassembled or disassembled.

In part, Explanatory Note 2(a)(VII) (p. 2) states that:

[f]or the purposes of this Rule, "articles presented unassembled or disassembled" means articles the components of which are to be assembled either by means of simple fixing devices (screws, nuts, bolts, etc.) or by riveting or welding, for example, provided only simple assembly operations are involved.

We are satisfied that, once imported into the U.S., simple assembly operations are involved in assembling the Mark III. Therefore, under GRI 2(a), the disassembled Mark III is to be classifiable as if it were imported into the U.S. in an assembled form.

HOLDING:

The Mark III full-color outdoor display system is classifiable under subheading 8543.80.95, HTSUS, as an other machine, having individual functions, not specified or included elsewhere in chapter 85, HTSUS.

EFFECT ON OTHER RULINGS:

HQ 088639 is affirmed.

Sincerely,

John Durant, Director

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