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 > 2000 HQ Rulings > HQ 114896 - HQ 115069 > HQ 115028

Previous Ruling Next Ruling
HQ 115028

---

June 7, 2000

VES-13-18-RR:IT:EC 115028 GEV

CATEGORY: CARRIER

Chief, Liquidation Branch
U.S. Customs Service
Post Office Box 2450
San Francisco, CA 94126

RE: Vessel Repair Entry No. C27-0171092-6; Modification; PRESIDENT ADAMS; V-114

Dear Sir:

This is in response to your memorandum dated April 14, 2000, which forwards for our consideration a petition for relief from the assessment of vessel repair duties pursuant to 19 U.S.C. § 1466. Our findings are set forth below.

FACTS:

The PRESIDENT ADAMS is a U.S.-flag which incurred foreign costs in October of 1999. Subsequent to the completion of the work, the vessel arrived at the Port of Los Angeles, CA, on October 16, 1999. A vessel repair entry was timely filed as was an application for relief.

By letter dated February 16, 2000, your office rendered its decision on the application for relief and informed the applicant of the right to file a petition for review of this decision.

A petition for review with supporting documentation was timely filed and forwarded to this office for review. At issue is Item no. 3 of the entry (Hong Yang Marine Invoice No. XD82619962) covering the installation of hatch cover lifting socket striking pads. The petitioner contends that this item constitutes a modification and is therefore non-dutiable.

ISSUE:

Whether the documentation submitted substantiates the petitioner’s claim that Item no. 3 of the subject vessel repair entry constitutes a modification and is therefore non-dutiable under 19 U.S.C. § 1466.

LAW AND ANALYSIS:

Title 19, United States Code, § 1466 (19 U.S.C. § 1466), 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”

In its application of the vessel repair statute, Customs has held that modifications, alterations, or additions to the hull and fittings of a vessel are not subject to vessel repair duties. The identification of work constituting modifications vis-à-vis work constituting repairs has evolved from judicial and administrative precedent. (See Otte v. United States, 7 Ct. Cust. Appls. 166, T.D. 36489 (1916); United States v. Admiral Oriental Line et al., 18 C.C.P.A. 137, T.D. 44359 (1930); and Customs Bulletin and Decisions, Vol. 31, Number 40, published October 1, 1997.) The factors discussed within the aforementioned authority are not by themselves necessarily determinative, nor are they the only factors which may be relevant in a given case. However, in a given case, these factors may be illustrative, illuminating, or relevant with respect to the issue of whether certain work may be a modification of a vessel which is nondutiable under 19 U.S.C. § 1466.

Upon reviewing the petition and supporting documentation, we have determined that Item no. 3 evidences not only a first time installation with a sufficient degree of permanent incorporation into the hull and superstructure of the vessel, but also those other criteria discussed in the above-referenced precedents, and therefore constitutes a non-dutiable modification.

HOLDING:

The documentation submitted substantiates the petitioner’s claim that Item no. 3 of the subject vessel repair entry constitutes a modification and is therefore non-dutiable under 19 U.S.C. § 1466.

Sincerely,

Acting Chief

Previous Ruling Next Ruling