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HQ 113310

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March 8, 1995

VES-13-18-CO:R:IT:C 113310 GEV

CATEGORY: CARRIER

Deputy Assistant Regional Commissioner
Commercial Operations
ATTN: Regional Vessel Repair Liquidation Unit New York, New York 10048-0945

RE: Vessel Repair Entry No. 514-3005082-6; S/S RESOLUTE; V-066; Ineffective Repairs; 19 U.S.C. ? 1466

Dear Sir:

This is in response to your memorandum dated January 6, 1995, forwarding for our review an application for relief. Our findings on this matter are set forth below.

FACTS:

The S/S RESOLUTE is a U.S.-flag vessel owned by the U.S. Maritime Administration. The subject vessel had foreign shipyard work performed on her in Valletta, Malta and Cadiz, Spain in January and February of 1994. Subsequent to the completion of the work the vessel arrived in the United States at the port of New York, on March 1, 1994. A vessel repair entry was filed on March 2, 1994.

Pursuant to an authorized extension of time, an application for relief, dated May 26, 1994, was timely filed. Included in the application was a request that Customs find the port boiler desuperheater repairs appearing on Mecanica Naval Cadiz, S.L. invoice #010/94 to be non-dutiable. The applicant alleges that these repairs were necessary because of the ineffectiveness of repairs performed by Malta Drydocks (invoice #004806, Part III, item 124).

ISSUE:

Whether the foreign costs for which the applicant seeks relief are dutiable pursuant to 19 U.S.C. ? 1466.

LAW AND ANALYSIS:

Title 19, United States Code, ? 1466, provides in pertinent part for 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 foreign or coastwise trade, or vessels intended to engage in such trade.

In regard to the applicant's claim as noted above, Customs has long-held that repairs which are completely ineffective and of no value to the vessel are not repairs subject to duty under the vessel repair statute (see T.D. 55193(24) and C.I.E. 1156/62). We note, however, that the record contains no proof to substantiate the claim that the specific repairs in question performed by Malta Drydocks were ineffective. Accordingly, in the absence of evidence to the contrary, we find the repairs on the two invoices in question to be dutiable.

HOLDING:

The foreign costs for which the applicant seeks relief are dutiable as discussed in the Law and Analysis portion of this ruling.

Sincerely,

Arthur P. Schifflin

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