Protest No. 2002-07-101530; Vessel Repair Entry No. NN3-0000068-8; SEALAND MOTIVATOR V-0417; 19 U.S.C. § 1466; Survey; Modifications; 19 U.S.C. § 1466(d)(1); Casualty; Consumables

HQ H019652 February 5, 2008 VES-13-18-OT:RR:BSTC:CCI H019652 JLB CATEGORY: Carriers Supervisory Import Specialist Vessel Repair Unit U.S. Customs and Border Protection 1515 Poydras Street, Suite 1700 New Orleans, Louisiana 70112 RE: Protest No. 2002-07-101530; Vessel Repair Entry No. NN3-0000068-8; SEALAND MOTIVATOR V-0417; 19 U.S.C. § 1466; Survey; Modifications; 19 U.S.C. § 1466(d)(1); Casualty; Consumables Dear Sir: This is in response to your memorandum of November 6, 2007, forwarding the above-referenced protest for further review. We have reviewed the arguments set forth by your office and by the protestant, Maersk Line Ltd. Our decision follows. FACTS The subject protest involves various shipyard work undergone by the vessel SEALAND MOTIVATOR. The vessel is currently owned and operated by Maersk Line Ltd who acquired the vessel in the middle of the shipyard period from U.S.S.M. Inc. On July 12, 2004, the vessel arrived in Gdansk, Poland for various shipyard work and returned to the United States at the port of Charleston, South Carolina on October 2, 2004. A vessel repair entry was timely filed. On January 18, 2005, Maersk Line Ltd. filed an application for relief of the vessel repair duties assessed on the costs covered in the subject vessel entry. In response thereto, your office issued a decision on April 13, 2007, which denied in part, and granted in part, the application for relief. Accordingly, your office assessed vessel repair duties in the amount of $2,409,571.32. A timely protest was filed thereto for the duties assessed for numerous items. ISSUES (1) Whether Items 2.66, 173, 175, 178, 179 to 183, 16 to 19, 48, 152 and 153 performed on the vessel while in a foreign shipyard constitute modifications to the vessel and therefore are not dutiable under 19 U.S.C. § 1466? (2) Whether the remaining work in question performed on the vessel while in a foreign shipyard is dutiable under 19 U.S.C. § 1466? LAW AND ANALYSIS Pursuant to 19 U.S.C. § 1466(a), there must be a 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 trades. In its application of the vessel repair statute, U.S. Customs and Border Protection (“CBP”) has held that modifications, alterations, or additions to the hull and fittings of a vessel are not subject to vessel repair duties. The factors considered in identifying work constituting modifications, vis-à-vis work constituting repairs, have evolved from judicial and administrative precedent. See Otte v. United States, 7 Ct. Cust. Appls. 166, Treasury Decision (T.D.) 36489 (1916); United States v. Admiral Oriental Line et al., 18 C.C.P.A. 137, Treasury Decision (T.D.) 44359 (1930); see also Cust. Bull. and Dec., Vol. 31, No. 40 (Oct. 1, 1997). These factors include: 1. Whether there is a permanent incorporation into the hull or superstructure of a vessel. 2. Whether in all likelihood an item under consideration would remain aboard a vessel during an extended lay-up.3. Whether, if not a first time installation, an item under consideration replaces a current part, fitting or structure which is not in good working order. 4. Whether an item under consideration provides an improvement or enhancement in operation or efficiency of the vessel. The factors are not by themselves necessarily determinative, nor are they the only factors which may be relevant in a given case. However, in a given case, these factors may be illustrative, illuminating, or relevant with respect to the issue of whether certain work may be a modification of a vessel which is non-dutiable under 19 U.S.C. § 1466. A leading case in the interpretation and application of § 1466 is United States v. Admiral Oriental Line et al., 18 C.C.P.A. 137 (T.D. 44359 (1930)). That case distinguished between equipment and repairs on one hand and permanent additions to the hull and fittings on the other. “Dutiable equipment" has been defined to include: “...portable articles necessary or appropriate for the navigation, operation, or maintenance of a vessel, but not permanently incorporated in or permanently attached to its hull or propelling machinery, and not constituting consumable supplies.” See Admiral Oriental, supra., (quoting T.D. 34150, (1914)). The court attempted to distinguish non-dutiable items which are part of the hull and fittings of a vessel from dutiable equipment, as defined above. Non-dutiable items might include: “...those appliances which are permanently attached to the vessel, and which would remain on board were the vessel to be laid up for a long period.” See Admiral Oriental, supra., (quoting 27 Op. Atty. Gen. 228). Remontowa, Part 1, Item 2.24 CBP has held that inspections not resulting in repairs are not dutiable. See American Viking Corp. v. United States, 37 Cust. Ct. 237, 247, C.D. 1830 (1956); Headquarters Decision 110395, dated September 7, 1989. Where periodic surveys are undertaken to meet the specific requirements of, for example, a classification society or insurance carrier, the cost of the surveys is not dutiable even when dutiable repairs are effected as a result thereof. See Customs Service Decision (C.S.D.) 79-277. Where an inspection or survey is conducted merely to ascertain the extent of damages sustained or whether repairs are deemed necessary, the costs are dutiable as part of the repairs which are accomplished. See C.I.E. 429/61; C.S.D. 79-2, 13 Cust. Bull. and Dec. 993 (1979); C.S.D. 79- 277, 13 Cust. Bull. and Dec. 1395, 1396 (1979). The burden is on the protestant to establish, by adequate, clear, and satisfactory documentary evidence, that an item is non-dutiable under 19 U.S.C. § 1466. See Headquarters Decision 116462, dated May 16, 2005. In this case, insufficient documentation was provided to demonstrate that the load bearing test was part of the non-dutiable tail shaft survey. The load bearing test is not mentioned in the American Bureau of Shipping (“ABS”) survey report nor is it mentioned as a required part of the survey in the ABS Rules for Survey After Construction 2004, Part 7, Chapter 5, published by ABS. The protestant merely claims that item 2.24 is part of the survey by stating the “load bearing test, which is also part of the tail shift survey” with no other evidence offered. See Protest at 2. The mere labeling of the test as part of a “survey” is ambiguous, for none of the documentation provided demonstrates whether the test was performed, for example, to ascertain the extent of the known deterioration of the part, which is dutiable, or whether the test was exclusively related to the ABS survey. See Headquarters Decision 112378, dated November 30, 1992. Additionally, on the drydocking invoice, the load bearing test is numbered sequentially with the line shaft bearing (2.1-1.9(a) and (b)) indicating that these items are related. See Drydocking Spreadsheet at pp. 3. Your office held the line shaft bearing to be dutiable and this decision was not protested. Consequently, since there is a clear lack of probative documentation, item 2.24 is held to be dutiable. Remontowa, Part 1, Item 2.66 CBP has held that an installation, even one of a permanent nature, is considered to be a dutiable repair rather than a modification if the installation addresses a repair need. Thus, if an area of a vessel is enhanced by the replacement of one permanent installation with another, the operation is considered dutiable if evidence reveals that a defect or wastage was present in the former installation, which condition was cured by replacement. See Headquarters Decision 110731, dated March 29, 1990. For an item to be characterized as a non-dutiable modification, it must encompass the installation of an item as a new design feature, not as a replacement for, or restoration of, parts now performing a similar function. See Headquarters Decision 109971, dated June 12, 1989. Dutiable repairs include repairs or replacements for “any wasted, deteriorated, or defective equipment, materials, or areas of the vessels.” See Headquarters Decision 108998, dated February 1, 1988. Our review of documentation submitted to determine whether an installation constitutes a modification depends to a great extent on the detail and accuracy of the drawings and invoice descriptions of the actual work performed. See Headquarters Decision 111554, dated October 11, 1991; Headquarters Decision 113233, dated February 23, 1996. Here, while the protestant claims that adapting the valve control constitutes a modification, the invoice description is lacking sufficient detail. The invoice merely states “old control to be modified for new valves,” making it unclear whether the valves were defective and had to be replaced or if they constitute an improvement and therefore, a modification. See Variation Order Request (“VOR”) 42 at item 1071. Consequently, due to the insufficient documentation provided, the work is held dutiable. Remontowa, Part 1, Item 2.69 Remontowa, Part 1, Items 2.71 and 2.72 Remontowa, Part 1, Item 2.85 Remontowa, Part 1, Item 3.16 Remontowa, Part 1, Item 3.21 The protestant claims items 2.69, 2.71, 2.72, 3.16 and 3.21 were a required part of the hull survey and item 2.85 was part of a mandatory classification survey. See Protest at 2. However, the ABS Survey Report indicates by the letter “A” after the report number that the items were in fact surveyed as part of the Damage-Repair Survey, not as part of the hull survey or mandatory classification survey as asserted. See ABS Class Survey Report at 1, 4, 30-32, 40. Under long-standing and consistently applied administrative policy, the costs associated with a Damage-Repair Survey are dutiable since the survey is conducted to ascertain whether repairs are necessary. See Headquarters Decision 115441, dated January 16, 2002; Headquarters Decision 113826, dated February 20, 1997; see also Headquarters Decision 111756, dated January 14, 1992. Where an inspection or survey is conducted merely to ascertain the extent of damages sustained or whether repairs are deemed necessary, the costs are dutiable as part of the repairs which are accomplished. See C.I.E. 429/61; C.S.D. 79-2, 13 Cust. Bull. and Dec. 993 (1979); C.S.D. 79- 277, 13 Cust. Bull. and Dec. 1395, 1396 (1979). Accordingly, items 2.69, 2.71, 2.72, 2.85, 3.16, and 3.21 are considered to be dutiable. Remontowa, Part 1, Item 2.84 The protestant claims that the ring of the fathometer well was “fabricated and fitted” as part of the mandatory hull survey. See VOR 45 at item 1106; Protest at 2. Neither the invoice nor the protest, however, states why this work was necessary or if it was part of a non-dutiable survey, and item 2.84 is not mentioned in the ABS survey report. Therefore, the protestant failed to meet its documentary burden of proof that the work was performed as part of a periodic survey. Additionally, your office held the related item 2.83, identified only as a fathometer well, dutiable and this decision was not protested. Since there is a clear lack of probative documentation and a related item was held dutiable, item 2.84 is dutiable. Remontowa, Part 1, Item 2.88 Dutiable repairs include repairs or replacements for “any wasted, deteriorated, or defective equipment, materials, or areas of the vessel.” See Headquarters Decision 108998, dated February 1, 1988. In this case, the variation order request for the watertight door chalk test states that “the surface around door frames to be chipped, grinded and brush painted.” See VOR 44 at item 1075. Although the protestant claims that item 2.88 was performed as part of the mandatory hull survey, it appears that the work was actually performed to repair deteriorated surfaces. See Protest at 2. As insufficient documentation was provided to establish that the test was in fact part of the survey and there is an indication that dutiable repairs were performed, the work is held dutiable. Remontowa, Part 1, Item 3.03 Item 3.03 is described as “cargo hold bilge well inspection” and it is asserted that this inspection was conducted as part of the mandatory hull survey. See Protest at 2. Upon examining the invoice for other costs related to cargo hold bilges, it is clear that several dutiable repairs were performed on this area of the vessel. See Remontowa, Part 2, Item 57; Remontowa, Part 2, Item 58; Remontowa, Part 3, Item 1; Remontowa, Part 3, Item 105. All of these costs were held to be dutiable in the original application for relief and have not been protested. Since dutiable work was performed in the cargo hold bilges and it cannot be proven that the work in item 3.03 was part of the non-dutiable survey, this work is dutiable. Remontowa, Part 1, Item 3.04 It is claimed that the lifeboat pin inspection, item 3.04, was conducted due to the non-dutiable hull survey. See Protest at 2. However, your office has already allowed duty-free treatment for services associated with a lifeboat survey including disconnecting and connecting the lifeboat motors, and removing and reinstalling the wireropes. See VOR 3 at item 1; VOR 8 at item 2.1-15. In fact, no evidence has been provided to show that the work performed in item 3.04 was done pursuant to the hull survey. The protest merely states that the inspection is part of the survey but no documentation is provided to substantiate this claim. See Protest at 2. Consequently, the cost of this item is dutiable. Remontowa, Part 2, Item 30 The protest states that it was necessary to shift the anchor chain in order to facilitate the required ABS inspection. Specifically, it is contended that the anchor chain had to be shifted out of the chain locker and lay on the ground to allow the surveyor to have access. See Protest at 2. Yet it was also necessary to take the anchor chain out of the chain locker in order to perform dutiable repairs as the “owner’s representative elected to renew five (5) shots of anchor chain at this time.” See ABS Class Survey Report at 40. The United States Court of Appeals for the Federal Circuit has ruled that CBP’s method of prorating duties based on the ratio of dutiable work versus non-dutiable work in regard to dual-purpose expenses is consistent with the "but for" test and section 1466(a). SL Service, Inc. v. United States, 357 F.3d 1358 (Fed. Cir. 2004), panel reh’g and reh’g en banc denied, 2004 U.S. App. LEXIS 10322 (April 19, 2004). Accordingly, in view of the fact that the evidence submitted indicates that the anchor chain shifting costs in item 30 can be attributed to both dutiable and non-dutiable costs, the cost of this item is prorated. Remontowa, Part 2, Item 31 If the work performed involves an element of repair due to damages, deterioration or wear and tear, then it is a dutiable repair. See Headquarters Decision 110569, dated April 12, 1990. Item 31 entails shifting the anchor chain around so that the portion of the chain that usually stayed in the chain locker would be at the operating end of the anchor chain and vice versa. See Protest at 2. There is no reason stated for such a change except a claim that no repairs were made. See id. It appears that while no actual repairs were made, the only reason the anchor chain was flipped around is to allow for even wear and tear. For that reason, item 31 is considered to constitute maintenance and therefore is held to be a dutiable repair. Remontowa, Part 2, Items 37, 38, and 39 Items 37, 38 and 39 are the costs of filling the vessel’s tanks with ballast water and fresh water at the conclusion of the drydocking period. The protestant claims that all the tanks were drained prior to entering the drydock to lessen the weight of the vessel; however, numerous dutiable repairs were performed to the tanks while in drydock. See Protest at 3; ABS Survey Report at 4-28, 36. Since the repairs to the tanks necessitated them being drained and no evidence is offered to the contrary, items 37, 38 and 39 are held dutiable. Remontowa, Part 2, Items 55 and 56 Pursuant to 19 U.S.C. § 1466(d)(1), a duty may be remitted if good and sufficient evidence is furnished establishing that the vessel was compelled by stress of weather or other casualty to enter into a foreign port to make repairs to secure the safety and seaworthiness of the vessel to enable her to reach her port of destination. It is CBP’s position that "port of destination" means a port in the United States. The statute thus sets a three-part test which must be met in order to qualify for remission: 1. The establishment of a casualty occurrence.2. The establishment of unsafe and unseaworthy conditions.3. The inability to reach the port of destination without obtaining foreign repairs. See Headquarters Decision 111539, dated December 11, 1991; Headquarters Decision 116426, dated March 23, 2006. The term "casualty" has been interpreted as something which, like stress of weather, comes with unexpected force or violence, such as fire, or spontaneous explosion of such dimensions as to be immediately obvious to ship's personnel, or as a collision. See Dollar Steamship Lines, Inc. v. United States, 5 Cust. Ct. 23, 28-29 (1940). In the absence of evidence of a casualty event, we must consider the foreign repair to have been necessitated by normal wear and tear. See Headquarters Decision 106159, September 8, 1983. It is the long-standing position of CBP that single acts of negligence of crewmembers which cause damage to vessels, whether attributable to officers or not, will be considered "other casualties" within the meaning of § 1466(d)(1), provided no evidence of owner direction or inducement is present. See C.S.D. 82-42; see, e.g., Headquarters Decision 103765, dated January 26, 1979; Headquarters Decision 112065, April 15, 1992; Headquarters Decision 112914, January 21, 1994. The petitioner claims that items 55 and 56, the flooding of three cargo holds, was caused when the ballast system valves leaked due to the negligence of the shipyard workers. The protest does not contain sufficient documentary evidence that the flooding was due to the shipyard workers’ negligence. One variation order request from the shipyard states that there was a valve leakage “due to ballast system was not in orde[r],” which caused flooding of the cargo holds. See VOR 38 at Section 1. However, another variation order request from the shipyard states that the cargo hold tank tops were reblasted due to rains. See VOR 8 at item 3.2-6. The costs associated with Item 56 include jet washing, gritsweeping, gritblasting, and painting. This constitutes dutiable painting and not a casualty. In view of the lack of good and sufficient evidence justifying the granting of relief for a casualty claim under 19 U.S.C. § 1466(d)(1), items 55 and 56 are held to be dutiable. Remontowa, Part 2, Items 117, 118 and 119 CBP has held that the cleaning of a switchboard unrelated to any dutiable repair work does not constitute a dutiable maintenance operation. See Headquarters Decision 116492, dated June 27, 2005, quoting Headquarters Decision 115603, dated May 16, 2002. The protestant cites this precedent and claims that these items are clearly non-dutiable yet the only description provided of the work performed is “main-cleaning, switchboard; emergency-cleaning, switchboard; and HV switchboard-cleaning.” See Drydocking Spreadsheet at pp. 9. It is unclear, based on the limited description provided, whether the switchboard cleaning is related to a dutiable repair or maintenance operation. Items 117, 118 and 119 are grouped together on the drydocking invoice under Section 4.1-5.2, Main and Emergency Switchboards (Terasaki), with the fourth item in the group being “alternator-repair,” an item which the protestant has conceded is dutiable. See Drydocking Spreadsheet at pp. 9. Since these four items appear to be related and the protestant has provided insufficient documentation to demonstrate that items 117, 118 and 119 are unrelated to dutiable repair work, all three items are considered dutiable. Remontowa, Part 2, Items 173, 175 and 178 If shipyard services are sought in order to address a deficiency in a vessel then the fact that the component replaced is of improved design or results in increased efficiency or performance is not relevant. In order to qualify as a modification rather than a repair, the replaced part must be in full working order at the time of the enhancement. See Headquarters Decision 114140, dated November 18, 1997. The protestant asserts that items 173, 175 and 178 are the costs associated with modifications to the hatch cover landing, are not associated with repairs and that the work performed is being done to all vessels of a certain class. See Affidavit at Exhibit B. While the affidavit states that no stress repairs were performed on the particular hatch covers in question, repairs are shown on the relevant variation order requests. For item 173, the work performed includes “stainless steel mating plates renewal,” “scaled (cleaned) & grinded, pitts welded,” “repairs to item 3.5-2,” “cracks rewelded,” and “cleat holder fabricated & replaced.” See VOR 31 at Section 7.1-1. These are all dutiable repairs that indicate a deficiency and deterioration of the hatch covers, therefore, this work does not constitute a modification. While we note that only part of item 173 constitutes dutiable repairs, there is only one price listed for the item. CBP will not grant relief where there is not a sufficient breakdown between dutiable and non-dutiable costs. See C.I.E. 565/55; C.I.E. 1325/58; C.D. 1836. Accordingly, this item is dutiable in its entirety. Item 175 is described as “stainless steel mating plates renewal.” See VOR 31 at Section 7.1-1. A renewal typically constitutes a dutiable repair, therefore, item 175 is held to be dutiable. Item 178 indicates that the work performed included “after old landing plates removal the surfaces on hatch coamings were chipped & scaled. Pitts were grinded, rewelded & finally grinded.” See VOR 46 at item 1110. This demonstrates deterioration, as a result, item 178 is held to be fully dutiable. Remontowa, Part 2, Items 179 to 183 The protestant provided insufficient documentation in support of the work performed on the stern seal being a modification. It is claimed that the existing stern seal was not in need of repair and that this was a modification of the type of stern utilized. See Protest at 3. The variation order requests and protest do not provide enough detail in their descriptions of the work performed to determine whether the factors necessary for a non-dutiable modification are met. In fact, item 183 described the work performed as “copper pipe renewed,” a dutiable repair. See VOR 42 at item 1073. Under long-standing and consistently applied administrative policy, an installation, even one of a permanent nature, is considered to be a dutiable repair rather than a modification if the installation addresses a repair need. See Headquarters Decision 110731, dated March 29, 1990. Consequently, since there is a clear lack of probative documentation, the work performed on the stern seal covered by these items is held to be dutiable. Remontowa, Part 3, Items 16 to 19 In order to qualify as a non-dutiable modification, the item must, among other factors, be permanently incorporated into the hull or superstructure of a vessel. The permanent incorporation factor should not be given undue weight in view of the fact that vessel components must be welded or otherwise "permanently attached" to the ship as a result of constant pitching and rolling. See Headquarters Decision 112525, dated April 15 1993; Headquarters Decision 112945, dated May 31, 1994; see also Headquarters Decision 112378, dated November 30, 1992. In this case, the garbage container was “fastened by crew using standard container fittings.” See VOR 17 at Section H-18. Since the garbage container was merely fastened in place, as would be any other piece of equipment which must be secured from potential shifting and movement aboard a vessel, it is not permanently incorporated. Accordingly, items 16 to 19 do not constitute a modification and are held dutiable. Remontowa, Part 3, Item 48 The protestant claims that item 48, for work done on the hatch coaming, is a modification and is part of the work performed on the hatch cover landing pads in items 173, 175 and 178. As stated above, we have held that the work related to those items does not meet the requirements for a modification and therefore, constitutes dutiable repairs. Additionally, the hatch coaming work in item 48 involved the “reinforcement of longitudinal stiffeners,” cleaning, and brash painting. See VOR 22 at Section H-40. This work appears to constitute dutiable repairs. Your office held that the other two items under the broad heading of H-40 Hatch Coamings, items 47, hatch coaming long stiff, and 49, hatch coaming repairs, dutiable and this decision was not protested. Therefore, since there is a clear lack of probative documentation to demonstrate that item 48 is a non-dutiable modification, this item is held dutiable. Remontowa, Part 3, Item 51 The protestant asserts that item 51 involved the flooding of cargo hold number 3 and is related to the casualty claim asserted in Part 2, items 55 and 56. See Protest at 3. Upon further examination, it is revealed that there were two different instances of cargo hold flooding. The first instance was the casualty claim for items 55 and 56 which involved cargo holds number 8 and 12 and occurred on August 8, 2004. See VOR 38 at Sec. 1. The second instance involved cargo hold number 3 and occurred on August 24, 2004. See id. Item 51 involves the second instance of cargo hold flooding. As stated above, we held that there was insufficient evidence that items 55 and 56 constituted a casualty event. The protestant provided even less documentation for item 51’s casualty claim than was provided for items 55 and 56. The relevant variation order request merely mentions that there was “flooding of cargo hold Gr. #3” without disclosing why or how this flooding occurred. Consequently, due to the lack of good and sufficient evidence that a casualty event occurred, we hold that item 51 is dutiable. Remontowa, Part 3, Item 53 CBP has long-held that consumable items are duty-free when not used in connection with dutiable repairs. See C.I.E. 196/60; Headquarters Decision 113404, dated April 21, 1995. The courts have defined consumable items as "supplies for the consumption, sustenance, and medical needs of the crew and passengers during the voyage." See H.E. Warner, Trustee, American Mail Line, Ltd. v. United States, 28 C.C.P.A. 143, 150 (1940) quoting Southwestern Shipbuilding Co. v. United States, 13 Ct. Cust. App. 74, 78 (1925). Consumable items also refer to other goods, such as fuel, that are wholly consumed in their first use. See Atlas Marine Supply Co. v. United States, 29 C.C.P.A. 20, 26-27 (1941). When an item is purchased for repair purposes, even if it would otherwise qualify as a consumable good, it is considered dutiable. See Treasury Decision (T.D.) 40934 (1925). The new CO2 that the protestant claims is a consumable item was only purchased due to a dutiable repair. Your office held that item 52, the CO2 hydo-piping renewal, was a dutiable repair. The relevant variation order request indicates that the CO2 in question was removed in order to perform the dutiable repairs on the piping and then refilled with new CO2. See VOR 2 at item 2. The United States Court of Appeals for the Federal Circuit has ruled that expenses that would not have been incurred "but for" the dutiable repair work done are themselves dutiable, and, conversely, expenses that would not have been incurred but for the non-dutiable work done are themselves non-dutiable. Texaco Marine Services, Inc. v. United States, 44 F.3d 1539 (Fed. Cir. 1994). Accordingly, item 53 is dutiable since the CO2 would not have been needed to be refilled but for the pipe renewal. Remontowa, Part 3, Items 152 and 153 If a permanent addition is a first-time installation, or if it replaces an existing structure that is in good working order at the time of its replacement and an enhancement in operating efficiency is provided, the operation may be considered a non-dutiable modification. See Headquarters Decision 111224, dated Feb. 19, 1991. CBP has held that for an item to be characterized as a non-dutiable modification, it must encompass the installation of an item as a new design feature, not as a replacement for, or restoration of, parts now performing a similar function. See Headquarters Decision 109971, dated June 12, 1989. In his affidavit, the port engineer states that items 152 and 153 were for a “purifier controller installation, where there was not [previously] a purifier controller.” See Affidavit at Exhibit B. Additionally, the protestant claimed that the purifier controller will remain onboard during any extended lay-up. See Protest at 4. In the protest, it is asserted that the purifier controller is permanently incorporated into the hull of the vessel since the controller’s installation required new wiring, foundation, piping, and valves. See Protest at 4. The relevant variation order request substantiates this claim, it states that existing electric cables and control boxes were removed, a foundation was built, new control and transformer boxes, emergency buttons and valves were installed, and the purifier was connected. See VOR 15 at item M-57. The work performed demonstrates that no equipment performing a similar function existed previously; therefore, the purifier controller constitutes a new design feature. Accordingly, we find that item 152 constitutes a non-dutiable modification. The United States Court of Appeals for the Federal Circuit has ruled that expenses that would not have been incurred "but for" the dutiable repair work done are themselves dutiable, and, conversely, expenses that would not have been incurred but for the non-dutiable work done are themselves non-dutiable. Texaco Marine Services, Inc. v. United States, 44 F.3d 1539 (Fed. Cir. 1994). Item 153 is for the labor, travel and hotel accommodations for an Alfa Laval technical representative to assist in the installation of the controller. See VOR 49 at Item M-57. Consequently, item 153 is non-dutiable since the Alfa Laval Service technical representative would not have needed but for the installation of the purifier controller. Remontowa, Part 3, Items 159 and 160 CBP has held that sludge removal is non-dutiable as long as it is not performed in connection with dutiable repairs. See Headquarters Decision 111039, dated October 4, 1990; Headquarters Decision 116088, dated March 3, 2004. The protestant claims that items 159 and 160, for the removal and storage of fuel oil, should similarly be held non-dutiable. However, those decisions explicitly state that such a removal will only be held non-dutiable if unrelated to dutiable repairs. In this case, there have been extensive repairs made to the fuel oil and diesel oil tanks. See ABS Class Survey Report at 28-29. The protestant did not sufficiently demonstrate that the removal and storage of the fuel oil was unrelated to the dutiable repairs. The United States Court of Appeals for the Federal Circuit has ruled that expenses that would not have been incurred "but for" the dutiable repair work done are themselves dutiable, and, conversely, expenses that would not have been incurred but for the non-dutiable work done are themselves non-dutiable. Texaco Marine Services, Inc. v. United States, 44 F.3d 1539 (Fed. Cir. 1994). As a result, items 159 and 160 are held to be dutiable since the fuel oil would not have needed to be removed and stored but for the dutiable repairs performed on the fuel oil and diesel oil tanks. Remontowa, Part 3, Item 161 The protestant claims that item 161, the cost of an assistance car with fire equipment, should at most be considered a dual-purpose item, one that contains dutiable and non-dutiable expenses, and should be prorated. See Protest at 4. However, these costs appear to be directly associated with items 159 and 160, which we have held fully dutiable. Items 159, 160 and 161 are all grouped together on the drydocking invoice, therefore, giving the appearance that the assistance car is a cost directly related to the transfer of the fuel oil. See Drydocking Spreadsheet at pp. 16. Since the protestant did not meet its burden of proof in demonstrating that item 161 also contains non-dutiable expenses, the item is held to be fully dutiable. HOLDING After a thorough review of the record, the protest is denied in part and granted in part as detailed above. 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