HQ 110790: Petition for Review on Vessel Repair Entry No. C16-0007616-5, SEA-LAND PERFORMANCE, V-13

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 110790
                         March 28, 1990

VES-13-18-CO:R:P:C 110790 LLB

CATEGORY:  Carriers

Deputy Assistant Regional Commissioner
Commercial Operations Division
ATTN:  Vessel Repair Liquidation Unit
New Orleans, Louisiana  70130

RE:  Petition for Review on Vessel Repair Entry
     No. C16-0007616-5, SEA-LAND PERFORMANCE, V-13


Dear Madam:

     Reference is made to your memorandum of January 17, 1990,
which forwards for our consideration a petition for review filed
by Sea-Land Service, Inc., seeking relief from the assessment of
duties under the vessel repair statute.

FACTS:

     The vessel in question arrived at the port of Charleston,
South Carolina, and filed a vessel repair entry (Customs Form
226) supported by internal documents intended to demonstrate cost
for Customs purposes.  The company filed an application for
relief which was denied by the Regional Vessel Repair Liquidation
Unit on the strength of previous published and unpublished
Customs rulings (C.S.D. 89-114, and Ruling Letter 110151),
determining that such company-generated documents were not
credible evidence.  The vessel operator has filed a blanket
petition covering nine similar entries, of which this is one.

ISSUE:

     Whether denial of the application supported only by internal
cost documents was proper and whether, if so, additional evidence
has been supplied to cure the noted deficiencies.

LAW AND ANALYSIS:

     Section 1466 provides, in pertinent part, for payment of
duty in the amount of 50 percent ad valorem of 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 engage in such trade.

     The Customs Regulations provide in section 4.14 (d)(1)(iii)
(19 CFR 4.14 (d)(1)(iii)), a specific listing of the kinds of
documentary evidence which "shall" be filed to support appli-
cations for relief from vessel repair duties.  Listed first
among these are "...itemized bills, receipts, and invoices".  To
be sure, other types of proof are of great value in supporting
applications, but none enjoy the primacy of actual itemized cost
documents issued by a foreign shipyard.

     In this case we are presented with a vessel operator-
generated listing of contracted-for job order sums which is, at
best, insufficient and self-serving.  The point is sought to be
made that Sea-Land has been submitting and Customs accepting such
proofs for some years now.  This may be so, but we are unaware of
cases in which total reliance was placed on such submissions.  As
previously indicated, such documentation is a welcome supplement
to probative evidence.  This does not indicate, however, that it
is an acceptable substitute for same.

     In two of the nine vessel entries covered by the blanket
petition under review, the company has made warranty repair
claims (Sea-Land PERFORMANCE, V-14, Entry No. C16-0007621-5;
Sea-Land NEDLLOYD HUDSON, V-15, Entry No. C16-0007625-6), thus
providing us the opportunity, once again, to comment on the
status enjoyed by foreign shipyard warranties.  In advancing the
warranty claims in the two cited entries, the petitioner places
reliance in the decision rendered in the case of Sea-Land
Service, Inc. v. United States, 683 F. Supp. 1404 (CIT 1988).
As a party to that case, Sea-Land must be charged with knowledge
that the Court found permissible, warranties:

          -    issued for a reasonable period of
               time (limited administratively to
               one year).

          -    issued pursuant to a specific
               agreement in a construction
               contract.

          -    supported by written notification
               of defect from operator to vendor.

          -    and, most critically, issued
               pursuant to a contract for new
               vessel construction.

None of these elements has been demonstrated to exist, or even
mentioned as possibilities in the two cases involving "warranty"
claims and, as such, the claims are without merit.

HOLDING:

     Following thorough review and analysis of the facts, law,
and evidence, it is our determination that the petition for
review must be denied.

                                Sincerely,




                                B. James Fritz
                                Chief
                                Carrier Rulings Branch



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