VES-13-18-RR:IT:EC 227085 GOB
Port Director of Customs
Attn.: Vessel Repair Liquidation Unit, Room 415
P.O. Box 2450
San Francisco, CA 94126
RE: Vessel Repair Entry No. 110-6461446-1; 19 U.S.C. 1466;
PRESIDENT TYLER, V-137; Petition
Dear Sir:
This is in response to your memorandum dated June 18, 1996,
which forwarded the petition submitted by American President
Lines, Ltd. ("applicant") with respect to the above-referenced
vessel repair entry.
FACTS:
The PRESIDENT TYLER ("the vessel") is a U.S.-flag vessel
owned and operated by the petitioner. Certain foreign shipyard
work was performed on the vessel in late 1993. The vessel
arrived at the port of Seattle, Washington on December 22, 1993.
The subject entry was timely filed on December 30, 1993.
In Ruling 113122 dated March 20, 1996, the application for
relief with respect to this entry was granted in part and denied
in part.
In its petition, the petitioner requests relief with respect
to many items which were not the subject of its application. 19
CFR 4.14(d)(2)(i) states, in pertinent part:
(2) Petition for review on a denial of an application for
relief-(i) Form. If an applicant is dissatisfied with the
decision on its application for relief, the applicant may
file a petition for review of that decision. The petition
for review need not be in any particular form. The petition
for review must identify the
decision on the application for relief and must detail the
exceptions taken to that decision...
(Emphasis supplied.)
Pursuant to 19 CFR 4.14(d)(2)(i), a party may not petition
for relief with respect to vessel repair items which were not
included in the application for relief.
Accordingly, we will rule here only on items included by the
petitioner within the petition which were also included within
the application for relief, i.e., were denied in Ruling 113122.
Those items are as follows:
Item Number Description
1.2-10 owner's spare parts
1.3-2 sea trial
3.3-5 structural removals
5.1-32 wooden box
ISSUE:
Whether the above-stated items are dutiable pursuant to 19
U.S.C. 1466.
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.
Item 1.2-10 - owner's spare parts. In Ruling 113122, we
stated as follows with respect to this item:
The invoice states, in part: "Providing storekeeper to
inventory and control issue of C-8 class storestock spare
for drydock use." This item is dutiable pursuant to 19
U.S.C. 1466. The applicant has not asserted or established
a reason for a different determination.
In its petition, the petitioner states:
This is essentially a transportation and documentation item.
It is not a repair item. Under pre TEXACO this service has
been afforded a non-dutiable treatment.
While the invoice reflects transportation charges, it also
reflects non-transportation costs, as stated supra, i.e.,
"providing storekeeper to inventory and control..." The
transportation costs are not segregated from the other costs.
The petitioner has not established that the other costs are
nondutiable. Accordingly, the entire item is dutiable.
Item 1.3-2 - sea trial. In Ruling 113122, we stated as
follows with respect to this item:
The invoice reflects a "sea trial," but it does not reflect
the purpose of the trial. In fact the invoice states, in
part: "Describe and detail what trials." The applicant
states: "At this drydock availability we were required to
maintain this twenty-one year old vessel in class under the
American Flag Registry to conduct the ABS 5th Special
Periodical Survey...No vessel operator is going to accept a
new vessel without a prior successful dock and sea trial
and, by the same token, we will demand a dock and sea trial
after a 5th special survey." There is insufficient evidence
to support the allegation of the application that this item
is nondutiable. Therefore, we find that it is dutiable.
See the excerpt supra from the Customs Court decision in
Admiral Oriental Line.
In its petition, he petitioner states:
...we direct your attention to Item #4.1-11 and ABS Rule
1/3.11.3 which is quoted in Item 4.1-11, which states:
An operational test of the turbines may be required by the
surveyor. This supports our position for the need for an
operational test.
The petitioner has not established that this cost is
nondutiable. Therefore, it is dutiable. The petitioner appears
to be trying to assert that this cost was related to a
survey, but it has not made an adequate causal connection between
the item and a nondutiable survey.
Item 3.3-5 - miscellaneous deck structure removals. In
Ruling 113122, we stated:
This work appears to have been accomplished in conjunction
with dutiable repairs, and the record does not establish a
sufficient and clear reason why this sub-item is not related
to dutiable work. There is insufficient evidence to support
the allegation of the application that this item is
nondutiable. Therefore, we find that it is dutiable. See
the excerpt supra from the Customs Court decision in Admiral
Oriental Line.
In its petition, the petitioner states:
This item was initially a non-dutiable item since this is a
permanent removal. It is not associated with any dutiable
repair contrary to the assumption of the author of the
subject Ruling. It is merely the permanent removal of
discontinued deck fittings and should be duty-free.
Upon further review of the pertinent invoice, we concur with
the petitioner's assertion that this item is nondutiable. The
invoice does not reflect a repair and there is no indication that
this item is an item incident to a repair. This item appears to
be the mere removal of deck structure.
Item 5.1-32 - wooden box. In Ruling 113122, we stated as
follows with respect to item 5.1-32:
Item 5.1-32 - SSTG rotor. The applicant states: "This item
includes the manufacture of a special fixture to handle the
SSTG turbine motor and pinion shafts to the workshop and
return...Upon return of the SSTG rotor and pinion shaft to
the vessel, the fixture is scraped. Since the fixture is
not incorporated in the vessel, it is not considered to be
dutiable." The invoice is not sufficiently clear with
respect to the precise nature of the work performed. There
is insufficient evidence to support the allegation of the
application that this item is nondutiable. Therefore, we
find that it is dutiable. See the excerpt supra from the
Customs Court decision in Admiral Oriental Line.
In its petition, the petitioner states:
The pinion shaft is a high precision machined integral part
of the SSTG set. It was necessary to remove it from the
unit in the ship and transport it from the ship to the
machine shop and ultimately back to the ship. It is the
packaging required for the transportation. Since this is a
pre TEXACO entry this element of the transportation should
be duty free.
The pertinent invoice item is entitled "SSTG Turbine Rotor."
Aside from the first paragraph of the invoice which states "See
Item 005," the invoice reflects certain work such as
"disconnecting and drawing," "fitting and installing," "making
and renewing one pc. steel key to suit new coupling," etc. Based
upon the invoice and its description of various work, we are
unable to conclude that the entire invoice cost of 12,122, or
either of the component costs of 9,262 and 2,860, is merely for
transportation. Accordingly, this item is dutiable.
HOLDING:
As detailed supra, the petition is granted with respect to
item 3.3-5, and denied with respect to the other items.
Sincerely,
Director,
International Trade Compliance
Division