HQ 112315: Protest No. 2704-92-101841; Vessel Repair Entry No. C27- 0061087-9; PRESIDENT ADAMS V-34; Maintenance; Cleaning; Air Scavenger Spaces

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 112315

                          July 14, 1992

VES-13-18-CO:R:IT:C 112315 GEV

CATEGORY:  Carriers

Chief, Technical Branch
Commercial Operations
Pacific Region
One World Trade Center
Long Beach, California 90731

RE:  Protest No. 2704-92-101841; Vessel Repair Entry No. C27-
     0061087-9; PRESIDENT ADAMS V-34; Maintenance; Cleaning; Air
     Scavenger Spaces

Dear Sir:

     This is in response to your memorandum dated June 3, 1992,
which forwards for our review the protest filed in conjunction
with the above-referenced vessel repair entry.

FACTS:

     The record reflects that the subject vessel, the PRESIDENT
ADAMS, arrived at the port of San Pedro, California on February
1, 1992.  Vessel repair entry no. C27-0061087-9 was filed on
February 3, 1992.  Protestant presents this protest concerning
Customs denial of relief from duty on work done on the vessel for
the process involving the cleaning of air scavenger spaces.
Protestant contests Customs Ruling HQ 111700, in which we held
that the removal of carbon and oil deposits from the main engine
air scavenger spaces is a maintenance operation, the cost of
which is subject to duty under 19 U.S.C. 1466.

ISSUE:

     Whether removing carbon and oil deposits from diesel engine
air scavenger spaces constitutes a nondutiable cleaning or a
dutiable maintenance operation under 19 U.S.C. 1466.

LAW AND ANALYSIS:

     The protestant seeks relief for the cleaning of certain main
engine air scavenger spaces.  (We incorporate by reference pages
1 and 2 of HQ 111700 which describes in detail the operation of
the air scavenger spaces.)
                              - 2 -

     Our position is that the Customs Service has consistently
held that cleaning is not dutiable unless it is performed as part
of, in preparation for, or in conjunction with dutiable repairs
or is an integral part of the overall maintenance of the vessel.
(see Headquarters Ruling Letter 110841, dated May 29, 1990, and
cases cited therein).  The Customs Service considers work
performed to restore a part to good condition following
deterioration or decay to be maintenance operations within the
meaning of the term repair as used in the vessel repair statute.
See generally, Headquarters Ruling Letter 106543, dated February
27, 1984; C.I.E. 142/61, dated February 10, 1961.

     Protestant argues that our decision is contrary to statute,
regulations and court precedent.  Protestant should take note
that this issue was already addressed on pages 2 and 3 of HQ
111700.  The fact remains that there is no binding precedent on
the precise issue of the maintenance operation that involves the
cleaning of the air scavenger spaces.

     Neither is our decision contrary to a "...long established
Customs policy..." as petitioner argues.  Our initial ruling on
this subject was issued on December 3, 1990, in HQ 110911.  Prior
to this time, there was no Customs policy that specifically
addressed the maintenance operation which includes the cleaning
of the air scavenger spaces.  However, in regard to cleaning
operations in general, it has been the longstanding policy of
Customs that cleaning is dutiable if it is performed as part of,
in preparation for, or in conjunction with dutiable repairs or is
an integral part of the overall maintenance of the vessel.

     HQ 110911 was issued in response to an application for
relief which called to our attention the fact that from 1982-1990
the Vessel Repair Liquidation Unit in San Francisco was not
assessing vessel repair duty under 19 U.S.C. 1466(a) for the
process of cleaning air scavenger spaces on vessels, whereas the
other regions were holding this process to be dutiable.  In HQ
110911 we ruled that the process involving the cleaning of the
air scavenger spaces is a dutiable maintenance procedure because
the end result of the described activity is to restore efficiency
to the vessel's engines.  The failure to assess appropriate duty
no more establishes policy than any other failure by an employee
of an organization.

     Protestant argues that this "change" by Customs of its long
established policy is a violation of both the Administrative
Procedures Act ("APA") and Customs' own regulations.  Protestant
has challenged our ruling, alleging that it constitutes a
substantive rule change which violates the notice and
opportunity to participate requirements of the APA and 19 CFR
177.10(c)(1).  Individual employees do not set the policy of this
or any other large organization.  How much less so is the case in
which the petitioner has for years known that Customs' policy is
                              - 3 -

set by Customs Headquarters.  A mistake by an employee will not
trigger the requirements of notice and opportunity to participate
as required by both the Administrative Procedures Act and
Customs' regulations.

     Finally, it does not appear that protestant ever received
any written ruling or determination of the Customs Service
pursuant to Part 177 of the Customs Regulations prior to HQ
110911 (see above).  Consequently, protestant cannot claim the
protection afforded importers under the regulation.  In addition,
while it may be determined that protestant will have to pay an
additional sum of money in unpaid vessel repair duties, there is
no reason to believe that it would have altered its actions in
any way had it known the true facts.  Protestant submits that:

          (a)  The logistics of our operations dictate that due
     to time/schedule restraints that this inspection work be
     accomplished in Asia.

          (b)  Within the time constraints of our operation
     schedule, coupled with the environmental restraints for
     disposal, it is questionable that these inspections could be
     successfully be accomplished on the West Coast.

Consequently, protestant is unable to show reasonable reliance on
the erroneous noncollection practice, a necessary element of
detrimental reliance.  See, B-240089.2, 1991 U.S. Comp. Gen.
LEXIS 698.

HOLDING:

     The removal of carbon and oil deposits from the main engine
scavenger spaces is a maintenance operation the cost of which is
subject to duty under 19 U.S.C. 1466.  Protest is denied.

                                   Sincerely,




                                   B. James Fritz
                                   Chief
                                   Carrier Rulings Branch