VES-13-18-CO:R:P:C 110711 BEW
Deputy Assistant Regional Commissioner
Commercial Operations
ATTN: Regional Vessel Repair Liquidation Unit
New York, New York 10048-0945
Re: Vessel Repair Entry No. C11-0002189-3, dated August 11,
1988; Date of Arrival: August 9, 1988; Port of Arrival:
Philadelphia, Pennsylvania; Vessel: M/V AMERICAN FALCON,
Voyage No. 034
Dear Sir:
This is in reference to an application for relief from
duties filed by American Transport Lines, in relation to the
above referenced vessel repair entry dated August 11, 1988,
transmitted to this office by memorandum dated December 18, 1989.
We have reviewed the entire record, and render the following
advice.
FACTS:
The record shows that the shipyard work in question was
performed on the subject vessel Rotterdam, Holland, during the
month of July 1988.
The subject vessel arrived in the United States at the port
of Philadelphia, Pennsylvania, on August 9, 1988.
The applicant claims that relief for the subject items
should be granted because the items should be classified as
nondutiable items covered under title 19, United States Code,
section 1466 and sections 4.14(a) and 4.14(c) of the Customs
Regulations.
The entire vessel repair entry involves a potential duty of
$7,576.77.
You have requested our advice concerning the following
items. We will refer to the work using the item numbers and
invoice descriptions shown on the attachments and invoices
submitted with your memorandum.
ISSUE:
Whether the foreign work performed on the subject vessel is
dutiable under 19 U.S.C. 1466.
LAW AND ANALYSIS:
Title 19, United States Code, section 1466, provides in
pertinent part for payment of an ad valorem duty of 50 percent of
the cost of foreign repairs to a vessel documented under the laws
of the United States to engage in the foreign or coastwise trade.
Section 1466 (d)(1) provides that the Secretary of the
Treasury is authorized to remit or refund such duties if the
owner or master of the vessel was compelled by stress of weather
or other casualty to put into such foreign port to make repairs
to secure the safety and seaworthiness of the vessel to enable
her to reach her port of destination.
We have reviewed all of the elements for which relief is
sought and, render the following advice:
1. SAACKE invoice No. 13591 - insufficient evidence to
sustain that this was a free exchange item, all items
are dutiable.
2. Sigma Coatings invoice No. 963280/000168 - all items
are dutiable.
3a. Aug. Kopeke & Co. invoice No. 27967 - all items are
dutiable.
3b. Aug. Kopeke & Co. invoice No. 27981 - all items are
dutiable.
4a. Ship Spares invoice No. 1505 - all items are dutiable.
4b. Ship Spares invoice No. 1506 - all items are dutiable.
4c. Ship Spares Invoice No. 1631 - all items are dutiable,
except those costs for transportation.
5. Fuji Trading (America) Inc. invoice No. 306870 - all
items are dutiable, except those costs transportation.
7. Aber Marine invoice - all items are dutiable, except
those costs for rail/air travel, taxi, meals and
transportation.
9. Diesel Power Services invoice T.160 - all items are
dutiable, except those costs for rail/air travel,
taxi, meals and transportation.
10. EB Communications invoice No. 05770 - all items are
dutiable, except those costs for rail/air travel,
taxi, meals and transportation.
11. Felixstowe Marine Electronics No. 5000 - all items are
dutiable.
12. D. Van de Wetering B.V. invoice No. JVR/SR S 907/8475 -
all items are dutiable.
13a. & 13b. Mobiltec invoice No. 187/88, pages 1 & 2 - all
items are dutiable, except those costs for rail/air
travel, taxi, meals and transportation.
In its application of the vessel repair statute (19 U.S.C.
1466), Customs has consistently held that modifications/altera-
tions/additions to the hull and fittings of a vessel which allow
the vessel to operate more efficiently are not subject to vessel
repair duties. Alterations to the hull and fittings of vessels
are not within the purview of section 1466, and the cost of the
work is not subject to duty. An article must be permanently
attached to the vessel and it most be essential to the successful
operation of the vessel (see Otte v. United States, 7 C.C.P.A.
166 (1916), and United States v. Richard & Co., 8 Ct. Cust. App.
231, T. D. 37496 (1917). To be found non-dutiable as a
modification/alteration/addition, the work must involve no
element of repair due to damages, deterioration or wear and tear.
If those are present, the work will be considered a repair and
dutiable. After reviewing the record, we consider the work done
under the following item to be in the nature of non-dutiable
modifications/alterations/additions to the hull and fittings
rather than dutiable repairs to the vessel due to damage or
deterioration:
Item No. 8 - Fleetserve Engineering invoice - items 1, 2,
3, and 6 are considered non-dutiable modifications to the
hull and fittings. All other items are dutiable, except
rail/air travel and taxi, which are nondutiable expenses.
With regard to Item No. 6 - International Lashing Systems
Limited invoice No. 2531, this invoice reveals that 600 pieces of
web car lashing straps and 100 pieces of chain lashings were
purchased. We cannot determine from the evidence submitted
whether the lashings are being imported for installation on
other vessels are whether they were installed on the subject
vessel. Under the provisions of T.D. 70-214(24), copy enclosed,
we held that equipment imported into the United States for
installation on a vessel other than the importing vessel is not
dutiable under the vessel repair statute but is dutiable under
the Harmonized Tariff Schedules of the United States as other
merchandise imported into the United States.
HOLDING:
The foreign repair work for which the applicant seeks
relief is dutiable under 19 U.S.C. 1466 with exception of those
items noted above.
Sincerely,
B. James Fritz
Chief
Carrier Rulings Branch
Enclosure