HQ 112729: Protest No. 3126-93-100005; Anchorage Vessel Repair Entry No. C31-0008394-9 dated September 28, 1990; M/V ARCTIC HERO V-1; Reconsideration of protest No. 3126-92-100005: 19 U.S.C. 1514; 19 U.S.C 1466

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 112729

                          May 14, 1993

VES-13-18  CO:R:IT:C  112729 BEW

CATEGORY:  Carriers

Deputy Regional Director
Commercial Operations
Pacific Region
One World Trade Center
Long Beach, California 90831-0700

RE:  Protest No. 3126-93-100005; Anchorage Vessel Repair Entry No.
     C31-0008394-9 dated September 28, 1990; M/V ARCTIC HERO V-1; 
     Reconsideration of protest No. 3126-92-100005: 19 U.S.C. 1514;
     19 U.S.C 1466

Dear Sir:

     This is in response to a copy of a memorandum dated 
March 16, 1993, which was received on May 13, 1993, from your
office.  The memorandum forwards for our review a second protest,
(3126-93-100005) filed by the attorneys for Palmco Pacific Corp.,
protesting our decision dated October 9, 1992 (HQ 112488 BEW), in
which we granted in part and denied in part protest No. 3126-92-
10005.  Copies of relevant materials relating to this case were
received by our office on May 7, 1993, directly from Palmco's
attorney.

FACTS:

     The record reflects that the subject vessel, the M/V ARCTIC
HERO, Voyage 1, arrived at the port of Anchorage, Alaska, September
22, 1990.  The ARCTIC HERO is a U.S.-flag vessel owned and operated
by Palmco Pacific Corporation of Seattle, Washington.  A vessel
entry was filed on September 28, 1990.  

     Pursuant to an authorized extension of time, an application
for relief, dated December 18, 1990, was filed.  The basis for the
relief requested was that the conversion work in question
constituted a nondutiable modification to the vessel.  The
conversion work purportedly entailed the following:  (1)
lengthening the vessel to create increased freezer storage space,
a larger area for a processing deck and a longer net deck to repair
and work the nets; (2) increasing the power, maneuverability and
control standards of the propulsion system; (3) increasing the
electrical and hydraulic power of the auxiliary engine systems to run processing, refrigeration and
hydraulic machinery; (4) installation of a hydraulic system 
including hydraulic pumps, motors, and winches to operate the trawl
net and to unload cargo; (5) installation of a processing plant to
produce a marketable product; (6) installation of a refrigeration
plant to freeze and preserve fish; and (7) increasing the number
and size of all accommodation areas to house a substantially larger
crew, including processing crewmen.  The application for relief was
denied on August 6, 1991 (HQ 111641 GEV), on the basis that:

           ... the Aizawa invoice descriptions do not enable
          us to determine conclusively that the work performed
          to the vessel is not dutiable as a modification. 
          The invoices contain only the most general summary
          of the work carried out by the shipyard.  Without
          details provided by the architectural plans and
          shipyard invoice descriptions of the work performed,
          we can only speculate on the actual work carried
          out.  In the absence of such information, we find
          the costs contained in the Aizawa invoices to be
          dutiable with the exception of the charges for
          dockage on p. 1 (see C.I.E. 429/61) and domestic
          packing and freight on p. 19-A (see C.D. 1830).

     The entry was liquidated on October 25, 1991.  A protest was
timely filed on January 22, 1992.  The protest stated that the
subject vessel was converted from an oil rig supply vessel to a
stern trawler head and gut fish factory processing vessel at the
Murakami Shipyard in Ishinomaki, Japan, during the period of July
21, 1989 - July 9, 1990.  The protestant claimed that certain items
contained in the Aizawa Shipping Company invoices were non-
dutiable modifications.  In support of the claim for relief various
documentation including invoices, lease agreements, statements of
corporate officers of Palmco Pacific Corporation, and prior Customs
rulings were submitted.  In addition, the protestant submitted
drawings (A-N) indicating the structural changes made to the
vessel.  The record shows that the Aizawa Shipping Company managed
the conversions, which actually took place at Murakami Shipyards,
Ishinomaki, Japan.  

     On September 31, 1992, the protestant submitted additional
evidence consisting of drawings explaining (a) the "non-dutiable
installation of the fish processing factory", (b) the "newly
converted hull superimposed over the previously existing hull",
(c) the removal and scrapping of the existing machinery components
and replacement with new components required for the newly extended
service, and (d) the modification of the existing hull which was required in order to accommodate the larger and more
complex machinery components, trawl gear, fish factory equipment,
freezer storage space and larger accommodations.  The services of
expert marine surveyors, Nelson & Associates, Inc., were retained
to review the work performed.  The protestant, in submitting the
new evidence, specifically sought relief for certain items of cost
listed on pages 21, 21A and 21B of the Aizawa Shipping Co. Ltd.
invoice.  Further, the protest sought relief for certain other
supplies and materials alleged to be U.S. spare parts.  

     On November 16, 1992, the Customs Form 19 was returned to the
vessel operator with the notation that the protest was denied in
part.   Based on our October 9, 1992, decision on the protest, (HQ
112488 BEW), the entry was reliquidated on November 20, 1992. 
     Palmco, through its attorney, now files a second protest in
which it disagrees with Customs classification of certain items of
cost listed on pages 21, 21A and 21B of the Aizawa Shipping Co.
Ltd., invoice, which were found to be dutiable under the provisions
of 19 U.S.C. 1466.

ISSUE:

     Whether the Customs Service may reconsider a final protest
decision.

LAW AND ANALYSIS:

     The protest cites 19 CFR  174 and the decision in Philip
Morris U.S.A. v. United States, 13 CIT 556 (1989), 716 F. Supp.
1476 as a basis for reconsideration of the initial protest.  

     Procedures for protests of decisions by the United States
Customs Service have been established through statute and
regulations.  Section 514, Tariff Act of 1930, as amended, provides
that decisions of appropriate customs officers relating to, inter
alia, the liquidation of an entry are final and conclusive unless
a protest is properly filed or a civil action contesting the denial
of a protest is commenced in the Court of International Trade (19
U.S.C.A.  1514(a) (West Supp. 1992)).    

     Following liquidation, a protest may be filed against the
decision to treat an item or a repair as dutiable under 19 U.S.C.
1466(a) (19 C.F.R. 4.14).  Under the provisions of title 19 United
States Code, section 1514, such protest of duties shall be filed
within 90 days from the notice of liquidation.
     Under the provisions of title 19, United States Code, section
1514(c)(1), a protest of a decision under subsection (a) of this
section shall be filed in writing with the appropriate Customs
officer designated in regulations prescribed by the Secretary of
the Treasury, setting forth distinctly and specifically each
decision described in subsection (a) of this section as to which
protest is made; each category of merchandise affected by each such
decision as to which protest is made; and the nature of each
objection and reasons therefor.  Only one protest may be filed for
each entry of merchandise, except where the entry covers
merchandise for different categories, a separate protest may be
filed for each category.

     Section 174.13(a)(5) of the Customs Regulations (19 CFR
174.13(a)(5)), provides that a protest shall contain a specific
description of the merchandise affected by the decision as to which
protest is made.  Section 174.13(a)(6) of the Customs Regulations
(19 CFR 174.13(a)(6)) provides that a protest shall set forth the
nature of, and justification for the objection set forth distinctly
and specifically with respect to each category, payment, claim,
decision, or refusal.  

     In the subject case, the first protest (No. 3126-92-10005)
contained specific descriptions of cost associated with the Aizawa
Shipping Co., Ltd. invoice.  The protest was granted in part and
denied in part, and the entry was reliquidated.  Section 1514(c)(1)
limits an importer to filing one protest to contest all
administrative decisions arising out of an entry comprising one
category of merchandise.  The first protest covered all categories
of merchandise, including the items of cost listed on pages 21,
21a, and 21b, of the Aizawa Invoice, which are also the subject of
the second protest.  Inasmuch as our decision covered all entered
items and was based on the evidence submitted with the first
protest, the second protest even though containing additional
evidence, i.e, the Hull and Cargo Surveyors, Inc report of survey,
File No. SSE 90 0756, dated June 14, 1990, is improperly filed (see
Webcor Electronics v. United States, 1977, 442 F.Supp. 95, 79 Cust.
Ct. C.D. 4725).  

     Under Customs Regulations, a protest may be amended prior to
final determination, however, under the provisions of section
174.31 of the Customs Regulations, any person whose protest has
been denied in whole or part, may only contest the denial by filing
a civil action in the United Stated Court of International Trade
in accordance with 28 U.S.C. 2632 within 180 days after -

     (a)  The date of mailing of notice of denial, in whole or in
          part, of a protest, or 
     (b)  The date a protest, for which accelerated disposition
          was requested, is deemed to have been denied in
          accordance with section 174.22(d).

     Under the provisions of section 174.30(a) of the Customs
Regulations (19 CFR 174.30(a)), the date appearing on the Customs
Form 19 shall be deemed the date on which such notice was mailed. 
In the subject case the Customs Form 19 is dated November 16, 1992.

     The statute (19 U.S.C. 1514) plainly requires the filing of
one protest on each category of merchandise.  Inasmuch as the first
protest contested each category of merchandise, the protestant has
exhausted its administrative remedies.  Accordingly, subject
protest is denied on the basis that administrative remedies have
been exhausted.
 
     Moreover, the Court of International Trade has itself held
that initiation of an action in the Court of International Trade
is the only recourse available following the denial of a protest
by the Customs Service.  San Francisco Newspaper Printing Co., v.
United States, 9 C.I.T. 517, 518-19, 620 F. Supp. 738, 740 (1985).

     The Court in the Philip Morris U.S.A. case, supra., which the
protestant cites as a basis for filing of its second protest,  held
that when Customs reliquidates merchandise beyond the statutory
period allowed for reliquidation, an importer must file a protest
in order to challenge the unlawful reliquidation.  The case further
held that under 19 U.S.C.   1514(c)(2)(A), an importer must file
a protest challenging reliquidation even if the protest is
essentially identical to a prior protest against liquidation.  In
Philip Morris, the reliquidation was untimely performed by the
Customs Service, thus rendering it unlawful.  Protest following
reliquidation was necessary in order that the Court might have
jurisdiction over the matter.  In the present case, the entry was
not unlawfully reliquidated, but was reliquidated on the basis of
our determination of the same issues appearing in the first
protest. 
 HOLDING:

     This office declines to review on the merits the request for
reconsideration of the denial of the protest (No. 3126-92-10005). 
The subject protest is denied in that the requirements set forth
in 19 U.S.C. 1514 permit the filing of only one protest for each
category of merchandise (19 U.S.C. 1514(c)(1).

                                     Sincerely,



                                     Stuart P. Seidel
                                     Director, International 
                                     Trade Compliance Division