HQ 0112519 - Protest No. 1001-91-109070; Vessel Repair Entry No. 514-3004494-4; M/V RALEIGH BAY V-35; Casualty - United States International Trade Commision Rulings

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HQ 112519

December 14, 1992

VES-13-18-CO:R:IT:C 112519 GEV

CATEGORY: CARRIER

Deputy Assistant Regional Commissioner
Commercial Operations
ATTN: Regional Vessel Repair Liquidation Unit New York, New York 10048-0945

RE: Protest No. 1001-91-109070; Vessel Repair Entry No. 514-3004494-4; M/V RALEIGH BAY V-35; Casualty

Dear Sir:

This is in response to your memorandum dated November 9, 1992, transmitting the above referenced protest and supporting documentation. Our ruling on this matter is set forth below.

FACTS:

The M/V RALEIGH BAY is a U.S.-flag vessel operated by Sea- Land Service, Inc. ("Sea-Land") of Edison, New Jersey. The subject vessel had foreign shipyard work performed in Algeciras, Spain in April and May of 1991. Subsequent to the completion of the work the vessel arrived in the United States at Elizabeth, New Jersey, on May 10, 1991. A vessel repair entry covering the work was filed on the date of arrival.

An application for relief was filed with Customs on July 19, 1991, approximately 70 days after the vessel arrived. Pursuant to section 4.14(d)(1)(ii), Customs Regulations, an application for relief with supporting evidence shall be filed within sixty (60) days from the date of first arrival of the vessel unless Customs grants an extension. Since an extension of time to file was not granted, the application was considered to have been untimely filed.

Accordingly, by Customs Ruling 111886 it was recommended that the application be denied on the basis of an untimely filing and that a penalty be assessed for the same reason. The application was denied and the entry was subsequently forwarded for liquidation which occurred on October 4, 1991.
Sea-Land subsequently filed a protest on December 30, 1991, alleging that the damage to the subject vessel's portside gangway, incurred when the gangway was struck by a crane while the vessel was docked at Algeciras on April 21, 1991, was the result of a casualty occurrence within the meaning of 19 U.S.C. 1466(d)(1). The protest requests remission of duties assessed on the cost of the ensuing repairs which were subseqently performed in Algeciras commencing the day following the incident. In support of this request the protestant has submitted the shipyard invoice and a copy of the vessel's log noting the accident.

ISSUE:

Whether evidence is presented sufficient to prove that the foreign repairs performed on the vessel for which relief is sought warrant remission pursuant to 19 U.S.C. 1466(d)(1).

LAW AND ANALYSIS:

Title 19, United States Code, section 1466, provides in part for payment of an ad valorem duty of 50 percent of 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 engage in such trade. Section 1466(d)(1) provides that the Secretary of the Treasury is authorized to remit or refund such duties if the owner or master of the vessel was compelled by stress of weather or other casualty to put into such foreign port to make repairs to secure the safety and seaworthiness of the vessel to enable her to reach her port of destination.

It is noted that section 4.14(c)(3)(i), Customs Regulations (19 CFR 4.14(c)(3)(i)), provides that "port of destination" means such port in the United States. This point is not in dispute, however, it is an embellishment upon section 1466(d)(1) which sets forth the following three-part test which must be met in order to qualify for remission:

1. The establishment of a casualty occurrence.

2. The establishment of unsafe and unseaworthy conditions.

3. The inability to reach the port of destination without obtaining foreign repairs.

In addition, if the above requirements are satisfied by evidence, the remission is restricted to the cost of the minimal repairs necessary to enable the vessel to reach her port of destination. Repair costs beyond that minimal amount are not subject to remission.

In the case under consideration, the evidence supports the claim that the subject vessel suffered a marine casualty due to stevedore negligence. Customs has long-held stevedore negligence to be a casualty within the meaning of section 1466(d)(1) and that repairs resulting therefrom are necessary for the safety and seaworthiness of the vessel to enable her to reach her United States port of destination (see C.I.E.s 1259/58 and 1161/62). Accordingly, remission on the cost of foreign repairs to the subject vessel's portside gangway is granted pursuant to 19 U.S.C.

HOLDING:

The evidence presented is sufficient to prove that the foreign repairs performed on the subject vessel for which relief is sought warrant remission pursuant to 19 U.S.C. 1466(d)(1).

Accordingly, the protest is granted.

Sincerely,

Stuart P. Seidel

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