HQ 113048: Vessel Repair; 19 U.S.C. 1466; SEA-LAND LIBERATOR, V-140; Entry No. C27-0112477-1; Application

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 113048

                            April 12, 1994

VES-13-18-CO:R:IT:C   113048 GOB

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; SEA-LAND LIBERATOR, V-140;
     Entry No. C27-0112477-1; Application

Dear Sir:

     This is in response to your memorandum dated March 18, 1994,
which forwarded the application for relief submitted by Sea-Land
Service, Inc. ("applicant") with respect to the above-referenced
entry.

FACTS:

     The record reflects the following.  The SEA-LAND LIBERATOR
("vessel") is a U.S.-flag vessel owned and operated by the
applicant.  Certain foreign shipyard work was performed on the
vessel on voyage 140.  The vessel arrived at the port of Los
Angeles on November 8, 1993 and filed a vessel repair entry.

     You have requested us to review invoices #7, 10, 11, and 12.

Application

     The applicant states:

     ...problems were encountered with turbocharger number 3.  This
     turbocharger was overhauled in Hong Kong on 24 October and
     upon sailing was found to be in worse condition than prior to
     overhaul.  In Kaohsiung on 26 October this turbocharger was
     again opened and inspected.  At this time it was decided to
     proceed to Kobe, Japan for an emergency port call so that a
     corrective overhaul could be performed.

ISSUE:

     Whether the items at issue are dutiable pursuant to 19 U.S.C.
1466.

                              - 2 -

LAW AND ANALYSIS:

     19 U.S.C. 1466 provides for the payment of duty at a rate of
fifty 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 be employed in such
trade.

Invoices #10 and 11

     Invoice #10 contains a handwritten notation at the bottom of
the second page, which states as follows:

     Free due to unsatisfactory work.  Sealand refused payment. 
     Note, item 11 is reinspection of #3 turbo charger and item 12
     is another overhaul done during emergency call in Kobe Japan
     29 Oct.

     Invoice #11 contains a handwitten notation at the bottom which
states:

     Free - turbo charger #3 unsuccessful repair in HKG.

     Although it is not stated who made these handwritten
notations, we assume that the applicant did.

     We find that the applicant has not provided evidence or
documentation upon which to make a determination that the expenses
on these invoices are nondutiable.  Accordingly, the expenses on
these invoices are dutiable.
  
     The invoices indicate that the expenses thereon were incurred. 
The only indications to the contrary are the handwritten notations
stated supra.  We are unable to conclude that the expenses listed
on these invoices are not expenses of repairs made in a foreign
country pursuant to 19 U.S.C. 1466(a) in the absence of clear,
conclusive documentation from the shipyard that these expenses have
not been paid and that the shipyard is not pursuing payment, i.e.,
the shipyard has agreed not to charge the applicant for these
repairs. 

Invoices #7 and 12

     We concur with the liquidator's analysis with respect to the
dutiability of the items on these invoices.

     On the CF 226, the applicant has described the pertinent work
as follows:

     Invoice #7 - Overhaul rotor for No. 1 turbo charger, main
engine.

                              - 3 -

     Invoice #12 - Install new rotor and repair No. 3 turbo charger
to correct surging problem.

     Each of these invoices contains numerous items which are, or
strongly appear to be, directly related to the basic repair and/or
replacement of equipment.  These items are dutiable in the absence
of satisfactory evidence or documentation that they are not repairs
or the replacement of equipment and are not directly related to the
repairs or replacement of equipment.    

HOLDING:

     As detailed supra, the application for relief is denied.



                              Sincerely,



                              Arthur P. Schifflin
                              Chief
                              Carrier Rulings Branch