BOR-7-07-CO:R:IT:C 112327 BEW
Hiroyuki Nakano
AMT Freight, Inc.
4799 Aviation Parkway, Suite H
Atlanta, Georgia 30349
RE: Eligibility of certain polystyrene hubs, tubes, spacers and
flanges to be designated as instruments of international
traffic (IIT)
Dear Mr. Nakano:
This is in reference to your letter dated June 10, 1992, and
communication of November 19, 1992, requesting that certain
polystyrene hubs, tubes, spacers and flanges be designated as
instruments of international traffic (IIT).
FACTS:
You state that Fuji Photo Film, Inc. anticipates using certain
polystyrene hubs, tubes, spacers and flanges to transport video
tape rolls from the United States to international destinations.
These hubs, tubes, spaces and flanges will be used to separate and
hold video tape rolls secure during the transportation. The units
would be returned to the United States empty for reuse. Fuji
advises that all spaces and flanges will be replaced before the
11th use in 35 months. The flange is the only item which has a
marking of "Made in U.S.A.", and the marking is engraved so that
it should remain for a long time. The number of units to be used
are as follows:
1992 1993
Hub 175,000 750,000
Tube 20,000 90,000
Spacer 200,000 900,000
Flange 40,000 180,000
You state that you anticipate using Savannah, Georgia, and
Charleston, South Carolina, as the ports of entry and departure.
ISSUE:
Whether the described polystyrene hubs, tubes, spacers and
flanges used for the transportation of video tape 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 polystyrene hubs, tubes, spacers and flanges
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 polystyrene hubs, tubes, spaces
and flanges under consideration are similar to certain reels
composed of polystyrene attached to a light metal core, and used
for the transportation of recording tape which were designated as
instruments of international traffic in Treasury Decision 76-204;
and that the polystyrene hubs, tubes, spacers and flanges 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 polystyrene hubs, tubes, spacers and flanges 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