BOR-7-07-CO:R:IT:C 112371 BEW
Mr. Thomas Moday
Guardian Industries Corp.
Kingsburg Plant
11535 East Mountain View
Kingsburg, California 93631
RE: Eligibility of certain metal racks to be designated as
instruments of international traffic (IIT)
Dear Mr. Moday:
This is in reference to your letter dated June 22, 1992 and
your fax dated October 16, 1992, requesting that certain metal
racks be designated as instruments of international traffic
(IIT).
FACTS:
You state that you anticipate bringing certain metal racks
into the United States to be used for transporting flat glass.
You state Guardian is currently using skids and similar
instruments in their capacity as an international carrier of
glass. Enclosed with your June 22, 1992, letter is an Appendix A
which shows the metal racks in both an empty and loaded state.
You state that the racks are substantial holders of flat glass,
that the are capable of repeated use, and that they are utilized
in large volume in the course of international traffic.
You further state that some of the ports where the racks
will be imported and/or exported, would include Charleston, South
Carolina; Richmond, Virginia; Miami, Florida; New York, New York;
Baltimore, Maryland; Houston, Texas; and Long Beach and Oakland,
California.
ISSUE:
Whether the described metal racks used for the
transportation of flat glass 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 racks under consideration are metal racks
capable of being used as a container or 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 metal racks under
consideration are similar to certain racks composed of metal and
wood, measuring 24 inches in width, 96 inches in length, and 60
inches in height, with the name "C-E Glass" and a serial number
stenciled on the rack, used for the transportation of glass units
which were designated as instruments of international traffic in
Treasury Decision 75-59.
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 metal racks 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