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HQ 114241

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March 10, 1998

VES-13-18-RR:IT:EC 114241 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. 110-6461448-7; PRESIDENT HARRISON, V-84; 19 U.S.C. 1466; Protest; Post-repair cleaning; Protective covers

Dear Madam:

This is in response to your memorandum of January 30, 1998, which forwarded the protest submitted by American Ship Management, LLC ("protestant") with respect to the above-referenced vessel repair entry.

FACTS:

The evidence of record indicates the following. The PRESIDENT HARRISON (the "vessel"), a U.S.-flag vessel, arrived at the port of Seattle, Washington on January 3, 1994. The subject vessel repair entry was filed on January 10, 1994. The vessel underwent certain foreign shipyard work in Taiwan, Hong Kong, and Japan.

In Ruling 113160 dated February 20, 1997, the application for relief with respect to the subject entry was granted in part and denied in part.

In Ruling 113939 dated October 23, 1997, the petition with respect to the subject entry was granted in part and denied in part.

ISSUE:

Whether the subject items are dutiable pursuant to 19 U.S.C. 1466(a).

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.

The subject entry is a "pre-Texaco" entry, i.e., an entry filed before the appellate decision in Texaco Marine Services, Inc., and Texaco Refining and Marketing, Inc. v. United States, 44 F.3d 1539 (CAFC 1994), aff'g 815 F.Supp. 1484 (CIT 1993).

The dutiability of post-repair cleaning and protective coverings related to repairs were the two items before the court in Texaco. The court found each of those items to be dutiable.

In Memorandum 113350 dated March 3, 1995, we stated: "With respect to vessel repair entries filed prior to December 29, 1994 [the date of the appellate decision in Texaco], all costs for post-repair cleaning and protective coverings incurred pursuant to dutiable repairs are dutiable."

Ruling 113939 denied relief with respect to item nos. 1.1-7 and 1.1-19. The protest concerns these two items.

Item No. 1.1-7. The invoice states: "General Cleaning ... General cleaning of main deck and engine room debris."

In Ruling 113939 we found this item to be dutiable because "... these cleaning costs were performed in preparation for and/or in conjunction with dutiable repair work to both the main deck and the engine room (see, e.g., Item Nos. 3.1-5, 5.1-14, 5.1-16, 5.1-22 and 5.1-23)."

Based upon our review of the evidence of record, we determine that the finding of Ruling 113939 was correct. Ruling 113939 cited several items where dutiable work was performed in the engine room or main deck area. For example, item 5.1-14 involved engine room fire pump relief valve piping (dutiable work including "cropping and partly renewing") and item 5.1-22 involved dutiable work with respect to the engine room port and starboard side supply fan motor.

The dutiable items cited in Ruling 113939 clearly establish that dutiable work was performed in the engine room and main deck areas. We conclude that item 1.1-7 was cleaning incident to that work and/or post-repair cleaning. As such, it is clearly dutiable.

The protestant states that the identical item on another of its vessels was liquidated as a nondutiable item. We note initially that the protestant has not submitted documentary evidence establishing the factual correctness of this claim. Beyond that, we must point out that a liquidation of an item in a certain manner on one vessel repair entry does not conclusively establish that an item on a different entry should be liquidated in the same manner. Finally, the evidence indicates that the two invoices (i.e., the invoice of the item at issue and the invoice submitted by the protestant for "the identical item" on another vessel) are not identical.

Item No. 1.1-19. The invoice describes the subject work as "Fitting and removing temporary protection covers on engine room console."

In Ruling 113939 we cited the Texaco decision to the effect that "expenses for protective covers incurred pursuant to dutiable repairs constitutes expenses of repairs' as that term is used in the vessel repair statute ..." and found this cost of protective covers to be dutiable "in view of the fact that dutiable repairs were performed in the engine room (see, e.g., Item Nos. 5.1-14, 5.1-16, 5.1-22 and 5.1-23) ..."

Based upon our review of the evidence of record, we determine that the finding of Ruling 113939 was correct. As detailed above, there is ample evidence that numerous dutiable repairs were performed in the engine room area. Under that circumstance, the item for fitting and removal of protective covers in the engine room area is clearly dutiable.

The protestant states that the identical item on another of its vessels was liquidated as a nondutiable item. The protestant has not submitted documentary evidence establishing the factual correctness of this claim, either as to the liquidation on the previous entry or as to the identicalness of the two invoices. Further, as stated above, a liquidation of an item in a certain manner does not conclusively establish that an item on a different entry should be liquidated in the same manner.

HOLDING:

As detailed above, the protest is denied.

Sincerely,

Director,
International Trade Compliance
Division

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