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HQ 967231




February 8, 2006

CLA-2 RR:CTF:TCM 967231 HkP

CATEGORY: CLASSIFICATION

TARIFF NO.: 8471.60.4580

Port Director
610 S. Canal Street
Room 306
Chicago, IL 60607

RE: Protest 3901-04-100216; Classification of the Barco TRACE Image System

Dear Port Director:

This is our decision regarding the Application for Further Review (“AFR”) of Protest Number 3901-04-100216, timely filed by counsel on behalf of Electronic Image System, Inc. (“EIS”), concerning the classification of the Barco TRACE image system under the Harmonized Tariff Schedule of the United States (“HTSUS”).

FACTS:

EIS is a U.S. affiliate of Barco N.V. (“Barco”), an international corporation headquartered in Belgium that is engaged in the manufacture and marketing of imaging technology products. EIS imports Barco projectors and projector equipment.

The subject entry consists of the Barco TRACE (Team Room Application Collaboration Environment) image system. The TRACE system is driven by and displays images from the Galaxy WARP stereo projector, which is incorporated into the free-standing display system, and measures approximately 80 inches high by 64 inches wide and is 30 inches deep. The Galaxy WARP projector is an active-stereo DLP™ projector with Integrated Geometry Distortion. DLP™ technology uses an optical semiconductor to manipulate light digitally. When used in the TRACE system the WARP projector projects images inside the display console onto the back surface of a screen, similar to a rear projection television. This projector accepts RGB or DVI data sources; it may also be outfitted with an optional matrix switcher and separate video switcher for multiple input sources, an optional BARCO VIEWSCAPE video windowing system that overlays multiple video/data windows on top of the main display, and optional video conferencing. We note that the display system under consideration was not imported with optional video input or output. The projector offers “1400 x 1050 pixel native resolution per channel for sharp details, ability to view massive amounts of data and excellent text readability from edge-to-edge. A patented pixel map processor enhances compatibility to source resolutions of up to 2000 x 1280 pixels.” The display system features a 70-inch diagonal, black tinted, high contrast screen and 3D active viewing technology. According to the TRACE webpages on the Barco website (www.barco.com), the TRACE system includes 3D viewing glasses and emitters, but these items are not under consideration here.

The subject merchandise was entered on September 8, 2003, under subheading 8528.30.6601, HTSUS, which provides for: “Reception apparatus for television, whether or not incorporating radiobroadcast receivers or sound or video recording or reproducing apparatus; video monitors and video projectors: Video projectors: Color: With a flat panel screen: Other: With a video display diagonal not exceeding 34.29 cm”. This entry was later rate advanced by U.S. Customs and Border Protection (“CBP”) and liquidated under subheading 8528.30.6801, HTSUS, which provides for: “Reception apparatus for television, whether or not incorporating radiobroadcast receivers or sound or video recording or reproducing apparatus; video monitors and video projectors: Video projectors: Color: With a flat panel screen: Other: Other”. The entry was liquidated on November 14, 2003. A timely protest was filed by EIS on February 12, 2004, in which counsel for EIS claimed that the merchandise should be classified as filed under subheading 8528.30.6601, HTSUS; or in the alternative under subheading 8471.60.4580, HTSUS, which provides for display units of automatic data processing (“ADP”) machines; or in the alternative under subheading 8543.89.9200, HTSUS, which provides for flat panel displays other than for articles of heading 8528.

ISSUE:

Whether the Barco TRACE image system is classified under heading 8528, HTSUS, which provides for video monitors and projectors, or heading 8471, HTSUS, which provides for automatic data processing machines and units thereof, or heading 8543, HTSUS, which provides for electrical machines and apparatus, having individual functions, not specified or included elsewhere in Chapter 85, HTSUS.

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 Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”) constitute the official interpretation of the Harmonized System at the international level. While neither 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.

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:
8471.60.45 Other
8471.60.4580 Other

8528 Reception apparatus for television, whether or not incorporating radiobroadcast receivers or sound or video recording or reproducing apparatus; video monitors and video projectors: Video projectors:
Color:
With a flat panel screen:
Other:
With a video diagonal display not exceeding 34.29 cm
8528.30.6801 Other

8543 Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other machines and apparatus:
Other:
Other:
Other:
8543.89.9200 flat panel displays other than for articles of heading 8528

Counsel has argued that the TRACE system incorporates the Galaxy WARP stereo projector, which can operate as a stand-alone projector without the display console and a fixed screen size and, as such, should be classified as a projector without a screen. We disagree, based on the well-established classification principle that goods are classified in their imported condition. XTC Products, Inc. v. United States, 771 F. Supp. 401, 405 (1991). See also, United States v. Citroen, 223 U.S. 407 (1911). Therefore, it is the classification of the TRACE image system that is at issue and not just the Galaxy WARP projector.

First, we consider classification of the subject machine in heading 8528, HTSUS. Based on the information provided in the product specification sheets, the characteristics of the subject system are such that, in its imported condition, it is only capable of displaying information from RGB or DVI data input. Consequently, we find that the system is excluded from consideration for classification in heading 8528, HTSUS, as a video monitor or projector, because, as imported, it cannot accept or display video signals.

Next, we consider the argument put forward by counsel for EIS that the TRACE system is used principally as a display unit of an ADP machine and should be classified in heading 8471, HTSUS, specifically under subheading 8471.60.4580, HTSUS. 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.

In this regard, we note that the TRACE system’s only function is that of displaying ADP input because its integrated WARP projector can only accept RGB or DVI data sources. Further, features of the system, to wit, 3,000 ANSI lumens for bright image, even in ambient light conditions; 800:1 contrast ratio; 1400 x 1050 pixel native resolution per channel; a pixel map processor to enhance compatibility with source resolutions of up to 2000 x 1280 pixels; the wide viewing angle provided by the 70 inch diagonal screen display; and, active 3D stereoscopic display, are devoted to providing a superior display image. We are therefore of the opinion that the TRACE display system is described in heading 8471, HTSUS, as a unit of automatic data processing machines because it is of a kind solely used in an ADP system, is directly connectable to the central processing unit, and is able to accept or deliver data in a form which can be used by the system. In addition, Note 5(E) of Chapter 84, regarding ADP units, does not exclude the subject display system.

Finally, we consider classification in heading 8543, HTSUS, which provides for electrical machines and apparatus, having individual functions, not specified or included elsewhere in Chapter 85. Explanatory Note 85.43 provides that “this heading covers all electrical appliances and apparatus, not falling in any other heading of the Chapter, nor covered more specifically by a heading of any other Chapter of this Nomenclature, nor excluded by the operation of a Legal Note to Section XVI or to this Chapter.” (Original emphasis.) Because the TRACE system is a machine that is operated by electricity, it is prima facie classifiable in heading 8543, HTSUS. However, EN 85.43 indicates that this proposed classification is a “basket” provision, in that, merchandise may only be classified in this heading if not more specifically covered by any other tariff heading.

Applying EN 85.43 to these facts, as between classification in heading 8471 or 8543, HTSUS, it is our opinion that the TRACE system is more specifically described in heading 8471, HTSUS, as a unit of an automatic data processing machine, specifically in subheading 8471.60, HTSUS, because it is the display unit of an ADP machine, than in heading 8543, HTSUS, as an electrical machine, having individual function, not specified or included elsewhere. Consequently, it is appropriate to classify the TRACE image system in heading 8471, HTSUS.

HOLDING:

By application of GRI 1, we find that the TRACE system is provided for in heading 8471, HTSUS, and is specifically classified in subheading 8471.60.4580, HTSUS, which provides for: “Automatic data processing machines and units thereof: With input or output units, whether or not containing storage units in the same housing: Other: Display units: Other: Other: Other.” The duty rate at the time of entry was Free.

Since reclassification of the merchandise as indicated above will result in the same rate of duty as claimed, you are instructed to ALLOW the protest in full.

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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