HQ 110972: Richmond, California, Vessel Repair Entry No. C28-0076726-4; GREEN BAY V-18

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 110972

                          July 9, 1990

VES-13-18-CO:R:P:C 110972 GV

CATEGORY:  Carriers

Chief, Technical Branch
Pacific Region
1 World Trade Center
Long Beach, California 90831

RE:  Richmond, California, Vessel Repair Entry No. C28-0076726-4;
     GREEN BAY V-18

Dear Sir:

     This is in response to your memorandum dated March 30,
1990, transmitting an application for relief from duties assessed
pursuant to 19 U.S.C. 1466.  You request that we review one (1)
item contained in the above entry.  Our finding is set forth
below.

FACTS:

     The GREEN BAY is a U.S.-flag vessel owned by Central Gulf
Lines, Inc., (Central Gulf) of New Orleans, Louisiana.  The
subject vessel had the work in question performed on it during
November 9-11, 1989, at Mitsui Engineering & Shipbuilding Co.,
Ltd., (Mitsui) in Nagoya, Japan.  Subsequent to the completion of
this work the vessel arrived in the United States at Richmond,
California, on November 24, 1989.  A vessel repair entry was
filed on November 29, 1989.  We also note that an "amended" entry
was filed on February 20, 1990.

     Pursuant to an authorized extension of time, an application
for relief, dated February 20, 1990, was timely filed.  The
applicant claims that the work in question constituted a
nondutiable modification.  In support of this claim the applicant
submitted the following work with the application:  a shipyard
invoice covering the work in question (Exhibit 1); a letter to
Mitsui requesting that the work be considered under the
shipbuilder's warranty (Exhibit 2); and a drawing of the work
(Exhibit 3).  In addition, a letter from the Vice-President,
Marine, Central Gulf, dated March 9, 1990, was also submitted for
the purpose of explaining Exhibit 2, noted above.

                              - 2 -

ISSUE:

     Whether the foreign expenses for which the applicant seeks
relief are dutiable under 19 U.S.C. 1466.

LAW AND ANALYSIS:

     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.

     Section 4.14(b)(2), Customs Regulations (19 CFR 4.14(b)(2))
provides, in pertinent part, that entry shall be filed with the
appropriate Customs officer within five (5) working days after
the vessel's arrival.  Although the original entry, dated
November 29, 1989, was timely filed, it should be noted that the
Customs Regulations make no provision for "amended" entries such
as the one dated February 20, 1990.

     Furthermore, pursuant to section 4.14(d)(1)(ii), Customs
Regulations, the application for relief, with supporting
evidence, shall be filed within 60 days from the date of first
arrival of the vessel, unless Customs grants an extension.
Accordingly, pursuant to a letter dated January 24, 1990, from
the Head, Liquidation Section II, Pacific Region, to the
applicant, granting their request for an extension of time, the
deadline for filing the supporting evidence and application for
this entry was February 22, 1990.  Any evidence submitted after
that date (i.e, the March 9, 1990, letter) will not be considered
in the liquidation of this entry.  Furthermore, Central Gulf
should be informed that absent Customs authorized extensions of
time, failure to submit an application for relief with supporting
evidence within the 60-day time period note above results in the
entry being forwarded for immediate liquidation.

     Notwithstanding the procedural deficiencies noted above, we
note that a leading case in the interpretation and application of
section 1466 is United States v. Admiral Oriental Line et al., 18
C.C.P.A. 137 (T.D. 44359 (1930)).  That case distinguished
between equipment and repairs on one hand and permanent
modifications/alterations/additions to the hull and fittings on
the other, the former being subject to duty under section 1466.

     The Court in Admiral Oriental, supra., cited with approval
an opinion of the Attorney General (27 Op. Atty. Gen. 288).  That
opinion interpreted section 17 of the Act of June 26, 1884, (23
Stat. 57, which allowed drawback on the vessels built in the U.S.
for foreign account, wholly or in part of duty-paid materials.
In defining equipment of a vessel, the Attorney General found
that items which are not equipment are:
                              - 3 -

          ...those appliances which are permanently attached
          to the vessel, and which would remain on board
          were the vessel to be laid up for a long period...
          [and] are material[s] used in the construction of
          the vessel...

While the opinion of the Attorney General interpreted a provision
of law other than section 1466 or a predecessor thereto, it is
considered instructive and has long been cited in Customs Service
rulings as defining permanent additions to the hull and fittings
of a vessel.

     For purposes of section 1466, dutiable equipment  has been
defined as:

          ...portable articles necessary or appropriate for
          the navigation, operation, or maintenance of a
          vessel, but not permanently incorporated in or
          permanently attached to its hull or propelling
          machinery, and not constituting consumable
          supplies.  (T.D. 34150 (1914)).

     It should be noted that the fact that a change or addition
of equipment is made to conform with a new design scheme, or for
the purpose of complying with the requirements of statute or
code, is not a relevant consideration.  Therefore, any change
accomplished solely for these reasons, and which does not
constitute a permanent addition to the hull and fittings to the
vessel, would be dutiable under section 1466.

     Upon reviewing the record with regard to the applicant's
claim we note that the work in question (i.e., the reinforcement
of Frame 117 with thicker steel) was necessitated as a result of
the development of structural cracks around Frame 117.  Although
the work may have strengthened the weakened area to prevent
future such cracks, it nonetheless constitutes dutiable repairs.

HOLDING:

     The foreign work for which the applicant seeks relief is
dutiable under 19 U.S.C. 1466.

                                   Sincerely,





                                   B. James Fritz
                                   Chief
                                   Carrier Rulings Branch