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HQ 113553





December 27, 1995

BOR-7-07-RR:IT:EC 113553 BEW

CATEGORY: CARRIER

Mr. Frank W. Schmitt
Camoplast Rockland, Inc.
1 Martina Place
Plattsburgh, New York 12901

RE: Eligibility of certain plastic tubes, to be designated as instruments of international traffic (IIT)

Dear Mr. Schmitt:

This is in reference to your letter dated August 8, 1995, requesting that certain plastic tubes be designated as instruments of international traffic (IIT).

FACTS:

You state that Camoplast Rockland, Inc. anticipates using certain plastic tubes to transport rolls of sheet rubber from the importer's supplier, Acton Rubber, located in Acton Quebec, Canada, to the United States. These tubes will be used exclusively as a reusable center core in the transportation of the rolls of sheet rubber, and that they will be reused continually. The tubes consist of a piece of schedule 40 ABS pipe approximately 16.5 inches long with an inside diameter of 2 inches and an outside diameter of 2.375 inches. You state that it is used in the same manner as textile cores.

ISSUE:

Whether the described plastic tubes used for the transportation of sheet rubber 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 plastic tubes under consideration are capable of being used as a holder, that they are substantial, suitable for and capable of repeated use. Based on your statement that the tubes will be reused continually, we conclude that they will be used in significant numbers in international traffic. We further find that the plastic tubes under consideration are similar to certain reels composed of polystyrene attached to a light metal core, and used for the transportation of recording tape which were designated as instruments of international traffic in Treasury Decision 76-204; and that the plastic tubes under consideration are similar to certain holders designed to hold two or more pounds of yarn or thread, made of wood, base metal, or plastic or a combination thereof, known as spools, bobbins, cops, and pins, used for the transportation of yarn and thread which were designated as instruments of international traffic in Treasury Decision 56543.

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 plastic tubes 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,

William G. Rosoff
Chief

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