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HQ 111933


Febraury 10, 1992

BOR-7-07-CO:R:IT:C 111933 BEW

CATEGORY: CARRIER

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

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