HQ 113584 - Vessel Repair Entry No. 808-051534-9; M/V JEB STUART; V-2-7; Parts; Equipment; Materials; 19 U.S.C. 1466 - United States International Trade Commision Rulings

United States International Trade Commision Rulings And Harmonized Tariff Schedule

faqs.org Rulings By Number Rulings By Category Tariff Numbers

faqs.org > Rulings and Tariffs Home > Rulings By Number > 1996 HQ Rulings > HQ 113366 - HQ 225206 > HQ 113584

Previous Ruling Next Ruling
HQ 113584

December 6, 1995

VES-13-18-RR:IT:EC 113584 GEV

CATEGORY: CARRIER

Chief, Liquidation Section II
U.S. Customs Service
Post Office Box 2450
San Francisco, California 94126

RE: Vessel Repair Entry No. 808-051534-9; M/V JEB STUART; V-2-7; Parts; Equipment; Materials; 19 U.S.C. 1466

Dear Sir:

This is in response to your memorandum of September 15, 1995, forwarding an application for relief from vessel repair duties assessed pursuant to 19 U.S.C. ? 1466. You request our review of thirty-one (31) of the one hundred and one (101) items listed on the CF 226 which allegedly cover U.S. parts contained within the above-referenced entry.

FACTS:

The M/V JEB STUART is a U.S.-flag vessel owned by Waterman Steamship Corporation ("Waterman") of New Orleans, Louisiana. The vessel incurred foreign shipyard expenses in Singapore during March 31, 1995-April 4, 1995. Subsequent to the completion of the work, the vessel arrived in the U.S. at San Francisco, California, on April 13, 1995, more than two years after it last departed this country. A vessel repair entry was timely filed.

Pursuant to an authorized extension of time, the agent for the vessel owner submitted a timely application for relief accompanied by supporting documentation. On page 2 of the application, relief is requested for the following item numbers listed on the vessel repair entry (CF 226) claimed to be duty-free on the basis of their appearing on U.S. invoices: 5, 6, 7, 8, 9, 30, 32, 33, 34, 35, 36, 37, 40, 44, 46, 48, 49, 55, 59, 63, 64, 90, 91, 92, 93, 95, 96, 97, 98, 100 and 101.

ISSUE:

Whether evidence is presented sufficient to prove that the vessel parts, equipment and materials for which the applicant seeks relief are not subject to duty under 19 U.S.C. 1466.

LAW AND ANALYSIS:

Title 19, United States Code, 1466(a) (19 U.S.C. 1466(a)), provides in pertinent part for the payment of an ad valorem duty of 50 percent of the cost of "...equipments, or any part thereof, including boats, purchased for, or the repair parts or materials to be used, or the expenses of repairs made in a foreign country upon a vessel documented under the laws of the United States..." (Emphasis added)

The applicant has claimed relief pursuant to 19 CFR 4.14(c)(3)(ii), which provides for the remission or refund of duty if good and sufficient evidence is furnished to show the following:

The equipment, equipment parts, repair parts or materials used on the vessel were manufactured or produced in the United States and purchased by the owner of the vessel in the United States, and the labor necessary to install such equipment or to make such repairs was performed by residents of the United States or by members of the regular crew of the vessel. (Emphasis added)

Section 4.14(c)(3)(ii), promulgated pursuant to 19 U.S.C. 1466(d)(2), therefore sets forth a two-pronged test in order to obtain relief from duty assessed pursuant to 19 U.S.C. 1466(a): U.S. manufacture/production and U.S. resident/crew labor. Notwithstanding this two-pronged test, Customs has interpreted ? 1466(d)(2) to hold that vessel parts, equipment and materials which are of U.S. manufacture and purchased by the vessel owner in the U.S. are not subject to duty under 19 U.S.C. 1466 when installed on the vessel in a foreign country (Headquarters ruling 113441). Consequently, insufficient evidence to support the U.S. labor requirement under

With respect to the documentation submitted in support of the applicant's claim, aside from its haphazard preparation and glaring inadequacies (e.g., failure to designate certain parts, equipment and materials to specific work) we note that the entire record is devoid of any documentation sufficient to evidence U.S.-resident and/or crew labor. (We note a reference to U.S. resident labor in letters dated March 23 and 24, 1993 from General Engineering & Machine Works in Item 8 of the application, however, the letters contain no cost of such labor segregated - 3 -
from the values of the materials and tools referenced therein.) The applicant has therefore failed to meet the requisite two-pronged test for relief pursuant to ? 4.14(c)(3)(ii) discussed above and consequently relief thereunder is denied for each of the thirty-one (31) items under review.

Further in regard to the aforementioned documentation, we note that it is comprised chiefly of purchase orders from Waterman and its affiliate (LCI Shipholding, Inc.), non-descript Waterman memoranda, memoranda from Central Gulf Lines, Inc. (Waterman's parent company), internal "Shipping Manifests" all of which contain the handwritten statement "Unable to Obtain Actual Invoices", "delivery tickets" and other shipping documentation, and miscellaneous letters/ memoranda to Waterman from various sources containing bald statements alleging U.S. manufacture of certain articles without corroborating evidence. Documentation such as this, which is largely self-serving, is not included in the acceptable cost evidence set forth in 19 CFR 4.14(d)(1)(iii)(A). Customs has long-held that, "A vessel owner's internal documents (e.g., purchase orders and notarized statements of corporate officers) submitted in lieu of a shipyard/vendor's invoice do not in and of themselves constitute sufficient evidence of cost for purposes of 19 CFR 4.14(d)(1)(iii)(A)." (See Headquarters ruling 110562, dated October 12, 1989)

Accordingly, the applicant should know that aside from failing to satisfy the requirements of ? 4.14(c)(3)(ii), the above documentation contained within this particular vessel repair entry falls of its own weight based on its inherent insufficiency. This documentation includes the following:

Item 7 - "Shipping Manifest" no. 920984; LCI Shipholding, Inc. purchase order nos. 00452, 00453, 00457, 31751, 31753, 31754; Waterman purchase order nos. 35055, 35058, EJS-35644, Forms Control Company packing slip no. P54280.

Item 9 -"Shipping Manifest" no. 921103; Waterman purchase order no. 35648, 35652. Item 30-"Shipping Manifest" no. 921115; Waterman purchase order no. 35638.

Item 32 -"Shipping Manifest" no. 921151; Waterman purchase order nos. 35962, 35964, 35975, 36006, 36128; LCI Shipholdings, Inc. purchase order no. 31856.

Item 33 -"Shipping Manifest" no. 921165; Waterman purchase order no. 36349.

Item 34 -"Shipping Manifest" no. 921165; Waterman purchase order nos. 36004, 36014, 36018, 36065, 36131.

Item 35-a memorandum dated April 29, 1993.

Item 36-"Shipping Manifest" no. 921174; Waterman purchase order nos. 36026, 36287, 36027.

Item 37-"Shipping Manifest" no. 921186; Marine Engineering, Incorporated packing slip dated May 10, 1993; Waterman purchase order nos. 36032, 36014.

Item 40-"Shipping Manifest" no. 921309; a memorandum dated June 2, 1993, from Joseph P. Fleming, Warehouse Coordinator, Lash Marine Services; a Transportation Control and Movement Document with control no. N22199- 3153-0001-XXX.

Item 44- "Shipping Manifest" no. 921336; Waterman purchase order nos. 36530, 41833. Item 46-"Shipping Manifest" no. 921346; Waterman purchase order no. 41958.

Item 48-"Shipping Manifest" no. 921350; LCI purchase order no. 31864.

Item 49 -"Shipping Manifest" no. 921356; Waterman purchase order nos. 42330, 42331.

Item 55-"Shipping Manifest" no. 921269; Waterman purchase order nos. 42341, 41947, 42340, 42335, 42342, 36273; Waterman requisition no. 108-93-01012.

Item 59 -"Shipping Manifest" no. 921388; two memoranda dated July 14, 1993, from Joseph P. Fleming, Warehouse Coordinator, Lash Marine Services.

Item 63-Sepco purchase order 5728271; "Shipping Manifest" no. 921384, Waterman purchase order nos. 36379, 42330.

Item 90-"Shipping Manifest" no. 921501; Waterman purchase order no. 41966.

Item 91-"Shipping Manifest" no. 921506; Waterman purchase order no. 41952.

Item 92 -"Shipping Manifest" no. 921518; Waterman purchase order nos. 36717, 43014, 43015, 43017, 43018, 42800.

Item 93-"Shipping Manifest" no. 921527; Waterman purchase order nos. 42907, 42814, 43061, 42808.

Item 95-"Shipping Manifest" no. 921548; Waterman purchase order nos. 42815, 43062, 42824, 42819.

Item 96-"Shipping Manifest" no. 921552.

Item 97-"Shipping Manifest" no. 921557; Waterman purchase order nos. 43030, 42828, 43031, 42837, 42821, 42811, 42823, 43012, 42822, 43027, 42837, 42811, 42822, requisition no. 108-93-01386.

Item 98-"Shipping Manifest" no. 921577; Waterman purchase order no. 42833.

Item 100-"Shipping Manifest" no. 921586; Waterman requisition no. 108-93-01386.

Item 101-"Shipping Manifest" no. 921595; Waterman purchase order nos. 43565, 42830).

Notwithstanding the evidentiary insufficiencies and the applicant's failure to meet the criteria for relief set forth in 19 CFR 4.14(c)(3)(ii) discussed above, we note the presence of several invoices or documents submitted in lieu of invoices contained within the record which are assigned to the item numbers listed on the CF 226 for which our review is sought. As previously discussed, pursuant to ruling 113441, supra, relief may be granted provided there is documentary evidence that the articles in question were manufactured in the U.S. Upon reviewing the aforementioned documentation, we note at a minimum the following deficiencies resulting in the denial of relief for those articles listed thereon:

Item 5 contains a document with the heading "Commercial Invoice" which fails to describe the parts and identify the seller and shipper and indicates "USA" as the country of manufacture but is not corroborated by evidence to that effect.

Item 6 contains a Waterman memorandum dated March 12, 1993, submitted in lieu of an invoice which does not establish the U.S. as the country of manufacture but rather that the article in question was manufactured in "Company Fleet Material".

Item 7 contains a document purported to be an invoice from Gulf-Best Electric, Inc. which fails to establish the U.S. as the country of manufacture or the price of the article; invoice nos. 310142 and 310192 from Ed Smith Stencil Works, Ltd. of New Orleans which does not designate the U.S. as the country of manufacture.

Item 9 contains invoice no. 6461 from Crescent City Sheet Metal Works, Inc. which fails to establish the U.S. as the country of manufacture; invoice no. 3427-069998 from Consolidated Electrical Distributors, Inc. which fails to designate the U.S. as the country of manufacture.

Item 32 contains delivery ticket no. 21247-5 from Gator Supply Co., Inc. which fails to establish the U.S. as the country of manufacture; invoice no. 60471 from Marine Splicing & Supply Co., Inc. which fails to establish the U.S. as the country of manufacture.

Item 33 contains Gulf Belting & Gasket Co., invoice no. 052878 which fails to describe the articles in question or establish the U.S. as the country of manufacture; invoice nos. 24438 and 24881 from Universal Supply & Equipment, Inc. which fail to establish the U.S. as the country of manufacture.

Item 34 contains Gator Supply Co., Inc. delivery ticket no. 21626 which fails to establish the U.S. as the country of manufacture.

Item 35 contains Gulf Belting & Gasket Co., Inc. invoice no. 052878 and a Notoco sales order both of which contain the statement "Made in the USA" but neither of which is corroborated by evidence proving that Gulf Belting & Gasket Co., Inc. or Notoco either manufactured the articles listed thereon or purchased them from a U.S. manufacturer, and neither of which describe the articles in question (see Item 33 above in regard to the Gulf Belting & Gasket Co., invoice); Bailey Refrigeration of New Orleans invoice no. 1986 which contains the statement "Made in the USA" but is not corroborated by evidence proving that Bailey Refrigeration of New Orleans either manufactured the articles listed thereon or purchased them from a U.S. manufacturer.

Item 44 contains The Arnessen Corporation invoice which fails to establish the U.S. as the country of manufacture; a customer order release from Dixie Bearings, Inc. which fails to describe the articles in question and contains only a handwritten notation that the articles were made in the U.S; Gator Supply Co. Inc. delivery ticket nos. 22621, 23967-5 and 23959-5 which fail to establish the U.S. as the country of manufacture.

Item 48 contains an invoice from Ruskin which fails to establish the U.S. as the country of manufacture.

Item 59 contains a Waterman memorandum from Joseph P. Fleming, Warehouse Coordinator, Lash Marine Services, which states that the article in question is "American Manufactured" but is not accompanied by corroborating evidence from the alleged U.S. manufacturer.

Item 63 contains an invoice from National Electric Company Supply Co., Inc. which fails to establish the U.S. as the country of manufacture.

Item 64 contains an invoice from Handlin Marine which fails to establish the U.S. as the country of manufacture.

Item 90 contains Marine Splicing & Supply Co., Inc. invoice no 60666 which fails to establish the U.S. as the country of manufacturer.

Item 92 contains Gator Supply Co. Inc. delivery ticket no. 28905 which fails to establish the U.S. as the country of manufacture; and Bailey Refrigeration of New Orleans invoice no. 2692 and Marine Splicing & Supply Co., Inc. invoice no. 61065 both of which contain the statement "Made in the USA" but neither of which is corroborated by evidence proving that Bailey Refrigeration of New Orleans or Marine Splicing & Supply Co., Inc. either manufactured the articles listed thereon or purchased them from a U.S. manufacturer.

Item 95 contains Bailey Refrigeration of New Orleans invoice no. 2836 which contains the statement "Made in the USA" but is not corroborated by evidence proving that Bailey Refrigeration of New Orleans either manufactured the articles listed thereon or purchased them from a U.S. manufacturer.

Item 96 contains Mackay Communications sales order no. 20174 which fails to establish the U.S. as the country of manufacture.

Item 97 contains Marine Splicing & Supply Co., Inc. invoice no. 61190 which fails to establish the U.S. as the country of manufacture; Sperry Marine Inc. invoice nos. 18289 and 18242 which fail to establish the U.S. as the country of manufacture; Industrial Bearings invoice no. 79624 which fails to establish the U.S. as the country of manufacture; and Industrial Bearings invoice no. 79977 which has a handwritten notation that the articles are made in the U.S. but is supported only by an unintelligible signature.

Item 98 contains Radio Holland-Harahan invoice no. 14009345 which fails to establish the U.S. as the country of manufacture; a Foster Corporation invoice which fails to establish the U.S. as the country of manufacture.

HOLDING:

For the reasons set forth in the Law and Analysis portion of this ruling, we have determined that the evidence presented is insufficient to prove that the vessel parts, equipment and materials for which the applicant seeks relief are not subject to duty under 19 U.S.C. 1466.

Sincerely,

William G. Rosoff

Previous Ruling Next Ruling