VES-13-18-CO:R:P:C 110557 BEW
Deputy Assistant Regional Commissioner
Commercial Operations Division
ATTN: Vessel Repair Liquidation Unit
New Orleans, Louisiana 70130
RE: Houston Vessel Repair Entry No. C13-0012148-6, dated
July 11, 1989, SS CHESTNUT HILL
Dear Sir:
This is in reference to an application for relief from
duties, filed by Chestnut Shipping Corporation in relation to the
above referenced vessel repair entry dated August 02, 1989,
transmitted to this office by memorandum dated October 2, 1989.
The record shows that the shipyard work in question was
performed on the subject vessel in Malta, during the period
June 16 through June 22, 1989. The subject vessel arrived in
the United States at the port of Houston, Texas, on July 8, 1989.
The entire vessel repair entry involves an estimated duty of
$17,000.
The applicant claims that the repairs or equipment purchases
described in the documents were necessitated by a casualty, i.e.,
collapse of the port boiler refractory in way of the vestibule
areas. It claims that the vessel was compelled, because of
damage, to make repairs and to purchase such equipment to secure
the safety and seaworthiness of the vessel to enable it to reach
its port of destination.
You have requested our advice concerning certain work and
services performed aboard, specifically item 1(a).
ISSUE:
Whether the foreign work performed on the subject vessel is
dutiable under 19 U.S.C. 1466.
LAW AND ANNALYSIS:
Title 19, United States Code, section 1466, provides in
part for payment of an ad valorem duty of 50 percent of the cost
of foreign repairs to vessels documented under the laws of the
United States to engage in the foreign or coastwise trade.
Section 1466 (d)(1) provides that the Secretary of the
Treasury is authorized to remit or refund such duties if the
owner or master of the vessel submits good and sufficient
evidence that 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 term "casualty", as it is used in the vessel repair
statute (19 U.S.C. 1466), has been interpreted by the Customs
Court as something which, like stress of weather, comes from
unexpected force or violence, such as from a fire, explosion, or
collision (see Dollar Steamship Lines, v. United States, 5 Cust.
Ct. 28-29, C.D. 362 (1940)).
A clear requirement of the statute is that the vessel be
compelled by such a casualty to seek foreign shipyard service to
secure the safety and seaworthiness of the vessel and to enable
her to safely reach her port of destination.
The file contains copies of the contemporaneously prepared
Master's report and American Bureau of Shipping Report No. PD
1927 dated June 12, 1989, concerning damage to the port side
main boiler. The report states that "No repairs were carried out
at this time, and it is recommended that all damaged fire_bricks
to be rebuilt as original befor putting the port side main boiler
in service at full capacity, within a period not later than one
(1) month from this date". These documents amount to reports on
the presence of damage, but provide no evidence as to how the
damage occurred. Absent clear proof of an identifiable event
resulting in damage, such damage is assumed to have resulted from
ordinary wear and tear. The documentation submitted is
insufficient to support a finding of a casualty as provided in
section 1466(d)(1). Accordingly, the cost incurred for repairs
under Marcon Engineering Ltd. invoice No. E 2346(89) to this
vessel repair entry is dutiable, except the expenses relating to
travel (air and taxi), hotel accommodations and living expenses.
HOLDING:
The documentation submitted is insufficient to support a
finding of a casualty as provided in section 1466(d)(1). The
claim is denied as to item 1(a), with the exceptions noted above.
Sincerely,
B. James Fritz
Chief
Carrier Rulings Branch