BOR-7-07-CO:R:IT:C 112274 BEW
Ms. Darlene DiBernardo
Regional Manager - Post Entry Operations
33 West Service
Post Office Box 188
Champlain, New York 12919
RE: Eligibility of certain beams, harness frames, reeds and
heddles to be designated as instruments of international
traffic (IIT)
Dear Mr. DiBernardo:
This is in reference to your letter dated April 27, 1992,
requesting that certain beams, harness frames, reeds and heddles
be designated as instruments of international traffic (IIT).
FACTS:
You state that you anticipate bringing certain beams,
harness frames, reeds and heddles into the United States to be
used for transporting strands of yarn. You state that yarn would
be shipped to the United States on a warp. The wrap would be
inclusive of the beam the yarns are wound on, harness frames,
reeds and heddles, which are fixed to the back of a weaving
machine. You state the a number of cones of yarn are unwound
onto a beam, thus assembling the warp of cloth that consists of
3,000 to 5,000 strands of yarn rolled onto a beam. The warp
will be anywhere from 300 meters to 2,000 meters in length. The
ends of the beam are inserted into metal heddles which are
grouped in frames for the up and down movement required to obtain
the desired weave effect, and drop wires are added to control the
stop-motion device on the loom. The yarn would be shipped from
Canada to the U.S. where the production of cloth would occur.
The beams, harness frames, reeds and heddles would be returned to
Canada for reuse, and shipment back to the U.S.
ISSUE:
Whether the described beams, harness frames, reeds and
heddles used for the transportation of yarn may be treated as
instruments of international traffic within the meaning of 19
U.S.C. 1322(a) and section 10.41a of the Customs Regulations (19
CFR 10.41a).
LAW AND ANALYSIS:
Section 322(a), Tariff Act of 1930, as amended (19 U.S.C.
1322(a)), provides that "[v]ehicles and other instruments of
international traffic, of any class specified by the Secretary of
the Treasury, shall be excepted from the application of the
customs laws to such extent and subject to such terms and
conditions as may be prescribed in regulations or instructions of
the Secretary of the Treasury..."
The Customs Regulations issued under the authority of
section 322(a) are in section 10.41a (19 CFR 10.41a). Paragraph
(a)(l) of section 10.41a designates as IIT lift vans, cargo vans,
shipping tanks and certain other named articles and states that
other articles may be designated as IIT by the Commissioner of
Customs in decisions to be published in the weekly Customs
Bulletin. Once designated as instruments of international
traffic, these items may be released without entry or the payment
of duty, subject to the provisions of section 10.41a.
To qualify as an "instrument of international traffic"
within the meaning of 19 U.S.C. 1322(a) and the regulation
promulgated pursuant thereto (19 CFR 10.41a et seq.), an article
must be used as a container or holder. The article must be
substantial, suitable for and capable of repeated use, and used
in significant numbers in international traffic. (See subheading
9803.00.50, Harmonized Tariff Schedule of the United States
Annotated (HTSUSA), and former Headnote 6(b)(ii), Tariff
Schedules of the United States (HTSUS), as well as Headquarters
Decisions 104766; 108084; 108658; 109665; and 109702).
The concept of reuse contemplated above is for commercial
shipping or transportation purposes, and not incidental or
fugitive uses. Tariff Classification Study, Sixth Supplemental
Report (May 23, 1963) at 99. See Holly Stores, Inc. v. United
States, 697 F.2d 1387 (Federal Circuit, 1982).
In Holly Stores, supra, the court determined that "reuse" in
the context of former General Headnote 6(b)(ii) "has been
consistently interpreted to mean practical, commercial reuse, not
incidental reuse." (Emphasis added). In that case, articles of
clothing were shipped into this country on wire or plastic coat
hangers. Evidence showed that the hangers were designed to be,
and were of fairly durable construction and that it would be
physically possible to reuse them. However, the court found that
only about one percent of the hangers were reused in any way at
all, and that those uses were of a noncommercial nature. The
court held that the uses of these hangers beyond shipping them once from overseas to the United States were purely incidental,
and concluded that the hangers were "not designed for, or capable
of, reuse". Subsequent Customs rulings on this matter have held
that single use is not sufficient; reuse means more than twice
(Headquarter rulings 105567 and 108658). Furthermore, it is our
position that the burden of proof to establish reuse is on the
applicant, even though the applicant may not be the party reusing
the instrument.
We find that the beams, harness frames, reeds and heddles
under consideration are capable of being used as a holder, that
they are substantial, suitable for and capable of repeated use,
and that they will be used in significant numbers in
international traffic. We further find that the beams, harness
frames, reeds and heddles under consideration are similar to
certain holders designed to hold two or more pounds of yarn or
thread, made of wood, base metal, or plastic or a combination
thereof, known as spools, bobbins, cops, and pins, used for the
transportation of yarn and thread which were designated as
instruments of international traffic in Treasury Decision 56543.
The designation of a container or holder as an IIT becomes
effective only when used as such upon its arrival in this country
in foreign trade, either empty or with merchandise. If the
holder or container is brought into the country by a party other
than the one who is using it as an IIT, it is subject to entry as
imported merchandise. The principal on the IIT bond is the party
who is using the holder or container as an IIT.
HOLDING:
The beams, harness frames, reeds and heddles under
consideration qualify for treatment as instruments of
international traffic and may be released under the procedures
set forth in section 10.41a, Customs Regulations.
Sincerely,
Acting Chief
Carrier Rulings Branch