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HQ 115561





April 8, 2002

VES-13-18:RR:IT:EC 115561 LLO

CATEGORY: CARRIER

Chief, Vessel Repair Unit
U.S. Customs Service
423 Canal Street, Room 306
New Orleans, Louisiana 70130

RE: Vessel Repair Petition; M/V STRONG VIRGINIAN; Vessel Repair Entry No. C14-0042717-1; 19 U.S.C. §1466; 19 C.F.R. §4.14

Dear Sir:

We received your memo dated November 19, 2001 requesting that we review a petition relating to the STRONG VIRGINIAN, regarding the dutiability of various parts denied remission in the application for relief. Our ruling on this matter is set forth below.

FACTS:

The STRONG VIRGINIAN, a United States-flag vessel operated by Van Ommeren Shipping, LLC of Stamford, Connecticut, arrived at the Cheatham Annex, Virginia on May 18, 1997. The date of entry was May 21, 1997.

An application for relief was timely filed on August 14, 1997. The application was granted in part and denied in part. Pursuant to an approved extension, a petition for review was filed on May 1, 2000. According to the vessel repair entry and other documents in the file, the vessel underwent work in Spain.

The operator agent, Van Ommeren Shipping, LLC submitted an application for relief identifying certain items as non-dutiable, and that application was acted upon by your office. This particular petition is requesting relief regarding eight items fully described in exhibits 5, 7, 15, 29, 30, 36, 37 and 39, that were denied in the application for relief since the purchase appeared to be foreign and no evidence was provided demonstrating that the items had been imported with duty having been paid.

ISSUE:

Whether items 5, 7, 15, 29, 30, 36, 37, and 39 contained within the subject petition for review are dutiable under 19 U.S.C. §1466.

LAW AND ANALYSIS:

Title 19, United States Code, section 1466(h)(2) (19 U.S.C. §1466(h)(2)), provides in pertinent part for “the cost of spare repair parts or materials (other than nets or netting) which the owner or master of the vessel certifies are intended for use aboard a cargo vessel, documented under the laws of the United States and engaged in the foreign or coasting trade, for installation or use on such vessel as needed, in the United States, at sea, or in a foreign country, but only if duty is paid under appropriated commodity classifications of the harmonized Tariff Schedule of the united States upon first entry into the United States of each such spare part purchased in, or imported from a foreign country”

The vessel repair statute exempts from duty spare repair parts or materials that have been manufactured in the United States or entered the United States duty-paid, and are used aboard a cargo vessel engaged in foreign or coastwise trade. Where a part is purchased from a party unrelated to the vessel owner, a United States invoice or bill of sale constitutes sufficient evidence that the product was either manufactured in the United States or entered in the United States duty-paid.

In this case, the exhibits provided include an invoice for each item clearly indicating the products purchased. In addition, for each invoice provided wherein the vendor was foreign based and the products were shipped to Van Ommeren Shipping, LLC from outside of the U.S., there is included with or on the invoice a stamp indicating that duty had been paid and amount tendered to the courier making delivery of the products. And finally, for each item that was imported from outside of the United States, a certification from the vendor has been provided indicating that the products were delivered to Van Ommeren Shipping, LLC, Freight on Board (FOB), Customs duty paid by Van Ommeren, Cash on Delivery (COD) by way of the courier used. Item 7 was purchased from a vendor located within the United States; all other items were purchased from outside of the United States.

Customs has consistently defined a part as “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 readily identify a part. Examples of parts as defined are seen in such items as piston rings and preformed gaskets.

In this situation, all of the products noted in the invoices provided are considered parts pursuant to 19 U.S.C. §1466 and prior Customs rulings. These include rebuild kits, joint rings, grooved parallel pins, packing and handling parts, vacuum pump membrane diaphragm, transducers, 4/3-way valve, potentiometer, resistance thermometers, and a CPL regulating unit. Each of these items is a distinct entity that is incorporated into the larger whole without losing its essential character.

HOLDING:

Following a thorough review of the facts in this case, as well as an analysis of the law and applicable precedents that bear upon those facts, we have determined that the Petition for Review should be granted in full for the reasons set forth in the Law and Analysis portion of this ruling.

Sincerely,

Larry L. Burton
Chief

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