Vessel Repair Entry No. C20-0060808-6; MOKIHANA; V-055; Protest No. 2002-07-101384; 19 U.S.C. § 1466(a)

HQ H015927 October 23, 2007 VES-13-18:RR:BSTC:CCI H015927 ALS CATEGORY: Carriers Supervisory Import Specialist Vessel Repair Unit U.S. Customs and Border Protection 1515 Poydras Street, Suite 1700 New Orleans, Louisiana 70112 RE: Vessel Repair Entry No. C20-0060808-6; MOKIHANA; V-055; Protest No. 2002-07-101384; 19 U.S.C. § 1466(a) Dear Sir: This is in response to your memorandum of August 13, 2007. The memorandum forwards an application for further review of a protest, filed on behalf of Matson Navigation Company (“Navigation”), seeking relief for duties assessed pursuant to 19 U.S.C. § 1466(a). You have asked us to review numerous items listed in your memorandum. Our ruling follows. FACTS: The MOKIHANA (the “vessel”), a U.S.-flag vessel owned by the protestant, incurred foreign shipyard costs. The vessel arrived in the port of Los Angeles, California on November 5, 2001. A vessel repair entry was timely filed. Matson filed an application for relief from duties on the entry. Upon review of the filing, your office determined that the application should be granted in part and denied in part, and notified Matson of this decision, through its legal counsel, via a letter dated February 2, 2007. Matson timely filed the subject application for further review, seeking relief pursuant to 19 U.S.C. § 1466(a). ISSUE: Whether the costs for which the protestant seeks relief are dutiable under 19 U.S.C. § 1466(a). LAW AND ANALYSIS: Title 19, United States Code, section 1466(a) provides in pertinent part for the payment of an ad valorem duty of 50 percent of the cost of “. . . equipments, or any part thereof, including boats, purchased for, or the repair parts or materials to be used, or the expenses of repairs made in a foreign country upon a vessel documented under the laws of the United States . . . “ The following items are at issue here: Item 218, Hatch Cover Bearing Pad Work (Exhibit 1) Item 315, Hatch Cover Repairs (Exhibit 1) Item 316, No. 1 Port Hatch Cover Repairs (Exhibit 1) Item 317, Hatch Coaming Repairs (Exhibit 1) Item 318, Hatch Coaming Labyrinth Seal Repairs (Exhibit 1) Item 319, Hatch Coaming Transverse Box Girder Maintenance (Exhibit 1) Invoice # 71312 from Hamworthy KSE AB (Exhibit 17) Invoice # 3798 from Hamworthy KSE (Exhibit 18) We will discuss these items as one central issue, given that they are all concerned with work done to the hatch cover of the subject vessel. The invoice under Exhibit 17 concerns costs incurred for payments to consultants for the hatch cover bearing pad work, and the purchase order under Exhibit 18 concerns costs incurred for parts purchased for the hatch cover bearing pad work. We note for your information that the submission of a purchase order carries little weight in our evaluation of the evidence. See CBP Ruling HQ 111309 (March 5, 1991). The protestant contends that the work at issue constitutes modifications to the hatch cover, citing CBP Rulings HQ 114782 (August 20, 1999) and HQ 113940 (August 27, 1997). In citing these rulings, the protestant notes that each ruling specifically mentions “bearing pad installations” as a non-dutiable modification. The protestant has also submitted an affidavit from one of its employees stating that “the original system was fully functional,” and the new hatch cover bearing pads “reduce the stresses on the hatch covers and increase the useful life of the hatch covers and the steel support structure on the hatch covers and on the coamings.” However, your office found these items dutiable because the detailed descriptions of these items on the shipyard invoice (specfically items 315-319) and the related American Bureau of Shipping report (p. 10, items 101-103) indicate that the parts of the hatch cover at issue were not in good working order when this work was done. After a thorough review of the protestant’s submission and accompanying documentation, we agree with your office’s findings. Furthermore, the protestant merely cites to the above-noted rulings without explaining how they apply to the case at hand. The mere fact that the cited rulings and this case all involve hatch cover bearing pad work is not dispositive in and of itself. Therefore, the costs for these items are dutiable. HOLDING: Following a thorough analysis of the facts as well as of the law and applicable precedents, we have determined that the protest with respect to the items considered above should be denied as specified in the Law and Analysis portion of this ruling. In accordance with the Protest/Petition Processing Handbook (CIS HB, January 2002, pp. 18 and 21), 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 CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution. Sincerely, Glen E. Vereb Chief Cargo Security, Carriers, and Immigration Branch