HQ 110644: Vessel Repair Entry No. C53-0012147-8, June 12, 1989; Date of Arrival: June 5, 1989; Port of Arrival: Houston, Texas; Vessel: M/V PRIDE OF TEXAS, Voyage No. 38

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 110644

                          July 13, 1990


VES-13-18-CO:R:P:C  110644 BEW

CATEGORY:  Carriers

Deputy Assistant Regional Commissioner
Commercial Operations Division
ATTN:  Vessel Repair Liquidation Unit
New Orleans, Louisiana  70130

Re:  Vessel Repair Entry No. C53-0012147-8, June 12, 1989;  Date
     of Arrival:  June 5, 1989;  Port of Arrival: Houston,
     Texas; Vessel:  M/V PRIDE OF TEXAS, Voyage No. 38

Dear Sir:

     This is in reference to an application for relief from
duties filed by Seahawk Management, Inc., in relation to the
above referenced vessel repair entry dated June 12, 1989.  We
have reviewed the entire record, and render the following advice.

FACTS:

     The record shows that the shipyard work in question was
performed on the subject vessel at sea in Gibraltar and Egypt,
during the period May 4 through May 29, 1989.

     The subject vessel arrived in the United States at the port
of Houston, Texas, on June 5, 1989.

     The entire vessel repair entry involves a potential duty of
$10,385.  You have requested our advice concerning two (2)
items.

     We will refer to the work using the item numbers and
invoice descriptions shown on the attachments and invoices
submitted with your memorandum.

     The applicant claims that relief for the subject items
should be granted because the items should be classified as
nondutiable items covered under title 19, United States Code,
section 1466(a) and sections 4.14(a) and 4.14(c) of the Customs
Regulations.

     The applicant claims that the repairs or equipment
purchases described in the documents were necessitated by a
casualty, i.e., damage caused by manufacturer's negligence
wherein the port main engine left bank cam idler gear bracket
dropped, which in turn, caused gear train damage and rendered the
engine inoperable.  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.

ISSUE:

     Whether the foreign work performed on the subject vessel is
dutiable under 19 U.S.C. 1466.

LAW AND ANALYSIS:

     Title 19, United States Code, section 1466, provides in
pertinent part for payment of an ad valorem duty of 50 percent
of the cost of foreign repairs to a vessel documented under the
laws of the United States to engage in the foreign or coastwise
trade.

      Section 1466(d)(2), provides that the Secretary of the
Treasury is authorized to remit or refund such vessel repair
duties if the owner or master provides good and sufficient
evidence that the repair parts or materials were manufactured or
produced in the United States and the labor necessary to make
these repairs was performed by residents of the United States, or
by members of the regular crew of the vessel (emphasis added).

     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 the vessel's log concerning the damage and
repair.  These documents amount to reports on the presence of
damage, but provide insufficient 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 sustains a finding of
wear and tear, but is insufficient to support a finding of a
casualty as provided in section 1466(d)(1).  Accordingly, the
cost incurred for the subject repairs is dutiable.

     We now come to the dutiability under section 1466 of
equipments, parts, repair material, etc., which have been
alleged to have been manufactured and purchased in the United
States for installation abroad on the subject U.S.-documented
vessels.   Customs, by memorandum dated April 19, 1989,
published in the United States Customs Bulletin and Decisions,
Vol. 23, No. 19, dated May 10, 1989, held that the use of
foreign labor to install U.S. parts subjects both the parts and
the labor to duty.  The implementation of Customs policy as set
forth in the May 10, 1989, Customs Bulletin should have been
preceded by the publication of a notice in the Federal Register
soliciting comments from interested parties.  Accordingly, until
such time as said notice is published, Customs will uphold its
position as delineated in T.D. 75-257, which held that where
equipment, parts, repair materials, etc., which have been
manufactured and purchased in the United States are installed
abroad on U.S.-documented vessels by other than U.S. residents or
regular crew, the labor alone is dutiable.

     In our adherence to the policy set forth in T.D. 75-257,
however, it has come to our attention that affidavits have been
submitted which misrepresent the place of manufacture of the
article in question.  Inasmuch as we have come to learn of this
misrepresentation, it is our policy to require evidence beyond
an affidavit from an interested party to establish U.S.
manufacture and U.S. purchase.  Therefore, we require direct
evidence of U.S. manufacture as well as U.S. purchase for
remission to be granted.

     In the application under consideration, the petitioner has
submitted invoices for the contested articles which indicate
purchase in the United States, however, there is no evidence
submitted that addresses the articles' place of manufacture.
Since no direct evidence of U.S. manufacture has been submitted,
we find the amounts listed for U.S. materials to be dutiable.

                                     Sincerely,




                                     B. James Fritz
                                     Chief
                                     Carrier Rulings Branch