# HQ 116482

# July 19, 2005

VES-13-18:RR:IT:EC 116482 TLS

CATEGORY: Carriers

Chief, Vessel Repair Unit

U.S. Customs and Border Protection

423 Canal Street

New Orleans, Louisiana 70130

RE: Vessel Repair Entry No. C20-0060829-2; M/V MANOA; V-057; Protest No.
2002-02-101139; 19 U.S.C. § 1466

Dear Sir:

This is in response to your memorandum of June 6, 2005. The memorandum
forwards an application for further review of a protest, filed by Matson
Navigation Company, Inc. ("Matson"), seeking relief for duties assessed
pursuant to 19 U.S.C. § 1466. Our ruling follows.

FACTS:

The M/V MANOA (the "vessel"), a U.S.-flag vessel owned by the
protestant, incurred foreign shipyard costs. The vessel arrived in the
port of Los Angeles on December 3, 2001. A vessel repair entry was
timely filed. Matson filed its application for relief from duties on the
entry. Upon review of the filing, the Vessel Repair Unit (VRU)
determined that Matson must be denied relief because the application for
relief was untimely, and notified Matson of this decision via a letter
dated August 30, 2002. Matson filed the subject application for further
review, which was received by the VRU on November 27, 2002. Of the
amount of duties assessed on the entry, \$25,065.67 is the subject of
this protest. Matson has also filed a supplement to the protest, dated
May 6, 2005.

The protest pertains to duty charged on all repair items used by the
regular crew of the vessel during the voyage. The VRU not finalize the
protest, as well as other similar Matson protests and vessel repair
entries involving spare parts used by the vessel's crew, pending the
passage of the "Miscellaneous Trade and Technical Corrections Act of
2004" (Public Law No. 108-429).

ISSUE:

Whether the costs for which the protestant seeks relief are dutiable
under 19 U.S.C. § 1466.

LAW AND ANALYSIS:

Initially, we note that the information in the file indicates that the
protest, with application for further review, was timely filed under the
statutory and regulatory provisions for protests. 19 U.S.C. § 1514(c)(3)
and 19 CFR 174.12(e). We further note that counsel for the protestant
filed a supplemental submission dated May 6, 2005 with the VRU, pursuant
to section 1554 of the "Miscellaneous Trade and Technical Corrections
Act of 2004."

Title 19, United States Code, section 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 . . . "

Pursuant to 19 U.S.C. § 1466(h)(2), if, upon entry, duty has been paid
on the cost of spare repair parts or materials (other than net or
nettings) which the owner or master of the vessel certifies are intended
for use aboard a United States-flagged vessel engaged in foreign or
coasting trade, for installation or use on such vessel, the duty imposed
by pursuant to 19 U.S.C. § 1466(a) shall not apply.

Section 1554 of the Miscellaneous Trade and Technical Corrections Act of
2004, signed by the President on December 3, 2004, amended the vessel
repair statute by adding the following exemption to section 1466(a)
found in 19 U.S.C. § 1466(h):

\(4\) the cost of equipment, repair parts, and materials that are
installed on a vessel documented under the laws of the United States and
engaged in the foreign or coasting trade, if the installation is done by
members of the regular crew of such vessel while the vessel is on the
high seas.

Declaration and entry shall not be required with respect to the
installation, equipment, parts, and materials described in paragraph
(4).

This newly enacted legislation further provides for a retroactive
effective date for that equipment, repair parts, and materials installed
on or after April 25, 2001.

As noted above, the subject protest was received by the VRU on November
27, 2002, and counsel for the protestant filed a supplemental submission
dated May 6, 2005. You have asked us to review the items described
below. We will use the exhibit numbers used in the supplemental
submission. The protestant seeks relief pursuant to 19 U.S.C. §
1466(h)(2) with respect to these items.

With regard to the protestant's submission, you note that Exhibits 3, 5,
7, and 8, from the supplemental submission are those items for which our
review is sought. We note that the invoice and purchase order for
Exhibit 3 are dated March 8, 2002 and March 12, 2002, respectively. The
invoice and purchase order for Exhibit 5 are dated January 9, 2002 and
December 5, 2001, respectively. The invoice and purchase order for
Exhibit 7 are dated October 30, 2001 and October 29, 2001, respectively.
The purchase order for Exhibit 8 is dated May 2, 2001; the protestant
has not submitted a corresponding invoice in this instance. We note that
the invoice and/or purchase order for Exhibits 3 and 5 are dated
[after]{.underline} the vessel's arrival date of December 3, 2001.

An invoice or purchase order dated after the date of arrival of a vessel
is not probative evidence with respect to a claim that an item listed
thereon is eligible for an exemption from any provision of 19 U.S.C. §
1466 with regard to the subject voyage. Accordingly, the protestant's
claim with respect to Exhibits 3 and 5 is unsubstantiated. Therefore, we
find the particular items at issue that are the subject of Exhibits 3
and 5 to be dutiable.

The invoice for Exhibit 7 indicates that 10 "circuit breaker\[s\]
non-auto," were purchased on October 30, 2001, and the purchase order,
indicating that 10 circuit breakers were purchased, is dated October 29,
2001. These items are of the type that would be used to replace or
repair existing equipment. The protestant, however, is requesting relief
from duties on a quantity of 24 circuit breakers, as noted on page two
of the supplemental submission. Inasmuch as the protestant has submitted
evidence of costs on only 10 circuit breakers, relief is granted only on
that amount. The claim for relief on the remaining 14 circuit breakers
is therefore denied.

The purchase order for Exhibit 8 indicates that 30 "interior for
receptacle, Midland-Ross DWGNO, f28595, item 14A" were purchased on May
2, 2001. This is the amount from which the protestant is claiming
relief. This item is further described as "a refrigeration part that is
used on the electrical system. It is the inside of the female receptacle
minus the outer casing." The protestant has not submitted a
corresponding invoice for this item. Absent any other documentation, the
purchase order submitted alone is insufficient to grant relief. [See,
e.g.]{.underline}, U.S. Customs and Border Protection (CBP) Ruling HQ
111309 (March 5, 1991). Consequently, this item is also dutiable.

HOLDING:

Following a thorough analysis of the facts as well as of the law and
applicable precedents, we have determined that the protest with respect
to the

items considered above should be partially granted and partially denied
as specified in the Law and Analysis portion of this ruling.

In accordance with the Protest/Petition Processing Handbook (CIS HB,
January 2002, pp. 18 and 21), 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 of the decision.
Sixty days from the date of the decision the Office of Regulations and
Rulings will make the decision available to CBP personnel, and to the
public on the CBP Home Page on the World Wide Web at

www.cbp.gov, by means of the Freedom of Information Act, and other
methods of public distribution.

Sincerely,

Glen E. Vereb

Chief

Entry Procedures and Carriers Branch