HQ 112725: Vessel Repair; 19 U.S.C. 1466; Application for Relief; Modification; Survey; Vessel Repair Entry No. H24-0014520-5 Date of Entry: January 7, 1993 Date of Arrival: January 7, 1993 Port of Arrival: Dutch Harbor, Alaska Vessel: ALASKA JURIS

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 112725

                          October 20, 1993

VES-13-18-CO:R:IT:C  112725 DEC

CATEGORY:  Carriers

Deputy Regional Director
Commercial Operations
Pacific Region
One World Trade Center
Long Beach, California  90831

RE:  Vessel Repair; 19 U.S.C. 1466; Application for Relief;
     Modification; Survey;
     Vessel Repair Entry No. H24-0014520-5
     Date of Entry:  January 7, 1993
     Date of Arrival:  January 7, 1993
     Port of Arrival:  Dutch Harbor, Alaska
     Vessel:  ALASKA JURIS

Dear Sir:

     This letter is in response to your memorandum dated May 4,
1993, which forwards for our consideration an application for relief
filed in connection with the assessment of vessel repair duties on
the above-referenced vessel.


FACTS:

     The ALASKA JURIS, an American-flag vessel, underwent various
foreign shipyard operations while in Shiogama, Japan, at the Tohoku
Dock Tekko K.K. shipyard.  Subsequent to the completion of the work
performed in Shiogama, the vessel arrived in the United States at
Dutch Harbor, Alaska, on January 7, 1993.  A vessel repair entry
covering the work was filed on the day of arrival.    

     An application for relief from vessel repair duties was timely
filed.  The following items have been submitted to this office for
review.

            Item       Sub-Item      Description

              I            8         factory area
                           9         hatch coamings
                          10         pan racks
                          12         bath tub
                          16         fish pond
                          17         packing table
                          18         fish factory equipment
                          20         ORCA sewage
                                 -2-

                          21         holding tank
             III           5         belt conveyor
                           6         head cutter
                           7         cutting machine
                           9         heater

              IV           1         tail roller
                           2         belt conveyor
                           3         hydraulic motor
                           4         hydraulic pump
                           5         change valve
                           6         miscellaneous

           Miscellaneous             Trans-Marine Propulsion

     Our ruling on the above-mentioned matters is set out below.


ISSUE:

     Whether the cost of foreign shipyard work completed aboard the
above-referenced vessel is dutiable pursuant to Title 19, United
States Code, section 1466.


LAW AND ANALYSIS:

     Title 19, United States Code, section 1466, provides, in
pertinent part, for payment of an ad valorem duty of 50 percent on
the cost of foreign repairs to a vessel documented under the laws of
the United States to engage in the foreign or coasting trade, or a
vessel intended to be employed in such trade.


Factory Area (Item I, Number 8)
Pan Racks (Item I, Number 10)
Bath Tub (Item I, Number 12)
Fish Pond (Item I, Number 16)
Packing Table (Item I, Number 17)
Fish Factory Equipment (Item I, Number 18)
ORCA Sewage (Item I, Number 20)

Belt Conveyor (Item III, Number 5)
Relocated Cutting Machine (Item III, Number 7)
Installation of Heater (Item III, Number 9)

Installed Belt Conveyor (Item IV, Number 2)
Checked Change Valve (Item IV, Number 5)
Miscellaneous Expenses (Item IV, Number 6)


     Over the course of years, the identification of modification
processes has evolved from judicial and administrative precedents. 
In considering whether an operation has resulted in a modification,
                                 -3-


which is not subject to duty, the following elements may be
considered.

           (1)  Whether there is a permanent incorporation into     
                the hull or superstructure of a vessel (see United  
                States v. Admiral Oriental Line et al., T.D. 44359  
                (1930)), either in a structural sense or as
                demonstrated by the means of attachment so as to    
                be indicative of the intent to be permanently       
                incorporated.

           (2)  Whether the item under consideration would remain   
                aboard a vessel during an extended layup.

           (3)  Whether, if not a first time installation, an item
                under consideration replaces a current part,        
                fitting or structure which is not in good working   
                order.

           (4)  Whether an item under consideration provides an
                improvement or enhancement in operation or
                efficiency of the vessel.

Before an item is to be construed as a part of the vessel, it must
be (1) a permanent attachment and (2) essential to the successful
operation of the vessel.   Otte v. United States, 7 C.C.P.A. 166,
169 (1916).

     Customs is satisfied that these operations (Item I, Numbers 8,
10, 12, 16, 17, 18, 20; Item III, Numbers 5, 7, and 9; and Item IV,
Numbers 2, 5, and 6) improve the efficiency of the vessel and
represent a permanent incorporation into the vessel's structure. 
Accordingly, no duty shall be assessed on these items.


Hatch Coamings (Item I, Number 9)
Holding Tank (Item I, Number 21)

Head Cutter (Item III, Number 6)

Tail Roller (Item IV, Number 1)
Hydraulic Motor (Item IV, Number 3)
Hydraulic Pump (Item IV, Number 4)


     Applying the standards set forth above, it is Customs position
that the applicant has not provided sufficient evidence supporting a
finding that these items (Item I, Numbers 9 and 21; Item III, Number
6; Item IV, Numbers 1, 3, and 4) are modifications.  The Customs
Service has 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
                                 -4-


performed.  No drawings were submitted and the invoice descriptions
provided an insufficient amount of detail precluding the Customs
Service to make a decision.

     The stated reason for the work performed on the hatch coamings
(Item I, Number 9) was to keep water out of the factory area.  It
appears that water leakage into the factory area was a preexisting
problem and that this operation was a repair which solved the
problem.

     The invoice that describes the work performed on the holding
tank (Item I, Number 21) is indicative of a restoration operation. 
Customs has consistently determined that work performed to restore
deteriorating items are repairs.  It appears that the holding tank,
in its pre-operative condition was under strain which necessitated
its renewal and reinforcement.

     The invoice description of the work performed with respect to
the head cutter (Item III, Number 6) and the tail roller (Item IV,
Number 1) are inadequate.  They simply state that the head cutter
and the tail roller, respectively, were modified.  This claim is a
legal conclusion and should be left to the Customs Service to
determine.  The applicant is instructed to provided details of the
operations.  No such details of the operation were provided.

     Item IV, Numbers 3 and 4 specifically state that these items
were overhauled.  This invoice description is indicative of a
dutiable repair process.  Absent a more detailed description of the
work, this item is dutiable.

     The items discussed above shall remain dutiable unless and
until evidence detailing the work performed is provided and found to
be a bona fide modification.


Trans Marine Propulsion (Year End Repairs)
Elliott Bay Design Group

     Two invoices from Trans Marine Propulsion and one invoice from
Elliott Bay Design Group were submitted.  Trans Marine Propulsion
Invoices 003977 (Nov. 30, 1992), 004089 (Jan. 19, 1993), and Elliott
Bay Design Group (Apr. 6, 1993, facsimile) are dutiable because the
applicant has not demonstrated that the work invoiced is non-
dutiable.  Based on the brief descriptions contained in the
invoices, it is apparent that the work performed relates to repair
operations.  The Elliott Bay Design Group facsimile offers no
explanation of the work performed.  Customs cannot grant relief
absent a description of the work performed.

     Transportation charges are non-dutiable. Accordingly, the air
and travel expenses noted on the Elliott Bay Design facsimile is not
dutiable.

                                 -5-


HOLDING:

     After a thorough review of the record, this application for
relief is granted in part and denied in part as detailed in the Law
and Analysis portion of this ruling.

                                Sincerely,




                                Arthur P. Schifflin
                                Chief
                                Carrier Rulings Branch