Vessel Repair Entry No. C15-0019391-2; S.S. ROVER; V-83; U.S.Labor

HQ 114122 October 21, 1997 VES-13-18-RR:IT:EC 114122 GEV CATEGORY: Carriers Chief, Vessel Repair Liquidation Unit U.S. Customs Service 423 Canal Street New Orleans, Louisiana 70130 RE: Vessel Repair Entry No. C15-0019391-2; S.S. ROVER; V-83; U.S. Labor Dear Sir: This is in response to your memorandum dated September 25, 1997, forwarding a petition for review of Headquarters ruling letter 112942 denying an application for relief from duties assessed pursuant to 19 U.S.C.  1466. Our findings are set forth below. FACTS: The S.S. ROVER is a U.S.-flag vessel owned and operated by Central Gulf Lines, Inc. of New Orleans, Louisiana. During the voyage in question, the petitioner states that gaskets from the vessel's Spare Parts Inventory were installed during the course of boiler repairs effected by U.S.-resident labor. The U.S. residents were sent to Bermuda to perform the aforementioned repairs which were continued while the vessel was en route to Germany. The vessel subsequently returned to the United States arriving at Sunny Point, North Carolina, on December 18, 1992. A vessel repair entry was timely filed on December 21, 1992. An application for relief, dated February 9, 1992, was also timely filed. The application provided that the "...basis for claiming relief...is that U.S. labor is remissable under section 4.14(c)(3)(ii) of the Customs Regulations." Pursuant to Customs ruling letter 112942, dated November 29, 1993, the application for relief was denied with respect to the subject U.S.- resident labor "...because the two-pronged test of 19 U.S.C. 1466(d)(2) is not satisfied..." A petition for review of the aforementioned decision was filed by letter dated April 21, 1994. The petitioner contends that "...[s]ection 4.14(c)(3)(ii) clearly provides remission of duty for U.S. labor at a foreign port." In support of their claim, the petitioner has submitted an affidavit from Louisiana Maintenance & Repair Co., Inc. (LAMARCO) certifying that their employees are U.S. citizens (Exhibit A of the petition). - 2 - ISSUE: Whether evidence has been presented sufficient to prove that the U.S.-resident labor for which the petitioner seeks relief is non-dutiable under 19 U.S.C.  1466. LAW AND ANALYSIS: Title 19, United States Code,  1466(a) (19 U.S.C.  1466(a)), provides in pertinent part for the payment of an ad valorem duty of 50 percent of the cost of "...equipments, or any part thereof, including boats, purchased for, or the repair parts or materials to be used, or the expenses of repairs made in a foreign country upon a vessel documented under the laws of the United States..." Section 1466(d)(2) provides, in pertinent part, as follows: (d) If the owner or master of such vessel furnishes good and sufficient evidence that- (2) such equipments or parts thereof or repair parts or materials, were manufactured or produced in the United States, and the labor necessary to install such equipments or to make such repairs was performed by residents of the United States, or by members of the regular crew of such vessel; or ... then the Secretary of the Treasury is authorized to remit or refund such duties...(Emphasis added) The Customs Regulations promulgated pursuant to 19 U.S.C.  1466 are found at 19 CFR  4.14. Section 4.14(c)(3)(ii), cited as the original basis for relief and specifically promulgated pursuant to  1466(d)(2) , provides, in pertinent part, that U.S.-manufactured parts purchased by the vessel owner in the United States and installed with U.S. labor or by members of the vessel's regular crew are subject to remission. With respect to the spare parts to which the petitioner refers, our review of the record reveals that it is devoid of any evidence probative of their origin. In this regard we note that it is Customs position that requests for relief for U.S.-resident labor must be denied absent evidence indicating U.S. manufacture of parts installed by such labor. (See Customs ruling letters 112934 and 113445) - 3 - HOLDING: Evidence has been presented insufficient to prove that the U.S.-resident labor for which the petitioner seeks relief is non-dutiable under 19 U.S.C.  1466. Accordingly, the petition is denied. Sincerely, Jerry Laderberg Chief Entry Procedures and Carriers Branch