HQ 0112973 - Vessel Repair; 19 U.S.C. 1466; Petition for Review; Modification; Vessel Repair Entry No. 110-0104410-3; Date of Entry: January 27, 1993 - United States International Trade Commision Rulings

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HQ 112973

March 23, 1994

VES-13-18-CO:R:IT:C 112973 DEC

CATEGORY: CARRIER

Deputy Regional Director
Commercial Operations
Pacific Region
One World Trade Center
Long Beach, California 90831

RE: Vessel Repair; 19 U.S.C. 1466; Petition for Review; Modification; Vessel Repair Entry No. 110-0104410-3; Date of Entry: January 27, 1993
Date of Arrival: January 27, 1993
Port of Arrival: Tacoma, Washington
Vessel: SEA-LAND ENTERPRISE V-56/58

Dear Sir:

This is in response to your memorandum dated December 1, 1993, which forwards the petition for review of the assessment of vessel repair duties filed in connection with the above-referenced vessel.

FACTS:

The SEA-LAND ENTERPRISE is owned by the Connecticut National Bank and operated by Sea-Land Service, Incorporated. It is an American-flag vessel. While abroad, the SEA-LAND ENTERPRISE stopped in Kaohsiung, Republic of China, where it underwent various operations. In Headquarters Ruling 112786 (Sept. 21, 1993), Customs denied, in part, relief from the assessment of vessel repair duties. A petition for review was timely filed.

ISSUE:

Whether the cost of foreign shipyard work completed aboard the subject vessel is dutiable pursuant to Title 19, United States Code, section 1466.

LAW AND ANALYSIS:

Title 19, United States Code, section 1466(a) provides, in pertinent part, for payment of a fifty percent ad valorem duty on the cost of foreign repairs to a vessel documented under United States law to engage in the foreign or coastwise trade, or to a vessel intended to be employed in such trade.

Items 145, 146, and 147

Upon further review, Customs finds that these items represent the expense associated with modifying the cell guide gathers. These new structural fittings placed between the cell guide gather and the hatch coaming were installed to prevent future damage to the vessel. The petitioner has assured Customs that this new installation is not a replacement of a current part, fitting, or structure that is not in good working order. Accordingly, Customs finds that this item represents a non-dutiable modification.

Item 283

Customs found that this item is subject to the assessment of vessel repair duty because the "invoice does not reflect a sufficient nexus with the M1 modification work . . . The invoice does not establish that these expenses are related to a nondutiable modification." Headquarters Decision 112786 (Sept. 21, 1993). Upon further review of this item, Customs finds no basis upon which to grant relief. In addition, the petitioner has not offered any new evidence to indicate why our ruling on this item in the application should be altered. Consequently, this item remains dutiable.

HOLDING:

After a thorough review of the submitted evidence, this petition for review is granted in part and denied in part for the reasons detailed in the Law and Analysis section of this ruling. The petitioner should be informed of the right to file a protest following liquidation of this entry, as evidenced by the posting of the bulletin notice of liquidation.

Sincerely,

Stuart P. Seidel
Director, International Trade

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