BOR-7-07-CO:R:IT:C 111933 BEW
Mr. R.J. Greenawalt
Union Carbide Chemicals
And Plastics Company, Inc.
39 Old Ridgebury Road
Danbury, CT 06817-0001
Re: Instrument of international traffic; Silane module; Entered
as IIT without previous formal designation
Dear Mr. Greenawalt:
This is in reference to your letters of January 30,
October 2, and October 11, 1991, which requests the proper
classification of a module used to transport silane gas.
FACTS:
You state that the module was entered by you as an
Instrument of International Traffic at Portland, Oregon. On
November 30, 1990, a Notice of Action was issued by Customs in
Portland stating that the empty module should be entered under
"Harm Code 7309.00 at 2.6% duty." In response to your assertion
that the containers should be entered as instruments of
international traffic, the Customs office in Portland stated
that, in the absence of an indication that these containers had
been so designated, the original proposal in the Notice of Action
would stand. Acting upon the suggestion of the Portland Customs
office, you request a ruling designating the module as an
instrument of international traffic.
You state that a silane module consists of a steel shipping
frame containing eight (8) Department of Transportation (DOT)
Specification 3T Cylinders. The 3T cylinders in these modules
are used exclusively for the transportation of Silane; and that
the 3T cylinders are used exclusively in the United States for
commercial transportation of atmospheric gases (oxygen, nitrogen,
argon), helium and other gases. You state that the silane
module specifically referred to in this ruling has been in
service for approximately six years, making one trip per year
(Moses Lake, Washington- Portland-Japan and then Japan-Portland-
Moses Lake). You state the U.S. port of departure is always
Portland, Oregon. You state that the service life of a 3T
cylinder is not limited, and that a cylinder may remain in
service indefinitely as long as it is requalified every five
years. The cylinder is permanently marked as follows:
a) DOT-3T
b) Service Pressure
c) Serial Number
d) Manufacturer's Registration Mark
e) Inspectors Official Mark
f) Tare Weight
g) Test Date (and retest/requalification dates)
ISSUE:
Whether the described module used for the transportation of
cylinders which contain atmospheric gases (oxygen, nitrogen,
argon), helium and other gases 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 IIT, of any class
specified by the Secretary of the Treasury, shall be granted the
customary exceptions from the application of the customs laws to
the 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.
Section 10.41a(a)(1) also authorizes the Commissioner of
Customs to designate other items as instruments of international
traffic 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 silane modules, consisting of (8) steel
shipping cylinders, under consideration are used as containers or
holders, 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 silane
modules under consideration are similar to the metal cylinders
filled with porous material, designed for transportation of
acetylene and rare gas which were designated as IIT's in Treasury
Decision 66-184; that they are similar to steel cylinders of
domestic manufacturer, approximately 4 feet in length and 1 foot
in diameter, marked, in part, DOT-4BA", in accordance with
Hazardous Materials Regulations, Department of Transportation,
used for shipment of fluorocarbon gas which were designated as
IIT's in Treasury Decision 71-35(2); and that they are similar to
the steel cylinders ranging in size from 39 to 57 inches in
height to 7 to 12 inches in diameter and marked "DOT-8" and "DOT-
3A2015" used for the transportation of propane and butane gas
which are designated as IIT's in Treasury Decision 74-299.
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 silane module 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,
B. James Fritz
Chief
Carrier Rulings Branch