BOR-7-07- R:IT:C 113389 BEW
Jonathan M. Fee, Esquire
Grunfield, Desiderio, Labowitz & Silverman
1201 West Peachtree Street, N.E.
Atlanta, Georgia 30309
RE: Eligibility of certain collapsible plastic boxes known as "ecoshuttles" used to transport reels of video magnetic to be designated as instruments of international traffic (IIT)
Dear Mr. Fee:
This is in reference to your letter dated November 18, 1994, requesting that certain collapsible plastic boxes known as "ecoshuttles" be designated as instruments of international traffic (IIT).
FACTS:
You state that Maxell Corporation of America ("MCA") anticipates using certain collapsible plastic boxes known as "ecoshuttles" to transport reels of video magnetic tape from the United States to international destinations. Each ecoshuttle consists of a shallow square box cover, a square base, a cylindrical plastic core and a plastic hub. The core is fitted into the center of the base. Eight reels of type know as "pancakes" are placed over the core, which fits in a hole in the middle of each pancake and holds them in place in the manner of a spindle. The hub is fitted over the top of the core to secure the pancakes. The box cover is fitted over the stacked pancakes and the base to form a closed box in which the pancakes can be conveniently shipped from the country of manufacture, Germany, to MCA in the United States.
You state that the articles are extremely durable and suitable for reuse. You state the MCA estimates that an ecoshuttle can be used at least ten times before wearing out.
You state that you anticipate using Atlanta and Savannah, Georgia, and Charleston, South Carolina, as the ports of entry and departure, although MCA may use additional ports as its needs require.
ISSUE:
Whether the described collapsible plastic boxes known as "ecoshuttles" 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.
In Treasury Decision 77-84 Customs ruled that bins constructed with plywood sides and bottoms reinforced with lumber, or made entirely of lumber with a slatted design, measuring 46 inches, by 46 inches, by 32 to 36 inches, and used for the transportation of apples, are instruments of international traffic. Based on this precedent, we have ruled that fiberboard cartons measuring 45 inches in length, 28 and one-half inches in width, and 30 and nine-sixteenth inches in height, used to transport unmanufactured leaf tobacco, and capable of use three to four times before being discarded, are instruments of international traffic (see also, Treasury Decisions 67-125, 77-214, and 77-283).
We find that the collapsible plastic boxes known as "ecoshuttles" 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 collapsible plastic boxes known as "ecoshuttles" under consideration are similar to the articles designated as instruments of international traffic in holders in Treasury Decision 77-84, 77-214 and 77-283.
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 collapsible plastic boxes known as "ecoshuttles" 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,
Arthur P. Schifflin
Acting Chief
Carrier Rulings Branch