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HQ 967230




February 8, 2006

CLA-2 RR:CTF:TCM 967230 HkP

CATEGORY: CLASSIFICATION

TARIFF NO.: 8471.60.3500; 8528.30.6000

Port Director
U.S. Customs and Border Protection
610 S. Canal Street
Room 306
Chicago, IL 60607

RE: Protest 3901-04-100200; Classification of Barco Projectors, Model nos. 808s, 908 and 909

Dear Port Director:

The following is our decision regarding Protest 3901-04-100200, timely filed by counsel on behalf of Electronic Image System, Inc. (“EIS”), which concerns the classification of BarcoGraphics 808s, BarcoReality/BarcoGraphics 908, and BarcoReality 909 projectors under the Harmonized Tariff Schedule of the United States (“HTSUS”).

FACTS:

The subject entries consist of various models of projectors - BarcoReality/BarcoGraphics 908, BarcoReality 909, and BarcoGraphics 808s. The protestant has provided specifications and literature for the projectors. The BarcoReality/BarcoGraphics 908 and the BarcoReality 909 are designed to accept automatic data processing (“ADP”) type input, specifically, RGB or (Y, R-Y, B-Y) input on 5 BNC connectors and RGB analog input on a D-15 connector. They cannot, in their imported condition, accept or project television (NTSC) or any other video-type signal. According to the literature, these projectors are designed for demanding applications such as simulation, virtual and augmented reality, 3D and stereoscopic projection, industrial design as well as military command and control centers. The BarcoGraphics 808s model has multiple signal capability. This High Definition, cathode-ray tube type projector can accept NTSC, PAL, and SECAM signals through a loop-through (2XBNC) with a 75 Ohm termination switch and S-video input through a (4-pin mini-DIN) loop through a 75 Ohm termination switch, as well as RGB inputs.

The subject merchandise was entered in 2003 on various dates under subheading 8471.60.3500, HTSUS, which provides for “Automatic data processing machines and units thereof : Input or output units, whether or not containing storage units in the same housing: Other: Other: With color cathode-ray tube (CRT)”. These entries were later rate advanced by U.S. Customs and Border Protection (“CBP”) and liquidated under subheading 8528.30.6000, HTSUS, which provides for: “Reception apparatus for television, whether or not incorporating radio broadcast receivers or sound or video recording or reproducing apparatus; video monitors and video projectors: Video projectors: Color: High definition, with a cathode-ray tube: Other”. The last of the entries was liquidated on November 14, 2003. A timely protest was filed by EIS on February 4, 2004, in which counsel for EIS asserted that, based on their principal use as display units and CBP rulings, the projectors are properly classified in heading 8471, HTSUS, as output units of automatic data processing machines, more specifically, under subheading 8471.60.3500, HTSUS.

ISSUE:

Whether the projectors are classifiable in heading 8471, HTSUS, which provides for automatic data processing machines and units thereof, or in heading 8528, HTSUS, which provides for video projectors.

LAW AND ANALYSIS:

Initially, we note that the matter protested is protestable under 19 U.S.C. §1514(a)(2) as a decision on classification, and that the protest was timely filed, within 90 days of liquidation of the last entry.

Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that the classification of goods shall be determined 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 headings and legal notes do not otherwise require, the remaining GRIs 2 through 6 may then be applied in order.

The HTSUS provisions under consideration are as follows:

8471 Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, not elsewhere specified or included: Input or output units, whether or not containing storage units in the same housing: Other:
Display units:
Other:
With color cathode-ray tube (CRT)

8528 Reception apparatus for television, whether or not incorporating radio broadcast receivers or sound or video recording or reproducing apparatus; video monitors and video projectors: Video projectors:
Color:
High definition, with a cathode-ray tube: 8528.30.6000 Other

The Harmonized Commodity Description and Coding System Explanatory Notes (EN) constitute the official interpretation of the HTSUS. While not legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80.

We first consider the BarcoReality/BarcoGraphics 908 and the BarcoReality 909 projectors, which are capable only of accepting RGB or (Y, R-Y, B-Y) input on 5 BNC connectors and RGB analog input on a D15-connector, but not video signals.

We note that the projectors are excluded from consideration for classification in heading 8528, HTSUS, as video projectors, because, as imported, they cannot accept video signals.

Heading 8471, HTSUS, is governed by the terms of Legal Note 5 to Chapter 84, HTSUS, which provides in relevant part:

(B) 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 of 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 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.

Machines performing a specific function other than data processing and incorporating or working in conjunction with an automatic data processing machine are to be classified in the headings appropriate to their respective functions or, failing that, in residual headings.

By application of GRI 1 and Legal Note 5 to Chapter 84, we find that the 908 and 909 projectors are described in heading 8471, HTSUS, as units of automatic data processing machines because they are of a kind solely used in ADP systems, are directly connectable to the central processing units, and are able to accept or deliver data in a form which can be used by the system. More specifically, they are classified in subheading 8471.60.35.00, HTSUS, as: “Automatic data processing machines and units thereof : Input or output units, whether or not containing storage units in the same housing: Other: Display units: Other: With color cathode-ray tube.” In addition, Note 5(E) of Chapter 84, regarding ADP units, does not exclude the subject projectors.

We will next consider the proper classification of BarcoGraphics 808s model, which is capable of receiving various signals, including computer (RGB) and video (NTSC, PAL, SECAM, and S-video). It is the position of CBP that the subject projectors are composite machines because they accept and display both ADP and video signals.

Legal Note 3 to Section XVI, HTSUS, which covers the goods of chapters 84 and 85, provides:

Unless the context otherwise requires, composite machines consisting or two or more machines fitted together to form a whole and other machines adapted for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function.

The EN to Legal Note 3 to Section XVI, HTSUS (EN (VI)), provides in relevant part:

Where it is not possible to determine the principal function, and where as provided in Note 3 to the Section, the context does not otherwise require, it is necessary to apply General Interpretive Rule 3(c)

CBP has considered the uses of projectors and the evidentiary requirements of Legal Note 3 to Section XVI. The courts have provided factors, which are indicative but not conclusive, to apply when determining whether merchandise falls within a particular class or kind. They include: general physical characteristics, expectation of the ultimate purchaser, channels of trade, environment of sale (accompanying accessories, manner of advertisement and display), use in the same manner as merchandise which defines the class, economic practicality of so using the merchandise, and recognition in the trade of such use. See U.S. v. Carborundum Co., 63 CCPA 98, 102 536 F.2d 373, 377 (1976), cert. Denied, 429 U.S. 979 (1976). We note that in Lenox Collections v. U.S., 19 CIT 345, 347 (1995) and Kraft, Inc. v. U.S., 16 CIT 483, 489 (1992), the court applied the Carborundum factors to principal use.

The protestant argues that the manufacturer’s literature and website, as well as the physical characteristics of the projectors, when considered under the Carborundum factors, demonstrate the projectors’ principal use, which is that of an ADP display unit. First, it is asserted that the projectors have physical characteristics that are only associated with display units, and that they have “wide ranges of horizontal and vertical frequency and bandwidth that are irrelevant to a projector that simply reproduces standard broadcast video input.” While we do agree that the projectors are display units, we do not find the aforementioned wide ranges of frequencies to be irrelevant to the 808s models, as these models are in fact capable of accepting and reproducing standard broadcast video input.

The protestant claims that the expectation of the ultimate purchaser is of a high-end graphics projector driven by sophisticated computer software that meets their simulator, virtual reality, process control, and scientific needs. However, we have not been provided with any evidence that these needs can only be met by the ADP, and not video, capabilities of the 808s projector. While the photographs from the Barco website depict computer generated images and not images reproduced from a video signal, this is not enough to substantiate the assertion that such images cannot be reproduced from a video signal. We find that sufficient documentary evidence has not been submitted to substantiate this assertion. Moreover, according to the reference subheading of the “Simulation”, “Virtual and Augmented Reality” headings (found under “Large Screen Visualization”) of the Barco website, the 808s projector is not used for these purposes. There was also no indication on the website that these projectors are used by customers to address their process control and scientific needs.

It is also asserted by the protestant that the exclusive channel of distribution for the 808s model is in the United States and that this channel is unlike any that would handle ordinary television sets and home entertainment projectors of the kind contemplated by heading 8528, HTSUS. We note that the language of heading 8528, HTSUS, classifies video projectors and does not limit itself to home entertainment projectors.

Protestant further claims that the use of the 808s projector is in the same manner as merchandise which defines the class, that is, computer display units falling within heading 8471, HTSUS, and is illustrated as a large discrete part of Barco’s business on its website. A review of Barco’s website found that the subject projectors are referenced in the section dealing with “Large Screen Visualization”, under the subheading “Edutainment”.

Next, we respond to protestant’s claim that graphics projection in automotive design applications and the sophisticated planetarium aboard the Queen Mary 2, illustrates uses that are consistent with the high cost of these projectors, and that different lower cost devices are used by customers for ordinary video viewing needs. Protestant states that the list price for 808s projectors is approximately $30,000, and that many customer applications require as many as six or more projectors. While cost is one factor that should be taken into consideration when determining principal function, it itself is not determinative. The fact that the displays are sophisticated and expensive does not show that the projectors are principally used as ADP machines and does not mean that they cannot be classified under heading 8528, HTSUS.

Finally, protestant states that the projectors are recognized in the trade of such use and submitted many different photographs and written materials from the Barco website to show the worldwide applications of computer driven graphic imaging performed by Barco’s projectors of the class or kind represented by the protested projectors. We find this to be only evidence of a use of the projector but not necessarily of its principal use. We have not received any information in this regard.

After consideration of counsel’s arguments as restated above and the available literature, we find that we are unable to determine the principal function of the BarcoGraphics 808s projectors, as they are prima facie classifiable in heading 8471, HTSUS, and heading 8528, HTSUS. It is CBP’s position that if the subject projectors are capable of accepting both ADP and video signals then they may be properly classified in a heading that allows for such capabilities, whether or not they will actually be used for both purposes. See, HQ963152, July 30, 2001. The terms of heading 8528, HTSUS, include video projectors and the terms of heading 8471, HTSUS include units of automatic data processing machines. Thus, both headings merit consideration.

By application of the Explanatory Note to Legal Note 3, the projectors are therefore classified according to GRI 3(c), which provides as follows:

When goods cannot be classified by reference to 3(a) or 3(b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration.

Accordingly, by application of GRI 1 and Legal Note 3 to Section XVI, we find that the BarcoGraphics 808s projectors are properly classified in heading 8528, HTSUS, which provides for video projectors.

HOLDING:

For the foregoing reasons, BarcoReality/BarcoGraphics 908 and BarcoReality 909 projectors are to be classified under heading 8471, HTSUS, as “automatic data processing machines and units thereof”, specifically under subheading 8471.60.35, HTSUS, as: “Automatic data processing machines and units thereof; : Input or output units, whether or not containing storage units in the same housing: Other: Display units: Other: With color cathode-ray tube”. The duty rate at the time of entry was Free. The BarcoGraphics 808s projectors are to be classified under heading 8528, HTSUS, as: “Reception apparatus for television ; video monitors and video projectors:”, specifically under subheading 8528.30.60, HTSUS, as “Reception apparatus for television ; video monitors and video projectors: Video projectors: Color: High definition, with a cathode-ray tube: Other”. The duty rate at the time of entry was 5% ad valorem.

You are instructed to deny the protest, except to the extent reclassification of the merchandise as indicated above results in a net duty reduction and partial allowance. In accordance with Section IV of the Customs Protest/Petition Processing Handbook (CIS HB, January 2002, pp.18 and 21), you are to mail this decision, together with the CBP Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to the mailing of the decision.

No later than 60 days from the date of this letter, the Office of Regulations and Rulings will make the decision available to CBP personnel, and to the public on the CBP homepage on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

Myles B. Harmon, Director
Commercial & Trade Facilitation Division

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