HQ 110741: Newark Vessel Repair Entry No. 514-3003356-6 dated December 8, 1988; S.S. EXPORT FREEDOM, Voyage No. 140. Application; drydocking; modifications; casualty; "departed a Port"; "passed upon the seas"; inspection and cleaning; surveys; owner-supplied spare parts; Customs and Trade Act of 1990; P.L. 101-382; 19 U.S.C. 1466; 19 U.S.C. 1466(h); 19 CFR 4.14

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                            HQ 110741

                        December 3, 1990


VES-13-18 CO:R:P:C  110741 BEW

CATEGORY:  Carriers

Deputy Assistant Regional Commissioner
Commercial Operations
ATTN:  Regional Vessel Repair Liquidation Unit
New York, New York 10048-0945

RE:  Newark Vessel Repair Entry No. 514-3003356-6 dated
     December 8, 1988; S.S. EXPORT FREEDOM, Voyage No. 140.
     Application; drydocking; modifications; casualty; "departed
     a Port"; "passed upon the seas"; inspection and cleaning;
     surveys; owner-supplied spare parts; Customs and Trade Act
     of 1990; P.L. 101-382; 19 U.S.C. 1466; 19 U.S.C. 1466(h); 19
     CFR 4.14

Dear Sir:

     This is in reference to a memorandum from your office which
transmitted an application for relief from duties filed by
Farrell Lines, Inc., relating to vessel repair entry No. 514-
3003356-6 concerning foreign repairs performed on the S.S. EXPORT
FREEDOM, voyage 140.

FACTS:

     The record shows that the shipyard work in question was
performed on the subject vessel in Kobe, Japan, during the month
of April 1988.  The subject vessel arrived in the United States
at the port of Newark, New Jersey, on May 8, 1988.

     The entire vessel repair entry involves a potential duty of
$500,000.

     The applicant claims that relief for the subject items
should be granted because the items should be classified as
nondutiable items covered under title 19, United States Code,
section 1466 and section 4.14 of the Customs Regulations.

     The applicant claims that certain repairs and equipment
purchases described in the documents were necessitated by a
casualty, i.e., damage sustained to the vessel due to the
striking of the dock at the port in Norfolk, Virginia.  It
claims that the vessel was compelled, because of damage, to
make repairs and to purchase such equipment to secure the
safety and seaworthiness of the vessel to enable it to reach
its port of destination.
     You have requested our advice concerning the following
repairs which relate to general services, general repairs,
modifications and improvements, repairs due to casualty and
owner-supplied parts and materials.

     Part I General Services, Drydocking, Inspection and Surveys
     Account

          Item 1   General Services
               Sub-item (m) Gas free certificate
          Item 7   Sea Valves
          Item 9   Anchor chains
          Item 21  Boiler valves
          Item 27  Main air compressor
          Item 33  L.O. service pump and motor
          Item 34  Steering engines
          Item 48  General cleaning
          Item 64  Main circulator motor
          Item 70  Deep tank cleaning

     Part II Major modifications and Improvements

          Item 75  Hatch Dog Modification
          Item 76  Ballast Tank Coating

     Part III Repairs Account

          Item  83 $99.00 faulty USA parts
          Item 100 $26.00 Transportation and cleaning
          Item 101 $12.00 Transportation and cleaning
          Item 102 $15.00 Transportation and cleaning

     Part IV Casualty Damages

     Part V  Electrocatalytic Ltd. Invoice No. 2668

     Part VI Rom Yam Ltd. Invoice No. 0772

     Part VII Alhoutyam Ltd. Invoice No.13980

     Part VIII Rom Yam Ltd. Invoice No. 0745

     Part IX Vessel Supplied Materials and Other Documentary
     Evidence

          Item 1  Coatings and solvents
          Item 2  Line shaft bearing - purchase of oil
          Item 3  Main turbines - rubber joints
          Item 4  Boiler mounts
          Item 5  Main condenser - zinc plates
          Item 6  Main air compressor
          Item 7  Main air ejector - butterfly valves
          Item 8  L.O. Service pumps - bearings
          Item 9  Steering engines
          Item 10 Fuel oil service pump
          Item 11 Boiler cleaning - gaskets
          Item 13 Port and Starboard boiler retubing
          Item 14 Main circulator pump
          Item 15 Main engine H.P. bleed line
          Item 16 After peak tanks
          Item 17 General Service pump suction
          Item 18 Misc. Deck Repairs
          Item 19 Back pressure relief valve
          Item 20 Gland seal regulator
          Item 21 Main steam line gaskets
          Item 22 Aux. condensate pump controller - repair kit
          Item 23 Bow thruster
          Item 24 Main circulator pump controller - switch and
                  fuse kit
          Item 25 Windlass controller - contractor kit

     Part X ABS Survey

ISSUE:

     Whether the foreign work performed on the subject vessel is
dutiable under 19 U.S.C. 1466.

LAW AND ANALYSIS:

     Title 19, United States Code, section 1466, provides in
pertinent part for payment of duty in the amount of 50 percent
ad valorem on the cost of foreign repairs to vessels documented
under the laws of the United States to engage in the foreign or
coastwise trade, or vessels intended to engage in such trade.
Section 1466(d)(1) provides for remission of the above duties in
those instances where good and sufficient evidence is furnished
to show that foreign repairs were compelled by "stress of weather
or other casualty" necessary to secure the safety and
seaworthiness of the vessel to enable her to reach her port of
destination.

     The term "casualty", as it is used in the vessel repair
statute (19 U.S.C. 1466) has been interpreted by the Customs
Court as something which, like stress of weather, comes with
unexpected force or violence, such as a fire, explosion, or
collision (see Dollar Steamship Lines, Inc., v. United States,
5 Cust. Ct. 28-29, C.D. 362 (1940)).  It should be noted that
absent specific evidence to the contrary, we consider foreign
repairs to have been necessitated by normal wear and tear, a
result which does not permit remission (see C.S.D. 79-32).
     In its application of section 1466, Customs has held that
modifications/alterations/additions to the hull and fittings of
a vessel are not subject to vessel repair duties.  A leading
case in the interpretation and application of section 1466 is
United States v. Admiral Oriental Line et al., T.D. 44359 (1930)
where the court considered the issue of whether steel swimming
tanks installed on a U.S.-flag vessel in a foreign port
constituted equipment or repairs within the meaning of section
1466.  In holding that the installation of these tanks did not
constitute either equipment or repairs and therefore was not
dutiable, the court in Admiral Oriental cited earlier court
decisions which define equipment, promulgations by the Board of
Naval Construction, and regulations of the Treasury Department,
as well as opinions of the Attorney General.

     Accordingly, for purposes of section 1466, dutiable
equipment has been defined as:

          ...portable articles necessary or appropriate
          for the navigation, operation, or maintenance
          of a vessel, but not permanently incorporated
          in or permanently attached to its hull or
          propelling machinery, and not constituting
          consumable supplies.  Admiral Oriental,
          supra. (quoting T.D. 34150 (1914))

     By defining what articles are considered to be equipment,
the authority cited above formulated criteria which distinguish
those items deemed to be modifications/alterations/additions to
the hull and fittings and therefore not dutiable under section
1466.  These items include:

          ...those applications which are permanently
          attached to the vessel, and which would
          remain on board were the vessel to be laid up
          for a long period...Admiral Oriental, supra.
          (quoting 27 Op. Atty. Gen. 228)

Furthermore, the court in Otte v. United States, T.D. 36489
(1916), stated that before an item can be regarded as part of a
vessel, it must be "essential to the successful operation" of the
vessel.

     Section 4.14(b)(2), Customs Regulations (19 CFR 4.14(b)(2))
provides, in pertinent part, that entry shall be filed with the
appropriate Customs officer within five working days after the
vessel's arrival.  Although the original entry, dated August 4,
1988, appeared to be timely filed, it nonetheless was incomplete

(i.e., not all foreign work was declared).  Notwithstanding the
intervening meetings and correspondence (including the additional
45-day time period the New York VRLU apparently permitted to
obtain single entry bonds), the Customs Regulations make no
provision for "amended" entries.

     Furthermore, pursuant to section 4.14(d)(1)(ii), Customs
Regulations, the application for relief, with supporting
evidence, shall be filed within 60 days from the date of first
arrival of the vessel, unless Customs grants an extension.
Applications for relief are to be submitted for each vessel
repair entry for which relief is sought.  The application under
consideration was filed more than three months from the date of
first arrival of the S.S. EXPORT FREEDOM.  Furthermore, it was
incomplete inasmuch as subsequent documentation submitted
indicated various items not declared for which relief was sought.

     Although an application for relief need not be in any
particular form, pursuant to section 4.14(d)(1)(i), Customs
Regulations, it should allege that an item or a repair expense is
not subject to duty under either paragraph (a) of section 4.14
(items that are not subject to duty) and/or paragraph (c)
(circumstances allowing remission of duty otherwise due).  The
applicant should be informed that absent Customs authorized
extensions of time, failure to submit a timely application for
relief and supporting documentation for each individual entry for
which relief is sought will result in the entry being forwarded
for immediate liquidation.

     The applicant should be informed for future reference that
in light of the Court's holding in Penrod Drilling Co. v. United
States, (Slip Op. 89-168, dated December 13, 1989) anything less
than strict adherence to the time requirements set forth in
section 4.14 will result in the issuance of penalties for
untimely filing.  In view of the apparent assurances/extensions
of time given by officials of the New York VRLU during
correspondence, we recommend no penalty action be taken
regarding this particular entry.  Notwithstanding the procedural
deficiencies noted above, our determinations regarding the
dutiable status of the work included on the subject entry are
set forth below.

     The applicant contends that repairs to the starboard side
shell plating were necessitated as a result of a "casualty"
occurrence and therefore the cost of such repairs should be
remitted pursuant to section 1466(d)(1).  Upon reviewing the ABS
report No. MT 1545, dated April 10, 1988, we note damage was
sustained on November 21, 1987, while the vessel was berthing in
loaded condition at pier No. 2 at Norfolk International Terminal,
Norfolk, Virginia.

     In regard to the above statement, we note that pursuant to
Customs ruling VES-13-18-R:CD:C 102707 BJF, dated July 19, 1977,
"...for the purpose of 19 U.S.C. 1466, a voyage begins when a
ship, having departed a port, is passing upon the seas to another
port or to several ports."  This holding is premised upon
judicial precedent in conjunction with the general interpretation
of section 3114, Revised Statutes (19 U.S.C. 1466(a) that "the
section is to be construed so as to give as much protection as
possible against the competition of foreign labor." (see 33 Op.
Atty. Gen. 432)

     Accordingly, it is apparent that the subject vessel had not
yet "departed a port" or "passed upon the seas" when vessel came
in contact with pier No. 2 at Norfolk.  Therefore, the vessel
was not "compelled, by stress of weather or other casualty, to
put into such foreign port" for repairs pursuant to section
1466(d)(1) and relief thereunder is not warranted as to Part IV
Accordingly, the cost associated with Part IV - Damage Account is
dutiable, except transportation, staging, and temporary lighting.

     Pursuant to CD 1836 charges for drydocking, for furnishing
electricity, air and water, fees paid for the use of tugs and
pilots in drydocking and undocking a vessel, and crane expenses
are not dutiable repairs if segregated on the invoice.

     The subject vessel underwent various work performed while
in drydock in Malta.  This work is listed on Malta Drydocks
Invoice No. 8070.  Upon reviewing this invoice it is apparent
that the work listed under the headings "Part I General Services,
Drydocking, Inspection and Surveys Account" on pages 1, 2, and
part of 3 constitute nondutiable drydocking expenses (with the
exception of expenses for a gas free certificate which should be
apportioned between dutiable and nondutiable work pursuant to
C.I.E.'s 1188/60 and 429/61.

     During the course of the drydocking operations which took
place, the applicant claims that two major modifications to the
vessel were under taken.  The vessel's Nos. 2, 3, and 4 port and
starboard double bottom ballast tanks were grit blasted and
coated with preservatives, and revised hatch dog securing
arrangements were installed.

     The documentation presented regarding the above hatch dog
arrangement substantiates the applicant's claim that this work
constituted a modification.  Accordingly, the repair cost
associated with the work done in Item 76 - Hatch Dog
Modifications is nondutiable.

     The documentation presented regarding the double bottom
ballast tanks reveals that the tanks were blasted and painted
with protective coatings.  Painting and protective coatings are
dutiable as the work performed on the subject items was in the
nature of maintenance to keep or preserve the tanks in good
condition.  Duty assessed on the cost of repairs which are
maintenance in nature may not be remitted (see C.I.E. 1537/60).
The cost associated with item 77 Ballast Tank Coating is
dutiable.

     Cleaning operations which remove rust and deterioration or
worn parts, and which are a necessary factor in the effective
restoration of a vessel to its former state of preservation,
constitute vessel repairs (See C.I.E. 429/61).  Insofar as
inspection and cleaning operations are concerned, Customs has
long held the cost of cleaning is not dutiable unless it is
performed as part of, in preparation for, or in conjunction with
dutiable repairs or is an integral part of the overall
maintenance of the vessel; see C.I.E.'s 18/48, 125/48, 910/59,
820/60, 51/61, 429/61; 569/62, 698/62; C.D. 2514; T.D.'s 45001
and 49531.  Pursuant to C.I.E. 919/60 remission of duty assessed
on the cost or repairs is not warranted under section 1466 where
the repairs are maintenance in nature.

     With regard to the remaining items on Malta Invoice No.
8070, on part of page 3, and pages 4-19, our review reveals that
cleaning and inspections were done on several items listed in the
subject invoice, and cleaning and inspections in preparation for
repairs were done on several other items.  According we find the
following items to be non-dutiable inspection and cleaning
operations:

          Item 48  General cleaning

          Item 70  Deep tank cleaning

     With regard to the following items, except for staging,
crane and transportation charges, the cleaning operations
performed in these items constitute dutiable repairs:

          Item 7   Sea Valves

          Item 9   Anchor chains

          Item 21  Boiler valves

          Item 33  L.O. service pump and motor

          Item 27  Main air compressor

          Item 34  Steering engines - Labor to install of U.S.
          parts (See Cunningham Marine Hydraulics Co. Inc.
          Invoice No. 065770 and our explanation on pages 8 and 9
          of this ruling.)

          Item 64  Main circulator motor

     Pursuant to the Customs and Trade Act of 1990 (Pub. L. 101-
382) which amends 19 U.S.C. 1466, the cost of foreign-made parts
imported into the United States for consumption and then
installed on U.S. vessels abroad is exempt from duty.   This
amendment adds a new subsection (h), which reads as follows:

          (h) The duty imposed by subsection (a) of this section
          shall not apply to--

               (1) the cost of any equipment, or any
               part of equipment, purchased for, or the
               repair parts or materials to be used, or
               the expense of repairs made in a foreign
               country with respect to, LASH (Lighter
               Aboard Ship) barges documented under the
               laws of the United States and utilized
               as cargo containers, or

               (2) the cost of spare repair parts or
               materials (other than nets or netting)
               which the owner or master of the vessel
               certifies are intended for use aboard a
               cargo vessel, documented under the laws
               of the United States and engaged in the
               foreign or coasting trade, for
               installation or use on such vessel, as
               needed, in the United States, at sea, or
               in a foreign country, but only if duty
               is paid under appropriate commodity
               classifications of the Harmonized Tariff
               Schedule of the United States upon first
               entry into the United States of each
               such spare part purchased in, or
               imported from, a foreign country.

The cost of foreign labor, however, required for the
installation of such parts is dutiable.  Uniform treatment will
be accorded to parts sent from the United States for use in
vessel repairs abroad, regardless of whether they are proven to
be produced in the U.S., or proven to have been imported and
entered for consumption with duty paid.  In both cases, the cost

of the materials is duty exempt and only the cost of foreign
labor necessary to install them is subject to duty.  Crew member
or U.S. resident labor continues to be free of duty when
warranted.

     The effective date of this amendment makes this section
applicable to any entry made before the date of enactment of this
Act that is not liquidated on the date of enactment of this Act,
and any entry made--

               (A) on or after the date of enactment of this
                   Act, and
               (B) on or before December 31, 1992.

     Since the subject entry has not been liquidated, the new
section 1466(h) is applicable to this entry as it relates to
spare parts.

     Customs has not yet formulated a position on whether the
duty exclusion stated in the new subsection (h)(2) which is
applicable to "... spare repair parts or materials..." should be
read to include the cost of vessel equipment; however, it is
probable that duty will continue to be assesed on "equipment" as
opposed to "parts".

     The certification required by 19 U.S.C. 1466(h)(2) as to the
vessel's documentation (foreign or coasting trades) and service,
will be made by the master on the vessel repair entry (CF 226)
at the time of arrival.  The fact of payment of duty under the
Harmonized Tariff Schedules of the United States (HTSUS) for a
particular part will take the form of a positive statement which
must identify the port of entry and the consumption entry number
for each part installed on the ship which has not previously been
entered on a CF 226.  This evidence of proof of importation and
payment of duty must be presented in order to escape duty and any
other applicable consequences.

     In addition, there must be a certification on the CF 226 or
an accompanying document by a person with direct knowledge of the
fact that an article was imported for the purpose of either an
immediate or specific future installation on a company vessel.

     After a complete review of the certification and
documentation submitted with this entry, we find the evidence
insufficient to substantiate the fact of payment of duty under
the HTSUS for foreign parts imported into the United States for
consumption and then installed abroad.  With regard to the U.S.
parts produced or manufactured in the U.S., only the cost of the
labor is dutiable, provided that the evidence verifies not only
U.S. purchase, but U.S. origin of that part.  Accordingly, the
repair cost associated with Item 83 - Main Circulator Pump
Repairs on Malta Invoice No. 8070 is dutiable, except
transportation and crane service.

     Transportation cost associated with foreign repairs are non-
dutiable expenses; however, pursuant to C.I.E. 1325/58 and
C.I.E. 565/55, duties may not be remitted where the invoice does
not segregate the dutiable cost from the non-dutiable cost.
Accordingly, the cost associated with following items on Malta
invoice No. 8070 are dutiable:

     Item No. 100 - No. 2. Hatch Vent Cover
     Item No. 101 Bilge Suction Line
     Item No. 102 - No. 9 D.B. Sounding Lines

     With regard to the remaining items on Malta Invoice 8070,
all items are dutiable, except for transportation, crane service
and staging.

     Farrell Lines has submitted documentation in which it is
stated that certain items were owned-supplied items furnished to
Malta Drydocks.  It claims that these items total $71,095.50.

     Section 1466(d)(2), provides that the Secretary of the
Treasury is authorized to remit or refund such vessel repair
duties if the owner or master provides good and sufficient
evidence that the repair parts or materials were manufactured or
produced in the United States and the labor necessary to make
these repairs was performed by residents of the United States, or
by members of the regular crew of the vessel.  (emphasis added)

     Pursuant to C.I.E. 1257/60, "The fact that repair material
used in accomplishing repairs is of United States manufacture is
irrelevant unless the work is performed by residents of the
United States or by regular members of the crew of the vessel
within the contemplation of 3115(2), Revised Statutes." (R.S.
3115(2) now appears as 19 U.S.C. 1466(d)(2)).

     The record shows that foreign labor was used to install the
owner-supplied parts shown on the invoices listed above.  The
cost of foreign-labor required for the installation of all parts
that are installed aboard, irrespective of origin, is dutiable.
Uniform treatment will be accorded to parts sent from the United
States for use in vessel repairs abroad.  The cost of the
materials is duty exempt and only the cost of foreign labor
necessary to install such parts is subject to duty.  Crew member
or U.S.-resident labor continues to be free of duty when
warranted.  Accordingly, we find the cost of the materials listed
on the following invoice to be exempt from duty:

          Item 1  Coatings and solvents - International Paint Co.
          Invoice No. 663002

          Item 2  Line shaft bearing - purchase of oil - Exxon
          Co. Invoice 251337

          Item 4  Boiler mounts - Eastern Industrial Supply Corp.
          Invoice No. 70497

          Item 5  Main condenser - zinc plates - Eastern
          Industrial Supply Corp. Invoice No. 72772

          Item 6  Main air compressor - Argo International
          Invoice No. 5207493

          Item 7  Main air ejector - butterfly valves Eastern
          Industrial Supply Corp. Invoice No. 73547

          Item 8  L.O. Service pumps - bearings - Frank Tracey
          Invoice No. 195345

          Item 10 Fuel oil service pump - Kerney Marine and
          Industrial Services, Inc. Invoice No. 2312

          Item 11 Boiler cleaning - gaskets -  All Reliable
          Marine Boiler Repairs, Inc. invoice

          Item 13 Port and Starboard boiler retubing - Murray
          Tube Invoice No. 1886 and Bay Refractory Company, Inc.
          Invoice No. 116-87

          Item 14 Main circulator pump S.C. Engineering Co.
          Invoice No. 7785 and Argo Invoice No. 526214

          Item 15 Main engine H.P. bleed line Brady Marine
          Invoice No. 15268

          Item 16 After peak tanks - International Paint Co.
          Invoice No. 66302

          Item 17 General Service pump suction H.S. White Co.
          Invoice No. 020176

          Item 19 Back pressure relief valve - Eastern Industrial
          Invoice No. 14189

          Item 23 Bow thruster - Argo International invoice No.
          52592 and 526478

          Item 24 Main circulator pump controller - switch and
          fuse kit Madison Contractor Invoice No. 32332.

     With regard to the following items, there is no evidence
submitted to show whether these items were purchased in the
United States and/or used aboard on the subject vessel:

          Item 3  Main turbines - rubber joints -

          Item 9  Steering engines - Cunningham Marine Hydraulics
          Co. Inc. Invoice No. 085770 - This invoice indicates
          that worked was performed on the item after the vessel
          had entered the U.S. port.

          Item 18 Misc. Deck Repairs

          Item 20 Gland seal regulator

          Item 21 Main steam line gaskets- Eastern Industrial
          Invoice No. 14189 - Invoice dated after vessel arrived
          and unlike other invoices of the same company, there is
          no notation that these items were shipped aboard.

          Item 22 Aux. condensate pump controller - repair kit -
          Brown Ross Invoice No. 72510 - invoice indicates that
          the items listed were shipped on November 29, 1988,
          subsequent to the vessel's arrival in the U.S. port.

          Item 25 Windlass controller - contractor kit - Brown
          and Ross Invoice No. 74461 - the date of the invoice
          shows that the item was shipped after the vessel
          entered the U.S. port.

     The entry also includes American Bureau of Shipping (ABS)
report Nos. MT1528, MT1528X, MT1529, MT1545 and MT1547 covering
various surveys.  Customs has held that where periodic surveys
are undertaken to meet the specific requirements of a
classification society, insurance carrier, etc., the cost of the
surveys is not dutiable even when dutiable repairs are effected
as a result thereof; however, in the liquidation process Customs
should go beyond the mere labels of "continuous" or "ongoing"
before deciding whether the item is dutiable.  If an inspection
or survey is conducted as a part of an ongoing maintenance and
repair program labelled "continuous" or "ongoing" the cost is
dutiable.  Also, if the survey is to ascertain the extent of
damage sustained, or to ascertain if the work is adequately
completed, the costs are dutiable as part of the repairs which
are accomplished pursuant to holdings in C.I.E. 429/61, C.S.D.
79-2, and C.S.D. 79-277.

     With regard to the surveys under consideration our findings
as to the items listed on ABS Invoice No. 800734 is as follows:

          ABS Report MT1545 - the entire amount is dutiable,

          ABS Reports MT1528, MT1528X and MT1547 - the entire
          amounts are nondutiable, and

          ABS Report MT1527 - the entire amount is nondutiable
          with the exception of the cost for "completion of
          periodical survey of hull No. 3", "repairs and
          modification of cargo holds hatch covers", repairs to
          buttweld on starboard box girder", "hull repairs",
          "completion of special periodical survey of machinery
          and electrical equipment", "starboard boiler survey and
          repairs", and "port boiler survey and repairs".

     The applicant lists various additional expenses.  In regard
to those expenses we find the following.

     Attachment 5 - Electrocatalytic Ltd. Invoice No. E 2668,
     except for the engineers rate, all items are nondutiable;

     Attachment 6  - Rom Yam Ltd. Invoice No. 0772. - Repairs
     which are completely ineffective and of no value to the
     vessel are not repairs dutiable under section 3114, R.S.
     T.D. 55193(24).  The evidence submitted is insufficient to
     show that the repairs made at Malta to the subject item are
     ineffective repairs.  Accordingly, the repairs listed on
     Invoice No. 0772 are dutiable.

     Attachment 7 - Alhoutyam Ltd. Invoice No. 13980 - all items
     of cost are nondutiable.  Pursuant to CD 1830 testing to see
     if repairs are necessary are dutiable as part of repairs, if
     no repairs are made the testing cost is free.  Our review of
     the invoice reveals that no repairs were made.  The radar
     was examined to determine why the picture varied in quality
     during use at sea.

     Attachment 8 - Rom Yam Ltd. Invoice No. 0745 - all items of
     cost are dutiable.

     Following a thorough review of the law and analysis of the
evidence, we recommend that the application be granted with the
exception of the items enumerated above.

HOLDING:

     The foreign work for which the applicant seeks relief is
dutiable under 19 U.S.C. 1466 with the exception of those items
noted above.


                                     Sincerely,



                                     B. James Fritz
                                     Chief
                                     Carrier Rulings Branch