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HQ 114929





February 2, 2000

VES-13-18-RR:IT:EC 114929 GOB

CATEGORY: CARRIER

Port Director of Customs
Attn.: Residual Liquidation and Protest Branch, Room 761 Six World Trade Center
New York, N.Y. 10048

RE: Vessel Repair Entry No. 514-3005906-6; 19 U.S.C. 1466(a) and (h)(3); DELAWARE BAY, V-001; Protest No. 1001-99-105385

Dear Madam:

This is in response to your memorandum of December 23, 1999, which forwarded the protest submitted by Nicholas Bachko Co. Inc. (“protestant”) with respect to the above-referenced vessel repair entry. The vessel repair entry (CF 226) lists Fleet National Bank as the owner/trustee and Farrell Lines Inc. as the principal and surety.

FACTS:

The DELAWARE BAY (the “vessel”), a U.S.-flag vessel, arrived at the port of New York on April 14, 1999. The subject vessel repair entry was timely filed. The vessel underwent certain shipyard work in March of 1996.

By letter of July 23, 1999, your office denied the application for relief.

ISSUE:

Whether the subject items are dutiable pursuant to 19 U.S.C. 1466(a) or are eligible for treatment under 19 U.S.C. 1466(h)(3).

LAW AND ANALYSIS:

We note initially that the protest was timely filed under the statutory and regulatory provisions for protests, 19 U.S.C. 1514(c)(3)(A) and 19 CFR 174.12(e)(1).

19 U.S.C. 1466(a) 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(h)(3) provides:

The duty imposed by section (a) of this section shall not apply to - ...
(3) the cost of spare parts necessarily installed before the first entry into the United states, but only if duty is paid under appropriate commodity classifications of the Harmonized Tariff Schedules of the United States upon first entry into the United States of each such spare part purchased in, or imported from, a foreign country.

For the purpose of 19 U.S.C. 1466(h), we have defined a “part” as follows:

A part is determined to be something which does not lose its essential character or its identity as a distinct entity but which, like materials, is incorporated into a larger whole. It would be possible to disassemble an apparatus and still be able to identify a part. The term part does not mean part of a vessel, which practically speaking would encompass all elements necessary for a vessel to operate in its designed trade. Examples of parts as defined are seen in such items as piston rings and pre-formed gaskets, as opposed to gaskets which are cut at the work site from gasket material. (Emphasis in original.)

The protestant claims that the subject items are eligible for duty under 19 U.S.C. 1466(h)(3).

The CF 226 describes the items as “2-fuel distributors for fuel pressure pipe.” The master’s affidavit describes the items as “fuel distributor blocks.” The packing list describes the items as “2 fuel distributor[s] for fuel pressure pipe.”

By letter of February 2, 2000, the protestant advises that one of the fuel distributors was installed on the vessel and the second fuel distributor was placed into inventory for future use.

After a review of the documentation of record, we find that one of the subject fuel distributors (i.e., the one that was installed on the vessel) is eligible for treatment under 19 U.S.C. 1466(h)(3). The second fuel distributor is not eligible for treatment under 19 U.S.C. 1466(h)(3) because it was not installed on the vessel.

HOLDING:

As detailed above, the protest should be granted with respect to one of the fuel distributors and denied with respect to the second fuel distributor..

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, 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 make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.ustreas.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

Jerry Laderberg
Chief,

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