HQ 110704: Protest No. 1601-9-000075; Vessel Repair Entry No. C16- 0007324-6, dated December 28, 1989; Date of Arrival: December 28, 1989; Port of Arrival: Charleston, S.C.; Vessel: M/V NEDLLOYD HUDSON, Voyage No. 008

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 110704

                           May 4, 1990


VES-13-18-CO:R:P:C  110704 BEW

CATEGORY:  Carriers

Deputy Assistant Regional Commissioner
Commercial Operations Division
ATTN:  Vessel Repair Liquidation Unit
New Orleans, Louisiana  70130

Re:  Protest No.  1601-9-000075;  Vessel Repair Entry No. C16-
     0007324-6, dated December 28, 1989;  Date of Arrival:
     December 28, 1989;  Port of Arrival:  Charleston, S.C.;
     Vessel:  M/V NEDLLOYD HUDSON, Voyage No. 008

Dear Sir:

     Reference is made to your memorandum of December 14, 1989,
which forwarded the above-captioned protest from the assessment
of vessel repair duties for our determination.

FACTS:

     Between December 14 and December 17, 1988, while in
Rotterdam, Holland, and Bremerhaven, Germany, the vessel M/V
NEDLLOYD HUDSON underwent various shipyard repairs.  The
dutiability of these operations has previously been considered by
your office.  The protestant elected not to file an Application
for Relief.  The entry was liquidated on April 28, 1989.  The
protest was timely filed on June 9, 1989.  Included in your
considerations was the matter of whether the cost associated with
the following items:

     I.   HS 5227 - Lubrafil filter

     II.  HS 5228 - ABS Special Survey

     III. HS 5229 - #2 Sulzer engine parts, and

     IV.  HS 8716 - G'Hart,

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is dutiable under the statute.  These are the only items which
are presently being protested.

ISSUE:

     Whether remission of duties is warranted under the statute
when the evidence of cost is supported only by internal cost
documents.

     Whether fees for an ABS Survey and postage and insurance are
dutiable costs under the statute.

LAW AND ANALYSIS:

     Section 1466 provides, in pertinent part, for payment of
duty in the amount of 50 percent ad valorem of 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 engage in such trade.

     The Customs Regulations provide in section 4.14 (d)(1)(iii)
(19 CFR 4.14 (d)(1)(iii)), a specific listing of the kinds of
documentary evidence which "shall" be filed to support
applications for relief from vessel repair duties.  Listed first
among these are "...itemized bills, receipts, and invoices".  To
be sure, other types of proof are of great value in supporting
applications, but none enjoy the primacy of actual itemized cost
documents issued by a foreign shipyard.

     In this case we are presented with a vessel operator-
generated document which is, at best, insufficient and self-
serving.  This point is sought to be made that Sea-Land has been
submitting and Customs accepting such proofs for some years now.
This may be so, but we are unaware of cases in which total
reliance was placed on such submissions.  As previously
indicated, such documentation is a welcome supplement to
probative evidence.  This does not indicate however, that it is
an acceptable substitute for same.  Accordingly, the protest is
denied as to items I.  HS 5227 and III.  HS 5229 #2 Sulzer engine
parts.

     Item IV. HS 8716 G'Hart covers the cost of postage and
insurance fees.  Inasmuch as the dutiable status of expenses
such as these has never been determined by either the courts or
Customs, we find them to be analogous to the costs of drydocking

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and general services (which are non-dutiable pursuant to C.I.E.
1188/60) in that they are not part of the actual repair work
done.  Accordingly, the protest is granted as to this item.

     Customs has held that where periodic surveys are undertaken
to meet the specific requirements of a classification society,
insurance carrier, etc., the cost of the surveys is not dutiable
even when dutiable repairs are effected as a result thereof;
however, in the liquidation process Customs should go beyond the
mere labels of "continuous" or "ongoing" before deciding whether
the item is dutiable.  If an inspection or survey is conducted as
a part of an ongoing maintenance and repair program labelled
"continuous" or "ongoing" the cost is dutiable.  Also, if the
survey is to ascertain the extent of damage sustained, or to
ascertain if the work is adequately completed, the costs are
dutiable as part of the repairs which are accomplished pursuant
to holdings in C.I.E. 429/61, C.S.D. 79-2, and C.S.D. 79-277.
The survey under consideration is nondutiable.  Accordingly, the
protest is granted as to this item.

HOLDING:

     Following thorough review and analysis of the facts, law and
evidence, it is our determination that the protest is denied as
to Items I and IV, and granted as to Items II and III.
Accordingly, the protest is allowed in part, and reliquidation is
directed.

                                   Sincerely,



                                   B. James Fritz
                                   Chief
                                   Carrier Rulings Branch