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HQ 113300

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March 14, 1995

VES-13-18-CO:R:IT:C 113300 GOB

CATEGORY: CARRIER

Chief, Residual Liquidation and Protest Branch New York Region
Six World Trade Center
New York, New York 10048-0945

RE: 19 U.S.C. 1466; Vessel Repair Entry No. 514-3005175-8; Petition; Casualty; Travel costs; S.S. HOWELL LYKES - V-15

Dear Sir:

This is in response to your memorandum dated December 30, 1994, which forwarded the petition submitted by Lykes Bros. Steamship Co., Inc. ("petitioner") in connection with the above-referenced entry.

FACTS:

The record reflects that the S.S. HOWELL LYKES (the "vessel") arrived at the port of Port Elizabeth, New Jersey on September 1, 1994 and filed the subject entry on the same date. Certain foreign shipyard work had been performed on the vessel.

By letter dated November 10, 1994, your office stated that the application for relief in this case:
has been denied in part due to the following: non certification of origin for materials that were supplied by Zim Bedek Workshop and travel costs for spare parts shown on the Tecnomar Leghorn fax.

ISSUE:

Whether certain items are subject to duty under 19 U.S.C. 1466. If so, whether the duty is subject to remission.

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

We find that the petitioner has not met the three-part test. An internal company report, which is not verified or attested to by a third party, is frequently not sufficient to meet the first part of the three part test. Further, the petitioner has not met the second and third parts of the test. Frequently, a U.S. Coast Guard report is deemed adequate to establish that a vessel was in an unsafe and unseaworthy condition and was unable to reach its port of destination without foreign repairs.

In its petition, the petitioner cites the "breakdown of travel costs for spare parts which should be duty free." We find that such travel costs are not dutiable.

HOLDING:

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

Sincerely,

Arthur P. Schifflin
Chief
Carrier Rulings Branch

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