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 > 2004 HQ Rulings > HQ 087779 - HQ 116088 > HQ 116050

Previous Ruling Next Ruling
HQ 116050

---

January 21, 2004

VES-13-18:RR:IT:EC 116050 TLS

CATEGORY: CARRIER

Chief, Vessel Repair Unit
U.S. Customs and Border Protection
423 Canal Street, Room 303
New Orleans, Louisiana 70130

RE: Vessel Repair Entry No. NB3-2824013-1; LYKES MOTIVATOR; 19 U.S.C. §1466; Protest No. 2002-03-100233.

Dear Sir:

This is in response to your memorandum of September 5, 2003, forwarding a protest of a denial of an application for relief, filed by Marine Transport Lines, Inc. (MTL) pursuant to 19 U.S.C. §1466. The protest specifically seeks relief from your denial of MTL’s application for relief from vessel repair duties dated December 6, 2002. Our determination is set forth in this ruling.

FACTS:

Shipyard work was performed on the LYKES MOTIVATOR in Antwerp, Belgium, and was completed on February 22, 2002. The vessel arrived in the United States at Charleston, South Carolina on March 6, 2002. A vessel repair entry was timely filed that same day. Upon filing the entry, the vessel’s master submitted a letter to you also dated March 6, 2002, explaining that the shipyard work done in Belgium was “an emergency repair to a boiler pipeline that was in free communication with the sea because of a weld failure on the skin of the ship.” On June 6, 2002, MTL applied for relief from duties on the vessel repair entry. You issued a letter to MTL on December 6, 2002, in which you notified MTL that its application for relief was denied and that duties were owed on the vessel repair entry in the amount of $2,102.25. On February 5, 2003, MTL filed the subject protest, which you have forwarded to us for review.

The protestant seeks relief claiming that the work performed in this case constitutes an emergency repair that should be exempt from vessel repair duties.

ISSUE:

Whether the work in question for which the protestant seeks relief constitutes an emergency repair and is therefore non-dutiable under 19 U.S.C. § 1466.

LAW AND ANALYSIS:

Title 19, United States Code, section 1466 (19 U.S.C. § 1466), provides in pertinent part for the payment of an ad valorem duty of 50 percent of the cost of "...equipments, or any part thereof, including boats, purchased for, or the repair parts or materials to be used, or the expenses of repairs made in a foreign country upon a vessel documented under the laws of the United States..." Section 1466(d)(1) provides for the remission 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.

The statute sets forth the following three-part test which must be met in order to qualify for remission under the subsection:

The establishment of a casualty occurrence;

The establishment of unsafe and unseaworthy conditions; and

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 which, 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. See Dollar Steamship Lines, Inc. v. United States, 5 Cust. Ct. 23, 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 casualty event, we must consider the repair to have been necessitated by normal wear and tear. See C.S.D. 89-95 (1989); Customs Ruling Letter HQ 115130 (October 26, 2000).

Upon reviewing the record in its entirety, we find that the protestant has failed to present any evidence of an extrinsic force or event that would constitute a casualty under 19 U.S.C. § 1466(d)(1). While MTL claims that the work in question was required by the U.S. Coast Guard, we note that the fact that any federal agency might require such work to be done is not in and of itself sufficient for purposes of obtaining remission of duties pursuant to section 1466(d)(1). Thus, the protestant has failed to meet the first part of the three-part test discussed above, alleviating any further need to consider the protestant’s claims in this case.

HOLDING:

Following a thorough analysis of the facts as well as of the law and applicable precedents, we have determined that the evidence presented is insufficient to prove that the foreign shipyard work performed on the LYKES MOTIVATOR for which the protestant seeks relief was necessitated by a casualty occurrence. Accordingly, remission of duties pursuant to 19 U.S.C. § 1466(d)(1) is hereby denied. The protest is hereby denied in full.

Sincerely,

Glen E. Vereb
Chief

Previous Ruling Next Ruling