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HQ W116460

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April 10, 2006

VES-13-18:RR:BSTC:CCI 116460 rb

CATEGORY: CARRIER

Chief, Vessel Repair Unit
U.S. Customs and Border Protection
P.O. Box 1389
Kenner, LA 70063

RE: Vessel Repair Entry No. C20-0059005-2; MOKIHANA; 19 U.S.C. 1466; Protest No. 2002-03-100045

Dear Sir:

Under cover of your memorandum (VES-13-02:G:NO:VR LBM), dated April 26, 2005, you forwarded, with attachments, an application for further review of the above-numbered protest that was filed by Matson Navigation Co., Inc. (protestant), concerning the assessment of vessel repair duty under 19 U.S.C. 1466(a). Our decision on this protest follows.

FACTS:

The M/V MOKIHANA (the vessel), a U.S.-flagged vessel owned by the protestant,* incurred foreign shipyard costs. The vessel arrived in the port of Los Angeles on April 29, 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. This determination of duty occurred on October 25, 2002.

(* The vessel repair entry indicates that Matson Navigation Co., Inc., is the owner of the vessel. A supplemental submission filed on behalf of the protestant states that Matson Navigation Co., Inc., is the operator of the vessel.)

The ensuing protest, received on January 23, 2003, 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 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); 19 CFR 174.12(e). We further note that counsel for the protestant filed a supplemental submission dated April 18, 2005, with the VRU, pursuant to section 1554 of the Miscellaneous Trade and Technical Corrections Act of 2004.

Generally speaking, under 19 U.S.C. 1466(a), the 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 certain vessels, including that involved in the instant protest, are liable to entry and the payment of a 50% ad valorem duty on the costs thereof in such foreign country upon the first arrival of the vessel in any port 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 section 1466(a), which exemption is 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 January 23, 2003, and counsel for the protestant filed a supplemental submission dated April 18, 2005, which was received by the VRU on April 19, 2005. You have asked us to review the Items described below. We will use the Exhibit numbers used in the supplemental submis- sion. The protestant seeks relief pursuant to 19 U.S.C. 1466(h)(2) with respect to these Items.

The pertinent Exhibits are Exhibits 1 and 2. At the outset, we note that Exhibit 1 refers to an Invoice numbered 832158 for a Gasket (Part for Main Engine). This invoice is dated April 30, 2002 - one day after the vessel’s arrival in the United States (at the port of Los Angeles). 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 Exhibit 1 is unsubstantiated.

Exhibit 2 refers to an Invoice numbered 2054416-01 for Filter Elements. However, in line with Headquarters ruling (HQ) 114984, dated April 10, 2000 (see Voyage 23, Item 8), the filter elements in this case are dutiable vessel equipment.

HOLDING:

The costs for which the protestant seeks relief are dutiable under 19 U.S.C. 1466(a) as discussed in the LAW AND ANALYSIS section of this decision.

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,

/S/ Glen E. Vereb

Glen E. Vereb
Chief

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