8528 Monitors and projectors, not incorporating television (con.) reception apparatus; reception apparatus for television, whether or not incorporating radio-broadcast receivers or sound or video recording or reproducing apparatus (con.):
8528.51.00 00 Of a kind solely or principally used in an automatic data processing system of heading 8471 . . . . . Free
Friday, March 05, 2010
BenQ America Corp. v. United States seeks to resolve the interesting question of how to differentiate between general purpose video monitors and monitors of data processing applications. The former products are classifiable in Heading 8528 while the latter are classifiable in 8471. At least they were in 2004 when this merchandise was entered. The tariff schedule has now changed.
Under the relevant version of the tariff schedule, monitors that were capable of receiving data signals only from the central processing unit of an automatic data processing machine, were deemed to be units of ADP systems in 8471. Other monitors that were capable of receiving signals from other sources, such as DVD players, were deemed to be video monitors of 8528. BenQ made a noble effort to apply a principal use, principal function argument based on the fact that 99% of the monitors were used in conjunction with a computer. The Court, however, did a careful and thorough analysis of the relevant legal notes and the commentary in the Explanatory Notes and rejected the argument. Instead, it found a bright line and applied it resulting in a victory for the United States.
Today, ADP monitors have been moved out of 8471 and expressly plunked down in 8528. Ignoring CRT-based monitors, the relevant language now reads:
Guess what that means? The current language is based on principal use. BenQ's data showed 99% of actual use with ADP systems and 87% of purchasers intending to use the monitors with ADP systems. While the use of the specific item in question is of limited evidentiary value (because the legal question is the principal use of the class or kind of merchandise), this data [Note: I refuse to say "these data"] is indicative of a principal use with ADP equipment. So today, BenQ might win the fight.