Vessel Repair Entry No. 110-7994460-6; PRESIDENT POLK, V-89;19 U.S.C. 1466; Petition

HQ 114143 October 28, 1997 VES-13-18-RR:IT:EC 114143 GOB CATEGORY: Carriers Port Director of Customs Attn.: Vessel Repair Liquidation Unit, Room 415 P.O. Box 2450 San Francisco, CA 94126 RE: Vessel Repair Entry No. 110-7994460-6; PRESIDENT POLK, V-89; 19 U.S.C. 1466; Petition Dear Madam: This is in response to your memorandum of October 3, 1997, which forwarded the petition submitted on behalf of American President Lines, Ltd. (the "petitioner") with respect to the above-referenced vessel repair entry. FACTS: The evidence of record indicates the following. The PRESIDENT POLK (the "vessel"), a U.S.-flag vessel owned and operated by the petitioner, arrived at the port of Seattle, Washington on March 20, 1997. The subject vessel repair entry was subsequently filed. The vessel underwent certain foreign shipyard work in Kaohsiung, Taiwan. By letter of August 28, 1997, your office granted the application for relief in part and denied the application in part. ISSUE: Whether the costs of certain items are dutiable pursuant to 19 U.S.C. 1466(a). LAW AND ANALYSIS: 19 U.S.C. 1466 provides for the payment of duty at a rate of fifty 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 be employed in such trade. a. In its petition, the petitioner asserts that item No. 4 (tank sounding name plates) is eligible for treatment pursuant to 19 U.S.C. 1466(h)(3). The pertinent purchase order provides: "The tank sounding nameplate holders have failed due to corrosion. Fabricate 12 new nameplate holders using 25mm x 2mm stainless steel material." 19 U.S.C. 1466(h)(3) applies to "the cost of spare parts necessarily installed before the first entry into the United States ..." The petitioner has failed to establish its eligibility for 19 U.S.C. 1466(h)(3) here. We have held previously that steel is a material and is not within the scope of 19 U.S.C. 1466(h)(3). The petitioner has not established that "spare parts" are involved here. b. The petitioner also claims that item No. 11, engine room cleaning, is nondutiable. The pertinent invoice provides as follows: Provided services of cleaner with necessary tools/material transported to attend onboard at APL berth to clean the several machinery spaces and general cleaning of containment and excessive build up of fuel and lub[rication] oil waste include engine room tanktops, and generator room, the foremast plenum chamber and the steering gear containment area as directed. We find that this item is dutiable under 19 U.S.C. 1466 as a restoration and/or maintenance operation. Where there is an excessive build-up of fuel and oil waste, we believe that the remedying of that condition is akin to maintenance and/or restoration of the pertinent area. For example, in Ruling 113730 dated October 30, 1996, we held boiler cleaning to be dutiable as restoration and/or maintenance work where it involved: "Jet blast cleaning to be supplemented with mechanical scaling to remove tenacious slag from superheater tubes." Similarly, in a number of rulings, including Ruling 112444 dated May 22, 1996, we have held that the correction (by cleaning) of a deterioration (i.e., the collection of carbon and oil deposits in air scavenger spaces) to be dutiable as a maintenance operation. HOLDING: As detailed above, the petition is denied. Sincerely, Jerry Laderberg Chief, Entry Procedures and Carriers Branch