HQ 0111571 - Vessel Repair; Maintenance; Scavenger Air Spaces; Spare Parts; 19 U.S.C. 1466; M.V. SEA LION; Entry No. C11- 0008616-9. - United States International Trade Commision Rulings

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HQ 111571

March 4, 1992

VES-13-18 CO:R:IT:C 111571 JBW

CATEGORY: CARRIER

Deputy Assistant Regional Commissioner
Classification and Value Division
ATTN: Regional Vessel Repair Liquidation Unit 6 World Trade Center
New York, New York 10048-002980

RE: Vessel Repair; Maintenance; Scavenger Air Spaces; Spare Parts; 19 U.S.C. 1466; M.V. SEA LION; Entry No. C11- 0008616-9.

Dear Sir:

This letter is in response to your memorandum dated March 4, 1991, which forwards for our review the petition for relief filed in conjunction with the above-referenced vessel repair entry.

FACTS:

The record reflects that the subject vessel, the M.V. SEA LION, arrived at the port of Philadelphia, Pennsylvania, on November 12, 1989. A timely entry was filed that indicated the vessel underwent foreign shipyard work during the course of its The vessel owner filed an application for relief, which sought relief from duty on the cleaning of scavenger air spaces and on the installation of a new cylinder liner. The application was denied by Headquarters. Headquarters Ruling Letter 110911, dated December 3, 1990. The vessel owner filed this petition for review of our previous holdings.

ISSUES:

(1) Whether removing carbon and oil deposits from diesel engine air scavenger spaces constitutes a nondutiable cleaning or a dutiable maintenance operation under 19 U.S.C. 1466.

(2) Whether the petitioner meets the evidentiary requirements to establish that a spare cylinder liner was included as part of the new vessel construction contract.

LAW AND ANALYSIS:

I. CLEANING OF THE SCAVENGER AIR SPACES.

The petitioner seeks relief for the cleaning of certain main engine air scavenger spaces. The scavenging spaces of a diesel engine are steel chambers that are permanently attached to the cylinders of the engine. The scavenging spaces serve two functions. First, the scavenging spaces receive the discharge from the turbo-chargers and deliver the charged air to each cylinder via reed valves and intake ports. Second, air from the piston underside is pumped into the scavenging space via reed valves to supplement turbo-charger-delivered air. This air enters the cylinders via inlet ports uncovered when the piston gets to the bottom end of its stroke and serves to "scavenge" the burnt gasses out of the cylinder. This process cleans the cylinders of spent energy and provides a clean air discharge for the next fuel injection. As a result of this process, some gasses containing unburnt carbon may be left and deposited in the scavenging spaces.

These carbon deposits and other oily deposits in the scavenger spaces may result in fire or explosion. They also reduce the efficient operation of the engine. Diesel engine maintenance manuals therefore require periodic cleaning of the scavenger spaces to permit the safe and efficient operation of the vessel. The maintenance of a scavenger space involves removing access plates and scraping, wire brushing, and wiping the inside of the space. This operation is labor intensive and would take a single worker up to two working days to clean a single cylinder.

In analyzing the dutiability of foreign vessel work, the Customs Service has consistently held that cleaning is not dutiable unless it is performed as part of, in preparation for, or in conjunction with dutiable repairs or is an integral part of the overall maintenance of the vessel. E.g., Headquarters Ruling Letter 110841, dated May 29, 1990 (and cases cited therein). The Customs Service considers work performed to restore a part to good condition following deterioration or decay to be maintenance operations within the meaning of the term repair as used in the vessel repair statute. See generally, Headquarters Ruling Letter 106543, dated February 27, 1984; C.I.E. 142/61, dated February 10, 1961.

The dutiability of maintenance operations has undergone considerable judicial scrutiny. The United States Court of Customs and Patent Appeals, in ruling that the term repair as used in the vessel repair statute includes "maintenance painting," gave seminal recognition to the dutiability of maintenance operations. E. E. Kelly & Co. v. United States, 55 Treas. Dec. 596, T.D. 43322 (C.C.P.A. 1929). The process of chipping, scaling, cleaning, and wire brushing to remove rust and corrosion that results in the restoration of a deteriorated item in preparation for painting has also been held to be dutiable maintenance. States Steamship Co. v. United States, 60 Treas. Dec. 30, T.D. 45001 (Cust. Ct. 1931).

Most recently, the United States Customs Court examined whether the scraping and cleaning of Rose Boxes constituted dutiable repairs. Northern Steamship Company v. United States, 54 Cust. Ct. 92, C.D. 1735 (1965). Rose Boxes are parts fitted at the ends of the bilge suction to prevent the suction pipes from being obstructed by debris. In arriving at its decision, the court focused on whether the cleaning operation was simply the removal of dirt and foreign matter from the boxes or whether it resulted in the restoration of the part to good condition after deterioration or decay. Id. at 98. The court determined that the cleaning did not result in the restoration of the boxes to good condition following deterioration and consequently held that the work was not subject to vessel repair duties. Id. at 99. The Customs Service has ruled that the regular cleaning of filters in most instances does not result in liability for duty. See Headquarters Ruling Letter 107323, dated May 21, 1985.

From these authorities, we determine that the cost of cleaning the air scavenger spaces is subject to duty under 19 U.S.C. 1466. The term deterioration is defined to mean degeneration, which in turn denotes declined function from a former or original state. See The American Heritage Dictionary of the English Language 376, 387 (2d ed. 1985). The principal function of the air scavenger spaces is to either deliver turbo- charged air to the cylinders or receive spent gasses from the cylinders. The collection of carbon and other oily deposits poses a fire or explosion hazard and results in a diminished engine function. The removal of the carbon deposits through scraping, wire brushing, and wiping results in a restoration of the scavenger spaces to good condition following a decline in function of the scavenger spaces. Such an operation can be distinguished from cleaning a Rose Box or other filter, for the collection of debris by these parts results not in a diminution of function, but alternatively demonstrates the proper function of the part.

II. INSTALLATION OF THE SPARE CYLINDER LINER.

The petitioner claims that the cylinder liner that was replaced during the course of the voyage was a part of the vessel's original spares that were placed aboard the vessel at the time of delivery of the newly-built vessel. As part of our ruling on the application, this office held that the vessel owner failed to submit sufficient evidence to support its claim that the cylinder liner was either manufactured in the United States or imported into the United States, duty-paid.

Spare parts placed aboard a vessel pursuant to a vessel construction contract may in some circumstances be held not subject to duty. Headquarters Ruling Letter 109424, dated March 31, 1988. This finding, however, is necessarily premised on the presentation of adequate documentary evidence to show that the part in question was in fact delivered pursuant to the vessel's construction contract. Id. In the instant case, the petitioner has submitted no evidence, other than its own statement, to demonstrate that the cylinder liner was included in the complement of spares provided for in the vessel's construction contract. Absence such evidence, we find the cost of the cylinder liner to be subject to duty under 19 U.S.C. 1466.

HOLDINGS:

(1) The removal of carbon and oil deposits from the main engine scavenger spaces is a maintenance operation the cost of which is subject to duty under 19 U.S.C. 1466.

(2) The petitioner has submitted no evidence, other than its own statement, to demonstrate that the cylinder liner was included in the complement of spares provided for in the vessel's construction contract. Absence such evidence, we find the cost of the cylinder liner to be subject to duty under 19 U.S.C. 1466.

Sincerely,

B. James Fritz
Chief

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