HQ 116457 - 19 U.S.C. §1466; Vessel Repair Entry C20-0060833-4; Protest 2002-02-101140; MOKIHANA - United States International Trade Commision Rulings

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HQ 116457

June 20, 2005

VES-3-18-RR:IT:EC 116457 CK

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 C20-0060833-4; Protest 2002-02-101140; MOKIHANA

Dear Sir:

This is in response to your memorandum of April 25, 2005, forwarding for our review the protest filed by Matson Navigation Company, Inc. (“protestant”) with respect to Vessel Repair Entry C20-0060833-4. Our ruling follows.

FACTS:

The MOKIHANA, 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 December 10, 2001. A vessel repair entry was timely filed. However, an application for relief from duties was untimely filed with the New Orleans Vessel Repair Unit (“VRU”), and the application was denied. 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 8, 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 8, 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 3 (T.R.#645), 4 (T.R.#659), 5 (T.R.#660), and T.R.# 648, which includes three articles described as 6213ZZ.

The original “inventory adjustment” sheet from “11/09/2001 to 12/10/2003” lists T.R.#645 as “Relay, Timer Attachment, Solid State, Motor Controllers.” However, the “Supplemental Submission Pursuant to section 1554 of the ‘Miscellaneous Trade and Technical Corrections Act’ (H.R. 1047)” shows Exhibit 3 (T.R.#645) as a screen/CR122BT0xOC (part for supply fan). The invoice for Exhibit 3 is from Alfa Laval Inc. and lists a screen. As this is an invoice from an US company and the screen is a part the screen would be non-dutiable pursuant to section 1466(h)(2). However, if protestant has an outstanding claim for “Relay, Timer Attachment, Solid State, Motor Controllers” then the part would be dutiable as there would be no evidence of any claim to relief.

The claim for Exhibit 4 (T.R.#659) is for 8 piston rings/Daros RS KNP. However, the invoice from US company Torrence Diesel Spares SVC Inc. lists the purchase of 6 piston rings/Daros RS KNP. Thus, relief may be granted for 6 piston rings/Daros RS KNP under section 1466(h)(2), and the other 2 are dutiable as there is no evidence as to their purchase.

The claim for Exhibit 5 (T.R.#660) is for 19 piston rings/Daros RS KN. However, the invoice from US company Torrence Diesel Spares SVC Inc. lists the purchase of 15 piston rings/Daros RS KN. Thus, relief may be granted for 15 piston rings/Daros RS KN under section 1466(h)(2), and the other 3 are dutiable as there is no evidence as to their purchase.

The last line at issue is T.R.# 648 which includes three articles described as 6213ZZ. There is no exhibit or invoice for these articles. Accordingly, the protestant’s claim for relief under 19 U.S.C. §1466(h)(2) with respect to these articles is unsubstantiated and they are therefore 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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