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HQ 112969


December 20, 1993

BOR-7-07-CO-R-IT-C 112969 GOB

CATEGORY: CARRIER

Michael A. Hertzberg, Esq.
Howrey & Simon
1299 Pennsylvania Avenue, N.W.
Washington, D.C. 20004-2402

RE: Instruments of International Traffic; Plastic Shipping Cassettes; 19 U.S.C. 1322; 19 CFR 10.41a. Dear Mr. Hertzberg:

This is in response to your letter dated December 14, 1993, which requested that certain plastic shipping cassettes be designated as instruments of international traffic within the meaning of 19 CFR 10.41a.

FACTS:

HMT Technology Corporation uses plastic shipping cassettes to transport aluminum substrates from Japan to the United States. The shipping cassettes are semi-rectangular mini-containers of durable plastic which are approximately eight and one half inches long, five inches wide, and five inches high. Each cassette is comprised of a top, a bottom, and an insert. The cassettes are used to transport aluminum substrates with nickel plating, which have a very fine, magnetic surface and which are very fragile. The insert of the cassette holds the substrates in order to prevent bending, denting, or other damage. The number of cassettes which arrive with each shipment ranges from 5,000 to 150,000. After the substrates are processed, the cassettes are shipped to a warehouse and accumulated in a shipping container. Once a container is filled, it is shipped to Japan, where the cassettes are reused to transport substrates to the United States. Each cassette is identified by a particular case number. The average life of a cassette is estimated at approximately eight to ten shipments, although it may be longer.

ISSUE:

Whether plastic shipping cassettes used to transport aluminum substrates from Japan to the United States may be
designated as instruments of international traffic within the meaning of 19 U.S.C. 1322(a) and 19 CFR 10.41a.

LAW AND ANALYSIS:

19 U.S.C. 1322(a) states in part:

Vehicles 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 19 U.S.C. 1322 are contained in 19 CFR 10.41a. 19 CFR 10.41a(a)(1) designates lift vans, cargo vans, shipping tanks, skids, pallets, caul boards, and cores for textile fabrics as instruments for international traffic.

19 CFR 10.41a(a)(1) also authorizes the Commissioner of Customs to designate as instruments of international traffic such additional articles or classes of articles as he shall find should be so designated. Instruments so designated may be released without entry or the payment of duty, subject to the provisions of 19 CFR 10.41a. Instruments so designated are also stated to be duty-free in subheading 9803.00.50, Harmonized Tariff Schedule of the United States.

To qualify as an instrument of international traffic within the meaning of 19 U.S.C. 1322(a) and 19 CFR 10.41a, 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 Headquarters decisions 108084, 108658, 109665, and 109702.

The concept of reuse pertains to commercial shipping or transportation purposes, and not incidental or fugitive uses. Tariff Classification Study, Sixth Supplemental Report (May 23, 1963) at p. 99. See Holly Stores, Inc. v. United States, 697 F. 2d 1387 (Federal Circuit, 1982). In Holly Stores, the court determined that reuse "has been consistently interpreted to mean practical, commercial reuse, not incidental reuse."

After a review of the information submitted, we determine that the plastic shipping cassettes meet the requirements to be designated as instruments of international traffic.

This result is consistent with numerous previous decisions, including Treasury Decisions 68-56, 74-281, and 75-265 and Ruling 109702.

HOLDING:

The subject plastic shipping cassettes are designated as instruments of international traffic within the meaning of 19 U.S.C. 1322(a) and 19 CFR 10.41a.

Sincerely,

Arthur P. Schifflin
Chief

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