Vessel Repair Entry No. 110-6461872-8; 19 U.S.C. 1466; PRESIDENT ADAMS, V-077; Petition

HQ 114554 December 4, 1998 VES-13-18-RR:IT:EC 114554 GOB CATEGORY: Carriers Port Director of Customs Attn.: Vessel Repair Liquidation Unit, Room 107 P.O. Box 2450 San Francisco, CA 94126 RE: Vessel Repair Entry No. 110-6461872-8; 19 U.S.C. 1466; PRESIDENT ADAMS, V-077; Petition Dear Madam: This is in response to your memorandum of November 23, 1998, which forwarded the petition submitted by American Ship Management, LLC (the "petitioner") with respect to the above-referenced vessel repair entry. FACTS: The PRESIDENT ADAMS (the "vessel"), a U.S.-flag vessel owned and operated by the petitioner, arrived at the port of Seattle, Washington on March 28, 1996. The subject vessel repair entry was subsequently filed. The vessel underwent certain foreign shipyard work in Korea, Taiwan, Japan, and Hong Kong in February and March of 1996. In Ruling 113678 of October 7, 1998, the application was granted in part and denied in part. ISSUE: Whether the subject items are dutiable pursuant to 19 U.S.C. 1466(a)? LAW AND ANALYSIS: 19 U.S.C. 1466(a) 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. The subject entry is a "post-Texaco" entry, i.e., an entry filed after the appellate decision in Texaco Marine Services, Inc., and Texaco Refining and Marketing, Inc. v. United States, 44 F.d. 1539 (CAF 1994), aff'g 815 F.Supp. 1484 (CIT 1993). Accordingly, the Texaco decision applies to this entry. Our position with respect to post-Texaco entries has been stated in detail in many rulings, as well as in Memorandum 113350 of March 3, 1995, which was published in the Customs Bulletin and Decisions on April 5, 1995 (vol. 29, No. 14, p. 24). General services costs. These items are to be prorated per our oft-stated position. See, for example, Ruling 113474 of October 24 1995, and the many rulings which followed on this issue. Drydock costs. These items are to be prorated per our oft-stated position. See, for example, Ruling 113474 of October 24 1995, and the many rulings which followed on this issue. C.O. #1. Bow thruster service engineer. The invoice indicates that the services of the subject engineer were utilized "to attend the MV President Adams item #302 and 303." Item 302 is nondutiable and item 303 is dutiable. Accordingly, we find that the cost of C.O. #1 may be prorated between the dutiable amount of item 302 and the nondutiable amount of item 303. The petitioner has suggested such a proration. We note, however, that we do not necessarily agree with or understand the arithmetic and the factual underpinning of the petitioner's attempt at proration. Your office is instructed to perform this proration based upon the full amounts of items 302 and 303. C.O. #15. Hotel costs for crew. The petitioner claims that this cost is nondutiable because it is related to C.O. #6, which is nondutiable. The petitioner has provided no documentary evidence in support of this claim, nor is the claim substantiated by the invoices. We find that this item is dutiable. HOLDING: As stated above, the petition is granted in part and denied in part. Sincerely, Jerry Laderberg Chief, Entry Procedures and Carriers Branch