Vessel Repair Entry No. C53-0028021-7; RICHARD G. MATTHIESEN, V-154; 19 U.S.C. 1466; Petition

HQ 114794 August 27, 1999 VES-13-18-RR:IT:EC 114794 GOB CATEGORY: Carriers Port Director of Customs Attn: Vessel Repair Liquidation Unit 423 Canal Street, Room 303 New Orleans, LA 70130-2341 RE: Vessel Repair Entry No. C53-0028021-7; RICHARD G. MATTHIESEN, V-154; 19 U.S.C. 1466; Petition Dear Sir: This is in response to your memorandum dated August 16, 1999, which forwarded the petition submitted on behalf of Ocean Ships, Inc. (the “petitioner”) with respect to the above-referenced vessel repair entry. FACTS: The RICHARD G. MATTHIESEN (the “vessel”) is a U.S.-flag vessel owned by Wilmington Trust Company. Certain foreign shipyard work was performed on the vessel between November 1993 and December 1994. On March 7, 1995, the vessel arrived in the United States. The subject vessel repair entry was subsequently filed. Your office decided the application with respect to the subject entry. ISSUE: The dutiability of the subject costs under 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, and equipment purchased in a foreign country for, 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. We will address the items at issue within the four sections used in the petition and in your forwarding memorandum. Section One. The petitioner claims that these items are eligible for treatment under 19 U.S.C. 1466(h)(2). We have reviewed all of the items, including the materials provided by the petitioner, your comments, and documents in the application package. Our determinations are based on the totality of the evidence, including the invoices and, where applicable, certifications by the vendor. In cases where the evidence is insufficient to determine eligibility for 19 U.S.C. 1466(h)(2) and/or where the subject item does not appear to be a “part” or “material,” the claim has been denied. We find that the following item numbers are eligible for treatment under 19 U.S.C. 1466(h)(2): 8, 73, 78, 117, 119, 120, 129, 131, 141, 143, 167, 172, 196, 221, 240, and 274. The claim is denied with respect to the following item numbers: 40, 132, 151, 177, 247, and 294. In item 85, the repair kit is dutiable; the indicator valve is eligible for 19 U.S.C. 1466(h)(2). In item 116, the repair kit is dutiable; the check valve and fuse are eligible for 19 U.S.C. 1466(h)(2). In item 214, the adapter kit is dutiable; the seal rotor is eligible for 19 U.S.C. 1466(h)(2). Section Two. The petitioner claims nondutiability under T.D. 75-257, the pertinent part of which provides: “... the cost of materials of United States origin which are purchased by the vessel owner in the United States is not subject to duty under 19 U.S.C. 1466, when installed on the vessel in a foreign country.” However, the pertinent part of T.D. 75-257 applies only to materials; it does not apply to parts. We have examined the evidence of record for eligibility under T.D. 75-257 and 19 U.S.C. 1466(h)(2). We make the following determinations. Relief is granted under 19 U.S.C. 1466(h)(2) with respect to the following item numbers: 2, 124, 189, 264, and 298. Relief is denied with respect to the following item numbers: 46, 47, 48, 49, 50, 84, 115, 180, 181, 182, 184, 186, 187, 188, 202, 237, 238, 245, 246, 259, 261, 297, 299 and 301. Certain of these items are equipment, and are thus ineligible for treatment under T.D. 75-257 and/or 19 U.S.C. 1466(h)(2). With respect to certain other of these items, it is unclear precisely what these items are. Where we cannot determine what an item is, and where the vessel owner has not proven that relief is appropriate, relief will be denied. In item 123, relief is granted under 19 U.S.C. 1466(h)(2) for the filter regulator; relief is denied for the repair kit. In item 300, relief is granted under 19 U.S.C. 1466(h)(2) for the gasket cover items; relief is denied for the other items. Section Three. The petitioner claims that the items herein are eligible for treatment under 19 U.S.C. 1466(h)(3). With respect to item 121, the claim is denied. At the application stage, certain items (gaskets and bearing cover) were found to be eligible for treatment under 19 U.S.C. 1466(h)(3). The petitioner has not established that the remaining items so qualify. We find that items 198 and 263 (including the incidental charges) are eligible for treatment under 19 U.S.C. 1466(h)(3). Section Four. We find that item 53 is nondutiable because it is a U.S. Coast Guard inspection item which is not related to a repair. HOLDING: As detailed above, the petition is granted in part and denied in part. Sincerely, Jerry Laderberg Chief, Entry Procedures and Carriers Branch