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HQ 116482

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July 19, 2005

VES-13-18:RR:IT:EC 116482 TLS

CATEGORY: CARRIER

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

RE: Vessel Repair Entry No. C20-0060829-2; M/V MANOA; V-057; Protest No. 2002-02-101139; 19 U.S.C. § 1466

Dear Sir:

This is in response to your memorandum of June 6, 2005. The memorandum forwards an application for further review of a protest, filed by Matson Navigation Company, Inc. (“Matson”), seeking relief for duties assessed pursuant to 19 U.S.C. § 1466. Our ruling follows.

FACTS:

The M/V MANOA (the “vessel”), a U.S.-flag vessel owned by the protestant, incurred foreign shipyard costs. The vessel arrived in the port of Los Angeles on December 3, 2001. A vessel repair entry was timely filed. Matson filed its application for relief from duties on the entry. Upon review of the filing, the Vessel Repair Unit (VRU) determined that Matson must be denied relief because the application for relief was untimely, and notified Matson of this decision via a letter dated August 30, 2002. Matson filed the subject application for further review, which was received by the VRU on November 27, 2002. Of the amount of duties assessed on the entry, $25,065.67 is the subject of this protest. Matson has also filed a supplement to the protest, dated May 6, 2005.

The protest pertains to duty charged on all repair items used by the regular crew of the vessel during the voyage. The VRU 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 May 6, 2005 with the VRU, pursuant to section 1554 of the “Miscellaneous Trade and Technical Corrections Act of 2004.”

Title 19, United States Code, section 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 . . . “

Pursuant to 19 U.S.C. § 1466(h)(2), if, upon entry, duty has been paid on the cost of spare repair parts or materials (other than net or nettings) which the owner or master of the vessel certifies are intended for use aboard a United States-flagged vessel engaged in foreign or coasting trade, for installation or use on such vessel, the duty imposed by pursuant to 19 U.S.C. § 1466(a) shall not apply.

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 section 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 May 6, 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.

With regard to the protestant’s submission, you note that Exhibits 3, 5, 7, and 8, from the supplemental submission are those items for which our review is sought. We note that the invoice and purchase order for Exhibit 3 are dated March 8, 2002 and March 12, 2002, respectively. The invoice and purchase order for Exhibit 5 are dated January 9, 2002 and December 5, 2001, respectively. The invoice and purchase order for Exhibit 7 are dated October 30, 2001 and October 29, 2001, respectively. The purchase order for Exhibit 8 is dated May 2, 2001; the protestant has not submitted a corresponding invoice in this instance. We note that the invoice and/or purchase order for Exhibits 3 and 5 are dated after the vessel’s arrival date of December 3, 2001.

An invoice or purchase order 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 with respect to Exhibits 3 and 5 is unsubstantiated. Therefore, we find the particular items at issue that are the subject of Exhibits 3 and 5 to be dutiable.

The invoice for Exhibit 7 indicates that 10 “circuit breaker[s] non-auto,” were purchased on October 30, 2001, and the purchase order, indicating that 10 circuit breakers were purchased, is dated October 29, 2001. These items are of the type that would be used to replace or repair existing equipment. The protestant, however, is requesting relief from duties on a quantity of 24 circuit breakers, as noted on page two of the supplemental submission. Inasmuch as the protestant has submitted evidence of costs on only 10 circuit breakers, relief is granted only on that amount. The claim for relief on the remaining 14 circuit breakers is therefore denied.

The purchase order for Exhibit 8 indicates that 30 “interior for receptacle, Midland-Ross DWGNO, f28595, item 14A” were purchased on May 2, 2001. This is the amount from which the protestant is claiming relief. This item is further described as “a refrigeration part that is used on the electrical system. It is the inside of the female receptacle minus the outer casing.” The protestant has not submitted a corresponding invoice for this item. Absent any other documentation, the purchase order submitted alone is insufficient to grant relief. See, e.g., U.S. Customs and Border Protection (CBP) Ruling HQ 111309 (March 5, 1991). Consequently, this item is also dutiable.

HOLDING:

Following a thorough analysis of the facts as well as of the law and applicable precedents, we have determined that the protest with respect to the items considered above should be partially granted and partially denied as specified in the Law and Analysis portion of this ruling.

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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