HQ 112077: Vessel repair; Petition for Review; Cleaning; Maintenance; Repair; Vessel EXPORT FREEDOM; Entry number C16-0007396-4

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 112077

                        February 11, 1992


VES-13-18-CO:R:IT:C  112077 LLB

CATEGORY:  Carriers

Deputy Assistant Regional Commissioner
Commercial Operations Division
423 Canal Street
New Orleans, Louisiana 70130-2341

RE:  Vessel repair; Petition for Review; Cleaning; Maintenance;
     Repair; Vessel EXPORT FREEDOM; Entry number C16-0007396-4

Dear Sir:

     Reference is made to your memorandum of January 14, 1991,
which forwards for our review and determination the Petition for
Review of an earlier decision regarding the dutiability of
certain foreign shipyard operations performed on the EXPORT
FREEDOM.  The appeal has been filed by the vessel operator,
Farrell Lines, Inc., in connection with the above-captioned
vessel repair entry.

FACTS:

     The vessel EXPORT FREEDOM underwent numerous operations in a
foreign shipyard, the record of which was submitted to Customs
for a determination as to dutiability.  Following that initial
determination, an appeal was filed as to two items which had been
held to be dutiable.  These involved cleaning operations
performed on the port and starboard boilers as well as on the
main condenser (presented as invoice items 12 and 13, Part II,
Malta Drydocks).

ISSUE:

     Whether the operations under review constitute non-repair-
related cleaning or, in the alternative, whether they are
considered to be maintenance operations which are dutiable
repair procedures.
LAW AND ANALYSIS:

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

     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. 30, 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.

     We find the holding of the court in the matter of Northern
Steamship, supra., to be dispositive of the issue before us.  The
operations under review were not performed in furtherance of any
other operation, such as painting or repair of any sort, and did
not address any decay or deterioration circumstances.  Therefore,
we find that they were not dutiable maintenance procedures but
mere cleaning operations done in preparation for non-dutiable
inspections.

HOLDING:

     Following a thorough review of the evidence submitted as
well as an analysis of the law and applicable precedents, we have
determined to allow the Petition for Review submitted in this
matter.

                              Sincerely,




                              B. James Fritz
                              Chief
                              Carrier Rulings Branch