HQ 112910: Vessel Repair; Application for Relief; Modification; Vessel Repair Entry No. 514-3004595-8; SEA-LAND ACHIEVER V-38

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 112910

                          December 1, 1993

VES-13-18-CO:R:IT:C  112910 DEC

CATEGORY:  Carriers

Chief, Residual Liquidation and Protest Branch
United States Customs Service
Six World Trade Center
New York, New York  10048-0945

RE:  Vessel Repair; Application for Relief; Modification; Vessel
     Repair Entry No. 514-3004595-8; SEA-LAND ACHIEVER V-38

Dear Sir:

     This is in response to your memorandum dated October 1, 1993,
which forwards the application for relief from vessel repair duties
filed in connection with the above-referenced vessel for our review.


FACTS:

     The SEA-LAND ACHIEVER is owned and operated by Sea-Land
Service, Incorporated.  The items that are the subject of this
application for relief from the assessment of vessel repair duties
were performed while the vessel was abroad.  In particular, the
applicant contends that the operations performed to increase the
vessel's container capacity (Item 8) as well as the shortening of
the vessel's foremast and relocation of navigational lights (Item
11) are non-dutiable modifications.


ISSUE:

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


LAW AND ANALYSIS:

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

     Over the course of years, the identification of modification
processes has evolved from judicial and administrative precedents. 
                                 -2-


In considering whether an operation has resulted in a modification,
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).

     The applicant contends that these two items represent
modifications to the vessel.  However, the evidence submitted for
review of Items 8 and 11 included an invoice stating that these
operations were installed as per the applicant's specifications and
drawings together with an outline of the specifications for the
operations under consideration.  Given the frequency with which work
orders are changed, we cannot assume that the work actually
performed was identical to the work proposed.  Without a more
detailed shipyard invoice describing the actual operations, Customs
is unable to conclude that these items constitute modifications to
the vessel.  For this reason, the application for relief is denied
and these items will remain dutiable unless a detailed invoice
describing the work performed is submitted.  Headquarters Ruling
112779 (Jul. 26, 1993).

     While these items are related to the work that is the subject
of an advisory ruling (Headquarters Ruling 111849 (Feb. 3, 1992)),
the Customs Service has consistently stated that these rulings are
merely advisory and do not eliminate the requirement to declare work
done abroad at the subject vessel's first United States port of
arrival, nor does it eliminate the requirement of filing the entry
showing this work (19 C.F.R.  4.14(b)(1)(2)).  Furthermore, any
final ruling is contingent on Customs review of the evidence
submitted pursuant to 19 C.F.R.  4.14(d)(1).  The advisory ruling 
                                 -3-


stressed that any final determination would be contingent on review
of the evidence submitted as part of the entry and procedure for
review.

     
HOLDING:

     After a thorough review of the submitted evidence, this
application for relief is denied for the reasons detailed in the Law
and Analysis section of this ruling.

                                Sincerely,



                                Arthur P. Schifflin
                                Chief