HQ 0111165 - Vessel Repair; LASH Barges; Casualty; Application for Relief; ROBERT E. LEE, v.25; 19 U.S.C. 1466; 19 C.F.R. 4.14. - United States International Trade Commision Rulings

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HQ 111165

November 6, 1990

VES-13-02/04/18/20 CO:R:P:C 111165 JBW

CATEGORY: CARRIER

Deputy Assistant Regional Commissioner
Classification and Value Division
ATTN: Regional Vessel Repair Liquidation Unit 6 World Trade Center
New York, New York 10048-002980

RE: Vessel Repair; LASH Barges; Casualty; Application for Relief; ROBERT E. LEE, v.25; 19 U.S.C. 1466; 19 C.F.R. 4.14.

Dear Sir:

On July 11, 1990, you forwarded for our review an application for relief filed by Waterman Steamship Corporation (Waterman) for vessel repair duties liquidated for Lighter Aboard Ship (LASH) barges carried by the mother vessel ROBERT E. LEE. Our analysis and conclusions are set forth herein.

FACTS:

The ROBERT E. LEE is a LASH barge mother vessel that arrived in the port of New York on September 3, 1981. A single vessel repair entry, number 1001-81-515-217-2, was filed on September 8, 1981, indicating foreign repairs made to LASH barges. Two supplemental vessel repair entries were filed, one on September 21, 1981, and the other on March 15, 1982.

On November 23, 1981, Waterman filed a document described as a petition for remission, but is more accurately an application for relief, in which Waterman seeks relief for duties for foreign repairs. Those barges for which relief is sought are:

WA-1-0395 CG-A40 LB-757
WA-2-0542 CG-489 LB-755
WA-3-577 CG-848

The legal basis claimed for relief is casualty. A supplemental Waterman inter-office letter, dated December 30, 1981, that indicates repairs to LASH barge WA-1-0392 appears in the record, but no Customs date of receipt is shown. In this letter, Waterman does not claim remission for casualty, nor does it submit evidence supporting a casualty claim. Likewise, an inter-office letter dated March 15, 1982, includes further barge repairs and invoices, but it does not claim remission for casualty.

The case lay dormant from 1982 until October 21, 1988, when Customs liquidated the entry and issued its bill, 40941910, for the duties liquidated. In a letter dated January 4, 1989, Waterman noted that it had not received a ruling on its application prior to liquidation. In response to another bill, Waterman again noted its failure to receive a ruling despite the filing of a "petition for remission" on November 23, 1981.

ISSUE:

(1) Whether failure to respond to a deficient application for relief can give rise to a reliquidation of an entry.

(2) Whether evidence is presented sufficient to prove that the repairs performed on the barge for which relief is sought were necessitated by a casualty occurrence, thus warranting remission.

LAW AND ANALYSIS:

I. Liquidation of Entry

Section 4.14(d) of the Customs Regulations provides specific time limitations for the submission of an application for relief of vessel repair duties. This section states:

The application for relief, with supporting evidence, shall be filed within 60 days from the date of first arrival of the vessel.
However, if good cause is shown, the appropriate vessel repair unit may authorize one 30-day extension of time to file beyond the 60-day filing period.

19 C.F.R. 4.14(d)(1)(ii) (1990). Unless steps are taken to validate or complete an application within the time period established by the regulations, the entry is subject to immediate liquidation upon the expiration of this time period. Headquarters Ruling Letter 110739, dated March 21, 1990.

The vessel under consideration first arrived on September 2, 1981. The 60-day filing period in this case expired November 1, 1981. Yet, the first communication by the ship's owner appearing in the record, other than supplemental entries, is dated November 23, 1981. The record contains no evidence that an extension of time was granted by the vessel repair liquidation unit. The entry was consequently subject to immediate liquidation.

This office has stated, however, that all applications must be answered. Headquarters Ruling Letter 110246, dated July 14, 1989. If the letter seeking relief falls short of the regulatory requirements, then the response of the vessel repair unit should identify the deficiencies. Id. Therefore, notwithstanding the failure of Waterman to file its application in a timely fashion, Customs should have responded to the application. Special circumstances are created in this case by the lapse of time between the date the application was filed and the date of liquidation of the entry and by the failure of Customs to respond to application of Waterman. We determine that these special circumstances give rise to an inadvertence by Customs sufficient to require correction of the liquidation. 19 U.S.C. 1520(c)(1) (1988); 19 C.F.R. 173.4 (1990).

We conclude that reliquidation of this entry should be calculated in accord with the substantive analysis given below. In effect, this letter is in response to an application. In our substantive analysis, we note omissions in the record that are essential to a final determination on the issues presented. Consequently, Waterman should be given the opportunity to file, within the regulatory time frame, a petition for remission against the liquidation to give Customs an opportunity to give appropriate remission. Liquidation should be suspended, and interest against the pending liquidation should be cancelled.

II. LASH Barge Casualty Claims

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 foreign or coastwise trade, or vessels intended to engage in such trade. The statute provides for the 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" and were necessary to secure the safety and seaworthiness of the vessel to enable her to reach her port of destination. 19 U.S.C. 1466(d)(1).

The term casualty, as it is used in the statute, has been interpreted as something that, like stress of weather, comes with unexpected force or violence, such as fire, explosion, or collision. Dollar Steamship Lines, Inc. v. United States, 5 Cust. Ct. 23, 28-29, C.D. 362 (1940). In the absence of evidence of such a casualty causing event, we must consider the repair to have been necessitated by normal wear and tear. C.S.D. 89-95, 23 Cust. B. & Dec., No. 43, 4, 5 (1989).
Owing to the factors peculiar to the operation of LASH barges and other unmanned vessels, the Customs Regulations allow for alternative standards of evidence when casualty claims are made concerning such vessels under 1466(d)(1). These regulations provide that there must be submitted evidence showing that a barge was inspected immediately prior to being loaded upon its vessel of departure from the United States, that it was found to be seaworthy at that time, that damage was discovered during the course of the foreign voyage, and that the repairs performed were necessary for the safety and seaworthiness of the barge to enable it to reach its United States port of destination. 19

The entry under consideration predated the promulgation of these LASH barge regulations. The vessel owner consequently submits evidence to demonstrate casualty under the rules ordinarily applied to manned vessels. The record as received by this office is incomplete, for documents that Waterman claims to have filed do not appear in the record. These documents provide support for Waterman's casualty claim without which this office is unable to evaluate fully Waterman's claimed remission. Whether these documents were omitted through error by Waterman or by Customs, we will proceed on the expectation that, in the ordinary course of business, a vessel owner will keep copies of their submissions to Customs until an issue is finally resolved. Therefore, as part of a future petition for remission, we do not believe that it is unreasonable to demand that Waterman submit in its entirety the documentation that it originally filed to prove casualty.

We conclude that the documentation is not sufficient to establish that repairs made to LASH barges WA-1-0395, WA-2- 0542, WA-3-577, CG-A40, CG-489, CG-848, LB 757, and LB-755 were the result of a casualty. Moreover, the cost of repairs to any barges other than those listed in the preceding sentence, not being subjects of claimed refunds or remissions of duty, are subject to duty and immediate liquidation. We also note that for the submissions relating to the two supplemental entries, Waterman makes no claim for refund or remission. The costs for repairs to LASH Barges WA-1-0392, WA-1-0072, WA-1-0172, CG-814, and CG-675 are also subject to duty and immediate liquidation.

HOLDINGS:

Because of the length of time that elapsed between the date that the vessel owner filed its application for relief and the date of this notice, and because of the failure of Customs to respond to this application, and notwithstanding the failure of the vessel owner to file its application within the time periods established by the regulations, we determine that these circumstances give rise to an inadvertence by Customs sufficient to require correction of the liquidation. Liquidation of this entry should be suspended, and interest accrued against the pending liquidation should be cancelled.

The documentation, as received by this office, is not sufficient to establish that repairs made to LASH barges WA-1- 0395, WA-2-0542, WA-3-577, CG-A40, CG-489, CG-848, LB 757, and LB-755 were the result of a casualty. As part of a petition for remission, the vessel owner should supply the documentation that it originally filed to establish casualty. However, the costs of repairs to any barges other than those listed in this paragraph are subject to duty and immediate liquidation.

Finally, the cost for repairs to LASH Barges WA-1-0392, WA- 1-0072, WA-1-0172, CG-814, and CG-675 are subject to duty and immediate liquidation.

Sincerely,

B. James Fritz
Chief

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