HQ 110949: Vessel Repair; Application; 19 U.S.C. 1466; 19 C.F.R. 4.14; Bunker Survey; Protest # 1001-9-003201; SEA-LAND VALUE.

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 110949

                         August 1, 1990


VES-13-02/13-18  CO:R:P:C  110949  JBW

CATEGORY:  Carriers

Deputy Assistant Regional Commissioner
Classification and Value Division
ATTN:  Regional Vessel Repair Liquidation Unit
6 World Trade Center
New York, New York 10048-002980

RE:  Vessel Repair; Application; 19 U.S.C. 1466; 19 C.F.R.
     4.14; Bunker Survey; Protest # 1001-9-003201; SEA-LAND
     VALUE.

Dear Sir:

          This letter is in response to your memorandum of March
22, 1990, which forwards for our review and ruling the above
captioned protest from the assessment of vessel repair duties.

FACTS:

          The record reflects that the subject vessel, the SEA-
LAND VALUE, arrived in the port of New York, New York, on January
2, 1989.  Vessel repair entry 514-3003603-1, Customs Form 226,
was filed on the same day indicating that a bunker survey and
fuel analysis were performed while the ship was in Spain.

          On March 21, 1989, Sea-Land Service, Inc., (protestant)
submitted a letter, titled "APPLICATION FOR RELIEF OF DUTY."
This letter lists the work performed, the cost of the work, and
the estimated duty. For each entry, the estimated duty is claimed
to be zero.  Reference is made to "Ruling" [C.I.E.] 429-61 in the
far left column of each line of the two work descriptions.
However, the letter proffers no reason or analysis on how this
ruling applies, nor does the protestant specifically state its
basis for relief.

          The vessel repair unit liquidated the entry on April
14, 1989, and posted the liquidation notice on the same day.  On
May 22, 1989, the protestant submitted another letter in which it
"protests" the failure of the Vessel Repair Unit to give "formal
written notice" justifying the liquidation.  In the same letter,
the protestant requests all decisions relating to the
dutiability under 19 U.S.C. 1466 (1982) of non-repair related
expenses.  The Vessel Repair Unit issued a "Notice of Action" on
May 26, 1989, in which it directed the protestant to perfect its
protest within ninety days of liquidation.

          The protestant filed its protest on June 9, 1989.  On
this form, the protestant again claims that it received no notice
or justification for the assessment of duty.  Furthermore, in an
accompanying letter, the protestant states that it has nothing in
its files to show that a bunker survey or fuel analysis is
required to be declared or is dutiable.

ISSUES:

          (1)  Whether the Customs Service is obligated to
respond to a deficient application for relief from vessel repair
duties.

          (2)  Whether a bunker survey and a fuel analysis,
performed for reasons not related to repairs of the vessel, are
subject to duty under 19 U.S.C. 1466.

LAW AND ANALYSIS:

          In your transmittal memorandum, you state that you
deemed the protestant's submission of March 21, 1989, not to be
an application for relief.  Consequently, you state that no
formal notice of decision need be sent to the protestant.

          The Customs Regulations state that an application for
relief need not be in any particular form.  19 C.F.R.
4.14(d)(1)(i).  However, the regulations state and this office
has consistently held that an application must identify the items
for which relief from payment of duty is sought as well as the
legal bases for the Customs Service not to assess duty.  Id.;
Headquarters Ruling Letter 110107, dated August 30, 1989.

          We agree with your assessment that the protestant's
letter of March 21, 1989, does not meet the regulatory criteria
for an application.  The mere citation to a ruling from the
Customs Service without analysis of the applicability of this
ruling does not amount to a statement of the legal basis upon
which the applicant is seeking relief.  The issue arises, then,
of whether the Customs Service is obligated to respond to a
deficient application.

          Section 4.14(d)(1)(v) of the Customs Regulations
provides in pertinent part:

          Within 60 days after receipt of an
          application for relief by a vessel repair
          liquidation unit, the appropriate regional
          commissioner shall either approve or deny
          the application for relief or forward it to
          Headquarters for advice....The appropriate
          regional commissioner shall give prompt
          written notice of any final decision to the
          party who submitted the application.  The
          notice shall advise the party of its right to
          petition for review of the decision....

19 C.F.R. 4.14(d)(1)(v).  Furthermore, 19 C.F.R. 4.14(e)
provides that where an application for relief is timely filed,
the vessel repair entry may be liquidated thirty days after the
date of the written notice to the party who filed the application
for relief, as provided in 19 C.F.R. 4.14(d)(1)(v), unless a
petition for review is filed under 19 C.F.R. 4.14(d)(2)(ii).

          This office has stated that all applications must be
answered.  Headquarters Ruling Letter 110246, dated July 14,
1989.  If the letter seeking relief falls short of the regulatory
requirements for an application, then your response should
identify the deficiencies.  Id.  Liquidation in such cases should
be suspended until the time period for filing an application or,
if appropriate, a petition for relief has passed.  Id.  Posting
the notice of liquidation, as was done in this case, does not
appear to us to be sufficient written notice.

          In your memorandum, you address the issue of whether a
routine bunker survey and fuel analysis is dutiable.  Title 19,
United States Code, 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.

          Customs has held that inspections not resulting in
repairs are not dutiable.  Headquarters Ruling Letter, 110395,
dated September 7, 1989; see American Viking Corp. v. United
States, 37 Cust. Ct. 237, 247, C.D. 1830 (1956).  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.  Headquarters Ruling Letter 110368, dated
July 26, 1989.  However, if the survey is to ascertain the extent
of damage sustained or to ascertain the extent of damage
sustained, then the costs are dutiable as part of the repairs
that are accomplished. C.I.E. 429/61; C.S.D. 79-2; C.S.D. 79-277.
In the liquidation process, Customs should look beyond the mere
labels of "continuous" or "ongoing" before deciding whether the
item is dutiable.  If an inspection or a survey is conducted as a
part of a maintenance and repair program labelled "continuous" or
"ongoing," the cost of such survey is dutiable if it is in fact
repair related.

          The bunker survey and fuel analysis undertaken in this
case are not dutiable.  While the survey appears to fall within
the category of "continuous" or "ongoing," the record reveals no
repairs to the vessel either before or after the survey.

          In your memorandum, you point out that this office
held, in Headquarters Ruling Letter 109816, dated November 17,
1988, that a bunker survey was dutiable.  We believe that the
circumstances of that case differ from those presented in the
present case.  In the earlier case, we determined that the bunker
survey was dutiable, for the applicant provided insufficient
evidence to show that the survey was not connected to the other
repairs that the vessel underwent.  In contrast, the survey
conducted in the present case is more in the nature of a periodic
inspection and has no connection with repairs to the vessel.

HOLDINGS:

          The Customs Service is under an obligation to respond
to all applications, including those that do not meet the
regulatory criteria for establishing an application.  The
response of the Customs Service should point out the deficiencies
of the letter.

          The bunker survey and fuel analysis, not being repair
related, are not dutiable.  The protest is therefore granted.


                              Sincerely,



                              B. James Fritz
                              Chief
                              Carrier Rulings Branch