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HQ H003029




January 24, 2007

CLA-2 RR:CTF:TCM H003029 IOR

CATEGORY: CLASSIFICATION

TARIFF NO: 8528.72.72, HTSUS

Mr. John M. Peterson, Esq.
Neville Peterson LLP
17 State Street – 19th Floor
New York, NY 10004

RE: 20.1” flat panel LCD monitor with integrated digital satellite receiver

Dear Mr. Peterson:

This is in response to your letter of October 23, 2006, to the National Commodity Specialist Division (NCSD), on behalf of your client Humax USA Inc., requesting a classification ruling for a 20.1” LCD monitor with integrated DIRECTV receiver, under the Harmonized Tariff Schedule of the United States (HTSUS). Your letter was referred to this office for response.

FACTS:

The product is a 20.1” LCD monitor, with integrated DIRECTV receiver, referred to in the accompanying literature as LD2060. The LD2060 is packaged with RCA-type A/V cables, a phone cord, a power cord, DIRECTV access card, a remote control with batteries and a user’s manual. The inputs/outputs on the rear of the LD2060 include: AC in, satellite in, phone jack, USB, service port, A/V out, A/V 1 input, A/V 2 input and component inputs. The LD2060 incorporates a DIRECTV satellite receiver built into the unit. The “satellite in” input of the receiver accepts regular coaxial cable directly from an appropriate satellite dish, and there is no need to run the satellite cable feed through a set-top box or other receiver. The “phone jack” input provides for a regular RJ-11 telephone plug to be inserted and allows for communication between the LD2060 and DIRECTV for ordering programming and similar functions. When the LD2060 is connected to a DIRECTV feed and phone line, it performs all of the functions of the DIRECTV set-top box, and programs can be ordered and viewed through the LD2060 for all DIRECTV programming. The AV1 and A/V2 inputs allow for connection to a VCR, DVD player or other audio/visual source, for display on the LD2060.

The LD2060 does not include a tuner which would allow it to receive or demodulate any other television signals, such as broadcast or cable television. The LD2060 does not have any recording capability. In the product literature for the LD2060, the unit is referred to as a “TV” throughout.

ISSUE:

What is the classification of an LCD monitor with integrated satellite television receiver.

LAW AND ANALYSIS:

Merchandise is classifiable under the HTSUS in accordance with the General Rules of Interpretation (GRIs). The systematic detail of the HTSUS is such that most goods are classified by application of GRI 1, that is, 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.

You assert that the LD2060, as imported consists of two separate components, the flat panel video monitor and the satellite television receiver (set-top box), and under GRI 3, and Note 3 to Section XVI, should be classified as a composite product or a composite machine with the essential character imparted by the integrated set-top box.

In understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System Explanatory Notes may be utilized. The Explanatory Notes (ENs), although not dispositive or legally binding, provide a commentary on the scope of each heading of the HTSUS, and are the official interpretation of the Harmonized System at the international level. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).

The 2007 HTSUS will be effective for goods entered or withdrawn from warehouse for consumption on or after February 3, 2007. The 2007 HTSUS includes changes resulting from modifications in the International Harmonized System nomenclature, which are described in Presidential Proclamation 8097. Presidential Documents, 72 Fed. Reg. 453 (2007). The effective date of the 2007 HTSUS is also set forth in Presidential Proclamation 8097. 72 Fed. Reg. 453, 458.

The HTSUS provisions under consideration are as follows:

8528 Monitors and projectors, not incorporating television reception apparatus; reception apparatus for television, whether or not incorporating radio-broadcast receivers or sound or video recording or reproducing apparatus: Other monitors:
Other:
Color:
With a flat panel screen:
Other:
8528.59.30 Other.
Reception apparatus for television, whether or not incorporating radio-broadcast receivers or sound or video recording or reproducing apparatus:
Not designed to incorporate a video display or screen: Other:
Set top boxes which have a communications function...
Other, color:
With a flat panel screen:
Other:
8528.72.72 Other.

As set out above, subheading 8528.71, HTSUS, is specifically limited to reception apparatus for television “[n]ot designed to incorporate a video display or screen.” The LD2060 is not described in subheading 8528.71, HTSUS, because the unit is in fact designed to incorporate a video display or screen. The LD2060 is however described in subheading 8528.72, HTSUS, as “other, color” reception apparatus for television, and further in subheading 8528.72.72, HTSUS, as “with a flat panel screen.” As the complete article is described in subheading 8528.72.72, HTSUS, we find that the article is classified by GRI 1.

Note 3 to Section XVI is not applicable, as we do not find that the LD2060 is “designed for the purpose of performing two or more complementary or alternative functions” as required by Note 3. The LD2060 simply provides viewable images as does any traditional broadcast television set. The literature for the LD2060 simply describes the article as a “tv” throughout. Therefore the LD2060 is not classifiable as a composite product or machine under either GRI 3, or Note 3 to Section XVI. As we find the LD2060 to be classified in subheading 8528.72.72, HTSUS, we do not reach the issue of whether the integrated satellite receiver would be separately classifiable as a set top box which has a communication function. The LD2060 is classified in subheading 8528.72.72, 2007 HTSUS, as “[m]onitors and projectors, not incorporating television reception apparatus; reception apparatus for television, whether or not incorporating radio-broadcast receivers or sound or video recording or reproducing apparatus: Reception apparatus for television, whether or not incorporating radio-broadcast receivers or sound or video recording or reproducing apparatus: Other, color: With a flat panel screen: Other: Other.”

This classification is supported by the 2007 ENs. The 2007 ENs, in the introductory paragraphs, distinguish between “[t]elevision reception apparatus,for the display of signals” which are parenthetically referred to as “television sets”, and “[a]pparatus for the reception of television signals, without display capabilities.” Further, in part (D), pertaining specifically to “Reception Apparatus for Television” the 2007 ENs again distinguish between “[r]eceivers of television broadcastswhich do not include a display device”, and “[t]elevision receivers of all kindsused in the home.” Nothing in the ENs indicates that the LD2060 cannot be classified as a television, in subheading 8528.72.72, HTSUS.

HOLDING:

By application of GRI 1, the LD2060, LCD monitor with integrated satellite television receiver, is classified in subheading 8528.72.7250, 2007 HTSUSA, as “[m]onitors and projectors, not incorporating television reception apparatus; reception apparatus for television, whether or not incorporating radio-broadcast receivers or sound or video recording or reproducing apparatus: Reception apparatus for television, whether or not incorporating radio-broadcast receivers or sound or video recording or reproducing apparatus: Other, color: With a flat panel screen: Other: OtherLCD-type (direct view),” with a column one, general duty rate of 5% ad valorem.

Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the internet at www.usits.gov/tata/hts/.

Sincerely,


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