HQ 112277: Vessel Repair; Sparrows Point, Maryland, Vessel Repair Entry No. C13-0016089-7; dated February 4, 1991, SS SEMINOLE (formerly MOBILE MERIDIAN); Petition for Relief; Surveys; 19 U.S.C. 1446

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 112277

                          April 9, 1993

VES-13-18-CO:R:IT:C 112277 BEW

CATEGORY:  Carriers

Deputy Assistant Regional Commissioner
Commercial Operations
ATTN:  Regional Vessel Repair Liquidation Unit
New York, New York 10048-0945

RE:  Vessel Repair; Sparrows Point, Maryland, Vessel Repair Entry
     No. C13-0016089-7; dated February 4, 1991, SS SEMINOLE
     (formerly MOBILE MERIDIAN); Petition for Relief; Surveys; 19
     U.S.C. 1446

Dear Sir:

     This is in response to a memorandum that forwards a Petition
for Relief from duties assessed under the provisions of title 19,
United Stated Code, Section 1466, in vessel repair entry No. C13-
0016089-7, relating to the SS SEMINOLE (formerly MOBILE MERIDIAN). 
  
FACTS:

     The record reflects that the SS SEMINOLE is an American-flag
vessel owned by Mobile Oil Corporation that had shipyard work
performed on her in Malaysia Shipyard and Engineering SDN. BHD. in
Malaysia from the period November 2 through December 29, 1990.

     The vessel arrived at the port of Sparrows Point, Maryland,
on January 31, 1990.  Vessel repair entry number C13-001608907 was
filed on February 4, 1991, reflecting the foreign work performed
to the vessel in Malaysia.  

     The SS SEMINOLE was renamed during the yard work.

     In a ruling dated February 3, 1992, 111907 RAH, we ruled that
Items 102, 103 and 105 constituted modifications to the hull and
fittings of the vessel and were thereby nondutiable within the
meaning of 19 U.S. C. 1466.  However, with regard to the American
Bureau of Shipping (ABS) surveys, the ruling held that the
applicant had failed to present sufficient evidence to establish
that items 35 through 38 constitute nondutiable surveys under 19
U.S.C. 1466.
     The petition centers primarily around the ABS surveys.  The
petitioner has submitted both ABS invoices and reports, and
contends that neither the statute nor the regulations require the
submission of ABS or other survey reports.  The petitioner contends
that the requirements in 19 CFR 4.14(d)(1)(iii)(c) relate to
photocopies of reports of the cause of and the type of damage
caused by a casualty, and not to routine periodic surveys. 

ISSUE:

     Whether the applicant has presented sufficient evidence to
establish that items 35 - 38 constitute nondutiable surveys under
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.

     Section 4.14(b)(2), Customs Regulations (19 CFR 4.14(b)(2))
provides, in pertinent part, that entry shall be filed with the
appropriate Customs officer within five working days after the
vessel's arrival.  The subject entry was timely filed.  Pursuant
to section 4.14(d)(1)(ii), Customs Regulations, the application
for relief, with supporting evidence, shall be filed within 60 days
from the date of first arrival of the vessel, unless Customs grants
an extension.  Applications for relief are to be submitted for each
vessel repair entry for which relief is sought.  

     Although an application for relief need not be in any
particular form, pursuant to section 4.14(d)(1)(i), Customs
Regulations, it should allege that an item or a repair expense is
not subject to duty under either paragraph (a) of section 4.14
(items that are not subject to duty) and/or paragraph (c)
(circumstances allowing remission of duty otherwise due).  Section
4.14(d)(1)(iii) provides that unless such evidence is already filed
with Customs, each application for relief shall include duplicate
copies of the following evidence, in addition to any other
documents the applicant wishes to submit in support of the
application:

     (A) All itemized bills, receipts, and invoices covering items
     specified in paragraph (a)(1) of this section, segregating the
     cost of those items for which relief is sought from all other
     items listed in the vessel repair entry.
     It is a well established Customs principle that relief cannot
be granted to a party that has failed to satisfy its obligation
pursuant to 19 C.F.R. 4.14(b)(2)(ii) to provide evidence of cost
of repairs (i.e., invoices) within 60 days after the vessel
arrives. (See Headquarters Decision 109961 KMF).  Although
paragraph (C) of this section of the Regulations relates to ABS
reports performed to determine the seaworthiness of a vessel after
it suffers damages due to a casualty, we equate reports of ABS
surveys relating to periodic and "continuous" or "ongoing" surveys
to invoices that detail the repair work performed on a specific
vessel.  

     Customs has held that where periodic surveys are undertaken
to meet the specific requirements of a classification society,
insurance carrier, etc., the cost of the surveys is not dutiable
even when dutiable repairs are effected as a result thereof;
however, in the liquidation process Customs should go beyond the
mere labels of "continuous" or "ongoing" before deciding whether
the item is dutiable.  If an inspection or survey is conducted as
a part of an ongoing maintenance and repair program labeled
"continuous" or "ongoing" the cost is dutiable.  Also, if the
survey is to ascertain the extent of damage sustained, or to
ascertain if the work is adequately completed, the costs are
dutiable as part of the repairs that are accomplished pursuant to
holdings in C.I.E. 429/61, C.S.D. 79-2, and C.S.D. 79-277.  

     We have thoroughly reviewed the entry documentation and the
additional documents submitted with the petition in this matter. 
It is our conclusion that the repairs that were made to the certain
items were made to replace a current part, fitting or structure
that was not in good working order at the time of the inspection
and repair.  With regard to the American Bureau of Shipping (ABS)
surveys under consideration our findings are as follows:

     Item 35 ABS Invoice No. 1-612-1-0009, the entire amount is
     nondutiable.

     Item 36 ABS Invoice No.1-612-1-0007, the entire amount is
     nondutiable with the exception of the cost for the "port &
     Stbd. boiler survey," and "time outside normal hours."  With
     regard to time outside of normal hours, there is no evidence
     to show whether this time relates to a dutiable or nondutiable
     survey. 

     Item 37 ABS Invoice No. 1-612-1-0008 all items of costs are
     dutiable.

     Item 38 ABS Invoice No. 1-612-0010, the entire amount is
     nondutiable.
 HOLDING:

     Following a thorough review of the LAW AND ANALYSIS of the
evidence, the petition is granted with the exception of the items
enumerated above.  Please refer this matter immediately for
liquidation, and inform the petitioner of the right to file a
protest upon the posting of the bulletin notice of liquidation.
                                     
                                     Sincerely,




                                     Stuart P. Seidel
                                     Director, International Trade
                                     Compliance Division