VES-13-18:CO:R:IT:C 112777 GOB
Deputy Assistant Regional Commissioner
Classification and Value Division
Attn: Regional Vessel Repair Liquidation Unit
New York, NY 10048-0945
RE: Protest No. 1001-92-106860; Vessel Repair Entry No. 514-
3004541-2 dated August 1, 1991; Date of Arrival: July 30,
1991; Port of Arrival: Port Elizabeth, New Jersey; Vessel
Name: S/S RESOLUTE; Voyage No. 43.
Dear Sir:
This is in reference to the above-referenced protest seeking
reliquidation of the above-referenced entry.
FACTS:
The record reflects that the subject vessel, the S/S RESOLUTE,
which is owned and operated by Farrell Lines Incorporated
("protestant"), arrived at Port Elizabeth, New Jersey on July 30,
1991 and filed a vessel repair entry on August 1, 1991.
In Ruling No. 112045 dated March 10, 1992 with respect to an
application for relief, Customs determined that certain costs were
dutiable, including the costs of propeller polishing and boiler
cleaning.
In Ruling No. 112276 dated September 4, 1992 with respect to
a petition for relief, Customs granted certain relief, but
continued to find that the costs of the propeller polishing (item
12) and boiler cleaning (item 13) were dutiable.
In its protest, the protestant reiterates its statement that
the propeller was polished to remove marine growth so as to make
all surfaces clean for examination by the ABS Surveyor and the U.S.
Coast Guard inspectors. It states that the polishing or cleaning
was not performed to remove rust or deterioration and was not a
necessary factor in restoring the vessel to its former state.
The protestant further claims that the boiler cleaning was
performed for survey.
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ISSUE:
Whether the foreign work performed on the subject vessel for
which the protestant seeks relief is dutiable under 19 U.S.C. 1466.
LAW AND ANALYSIS:
19 U.S.C. 1466 provides 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 the
foreign or coastwise trade, or vessels intended to engage in such
trade.
19 CFR 4.14(f) provides that following liquidation of an
entry, a protest under 19 CFR 174 may be filed against the decision
to treat an item or repair as dutiable.
In this protest, the protestant seeks relief beyond that
granted in the application for relief and petition.
The issue of the propeller polishing was thoroughly considered
in Ruling No. 112276, wherein we found that propeller polishing
constituted dutiable maintenance. We see no reason, and the
protestant has not put forth any reason upon which to alter that
determination. The protestant has cited an entry upon which the
cost of propeller polishing was liquidated as nondutiable. The
fact that Customs previously liquidated an entry with the cost of
propeller polishing as nondutiable does not cause us to change our
previous decisions and analysis. We find that the analysis in
Ruling No. 112276 is dispositive and controlling. Accordingly, the
cost of the propeller polishing is dutiable.
With respect to the issue of the boiler cleaning, the
protestant cites previous Customs Headquarters rulings where that
cost was determined to be nondutiable.
In Ruling No. 112045 on the application for relief in this
case, we stated:
Cleaning operations which remove rust and deterioration and
worn parts, and which are a necessary factor in the effective
restoration of a vessel to its former state of preservation,
constitute vessel repairs (See C.I.E. 429/61). Customs has
long held the cost of cleaning is not dutiable unless it is
performed as part of, in preparation for, or in conjunction
with dutiable repairs or is an integral part of the overall
maintenance of the vessel; see C.I.E.'s 18/48, 125/48, 910/59,
820/60, 51/61, 429/61, 569/62, 698/62; C.D. 2514; T.D.'s 45001
and 49531. Pursuant to C.I.E. 919/60 remission of duty
assessed on the cost of repairs is not warranted under section
1466 where the repairs are maintenance in nature.
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In Ruling No. 112276 on the petition for relief in this case,
we stated:
This item represents charges for boiler cleaning which
petitioner alleges was performed pursuant to an ABS
inspection. It is undisputed that, in addition to such
cleaning, boiler repairs were effected as enumerated in items
35, 36, and 37. In response to petitioner's initial
application for duty remission, we held that said cleaning was
performed pursuant to repairs and was thus, dutiable.
Petitioner now avers that the repaired boiler parts under
consideration were neither cleaned nor required to be cleaned
prior to renewal. In examining the shipyard invoice, it is
clear that repairs were indeed effected to items 35, 36, and
37, and that each is dutiable. With respect to the cleaning
however, despite petitioner's affirmations that it was not
performed prior to the repairs, it is impossible to identify
the date upon which such cleaning took place. It is entirely
possible that the cleaning took place in anticipation of, and
pursuant to, dutiable repairs. Alternatively, it is also
possible that such cleaning was performed pursuant to an ABS
inspection. As the invoice provides no clear indication
either way, such costs must be considered dutiable.
Accordingly, the cost of the item ($14,961.00) is dutiable.
There is no basis in the record for us to change our previous
findings. The record is clear that repairs were made to the
boiler. We are unable to conclude that the boiler cleaning was
unrelated to the boiler repairs. Absent evidence to the contrary,
we conclude that the cleaning was done prior to or in preparation
for dutiable boiler repairs.
HOLDING:
The foreign work which is the subject of this protest is
dutiable pursuant to 19 U.S.C. 1466. Accordingly, the protest is
denied.
Sincerely,
Stuart P. Seidel
Director, International
Trade Compliance Division