Protest No. 2704-99-100977; Vessel Repair Entry No. C27-0158637-5; CHIEF GADAO; V-008B; General Services; Proration; 19 U.S.C. § 1466

HQ 114726 June 24, 1999 VES-13-18-RR:IT:EC 114726 GEV CATEGORY: Carriers Chief, Liquidation Branch U.S. Customs Service Post Office Box 2450 San Francisco, California 94126 RE: Protest No. 2704-99-100977; Vessel Repair Entry No. C27-0158637-5; CHIEF GADAO; V-008B; General Services; Proration; 19 U.S.C. § 1466 Dear Sir: This is in response to your memorandum dated June 3, 1999, forwarding the above-referenced protest. Our ruling is set forth below. FACTS: The CHIEF GADAO is a U.S.-flag vessel owned and operated by Matson Navigation Company. Subsequent to the completion of various foreign shipyard work, the vessel arrived at San Pedro, California, on February 18, 1997. A vessel repair entry was timely filed. An application for relief with supporting documentation was timely filed. The applicant sought relief with respect to numerous items listed within the above-referenced vessel repair entry. Customs rendered its decision on the application for relief granting it in part and denying it in part based on Headquarters ruling letter 114034, dated October 16, 1998. Subsequently, a petition was timely filed. Pursuant to Headquarters ruling letter 114570, dated January 13, 1999, Customs rendered its decision on the aforementioned petition. The subject entry was forwarded for liquidation which took place on February 12, 1999. A protest, dated April 13, 1999, was timely filed. The protest seeks relief for general services (Item nos. 101-119, exclusive of Item no. 114). ISSUE: Whether the general services costs for which the protestant seeks relief are dutiable under 19 U.S.C. § 1466.  - 2 - LAW AND ANALYSIS: Title 19, United States Code, § 1466, 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..." With respect to the general services under consideration, we note that at both the application and petition stages the evidence submitted was insufficient to support the claim that such costs were attributed solely to nondutiable work. No additional evidence has been submitted by the protestant to support its claims with respect to these costs. Furthermore, since the subject entry contained both dutiable and nondutiable costs, the general services at issue were prorated pursuant to Customs ruling letter 113474 and memorandum 113350 both of which addressed Customs implementation of the decision of the U.S. Court of Appeals for the Federal Circuit in Texaco Marine Services, Inc., and Texaco Refining and Marketing, Inc. v. United States, 44 F.3d 1539 (CAFC 1994). Notwithstanding the protestant’s assertions to the contrary, we maintain that the general services in question (Item nos. 101-119, exclusive of Item no. 114) were correctly prorated in accordance with the above-cited authority in view of the absence of evidence substantiating a finding that these costs were attributed solely to nondutiable work. HOLDING: As detailed above, the protest is denied. In accordance with § 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.ustreas.gov, by means of the Freedom of Information Act, and other methods of public distribution. Sincerely, Sandra L. Bell Director International Trade Compliance Division