HQ 112221: Vessel Repair; 19 U.S.C. 1466; Application for Relief; Alleged Casualty; Crosshead Bearings; Vessel Repair Entry No. C27-0061073-9; SEA-LAND INNOVATOR V-117

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 112221

                          June 30, 1992

VES-13-18 CO:R:IT:C 112221 MLR

CATEGORY:  Carriers

Deputy Regional Director
Commercial Operations
Pacific Region
One World Trade Center
Long Beach, California  90831

RE:  Vessel Repair; 19 U.S.C. 1466; Application for Relief;
     Alleged Casualty; Crosshead Bearings; Vessel Repair Entry
     No. C27-0061073-9; SEA-LAND INNOVATOR V-117

Dear Sir:

     This is in reference to your memorandum of April 22, 1992,
which forwards for our consideration the above-referenced
Application for Relief by Randy E. Miller, of Sea-Land Service,
Inc.

FACTS:

     The record reflects that the subject vessel, the SEA-LAND
INNOVATOR, arrived at Los Angeles, California, on December 17,
1991.  Vessel repair entry, number C27-0061073-9, was filed on
December 18, 1991, indicating work performed on the vessel in
Japan and Taiwan.  Additional time to file an application for
relief was granted which was filed on March 19, 1992.  We review
the dutiability of the following items:

1.   Item 4, and item 4-1b - Mitsubishi Heavy Industries (main
     engine repair, and main engine oil mist detector)

2.   Item 5 - ABS Survey (continued survey)

3.   Item 7 - ABS Survey (bearing damage survey)

4.   Item 8 - Posa Marine (independent survey)

     The Chief Engineer reported that on November 24, 1991, at
1835 hours, when the vessel left Naha bound for Hakata, Japan, an
auto slowdown alarm was actuated from the oil mist detector.  He
noted that the temperature of the newly installed liner no. 3 was
moderately high, and the crosshead pressure was low.  The vessel
was diverted to Kobe, Japan, with reduced RPM of the main diesel
engine and arrived on November 28, 1991.

     The ABS survey found crosshead bearings nos. 3, 5 and 8 to
be heavily overheated and partly melted.  It was recommended that
bearing metals be renewed and crosshead pins be polished.  Also,
it was recommended that the remaining six crosshead bearings be
opened and renewed.

     The Posa Marine Survey states, in part, that the first and
most probable cause of the engine failure was the loss of
crosshead lube oil pressure to the upper connecting rod bearings.
"The only confirmed fact is that the crosshead lube oil low
pressure safety system failed to save the bearings due to failure
of Alarm and pumps Auto-Change to function due to the blown fuse
found in the Speed Meter Relay."  The second possible cause of
the engine failure was "wear and tear".  "Crosshead bearings nos.
3, 5 and 8 had already logged over 70,000 running hours....It can
however be argued that failure by wear and tear of three bearings
at the same time would be too much of a coincidence, therefore
unlikely to happen."  The report also states that the failure of
the crosshead L.O. Low pressure safety system to function is not
relevant in this case, "as no significant lube oil pressure drop
would result due to larger clearance of the damaged bearings."

     Sea-Land claims these items are non-dutiable pursuant to 19
CFR 4.14(c)(3)(i).

ISSUE:

     Whether sufficient evidence is presented to establish that
foreign repairs were necessitated by a "casualty" making the
duties remissible under the vessel repair statute (19 U.S.C.
1466).

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.

     Paragraph (1), subsection (d) of section 1466 provides that
duty may also 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 which must be met in
order to qualify for remission under the subsection, these
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 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 {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).

     Customs Regulations require that certain supporting
evidence be submitted.  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 U.S.  19 C.F.R. 4.14(d)(1)(iii)(D)-(F).  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.

     The Posa Marine Survey report lists two possible causes for
the engine failure:  (1) loss of crosshead lube oil pressure, and
(2) wear and tear of the crosshead bearings.  The crosshead
bearings had logged over 70,000 running hours.  Although the
report states that the failure of the safety system to function
is not relevant, we find the applicant has not met its burden to
establish that the engine failure was a result of a casualty
pursuant to 19 U.S.C. 1466(d) and 19 CFR 4.14(c)(3)(i).
Accordingly, we find that the operations performed are dutiable
repairs.  Further, the surveys conducted are also dutiable.  Only
the costs of a required scheduled inspection by a qualifying
entity are non-dutiable, not the costs incurred to test the
necessity and effectiveness of repairs.

     The "special continuous survey" conducted by the ABS (item
5) is also dutiable.  Although the survey was given credit as a
"special continuous survey of machinery and electrical
equipment", the survey was conducted at the owner's convenience
to examine all crosshead pins and bearings for possible damage as
a result of the engine failure.  In the liquidation process,
Customs should go beyond the mere labels of "continuous" or
"ongoing" before deciding whether a part of an ongoing
maintenance and repair program labelled "continuous" or "ongoing"
is dutiable.

HOLDING:

     The evidence presented is insufficient to sustain the
finding of a casualty; the application for relief is denied.

                                   Sincerely,




                                   B. James Fritz
                                   Chief
                                   Carrier Rulings Branch