HQ 112178: Vessel Repair Entry No. C15-0012370-3; M/V GREEN RIDGE, V-15; 19 U.S.C. 1466; 19 U.S.C. 1466(d)(2) and (h)(2)

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                              HQ 112178

                                March 14, 1995

VES-13-18-CO:R:IT:C   GOB

CATEGORY:  Carriers

Port Director of Customs
Attn:  Vessel Repair Liquidation Unit
423 Canal Street, Room 303
New Orleans, Louisiana 70130-2341

RE:  Vessel Repair Entry No. C15-0012370-3;  M/V GREEN RIDGE, V-15;  19 U.S.C.
     1466;  19 U.S.C. 1466(d)(2) and (h)(2)

Dear Sir:

     This is in response to your memorandum dated March 23, 1993, which
forwarded  the application for relief submitted by Central Gulf Lines, Inc. ("applicant")
with respect to the above-referenced vessel repair entry.

FACTS:

     The record reflects that the M/V GREEN RIDGE ("the vessel") arrived at the port
of Sunny Point, North Carolina on December 8, 1991 and filed the subject entry.

     You request our determination with respect to the following items:  

          a.  H1.1, H1.2, and H1.4 (cleaning); H1.3 (covering); H10(1), (3), and (8)
(covering and cleaning); H15.1 (repaired covers); H17; 

          b.  "access" portions of the following - H3, H16, M1, M4, and M5; 

          c.  the drydocking and repairs portion of ABS invoice SP831047;

          d.  U.S. source parts - 10 and 26; and

          e.  U.S. labor - 17.



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ISSUE:

     Whether the subject items are dutiable pursuant to 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 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.

     In Texaco Marine Services, Inc. v. United States, Case No. 93-1354, decided on
December 29, 1994, the Court of Appeals for the Federal Circuit held that the costs of
post-repair cleaning and protective coverings related to repairs were dutiable.

     After a consideration of the record, we make the following determinations.

     The costs of the items listed in a, supra, are dutiable because they are either
dutiable repairs or costs incident to dutiable repairs.

     The access costs of the items in b, supra, are dutiable because such costs were
incident to dutiable repairs.

     The drydock and repairs portion of ABS invoice SP831047 is dutiable because:
(a) repairs are dutiable and; and (b) drydock costs which might otherwise be
nondutiable are not segregated from the dutiable repair costs..

     The applicant requests remission pursuant to 19 U.S.C. 1466(d)(2) for items 10,
17, and 26.  In order to receive remission under 19 U.S.C. 1466(d)(2), the following
must be established:  U.S. manufacture or production and that the labor was performed
by U.S. residents or members of the regular crew of the vessel.  The applicant has not
established either of the parts of this two-part test.  

     However, we find that the cost of the parts and materials on item 26 is not
subject to duty pursuant to 19 U.S.C. 1466(h)(2).  The parts and materials on item 10
are dutiable because they were shipped from Switzerland and do not fall within the
scope of 19 U.S.C. 1466(h)(2).  

     The labor on item 17 is dutiable because the applicant has not established that it
was performed by U.S. residents or members of the regular crew of the vessel.  
Further, as stated supra, the applicant has not met the other part of the 19 U.S.C.
1466(d)(2) test, i.e., U.S. manufacture or production.


                              - 3 -

HOLDING:

     As detailed supra, the application is granted in part and denied in part.

       
                         Sincerely,



                         Arthur P. Schifflin
                         Chief
                         Carrier Rulings Branch