Protest No. 2002-91-000157; Vessel Repair Entry No. VR-C20-0006468-6; S/S ULTRAMAR; Removal of Debris; 19 U.S.C.  1466

HQ 111618 March 15, 1995 VES-13-18-CO:R:IT:C 111618 GEV CATEGORY: Carriers Port Director U.S. Customs Service Vessel Repair Liquidation Unit, Room 303 423 Canal Street New Orleans, Louisiana 70130-2341 RE: Protest No. 2002-91-000157; Vessel Repair Entry No. VR-C20-0006468-6; S/S ULTRAMAR; Removal of Debris; 19 U.S.C.  1466 Dear Sir: This is in response to a memorandum from the DARC, Commercial Operations Division, dated March 28, 1991, forwarding for our review, the above-reference protest. Our ruling on this matter is set forth below. FACTS: The record reflects that the S/S ULTRAMAR is a U.S.-flag vessel which had foreign shipyard work performed on her in Livorno, Italy during the period of November 1 - 25, 1988. The vessel arrived in the port of New Orleans, Louisiana, on December 9, 1988. A vessel repair entry covering the work was timely filed on December 13, 1988. An application for relief was filed on February 8, 1989. In response to this application, Customs issued Headquarters ruling letter 110250, dated May 24, 1990. A petition for review of the aforementioned ruling letter was subsequently filed. Customs issued Headquarters ruling letter 111204, dated December 7, 1990, denying the petition in full. The subject entry was subsequently liquidated on January 18, 1991. A protest was filed with Customs on February 19, 1991 challenging Customs position that the removal of debris following dutiable repairs is subject to duty. The following supplemental materials were submitted with the protest: (1) counsel's letter dated February 18, 1991 (Exhibit A); Fincantier Shipyard Invoice No. 15050878 (Exhibit 1); a copy of American Viking Corp. v. - 2 - United States, 150 F.Supp. 746, 37 Cust. Ct. 237, C.D. 1830 (1956) (Exhibit 2); a copy of International Navigation Co., Inc. v. United States, 148 F.Supp. 448, 38 Cust. Ct. 5, C.D. 1836 (1957) (Exhibit 3); a copy of Customs Headquarters Letter 107829 (Exhibit 4); and copies of invoices pertaining to the aforementioned letter (Exhibits 4(a), 4(b) and 4(c)). ISSUE: Whether the cost of removing debris following dutiable repairs is dutiable under 19 U.S.C.  1466. LAW AND ANALYSIS: Title 19, United States Code,  1466, provides in pertinent part for 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. Pursuant to the "but for" test enunciated by the U.S. Court of Appeals for the Federal Circuit in Texaco Marine Services, Inc. and Texaco Refining and Marketing, Inc. v. United States, Docket No. 93-1354, decided December 29, 1994 (affirming the decision of the U.S. Court of International Trade at 815 F.Supp. 1484 (1993)), post-repair cleaning is dutiable under 19 U.S.C.  1466. Accordingly, the costs for removal of debris following dutiable repairs which are the subject of this protest are dutiable. HOLDING: The cost of removing debris following dutiable repairs is dutiable under 19 U.S.C.  1466. Accordingly, the protest is denied in its entirety. In accordance with  3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision should be mailed by your office no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with this decision must be accomplished prior to mailing the decision. Sixty days from the date of the - 3 - decision the Office of Regulations and Rulings will take steps to make the decision available to customs personnel via the Customs Ruling Module in ACS and the public via the Diskette Subscription Service, Freedom of Information Act and other public access channels. Sincerely, Arthur P. Schifflin Chief Carrier Rulings Branch