United States Court of Appeals
for the Federal Circuit
__________________________
BENQ AMERICA CORPORATION,
Plaintiff-Appellant,
v.
UNITED STATES,
Defendant-Appellee.
__________________________
2010-1259
__________________________
Appeal from the United States Court of International
Trade in case No. 05-CV-0637, Judge Delissa A. Ridgway.
_________________________
Decided: May 27, 2011
_________________________
V. JAMES ADDUCI, II, Adduci, Mastriani & Schaum-
berg, L.L.P., of Washington, DC, argued for plaintiff-
appellant. With him on the brief were MUNFORD PAGE
HALL, II and WILLIAM C. SJOBERG.
BARBARA S. WILLIAMS, Attorney in Charge, Interna-
tional Trade Field Office, Commercial Litigation Branch,
Civil Division, United States Department of Justice, of
New York, New York, argued for defendant-appellee.
With her on the brief were TONY WEST, Assistant Attor-
ney General, and JEANNE E. DAVIDSON, Director, of Wash-
ington, DC. Of counsel on the brief was BETH BROTMAN,
BENQ AMERICA CORP v. US 2
Office of the Assistant Chief Counsel, International Trade
Litigation, United States Customs and Border Protection,
of New York, New York. Of counsel were MIKKI COTTET
and EDWARD F. KENNY, Attorneys, of New York, New
York.
WILLIAM D. OUTMAN, II, Baker & McKenzie LLP, of
Washington, DC, for amicus curiae Hewlett-Packard
Company. With him on the brief were MICHAEL E.
MURPHY and KEVIN J. SULLIVAN.
__________________________
Before LINN, SCHALL, and DYK, Circuit Judges.
SCHALL, Circuit Judge.
BenQ America Corporation (“BenQ”) appeals the final
decision of the United States Court of International Trade
in BenQ America Corp. v. United States, 683 F. Supp. 2d
1335 (Ct. Int’l Trade 2010) (“BenQ”). In its decision, the
court denied BenQ’s motion for summary judgment and
granted the government’s cross-motion for summary
judgment. In so doing, the court upheld the ruling of the
Bureau of Customs and Border Protection (“Customs”)
classifying certain liquid crystal display (“LCD”) monitors
imported by BenQ from China in 2004 under subheading
8528.21.70 of the Harmonized Tariff Schedule of the
United States (“HTSUS”). BenQ had protested the classi-
fication, arguing that the monitors should be classified
under subheading 8471.60.45 of the HTSUS. Because we
conclude that the Court of International Trade erred in
not conducting a principal use analysis with respect to the
imported goods, we vacate the grant of summary judg-
ment in favor of the government and remand the case to
the court for further proceedings consistent with this
opinion.
3 BENQ AMERICA CORP v. US
BACKGROUND
I.
The products at issue are flat-panel LCD monitors
with screens measuring 20.1 inches on the diagonal. The
monitors are equipped with five different types of connec-
tors for receiving data: (1) a 15-pin D-sub analog video
connector; (2) a DVI-D digital video connector; (3) an S-
video connector; (4) a composite connector; and (5) USB
ports. The D-sub analog video and DVI-D digital video
connectors can receive signals from a personal computer,
whereas the S-video and composite connectors can receive
video signals from devices such as DVD players and
VCRs. The USB ports allow the monitors to be connected
to digital cameras and other devices. The monitors are
imported with a stand for use on a desktop but can also be
mounted on a wall. BenQ imported the monitors, DellTM
2001FP Flat Panel Color Monitors, for BenQ Corporation,
a Taiwanese company that manufactured the monitors for
DellTM.
Upon importation, BenQ entered the monitors under
HTSUS heading 8471, subheading 8471.60.45, both of
which are part of Section XVI of the HTSUS. Subheading
8471.60.45 is a duty-free provision for:
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 else-
where specified or included: Input or output units,
whether or not containing storage units in the
same housing: Other: Display units: Other:
Other. 1
1Unless otherwise noted, all references to the
HTSUS are to the 2004 HTSUS.
BENQ AMERICA CORP v. US 4
In due course, Customs classified and reliquidated the
monitors under HTSUS heading 8528, subheading
8528.21.70, dutiable at 5% ad valorem, and assessed
duties on the monitors at that rate. Heading 8528 and
subheading 8528.21.70 also are part of HTSUS Section
XVI. Subheading 8528.21.70 provides for:
Reception apparatus for television, whether or not
incorporating radiobroadcast receivers or sound or
video recording or reproducing apparatus; video
monitors and video projectors: Video monitors:
Color: With a flat panel screen: Other: Other. 2
BenQ filed a timely protest of Customs’ reclassifica-
tion, arguing that the monitors are of a kind solely or
principally used in an automatic data processing (“ADP”)
system and thus classifiable under subheading 8471.60.45
pursuant to Notes 5(B) and (C) of Chapter 84 of the
HTSUS. After Customs failed to take action on the
protest, the protest was deemed denied.
II.
BenQ filed suit in the Court of International Trade
under 28 U.S.C. § 1581(a) to contest the denial of its
protest. After designating the action a test case to control
the outcome of at least one other action, the court enter-
tained the parties’ respective motions for summary judg-
2 As of 2007, HTSUS heading 8528 was amended to
cover all monitors “[o]f a kind solely or principally used in
an automatic data processing system of heading 8471.”
See subheading 8528.41.00, HTSUS (2007) (covering
“ . . . Cathode-ray tube monitors: Of a kind solely or
principally used in an automatic data processing system
of heading 8471”); subheading 8528.51.00, HTSUS (2007)
(covering “ . . . Other monitors: Of a kind solely or princi-
pally used in an automatic data processing system of
heading 8471”); see also BenQ, 683 F. Supp. 2d at 1347
n.22.
5 BENQ AMERICA CORP v. US
ment. In its motion, BenQ argued that the court should
apply a principal function analysis under Note 3 to
HTSUS Section XVI. Note 3 provides that, “[u]nless the
context otherwise requires, composite machines consisting
of two or more machines fitted together to form a whole
and other machines designed for the purpose of perform-
ing 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.” According to BenQ, the principal function of
the DellTM monitors is to serve as a monitor for a com-
puter or an automatic data processing machine. Hence,
they should be classified under HTSUS subheading
8471.60.45, as BenQ claimed at the time of importation.
For its part, the government urged that, in order for
the DellTM monitors to be classified in heading 8471,
BenQ must satisfy the criteria of Note 5(B) to Chapter 84,
which requires a principal use analysis pursuant to
HTSUS Additional U.S. Rule of Interpretation (“ARI”)
1(a). Chapter 84, Note 5(B)(a) states that a unit can be
classified under heading 8471 if it is “of a kind solely or
principally used in an automatic data processing system.”
ARI 1(a) states in relevant part that, “[i]n the absence of
special language or context which otherwise requires —
(a) a tariff classification controlled by use (other than
actual use) is to be determined in accordance with the use
in the United States at, or immediately prior to, the date
of importation, of goods of that class or kind to which the
imported goods belong, and the controlling use is the
principal use.” Such an analysis, the government con-
tended, compelled the conclusion that the DellTM monitors
could not be classified under HTSUS subheading 8471
because BenQ did not present evidence regarding the
class or kind of goods to which the monitors belong. The
government also pointed to an Explanatory Note to head-
BENQ AMERICA CORP v. US 6
ing 8471 limiting “Display units of automatic data proc-
essing machines” to those machines that are “capable of
accepting a signal only from the central processing unit of
an automatic data processing machine . . . .” World
Customs Org., Harmonized Commodity Description &
Coding System, Explanatory Notes (“Explanatory Notes”)
1579 (2002). In the government’s view, the Explanatory
Note provided additional support for its position that the
monitors should not be classified under heading 8471
because the DellTM monitors accept signals from sources
other than automatic data processing machines. Accord-
ing to the government, the monitors were properly classi-
fied in heading 8528, a provision encompassing video
monitors.
The Court of International Trade granted the gov-
ernment’s motion and denied BenQ’s motion, holding that
Customs had properly classified the monitors under
HTSUS heading 8528. BenQ, 683 F. Supp. 2d at 1347-48.
The court, however, followed an approach somewhat
different from that urged by either BenQ or the govern-
ment. Instead of employing either a principal use or
principal function analysis, the court relied on Note 5(E)
to Chapter 84, HTSUS, and the Explanatory Notes to
heading 8471. The court determined that the DellTM
monitors can perform a specific function other than data
processing, that function being serving as a video monitor
for a video source. Id. at 1345. This ability, the court
concluded, meant that the monitors could not be classified
under heading 8471 because Note 5(E) provides that
“[m]achines performing a specific function other than data
processing and incorporating or working in conjunction
with an automatic data processing machine are to be
classified in the headings appropriate to their respective
7 BENQ AMERICA CORP v. US
functions or, failing that, in residual headings.” 3 Note
5(E) to Chapter 84, HTSUS. Since the DellTM monitors
are admittedly capable of connection to a video source for
use as video monitors, the court reasoned that they can
“perform[ ] a specific function other than data processing”
and thus had to be classified, not under heading 8471, but
under “the heading[ ] appropriate to their respective
function[ ] . . . .” BenQ, 683 F. Supp. 2d at 1345-46 (quot-
ing Note 5(E) to Chapter 84, HTSUS). That heading,
according to the court, was the broad eo nomine heading
8528 (“Reception apparatus for television, whether or not
incorporating radiobroadcast receivers or sound or video
recording or reproducing apparatus; video monitors and
video projectors”) because the monitors are video moni-
tors. Thus, the court upheld Customs’ classification of the
monitors under subheading 8528.21.70. The court re-
jected BenQ’s reliance on Note 3 to Section XVI on the
ground that the Note includes the express proviso that it
applies “[u]nless the context otherwise requires.” Id. at
1341-42. The terms of heading 8471 and the relevant
Chapter Notes, the court found, “plainly constitute a
‘context [which] otherwise requires,’” overriding the
general default rule in Note 3 to Section XVI. Id. at 1342.
BenQ timely appealed the decision of the Court of In-
ternational Trade. We have jurisdiction pursuant to 28
U.S.C. § 1295(a)(5).
3 The court also agreed with the government that
the Explanatory Notes to heading 8471 confirm that the
DellTM monitors could not be classified under that heading
because the monitors accept signals from video sources.
See BenQ, 683 F. Supp. 2d at 1346-47.
BENQ AMERICA CORP v. US 8
DISCUSSION
I.
Whether particular imported merchandise has been
classified under an appropriate tariff provision generally
entails a two-step process: (1) ascertaining the proper
meaning of specific terms within the tariff provision, and
(2) determining whether the merchandise at issue comes
within the description of such terms as properly con-
strued. Intel Singapore, Ltd. v. United States, 83 F.3d
1416, 1417-18 (Fed. Cir. 1996). The first step is a ques-
tion of law that is reviewed de novo; the second is a ques-
tion of fact that is reviewed for clear error. Id. The issue
in this case presents a question of law: specifically,
whether, in determining the HTSUS subheading under
which the DellTM monitors should be classified, the Court
of International Trade improperly relied upon certain
provisions of the HTSUS.
The General Rules of Interpretation (“GRIs”) and the
ARIs govern classification of merchandise under the
HTSUS, and are applied in numerical order. N. Am.
Processing Co. v. United States, 236 F.3d 695, 698 (Fed.
Cir. 2001). When determining the correct classification
for merchandise, a court first construes the language of
the headings in question, in light of any related section or
chapter notes. Faus Grp., Inc. v. United States, 581 F.3d
1369, 1372 (Fed. Cir. 2009) (citing Orlando Food Corp. v.
United States, 140 F.3d 1437, 1440 (Fed. Cir. 1998)).
“The terms of the HTSUS are construed according to
their common commercial meanings.” Millenium Lumber
Distribution Ltd. v. United States, 558 F.3d 1326, 1329
(Fed. Cir. 2009). “According to the [HTSUS’s] [p]reface,
‘[t]he legal text of the [HTSUS] includes all provisions
enacted by Congress,’ including ‘Section and Chapter
notes.’” Honda of Am. Mfg., Inc. v. United States, 607
9 BENQ AMERICA CORP v. US
F.3d 771, 773 (Fed. Cir. 2010). The Section and Chapter
Notes “are not optional interpretive rules, but are statu-
tory law.” Park B. Smith, Ltd. v. United States, 347 F.3d
922, 926 (Fed. Cir. 2003). Unlike the Section and Chapter
notes, the Explanatory Notes are not legally binding or
dispositive, but they may be consulted for guidance and
are generally indicative of the proper interpretation of the
various HTSUS provisions. Id. at 929 n.3; N. Am. Proc-
essing Co., 236 F.3d at 698 (citing Carl Zeiss Inc. v.
United States, 195 F.3d 1375, 1378 n.1 (Fed. Cir. 1999)).
II.
BenQ’s first argument on appeal is one that the gov-
ernment does not dispute: that the trial court erred in
relying on Note 5(E) to Chapter 84, HTSUS, to exclude
the monitors from heading 8471. According to BenQ,
Note 5(E) applies only in two distinct situations: (1) in the
case of a machine incorporating an ADP machine and
performing a specific function other than data processing;
or (2) in the case of a machine presented with an ADP
machine and intended to work in conjunction with the
ADP to perform a specific function other than data proc-
essing, as set forth in the Explanatory Note to Chapter
84, Note 5. 4 At the time of importation BenQ’s monitors
4 The Explanatory Note to Chapter 84, Note 5(E)
states:
In accordance with the provisions of Note 5(E) to
Chapter 84, the following classification principles
should be applied in the case of a machine incorporat-
ing or working in conjunction with an automatic data
processing machine, and performing a specific func-
tion:
(1) A machine incorporating an automatic data proc-
essing machine and performing a specific func-
tion other than data processing is classifiable in
BENQ AMERICA CORP v. US 10
did not incorporate an ADP machine, did not work in
conjunction with an ADP to perform a function other than
data processing, and were not presented with an ADP
machine. Therefore, BenQ argues and the government
agrees, the court’s reliance on Chapter 84, Note 5(E), was
in error.
The government also concedes BenQ’s second argu-
ment: that the Court of International Trade erroneously
relied on the first clause of an Explanatory Note to head-
ing 8471 to exclude BenQ’s monitors from that heading.
BenQ argues that the first clause of the non-binding
Explanatory Note to heading 8471, which requires that a
display unit of an ADP be capable of accepting a signal
“only from the central processing unit of an [ADP],” 5
the heading corresponding to the function of that
machine or, in the absence of a specific heading,
in a residual heading, and not in heading 84.71.
(2) Machines presented with an automatic data proc-
essing machine and intended to work in conjunc-
tion therewith to perform a specific function
other than data processing, are to be classified as
follows:
the automatic data processing machine must be
classified separately in heading 84.71 and the
other machines in the heading corresponding to
the function which they perform unless, by appli-
cation of Note 4 to Section XVI or Note 3 to
Chapter 90, the whole is classified in another
heading of Chapter 84, Chapter 85 or of Chapter
90.
Explanatory Notes 1395 (2004).
5 The Explanatory Notes to heading 8471 state:
Among the constituent units included [under heading
8471] are display units of automatic data processing
machines which provide a graphical presentation of
the data processed. They differ from the video moni-
11 BENQ AMERICA CORP v. US
conflicts with the statutory language of Note 5(B)(a) to
Chapter 84, which states that a unit can be classified
under heading 8471 if, amongst other things, it is “of a
kind solely or principally used in an automatic data
processing system.” Chapter 84, Note 5(B)(a) (emphasis
added). See Appellee’s Br. 29 n.9 (“To the extent that the
Explanatory Notes to Heading 8471 (2002) at 1579 sup-
port the trial court’s reading of Note 5(E), we believe that
the Explanatory Notes may conflict with Note 5(B) and,
accordingly, do not govern here.”).
BenQ’s principal argument is that the Court of Inter-
national Trade should have determined, and that we
should now determine, the “principal function” of the
DellTM monitors, as required by Section XVI, Note 3,
HTSUS. BenQ urges that the monitors’ “principal func-
tion” is serving “as an output (display) unit of an ADP
system,” and that the monitors thus should be classified
in heading 8471 as “units” of ADPs. Appellant’s Br. 44.
BenQ argues that Section XVI, Note 3, prevails over
Chapter 84, Note 5(B)(a), and the “principal use” analysis
under ARI 1(a), because the Chapter Note relates to only
one of the competing headings, whereas both Chapter 84
and Chapter 85 fall within Section XVI. BenQ also ar-
gues that ARI 1 applies “[i]n the absence of special lan-
guage or context which otherwise requires” and that
Section XVI, Note 3 provides such “special language or
context.” BenQ requests that we perform a principal
function analysis through an application of the factors set
tors and television receivers of heading 85.28 in sev-
eral ways, including the following:
(1) Display units of automatic data processing ma-
chines are capable of accepting a signal only from
the central processing unit of an automatic data
processing machine . . . .
Explanatory Notes 1579 (2002).
BENQ AMERICA CORP v. US 12
forth in United States v. Carborundum Co., 536 F.2d 373,
377 (C.C.P.A. 1976), even though those factors are typi-
cally used to establish whether merchandise falls within a
particular class or kind for purposes of a principal use
analysis. In the alternative, BenQ argues that we should
remand the case to the Court of International Trade for it
to perform a principal function analysis.
The government responds that we should affirm the
Court of International Trade’s decision for several alter-
native reasons. First, the government points out that
BenQ has admitted that the monitors are “capable of
connection to a video source as video monitors.” BenQ,
683 F. Supp. 2d at 1341. Thus, the government contends,
the monitors fall squarely under heading 8528, which is a
broad eo nomine provision covering, inter alia, “video
monitors.”
Next, the government argues that BenQ has not es-
tablished that the monitors should be classified in head-
ing 8471, which is directed to “Automatic data processing
machines and units thereof.” BenQ, the government
observes, does not argue that the monitors are ADP
machines, but instead that they are “units thereof.” As
noted above, Chapter 84, Note 5(B), provides statutory
requirements for “units” of ADP systems, requiring at
Note 5(B)(a) that such units be “of a kind solely or princi-
pally used in” an ADP system. The government argues,
and BenQ does not dispute, that Chapter 84, Note 5(B),
invokes a principal use analysis under ARI 1(a). See
Primal Lite, Inc. v. United States, 182 F.3d 1362, 1363-64
(Fed. Cir. 1999); Grp. Italglass U.S.A., Inc. v. United
States, 17 Ct. Int’l Trade 226, 228 (1993), reconsideration
granted in part by 17 Ct. Int’l Trade 373 (1993). 6 Thus,
6 The government also argues that Note 5(B)(a) in-
vokes the concept of “actual use” under ARI 1(b) and 19
13 BENQ AMERICA CORP v. US
the government argues that, pursuant to ARI 1(a), BenQ
was required to establish (1) the class or kind to which
the imported goods belong, and (2) the principal use of
that class or kind at or immediately prior to the date of
importation. According to the government, BenQ did not
carry this burden because it failed to define the class of
goods encompassed by heading 8471 and failed to produce
evidence regarding the class or kind of goods to which the
imported multimedia monitors belong. The government
argues that the trial court correctly found Note 3 of Sec-
tion XVI inapplicable and that BenQ is impermissibly
seeking to use this Note to extend heading 8471 beyond
its statutory terms by rendering it an “actual use” provi-
sion in direct contravention of the principal use statutory
requirements for classification as a “unit” provided in
Chapter 84, Note 5(B). Accordingly, the government
states that the trial court’s classification of BenQ’s moni-
tors as video monitors under heading 8528 should be
affirmed.
III.
Chapter 84, Note 5(B), lists three features which, if
present, indicate that, pursuant to Note 5(C), a “unit is to
be regarded as being a part of a complete [ADP] system”
under heading 8471. Notes 5(B) and (C) to Chapter 84 of
the HTSUS (2004) state:
5. (B) Automatic data processing ma-
chines may be in the form of sys-
tems consisting of a variable
number of separate units. Subject to
paragraph (E) below, a unit is to be
C.F.R. §§ 10.131-10.139, HTSUS, but that BenQ did not
satisfy any of the statutory or regulatory requirements for
classification of the monitors based on “actual use.” BenQ
does not appear to dispute this contention.
BENQ AMERICA CORP v. US 14
regarded as being a part of a com-
plete system if it meets all the fol-
lowing conditions:
(a) It is of a kind solely or princi-
pally used in an automatic
data processing system;
(b) It is connectable to the cen-
tral processing unit either di-
rectly or through one or more
other units; and
(c) It is able to accept or deliver
data in a form (codes or sig-
nals) which can be used by
the system.
(C) Separately presented units of an
automatic data processing machine
are to be classified in heading 8471.
As already seen, Note 5(E), which is referenced in Note
5(B), states:
5. (E) Machines performing a specific
function other than data processing
and incorporating or working in
conjunction with an automatic data
processing machine are to be classi-
fied in the headings appropriate to
their respective functions or, failing
that, in residual headings.
As noted above, the Court of International Trade did
not perform an analysis under Chapter 84, Note 5(B),
because the court concluded that Note 5(E) and the Ex-
planatory Note to heading 8471 prohibited classification
15 BENQ AMERICA CORP v. US
in heading 8471. BenQ, 683 F. Supp. 2d at 1343-47. The
parties take the position that the court’s reliance on Note
5(E) and the relevant Explanatory Note was erroneous,
and we agree. Note 5(E) is limited to “[m]achines per-
forming a specific function other than data processing and
incorporating or working in conjunction with an auto-
matic data processing machine.” The DellTM monitors do
not incorporate ADP machines, but rather are separate
and distinct units. Additionally, the government does not
appear to dispute that when “performing a specific func-
tion other than data processing,” such as when the moni-
tors are serving as video monitors for other devices such
as DVD players and VCRs, the monitors are “working in
conjunction” with those other devices, not with an auto-
matic data processing machine. 7 Further, to the extent
that the Explanatory Note to heading 8471 prohibits
classification in heading 8471 for those machines that are
not “capable of accepting a signal only from the central
processing unit of an automatic data processing machine,”
it contradicts the express statutory language of Note
5(B)(a), which specifically provides for units that are
merely “principally,” as opposed to “solely,” used in auto-
matic data processing systems. Explanatory Notes 1579
(2002) (emphasis added); Chapter 84, Note 5(B)(a).
Although the Court of International Trade relied on Note
5(E) in error, the remaining statutory requirements of
Chapter 84, Note 5, must be met in order for the monitors
to be classified under heading 8471. Thus, to determine if
the DellTM monitors can be classified under heading 8471
as BenQ argues, an analysis under Chapter 84 Note 5(B)
must be undertaken.
7 In addition, we note that the government does not
dispute that the DellTM monitors are not “presented with”
(i.e., imported with) automatic data processing machines.
See Explanatory Notes 1395 (2004).
BENQ AMERICA CORP v. US 16
IV.
It is undisputed that the requirements of paragraphs
(b) and (c) of Note 5(B) are met in the DellTM monitors.
The question thus becomes whether the requirement of
paragraph (a) (“of a kind solely or principally used in an
automatic data processing system”) also is met. BenQ
does not argue that the monitors are “solely” used in ADP
systems. A determination of whether this requirement is
met therefore requires an analysis of the “principal use” of
the monitors unless, as BenQ argues, the “principal
function” analysis of Section XVI, Note 3, overrides the
“principal use” analysis of Note 5(B)(a).
As previously noted, ARI 1(a) states that “a tariff
classification controlled by use (other than actual use) is
to be determined in accordance with the use in the United
States at, or immediately prior to, the date of importation,
of goods of that class or kind to which the imported goods
belong, and the controlling use is the principal use.” The
rule “call[s] for a determination as to the group of goods
that are commercially fungible with the imported goods.”
Primal Lite, 182 F.3d at 1365. One method of determin-
ing the “class or kind” is by applying the factors set forth
in Carborundum. These factors are the general physical
characteristics of the merchandise; the expectation of the
ultimate purchasers; the channels, class or kind of trade
in which the merchandise moves; the environment of the
sale of the merchandise; the use of the goods at issue, if
any, in the same manner as merchandise which defines
the class; the economic practicality of so using the import;
and the recognition in the trade of this use (“the Car-
borundum factors”). See 536 F.2d at 377.
Even though both heading 8471 and heading 8528 fall
within Section XVI, Chapter 84, Note 5(B), is specifically
directed to heading 8471. Section XVI, Note 3, is a Note
17 BENQ AMERICA CORP v. US
of general application which, in certain circumstances,
calls for a principal function analysis. It is highly
unlikely that the drafters intended to override the specifi-
cally tailored Note 5(B), which sets forth the statutory
requirements for heading 8471, with Section XVI, Note 3’s
general analysis. This is particularly the case, we think,
because Section XVI, Note 3, includes a proviso indicating
that it does not apply when “the context otherwise re-
quires.” Here, we think that, by reason of the language of
Note 5(B), “the context otherwise requires.” Moreover,
the purpose of “principal use” provisions in the HTSUS is
to classify particular merchandise according to the ordi-
nary use of such merchandise, even though particular
imported goods may be put to some atypical use. Primal
Lite, 182 F.3d at 1364. Although, as seen, the parties
disagree about whether a Section XVI, Note 3, principal
function analysis or a Note 5(B) principal use analysis
should be performed, they do not appear to argue that the
DellTM monitors are put to atypical use after importation,
so that the two analyses could possibly produce different
outcomes in this case. 8 In fact, BenQ admits that Cus-
toms “has traditionally used [the Carborundum] factors to
classify multifunction monitors,” Appellant’s Br. 44, and
proposes that we consider these factors in performing a
principal function analysis. It is unclear whether a prin-
cipal use analysis would require a different result in this
case than a principal function analysis. In any event, we
conclude that a principal use analysis is the correct ap-
proach in this case.
8 This is not the case where, for example, we must
consider whether a classification covering vehicles princi-
pally used for automobile racing would cover a race car,
even if the particular imported car was actually used
solely in an advertising display. See Primal Lite, 182 F.3d
at 1364.
BENQ AMERICA CORP v. US 18
The government argues that remand is not necessary
because BenQ failed to provide any evidence regarding
principal use, instead limiting its proof to a principal
function analysis focused upon the use of the monitors
themselves as opposed to their “class or kind.” We note
that the government challenged the adequacy of BenQ’s
showing at the trial court as it related to principal func-
tion, but the Court of International Trade expressly did
not reach the issue of the adequacy of the evidence for
either a principal use or principal function analysis be-
cause of its rationale for disposing of the case. BenQ, 683
F. Supp. 2d at 1343-44 n.15. Because the Court of Inter-
national Trade did not reach this issue, we decline to
address it on appeal. On remand the Court of Interna-
tional Trade should conduct a principal use analysis to
determine the correct classification of the DellTM monitors.
CONCLUSION
For the foregoing reasons, we vacate the judgment of
the Court of International Trade classifying BenQ’s
monitors under subheading 8528.21.70. The case is
remanded to the Court of International Trade for further
proceedings consistent with this opinion.
VACATED and REMANDED
COSTS
Each party shall bear its own costs.