HQ 226737: Vessel Repair Entry No. 603-1020206-8; 19 U.S.C. 1466; Hullcleaning; Maintenance; Restoration

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 226737

                                March 12, 1996

VES-13-18-RR:IT:EC    226737 GOB

CATEGORY:    Carriers

U.S. Customs Service
Chief, Liquidation Section II
P.O. Box 2450
San Francisco, CA 94126

RE:  Vessel Repair Entry No. 603-1020206-8; 19 U.S.C. 1466; Hull
cleaning;           Maintenance; Restoration

Dear Sir:

     This is in response to your memorandum dated February 5,
1996, which forwarded the application for relief submitted on
behalf of American Seafoods Company ("applicant") in connection
with the above-referenced vessel repair entry.

FACTS:

     The AMERICAN EMPRESS ("the vessel") is a U.S.-flag vessel
owned by the applicant.  Certain foreign shipyard work was
performed on the vessel prior to its arrival at the port of
Seattle, Washington on August 3, 1995.  The subject entry was
filed on August 4, 1995.

     You have asked us to consider the dutiability under 19
U.S.C. 1466 of item 0040, hull cleaning.

ISSUE:

     Whether the hull cleaning is dutiable pursuant to 19 U.S.C.
1466.

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.

     The invoice at issue states in pertinent part:

     HULL CLEANING
     Providing pressure washing equipment and handling to dock
bottom.
     ...
     Power washing hull with fresh water to remove salt deposits
and marine growth.
     ...
     Hand scraping marine growth...

     In Texaco Marine Services, Inc. v. United States, 44 F.3d.
1539 (1994),  the Court of Appeals for the Federal Circuit held
that the costs of post-repair cleaning and protective coverings
related to repairs were dutiable under 19 U.S.C. 1466.

     In Ruling 112045 dated September 4, 1992, we stated, in
pertinent part:

     Cleaning operations which remove rust and deterioration and
     worn parts, and which are a necessary factor in the
     effective restoration of a vessel to its former state of
     preservation, constitute vessel repairs (See C.I.E. 429/61). 
     Customs has long held the cost of cleaning is not dutiable
     unless it is performed as part of, in preparation for, or in
     conjunction with dutiable repairs or is an integral part of
     the overall maintenance of the vessel; see C.I.E.'s 18/48,
     125/48, 910/59, 820/60, 51/61, 429/61, 569/62, 698/62; C.D.
     2514; T.D.'s 45001 and 49531.  Pursuant to C.I.E. 919/60
     remission of duty assessed on repairs is not warranted under
     section 1466 where the repairs are maintenance in nature.

     In Ruling 111571 dated March 4, 1992, we stated, in
pertinent part:

     In analyzing the dutiability of foreign vessel work, the
     Customs Service has consistently held that cleaning is not
     dutiable unless it is performed as part of, in preparation
     for, or in conjunction with dutiable repairs or is an
     integral part of the overall maintenance of the vessel. 
     E.g., Headquarters Ruling Letter 110841, dated May 29, 1990
     (and cases cited therein).  The Customs Service considers
     work performed to restore a part to good condition following
     deterioration or decay to be maintenance operations within
     the meaning of the term repair as used in the vessel repair
     statute.  See generally, Headquarters Ruling Letter 106543,
     dated February 27, 1984; C.I.E. 142/61,, dated February 10,
     1961.

     The dutiability of maintenance operations has undergone
     considerable judicial scrutiny.  The United States Court of
     Customs and Patent Appeals, in ruling that the term repair
     as used in the vessel repair statute includes "maintenance
     painting," gave seminal recognition to the dutiability of
     maintenance operations.  E.E. Kelly & Co. v. United States,
     55 Treas. Dec. 596, T.D. 43322 (C.C.P.A. 1929).  The process
     of chipping, scaling, cleaning, and wire brushing to remove
     rust and corrosion that results in the restoration of a
     deteriorated item in preparation for painting has also been
     held to be dutiable maintenance.  States Steamship Co. v.
     United States, 60 Treas. Dec., T.D. 45001 (Cust. Ct. 1931).

     Most recently, the United States Customs Court examined
     whether the scraping and cleaning of Rose Boxes constituted
     dutiable repairs.  Northern Steamship Company v. United
     States, 54 Cust. Ct. 92, C.D. 1735 (1965).  Rose Boxes are
     parts fitted at the ends of the bilge suction to prevent the
     suction pipes from being obstructed by debris.  In arriving
     at its decision, the court focused on whether the cleaning
     operation was simply the removal of dirt and foreign matter
     from the boxes or whether it resulted in the restoration of
     the part to good condition after deterioration or decay. 
     Id. at 98.  The court determined that the cleaning did not
     result in the restoration of the boxes to good condition
     following deterioration and consequently held that the work
     was not subject to vessel repair duties.  Id. at 99.  The
     Customs Service has ruled that the regular cleaning of
     filters in most instances does not result in liability for
     duty.  See Headquarters Ruling Letter 107323, dated May 21,
     1985.

     From these authorities, we determine that the cost of
     cleaning the air scavenger spaces is subject to duty under
     19 U.S.C. 1466.  The term deterioration is defined to mean
     degeneration, which in turn denotes declined function from a
     former or original state.  See The American Heritage
     Dictionary of the English Language 376, 387 (2d ed. 1985). 
     The principal function of the air scavenger spaces is to
     either deliver turbo-charged air to the cylinders or receive
     spent gasses from the cylinders.  The collection of carbon
     and other oily deposits poses a fire or explosion hazard and
     results in a diminished engine function.  The removal of the
     carbon deposits through scraping, wire brushing, and wiping
     results in a restoration of the scavenger spaces to good
     condition following a decline in function of the scavenger
     spaces.  Such an operation can be distinguished from
     cleaning a Rose Box or other filter, for the collection of
     debris by these parts results not in a diminution of
     function, but alternatively demonstrates the proper function
     of the part.
     (All emphasis in original.)

     In States Steamship v. United States, T.D. 45001 (Cust. Ct.,
1931), the court stated in pertinent part as follows:

     Considering first the question whether the cleaning of deep
     tanks constitutes a repair, it is observed that the
     testimony does not show precisely the nature of the
     cleaning.  It does not appear whether the cleaning process
     was simply the removal of accumulated dirt, or whether it
     was a restoration of the inner portion of the tanks to a
     good condition after deterioration.  It is clear, however,
     that the process, whatever it may have been, was quite
     elaborate.  The cost as shown by the bill of the foreign
     contractor, amounted to yen 650, and from this fact it is
     safe to assume that such cleaning process included more than
     removing foreign substances in the tanks such as would be
     necessary to prevent the bean-oil cargo from becoming
     impure.

     We are of the opinion that the plaintiff has failed to
     establish that the cleaning of the deep tanks of the steamer
     Illinois did not constitute a repair.

     In respect to the work of chipping, scaling, cleaning, and
     wire brushing it was testified that such work became
     necessary on account of rust and corrosion, which of course
     is a deterioration and damage to the vessel upon which it
     occurs.  Even although the work of chipping, scaling, and
     wire brushing is considered an independent act from painting
     it is a necessary factor in order to have the work of
     restoration of the vessel to its former state of
     preservation become effective.

     In H.C. Gibbs v. United States, 28 Cust. Ct. 318, C.D. 1430
(1952), the court stated in pertinent part as follows:

     Relative to painting the hull of the vessel black between
     the decks and repainting the ship's name thereon, as well as
     the expenses of cartage of materials and labor, this court
     is of the opinion that the cost thereof is properly dutiable
     under the provisions of section 466 as "repairs."  Although
     it is contended that the painting in question was strictly
     ornamental and in no sense performed for the preservation of
     the vessel and, therefore, cannot be considered "maintenance
     painting," it remains a fact that, irrespective of the
     intention behind the act, the painting of the ship black in
     order to present a better appearance to the public had the
     effect of restoring the old and rusted surfaces, and since
     the repainting of the hull covered the ship's name, it
     became necessary thereafter to paint the name Gretna Victory
     over the new black paint. 

     In its letter of October 17, 1995, the applicant states that
"cleaning is not a repair and that the cleaning was not done in
connection with any repairs to the vessel."  In its letter of
December 5, 1995, the applicant states that "merely cleaning the
hull is not a repair within the intention of the statute since
there was no further work done in the nature of a repair such as
painting or renewing the hull." 

     The pertinent invoice states that the hull cleaning was to
remove salt deposits and marine growth from the hull of the
vessel and that hand scraping of marine growth 

was performed.  It seems clear that this work will enhance the
operation of the vessel in terms of speed, efficiency of the
hull, fuel efficiency, etc.  
     
     After a consideration of this matter, we determine that the
hull cleaning is more akin to a restoration and/or maintenance
item than it is akin to an item that involves no restoration or
maintenance.  The description of the work, including the removal
of "salt deposits and marine growth" and "hand scraping marine
growth," indicate to us that the work goes beyond "mere
cleaning."  The work performed is closer to a restoration of the
hull to its former state and is an integral part in the overall
maintenance of the vessel.

     Accordingly, the hull cleaning is dutiable pursuant to 19
U.S.C. 1466.

     The applicant has cited the telegram in file 104943 in
support of its position.  We decline to follow 104943 because it
is clearly inconsistent with numerous court decisions and Customs
rulings, including the court decisions and Customs rulings cited
supra.  Telegram 104943 is not a Customs ruling, nor was it in
ruling format.
 
HOLDING:

     The hull cleaning is dutiable pursuant to 19 U.S.C. 1466.


                              
                              Sincerely,



                              William G. Rosoff
                              Chief, Entry and Carrier Rulings
Branch