BOR-7-07-CO:R:IT:C 112467 LLB
Mr. Tim Di Prinzio
A.N. Deringer, Inc.
30 West Service Road
Champlain, New York 12919-9703
RE: Instruments of International Traffic; Metal-Alloy Mandrels;
Molds; 19 U.S.C. 1322
Dear Mr. Di Prinzio:
This is in response to your letter of September 16, 1992,
which forwards for our consideration and appropriate response a
request for a ruling on whether certain metal-alloy mandrels may
be designated as Instruments of International Traffic under Customs
Regulations and practice. Our ruling is set forth below.
FACTS:
It is stated that certain mandrels, or molds, are die cast in
Canada. The mandrels are made of an alloy consisting of lead, tin,
and antimony. The finished mandrels are shipped in their finished
form to the United States where the importer, Dow United
Technologies Composite Products, Inc., braids graphite around the
exterior of the imported articles in order to create an aircraft
part. The wrapped mandrels are then returned to Canada where they
are melted out of the graphite, leaving only the finished aircraft
part. The melted alloy is then used to form other mandrels, and
the process is repeated. An opinion is sought as the whether the
mandrels arriving in the United States may be designated as
Instruments of International Traffic.
ISSUE:
Whether mandrels which are reconstituted as such prior to each
arrival in the United States 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).
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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
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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.
The peculiar problem arising in the present matter is that
the same article is not being reused each time. Upon each
exportation of the mandrels in use, they are completely melted and
reformed into new mandrels prior to arriving in the United States
ready for use. Each mandrel enters and leaves this country only
once in its unique molecular configuration. As such, the mandrels
fail the test of repeated use and cannot be designated as desired.
HOLDING:
Metal-alloy mandrels which are melted and reformed prior to
each use in the transportation of graphite aircraft parts are, in
actuality, used only one time in a unique molecular configuration
and thus fail to meet the reuse requirement necessary for
designation as Instruments of International Traffic.
Sincerely,
Acting Chief