HQ 110866: Vessel Repair; Protest; Late Filing of Invoice; Late Entry; Vessel SEISMIC EXPLORER; Entry No. C14-0006361-1

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 110866
                          July 31, 1990

VES-13-18-CO:R:P:C 110866 LLB

CATEGORY:  Carriers

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

RE:  Vessel Repair; Protest; Late Filing of Invoice; Late Entry;
     Vessel SEISMIC EXPLORER; Entry No. C14-0006361-1


Dear Madam:

     Reference is made to your memorandum of February 14, 1990,
by which you forward for our consideration the protest filed by
the Whitehall Corporation (protest number 1401-89-000167) in
regard to the above-captioned vessel repair entry.

FACTS:

     The vessel arrived in the port of Norfolk, Virginia, on
September 21, 1987.  A vessel repair entry was filed but was not
properly signed or dated.  The entry reflects that "NO BOND" is
written in block 19 of the entry form, the space reserved for
recordation of the name of the principal and surety.  It is
reported that the vessel operator indicated at the time that the
vessel qualified for clearance without the necessity of posting a
bond under the provisions of section 4.14(b)(2)(i), Customs
Regulations (19 CFR 4.14(b)(2)(i)), the regulation concerning
government owned or chartered vessels (apparently neither being
the case).

     No formal application for relief was ever submitted, the
only colorable plea being a bald statement on the bottom of the
vessel repair entry, "Repairs furnished by U.S.A. Personnel using
U.S.A. Parts."  The entry remained open until April 28, 1989, at
which time it was liquidated without benefit of shipyard
invoices.  The invoices were submitted on June 20, 1989, two
months after liquidation and nearly two years after arrival of
the vessel.  The liquidation is protested on the grounds that
since seventeen months lapsed between entry and liquidation,
Customs failed to satisfy the time limits prescribed in section
4.14(e), Customs Regulations (19 CFR 4.14(e), thus sending the
message that the matter was considered closed.

ISSUE:

     Whether the protest of liquidation of vessel repair duties
under consideration states a claim upon which relief may be
granted.

LAW AND ANALYSIS:

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

     The Customs Regulations provide that entry of all foreign
repair costs and equipment expenditures shall be made within five
working days after arrival in the United States.  Some confusion
exists over the actual entry date in this case, with block 16c.
of the entry document being dated September 21, 1981 [sic], yet
with no date or signature appearing in the required block 25 of
the form.  Block 18, reserved for Customs use only, shows a date
of November 19, 1987, as the entry date, some two months after
the vessel arrival date.  The protest form (CF 19), which is
signed by counsel for the protestant, shows the entry date to be
November 19, 1987.  We will, therefore, consider this to be the
correct entry date and note that the entry was delinquent by some
fifty-five days.

     As previously noted, the regulations provide that government
owned or leased vessels need not post a bond to secure duties
which may be owing prior to departing the first port of arrival.
Apparently the representation of government ownership or lease
was made by the vessel operator in this case, although no
substantiation of such relationship with the government can be
found in the record of this case.

     The Customs Regulations provide at section 4.14(d)(1) (19
CFR 4.14(d)(1)), that although applications for relief need not
be submitted in any particular format, it is necessary that such
allege that an item or a repair expense is not subject  to duty
under either paragraph (a) or (c) of section 4.14.  Further, the
application shall certify that all foreign expenditures made
within one year of the application date have been declared.  The
provision goes on to state that the application shall be filed at
either the same port at which the entry was filed, or with the
appropriate vessel repair liquidation unit.  This provision shows
clearly that the application is a separate submission from the
entry.  Further, juxtaposition of the facts with the regulatory
requirements in this case reveals a multitude of deficiencies,
even if the bald statement on the entry form were to be
considered an application for relief.

     The protestant, as previously stated, relies in whole upon
section 4.14(e), Customs Regulations (19 CFR 4.14(e)) to support
this protest.  That section provides that if cost evidence is
available and notice is received that no application for relief
will be filed, the entry shall be promptly liquidated.  Of
course, neither of these conditions were present in this case,
with no invoices having been submitted prior to liquidation and
no indication regarding application having been made.  The
regulations provide further that in all other cases in which cost
evidence is available, the entry may be liquidated 60 days after
arrival.  This language is permissive and not mandatory.  There
is no obligation on the part of Customs to liquidate a vessel
repair entry within 60 days of arrival, especially in cases where
invoices are withheld by the vessel operator.  The fact that an
entry remains open and unliquidated should certainly not be taken
as an indication that the matter of the entry is concluded with
nothing further required of an operator by Customs.  In fact,
logically speaking, quite the opposite interpretation may be
indicated.

     All of this notwithstanding, the question of the validity of
the protest remains.  The right to protest the liquidation of an
entry is provided in section 514, Tariff Act of 1930, as amended
(19 U.S.C. 1514).  Even though no pre-liquidation prayer for
relief might be submitted, there is a statutory right to seek
refund of duties assessed under subsection (a) of the vessel
repair statute (19 U.S.C. 1466(a)), and a section 1514 protest
seeking such refund must be considered on its merits.  The
failure to submit a timely and/or defective Application for
Relief under the Customs Regulations is tantamount to the failure
to seek pre-liquidation relief from duties.  Therefore, this
protest will be considered.

     Section 1514(c)(1) (19 U.S.C. 1514(c)(1)), provides, in
pertinent part:

          A protest of a decision under subsection (a)
          of this section shall be filed in writing
          with the appropriate customs officer
          designated in regulations prescribed by the
          Secretary, setting forth distinctly and
          specifically each decision described in
          subsection (a) of this section as to which
          protest is made; each category of merchandise
          affected by each such decision as to which
          protest is made; and the nature of each
          objection and reasons therefor.

In this case there is no distinct and specific objection raised
to the decision to liquidate the items as entered.  Neither is
any category of merchandise affected by each liquidation decision
made a subject of this protest, nor is the nature of each
objection, with reasons stated, mentioned.  As such, we find the
protest to be without merit.

     The presence of prepenalty considerations is mentioned in
the memorandum transmitting this matter to us.   We believe,
considering all of the previously mentioned failures,
misstatements and deficiencies in the entry process, that such
action is well justified.

HOLDING:

     Upon thorough consideration of the facts analyzed in
connection with the applicable law and regulations, we have
determined that he protest is not meritorious and should be
denied.  Further, we find ample reason to refer this matter for
issuance of a prepenalty notice.

                                Sincerely,




                                B. James Fritz
                                Chief
                                Carrier Rulings Branch







CO:R:P:C/LLBurton/VDT/07/25/90