Vessel Repair Entry No. C28-0230364-7; 19 U.S.C. 1466(a) and (h)(3); PRESIDENT GRANT, V-02E; Protest

HQ 114601 February 9, 1999 VES-13-18-RR:IT:EC 114601 GOB CATEGORY: Carriers Port Director of Customs Attn.: Vessel Repair Liquidation Unit, Room 107 P.O. Box 2450 San Francisco, CA 94126 RE: Vessel Repair Entry No. C28-0230364-7; 19 U.S.C. 1466(a) and (h)(3); PRESIDENT GRANT, V-02E; Protest Dear Madam: This is in response to your memorandum of January 12, 1999, which forwarded the protest submitted by American Ship Management, LLC (“protestant”) with respect to the above-referenced vessel repair entry. FACTS: The PRESIDENT GRANT (the “vessel”), a U.S.-flag vessel, arrived at the port of Oakland, California on May 17, 1998. The subject vessel repair entry was timely filed. The vessel underwent certain shipyard work in Taiwan and Japan in May of 1996. The protestant asserts that an item listed on the vessel repair entry should be eligible for treatment under 19 U.S.C. 1466(h)(3), rather than dutiable under 19 U.S.C. 1466(a). ISSUE: Whether the subject item is dutiable pursuant to 19 U.S.C. 1466(a) or is eligible for treatment under 19 U.S.C. 1466(h)(3). LAW AND ANALYSIS: 19 U.S.C. 1466(a) 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. 19 U.S.C. 1466(h)(3) provides: The duty imposed by section (a) of this section shall not apply to - ... (3) the cost of spare parts necessarily installed before the first entry into the United states, but only if duty is paid under appropriate commodity classifications of the Harmonized Tariff Schedules of the United States upon first entry into the United States of each such spare part purchased in, or imported from, a foreign country. For the purpose of 19 U.S.C. 1466(h), we have defined a “part” as follows: A part is determined to be something which does not lose its essential character or its identity as a distinct entity but which, like materials, is incorporated into a larger whole. It would be possible to disassemble an apparatus and still be able to identify a part. The term part does not mean part of a vessel, which practically speaking would encompass all elements necessary for a vessel to operate in its designed trade. Examples of parts as defined are seen in such items as piston rings and pre-formed gaskets, as opposed to gaskets which are cut at the work site from gasket material. (Emphasis in original.) After a review of the documentation of record, we find that the protestant has not established that the subject items are eligible for treatment pursuant to 19 U.S.C. 1466(h)(3). The protest does not include any substantive, probative information supportive of the protestant’s claim. The protestant merely asserts that certain parts qualify for treatment under 19 U.S.C. 1466(h)(3). The documentation provided by the protestant does not illuminate or substantiate its claim. Accordingly, there is no basis upon which to grant the protest. HOLDING: The protest should be DENIED. In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.ustreas.gov, by means of the Freedom of Information Act, and other methods of public distribution. Sincerely, Jerry Laderberg Chief, Entry Procedures and Carriers Branch