VES-13-18 CO:R:IT:C 112699 BEW
Chief, Residual Liquidation and Protest Branch
U.S. Customs Service
6 World Trade Center
New York, New York 10048-0945
RE: Protest No. 1303-92-100241; Baltimore, Maryland, Vessel
Repair Entry No. 788-4005801-6, dated December 5, 1991;
PRIDE OF BALTIMORE II, Voyage 2; Casualty; 19 U.S.C.
1466(d)(1); 19 CFR 4.14
Dear Sir:
This is in response to your memorandum that forwards protest
No. 1303-92-100241, concerning vessel repair entry No. 788-
4005801-6, relating to the PRIDE OF BALTIMORE II, Voyage 2.
FACTS:
The PRIDE OF BALTIMORE II is an United States-flag vessel
owned by the Department of Transportation, State of Maryland.
The vessel is a replica of a tall ship which is used for the
purpose of promoting goodwill. The vessel is documented for
coastwise trade, registry and recreation. The record shows that
the subject vessel arrived in the port of Baltimore, Maryland, on
November 28, 1991, after having undergone repairs in the ports of
Barcelona, Spain, and Lisbon, Portugal, on November 30, 1990, and
October 10, 1991, respectively. An application for relief was
not filed. A petition for relief was filed alleging that the
subject repairs were necessary due to "casualty". The Talleres
Nautilus, SA, invoice 445/90, dated November 12, 1990, submitted
with the petition, revealed a statement alleging a latent defect.
By decision dated September 2, 1992, HQ 112427 GEV, we ruled that
the evidence was insufficient to support a finding that a
casualty was caused by a latent defect. The entry was liquidated
on June 26, 1992. The protest was timely filed on September 9,
1992.
The protestant claims that the subject invoices relate to
the repairs necessary because of a casualty. It claims that the
repairs to the single side band radio and the generator were made
for the safe navigation of the vessel and the safety of the crew;
and that the repair work performed on the pipe in the galley was
a necessary safety factor which was done to prevent the problem
from escalating. The protestant has also submitted a copy of the
vessel's log which shows that the vessel encountered heavy
weather during the period April 10 through April 11, 1990.
ISSUE:
Whether sufficient evidence is presented to establish that
the subject repairs were necessitated by a "casualty" which is
remissible under the vessel repair statute (19 U.S.C. 1466).
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.
Paragraph (1), subsection (d) of section 1466 provides that
duty may be remitted if good and sufficient evidence is furnished
establishing that the vessel was compelled by stress of weather
or other casualty to put into a foreign port to make repairs to
secure the safety and seaworthiness of the vessel to enable her
to reach her port of destination. It is Customs position that
"port of destination" means a port in the United States.
The statute thus sets a three-part test that must be met in
order to qualify for remission under the subsection, this being:
1. The establishment of a casualty occurrence.
2. The establishment of unsafe and unseaworthy conditions.
3. 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 that, 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 (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 (ruling letter 106159, September 8, 1983).
In addition, if the above requirements are satisfied by
evidence, the remission is restricted to the cost of the minimal
repairs necessary to "secure the safety and seaworthiness of the
vessel to enable her to reach her port of destination" (19 U.S.C.
1466(d)(1)). Repair costs beyond that minimal amount are not
subject to remission.
Customs Regulations require that certain supporting evidence
be submitted with an application for relief from duties on
repairs resulting from stress of weather. This evidence includes
photocopies of the relevant parts of the vessel's logs,
certification of any claimed casualty by the master or other
responsible vessel officer with personal knowledge of the facts,
and a certification by the master that the repairs were necessary
for the safety and seaworthiness of the vessel to enable her to
reach her port of destination in the United States (19 C.F.R.
4.14(d)(1)(iii)(D)-(F)).
We have reviewed the invoices submitted with the protest.
It is clear from the evidence that the vessel was in need of
repairs to its radar system, generator and feed pipe to the
galley cock.
Further, it is clear from the evidence that the vessel was
in need of repairs to secure her safety and seaworthiness,
however, the evidence is insufficient to show what actually
caused the breakdown of the subject items. Absent clear proof of
an identifiable event to show an unexpected force or violence,
such as fire, explosion, or collision resulting in damage, such
cost of repairs is not remissible (see C.I.E. 1826/58). The
documentation submitted is insufficient to support a finding of a
casualty as provided in section 1466(d)(1). The protestant has
not submitted documentation to substantiate that the damage was
due to an identifiable event of some sort which caused the
damage. A review of the vessel's log for April 10 and 11, 1990,
failed to show that the subject repairs were necessiated by heavy
weather damage. Pursuant to C.I.E. 919/60 remission of duty
assessed on the cost or repairs is not warranted under section
1466 where the repairs are maintenance in nature.
HOLDING:
The evidence presented is insufficient to substantiate that
the subject repairs were necessitated by a casualty. The foreign
work for which the protestant seeks remission is therefore
dutiable under 19 U.S.C. 1466. The district director should deny
the protest in full. A copy of this decision should be attached
to the Customs Form 19 and forwarded to the protestant as part of
the notice of action on the protest.
Sincerely,
Stuart P. Seidel
Director, International
Trade Compliance Division