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HQ 114471

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September 25, 1998

VES-13-18-RR:IT:EC 114471 GOB

CATEGORY: CARRIER

Port Director of Customs
Attn.: Vessel Repair Liquidation Unit, Room 107 P.O. Box 2450
San Francisco, CA 94126

RE: 19 U.S.C. 1466; PRESIDENT JEFFERSON; Vessel Repair Entry No. C27- 0158688-9; Protest

Dear Madam:

This ruling is in response to your memorandum dated September 9, 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 JEFFERSON (the "vessel"), a U.S.-flag vessel, arrived at the port of San Pedro, California on September 6, 1997. The subject vessel repair entry was subsequently filed. The vessel underwent certain foreign shipyard work in Taiwan in June and July of 1995.

In Ruling 114243 dated April 23, 1998, the petition for relief was denied.

ISSUES:

Whether the subject items are dutiable pursuant to 19 U.S.C.

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 protestant requests relief with respect to the following item nos.: 11,16, 21, 23, and 65.

The protestant asserts that item nos. 11, 16, 21, and 65 are eligible for treatment pursuant to 19 U.S.C. 1466(h)(3). In Ruling 114243 on the petition with respect to this entry, we stated:

With respect to invoice items 11, 21, and 65, we are asked to review the dutiability of a hermetically sealed refrigeration compressor, two freon compressors, and a transmitter for monitoring boiler feed water levels and combustion control, respectively. Both items 11 and 21 are represented in copies of engineering drawings which are supplemented by extensive parts lists. Both appear to far exceed the common understanding of a part, and are instead operational units of equipment which themselves consist of numerous individual parts. Item 65, while not represented by drawings, is shown on the accompanying invoice to itself consist of materials and equipment. In light of these determinations, we find that none of these invoice items qualify as parts within the meaning of 19 U.S.C. 1466(h)(3). They are dutiable under subsection (a) of the vessel repair statute.

The invoice description of item 16, the canvas winch cover, clearly shows that it does not meet the definition of a "part" within the meaning of subsection (h)(3) of the statute. It is nothing more than a protective weather shield which the invoice shows to have been fabricated to fit over the winch pursuant to the orders of the chief engineer. The cover is best described as dutiable equipment.

We agree with and affirm the analysis and determinations of Ruling 114243, above. The subject items are not parts eligible for treatment under 19 U.S.C. 1466(h)(3) for the reasons stated above.

The protestant states that item 23 is nondutiable as a regulatory requirement which was conducted in accordance with ABS requirements.

The pertinent invoices describe this work as follows: "witness gauging of main deck for underwriters requirement"; "gauging, mn. deck plating for ABS ... Insurance underwriters require gauging of all exposed main deck plates, full length. Provide ABS qualified vendor to gauge by nondestructive method, main deck plates as directed by local ABS surveyor"; and "ultrasonic thickness gauging."

We find that item 23 is nondutiable as an item incident to an ABS survey which does not involve a repair.

HOLDING:

As detailed above, the protest is granted in part and denied in part.

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,

Director,
International Trade Compliance

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