HQ 0111100 - Vessel repair; round voyage rule; ineffective repairs; casualty; radar - United States International Trade Commision Rulings

United States International Trade Commision Rulings And Harmonized Tariff Schedule

faqs.org Rulings By Number Rulings By Category Tariff Numbers

faqs.org > Rulings and Tariffs Home > Rulings By Number > 1992 HQ Rulings > HQ 0110899 - HQ 0111107 > HQ 0111100

HQ 111100

October 25, 1990

VES-13-18-CO:R:P:C 111100 KVS

CATEGORY: CARRIER

Chief
Residual Liquidation and Protest Branch
6 World Trade Center
New York, NY 10048-0954

RE: Vessel repair; round voyage rule; ineffective repairs; casualty; radar
Vessel: AMERICAN FALCON V-68
Vessel Repair Entry No. C13-0015015-3
Date of Arrival: February 14, 1990
Port of Arrival: Baltimore, Maryland

Dear Sir:

This is in response to your memorandum of May 25, 1990, which forwards for our consideration a petition for review filed in connection with the AMERICAN FALCON, vessel repair entry no. C13-0015015-3. Our findings are set forth below.

FACTS:

The AMERICAN FALCON underwent repairs to the radar system in the United States on January 10, 1990, prior to sailing. While in the course of its voyage abroad, the vessel underwent certain foreign shipyard operations in the Netherlands at Rotterdam and in the United Kingdom at Felixstowe and Brixham. The operations undertaken at Felixstowe on February 2, 1990, included repairs to the radar.

The vessel arrived in the United States at Baltimore, Maryland on February 14, 1990 and made timely entry. An application for relief from vessel repair duties was filed on March 21, 1990. The petitioner was notified of the decision on the application denying relief in part in a letter dated April 5, 1990. The petition for review currently under consideration was timely filed on April 30, 1990.

ISSUE:

Whether the foreign shipyard operations involving the radar undertaken aboard the subject vessel are subject to duty under 19 U.S.C. 1466.

LAW AND ANALYSIS:

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 engaged, intended to engage, or documented under the laws of the United States to engage in the foreign or coastwise trade. Paragraph (1), subsection (d) of section 1466 provides that duty may be remitted if good and sufficient evidence is furnished establishing that the vessel was compelled by stress of weather or other casualty to put into a foreign port to make repairs 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 statute, has been interpreted as something which, 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. 28-29, C.D. 362 (1940)). In this sense, a "casualty" arises from an identifiable event of some sort. In the absence of evidence of such casualty, we must consider a repair to have been necessitated by normal wear and tear (Custom letter ruling 105159 (dated September 8, 1983)).

However, in T.D. 71-83(38) (dated March 11, 1971), the Customs Service held that when evidence shows that any part of a vessel failed while on the first round trip voyage immediately following domestic repair of that part, such failure occurring within six months of domestic repairs will be considered a casualty occurrence which qualifies for remission under section 1466(d)(1). T.D. 71-83(38) contains a limitation, however, in that remission of duty is "limited to duty on the essential, minimum foreign repairs to the part."

In the case under consideration, Raytheon invoice number B0341-01015 indicates that, in the domestic repairs undertaken prior to sailing, the rec crystals were replaced, the system was tuned and aligned, and the waveguide was checked and found to be without faults.

The foreign repairs invoiced on the Felixstowe Marine Electronics invoice submitted indicate that the waveguide was opened but no sign of water was apparent and the T.R. cell was found to be cracked and was removed and replaced.

Based upon the evidence before us, it does not appear that the radar had the same service and repairs performed both domestically by Raytheon and abroad at Felixstowe. Since the foreign repairs were different than those performed domestically, we are unable to conclude that the domestic repairs were ineffective and did not complete one round voyage. Therefore,
the cost of such foreign repairs is not remissible pursuant to 19 U.S.C. 1466(d)(1) and we find the amount to be dutiable. Accordingly, the petition for review is denied.

HOLDING:

Where no evidence is submitted demonstrating that a certain vessel part had the same repairs performed both in the United States immediately prior to departure and in a foreign shipyard, the cost of the foreign repair is not remissible as a casualty pursuant to 19 U.S.C. 1466(d)(1).

Sincerely,

Stuart P. Seidel

Previous Ruling Next Ruling