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HQ 111335

January 3, 1991

VES-13-18-CO:R:IT:C 111335 RAH

CATEGORY: CARRIER

Chief, Technical Branch
Commercial Operations Division
Pacific Region
One World Trade Center
Long Beach, California 90831-0700

RE: 19 U.S.C. 1466; Vessel Repair; Application for Relief; Time.

Dear Sir:

This is in response to your memorandum of September 28, 1990, regarding vessel repair entry number 906-1514663-7.

FACTS:

The record reflects that the S.S. SANTA ADELA arrived at the port of San Francisco, California, on April 25, 1990. An incomplete entry was filed on May 1, 1990. A timely request for an extension was granted until July 25, 1990, but invoices were not received until July 26, 1990. A Federal Express bill shows that the invoices were sent on July 24, 1990, but were not delivered the next day as promised.

The final drydock invoice is still being negotiated between the shipyard and the applicant. The subject of this ruling is an application for relief dated July 24, 1990. You specifically request our advice for three reasons:

1. The entry was received late but an explanation was given.

2. A final invoice was not available when the 30 day extension ended.

3. Item M007-9 is regarded by the applicant as a modification, but you believe it is dutiable equipment.

ISSUE:

Whether the application for relief and invoices were timely filed and may be considered for relief from duty under 19 U.S.C. 1466.

LAW AND ANAYLSIS:

Title 19, United States Code, section 1466(a), 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 be employed in such trade.

As you know, the Customs Regulations provide specific time frames for the filing of an application for relief, submitting evidence of cost, and the granting of extensions of time to submit documents required by the regulations. Pursuant to 19 CFR 4.14(d)(ii), an application for relief shall be filed within 60 days from the date of first arrival of the vessel. Under 19 CFR 4.14(b)(ii)(B), the 60-day time period to submit evidence of cost is concurrent with the 60-day time period to submit the application for relief. If good cause is shown, the vessel repair liquidation unit may authorize one 30-day extension beyond the 60-day filing period. Additional extensions may, for good cause, be granted by Headquarters.

In the instant case, the vessel arrived in the United States on April 25, 1990. The applicant requested an extension of time to file documents of cost stating that "...without it we may be forced to compromise our position in the negotiation with the yard and as a result suffer substantial financial harm." The extension was granted until June 25, 1990; however, the invoices and application for relief were not received until June 26, 1990, one day after the extension expired.

In its application for relief the applicant states that the prices on the invoice (China Shipbuilding Invoice #RS-90-158) are the owners estimates applied to the shipyard's write-up. Negotiations are continuing to provide a complete and detailed invoice from China Shipbuilding. The applicant states:

Throughout the shipyard period, the Keelung Shipyard facility was extremely busy, subletting most of the required contracted work. The shipyard was unable to assign an estimator full time to the SANTA ADELA contract. This situation made it very difficult to negotiate and firm up item prices, credits, and additional work orders. It is our normal practice to finalize costs for all items well before the ship's departure. Unfortunately, as a result of the shipyard's inability to assign an estimator, we were unable to accomplish this objective during this shipyard period.

In Headquarters Decision 110145 we held that a request for extension of time to file evidence of cost insufficient where reason was negotiation with shipyard.

Finally, the applicant has filed Federal Express Invoice #5995667631 showing that documents were delivered to Federal Express to be forwarded to Customs on July 24, 1990. Never- theless, the applicants's obligation under the regulations does not end upon delivery of the requisite documents to a mail carrier service within sufficient time to reach Customs. See, Penrod Drilling Co. v. United States, 727 F. Supp. 1463 (CIT 1989). In Penrod, the plaintiff filed a protest the day after the ninety-day time period to file a protest under 19 U.S.C. 1514. The court stated that even though Federal Express may have been negligent in not delivering the documents on time, such negligence does not operate to shift the statutory responsibility for filing a protest from plaintiff to Federal Express. Id at 1467.

Under the facts in question, the application for relief and supporting documentation were not timely filed and the time for filing same has expired. Customs cannot selectively waive procedural requirements; to weaken or ignore clear and specific regulations regarding the filing of an application for relief could result in such uncertainty as to produce unfairness, not only to the government, but to other applicants. Accordingly, relief should not be granted under 19 U.S.C. 1466 where an application for relief is not submitted within the requisite time frames.

HOLDING:

In light of the clear direction provided by the regulations as related above, the application for relief is denied.

If you have any further questions regarding this matter, please do not hesitate to contact our office.

Sincerely,

B. James Fritz

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