VES-13-18-CO:R:IT:C 111879 LLB
Chief, Technical Branch
Commercial Operations Division
Pacific Region
One World Trade Center
Long Beach, California 90831
RE: Vessel repair; Casualty; Act of God; Volcanic eruption;
Accumulation of volcanic ash; Vessel PRESIDENT MADISON;
Vessel repair entry number 335-0100601-0; Port of arrival
Seattle, Washington
Dear Sir:
Reference is made to your memorandum of August 27, 1991,
which forwards for our review and consideration the Application
for relief from the assessment of vessel repair duties filed by
American President Lines, Ltd., in regard to the above-captioned
vessel repair entry.
FACTS:
The vessel PRESIDENT MADISON was berthed at the United
States Naval Base at Subic Bay, the Philippines, at the time
Mount Pinatubo erupted. During the pendency of the stay in Subic
Bay, the volcano continued to erupt, raining down caustic
volcanic ash. The Master ordered all engine room intakes covered
with available filter materials, and all non-essential
ventilation shut down. The vessel was eventually covered with 10
inches of ash with drifting up to 2-feet deep. It then began to
rain which turned the ash to a brittle concrete-like consistency.
The vessel then proceeded to Taiwan for ash removal and repair.
We have been requested to review ten (10) shipyard items, but
have the invoices for only eight (8) of them. Of the invoices
made available for our review, seven (7) of them consist of ash
removal and filter material replacement (Invoice item numbers 14,
15, 16, 17, 18, 20 and 21). The eighth item (3) involves the
build-up of an undersize bearing land and coupling land in a
motor coupling. Invoices for the remaining two items (10 and
11), are not evident in the file.
ISSUE:
Whether sufficient evidence is submitted to demonstrate that
the foreign shipyard operations under review were necessitated by
an unforseen casualty event.
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.
Title 19, United States Code, subsection 1466(d)(1), states
that the Secretary of the Treasury is authorized to remit or
refund such duties if the owner or master furnishes good and
sufficient evidence that the vessel was compelled 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.
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, explosion, 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. See Customs
Ruling Letter 106159 LLB (9-8-83).
In the present matter, it is clear that of the eight (8)
items available for review, all except item three (3) are
directly related to the eruption of Mount Pinatubo in the
Philippine Islands, which we find to be a true casualty-causing
event. The Applicant has failed, however, to draw a sufficient
connection between that eruption and the operations performed in
item three (3), relating to the motor coupling. Accordingly,
item three (3) is considered dutiable and duty is remitted in
regard to the other seven (7) operations under consideration.
HOLDING:
Following a thorough review of the evidence submitted as
well as analysis of the law and applicable precedents, we have
determined to allow the Application in part and deny it in part,
as specified in the Law and Analysis portion of this ruling.
Sincerely,
B. James Fritz
Chief
Carrier Rulings Branch