Page 22: of Maritime Reporter Magazine (November 2001)

is the chocking compound ap- proved by every major classifi- cation society, including ABS /7wPhiladelphia Resins ORANGE

Don't risk engine security, maintenance economy and proven peace of mind:

Specify CHOCKFAST ORANGE.

Circle 300 on Reader Service Card or visit www.maritimereporterinfo.com

SUNDIAL

MARINE CONSTRUCTION & REPAIR

A Full Service Shipyard on the Columbia River

NEW CONSTRUCTION

REPAIRS AND CONVERSIONS

PAINTING AND BLASTING 2000 TON DRY DOCK

BUILDING & LAUNCH WAYS 5605 NE Sundial Road Troutdale. Oregon 97060

Ph: 503-667-1974 Fax: 503-666-7872

Email: sundialfciisundial-marine.com

Circle 320 on Reader Service Card or visit www.maritimereporterinfo.com

International

Maritime

Training

International Maritime Training Inc.

Presents

U.S.C.G. COURSES

Basic S.T.C.W. "95 Safety Training

Bridge Resource Management

G.M.D.S.S.

Radar

A.R.P.A. 500 & 1600 Ton Prep.

Immediate Reservations Available

At the Ft. Lauderdale Facility

Call (954) 779-7764

Or Email: [email protected]

Circle 264 on Reader Service Card or visit www.maritimereporterinfo.com

Shipbuilders

Architects

Marine engineers

Build your next boat at the yard known for uncompromised quality and reliability

For more info, please contact:

Bruce Doughty, President

P.O. Box 296, enterprise Street, €ast Boothbay, Maine 04544

Phone: (207) 633-6517 Fax: (207) 633-7007 w uttu.ujashburndoughty.com

Circle 335 on Reader Service Card or visit www.maritimereporterinfo.com

CENTRIFUGE

SERVICES INC.

NOW YOU HAVE A CHOICE WITH,.

Specializing in Centrifuge Systems

Repairs to all Types and models! • ALFA-LAVAL (DE LAVAL) 1 WESTFALIA (CENTRICO) • BIRD • DORR OLIVER 'SHARPLES ' MITSUBISHI ' VERONESI • KRAUSS MAFFEI

ALL OTHER MANUFACTURERS

MARKETS SERVED • MARINE ' FACTORY 'POWER • PHARMACEUTICAL 'PETROLEUM ' CHEMICAL 1 FOOD 'WASTE OIL •WASTE REDUCTION * PARTS * SERVICE * REPAIRS • STOCKING PARTS FOR MOST MODELS • IN HOUSE REPAIRS •FIELD SERVICE • BOWL REPAIRS AND BALANCING IN HOUSE AND IN-FIELD

Stocking New Remanufactured and Used Centrifuges 120 SOUTH 16™ STREET

La Porte, Texas 77571

Phone: 281/470 - 9005

Fax: 281/470 - 6380 22 Circle 313 on Reader Service Card or visit www.maritimereporterinfo.com total cost of non-dutiable inspections and modifications, and then multiplied the resulting percentage by the total dry-dock- ing expenses.

Contrary to American Ship Manage- ment's contention, the court held that an apportionment of dry-docking expenses is not per-se illegal, so long as the dutiable dry-docking expenses undertaken solely for the purpose of repair and the non- dutiable dry-docking expenses undertaken for a purpose either unrelated to repair or for a mixed purpose are clearly identified.

However, the court condemned the partic- ular apportionment used by Customs as arbitrary and in violation of Texaco.

The court noted that the Texaco decision specified that "[tjhe mere drawing up of a vessel on a dry dock is not a part of her repairs, but is rather a method of making an inspection of her to determine whether any repairs are necessary." Again citing

Texaco, the court stated that "the cost of tugs is an inevitable expense of a manda- tory inspection and, thus, is not dutiable."

The court added that all maintenance charges in connection with the dry-dock- ing during the period of mandatory inspection and/or modifications are non- dutiable under Texaco, notwithstanding whether or not any repair was performed during the same period. The court stressed the importance of the timing of dutiable repairs relative to the completion of non-dutiable inspections and/or modifi- cations, holding that "only the mainte- nance expense of dry-docking for the peri- od of time in excess of that necessary for a mandatory inspection and/or modifica- tions are dutiable under the Texaco test."

Judging from the Customs Service's past treatment of challenges to its interpreta- tion and application of the Texaco case, a settlement in American Ship Management is unlikely. If the CIT's holdings are upheld, Customs may be forced to move from a percentage-based apportionment to a simple examination of timing in assess- ing duties related to dry-docking.

As a result, dry-docking expenses would not be dutiable where dry-docking is per- formed to carry out duty-free inspections and/or modifications, even if dutiable repairs are performed simultaneously. If, however, dutiable repairs are conducted after the time necessary for duty-free inspections and/or modifications has expired, then the cost of continuing the dry-docking from that point forward would be dutiable.

Thomas Cheplo is an attorney at Dyer

Ellis c£ Joseph, P.C., a Washington, D.C. based law firm with a domestic and inter- national practice involving transporta- tion, shipping, finance, corporate, securi- ties, legislative, environmental, and trade matters.

Maritime Reporter & Engineering News