HQ 0112812 - Vessel Repair; Tacoma, Washington, Vessel Repair Entry No. 906-7500674-7; SEA-LAND DEVELOPER Voyage 137/172; Petition for Relief; crane services; 19 U.S.C. 1466; 19 CFR 4.14 - 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 > 1994 HQ Rulings > HQ 0112786 - HQ 0112925 > HQ 0112812

HQ 112812

November 17, 1993

VES-13-18-CO:R:IT:C 112812 BEW

CATEGORY: CARRIER

Deputy Regional Director
Commercial Operations
Pacific Region
One World Trade Center
Long Beach, California 90831

RE: Vessel Repair; Tacoma, Washington, Vessel Repair Entry No. 906-7500674-7; SEA-LAND DEVELOPER Voyage 137/172; Petition for Relief; crane services; 19 U.S.C. 1466; 19 CFR 4.14

Dear Sir:

This is in response to your memorandum dated June 22, 1993, which forwards for our consideration a petition for relief filed in connection with the above-referenced vessel repair entry. Our findings are set forth below.

FACTS:

The SEA-LAND DEVELOPER is owned by the Connecticut National Bank and operated by Sea-Land Service, Inc. It is an American- flag container vessel. The vessel departed from Tacoma, Washington on May 21, 1991, and returned to Tacoma, Washington on September 17, 1992. While abroad, the vessel was routinely repaired in various foreign shipyards. In addition, the vessel sustained substantial damage on March 21, 1992, when it was struck by the Liberian-flag vessel, T.A. NAVIGATOR, while she was moored at Honmoku Pier 6, Yokohama, Japan. The operators of the SEA-LAND DEVELOPER contend that various foreign shipyard operations were modifications or non-effective repairs and that certain items should be considered as articles of international traffic.

An application for relief dated December 16, 1992, seeking relief from vessel repair duties assessed on the above-referenced foreign repairs was timely filed. By our decision dated May 23, 1993 (HQ 112600 DEC), we found the following:

Sampson Marine Services Co., Ltd................$ 17,245 Sampson Marine Services Co., Ltd................$ 14,452

The applicant submits the invoices referred to above for review as being connected to the collision between the T.A. NAVIGATOR and the SEA-LAND DEVELOPER. However, no independently-generated documentation makes this nexus. While the vessel operator can expect to be granted remission for repairs associated with a casualty occurrence, it is Customs responsibility to require that the operators meet their burden of proving that the work performed was associated with the casualty event. Unless and until such evidence is submitted, these items shall remain dutiable. The itemized transportation charges ($1740 per invoice) are free of duty.

Seagull Marine (Invoice No. SL-0030X/A)..........? 87,490 Seagull Marine (Invoice No. SL-0030X/B)..........? 78,540 OMI Engineering (Invoice No. 92-105).............? 934,100

The collision between vessels is deemed to be a casualty event. Accordingly, the vessel repair statute provides for remission of vessel repair duties on work that is demonstrated to be associated with the casualty. We are satisfied that the invoices referenced above are connected with the casualty. Accordingly, remission of vessel repair duties is granted....

Suyeki Floating Derrick Co., Ltd.................? 875,250

The applicant submits this invoice for review as being connected to the collision between the T.A. NAVIGATOR and the SEA-LAND DEVELOPER. However, no independently generated documentation makes this nexus. While the vessel operator can expect to be granted remission for repairs associated with a casualty occurrence, it is Customs responsibility to require that the operators meet their burden of proving that the work performed was associated with the casualty event. Unless and until such evidence is submitted, these items are dutiable....

Utoku Express Co., Ltd. (Bill No. WL-3-1018).....? 375,139

This invoice makes reference to a cargo swing charge. Without a more elaborate description of what work was performed Customs is unable to make an informed decision with respect to vessel repair dutiability. Unless and until a satisfactory explanation is submitted setting forth a basis for relief from vessel repair duties, this item remains dutiable....

The petition is centered around the Suyeki and the Utoku invoices. The petitioner contends that the above stated invoices represent costs for a floating crane hired in order to facilitate the opening of hatch covers and necessary to work the under deck containers in way of the damaged hinge towers. The petitioner further claims that the floating cranes were used to assist in removing and offloading the damage structures, and to swing cargo in an effort to repair the vessel and expedite the sailing.

LAW AND ANALYSIS

Title 19, United States Code, section 1466, 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 foreign or coastwise trade, or vessels intended to engage in such trade.

Pursuant to CD 1836 charges for drydocking, for furnishing electricity, air and water, fees paid for the use of tugs and pilots in drydocking and undocking a vessel, staging, and crane expenses are not dutiable repairs if segregated on the invoice.

Examination of the entire record and the documentation submitted with the petition, reveals that the subject invoices were for costs associated with crane services necessary due to the casualty. Accordingly, the petition is granted as to the subject items.

HOLDING:

After thorough review of the evidence presented, and as detailed in the Law and Analysis portion of this ruling, the petition for relief is granted.

Sincerely,

Arthur P. Schifflin

Previous Ruling Next Ruling