HQ 111710: Instruments of International Traffic; Steel racks; 19U.S.C. 1322(a); Invoice requirements; 19 CFR 10.41a; Entry

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 111710

                            February 27, 1992

BOR-7-07-CO:R:P:C 111710 MAR

CATEGORY:  Carriers

Ms. Tamra George
Subaru-Isuzu Automotive Inc.
5500 State Road 38 East
P.O. Box 5689
Lafayette, Indiana  47903

RE:  Instruments of International Traffic; Steel racks; 19
U.S.C. 1322(a); Invoice requirements;  19 CFR 10.41a; Entry

Dear Ms. George:

     This is in response to your letter dated April 22, 1991, on
behalf of Subaru-Isuzu Automotive Inc. requesting a ruling that
certain steel rack floors are instruments of international
traffic; and, if so, whether it is necessary to list such on the
entry invoices.  Our ruling is set forth below.

FACTS:

     Subaru-Isuzu Automotive Inc., ("SAI") of Lafayette, Indiana,
uses steel racks when importing automobile parts from Japan.
These containers, imported normally through West Coast ports of
entry (Los Angeles/Long Beach, Seattle, and Tacoma), are used to
transport automotive parts inside an ocean container.  The
automotive parts arrive at SAI's plant in Lafayette, Indiana,
inside these steel racks.

     The steel racks consist of both floors and sides.  It is
estimated that an average of 80 percent of the 675 rack floors
received per day are in acceptable condition for repeated use,
with a possible maximum number of uses to be 3 trips. However,
the sides of the racks are in unacceptable condition after one
shipment and are subsequently scrapped.

ISSUE:

     1.) Whether steel racks used to import certain automotive
parts from Japan may be designated as instruments of
international traffic within the meaning of 19 U.S.C. 1322(a) and
section 10.41a, Customs Regulations (19 CFR 10.41a).



     2.)  Whether it is necessary to list instruments of
international traffic on invoice descriptions of imported
shipments.


LAW AND ANALYSIS:

     Title 19, United States Code, section 1322(a) (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 contained in section 10.41a (19 CFR 10.41a).
Section 10.41a(a)(1) specifically designates lift vans, cargo
vans, shipping tanks, skids, pallets, caul boards, and cores for
textile fabrics as instruments of international traffic.

     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.

     Upon reviewing the information provided, we are of the
opinion the above requirement of reuse has not been met.
Although 80 percent of the floors are capable of repeated use,
with a maximum number of uses to be 3 trips, the sides are not
reusable and capable of only 1 trip.  When considering whether
an article is an instrument of international traffic, we consider
the article in its entirety and not by its component parts.  The
floors by themselves cannot be used as a container or holder and
are rendered useless without the sides for the stated purpose of
transporting automotive parts.  Therefore, the uses of the steel
racks beyond shipping them once from overseas to the United
States are purely incidental.  See Holly Stores, supra.

     The second question, whether it is necessary to list
instruments of international traffic on invoice descriptions of
imported shipments, is moot since the steel racks are not
designated as instruments of international traffic.

HOLDING:

     Steel racks with floors incapable of sustained repeated use
and nonreusable sides used to import certain automotive parts
from Japan do not meet the requisite criteria for designation as
instruments of international traffic within the meaning of 19
U.S.C. 1322(a) and section 10.41a, Customs Regulations (19 CFR
10.41a).

                                Sincerely,

                                B. James Fritz
                                Chief
                                Carrier Rulings Branch