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HQ 116452

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May 10, 2005
VES-3-18-RR:IT:EC 116452 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 C20-0060857-3; Protest 2002-02-101143

Dear Sir:

This is in response to your memorandum of April 22, 2005, forwarding for our review the protest filed by Matson Navigation Company, Inc. (“protestant”) with respect to Vessel Repair Entry C20-0060857-3. Our ruling follows.

FACTS:

The MAHIMAHI (the “vessel”), a U.S.-flag vessel owned by the protestant,

The CF 226 reflects that Matson Navigation Company, Inc. is the owner of the vessel. The supplemental submission states that Matson Navigation Company, Inc. is the operator of the vessel. incurred foreign shipyard costs. The vessel arrived in the port of Los Angeles on January 21, 2002. A vessel repair entry was timely filed. Pursuant to a letter from the New Orleans Vessel Repair Unit (“VRU”), the application for relief was granted in part and denied in part. The determination of duty occurred on August 30, 2002.

The ensuing protest, received on November 27, 2002, pertained to duty charged on all repair items used by the regular crew of the vessel during the voyage. The VRU did not finalize the protest, as well as other similar Matson protests and vessel repair entries involving spare parts used by the vessel’s crew, pending the passage of the “Miscellaneous Trade and Technical Corrections Act of 2004” (Public Law No. 108-429).

ISSUE:

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

LAW AND ANALYSIS:

Initially, we note that the information in the file indicates that the protest, with application for further review, was timely filed under the statutory and regulatory provisions for protests. 19 U.S.C. 1514(c)(3) and 19 CFR 174.12(e). We further note that counsel for the protestant filed a supplemental submission dated April 19, 2005 with the VRU, pursuant to section 1554 of the “Miscellaneous Trade and Technical Corrections Act of 2004.”

Title 19, United States Code, § 1466(a) 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 . . . “

Section 1554 of the Miscellaneous Trade and Technical Corrections Act of 2004, signed by the President on December 3, 2004, amended the vessel repair statute by adding the following exemption to §1466(a) found in 19 U.S.C. 1466(h):

(4) the cost of equipment, repair parts, and materials that are installed on a vessel documented under the laws of the United States and engaged in the foreign or coasting trade, if the installation is done by members of the regular crew of such vessel while the vessel is on the high seas.

Declaration and entry shall not be required with respect to the installation, equipment, parts, and materials described in paragraph (4).

This newly-enacted legislation further provides for a retroactive effective date for that equipment, repair parts, and materials installed on or after April 25, 2001.

As noted above, the subject protest was received by the VRU on November 27, 2002 and counsel for the protestant filed a supplemental submission dated April 19, 2005. You have asked us to review the items described below. We will use the exhibit numbers used in the supplemental submission. The protestant seeks relief pursuant to 19 U.S.C. §1466(h)(2) with respect to these items.

The pertinent exhibits are Exhibits 1, 3, 4, 6, 7, and 8. At the outset, however, we note that the invoices for all of these exhibits are dated after the date of arrival of the vessel. Further, the “ship date” on all of these invoices is after the date of arrival of the vessel. For five of the six invoices at issue the ship date is the same as the invoice date; for Exhibit 3, the ship date is two days prior to the invoice date (but after the date of arrival of the vessel).

An invoice dated after the date of arrival of a vessel is not probative evidence with respect to a claim that an item listed thereon is eligible for an exemption from any provision of 19 U.S.C. §1466 with regard to the subject voyage.

Accordingly, the protestant’s claim for relief under 19 U.S.C. §1466(h)(2) with respect to Exhibits 1, 3, 4, 6, 7, and 8 is unsubstantiated.

You also request our review with respect to TR # 51 and 388, listed on page two of the supplemental submission. You state that no documentation was provided with respect to these items and their eligibility for a particular exemption from duty under 19 U.S.C. §1466, including subsection (h)(2). We concur. Therefore, these items are dutiable.

HOLDING:

The costs for which the protestant seeks relief are dutiable under 19 U.S.C. § 1466 as discussed in the Law and Analysis section of this ruling.

You are instructed to deny the protest with respect to the above-discussed items.

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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