HQ 0112699 - Protest No. 1303-92-100241; Baltimore, Maryland, Vessel Repair Entry No. 788-4005801-6, dated December 5, 1991; PRIDE OF BALTIMORE II, Voyage 2; Casualty; 19 U.S.C. 1466(d)(1); 19 CFR 4.14 - United States International Trade Commision Rulings

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HQ 112699

October 21, 1993

VES-13-18 CO:R:IT:C 112699 BEW

CATEGORY: CARRIER

Chief, Residual Liquidation and Protest Branch U.S. Customs Service
6 World Trade Center
New York, New York 10048-0945

RE: Protest No. 1303-92-100241; Baltimore, Maryland, Vessel Repair Entry No. 788-4005801-6, dated December 5, 1991; PRIDE OF BALTIMORE II, Voyage 2; Casualty; 19 U.S.C. 1466(d)(1); 19 CFR 4.14

Dear Sir:

This is in response to your memorandum that forwards protest No. 1303-92-100241, concerning vessel repair entry No. 788- 4005801-6, relating to the PRIDE OF BALTIMORE II, Voyage 2.

FACTS:

The PRIDE OF BALTIMORE II is an United States-flag vessel owned by the Department of Transportation, State of Maryland. The vessel is a replica of a tall ship which is used for the purpose of promoting goodwill. The vessel is documented for coastwise trade, registry and recreation. The record shows that the subject vessel arrived in the port of Baltimore, Maryland, on November 28, 1991, after having undergone repairs in the ports of Barcelona, Spain, and Lisbon, Portugal, on November 30, 1990, and October 10, 1991, respectively. An application for relief was not filed. A petition for relief was filed alleging that the subject repairs were necessary due to "casualty". The Talleres Nautilus, SA, invoice 445/90, dated November 12, 1990, submitted with the petition, revealed a statement alleging a latent defect. By decision dated September 2, 1992, HQ 112427 GEV, we ruled that the evidence was insufficient to support a finding that a casualty was caused by a latent defect. The entry was liquidated on June 26, 1992. The protest was timely filed on September 9, 1992.

The protestant claims that the subject invoices relate to the repairs necessary because of a casualty. It claims that the repairs to the single side band radio and the generator were made
for the safe navigation of the vessel and the safety of the crew; and that the repair work performed on the pipe in the galley was a necessary safety factor which was done to prevent the problem from escalating. The protestant has also submitted a copy of the vessel's log which shows that the vessel encountered heavy weather during the period April 10 through April 11, 1990.

ISSUE:

Whether sufficient evidence is presented to establish that the subject repairs were necessitated by a "casualty" which is remissible under the vessel repair statute (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 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.

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. It is Customs position that "port of destination" means a port in the United States.

The statute thus sets a three-part test that must be met in order to qualify for remission under the subsection, this being:

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.

The term "casualty" as it is used in the statute has been interpreted as something that, like stress of weather, comes with unexpected force or violence, such as fire, spontaneous explosion of such dimensions as to be immediately obvious to ship's personnel, 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 (ruling letter 106159, September 8, 1983).

In addition, if the above requirements are satisfied by evidence, the remission is restricted to the cost of the minimal repairs necessary to "secure the safety and seaworthiness of the vessel to enable her to reach her port of destination" (19 U.S.C. 1466(d)(1)). Repair costs beyond that minimal amount are not subject to remission.

Customs Regulations require that certain supporting evidence be submitted with an application for relief from duties on repairs resulting from stress of weather. This evidence includes photocopies of the relevant parts of the vessel's logs, certification of any claimed casualty by the master or other responsible vessel officer with personal knowledge of the facts, and a certification by the master that the repairs were necessary for the safety and seaworthiness of the vessel to enable her to reach her port of destination in the United States (19 C.F.R.

We have reviewed the invoices submitted with the protest. It is clear from the evidence that the vessel was in need of repairs to its radar system, generator and feed pipe to the galley cock.

Further, it is clear from the evidence that the vessel was in need of repairs to secure her safety and seaworthiness, however, the evidence is insufficient to show what actually caused the breakdown of the subject items. Absent clear proof of an identifiable event to show an unexpected force or violence, such as fire, explosion, or collision resulting in damage, such cost of repairs is not remissible (see C.I.E. 1826/58). The documentation submitted is insufficient to support a finding of a casualty as provided in section 1466(d)(1). The protestant has not submitted documentation to substantiate that the damage was due to an identifiable event of some sort which caused the damage. A review of the vessel's log for April 10 and 11, 1990, failed to show that the subject repairs were necessiated by heavy weather damage. Pursuant to C.I.E. 919/60 remission of duty assessed on the cost or repairs is not warranted under section 1466 where the repairs are maintenance in nature. HOLDING:

The evidence presented is insufficient to substantiate that the subject repairs were necessitated by a casualty. The foreign work for which the protestant seeks remission is therefore dutiable under 19 U.S.C. 1466. The district director should deny the protest in full. A copy of this decision should be attached to the Customs Form 19 and forwarded to the protestant as part of the notice of action on the protest.

Sincerely,

Stuart P. Seidel

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