HQ 112682: Vessel Repair; Petition for Relief; ABS Survey; Vessel Repair Entry No. C16-0008571-1 Date of Arrival: September 23, 1992 Port of Arrival: Charleston, South Carolina Vessel: ILE DE FRANCE

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 112682

                          May 13, 1993


VES-13-18-CO:R:IT:C 112682 DEC

CATEGORY: Carriers

Regional Director
Commercial Operations Division
423 Canal Street
New Orleans, Louisiana  70130-2341

RE:  Vessel Repair; Petition for Relief; ABS Survey; 
     Vessel Repair Entry No. C16-0008571-1
     Date of Arrival:  September 23, 1992
     Port of Arrival:  Charleston, South Carolina
     Vessel:  ILE DE FRANCE

Dear Sir:

     This ruling is in response to your memorandum dated April
13, 1993, which forwards for our consideration a petition for
relief from vessel repair duties filed in connection with the
above-referenced vessel.

FACTS:

     The ILE DE FRANCE, an American-flag vessel, underwent an
American Bureau of Shipping ("ABS") inspection of its main engine
bearings while in Rotterdam, The Netherlands, on September 8,
1992.  Upon arrival of the ILE DE FRANCE in the United States, a
vessel repair entry and an application for relief from vessel
repair duties, which was denied, was filed.  


ISSUE:

     Whether the cost of a continuous survey of machinery is
subject to vessel repair duties pursuant to Title 19, United
States Code, section 1466.


LAW AND ANALYSIS:

     Title 19, United States Code, section 1466, provides, in
pertinent part, for payment of an ad valorem duty of fifty
percent on the cost of foreign repairs to a vessel documented
under the laws of the United States to engage in the foreign or
coasting trade, or a vessel intended to be employed in such
trade.
                                -2-

     Certain vessel inspection operations are generally
considered non-dutiable.  Where periodic surveys are undertaken
to meet the specific requirements of a classification society or
insurance carrier, the cost of the surveys is not dutiable even
when dutiable repairs are effected as a result thereof.  C.S.D.
79-277.  However, where an inspection or survey is conducted
merely to ascertain the extent of damages sustained or whether
repairs are deemed necessary, the costs are dutiable as part of
the repairs which are accomplished.  

     Consequently, only the cost of a required scheduled
inspection by a qualifying entity (e.g. U.S. Coast Guard or ABS) 
is non-dutiable.  In the liquidation process, Customs must go
beyond the mere labels of "continuous" or "ongoing" before
deciding whether a part of an ongoing maintenance and repair
program labelled "continuous" or "ongoing" is dutiable.  If an
inspection or survey is conducted as part of an ongoing
maintenance and repair program, the cost is dutiable.  C.S.D. 89-
94.  Additionally, if the survey is undertaken to ascertain the
extent of damage sustained or to verify whether the work is
satisfactorily completed, the costs are dutiable as part of the
repairs which are accomplished.  C.I.E. 429/61 (Apr. 28, 1961).

     Turning to the set of facts before us, we find the
petitioner's claim that the "continuous" survey is non-dutiable
to be problematic.  The fact that a classification society is
involved in the survey does not necessarily render all survey
costs non-dutiable.  Furthermore, the documents submitted
indicate that several "pumps were examined, operationally tested,
relief valves tested as applicable and found or placed in
satisfactory condition . . .."  This description of the operation
is, arguably, more akin to a repair item.  Absent any other
persuasive evidence to the contrary, it appears that the
continuous survey at issue is a part of an ongoing maintenance
and repair program.  Consequently, this petition for relief is
denied.


HOLDING:

     After a thorough review of the evidence submitted, this
petition for relief is denied for the reasons detailed in the Law
and Analysis section of this ruling.  The Petitioner should be
informed of the right to file a Protest following liquidation of
this entry, as evidenced by the posting of the bulletin notice of
liquidation.

                                   Sincerely,




                                   Acting Chief