HQ 112106: Vessel Repair; 19 U.S.C. 1466(d)(1); Vessel Repair Entry No. C21-0000099-4; Protest No. 5301-92-100038; Casualty; Grounding; M/V SPIRIT OF TEXAS V-62

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 112106

                          June 30, 1992

VES-13-18-CO:R:IT:C 112106 MLR

CATEGORY:  Carriers

Deputy Assistant Regional Commissioner
Commercial Operations
423 Canal Street
New Orleans, Louisiana  70130-2341

RE:  Vessel Repair; 19 U.S.C. 1466(d)(1); Vessel Repair Entry No.
     C21-0000099-4; Protest No. 5301-92-100038; Casualty;
     Grounding; M/V SPIRIT OF TEXAS V-62

Dear Sir:

     This is in response to your memorandum of March 12, 1992,
regarding the protest, filed by Sharon Steele Doyle, Givens and
Kelly, on behalf of Seahawk Management, Inc.

FACTS:

     The record reflects that the M/V SPIRIT OF TEXAS, arrived at
Port Arthur, Texas, on April 1, 1991.  Vessel repair entry,
number C21-0000099-4, was untimely filed on April 10, 1991,
indicating foreign work performed on the vessel.  Customs did not
consider the application for relief filed after the 60-day time
period specified in section 4.14(d)(1)(ii) of the Customs
Regulations {19 CFR 4.14(d)(1)(ii)}, consequently the entry was
liquidated November 11, 1991.  A protest was timely filed on
January 22, 1992.

     The charges underlying the protest in this case are stated
to have resulted from an incident when the vessel allegedly ran
aground on March 1, 1991, near the port entrance of Bourgas,
Bulgaria, resulting in two holes in the hull below the water
line.

     The Master, Robert B. Crane, stated that the vessel was
proceeding to the pilot station, in the designated inbound
traffic lane, when he was informed that the pilot was delayed.
He reduced the speed and subsequently stopped the engine.  The
course was "falling to the right" and Port Control informed him
that the vessel was "standing into danger".  To bring the head to
the left, the engine was put ahead at dead slow and then slow
ahead.  "Before the heading came left, the ship was felt to be on
the bottom."  The fore peak tank was later pumped down, and water
was discovered to be coming into that tank; however, "not at an
alarming rate".

     The Chief Mate, Stephen Peek, related a similar account of
the incident indicating that the inbound lane stops about one
mile from the shallow area east of Bourgas breakwater, marked by
a buoy.  The pilots were delayed and after the engines were
stopped, the vessel continued to approach the end of the traffic
separation scheme.  The bow began to swing to starboard.  The
pilot called to say the ship was standing into danger, so the
Captain ordered left rudder and engines dead slow ahead, then
slow ahead.  The ship began to swing to port, and the vessel
touched bottom.

     Center of Ocean Engineering Invoice no. 5 indicates that a
diving team detected revealed two large inset areas and cracks in
the watertight hull.  The cracks allowed water to enter the
forepeak tank and the #1 port double bottom tank.  Drawings are
attached to the invoice.  The underwater survey also showed that
the deformations on the hull "are just slight bendings and there
are not obvious changes in the form of the hull".  A TV film was
made for the ABS, shipowners and the captain.

     The American Bureau of Shipping survey report states that
temporary repairs were carried out:

          Bottom plate fractures...were made tight with four (4)
          cimented boxes each of 800x1000x600 mm in way of
          Bulbous bottom at 1st and 2nd port-stbd bays from
          forward and five (5) cimented boxes each of
          800x1300x800 mm in No. 1 port double bottom tank and at
          bays formed by frames No. 200-201, 201-202, 202-203,
          203-204, 204-205 and the outboard, longitudinal swash
          bulkhead.  The cimented boxes were reinforced with iron
          rods 16 mm dia and conditions were considered
          satisfactory for further service.

          Upon completion of vessel's underwater body examination
          and temporary repairs carried out as described
          in...this report the vessel was considered fit to
          proceed to her service intended.

          It is recommended that permanent repairs be carried out
          at vessel's next scheduled drydocking survey.

     The Chief Engineer, William E. Shuga, stated:

          Due to the stranding, there was a crack in the shell
          plating in the forepeak and a crack in No. 1 ballast
          tank, port side....It was the opinion of the ABS
          surveyor and myself, that repairs would have to be made
          to make the vessel seaworthy to return to a U.S. port.
          We agreed that the leaks should be sealed from the
          outside to stop all leakage.  Leaking compartments were
          filled with concrete and reinforcing bars from the
          inside.

     The record also contains the vessel log which indicates that
the vessel touched bottom at 0819, and the U.S. Coast Guard
"Report of Marine Accident, Injury or Death" which indicates that
the extent of damage is unknown pending an underwater inspection.

     Protestant states that because the damage was the result of
a grounding and the repairs were performed to restore the safety
and seaworthiness of the vessel, the costs incurred for the
repair of the hull damage should be subject to remission.

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:

     The right to protest the liquidation of an entry is provided
in section 514, Tariff Act of 1930, as amended (19 U.S.C. 1514).
Even though no pre-liquidation prayer for relief might be
submitted, there is a statutory right to seek refund of duties
assessed under subsection (a) of the vessel repair statute {19
U.S.C. 1466(a)}, and a section 1514 protest seeking such refund
must be considered on its merits.  The failure to submit a timely
application for relief under the Customs Regulations is
tantamount to the failure to seek pre-liquidation relief from
duties.  Therefore, this protest will be considered on its
merits.

     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 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.  C.S.D. 89-61.

     The record supports the finding that a grounding resulted
and that the temporary repairs conducted were necessitated to
secure the safety and seaworthiness of the vessel.  Accordingly,
the entry should be reliquidated, the charges for shipyard
services performed in Bulgaria being remissible.


HOLDING:

     The evidence presented is sufficient to sustain the finding
of a casualty, thus making the duties on the foreign repair costs
remissible under 19 U.S.C. 1466(d)(1).

                                   Sincerely,



                                   B.James Fritz
                                   Chief
                                   Carrier Rulings Branch