HQ 0112361 - Protest No. 2704-92-101842; Los Angeles Vessel Repair Entry No. C27-0061080-4, dated January 20, 1992; M/V PRESIDENT KENNEDY; Voyage 036, Maintenance; Cleaning; Air Scavenger Spaces; 19 U.S.C 1466 - United States International Trade Commision Rulings

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HQ 112361

February 4, 1993

VES-13-18/13-07 CO:R:IT:C 112361 BEW

CATEGORY: CARRIER

Deputy Regional Director
Commercial Operations
Pacific Region
1 World Trade Center
Long Beach, California 90831-0700

RE: Protest No. 2704-92-101842; Los Angeles Vessel Repair Entry No. C27-0061080-4, dated January 20, 1992; M/V PRESIDENT KENNEDY; Voyage 036, Maintenance; Cleaning; Air Scavenger Spaces; 19 U.S.C 1466

Dear Sir:

This is in response to a memorandum dated June 23, 1992, that forwards protest No. 2704-92-101842, concerning vessel repair entry No. C27-0061080-4, relating to the M/V PRESIDENT KENNEDY, Voyage 036.

FACTS:

The M/V PRESIDENT KENNEDY arrived at the port of Los Angeles, California on January 19, 1992, and filed a timely vessel repair entry. The entry indicated that the vessel underwent foreign shipyard work to remove carbon and oil deposits from the main engine 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 gases 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 gases 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.

The entry was liquidated on April 17, 1992, and Item 1 - Cleaning of Air Scavenger Spaces was found to be dutiable. The vessel operator protests this decision.

ISSUE:

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.

LAW AND ANALYSIS:

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

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. The court determined that the removal of dirt and foreign matter from the boxes 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 protestant cites this line of judicial and administrative decisions and contends that these decisions establish a position of the Customs Service with regard to the dutiability of cleaning air scavenger spaces. We do not dispute that this line of decisions generally establishes the position of the Customs Service on the non-dutiability of cleaning operations unrelated to repairs or the dutiability of maintenance operations. However, the precise issue presented is whether the cleaning of air scavenger spaces may be characterized as simple cleaning or as maintenance, not whether cleaning or maintenance operations are dutiable or non-dutiable.

The protestant's conclusion that the cleaning of air scavenger spaces is a "simple" cleaning and is a fortiori not subject to duty based on the decisions cited is untenable. The protestant attempts to characterize the cleaning of air scavenger spaces as "simple" cleaning needed only for inspection of the engine valves. This characterization fails, however, to include the threat of fire or explosion posed by the failure to properly maintain the scavenger spaces. It further fails to note the decline in efficiency of the engines that results from the collection of the carbon and oil deposits in the air scavenger spaces. As stated in our previous rulings, the collection of carbon and oil deposits results in a deterioration--as manifested in the safety and efficiency problems--of the air scavenger spaces that may only be corrected by cleaning the air scavenger spaces. (See generally Headquarters Ruling Letter 111700, dated November 19, 1991.) We therefore reaffirm our position that cleaning air scavenger spaces is a maintenance operation that is subject to duty under 19 U.S.C. 1466.
The protestant contends that the Customs Service did not publish its "surprise change of position" as required by the Administrative Procedure Act and the Customs Regulations. The Customs Regulations require the publication in the Federal Register with an opportunity for public comment of a ruling that has the effect of changing a practice that results in a higher rate of duty. 19 C.F.R. 177.10(c)(1) (1992). The Customs Service first addressed the issue of cleaning air scavenger spaces in Headquarters Ruling Letter 110911, dated December 3, 1990. The protestant has failed to cite a ruling or to demonstrate otherwise that the Customs Service had in fact established a position on the dutiability under 19 U.S.C. 1466 of the cleaning of air scavenger spaces prior to Headquarters Ruling Letter 110911. Moreover, as shown in the previous paragraph, we do not believe that the protestant has demonstrated that the holding in Headquarters Ruling Letter 110911 deviates from existing judicial decisions or results in a reversal or modification of any of the existing administrative rulings. We submit that the reasoning and conclusion of that letter and subsequent rulings on the issue are consistent with the precedent identified in those ruling letters and by the protestant. Thus, publication of a change of practice was not required.

Finally, the protestant contends that the Customs Service has not held the cleaning of air scavenger spaces to be dutiable since 1982. Headquarters Ruling Letter 110911 was issued in response to an application for relief forwarded by the New York Vessel Repair Liquidation Unit (VRLU) following which we learned that from 1982 to 1990 the San Francisco VRLU had not been assessing duty whereas the two other regional VRLU's were. Absent a ruling letter or a published statement of position, we hold that the protestant cannot rely on determinations made by the San Francisco VRLU to establish a position of the Customs Service. (See Superior Wire v. United States, 7 Fed. Cir. (T) 43, 45-46, 867 F.2d. 1409, 1412-13 (1989).)

HOLDING:

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. The protest is therefore denied. Enclosed is Customs Form 19 for appropriate action.

Sincerely,

Acting Chief
Carrier Rulings Branch

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