HQ 113581: Vessel repair; Application for Relief; Casualty claim; Survey and repairs prior to sailing; Vessel BRISTOL BAY TRADER; Vessel repair entry number 603-1019842-3

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 113581


                         February 8, 1996

VES-13-18-RR:IT:EC 113581 LLB

CATEGORY: Carriers

Chief, Liquidation Section II
U.S. Customs Service
Post Office Box 2450
San Francisco, California 94126

RE:  Vessel repair; Application for Relief; Casualty claim;
     Survey and repairs prior to sailing; Vessel BRISTOL BAY
     TRADER; Vessel repair entry number 603-1019842-3

Dear Sir:

     Reference is made to your memorandum of September 14, 1995,
which forwards for our review and appropriate action the
Application for Relief filed by counsel on behalf of Northland
Services, Inc., in connection with the above-captioned vessel
repair entry.  Our finding are contained in the ruling which
follows.

FACTS:

     The BRISTOL BAY TRADER is an unmanned barge which, prior to
April of 1995, had been named ALASKA ENTERPRISE.  In October of
1986, while under different ownership, the vessel commenced a
voyage under tow from Seattle, Washington, to Busan, Korea, via
the port of Dutch Harbor, Alaska.  Ten days prior to the
commencement of the voyage, the vessel was placed on drydock and
underwent a condition and valuation survey conducted by the
Salvage Association in Seattle.  Necessary deficiencies were
attended to, the hull was repainted, and the vessel was
pronounced fit for its service.  No deficiencies were noted with
regard to the hull plating.

     It is stated that foul weather was encountered during the
trans-pacific crossing in October of 1986.  In February of 1987,
it is noted that the Master of the towing vessel E.B. MACNAUGHTON
noted that the subject barge, while under tow and in ballast,
listed to the port side.  The vessel was subsequently hauled at
the port of Kaoshiung where a survey conducted by The Salvage
Association revealed the presence of underwater damage consistent
with heavy weather.  Water was found in the center tanks, and it
was discovered that the tank bottom was missing.
ISSUE:

     Whether the evidence is sufficient to prove that the vessel
suffered from a casualty occurrence, so as to permit the
remission of assessed duty pursuant to subsection (d)(1) of the
vessel repair statute.

LAW AND ANALYSIS:

     Title 19, United States Code,  1466 (a) (19 U.S.C.  1466
(a)), provides in pertinent part for the payment of an ad valorem
duty of 50 percent of the cost of "...equipments, or any part
thereof, including boats, purchased for, or the repair parts or
materials to be used, or the expenses of repairs made in a
foreign country upon a vessel documented under the laws of the
United States...."

     The vessel repair statute provides for the remission of
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" and were 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).  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, explosion, or collision.  Dollar
Steamship Lines, Inc. v. United States, 5 Cust. Ct. 23, 28-29,
C.D. 362 (1940).  In the absence of evidence of such a casualty
causing event, we must consider the repair to have been
necessitated by normal wear and tear.  C.S.D. 89-95, 23 Cust. B.
& Dec., No. 43, 4, 5 (1989).

     Experience demonstrates that damage to underwater parts of
vessels is usually not easily detectable or susceptible of
definite proof respecting the date and place of occurrence. 
Therefore, relief under  1466 is granted in the absence of proof
that the vessel concerned was grounded, struck bottom or her
propeller contacted some floating object capable of causing
damage, prior to commencement of her voyage.  C.I.E. 1202/59.

     In this case we are presented with evidence that the vessel
underwent an inspection while drydocked, immediately prior to the
commencement of the voyage in question.  In light of the fact
that extensive damage to underwater portions of the vessel was
discovered in a damage survey while again in drydock only four
months later, Customs precedent decisions assist us in
determining that the repairs which followed were necessitated by
a casualty event.

     We also note the presence in the repair invoices of vessel
modification elements with regard to items 13, and 16 through 25. 
As an adjunct to the casualty-related repairs, the affected areas
were enhanced by the addition of newly fitted tripping brackets
for reinforcement.  In its application of the vessel repair
statute, the Customs Service has held that modifications,
alterations, or additions to the hull and fittings of a vessel
are not subject to vessel repair duties.  Over the course of
years, the identification of work constituting modifications on
the one hand and repairs on the other has evolved from judicial
and administrative precedent.  In considering whether an
operation has resulted in a modification that is not subject to
duty, the following elements may be considered:

     1.   Whether there is a permanent incorporation into the
          hull or superstructure of a vessel (see United States
          v. Admiral Oriental Line, 18 C.C.P.A. 137 (1930)),
          either in a structural sense or as demonstrated by the
          means of attachment so as to be indicative of the
          intent to be permanently incorporated.

     2.   Whether in all likelihood an item under consideration
          would remain aboard a vessel during an extended lay-up.

     3.   Whether, if not a first time installation, an item
          under consideration constitutes a new design feature
          and does not merely replace a part, fitting, or
          structure that is performing a similar function.

     4.   Whether an item under consideration provides an
          improvement or enhancement in operation or efficiency
          of the vessel.

We find the tripping brackets under consideration to meet the
criteria for modification elements.

     Since remission is granted under the terms of the vessel
repair statute itself as well as judicial and administrative
precedent, there is no need to address the claim that since the
vessel was sold in bankruptcy while abroad pursuant to Court
order stated as, "free and clear of all liens, encumbrances or
interests...", no authority exists to collect vessel repair duty.

HOLDING:

     Following a thorough examination of the evidence presented
as well as an analysis of the law and applicable precedents, we
have determined that the operations performed aborad on the
vessel in question were necessitated by a weather-related
casualty, or are in the nature of modifications to the vessel. 
Accordingly, duties assessed on the cost of the foreign repairs
is remitted pursuant to subsection (d)(1) of the vessel repair
statute (19 U.S.C. 1466 (d)(1)), and judicial and administrative
precedent.  The Application for Relief is granted.

                                                                  
   Sincerely,




                                                                  
   William G.  Rosoff
                                                                  
   Chief
                                                                  
   Entry and Carrier Rulings Branch