HQ 110951: Modification; installation of purifier feed pump Vessel: SEA-LAND DEVELOPER V-102 Vessel repair entry no. 514-3003248-5 Protest no. 1001-8-005589

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 110951

                       September 26, 1990


VES-13-18-CO:R:P:C 110951 KVS

CATEGORY:  Carriers

Chief
Residual Liquidation and Protest Branch
6 World Trade Center
New York, NY  10048-0954

RE:  Modification; installation of purifier feed pump
     Vessel:  SEA-LAND DEVELOPER V-102
     Vessel repair entry no. 514-3003248-5
     Protest no. 1001-8-005589

Dear Sir:

     This is in response to your memorandum of March 22, 1990,
which forwards for our consideration protest no. 1001-8-005589,
filed in connection with the Sea-Land DEVELOPER V-102, vessel
repair entry no. 514-3003248-5.  Our findings are set forth
below.

FACTS:

     The Sea-Land DEVELOPER, an American-flag vessel, made two
calls at Rotterdam, Holland.  During the first call, on December
14, 1987, the vessel began shipyard operations involving the
installation of a purifier feed pump.  Following completion of
the first phase of installation on voyage 101, the vessel arrived
in the United States on December 26, 1987 at Elizabeth, New
Jersey.  Formal entry was made on December 30, 1987.

     The installation of the purifier pump was completed during
the second call to Rotterdam, on January 5, 1988.  Soon
thereafter, the vessel arrived at the United States at Elizabeth,
New Jersey, on January 16, 1988.  Formal entry was made on
January 20, 1988 (vessel repair entry no. 514-3003248-5).
Regarding the purifier work completed on voyage 102, the
protestant listed $5,100.00 in column 23 for the Entered U.S.
Cost on the 226 Customs Entry Form.

     Liquidation for the entry for voyage 102, vessel repair
entry no. 514-3003248-5, took place on June 3, 1988.  The
protest under consideration, which was timely filed on June 27,
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1988, seeks relief on the basis that the cost included on the
entry for the second voyage represents a duplication of the cost
declared on voyage 101 (vessel repair entry no. 514-3003218-8).

ISSUE:

     Whether the work performed on the subject vessel is dutiable
pursuant to 19 U.S.C. 1466.

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 engaged,
intended to engage, or documented under the laws of the United
States to engage in the foreign or coastwise trade.

     The protest under consideration seeks relief for duties
levied on the subject vessel repair entry (voyage 102, no. 514-
3003248-5) pursuant to 19 U.S.C. 1466, on the basis that the
entire cost of the installation was included on the entry for a
previous entry (voyage 101, no. 514-3003218-8).

     Examination of that previous entry (no. 514-3003218-8, filed
in connection with voyage 101) discloses that, contrary to the
assertations of the protestant, the cost of the installation was
not included in the dutiable value for that entry.  Instead, in
declaring the installation work, the protestant listed "Pending
Next Voyage" in column 23 for the Entered U.S. Cost on the 226
Customs Entry Form.

     In light of the unambiguous evidence before us, we are
denying the protest.  In addition, we are referring this matter
to the Office of Commercial Fraud Enforcement for investigation
and appropriate action to determine if the assertions of the
protestant were a deliberate attempt to mislead and defraud the
Customs Service in the performance of its official duties.

     Although the protest asserts no other basis for relief other
than the duplicate declaration assertion previously discussed, we
note parenthetically that the invoice included with the protest
includes a handwritten notation that that the purifier feed pump
installation was a "permanent modification."

     In its application of 19 U.S.C. 1466, the Customs Service
has held that modifications/alterations/additions to the hull and
fittings of a vessel are not subject to vessel repair duties.
Customs has held that for an item to be characterized as a
nondutiable modification, it must encompass the installation of
an item as a new design feature, not as a replacement for, or

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restoration of, parts now performing a similar function (Customs
Memorandum 108871 GV (dated 4/16/87)).

     Customs has also held that the decision in each case as to
whether an installation constitutes a nondutiable addition to the
hull and fittings of the vessel depends to a great extent on the
detail and accuracy of the drawings and invoice descriptions of
the actual work performed (Customs Memorandum 108871 (4-16-87)),
citing C.S.D. 83-35.  Even if an article is considered to be part
of the hull and fittings of a vessel, the repair of that article,
or the replacement of a worn part of the hull and fittings, is
subject to vessel repair duties.  See C.I.E. 233/60.

     In the case under consideration, an examination of the Van
Ingen invoice in question (no. 880001/1175410) reveals that the
existing pump assembly was dismantled and replaced by the new
purifier pump and 3 purifier pump by-pass lines.  The invoice
does not describe the work performed in sufficent detail to
determine whether the installation was a new design feature or
merely the replacement or restoration of parts now performing a
similar function.  Furthermore, no blueprints or plans have been
submitted which would indicate that the installation was part of
a new design feature.

     Additionally, we have held that a modification to a
purifier system of a vessel performed to effect a repair, i.e.,
for the purpose of bringing the system up to normal operating
specifications, is dutiable (Customs Letter Ruling 105385 JL
(dated January 25, 1982)).

     Therefore, in the absence of evidence that the installation
of the purifier feed pump is a not a replacement but a
modification, and that the modification was not performed to
bring the system up to normal operating specifications, we find
the cost to be dutiable.  Accordingly, the protest is denied.

HOLDING:

     After thorough review of the evidence presented, and as
detailed in the Law and Analysis portion of this ruling, the
protest is denied.

                                     Sincerely,




                                     Stuart P. Seidel
                                     Director
                                     Regulatory Procedures
                                     and Penalties Division