Litigation Kicks Off Over Proper Classification of Certain HP Monitors

Taiwanese manufacturer Innolux Corporation launched its case against CBP's classification of the company's shipments of Hewlett-Packard 25-inch monitors, in an Oct. 15 complaint at the Court of International Trade. The case was originally filed in 2013 but placed on the reserve calendar, with counsel for Innolux filing for extensions of time to remain on the reserve calendar beginning in December 2014 (Innolux Corporation v. United States, CIT #13-00272).

Having been classified under Harmonized Tariff Schedule subheading 5828.59.3050, which provides for "monitors and projectors, not incorporating television reception apparatus ... with a flat panel screen ... LCD-type (direct view)," dutiable at 5%, Innolux instead fought for classification under subheading 8528.51.0000, which is for monitors solely used in an automatic data processing system and allows the goods to enter duty-free.

CBP denied Innolux's argument, leading to the exporter filing suit at CIT. In its complaint, Innolux cites the 2011 U.S. Court of Appeals for the Federal Circuit case BenQ America Corp. v. United States, which said that a monitor used with an Automatic Data Processing system must be classified under subheading 8471.60.45. However, the text of this subheading was renumbered and included in the tariff schedule as 8528.51.0000, Innolux said.

Since Innolux's monitors are meant for connection to ADPs, they should be classified under this subheading and be allowed to enter the U.S. duty-free, the complaint argues. "The HP set up guide that accompanied the sale of the subject HP PC monitors explains how to connect this model to an ADP system (PC) only," Innolux said. "It does not explain or show how this monitor may be used or configured with any other system or device."