HQ 0113069 - Vessel Repair; 19 U.S.C. 1466; M/V SEA-LAND KODIAK, V-201; Entry No. 110-6461404-0; Casualty - United States International Trade Commision Rulings

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HQ 113069

April 18, 1994

VES-13-18-CO:R:IT:C 113069 GOB

CATEGORY: CARRIER

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

RE: Vessel Repair; 19 U.S.C. 1466; M/V SEA-LAND KODIAK, V-201; Entry No. 110-6461404-0; Casualty

Dear Sir:

This is in response to your memorandum dated March 15, 1994, which forwarded the application for relief submitted by Sea-Land Service, Inc. ("applicant") with respect to the above-referenced entry.

FACTS:

The record reflects the following. The M/V SEA-LAND KODIAK (the "vessel") is a U.S.-flag vessel owned and operated by the protestant. Certain foreign shipyard work was performed on voyage 201. The vessel arrived at the port of Tacoma, Washington on October 20, 1993 and subsequently filed a vessel repair entry.

Your office has asked for our review of the following items:

Item No. Description

1.5 propeller damage
6.1 survey of propeller
8.1 engineer
8.6 casualty preparation
15.1 rudder access modification
15.2 rudder access test fuse
17.12a propeller shaft inspection
17.14a rudder inspection
17.15 aft stern tube seal inspection
17.16a propeller repairs
17.17a stern tube seal inspection
17.18a propeller system repairs
18.1b inspection of tanks

The applicant states that the vessel "experienced failure of the control pitch propeller while en route from Alaska to Tacoma, Washington on October 6, 1993 while off Port Angeles, WA." The documentation submitted with the application indicates that the applicant requests remission of duties pursuant to 19 U.S.C. 1466(d)(1) based on a casualty occurrence.

ISSUE:

Whether the subject items are dutiable pursuant to 19 U.S.C. 1466(a). If so, whether duty is remissible pursuant to 19 U.S.C.

LAW AND ANALYSIS:

19 U.S.C. 1466 provides for the payment of duty at a rate of fifty 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 be employed in such trade.

19 U.S.C. 1466(d)(1) provides in part that the Secretary of the Treasury is authorized to remit or refund such duties if the owner or master of the vessel furnishes good and sufficient evidence that the vessel was compelled by stress of weather or other casualty 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. 19 CFR 4.14(c)(3)(i) provides that "port of destination" means such port in the United States and "...only the duty on the cost of the minimal repairs needed for the safety and seaworthiness of the vessel is subject to remission or refund." 19 U.S.C. 1466 and 19 CFR 4.14 essentially set forth a three-part test, each of the elements of which must be established by good and sufficient evidence to qualify for remission:

1. a casualty occurrence;
2. an unsafe and unseaworthy condition; and 3. the inability to reach the port of destination without foreign repairs.

We find that the applicant has not established that a casualty occurred.

The application states that the vessel "experienced failure of the control pitch propeller." The statement of the master asserts: "the CPP failed to function at 1015hrs. Specifically it would not go full pitch and behaved erratically." The applicant has established that there was a mechanical problem with the propeller. It has not established that the problem occurred as a result of a casualty.

We have stated as follows in numerous decisions:

The term "casualty", as it is used in the vessel repair statute (19 U.S.C. 1466) has been interpreted as something which, like stress of weather, comes with unexpected force or violence, such as fire, or spontaneous explosion of such dimensions as to be immediately obvious to ship's personnel, or collision (see Dollar Steamship Lines, Inc. v. United States, 5 Cust. Ct. 28-29, C.D. 362 (1940)). In the absence of such a casualty event, we must consider the repair to have been necessitated by normal wear and tear (ruling 106159, September 8, 1983).

In Dollar Steamship Lines, the court stated in pertinent part:

We are of the opinion that a casualty similar to "stress of weather" should be of necessity a happening that comes with the violence of the turbulent forces of nature.

Black's Law Dictionary (Fifth Edition, 1979) defines casualty as follows:

A serious or fatal accident. A person or thing injured, lost or destroyed. A disastrous occurrence due to sudden, unexpected or unusual cause. Accident; misfortune or mishap; that which comes by chance or without design. A loss from such an event or cause; as by fire, shipwreck, lightning, etc.

Accordingly, the following items are dutiable repairs or repair-related items and the duty is not remissible: 1.5, propeller damage; 6.1, survey of propeller; 8.1, engineer services related to propeller repairs; 8.6, preparation for repairs; 17.12a, propeller shaft inspection; 17.16a, propeller repairs; and 17.18a, propeller system repairs.

We find that the following items are nondutiable because they are not repairs or repair-related items: 15.1, rudder access modification; 15.2, rudder access test fuse; 17.14a, rudder inspection; 17.15, aft stern tube seal inspection; 17.17a, stern tube seal inspection; 18.1b, inspection of tanks.

HOLDING:

As detailed supra, the application is granted in part and denied in part.

Sincerely,

Arthur P. Schifflin
Chief

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