HQ 0111173 - Casualty; insufficient evidence - United States International Trade Commision Rulings

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HQ 111173

July 27, 1990

VES-13-18-CO:R:P:C 111173 KVS

CATEGORY: CARRIER

Chief, Technical Branch
Commercial Operations Division
1 World Trade Center
Long Beach, CA 90831

RE: Casualty; insufficient evidence
Vessel: SEA-LAND PACIFIC V-26
Vessel Repair Entry No. C27-0045928-5

Dear Sir:

This is in repsonse to your memorandum of July 10, 1990, which forwards for our consideration an application for relief filed in connection with the SEA-LAND PACIFIC V-26, vessel repair entry no. C27-0045928-5. Our findings are set forth below.

FACTS:

The PACIFIC, an American-flag vessel, underwent foreign shipyard operations at Okinawa, Japan on April 14, 1990, and at Kaohsiung, Taiwan, on April 17-19, 1990. The vessel arrived in the United States at Long Beach, California, on May 2, 1990, and made entry that same day.

An application for relief was timely filed June 29, 1990. The following items, which are all related to the failure of the vessel's steering gear, have been presented for our review: Items 3, 4, 5, 6 and 7.

ISSUE:

Whether the duty on the alleged casualty-related foreign repair is remissable pursuant to 19 U.S.C. 1466(d)(1).

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. Thus, in order to qualify for duty remission, it is necessary that the party seeking relief must show both the occurrence of a casualty, and the minimal repairs necessary for the safety and seaworthiness of the vessel.

The term "casualty", as it is used in the statute, has been interpreted to mean 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 a casualty, we must consider a repair to have been necessitated by normal wear and tear (Customs Letter Ruling 105159 (dated September 8, 1983)).

In the case under consideration, the applicant has not submitted evidence identifying any particular event in connection with the steering gear which would qualify as a casualty. Nor has documentation been submitted that would verify the occurrence of a particular casualty, once identified. To the contrary, the evidence indicates that repairs were made to the steering gear at Honolulu, Hawaii, on April 3, 1990, and at Guam on April 10, 1990. In light of this history of repair, we are unable to conclude that the steering gear failure arose as a result of a sudden or unexpected force or violence, as required by Dollar Steamship, supra.

In the absence of evidence indicating the occurrence of a casualty, we find the cost of repairs to be dutiable. Accordingly, the application for review is denied.

HOLDING:

In the absence of evidence which identifies and verifies the occurrence of an event which would qualify as a "casualty" within the meaning of 19 U.S.C. 1466(d)(1), we find the cost of repairs for an item alleged to be damaged by reason of casualty to be dutiable.

Sincerely,

B. James Fritz

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