HQ 112816: Eligibility of certain plastic baskets to be designated as instruments of international traffic (IIT)

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                            HQ 112816
                                
                         October 8, 1993
                                

BOR-7-07-CO:R:IT:C 112816 BEW

CATEGORY:  Carriers

Mr. Kazunori Endo
President
JS Technos Corporation
Post Office Box 1086
188 Earl Davis Drive
Russellville, Kentucky 42276

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

Dear Mr. Endo:

     This is in reference to your letter dated July 12, 1993,
requesting that certain plastic baskets be designated as
instruments of international traffic (IIT).

FACTS:

     You state that the plastic baskets will be used to import
and export automobile Master cylinders and parts from the United
States to Japan.  You state that you will be using two kinds of
baskets for different purposes.  Specification (A) is a plastic
basket with a partition, and the partition must move with each
basket.  Specification (B) is a plastic basket only.  Each basket
is made of polypropylene and steel and the partition for basket
(A) is made of polypropylene.  You indicated that there are 720
pieces in Specification (A), and it has a life span of 5 years. 
These baskets are marked with "JKC ~~~~ ~~~~~ #80", and the
partitions are marked "JKC MADE IN JAPAN".  There are 1,740
pieces in Specification (B), and it has a life span of 5 years. 
These baskets are also marked with "JKC ~~~~ ~~~~~ #80".  The
baskets will be transported in either 20 or 40 feet containers. 

     You state that you anticipate using Memphis or Nashville,
Tennessee, for Customs clearance.

ISSUE:

     Whether the described plastic baskets and partition used for
the transportation of automotive parts 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 polypropylene and steel baskets with the
polypropylene partitions, and the polypropylene and steel baskets 
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 baskets under consideration
are similar to polyethylene starting trays designed to hold
vehicle disc brakes which were designated as IIT's in Treasury
Decision 77-284, and similar to stands or cases composed of
steel, wood or steel mesh coated with fiberglass, used by Rolls
Royce for transportation of parts of an aircraft engine which
were designate as IIT's in Treasury Decision 74-195.

     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 polypropylene and steel baskets with partitions, and the
polypropylene and steel baskets 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
                                     Chief
                                     Carrier Rulings Branch