Vessel Repair Entry No. 110-7995853-1; APL KOREA; V-30E; Staging; Parts; 19 U.S.C. § 1466

HQ 114751 August 20, 1999 VES-13-18-RR:IT:EC 114751 GEV CATEGORY: Carriers Chief, Liquidation Branch U.S. Customs Service Post Office Box 2450 San Francisco, California 94126 RE: Vessel Repair Entry No. 110-7995853-1; APL KOREA; V-30E; Staging; Parts; 19 U.S.C. § 1466 Dear Sir: This is in response to your memorandum dated June 28, 1999, forwarding the above-referenced petition for review. Our ruling is set forth below. FACTS: The APL KOREA is a U.S.-flag vessel operated by American Ship Management, LLC. Subsequent to the completion of various foreign work, the vessel arrived at Seattle, Washington, on February 12, 1999. 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 pursuant to your letter of May 17, 1998. Subsequently, a petition for review was timely filed seeking relief with respect to Invoice No. 1, item 3, and Invoice No. 5, item 1. ISSUE: Whether the costs for which the petitioner 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 Invoice No. 1, item 3, we note that its exact wording is as follows: Provided supervision, labour, tools and equipment and transportation to erect hanging staging onboard of subject vessel in engine room at PSA, for your men to carry out repair works. Upon completion, dismantle and remove same from sites. The petitioner contends that this particular item is non-dutiable since it involved only the furnishing of staging for repairs done by the vessel’s crew. As such, the petitioner claims that this cost “was not associated with any dutiable repair whatsoever.” In regard to repairs done by the crew of a U.S.-flag vessel, we note that 19 U.S.C. § 1466(a) provides, in pertinent part, that, “...compensation paid to members of the regular crew of such vessel in connection with the installation of any such equipments or any part thereof, or the making of repairs, in a foreign country, shall not be included in the cost of such equipment or part thereof, or of such repairs.” (Emphasis added) Accordingly, only the cost of crew labor is non-dutiable under the vessel repair statute. Those parts, materials and/or equipment used and/or installed during the course of repairs done by crew labor are not exempt from the assessment of duty under the statute solely by virtue of their having been installed/used by the vessel’s crew. Furthermore, with regard to the repairs at issue, not only is the record devoid of any evidence as to what specific repairs were effected by the claimed crew labor, it also lacks evidence probative of the fact that any parts, materials and/or equipment used and/or installed under Invoice No. 1, item 3, are non-dutiable. Consequently, it is not readily apparent that the subject staging was unrelated to dutiable costs. Customs will not grant relief in the absence of segregation showing what is dutiable and what is not. (C.I.E.s 565/55, 1325/58 and C.D. 1836) Invoice No. 1, item 3, therefore remains dutiable. In regard to Invoice No. 5, item 1 (handles with screws for the scullery doors), the petitioner claims that the articles in question are classifiable under subheading 9818.00.05, HTSUS (19 U.S.C. § 1466(h)(3)). We have reviewed the record and concur. Consequently, the petitioner’s claim with respect to Invoice No. 5, item 1, is granted.  - 3 - HOLDING: As detailed above, the petition is granted in part and denied in part. Sincerely, Jerry Laderberg Chief Entry Procedures and Carriers Branch