VES-13-18-CO:R:P:C 111039 KVS
Chief
Residual Liquidation and Protest Branch
6 World Trade Center
New York, NY 10048-0954
RE: Vessel repair; Diesel fuel sludge removal; cleaning
Vessel: NEWARK BAY V-20
Vessel Repair Entry No. 559-1237157-6
Date of Entry: October 10, 1989
Port of Entry: Boston, Massachusetts
Dear Sir:
This is in response to your memorandum of April 18, 1990,
which forwards for our consideration a petition for review filed
in connection with the NEWARK BAY, vessel repair entry no. 559-
1237157-6. Our findings are set forth below.
FACTS:
The NEWARK BAY, an American-flag vessel, underwent foreign
shipyard operations in Bremerhaven, West Germany, to remove
sludge from the vessel. On October 1-2, 1990, the vessel
underwent other shipyard operations at Rotterdam, The
Netherlands. Shortly thereafter, the vessel arrived at the
United States on October 10, 1989, at Boston, Massachusetts.
A submission purporting to be an application for relief
dated January 4, 1990, was filed with the New York Vessel Repair
Liquidation Unit. However, the vessel did not make formal entry
until January 25, 1990. The applicant was notified of the
decision on its application denying relief in part in a letter
dated March 14, 1990. The petition for review currently under
consideration was timely filed on March 27, 1990.
ISSUE:
Whether the removal of diesel engine fuel sludge, without
more, is a dutiable repair operation within the purview of 19
U.S.C. 1466.
- 2 -
LAW AND ANALYSIS:
Title 19, United States Code, section 1466(a) provides, in
pertinent part, for payment of duty in the amount of 50 percent
ad valorem on the cost of foreign repairs to vessels engaged,
intended to engage, or documented under the laws of the United
States to engage in the foreign or coastwise trade.
The petitioner asserts that removal of diesel fuel sludge is
an operation that has no connection with the purchase of parts or
materials and does not involve any repair, and is therefore, not
subject to duty under 19 U.S.C. 1466.
We note that the Pusback u. Morgenstern Petrotank invoice
which lists the work performed aboard the NEWARK BAY indicates
that sludge removal also took place aboard the NEDLLOYD HUDSON
(on 9/22/89), the SEA-LAND ATLANTIC (on 10/6/89) and the SEA-LAND
INTEGRITY (on 9/21/89, 10/19/89 and 11/16/89).
Although the repetition of this operation aboard these
vessels, suggests the possibility that the operation be
classified as maintenance, based on the record before us, we find
the discharge of sludge to be analagous to a cleaning operation.
The Customs Service has held that cleaning operations are not
subject to duty unless performed in preparation for, or as an
integral part of repairs (see also C.D. 2514 (dated February 16,
1965)).
In the case currently before us, we find no indication that
the fuel tanks which underwent sludge removal were the site of
any repair. Therefore, we find the charge to be non-dutiable.
Accordingly, the petition for review is granted.
HOLDING:
The removal of sludge from the fuel tank of a vessel, when
unaccompanied by any repair work, is analagous to a cleaning
operation and is non-dutiable within the purview of 19 U.S.C.
1466.
Sincerely,
B. James Fritz
Chief
Carrier Rulings Branch