HQ 111809: Vessel Repair Entry No. 744-2053034-2; SUGAR ISLANDER; Casualty; 19 U.S.C. 1466(d)(1)

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                            HQ 111809

                        December 24, 1991

VES-13-18-CO:R:IT:C 111809 GEV

CATEGORY:  Carriers

Deputy Assistant Regional Commissioner
Commercial Operations
ATTN:  Regional Vessel Repair Liquidation Unit
New York, New York 10048-0945

RE:  Vessel Repair Entry No. 744-2053034-2; SUGAR ISLANDER;
     Casualty; 19 U.S.C. 1466(d)(1)

Dear Sir:

     This is in response to your memorandum dated July 19, 1991,
transmitting an application for relief from duties assessed
pursuant to 19 U.S.C. 1466(d)(1).  Our findings are set forth
below;

FACTS:

     The SUGAR ISLANDER is a U.S.-flag vessel owned and operated
by Eastern Upper Peninsula Transportation Authority (EUPTA) of
Kincheloe, Michigan.  The subject vessel had foreign shipyard
work performed in Sault Ste. Marie, Ontario, Canada, during
March of 1991.  Subsequent to the completion of the work the
vessel arrived in the United States at Sault Ste. Marie,
Michigan on March 8, 1991.  A vessel repair entry was filed on
the date of arrival.

     An application for relief, dated March 11, 1991, was timely
filed requesting remission for the repairs performed.  The
specifics of this case are as follows.

     The vessel is operated by EUPTA as a ferry to transport
passengers between Mission Point, Michigan and Sugar Island,
Michigan.  On March 2, 1991, a man was sighted attempting to walk
across the ice of the frozen St. Mary's River from the Canadian
shore to the United States shore.  He fell through the ice and
the subject vessel was requested to render assistance to the
ensuing rescue operation.  During the rescue operation the vessel
ran aground on the Canadian side of the St. Mary's River and
sustained extensive damage to its rudders, propeller shafts,
bushings, etc.

                              - 2 -

     The repairs in question were performed by Purvis Marine
Ltd., a Sault Ste. Marie, Ontario facility.  The record indicates
that an employee of the U.S. facility normally utilized by EUPTA
in performing repair work on the subject vessel supervised the
repairs in the Canadian yard.

     It is contended that remission of the duties assessed on the
repairs in question should be granted pursuant to 19 U.S.C.
1466(d)(1).  In support of this claim the applicant has submitted
the following:  (1) a U.S. Coast Guard Certificate of Inspection;
(2) a U.S. Coast Guard Consolidated Certificate of Enrollment and
License; (3) copies of local newspaper articles covering the
grounding in question, including photographs of the damaged
portions of the vessel as well as the surplus Corps of Engineers
tug used as the only transportation between Sugar Island and the
mainland while the damaged vessel was being repaired; (4) a copy
of a letter dated March 4, 1991, from the Deputy Chief of Police,
Sault Ste. Marie, Ontario, thanking the operators of the vessel
during the rescue operation; (5) a letter dated March 21, 1991,
from John V. Carr & Son, Inc., Custom Brokers forwarding an
amended invoice from Purvis Marine Ltd.; and (6) an invoice from
Purvis Marine Ltd. listing the charges for the repairs in
question.

ISSUE:

     Whether evidence is presented sufficient to prove that the
foreign repairs performed on the subject vessel were necessitated
by a casualty occurrence, thus warranting remission pursuant to
19 U.S.C. 1466(d)(1).

LAW AND ANALYSIS:

     Title 19, United States Code, section 1466, 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 foreign or
coastwise trade, or vessels intended to engage in such trade.
Pursuant to Presidential Proclamation 5923 of December 14, 1988,
effective January 1, 1989, all such costs incurred in Canada are
dutiable at a rate of 45 percent ad valorem and shall decrease at
5 percent increments on January 1 of each successive year until
January 1, 1998, when duty on Canadian work assessed pursuant to
19 U.S.C. 1466 will be eliminated.

     Section 1466(d)(1) provides for remission of the above
duties in those instances where good and sufficient evidence is
furnished to show that foreign repairs were compelled by "stress
of weather or other casualty" necessary to secure the safety and
seaworthiness of the vessel to enable her to reach her port of
destination.

                              - 3 -

     The term "casualty", as it is used in the vessel repair
statute (19 U.S.C. 1466) has been interpreted as something
which, like stress of weather, comes with unexpected force or
violence, such as fire, or 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. 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 106159,
September 8, 1983).

     The Customs Service has consistently held that the grounding
of a vessel constitutes a "casualty" as that term is used in
section 1466(d)(1), and that duties on repairs necessitated by a
grounding are remissible if the repairs are performed to secure
the safety and seaworthiness of the vessel (see C.S.D. 89-61,
citing C.I.E.'s 1822/58, 1823/58 and 1160/60).

     Upon reviewing the record in its entirety, it is apparent
that the applicant has met the evidentiary requirements of 19
U.S.C. 1466(d)(1).  Accordingly, remission is granted.

HOLDING:

     The evidence presented is sufficient to prove that the
foreign repairs performed on the subject vessel for which relief
is sought were necessary for its safety and seaworthiness
therefore remission pursuant to 19 U.S.C. 1466(d)(1) is granted.

                                   Sincerely,




                                   B. James Fritz
                                   Chief
                                   Carrier Rulings Branch