HQ 112037: Vessel Repair Entry No. C20-0035753-6; 19 U.S.C. 1466; OVERSEAS HARRIETTE, V-119; Overhead; Cleaning; Survey

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 112037

                                 March 14, 1995

VES-13-18-CO:R:IT:C   112037 GOB

CATEGORY:  Carriers

Port Director of Customs
Attn: Vessel Repair Liquidation Unit
423 Canal Street, Room 303
New Orleans, Louisiana 70130-2341

RE:  Vessel Repair Entry No. C20-0035753-6;  19 U.S.C. 1466;  OVERSEAS          HARRIETTE, V-119;  Overhead;  Cleaning;  Survey

Dear Sir:

     This is in response to your memorandum dated February 14, 1992, which
forwarded  the application for relief submitted by Mid-Gulf Shipping Company, Inc. on
behalf of Maritime Overseas Corporation ("applicant") with respect to the above-referenced entry.

FACTS:

     The record reflects that the OVERSEAS HARRIETTE ("the vessel") arrived at
the port of New Orleans, Louisiana on October 11, 1991 and filed the subject vessel
repair entry.

     You request our determination with respect to certain items on the Appledore
invoice no. 572/486.

ISSUE:

     Whether certain items are 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 


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United States to engage in foreign or coastwise trade, or vessels intended to be
employed in such trade.
     
     We find that the survey items on pages seven and eight of Appledore invoice no.
572/486 are dutiable for the following reasons: (a) the applicant has not established
that these items are periodic surveys required by a governmental entity or a
classification society; and (b) the items include dutiable repairs, the amounts for which
are not separately itemized.

     Overhead costs, including secretarial services, related to dutiable repairs are
dutiable.  Overhead costs related to nondutiable items are nondutiable, provided that
such costs are included in the cost or expense of the nondutiable items or clearly
reflected as related to such nondutiable items on the pertinent invoices.  In Ruling
112965 dated December 23, 1993, we stated as follows:  

     As we stated in Ruling 112900 d ated Novembe r 4, 1993 and Ruling 112861     dated October 19, 1993, it is Customs position that  overhead relating to repair      work is dutiable as part of the cost of the  repair, i.e., the total cost or expense of    the repair is dutiable.  In contrast, overhead relating to a nondutiable item such as a modification is nondutiable, i.e., the total cost or expense of a nondutiable item is nondutiable.  While Customs does not wish to see overhead broken-out or segregated as a separate item, our position on the dutiability of overhead, as stated supra, holds whether or not overhead is a separate item.

     The cost of a "value added tax" is dutiable if it is levied on a dutiable item.  It is
not dutiable if it is levied on a nondutiable item.

     We find that the cleaning of the main and emergency switchboards, item 81a on
Appledore invoice No. 572/486, is dutiable because it is maintenance cleaning.  Items
which are of a maintenance or preventive maintenance nature are dutiable. 

HOLDING:

     Our determinations are as stated supra.


                              Sincerely,



                              Arthur P. Schifflin
                              Chief
                              Carrier Rulings Branch