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 0112009 - HQ 0112144 > HQ 0112125

Previous Ruling Next Ruling


HQ 112125


May 13, 1992

VES-13-18-CO:R:IT:C 112125 LLB

CATEGORY: CARRIER

Chief, Technical Branch
Commercial Operations Division
Pacific Region
One World Trade Center
Long Beach, California 90731

RE: Vessel repair; Casualty alleged; Incident remote from repair; Vessel PRESIDENT HOOVER, V-120; Vessel repair entry number 335-0100608-5

Dear Sir:

Reference is made to your memorandum of March 3, 1992, which forwards for our consideration the above-captioned application for relief from the assessment of vessel repair duties filed by American President Lines, Ltd.

FACTS:

The record reflects that the vessel PRESIDENT HOOVER completed its voyage number 120 with its arrival at the port of Seattle, Washington, on November 30, 1991, and the filing of a full and complete vessel repair entry two days later. Various inspection and repair costs are claimed to be duty-free by reason of having been necessitated by a weather-related casualty event.

A vessel repair entry had previously been filed concerning the prior voyage number 119, the circumstances of which included a heavy weather crossing from the United States to the Far East. Reference to the vessel's deck log for voyage 119 reveals that force 10 winds and heavy seas were encountered. Damage related to that incident was repaired at that time and the evidence was considered by the proper vessel repair liquidation unit since the duty amount in question was less than $2,500.00.

The present matter involving voyage 120 concerns inspections and repairs which are claimed to the direct result of the heavy weather crossing two months earlier. The repairs address cracks in hull plating, ballast tank side plating, and web frames.

ISSUE:

Whether vessel repair duty assessed upon the value of repair and inspection costs may be remitted by reason of a weather- related casualty claim relating to a previous voyage.

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 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.

Title 19, United States Code, subsection 1466(d)(1), states that the Secretary of the Treasury is authorized to remit or refund such duties if the owner or master furnishes good and sufficient evidence that the vessel was compelled to put into a foreign port and 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 a casualty event, we must consider the repair to have been necessitated by normal wear and tear. See Customs Ruling Letter 106159 LLB (9-8-83).

The fact that the damage complained of and the repairs addressing that damage occurred on separate voyages is critical in the disposition of this matter. It has been the long-standing position of the Customs Service that by repairs being deferred, seaworthiness is demonstrated. In this case, two months passed between the weather incident and the repair operations. In a published ruling (C.I.E. 538/62, May 22, 1962), Customs held that:

...remission is not warranted where damage results from a casualty in one voyage, and repairs are obtained in a later one. Relief may be allowed however, in accordance with section [1466(d)(1)]...provided the delay is adequately explained. Mere failure to discover the damage or extent thereof before a voyage terminates does not constitute an adequate explanation.

Given the rather clear direction of published precedent, taken in conjunction with the fact that the entire claim for relief relates to casualty matters going to a previous voyage, there is no question that the claim for relief in this case must be denied.

HOLDING:

Following a thorough review of the facts in this case as well as an analysis of the law and applicable precedents which bear upon those facts, we have determined that the Application for Relief should be denied for the reasons set forth in the Law and Analysis section of this ruling.

Sincerely,

B. James Fritz

Previous Ruling Next Ruling