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HQ 113653

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July 7, 1997

VES-13-18-RR:IT:EC 113653 GEV

CATEGORY: CARRIER

Chief, Vessel Repair Liquidation Unit
U.S. Customs Service
423 Canal Street
New Orleans, Louisiana 70130

RE: Vessel Repair Entry No. C16-0008663-6; SEA-LAND ATLANTIC; V-265; Parts; 19 U.S.C. ? 1466(h)(2)

Dear Sir:

This is in response to your memorandum dated September 9, 1996, forwarding a petition for review of your decision denying an application for relief from duties assessed pursuant to 19 U.S.C. ? 1466. Our findings are set forth below.

FACTS:

The SEA-LAND ATLANTIC is a U.S.-flag vessel owned and operated by Sea-Land Service, Inc. ("Sea-Land"). During the voyage in question, previously imported parts were placed on board. The petitioner states that these parts were duty-paid and then shipped overseas for installation. The vessel subsequently returned to the United States arriving at Charleston, South Carolina on May 5, 1994. A vessel repair entry was timely filed.

An application for relief, dated June 28, 1994, was also timely filed. With respect to the basis for relief claimed for the parts in question (Item 5 on the application), the application merely provided, "Ship parts previously imported into the U.S." By letter dated November 18, 1994, from the Chief, New Orleans Vessel Repair Liquidation Unit (VRLU), to Sea-Land, the appli-cation for relief was denied with respect to Item 5 in view of the fact that the statutory provision which would have authorized the relief sought (19 U.S.C. ? 1466(h)(2)) had expired on December 31, 1992. A petition for review of the decision of the VRLU was timely filed by letter dated December 15, 1994. The petitioner states that "[s]ince the aforementioned law was re-instated under the GATT agreement and evidence is provided that duty was paid, our position is that the previously imported part in this case is duty-free..."

ISSUE:

Whether Item 5 for which the petitioner seeks relief is dutiable under 19 U.S.C.

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..."

The climate with regard to parts shipped abroad from the United States for foreign installation was transformed on August 20, 1990, when the President signed Public Law 101-382 which added a new subsection (h) to 19 U.S.C. ? 1466. Subsection (h) contained two provisions, one governing foreign expenditures for LASH barges ((h)(1), herein inapplicable), the other ((h)(2)) addressed the petitioner's concerns and provided as follows:

(h) The duty imposed by subsection (a) of this section shall not apply to--

(2) the cost of spare repair parts or materials (other than nets or nettings) which the owner or master of the vessel certifies are intended for use aboard a cargo vessel, documented under the laws of the United States and engaged in the foreign or coasting trade, for installation or use on such vessel, as needed, in the
United States, at sea, or in a foreign country, but only if duty is paid under appropriate commodity classifications of the
Harmonized Tariff Schedule of the United
States upon first entry into the United States of each such spare part purchased in, or imported from, a foreign country,...

The effective date of the above amendment was stated to be as follows:

Effective Date.--The amendment made by this section shall apply to--

(1) any entry made before the date of enactment of this Act that is not liquidated on the date of enactment of this Act, and
(2) any entry made--
(A) on or after the date of enactment of this Act, and
(B) on or before December 31, 1992.

With respect to the entry in question, we note that it was made subsequent to the expiration date of subsection (h) (i.e., December 31, 1992). Although subsection (h) was reenacted on December 8, 1994 (see Public Law 103-465), the implementing legislation contained no provision regarding retroactive treatment for this or any other such entry. Consequently, no statutory authority exists upon which to grant the petitioner the relief that is sought.

HOLDING:

Item 5 for which the petitioner seeks relief is dutiable under 19 U.S.C. ? 1466.

Accordingly, the petition is denied in its entirety.

Sincerely,

Jerry Laderberg

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