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HQ 116247

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July 9, 2004

VES-13-18-RR:IT:EC 116247 GOB

CATEGORY: CARRIER

Chief, Vessel Repair Unit
U.S. Customs and Border Protection
423 Canal Street
New Orleans, LA 70130

RE: 19 U.S.C. 1466; Vessel Repair Entry C20-0058648-0; JANIS GUZZLE; Protest No. 2002-03-100881

Dear Sir:

This is in response to your memorandum of May 26, 2004, forwarding for our review certain items on the protest filed on behalf of TECO Ocean Shipping, Inc. (“protestant”) with respect to Vessel Repair Entry C20-0058648-0. Our ruling follows.

FACTS:

The JANIS GUZZLE (the “vessel”), a U.S.-flag vessel operated by the protestant, incurred foreign shipyard costs. After completion of the work in question, the vessel arrived in Galveston, Texas on November 1, 2002. A vessel repair entry was filed.

You have asked us to review the dutiability of the labor costs on the Pantropic invoices which are Exhibit 4 in the protestant’s submission.

ISSUE:

Whether the costs for which the protestant seeks relief are dutiable under 19 U.S.C. §1466.

LAW AND ANALYSIS:

Title 19, United States Code, section 1466 (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.

As stated above, you have asked us to review the dutiability of the labor costs on the Pantropic invoices which are Exhibit 4 in the protestant’s submission.

The subject documentation, which includes a letter from the vendor, indicates that the labor at issue was performed by a U.S. resident citizen. We therefore find that this cost is nondutiable.

This determination is consistent with a determination in HQ 114650 dated April 11, 2000, where we found certain labor costs were not subject to vessel repair duties because they were performed by residents of the United States who traveled to the vessel from this country.

HOLDING:

As discussed in the Law and Analysis section of this ruling, the subject labor cost is nondutiable. Accordingly, you are instructed to allow the protest.

In accordance with the Protest/Petition Processing Handbook (CIS HB, January 2002, pp. 18 and 21), 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 CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

Glen E. Vereb
Chief

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