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HQ 960937




November 19, 1997

CLA-2 RR:CR:GC 960937 RFA

CATEGORY: CLASSIFICATION

TARIFF NO.: 8531.20.00

Mr. Peter J. Gartland
Ms. Fusae Nara
Donovan, Leisure, Newton & Irvine
30 Rockefeller Plaza
New York, NY 10112

RE: Liquid Crystal Displays (LCDs); Flat Panel Displays; Output units for Automatic Data Processing (ADP) Machines; Signaling Apparatus; Principal Use; Headings 8471, 8531, and 9013; HQ 959945

Dear Mr. Gartland and Ms. Nara:

This is in response to your letter dated September 10, 1997, to Customs in New York, on behalf of Sharp Electronics Corporation, concerning the tariff classification of a liquid crystal display under the Harmonized Tariff Schedule of the United States (HTSUS).

FACTS:

The merchandise is the Sharp liquid crystal display (LCD), model DUNTL1392YCZS, labeled as a Quarter-VGA display for the Sharp Zaurus Personal Digital Assistant (PDA), model ZR-3500X. The Sharp Zaurus PDA was classified as an automatic data processing (ADP) machine under heading 8471 in NY B82349, dated February 26, 1997. The subject LCD consists of a 320 x 240 pixel configuration display glass, printed circuit boards (PCBs), large-scale integrated circuits, and tab interconnections, all of which are housed in a bezel.

ISSUE:

Are the subject LCDs classifiable as display units for ADP machines, or as signaling apparatus, or as liquid crystal devices not constituting articles provided for elsewhere under the HTSUS?

LAW AND ANALYSIS:

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

LCDs are prima facie classifiable in the following HTSUS headings: 8471, which provides for ADP machines and units thereof; 8531, which provides for electric sound or visual signaling apparatus; and, 9013, which provides for liquid crystal devices not constituting articles provided for in other headings. Legal Note 1(m) to Section XVI, HTSUS (which includes chapter 84), states that: "[t]his section does not cover: [a]rticles of chapter 90." Because of the wording of heading 9013, if the subject merchandise is provided for more specifically in another heading, it would not be classifiable in heading 9013. See Sharp Microelectronics Technology, Inc. v. United States, 932 F.Supp. 1499 (CIT 1996), aff'd., 122 F.3d 1446, CAFC Slip Op. 97-1013 (September 2, 1997). See also HQ 959175, dated November 25, 1996. Therefore, if an LCD does not meet the terms of either headings 8471 or 8531, then it is classifiable under heading 9013.

You claim that the subject merchandise meets the terms of an ADP output unit under heading 8471, because the PDA is an ADP machine. To be classified as an ADP unit, the subject displays must meet the terms of Legal Note 5(B) to chapter 84, HTSUS, which provides that:

Automatic data processing machines may be in the form of systems consisting of a variable number of separate units. Subject to paragraph (E) below, a unit is to be regarded as being a part of a complete system if it meets all the following conditions:

(a) It is of a kind solely or principally used in an automatic data processing system;

(b) It is connectable to the central processing unit [CPU] either directly or through one or more other units; and

(c) It is able to accept or deliver data in a form (codes or signals) which can be used by the system.

Customs has held that headings 8471 and 8531, are use provisions subject to Additional U.S. Rule 1(a), HTSUS. See HQ 956870 (July 27, 1995) and HQ 951288 (July 7, 1992). Additional U.S. Rule 1(a), HTSUS, 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."

In HQ 959945, also issued to you on this date, Customs determined that the class of Quarter-VGA displays are not of the kind solely or principally used in an ADP system because of there wide usage in a variety of signaling apparatus. Classification is determined based upon the use of the class of goods and not the actual use of the specific imports. Group Italglass U.S.A., Inc. v. United States, 839 F.Supp. 866, 867, 17 CIT 1177, 1177 (1993). Even though the actual use of the subject merchandise may be used in an ADP machine, we find that it does not meet the terms of Legal Note 5(B)(a) because the Quarter-VGA size display is not of a class or kind solely or principally used in an automatic data processing system. Based upon the application of HQ 959945, we find that the subject Quarter-VGA LCD belongs to the class or kind of LCDs that are classifiable under heading 8531, as signaling apparatus.

HOLDING:

The subject Quarter-VGA LCD, model DUNTL1392YCZS, is classifiable under subheading 8531.20.00, HTSUS, which provides for: "[e]lectric sound or visual signaling apparatus (for example, bells, sirens, indicator panels, burglar or fire alarms). . .: [i]ndicator panels incorporating liquid crystal devices (LCD's) or light emitting diodes (LED's). . . ." The general, column one rate of duty is 1.4 percent ad valorem.

Sincerely,

John Durant, Director
Commercial Rulings Division

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