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HQ 112777


October 4, 1993

VES-13-18:CO:R:IT:C 112777 GOB

CATEGORY: CARRIER

Deputy Assistant Regional Commissioner
Classification and Value Division
Attn: Regional Vessel Repair Liquidation Unit New York, NY 10048-0945

RE: Protest No. 1001-92-106860; Vessel Repair Entry No. 514- 3004541-2 dated August 1, 1991; Date of Arrival: July 30, 1991; Port of Arrival: Port Elizabeth, New Jersey; Vessel Name: S/S RESOLUTE; Voyage No. 43.

Dear Sir:

This is in reference to the above-referenced protest seeking reliquidation of the above-referenced entry.

FACTS:

The record reflects that the subject vessel, the S/S RESOLUTE, which is owned and operated by Farrell Lines Incorporated ("protestant"), arrived at Port Elizabeth, New Jersey on July 30, 1991 and filed a vessel repair entry on August 1, 1991.

In Ruling No. 112045 dated March 10, 1992 with respect to an application for relief, Customs determined that certain costs were dutiable, including the costs of propeller polishing and boiler cleaning.

In Ruling No. 112276 dated September 4, 1992 with respect to a petition for relief, Customs granted certain relief, but continued to find that the costs of the propeller polishing (item 12) and boiler cleaning (item 13) were dutiable.

In its protest, the protestant reiterates its statement that the propeller was polished to remove marine growth so as to make all surfaces clean for examination by the ABS Surveyor and the U.S. Coast Guard inspectors. It states that the polishing or cleaning was not performed to remove rust or deterioration and was not a necessary factor in restoring the vessel to its former state.

The protestant further claims that the boiler cleaning was performed for survey.

ISSUE:

Whether the foreign work performed on the subject vessel for which the protestant seeks relief is dutiable under 19 U.S.C. 1466.

LAW AND ANALYSIS:

19 U.S.C. 1466 provides for the payment of duty in the amount of 50 percent ad valorem on the cost of foreign repairs to vessels documented under the laws of the United States to engage in the foreign or coastwise trade, or vessels intended to engage in such trade.

19 CFR 4.14(f) provides that following liquidation of an entry, a protest under 19 CFR 174 may be filed against the decision to treat an item or repair as dutiable.

In this protest, the protestant seeks relief beyond that granted in the application for relief and petition.

The issue of the propeller polishing was thoroughly considered in Ruling No. 112276, wherein we found that propeller polishing constituted dutiable maintenance. We see no reason, and the protestant has not put forth any reason upon which to alter that determination. The protestant has cited an entry upon which the cost of propeller polishing was liquidated as nondutiable. The fact that Customs previously liquidated an entry with the cost of propeller polishing as nondutiable does not cause us to change our previous decisions and analysis. We find that the analysis in Ruling No. 112276 is dispositive and controlling. Accordingly, the cost of the propeller polishing is dutiable.

With respect to the issue of the boiler cleaning, the protestant cites previous Customs Headquarters rulings where that cost was determined to be nondutiable.

In Ruling No. 112045 on the application for relief in this case, we stated:

Cleaning operations which remove rust and deterioration and worn parts, and which are a necessary factor in the effective restoration of a vessel to its former state of preservation, constitute vessel repairs (See C.I.E. 429/61). Customs has long held the cost of 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; see C.I.E.'s 18/48, 125/48, 910/59, 820/60, 51/61, 429/61, 569/62, 698/62; C.D. 2514; T.D.'s 45001 and 49531. Pursuant to C.I.E. 919/60 remission of duty assessed on the cost of repairs is not warranted under section 1466 where the repairs are maintenance in nature.

In Ruling No. 112276 on the petition for relief in this case, we stated:

This item represents charges for boiler cleaning which petitioner alleges was performed pursuant to an ABS inspection. It is undisputed that, in addition to such cleaning, boiler repairs were effected as enumerated in items 35, 36, and 37. In response to petitioner's initial application for duty remission, we held that said cleaning was performed pursuant to repairs and was thus, dutiable. Petitioner now avers that the repaired boiler parts under consideration were neither cleaned nor required to be cleaned prior to renewal. In examining the shipyard invoice, it is clear that repairs were indeed effected to items 35, 36, and 37, and that each is dutiable. With respect to the cleaning however, despite petitioner's affirmations that it was not performed prior to the repairs, it is impossible to identify the date upon which such cleaning took place. It is entirely possible that the cleaning took place in anticipation of, and pursuant to, dutiable repairs. Alternatively, it is also possible that such cleaning was performed pursuant to an ABS inspection. As the invoice provides no clear indication either way, such costs must be considered dutiable. Accordingly, the cost of the item ($14,961.00) is dutiable.

There is no basis in the record for us to change our previous findings. The record is clear that repairs were made to the boiler. We are unable to conclude that the boiler cleaning was unrelated to the boiler repairs. Absent evidence to the contrary, we conclude that the cleaning was done prior to or in preparation for dutiable boiler repairs.

HOLDING:

The foreign work which is the subject of this protest is dutiable pursuant to 19 U.S.C. 1466. Accordingly, the protest is denied.

Sincerely,

Stuart P. Seidel
Director, International

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