HQ 113013: Vessel Repair; 19 U.S.C. 1466; Entry No. 514-3004582-6; SEA- LAND VALUE, V-38; Petition

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 113013

                           February 10, 1994

VES-13-18   CO:R:IT:C    113013 GOB

CATEGORY:  Carriers

Chief, Residual Liquidation and Protest Branch
New York Region
Six World Trade Center
New York, New York 10048-0945

RE:  Vessel Repair; 19 U.S.C. 1466; Entry No. 514-3004582-6; SEA-
     LAND VALUE, V-38; Petition 

Dear Sir:

     This is in response to your memorandum dated January 28, 1994,
which forwarded the petition for relief submitted by Sea-Land
Service, Inc. ("petitioner") with respect to the above-referenced
vessel repair entry.

FACTS:

     The record reflects the following.  The SEA-LAND VALUE
("vessel") is a U.S.-flag vessel owned and operated by the
petitioner.  Certain foreign shipyard work was performed on the
vessel on voyage 38.  The vessel arrived at the port of Elizabeth,
New Jersey on September 29, 1991 and filed a vessel repair entry.

     By letter dated December 17, 1993, your office denied the
application for relief with respect to certain items.

Petition

     The petition pertains to only one item, #101 on the
petitioner's spreadsheet.  Item 101 is described on the spreadsheet
only as "attachment G", with the word "modifications" being written
in hand next to that phrase.  One invoice sheet has been submitted
with the documentation which we have received.  That sheet, which
is a Wilton-Fijenoord b.v. invoice and which pertains to the
subject vessel, describes work pertinent to the "Forward Seachest
Modification" and "A new stainless steel strainer."  There is no
indication of any repair on this invoice.  Additional documentation
includes the following: (a) A letter dated May 6, 1991 from the
petitioner to the U.S. Coast Guard, which discusses the relocation
of "the existing forward sea chest on the subject class vessels." 
This letter does not refer to specific vessels.  The modification
drawings were not included with the submission; (b) A three-page 

                              - 2 -

description of a sea chest "modification specification" with 
respect to "Atlantic Class Vessels" which are not specified by
name.  These pages describe the installation of a new sea chest;
(c) Petitioner's inter-office correspondence dated February 6, 1991
with respect to the "forward sea chest relocation modification" for
Atlantic Class Vessels; and (d) A letter dated January 30, 1991
from ABS Americas to petitioner.  This letter pertains to the
"NEDLLOYD HOLLAND ID# 8401896 and Class Vessels."

ISSUE:

     Whether the item at issue is 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 our application of the vessel repair statute, the Customs
Service has held that modifications, alterations, or additions to
the hull and fittings of a vessel are not subject to vessel repair
duties.  The identification of work constituting modifications vis-
a-vis work constituting repairs has evolved from judicial and
administrative precedent.  In considering whether an operation has
resulted in a nondutiable modification, the following factors have
been considered:

     1.   Whether there is a permanent incorporation into the hull
or superstructure of a vessel, either in a structural sense or as
demonstrated by means of attachment so as to be indicative of a
permanent incorporation.  See United States v. Admiral Oriental
Line, 18 C.C.P.A. 137 (1930).  We note, however, that a "permanent
attachment" does not necessarily involve a modification to the hull
and fittings.

     2.   Whether in all likelihood an item would remain aboard a
vessel during an extended lay-up.

     3.   Whether an item constitutes a new design feature and does
not merely replace a part, fitting, or structure that is performing
a similar function.

     4.   Whether an item provides an improvement or enhancement
in operation or efficiency of the vessel.

     After a consideration of the evidence of record, we find that
the subject item is a nondutiable modification.  We make this 


                              - 3 -

determination based upon the Wilton Fijenoord b.v. invoice
described above.

     For the purpose of future vessel repair entry submissions, the
petitioner should be advised as follows: (a) all pertinent
documentation, including invoices, drawings, and attachments should
be submitted and properly labelled; and (b) it should be clear from
the submitted documentation that such documentation pertains to the
specific vessel and foreign shipyard work which is at issue in that
entry.

HOLDING:

     The petition is granted based on the determination that item
101 is a nondutiable modification.



                              Sincerely,



                              Arthur P. Schifflin
                              Chief
                              Carrier Rulings Branch