VES-13-18-CO:R:IT:C 113127 GOB
Deputy Regional Director
Commercial Operations
Pacific Region
One World Trade Center
Long Beach, California 90831
RE: Vessel Repair Entry No. 410-0019858-4; 19 U.S.C. 1466; SEA-
LAND CONSUMER, V-239; Modification
Dear Sir:
This is in response to your memorandum dated May 27, 1994,
which forwarded the application for relief submitted by Sea-Land
Service, Inc. ("applicant") with respect to the above-referenced
entry.
FACTS:
The record reflects the following. The SEA-LAND CONSUMER
("vessel") is a U.S.-flag vessel owned and operated by the
applicant. Certain foreign shipyard work was performed on the
vessel on voyage 239. The vessel arrived at the port of San
Francisco on January 27, 1994 and filed a vessel repair entry on
February 2, 1994.
You ask for our determination with respect to the following
items:
Item No. Description
7.1 ship's whistle
7.3 fuel oil transfer piping
7.4 flume tank system activation
7.5 slop tank modification
C performance monitoring modification
2.1-5 sea valves
1 certain items on ABS survey
ISSUE:
Whether the subject items are dutiable pursuant to 19 U.S.C.
1466.
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LAW AND ANALYSIS:
19 U.S.C. 1466 provides for the payment of duty at a rate of
fifty percent ad valorem on the cost of foreign repairs to vessels
documented under the laws of the United States to engage in foreign
or coastwise trade, or vessels intended to be employed in such
trade.
In its application of the vessel repair statute, the Customs
Service has held that modifications, alterations, or additions to
the hull and fittings of a vessel are not subject to vessel repair
duties. The identification of work constituting modifications vis-
a-vis work constituting repairs has evolved from judicial and
administrative precedent. In considering whether an operation has
resulted in a nondutiable modification, the following factors have
been considered:
1. Whether there is a permanent incorporation into the hull
or superstructure of a vessel, either in a structural sense or as
demonstrated by means of attachment so as to be indicative of a
permanent incorporation. See United States v. Admiral Oriental
Line, 18 C.C.P.A. 137 (1930).
2. Whether in all likelihood an item would remain aboard a
vessel during an extended lay-up.
3. Whether an item constitutes a new design feature and does
not merely replace a part, fitting, or structure that is performing
a similar function.
4. Whether an item provides an improvement or enhancement
in operation or efficiency of the vessel.
After a consideration of the evidence of record, we find that
the following items are nondutiable modifications: 7.1, 7.3, 7.4,
7.5, and 2.1-5.
We find that item C, performance monitoring modification, is
dutiable because it includes certain repairs which are not
separately itemized.
You have requested our determination with respect to the
following items included within item 1: (a) modification of
existing spare propeller shaft and replacement of existing
propeller shaft; and (b) modification survey of slop lines and fuel
oil transfer lines. We find that item (a) is dutiable because it
involves a repair - the propeller shaft was fractured and repaired.
We find that item (b) is a nondutiable modification.
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HOLDING:
As detailed supra, the application is granted with respect to
items 7.1, 7.3, 7.4, 7.5, 2.1-5, and 1(b). The application is
denied with respect to items C and 1(a).
Sincerely,
Arthur P. Schifflin
Chief
Carrier Rulings Branch