VES-13-18-CO:R:IT:C 111499 LLB
Deputy Assistant Regional Commissioner
Commercial Operations
ATTN: Regional Vessel Repair Liquidation Unit
New York, New York 10048-0945
RE: Protest No. 1001-0-201026; S.S. MORMACSTAR V-138C
Dear Sir:
This is in reference to your memorandum dated January 28,
1991, forwarding additional information regarding a protest
concerning vessel repair entry no. C01-0015421-7. Our findings
are set forth below.
FACTS:
The S.S. MORMACSTAR is a U.S.-flag vessel owned by
Wilmington Trust Company of Wilmington, Delaware. The vessel had
foreign shipyard work performed during June 14-18, 1990, in
Bilbao, Spain. Subsequent to the completion of the work the
subject vessel arrived in the United States at Portland, Maine,
on June 29, 1989.
A vessel repair entry covering the work in question was
filed on the date of arrival. Several documents relating to this
entry were filed with the New York Vessel Repair Liquidation
Unit (VRLU) with the intention that they collectively constituted
an application for relief. Upon a review of these documents by
the Carrier Rulings Branch it was determined that the
requirements for an application for relief as set forth in
section 4.14(d)(1), Customs Regulations (19 CFR 4.14(d)(1)) were
not met and that the entry should be liquidated without regard to
any claim for relief (see Headquarters Ruling 110739 KVS, dated
March 21, 1990).
The entry was liquidated on June 1, 1990. On June 26, 1990,
a timely protest was filed claiming, among other elements, that
the cost of certain allegedly U.S.-manufactured materials was
non-dutiable. The protestant was allowed an additional 60 days
from the date of notification of the decision on the protest in
which to submit evidence on this point.
ISSUE:
Whether the additional evidence which is presented is
sufficient to prove that the parts and materials for which the
protestant seeks relief were U.S.-manufactured and therefore
non-dutiable under 19 U.S.C. 1466.
LAW AND ANALYSIS:
Title 19, United States Code, section 1466, provides in
pertinent part for the payment of duty in the amount of 50
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 engage in such
trade.
The Customs and Trade Act of 1990, section 484E, Pub. L.
No. 101-382 (codified at 19 U.S.C. 1466(h)(2)), amended the
vessel repair statute to except from duty spare repair parts or
materials that have entered the United States duty-paid and are
used aboard a cargo vessel engaged in foreign or coastwise
trade.
In regard to the dutiability under section of 1466 of
equipments, parts, repair materials, etc., which have been
manufactured and purchased in the United States for installation
abroad on U.S.-documented vessels, Customs is guided by the
position as delineated in T.D. 75-257, which held that where
equipment, parts, repair materials, etc., which have been
manufactured and purchased in the United States are installed
abroad on U.S.-documented vessels by other than U.S. residents or
regular crew, the labor alone is dutiable. If the installation
of such articles is performed by U.S. residents or the regular
crew, remission is warranted pursuant to section 1466(d)(2). In
order to support claims of U.S. manufacture and purchase, we
require evidence beyond an affidavit from an interested party.
We require direct evidence of U.S. manufacture (e.g., an
affidavit by the equipment manufacturer) as well as proof of U.S.
purchase.
In the protest currently under consideration, the protestant
submitted invoices and purchase orders. While it was apparent
that the documentation was sufficient proof of U.S. purchase, it
was insufficient for purposes of proving U.S. manufacture.
Accordingly, we delayed final consideration of the protest for a
period of 60 days from the date the protestant was notified of
our decision by the New York VRLU so that direct evidence of U.S.
manufacture might be submitted.
The most recent evidence includes invoices from three
concerns, International Paint, Arcy Manufacturing Company, and
Hobart Brothers Company. All are U.S. companies who have
supplied documents indicating that the materials supplied the
vessel in this matter are manufactured in the United States.
Further, evidence has been submitted to the New York Vessel
Repair Liquidation Unit which satisfies that office that a charge
for pipe fabrication in the amount of $2,570.25 and associated
repair parts costing $131.32, should be remitted. The reason for
these latter findings is that the fabrication was performed in
the U.S. by resident labor, and the related parts were of U.S.
manufacture.
HOLDING:
Following a thorough review of the evidence and
analysis of the law and applicable precedents, we have determined
to allow the protest in whole.
Sincerely,
B. James Fritz
Chief
Carrier Rulings Branch