HQ 0111273 - LASH barge; 19 U.S.C. 1466(h); retroactive effect on pending protests; rubpad installation; cleaning - United States International Trade Commision Rulings

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HQ 111273

May 24, 1991

VES-13-18-CO:R:IT:C 111273 KVS

CATEGORY: CARRIER

Chief
Residual Liquidation and Protest Branch
6 World Trade Center
New York, NY 10048-0954

RE: LASH barge; 19 U.S.C. 1466(h); retroactive effect on pending protests; rubpad installation; cleaning
Vessel: ROBERT E. LEE V-46
Vessel Repair Entry No. 514-3002900-2
Protest No. 1001-0-000675
Date of Arrival: May 8, 1987
Port of Arrival: New York, New York

Dear Sir:

This is in response to your memorandum of August 13, 1990, which forwards for our consideration protest no. 1001-0-000675, filed in connection with the ROBERT E. LEE, vessel repair entry no. 514-3002900-2. Our findings are set forth below.

FACTS:

The ROBERT E. LEE, a Lighter Aboard Ship (LASH) barge mother vessel, arrived in the United States at New York, New York on May 8, 1987, with a complement of LASH barges which had undergone various shipyard operations while abroad. The vessel made formal entry on May 13, 1987.

An application for relief was timely filed on May 11, 1987. The application was denied as an insufficient submission in Customs Letter Ruling 110046 (dated April 20, 1989). The petition for review filed June 2, 1989, was granted in full pursuant to Customs Letter Ruling 110331 (dated September 11, 1989). Liquidation of the entry took place on October 27, 1989.

Although the petition clearly held the installation of rubpads to be non-dutiable, the liquidation erroneously failed to provide relief for these charges. The protest currently under consideration was timely filed on January 19, 1990, and seeks relief for the cost of rubpad installation as well as certain cleaning costs.

ISSUE:

Whether the cost of cleaning and rubpad installation carried out aboard the subject LASH barge is dutiable pursuant to 19 U.S.C. 1466.

LAW AND ANALYSIS:

Title 19, United States Code, section 1466(a) provides, in pertinent part, for payment of duty in the amount of 50 percent ad valorem on the cost of foreign repairs to vessels engaged, intended to engage, or documented under the laws of the United States to engage in the foreign or coastwise trade.

Section 1466 was amended by the Act of August 20, 1990 (Pub. L. 101-382), whereby a new paragraph (h)(1) was added which exempts from duty under section 1466(a), the cost of parts, materials, equipment, and repairs made abroad to U.S.-documented LASH barges used as cargo containers. The effective date of the amendment is stated as follows:

Effective Date.--The amendment made by this section shall apply to--

(1) any entry made before the date of enactment of this Act that is not liquidated on the date of enactment of this Act, and

(2) any entry made--
(A) on or after the date of enactment of this Act, and
(B) on or before December 31, 1992.

In the case currently before us, the entry in question was liquidated on December 22, 1989, before the date of enactment on August 20, 1990, and thus, would appear to fall outside the purview of the amendment.

However, Customs Letter Ruling 111474 GEV (dated March 6, 1991), discussed the retroactive impact of the new amendment to those cases in which a protest was pending on the date of enactment of the new legislation. Upon examining the applicable legislative history of the amendment, as well as reviewing various court decisions and other statutory use of the term "liquidated," we held that:

For purposes of the retroactive impact of new section 1466(h), the benefits of said legislation will inure to those entries which were not finally liquidated (i.e., for which
a timely protest was filed or court action initiated) on or before August 20, 1990.

Accordingly, since the protest under consideration had been timely filed on or before the date of the amendment's enactment (August 20, 1990), the entry had not been "finally liquidated" and would thus be entitled to any benefit extended by the legislation.

However, the statutory exemption for the cost of equipment and repairs extends only to those LASH barges documented under the laws of the United States and utilized as cargo containers. Therefore, we suggest that the vessel owner be notified of the need for additional information. Upon receipt of a certificate of documentation and a certification as to the vessel's use, the protest should be granted.

HOLDING:

The cost of rubpad installation and cleaning carried out aboard the subject LASH barge is not dutiable pursuant to 19 U.S.C. 1466(h).

Sincerely,

B. James Fritz

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