HQ 112635: Protest No. 2501-92-100077; San Diego, California, Vessel Repair Entry No. 534-1119525-7, dated April 17, 1992; M/V SEA JET I; Voyage 1; Dry dock; Cleaning; Hull Painting; 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 112635

                         August 5, 1993

VES-13-18 CO:R:IT:C  112635 BEW

CATEGORY:  Carriers

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

RE:  Protest No. 2501-92-100077; San Diego, California, Vessel
     Repair Entry No. 534-1119525-7, dated April 17, 1992; M/V
     SEA JET I; Voyage 1; Dry dock; Cleaning; Hull Painting; 19
     U.S.C. 1466

Dear Sir:

     This is in response to a memorandum dated March 16, 1993,
that forwards protest No. 2501-92-100077 concerning vessel repair
entry No. 534-1119525-7, relating to the M/V SEA JET I, Voyage 1. 

FACTS:
          
     The SEA JET I is a U.S.-flag vessel owned by Hawaii Ocean
Transit System.  The record shows that the shipyard work in
question was performed on the subject vessel in Ensenada, Mexico,
on March 13, 1992.  

     The SEA JET I, arrived in San Diego, California, on 
April 9, 1992.  The entry was liquidated on June 19, 1992, and
the protest was timely filed on September 11, 1992. 

     Your office liquidated the entire entry as dutiable because
the nondutiable repairs, namely, the drydocking charges were not
segregated from the dutiable charges.

     The protestant claims that certain charges entered on the
vessel repair entry as "Dry Docking, Cleaning" are for drydocking
the vessel in order to paint the vessel, and as such should not
be considered dutiable.
 ISSUE:

     Whether sufficient evidence is presented to establish that
the subject repairs constitute nondutiable drydocking and
cleaning charges or a dutiable maintenance operation under the
vessel repair statute (19 U.S.C. 1466). 

LAW AND ANALYSIS:

     Title 19, United States Code, section 1466, 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 foreign or
coastwise trade, or vessels intended to engage in such trade.

     In analyzing the dutiability of foreign vessel work, the
Customs Service has consistently held that a cleaning operation
which removes rust and deterioration or worn parts, and which is
a necessary factor in the effective restoration of a vessel to
its former state of preservation, constitutes vessel repairs (See
C.I.E. 429/61).  Insofar as inspection and cleaning operations
are concerned, Customs has long held the cost of 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 (see C.I.E.'s 18/48,
125/48, 910/59, 820/60, 51/61, 429/61, 569/62, 698/62; C.D. 2514;
T.D.'s 45001 and 49531).

      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).

     In the case under consideration, we find that the repair
work associated with item No. (1) on the subject invoice,
cleaning with spot coating, to be maintenance in nature.

     Pursuant to C.I.E. 919/60 remission of duty assessed on the
cost or repairs is not warranted under section 1466 where the
repairs are maintenance in nature.  Accordingly, we find the work
associated with cleaning with spot coating to be dutiable.  

     Pursuant to CD 1836 charges for drydocking, for furnishing
electricity, air and water, fees paid for the use of tugs and
pilots in drydocking and undocking a vessel, staging, and crane
expenses are not dutiable repairs if segregated on the invoice. 

     Pursuant to C.I.E. 1325/58 and C.I.E. 565/55, duties may not
be remitted where the invoice does not segregate the dutiable
costs from the nondutiable costs.  In the subject invoice, the
cost for cleaning operations associated with the dutiable repairs
is not segregated from cost of the nondutiable drydocking.
     
     Accordingly, we find that all costs associated with item No.
(1) dry dock, clean and paint bottom, and item No. (2) paint
under water hull, listed on Industria Naval invoice No. 0871 to
be dutiable.  The protest is denied as to all items of cost.

HOLDING:

     Following a thorough review of the facts and evidence, and
after an analysis of the law and applicable precedent decisions,
the protest is denied as specified in the law and analysis
portion of this decision. 
     

                                     Sincerely,



                                     
                                     Acting Chief