HQ 113120: Vessel Repair Entry No. C53-0028016-7; Parts; Casualty; M/V H.O.S. AGILE; V-2; 19 U.S.C. 1466

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 113120

                         August 4, 1994

VES-13-18-CO:R:IT:C 113120 GEV

CATEGORY:  Carriers

Regional Director
Commercial Operations Division
U.S. Customs Service
423 Canal Street
New Orleans, Louisiana 70130-2341

RE:  Vessel Repair Entry No. C53-0028016-7; Parts; Casualty;
     M/V H.O.S. AGILE; V-2; 19 U.S.C.   1466

Dear Sir:

     This is in response to your memorandum dated May 25, 1994,
forwarding an application for relief from duties assessed pursuant
to 19 U.S.C.   1466.  Our findings in this matter are set forth
below.

FACTS:

     The M/V H.O.S. AGILE is a U.S.-flag vessel owned by Hornbeck
Offshore Corporation of Galveston, Texas and operated by Bletsch
Steamship Company of Houston, Texas.  The subject vessel underwent
foreign repairs in Cartagena, Spain and Crete, Greece in September
and October of 1993.  Subsequent to the completion of these
repairs, the vessel arrived in the United States at Galveston,
Texas on November 12, 1993.  A vessel repair entry was filed on
November 16, 1993.

     An application for relief from vessel repair duties was filed
on November 16, 1993.  The applicant claims that the vessel
incurred major engine problems while working on a job and that the
Chief Engineer and vessel owners made the decision to repair/change
out the engine to avoid any possible problems at sea.  The
applicant submitted the following documentation:  invoices from the
U.S. manufacturer of parts used for repairs;  invoices evidencing
overseas travel by, and labor of, a U.S. technician; invoices from
the Greek manufacturer of parts used for repairs; and air waybills
covering both U.S. and Greek parts.
                              - 2 -

ISSUE:

     Whether evidence is presented sufficient to prove that the
foreign repairs performed on the vessel for which relief is sought
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,   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, or vessels intended
to engage in such 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
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 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 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).

     It is noted that   4.14(c)(3)(i), Customs Regulations (19 CFR
  4.14(c)(3)(i)), provides that "port of destination" means such
port in the United States.  This point is not in dispute, however,
it is an embellishment upon   1466(d)(1) which, as stated above,
sets forth the following three-part test which must be met in order
to qualify for remission: 

     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.

     In addition, if the above requirements are satisfied by
evidence, the remission is restricted to the cost of the minimal
repairs necessary to enable the vessel to reach her port of
destination.  Repair costs beyond that minimal amount are not
subject to remission.  


                              - 3 -

     In regard to the case under consideration, other than the bald
statement of the applicant that the work in question constituted
"emergency repairs," the record is devoid of any documentary
evidence supporting such a claim (see 19 CFR 
  4.14(d)(1)(iii)).  Accordingly, the applicant's request for
remission pursuant to a casualty claim is denied.

     Parenthetically, we note that the application is also devoid
of the requisite certifications specified in 19 CFR   
4.14(d)(1)(i) and (iv).  Future applications from this applicant
must contain the aforementioned certifications in order to receive
Customs consideration.

     Notwithstanding our above determination, we nonetheless note
that documentation has been submitted covering parts and labor used
in the repairs.  It is Customs position that the dutiability of
vessel parts installed on U.S.-flagged vessels is controlled by
Treasury Decision (T.D.) 75-257.  Accordingly, the costs of parts
and materials covered by invoices from Stewart & Stevenson
Services, Inc. of Houston, Texas which evidences U.S. purchase by
the vessel owner and U.S.-manufacture are not dutiable.  In
addition, the cost of the labor to install the aforementioned parts
and material is remissible pursuant to 19 U.S.C. 
  1466(d)(2).  The cost of the Greek-manufactured parts in issue
is dutiable.

HOLDING:

     The evidence presented is insufficient to prove that the
foreign repairs performed on the vessel for which relief is sought
were necessitated by a casualty occurrence thus warranting
remission pursuant to 19 U.S.C.   1466(d)(1).

     However, upon review of the record in its entirety, we have
determined to grant in part and deny in part the application for
relief in this matter as specified in the Law and Analysis portion
of this ruling.

                              Sincerely,




                              Arthur P. Schifflin
                              Chief
                              Carrier Rulings Branch