HQ 952973

August 5, 1993

CLA-2 CO:R:C:M 952973 MBR

CATEGORY: Classification

TARIFF NO.: 8471.92.30; 8531.20.00; 9013.80.60

Mr. Dennis Heck

Tower Group International, Inc.

5420 West 104th Street

Los Angeles, CA 90045

RE: Modification of HQ 952246; Modification of NY 843928;

Modification of NY 849402; Epson America, Inc.; Liquid Crystal

Display; LCD; Signaling; ADP Display; 8531; 8471; 9013; HQ

951609; HQ 951288; HQ 952360; HQ 086929; E.M. Chemicals v.

United States

Dear Mr. Heck:

This is our reply to your letter of November 24, 1992,

requesting reconsideration of HQ 952246, dated November 10, 1992,

regarding the classification of Liquid Crystal Displays (LCDs),

under the Harmonized Tariff Schedule of the United States (HTSUS).

FACTS:

EPSON\'s dot matrix LCD modules consist of a newly developed

TN and STN positive/reflective type liquid crystal display with

high-contrast, wide-viewing angle and wide operating temperature

range, C-MOS LSI driver and controller. EPSON\'s easily installed

LCD modules have a multiple instruction set, and a wide variety of

applications. The provided literature delineates the following

applications: portable computers, hand-held terminals, computer

terminals, word processor/typewriters, instrument devices, POS

terminals, telecommunications terminals, and synthesizers. The EA

and EG-X Series have built-in DATA RAM for display data

storage/refresh on board which provide for easy microprocessor

interface with most CPUs.

The features of the EA Series are as follows: alphanumeric and

special symbols, 5 x 7 dot matrix with cursor, 5 x 11 dot matrix

without cursor, 5 x 12 dot matrix without cursor, and 16 to 80

character display.

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The EG Series features are as follows: 1/64 to 1/242

multiplexing, graphics and characters, special controller. The EG-

X Series provides easy connection to the bus line of most 4-bit/8-

bit microcomputers, and has both graphics and characters.

You also import \"LCD Panels\" which consist of a twisted

nematic liquid crystal cell sandwiched between two polarizers in

which light enters the first polarizer in one plane, is twisted and

passes through the second polarizer resulting in a light colored

background. When one of the transparent pixels is activated, the

twist is inhibited and the second polarizer blocks the light

creating a dark pixel. In their imported condition, these LCD

sandwiches do not contain a printed circuit board, row and column

drivers, or integrated circuits of any kind. However, at

importation they do have either rubber connectors, heat seal

connectors, or dual-in-line (DIL) pin connectors.

The Test and Control Module (TCM) and the Epson Custom Module

(ECM) contain row and column drivers and are utilized as ADP

displays, fish finders, point of sale terminals, medical equipment,

etc.

ISSUE:

Are the instant liquid crystal displays classifiable under

heading 8531, HTSUS, which provides for electric sound or visual

signaling apparatus, or under heading 8471, HTSUS, which provides

for ADP output devices, or under heading 9013, HTSUS, which

provides for liquid crystal devices, under the Harmonized Tariff

Schedule of the United States (HTSUS)?

LAW AND ANALYSIS:

The General Rules of Interpretation (GRI\'s) to the HTSUS

govern the classification of goods in the tariff schedule. GRI 1

states, in pertinent part:

\...classification shall be determined according to the terms

of the headings and any relative section or chapter notes\...

Liquid crystal displays (LCDs) are prima facie classifiable

under the following subheadings:

8531 Electric sound or visual signaling apparatus (for example,

bells, sirens, indicator panels\...

8531.20.00 Indicator panels incorporating liquid crystal

devices (LCD\'s) or light emitting diodes (LED\'s)

\* \* \* \* \* \* \* \* \* \* \* \* \* \*

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9013 Liquid crystal devices not constituting articles provided for

more specifically in other headings

9013.80.60 Other devices, appliances and instruments: Other

\* \* \* \* \* \* \* \* \* \* \* \* \* \*

8471 Automatic data processing machines and units thereof

8471.92.30 Other: Input or output units\...: Other: Display

units: Without cathode-ray tube (CRT), having a

visual display diagonal not exceeding 30.5 cm

\* \* \* \* \* \* \* \* \* \* \* \* \* \*

Heading 8531, HTSUS, provides for electric sound or visual

signaling apparatus. Therefore, to be classifiable in this

heading, the apparatus must be designed for \"signaling,\" as that

term is defined for tariff purposes.

The Harmonized Commodity Description and Coding System

Explanatory Notes (ENs) to heading 8531, HTSUS, page 1381, are

fairly descriptive and restrictive as to the types of \"signaling\"

indicator panels and the like must perform in order to be

classifiable in that provision. It states: \"\[t\]hese are used

(e.g., in offices, hotels and factories) for calling personnel,

indicating where a certain person or service is required,

indicating whether a room is free or not. They include:

\(1\) Room indicators. These are large panels with numbers

corresponding to a number of rooms\...

\(2\) Number indicators. The signals appear as illuminated

figures on the face of a small box; in some apparatus of

this kind the calling mechanism is operated by the dial

of a telephone. Also clock type indicators in which the

numbers are indicated by a hand moving round a dial.

\(3\) Office indicators, for example, those used to indicate

whether the occupant of a particular office is free or

not\...

\(4\) Lift indicators. These indicate, on an illuminated

board, where the lift is and whether it is going up or

down. etc.

Therefore, only those LCDs which are limited by design and

function to that of \"signaling,\" are classifiable in heading 8531,

HTSUS. In HQ 952246, dated November 10, 1992 (citing HQ 951288,

dated July 7, 1992), we held that the Epson EA-D16125AR-S (2 lines

of 16 characters) is restricted by its limited operational

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capabilities to that of signaling functions, and is classifiable

under subheading 8531.20.00, HTSUS.

E.M. Chemicals v. United States, Appeal No. 90-1141, Cust.

Bul. Vol. 24, No. 51, (1990), 13 CIT 849, 728 F. Supp. 723 (1989),

held that under the TSUS, the actual liquid crystals themselves

were classifiable under item 685.70 (the predecessor provision to

heading 8531, HTSUS). However, there has been a significant change

in the relevant tariff provisions under the HTSUS. In fact,

heading 9013, HTSUS, which provides for LCDs specifically, is a new

provision under the HTSUS. Furthermore, LCDs have been

technologically developed for a myriad of uses, many of which

cannot be said to be for \"signaling.\"

In HQ 952246 we held that due to the expansive character

capabilities of the EG-2401S-ER-1 (1 line with 64 characters) and

EG-7500B-NS-1 (1 line with 200 characters) a principal use of

signaling cannot be supported. However, due to the submission of

supplemental information regarding the principal use of LCDs, we

are now of the opinion that LCDs having 80 or less characters are

restricted to signaling functions by virtue of their operational

limitations. Furthermore, they are complete, finished indicator

panels that are ready to be plugged into other machines.

Therefore, the EG-2401S-ER-1 (1 line with 64 characters) is

classifiable in subheading 8531.20.00, HTSUS.

We agree that there is a class of LCDs that are principally

used for ADP display. Automatic Data Processing machine LCD flat

panel displays (laptop and notebook computer displays) typically

exhibit the following characteristics: pixel configuration (640 X

480), dot pitch (.27 to .30mm), thin profile, light weight, liquid

crystal material mix (150 to 200 milliseconds response time signal

to signal), and low power consumption (5V). The Epson EG7009N-NS

8834COS ADP display subassembly is a complete ADP Flat Panel

Display, missing only the exterior housing. Therefore, pursuant

to GRI 2(a), this model has the essential character of a finished

ADP display, classifiable under subheading 8471.92.30, HTSUS, which

provides for ADP display units without cathode ray tubes.

Previously, we issued NY 843928, dated August 7, 1989, to you

in which Customs classified the Epson computer display module

(projectable LCD) model ECM-A0360 under subheading 8473.30.40,

HTSUS, which provides for parts of ADP machines not incorporating

cathode ray tubes. However, we have received supplemental

information that this ADP display subassembly is a complete ADP

Flat Panel Display, missing only the exterior housing. Therefore,

pursuant to the above analysis, we now consider this module to

impart the essential character of an ADP display without a cathode

ray tube. Therefore, it is classifiable in subheading 8471.92.30,

HTSUS, which provides for ADP displays without cathode ray tubes.

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We also issued NY 849402, dated February 12, 1990, to you in

which Customs classified the Epson \"Magnabyte Computer Projection

System\" (projectable computer display module LCD) model ECM-A0275

under subheading 8473.30.40, HTSUS, which provides for parts of ADP

machines not incorporating cathode ray tubes. However, we now also

have information that this ADP display subassembly is a complete

ADP Flat Panel Display, missing only the exterior housing.

Therefore, we consider this module to impart the essential

character of an ADP display without a cathode ray tube.

Consequently, it is classifiable in subheading 8471.92.30, HTSUS,

which provides for ADP displays without cathode ray tubes.

Section XVI, Legal Note 1(m) states that: \"\[t\]his section does

not cover: \[a\]rticles of chapter 90.\" Heading 9013, HTSUS,

provides for: \"\[l\]iquid crystal devices not constituting articles

provided for more specifically in other headings.\" Therefore, if

the Epson LCDs are provided for more specifically in another

heading, they would not be classifiable in heading 9013, HTSUS.

You have requested classification of \"LCD Panels\" which

consist of a twisted nematic liquid crystal cell sandwiched between

two polarizers in which light enters the first polarizer in one

plane, is twisted and passes through the second polarizer resulting

in a light colored background. When one of the transparent pixels

is activated, the twist is inhibited and the second polarizer

blocks the light creating a dark pixel. In their imported

condition, these LCD sandwiches do not contain a printed circuit

board, row and column drivers, or integrated circuits of any kind.

However, at importation they do have either rubber connectors, heat

seal connectors, or dual-in-line (DIL) pin connectors.

Heading 9013, HTSUS, provides for: \"\[l\]iquid crystal devices

not constituting articles provided for more specifically in other

headings. The ENs to heading 9013, HTSUS, page 1478, state:

\(1\) Liquid crystal devices consisting of a liquid crystal

layer sandwiched between two sheets or plates of glass

or plastics, whether or not fitted with electrical

connections, presented in the piece or cut to special

shapes and not constituting articles described more

specifically in other headings of the Nomenclature.

(Emphasis added).

Customs has determined that the instant LCD glass sandwich is

a component part of an ADP display. However, the instant

importation merely consists of the LCD glass sandwich with

electrical connections. It is imported without all of the

additional components usually necessary to complete an ADP flat

panel display, such as; a printed circuit board (which activates

the row and column drivers), row and column drivers (which activate

the LCD pixels), and integrated circuits. Therefore, the instant

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glass sandwich is determined not to impart the essential character

of a finished ADP display. See, for example, HQ 086929, dated

January 31, 1991, which held that a cathode ray tube for an ADP

output unit was not classifiable as an unfinished ADP output

device, and was instead classifiable in subheading 8540.30.00,

HTSUS, which provides for other cathode-ray tubes.

Subheading 8473.30.40, HTSUS, provides for: \"\[p\]arts and

accessories\...suitable for use solely or principally with machines

of headings 8469 to 8472: \[p\]arts and accessories of the machines

of heading 8471: \[n\]ot incorporating a cathode ray tube.\" However,

heading 9013 specifically provides for: \"\[l\]iquid crystal devices

not constituting articles provided for more specifically in other

headings.\" It is Customs position that heading 9013, HTSUS, is

more specific than heading 8473, HTSUS.

Therefore, the Epson \"LCD Panels\" glass sandwich with

electrical connections is classifiable in subheading 9013.80.90,

HTSUS. See HQ 951609, dated October 20, 1992, for a decision

regarding ADP LCD glass sandwiches, which were not classifiable as

unfinished ADP output units because they lacked the essential

character of the finished display. For other rulings regarding

LCDs, see HQ 952360, and HQ 951288, dated July 7, 1992.

Therefore, unless a principal use for \"signaling\" (heading

8531, HTSUS) or for ADP display (heading 8471, HTSUS) can be

established satisfactorily either by design limitation or other

reliable means, LCD displays are classifiable in subheading

9013.80.60, HTSUS, which provides for: \"\[l\]iquid crystal devices

not constituting articles provided for more specifically in other

headings: \[o\]ther devices, appliances and instruments: \[o\]ther.\"

The Test and Control Module (TCM) and the Epson Custom Module

(ECM) contain row and column drivers and are utilized in numerous

applications, such as point of sale terminals, medical equipment,

etc. Therefore, since there appears to be no principal use and no

design limitations, the TCM and ECM are classifiable in subheading

9013.80.60, HTSUS. We continue to disagree with your assertion

that we should classify these models as ADP displays absent a

showing of principal use as such.

We also disagree with your assertion that the EG (graphics

displays) series LCD modules are classifiable under the provision

for ADP displays, absent a showing of sole or principal use of each

model for ADP display.

HOLDING:

The Epson \"LCD Panels\" glass sandwich with electrical

connections is classifiable in subheading 9013.80.60, HTSUS, which

provides for: \"\[l\]iquid crystal devices not constituting articles

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provided for more specifically in other headings: \[o\]ther devices,

appliances and instruments: \[o\]ther.\"

The Epson EA-D16125AR-S (2 lines of 16 characters) and the EG-

2401S-ER-1 (1 line with 64 characters), are restricted by their

limited operational capabilities to that of signaling functions,

therefore, they are classifiable in subheading 8531.20.00, HTSUS,

which provides for: \"\[e\]lectric sound or visual signaling apparatus

(for example, bells, sirens, indicator panels\...: \[i\]ndicator

panels incorporating liquid crystal devices (LCD\'s) or light

emitting diodes (LED\'s).\"

Due to the expansive character capabilities of the EG-7500B-

NS-1 (1 line with 200 characters), a principal use of signaling is

not found. Therefore, they are classifiable in subheading

9013.80.60, HTSUS, which provides for: \"\[l\]iquid crystal devices

not constituting articles provided for more specifically in other

headings: \[o\]ther devices, appliances and instruments: \[o\]ther.\"

The Epson EG7009N-NS 8834COS ADP display subassembly is a

complete ADP Flat Panel Display, missing only the exterior housing.

Therefore, pursuant to GRI 2(a), this model has the essential

character of a finished ADP display, and is classifiable under

subheading 8471.92.30, HTSUS, which provides for ADP display units

without cathode ray tubes.

The Test and Control Module (TCM) and the Epson Custom Module

(ECM) contain row and column drivers and are utilized in numerous

applications, such as point of sale terminals, and medical

equipment. Therefore, since there appears to be no principal use

and there are no design limitations, the TCM and ECM are

classifiable in subheading 9013.80.60, HTSUS.

EFFECT ON OTHER RULINGS:

In HQ 952246, dated November 10, we held that, due to the

expansive character capabilities of the EG-2401S-ER-1 (1 line with

64 characters), a principal use of signalling was not present.

However, due to the submission of supplemental information

regarding the principal use of LCDs, we are now of the opinion that

LCDs having 80 or less characters are restricted to signaling

functions by virtue of their operational limitations. Therefore,

the EG-2401S-ER-1 (1 line with 64 characters) is classifiable in

subheading 8531.20.00, HTSUS.

In HQ 952246, we classified LCDs designed for ADP display

under subheading 8471.92.80, HTSUS, which provides for ADP output

units suitable for physical incorporation. However, upon further

analysis, the correct classification is under subheading

8471.92.30, HTSUS, which provides for ADP display units without

cathode ray tubes.

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In NY 843928, dated August 7, 1989, Customs classified the

Epson computer display module (projectable LCD) model ECM-A0360

under subheading 8473.30.40, HTSUS, which provides for parts of ADP

machines not incorporating cathode ray tubes. However, we now

consider this module to impart the essential character of an ADP

display without a cathode ray tube. Therefore, it is classifiable

in subheading 8471.92.30, HTSUS, which provides for ADP displays

without cathode ray tubes.

In NY 849402, dated February 12, 1990, Customs classified the

Epson \"Magnabyte Computer Projection System\" (projectable computer

display module LCD) model ECM-A0275 under subheading 8473.30.40,

HTSUS, which provides for parts of ADP machines not incorporating

cathode ray tubes. However, we now consider this module to impart

the essential character of an ADP display without a cathode ray

tube. Therefore, it is classifiable in subheading 8471.92.30,

HTSUS, which provides for ADP displays without cathode ray tubes.

These rulings are modified under authority of section

177.9(d), Customs Regulations (19 CFR 177.9(d).

Sincerely,

John Durant, Director