#  HQ 964043

July 25, 2000

**CLA-2 RR:CR:GC** 964043 GOB

**CATEGORY:** Classification

TARIFF NO.: 8528.30.66

Mr. Sidney N. Weiss

90 Park Avenue

New York, N.Y. 10016

**RE:** LCD projector; NY A81603 revoked

Dear Mr. Weiss:

This is with respect to New York Ruling Letter ("NY") A81603, issued to
counsel by the Customs National Commodity Specialist Division, New York,
on March 22, 1996, on behalf of Toshiba America Consumer Products, Inc.
("Toshiba"). In that ruling, an LCD projector equipped with a data
source and a video source was classified under subheading 8471.60.30,
Harmonized Tariff Schedule of the United States ("HTSUS"). We have
reviewed that classification and have determined that it is incorrect.
This ruling sets forth the correct classification.

In response to the Notice of Proposed Revocation of NY A81603 which was
published in [the Customs Bulletin]{.underline} on June 7, 2000, you
submitted a comment dated July 6, 2000. In summary your claims are as
follows. The LCD data projector's technology and specifications indicate
that it is principally used as an ADP display, not as a TV or video
monitor. The projector's applications indicate that it is principally
used in group settings, not in individual recreational or home
environments. Toshiba's marketing materials indicate that the projectors
have been designed, marketed, and sold, and will continue to be marketed
and sold, with the idea that computers are the primary input devices.
The projectors are properly classifiable under subheading 8471.60.30,
HTSUS, by reference to GRI 1 only, because they perform only one
principal function -- that of display. Customs has made the error that
the projectors' different inputs somehow equal their functions or
control. 97% of the projector's components are devoted to receiving and
processing computer signals, and only about 3% of its components are
devoted to receiving and processing video signals. The projectors' high
cost effectively precludes them from home use by all but the most
affluent Americans. Finally, you contend that Customs has ignored the
Harmonized Commodity Description and Coding System Explanatory Notes in
reaching its decision.

Customs response to your claims is discussed in the LAW AND ANALYSIS
section of this ruling.

**FACTS:**

The LCD projector was described as follows in NY A81603:

The TLP-310 LCD Data Projector ... utilizes three 1.3 inch polysilicon
fine LCDs with a resolution of 644 by 484 pixels, which is very close to
the VGA resolution of 640 by 480 pixels used in most IBM compatible
computers. The TLP-310 LCD Data Projector is equipped with data and
video inputs and outputs, and a RS-232 type serial port for attachment
to a computer. The device is also equipped with a wireless remote, lens
cap, power cord, AV (audio-video) cable, VGA (computer video) cable, and
an Apple Macintosh computer adapter.

The TLP-310 LCD Data Projector is capable of using different signal
sources for the video to be projected, including VGA, VHS, and S-VHS
(using NTSC, PAL, SECAM and NTSC 4.43 signals).

**ISSUE:**

Are the above-described LCD projectors provided for in heading 8471,
HTSUS, as automatic data processing units, or in heading 8528, HTSUS, as
video projectors?

**LAW AND ANALYSIS:**

Classification under the HTSUS is made in accordance with the General
Rules of Interpretation ("GRI's"). 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 GRI may then be applied.

The Harmonized Commodity Description and Coding System Explanatory Notes
("EN's") constitute the official interpretation of the Harmonized System
at the international level. While neither legally binding nor
dispositive, the EN's 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.

Heading 8471 covers:

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\[.\]

Heading 8528 covers:

Reception apparatus for television, whether or not incorporating
radiobroadcast receivers or sound or video recording or reproducing
apparatus; video monitors and video projectors\[.\]

Legal Note 3 to Section XVI, HTSUS, provides:

Unless the context otherwise requires, composite machines consisting of
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
pertinent 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) ...

Customs has reconsidered 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.]{.underline}, 63 CCPA 98, 102, 536 F. 2d 373,
377 (1976), [cert denied]{.underline}, 429 U.S. 979 (1976). We note that
in [Lenox Collections v. U.S.]{.underline}, 19 CIT 345, 347 (1995) and
[Kraft, Inc. v. U.S.]{.underline}, 16 CIT 483, 489 (1992) the court
applied the [Carborundum]{.underline} factors to principal use. See also
[G. Heileman Brewing Co. v. U.S.]{.underline}, 14 CIT 614, 620 (1990).

In applying these factors to the merchandise, we note that the TLP-310
projector at issue has two functions. It may be connected to a computer
for the projection of computer-generated data images. It may also be
connected directly to video devices for the projection of video images.
In general, such projectors may be used to project video from a growing
array of sources, including VCRs, camcorders and laser discs, as is
noted in the Toshiba marketing literature.

In the original ruling request it was stated that "\[t\]he TLP-310 LCD
Data Projector will be sold primarily for use as a data projector" and
that the "\[p\]rocessing and display of computer signals will be the
principal function of the projector, and a larger percentage of the
components of the TLP-310 are devoted to receiving and processing
computer signals than video signals." In your comment to the proposed
revocation, you state that the projectors have been designed, marketed
and sold as primarily computer output devices. You claim that 97% of the
projector's components are devoted to receiving and processing computer
signals. However, no probative documentary evidence in support of these
assertions was submitted, as we specifically requested in the proposed
ruling revocation. The advertising narrative submitted lists the video
capabilities ahead of the computer capabilities, and the specifications
give no weight to any individual attribute over another.

You indicate that the projectors will be used in group settings, and are
too expensive to be used in most home or recreational environments. This
comment suggests that projectors are used in the same manner as ADP
displays, that ADP units are principally used in group settings and that
projectors are too expensive for home or recreational use. Without
concrete evidence to support this notion, we are unable to give it much
weight. We are aware that ADP display units are used in many
environments, and for many purposes. Moreover, more probative of the
environment of use would be evidence of whether consumers use the goods
more often to display video signals or ADP signals.

You factually misstate that the good at issue is used as a TV or video
monitor. We note that the article is a projector. You claim that Customs
is ignoring the Explanatory Notes in classifying the instant good. You
cite the EN to heading 8471 as support for your claim, when in fact the
EN's require that a separately presented ADP display must be capable
only of accepting a signal from a central processing unit. Toshiba's
projectors are more versatile. In any event, principal use or function
is the legal standard that must be met. Alternatively, you claim that
the principal function is display. Since both headings 8471 and 8528
include units which display, this claim is unhelpful.

Legal Note 3 to Section XVI does not resolve the classification at issue
because the projectors are composite machines and satisfactory
documentary evidence has not been submitted with respect to the
principal function of the projectors. As a result, we are now of the
view that the projectors cannot be classified based upon GRI 1. GRI 2 is
not applicable here. GRI 3 provides as follows:

> When, by application of rule 2(b) or for any other reason, goods are,
> *prima facie*, classifiable under two or more headings, classification
> shall be effected as follows:

(a) The heading which provides the most specific description shall be
    preferred to headings providing a more general description. However,
    when two or more headings each refer to part only of the materials
    or substances contained in mixed or composite goods or to part only
    of the items in a set put up for retail sale, those headings are to
    be regarded as equally specific in relation to those goods, even if
    one of them gives a more complete or precise description of the
    goods.

(b) Mixtures, composite goods consisting of different materials or made
    up of different components, and goods put up in sets for retail
    sale, which cannot be classified by reference to 3(a), shall be
    classified as if they consisted of the material or component which
    gives them their essential character, insofar as this criterion is
    applicable.

(c) 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.

EN (VIII) for GRI 3(b) provides:

> The factor which determines essential character will vary as between
> different kinds of goods. It may, for example, be determined by the
> nature of the material or component, its bulk, quantity, weight or
> value, or by the role of a constituent material in relation to the use
> of the goods.

At GRI 3(a), neither of the two competing headings provides a more
specific description than the other. Pursuant to GRI 3(b), the projector
is a composite good. There is no essential character to the projector
because both functions are equally important. Accordingly, we proceed to
GRI 3(c), i.e., the good shall be classified under the heading which
occurs last in numerical order among those which equally merit
consideration.

Pursuant to GRI 3(c), we determine that the projector is provided for in
heading 8528, HTSUS. It is classified in subheading 8528.30.66, HTSUS
as: "Video projectors: Color: With a flat panel screen: Other: With a
video display diagonal not exceeding 34.29 cm." In your comment on the
proposed revocation, you state that Customs is equating the projectors'
inputs with their function. Classification at GRI 3(c) is not an
indication that the principal function of the video projector is video,
but rather an indication that there is no principal function.

Our determination is consistent with a recent decision on similar
merchandise published in the World Customs Organization ("WCO")
[Compendium of Classification Opinions]{.underline} on the Harmonized
Commodity Description and Coding System where the classification of a
projector which received signals from an automatic data processing
machine and a video source and whose principal function could not be
determined was based upon GRI 3(c). [See]{.underline} Opinion No.
8528.30/1 of the WCO [Compendium of Classification
Opinions]{.underline}, Amending Supplement No. 24 (August 1999). As we
stated in T.D. 89-80, decisions in the [Compendium of Classification
Opinions]{.underline} should be treated in the same manner as the EN's,
i.e., while neither legally binding nor dispositive, the they provide a
commentary on the scope of each heading of the HTSUS and are generally
indicative of the proper interpretation of these headings. T.D. 89-80
further states that EN's and decisions in the [Compendium of
Classification Opinions]{.underline} "should receive considerable
weight."

**HOLDING:**

The LCD projector is provided for in heading 8528, HTSUS, and is
classified in subheading 8528.30.66, HTSUS, as "Video projectors: Color:
With a flat panel screen: Other: With a video display diagonal not
exceeding 34.29 cm."

**EFFECT on OTHER RULINGS:**

NY A81603 is revoked.

Sincerely,

John Durant, Director

Commercial Rulings Division