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 > 1997 HQ Rulings > HQ 112890 - HQ 113749 > HQ 113663

Previous Ruling Next Ruling
HQ 113663

---

September 25, 1996

VES-13-18-RR:IT:EC 113663 GOB

CATEGORY: CARRIER

Port Director of Customs
Attn.: Vessel Repair Liquidation Unit, Room 415 P.O. Box 2450
San Francisco, CA 94126

RE: Vessel Repair Entry No. 808-051534-9; M/V JEB STUART, V-2-7; 19 U.S.C. 1466; 19 U.S.C. 1466(d)(2); T.D. 75-257

Dear Sir or Madam:

This is in response to your memorandum dated September 6, 1996, which forwarded the protest submitted by Waterman Steamship Corporation ("protestant") with respect to the above-referenced vessel repair entry.

FACTS:

The M/V JEB STUART ("vessel") is a U.S.-flag vessel owned by the protestant. The vessel underwent foreign shipyard work in Singapore from March 31, 1995 through April 4, 1995. The vessel arrived at the port of San Francisco on April 13, 1995. A timely vessel repair entry was filed.

Our decision on the petition with respect to the subject entry was Ruling 113584 dated December 6, 1995. In that ruling, we stated, in pertinent part:

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...The applicant has therefore failed to meet the requisite two-pronged test for relief pursuant to ? 4.14(c)(3)(ii)... ...
...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.

With its protest, the protestant has submitted numerous invoices in support of its claim that certain costs are remissible pursuant to 19 CFR 4.14(c)(3)(ii). That regulation authorizes remission or refund of duty if good and sufficient evidence is furnished which establishes that United States parts and equipment were installed by residents of the United States or members of the regular crew of the vessel. 19 CFR 4.14(c)(3)(ii) parallels 19 U.S.C. 1466(d)(2).

ISSUE:

Whether the costs of the subject items are dutiable pursuant to 19 U.S.C. 1466. If so, whether those costs are subject to remission pursuant to 19 U.S.C. 1466(d)(2).

LAW AND ANALYSIS:

19 U.S.C. 1466 provides for the payment of duty at a rate of fifty 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 be employed in such trade.

19 U.S.C. 1466(d)(2) provides for the remission or refund of duties:

If the owner or master of such vessel furnishes good and sufficient evidence that-
...
(2) such equipments or parts thereof or repair parts or materials, were manufactured or produced in the United States, and the labor necessary to install such equipments or to make such repairs was performed by residents of the United States, or by members of the regular crew of such vessel. (Emphasis supplied.)

T.D. 75-257 states in part:

...the cost of materials of United States origin which are purchased by the vessel owner in the United States is not subject to duty under 19 U.S.C. 1466, when installed on the vessel in a foreign country.
(Emphasis supplied.)

In order to receive remission under 19 U.S.C. 1466(d)(2), U.S. manufacture or production must be established, in addition to the establishment that the labor was performed by U.S. residents or members of the regular crew of the vessel. In order to receive duty-free treatment pursuant to T.D. 75-257, U.S. origin must be established. To establish U.S. manufacture, production, or origin, a party must submit a statement from the vendor or manufacturer of the merchandise that such merchandise was manufactured or produced in the United States.

With respect to 19 U.S.C. 1466(d)(2), the protestant has not established that the subject parts were manufactured or produced in the United States, nor has it established that the labor to install the parts was performed by U.S. residents or by members of the regular crew of the vessel. Thus, the protestant has failed to satisfy both parts of the two-pronged test of 19 U.S.C.

With respect to the applicability of T.D. 75-257, the protestant has not established that the parts are of U.S. origin.

As stated above, to establish U.S. manufacture, production, or origin, a party must submit a statement from the vendor or manufacturer of the merchandise that such merchandise was manufactured or produced in the United States.

Accordingly, the subject costs are dutiable pursuant to 19 U.S.C. 1466. The costs are not subject to remission pursuant to 19 U.S.C. 1466(d)(2).

HOLDING:

The protest is denied. The subject costs are dutiable pursuant to 19 U.S.C. 1466. The costs are not subject to remission pursuant to 19 U.S.C. 1466(d)(2).

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision should be mailed by your office to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will take steps to make the decision available to Customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, the Freedom of Information Act and other public access channels.

Sincerely,

Chief,
Entry and Carrier Rulings Branch

Previous Ruling Next Ruling