HQ 110743: Repetition of precedent alone is not a basis for relief; Supplementation of original entry after 2 years denied; inspections; transportation; drydocking; modifications Vessel: EXXON BATON ROUGE V-01/87 Vessel Repair Entry No. C10-4903433-8

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 110743

                          July 25, 1990

VES-13-18-CO:R:P:C  110743 KVS

CATEGORY:  Carriers

Chief
Residual Liquidation and Protest Branch
6 World Trade Center
New York, NY  10048

RE:  Repetition of precedent alone is not a basis for relief;
     Supplementation of original entry after 2 years denied;
     inspections; transportation; drydocking; modifications
     Vessel:  EXXON BATON ROUGE V-01/87
     Vessel Repair Entry No. C10-4903433-8

Dear Sir:

     This is in response to your memorandum of December 18, 1989,
which transmits for our consideration a petition for review filed
in connection with the EXXON BATON ROUGE V-01/87, vessel repair
entry no. C10-4903433-8.  Our findings are set forth below.

FACTS:

     The BATON ROUGE, a U.S.-flag vessel, underwent foreign
shipyard operations from November 14, 1986, to January 8, 1987,
at Lisbon, Portugal.  The vessel arrived in the United States on
January 29, 1987, at New York and made entry on February 6, 1987.

     The petitioner filed an application for relief from vessel
repair duties on April 23, 1987.  The application was granted in
part and denied in part in Customs Letter Ruling 110087 RAH
(dated June 10, 1989).  The petitioner was notified of our
decision on the application on October 18, 1989.

     The petition for review currently under consideration was
timely filed on November 10, 1989.  In addition to contesting
certain items denied in our decision on the application, the
petitioner also seeks to amend its original entry by a letter
dated March 1, 1989, which submits invoice no. 11097 (dated
February 13, 1989) from A.R.N.O. Shipyard, located in Brest,
France.



                              - 2 -


ISSUE:

     Whether the foreign shipyard operations performed on the
subject vessel are dutiable pursuant to 19 U.S.C. 1466.

LAW AND ANALYSIS:

     Title 19, United States Code, section 1466(a) provides, in
pertinent part, for payment of duty in the amount of 50 percent
ad valorem on the cost of foreign repairs to vessels engaged,
intended to engage, or documented under the laws of the United
States to engage in the foreign or coastwise trade.

     In its application of 19 U.S.C. 1466(a), the Customs Service
has held that certain shipyard operations should not be
classified as dutiable repairs within the meaning of the vessel
repair statute.  In C.I.E. 204/60 (dated 3/3/60) we held that
properly segregated costs of transportation of machinery from a
vessel to the shop and return thereto are not dutiable as
expenses of repairs within the meaning of the vessel repair
statute.  Accordingly, after examining Lisnave shipyard invoice
#1392/86/LISN, we find the charges listed for transportation on
the following items to be non-dutiable:

Item Number                                     Amount

5............................................$ 1,120.00
8............................................$   310.00
12...........................................$ 3,920.00
14...........................................$ 3,720.00
19...........................................$   180.00
23...........................................$ 1,500.00
24...........................................$ 1,530.00
25...........................................$   380.00
27...........................................$   220.00
28...........................................$   240.00
36...............................(part I)....$ 6,680.00
                                 (part II)...$ 1,780.00
                                 (part III)..$ 1,780.00
37...........................................$11,980.00
40...........................................$   920.00
55...........................................$   560.00
74...........................................$   180.00
75...........................................$   680.00
82...........................................$ 4,120.00
92...........................................$   300.00
94...........................................$   220.00
97...........................................$   380.00
103..........................................$   540.00
104..........................................$   410.00
105..........................................$   960.00
                              - 3 -


Item Number (cont.)                             Amount

106..........................................$   960.00
                                 (shipping)..$   720.00
107..........................................$   160.00
108..........................................$    40.00
109..........................................$   160.00
112..........................................$   480.00
119..........................................$ 1,860.00
123..........................................$    80.00
127..........................................$   910.00
130..........................................$   380.00
135..........................................$   180.00
148..........................................$ 1,800.00
149..........................................$   680.00
153..........................................$   140.00
157..........................................$   680.00
162..........................................$   380.00
195..........................................$   340.00


                                             $54,560.00

     Item 1 on Lisnave Shipyard invoice #1392/86/LISN lists
certain services performed in connection with drydocking that
Customs has previously held to be non-dutiable.  Accordingly, we
find the following subparts of Item 1 to be non-dutiable:

Subpart (Service Performed)                     Amount

4  (garbage removal)..........................$ 1,760.00
5  (ground wire)..............................$   100.00
9  (portable telephones)......................$   640.00
10 (protective paper).........................$ 1,800.00
12 (transfer of ship stores to vessel)........$   900.00
   (additional crane service).................$ 2,640.00
13 (owner's materials transp. fm airport).....$ 2,720.00
14 (shore steam)..............................$ 5,150.00
17 (temporary bilge pumps)....................$ 5,000.00
18 (temporary heaters)........................$11,100.00
   (mooring)..................................$ 1,820.00
   (fire protection)..........................$ 1,700.00
   (fire watch)...............................$22,400.00
22 (crane service)............................$   525.00
25 (transfer of containers on vessel).........$ 1,780.00


                                              $60,035.00

     Regarding item 1, subpart 18-4, which lists the cost of
obtaining gas free certificates, the Customs Service has held
                              - 4 -


that the cost of obtaining gas free certificates is dutiable as
an ordinary and necessary expense incident to repair operations
and must be apportioned between dutiable and free items (see
C.I.E. 1188/60).  Accordingly, the cost listed on the invoice
under item 1 for obtaining gas free certificates ($2,860.00) must
be apportioned between the dutiable and non-dutiable items.

     Customs has also held other services related to drydocking
to be classifiably free from the duty imposed by the vessel
repair statute.  The costs listed for ventilation, lighting,
staging, fire watch, fire protection, fumigation, or rain
shelters listed on Lisnave invoice #1392/86/LISN under the
following items are duty-free:

Item number                                     Amount

3...(fumigation).............................$   520.00
36..(PART I)(staging)........................$ 4,820.00
  ..........(lighting).......................$ 5,560.00
  ..........(ventilation)....................$ 3,680.00
  ..........(fire protection)................$ 6,400.00
  ..(PART II)(lighting)......................$ 1,580.00
  ...........(ventilation)...................$ 1,260.00
  ...........(fire watch)....................$ 2,100.00
  ..(RENEWALS(lighting)......................$ 1,310.00
  ............(ventilation)..................$ 9,080.00
  ............(fire watch)...................$10,800.00
40..(lighting)...............................$   460.00
  ..(ventilation)............................$   430.00
  ..(fire watch).............................$   800.00
128..(staging)...............................$   200.00
143..(staging)...............................$ 1,200.00
145..(crane service).........................$ 1,860.00
   ..(lighting)..............................$   520.00
   ..(crane service).........................$ 3,200.00
   ..(lighting)..............................$   620.00
   ..(crane service).........................$ 4,320.00
   ..(lighting)..............................$   840.00
   ..(crane service).........................$ 3,640.00
   ..(lighting)..............................$ 2,680.00
   ..(crane service).........................$   520.00
   ..(crane service).........................$   580.00
146..(ventilation)...........................$12,360.00
   ..(lighting)..............................$ 8,440.00
   ..(crane service).........................$ 6,720.00
   ..(rain shelters).........................$   580.00
147..(ventilation)...........................$13,230.00
   ..(lighting)..............................$ 8,680.00
   ..(crane service).........................$ 6,920.00
   ..(rain shelters).........................$   580.00
                                            $126,490.00
                              - 5 -


     The petition for relief also seeks relief for various items
denominated as "inspections".  In seeking relief, the petitioner
repeats time after time one sentence of Customs precedent which
may or may not be applicable to the contested item (The repeated
quote is "C.S.D. 79-277 Held that a survey is undertaken to meet
specific requirements of a government entity, classification
society, insurance carrier etc., the cost is not dutiable even
when dutiable repairs are effected as a result thereof." [sic])
The petitioner makes no argument nor alleges facts which provide
any relationship between the Customs precedent cited and the
item for which relief is sought.  For relief to be granted, it is
incumbent upon the party seeking relief to specify a basis upon
which relief can be granted. The mere listing of an invoice line
item followed by a sentence of precedent, which may or may not be
applicable, is not a sufficient basis for us to grant relief.
Accordingly, we find the following items on Lisnave invoice
1392/86/LISN to be dutiable:

Item Number                                     Amount

5............................................$ 2,920.00
6............................................$ 1,680.00
7............................................$ 2,730.00
19...........................................$ 4,480.00
  ...........................................$ 1,320.00
24...........................................$ 9,520.00
27...........................................$ 1,410.00
32...........................................$   320.00
42...........................................$ 1,640.00
43...........................................$ 5,345.00
45...........................................$   840.00
46...........................................$ 1,070.00
48...........................................$ 1,080.00
49...........................................$   770.00
51...........................................$ 2,280.00
54...........................................$ 4,300.00
56...........................................$ 5,490.00
69...........................................$ 1,360.00
78...........................................$   750.00
80...........................................$   230.00
82...........................................$ 4,120.00
85...........................................$ 1,980.00
87...........................................$ 8,700.00
88...........................................$ 8,390.00
93...........................................$ 1,530.00
95...........................................$ 1,250.00
97...........................................$   175.00
100..........................................$ 7,320.00
   ..........................................$ 1,240.00
103..........................................$ 2,620.00
118..........................................$ 1,380.00
                              - 6 -


Item Number (cont.)                             Amount

129..........................................$ 9,560.00
131..........................................$   880.00
133..........................................$   560.00
134..........................................$   320.00
136..........................................$ 1,720.00
138..........................................$ 1,100.00


                                            $102,380.00

     The petitioner also seeks relief for various items on the
basis that the work performed involved either the installation
and modification of the hull and fittings or the removal of
obsolete equipment from the vessel.  The Customs Service has held
that for an item to be characterized as a non-dutiable
modification, it must encompass the installation of of an item as
a new design feature, not as a replacement for, or restoration
of, parts now performing a similar function.  We have also held
that the decision in each case as to whether an installation
constitutes a non-dutiable addition to the hull and fittings of
the vessel depends to a great extent on the detail and accuracy
of the drawings and invoice descriptions of the actual work
performed.  Even if the article is considered to be part of the
hull and fittings of a vessel, the repair of that article, or the
replacement of a worn part of the hull and fittings, is subject
to vessel repair duties.

     After review of the shipyard invoice and the drawings
submitted, we find that the following contested items involved
either the utilization of a new design feature, the replacement
of non-defective obsolete equipment with a different type of
equipment, or the removal of obsolete equipment with no
replacement, so as to allow the item to be used in another
manner.  These items can be characterized as modifications to the
vessel and as such, are non-dutiable:

Item Number                                     Amount

11  (tank pipe removal)......................$ 6,480.00
    .........................................$   480.00
34  (sacrificial anodes removal).............$ 6,860.00
38  (refuel at sea equipment)................$ 2,100.00
40  (port chain locker)......................$ 4,270.00
71  (filter relocation)......................$ 3,260.00
143 (starboard running lights)...............$ 3,830.00
144 (steam to electric whistle)..............$ 2,240.00


                                             $29,520.00
                              - 7 -


     The petitioner also seeks relief for all items listed on
American Bureau of Shipping invoice #830310, dated March 9,
1987.  Included among the charges listed for performing various
surveys is a charge of $585.00 for overtime and a charge of
$156.60 for expenses.  Since some of the costs listed on the
invoice are dutiable (i.e. repairs in the amount of $4,385.55),
the overtime and expenses charges must be segregated between the
dutiable and non-dutiable charges.  Since these charges are not
separated, the entire amount of these charges ($585.00 and
$156.60) is dutiable, as well as the amount listed for repairs
($4,385.55).  The remaining items on the invoice are non-
dutiable.

     Finally, the petitioner, by letter dated March 1, 1989,
seeks to supplement its original entry by submitting A.R.N.O.
shipyard invoice #11097 in the amount of $24,846.18, for costs
incurred by the yard prior to the cancellation of the scheduled
drydocking for the BATON ROUGE.  The petitioner claims "it was
unaware of any yard preparation work until the invoice of 14 Feb.
1989 was received."  However, we note that A.R.N.O., by letter
dated November 27, 1986, informed the petitioner of these charges
and references two previous telexes (#1330 DB, dated November 13,
1986, and 1148 DB, dated September 26, 1986) sent in connection
with these charges.

     The evidence submitted indicates that the petitioner was
notified of the existance of these charges at least 124 days
prior to the entry of the vessel into the United States.  We know
of no basis for relief which would allow us to grant relief in
such circumstances.  Accordingly, relief for this invoice is
denied.  Additionally, we are referring this matter to your
office with the recommendation that penalty action be instituted
for failure to file in accordance with the appropriate Customs
regulations and statutes.

HOLDING:

     Following a thorough review of the documentation submitted
by the petitioner, and as detailed in the Law and Analysis
section of this ruling, the petition for review is granted in
part and denied in part.

                                     Sincerely,




                                     Stuart P. Seidel
                                     Director
                                     Regulatory Procedures
                                     and Penalties Division