HQ 112226: Vessel Repair; 19 U.S.C. 1466(d)(1); Vessel Repair Entry No. C31-0009827-7; Protest No. 3126-92-100011; Casualty; F/V MISS HUMBOLDT V-1

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 112226

                          July 22, 1992

VES-13-18-CO:R:IT:C 112226 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(d)(1); Vessel Repair Entry No.
     C31-0009827-7; Protest No. 3126-92-100011; Casualty; F/V
     MISS HUMBOLDT V-1

Dear Sir:

     This is in response to your memorandum of April 15, 1992,
(your file VES-13-SF:O:C:T BZ) regarding the protest, filed by
Daniel J. Figueiredo.

FACTS:

     The record reflects that the F/V MISS HUMBOLDT, arrived at
Kodiak, Alaska, on July 5, 1991.  Vessel repair entry, number
C31-0009827-7, was untimely filed on July 25, 1991, indicating
foreign work performed on the vessel at Vancouver, Canada.  Mr.
Figueiredo states that in June 1991, en route from Eureka,
California, to Sand Point, Alaska, the engine "overheated and
froze up".  The Canadian Coast Guard towed the vessel into
Campbell River, Vancouver, B.C.  There the engine was overhauled.
The invoice indicates that 6 cylinder kits and 3 exchange
cylinder heads were installed.

     According to Customs Round Voyage Rule where a vessel which
was repaired just prior to the voyage in question is presumed to
be seaworthy for a round voyage, limited to six months, Mr.
Figueiredo submitted documentation which substantiated that the
engine was repaired in August 1989.  Customs denied remission of
duty for the engine overhaul in June 1991, because the "extensive
repairs were made nearly two years before (the) incident".
Customs believed a mechanical failure necessitated the repairs;
therefore, the work done did not qualify as an "other casualty"
for duty to be remitted.

     Consequently the entry was liquidated on December 20, 1991.
A protest was timely filed on March 2, 1992.  Mr. Figueiredo now
contends that Customs did not consider the type of engine and its
maintenance requirements when duty was assessed.  He states that
the vessel is powered by a Cummins 250 diesel engine and that it
is not uncommon to go 15 to 25 years between major overhauls.  He
asserts that between the August 1989 engine overhaul and the
emergency repairs in June 1991, the engine had approximately 800
hours.  Throughout the 800 hours, regular maintenance was
performed as recommended in the Cummins 250 diesel engine manual.
Mr. Figueiredo believes that the engine was well maintained and
in a "like new condition" at the time of the overheating incident
near Campbell River, B.C., and the engine problem was not
anticipated.  Further, he states that the cost of repairs was
approximately $2,000 more in Canada than it would have been in
the United States.  Accordingly, Mr. Figueiredo seeks remission
in the amount of $2123.00.

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 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.

     In Dollar Steamship Lines, Inc. v. United States, 5 Cust.
Ct. 23, 28-29, C.D. 362 (1940), the term "casualty" was
discussed:

          The phrase 'or other casualty' is supplemental to and
          qualifies the phrase 'stress of weather' broadening the
          term to include other similar casualties.  A casualty
          similar to 'stress of weather' would include such as is
          violently exerted; that which comes with unexpected
          force or violence, such as that of a fire, or a
          collision, or an explosion.

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).

     In Customs Service Decision 79-32, we held that a breakdown
in machinery may not be regarded as a casualty within the purview
of the vessel repair statute in the absence of a showing that the
breakdown or failure was caused by some extrinsic force.
Further, in International Navigation Co. Inc. v United States,
1957, 38 Cust. Ct. 5, 11, C.D. 1836 (1957), the court stated in
part:

          ...It is evident that under the provision as enacted it
          was not intended that duties should be remitted in all
          cases where repairs were made because of damages
          suffered or equipment damaged or worn out during the
          course of a voyage, even though such repairs were
          necessary to maintain the vessel in a seaworthy
          condition.  It was only where the damage occurred by
          reason of some serious or extraordinary event,
          described as 'stress of weather or other casualty,'
          that remission was permitted.

     ORR Ruling 192-71 {abstracted as T.D. 71-83(38)}, holds that
if satisfactory evidence is furnished clearly showing any part of
a vessel to have been repaired and/or serviced just prior to the
commencement of a voyage from a United States port, it is
reasonable to assume the part is seaworthy for a round voyage,
foreign and return, limited to six months from the date of repair
or servicing.  In ORR Ruling 192-71, the vessel's boilers were
opened, cleaned and examined externally and internally; all
repair work that was required was performed; and the boilers were
hydrostatically tested, proven tight and certified in the boiler
survey report as being in satisfactory condition.  Less than six
months later, the vessel's boilers failed on the voyage
undertaken just subsequent to the repairs and survey.  This was
considered a casualty.

     Here the facts closely resemble those in HQ 105970.  There a
diesel engine on a fisheries research vessel was overhauled in
May 1979.  In January 1981, after running 3000 hours subsequent
to the overhaul, the engine began to knock.  The vessel was towed
in and the engine was overhauled.  It was claimed that the engine
had an expected life of 10,000 hours between overhauls, and that
because the engine failed after 30 percent of its expected life,
the failure was sudden and constituted a casualty.  It was also
alleged that the vessel's crew serviced the engine prior to the
voyage, and that the engine oil was analyzed.  Customs regarded
this type of servicing not sufficient to fall within the purview
of ORR Ruling 192-71.  It was held that mere mechanical failure
of machinery, standing alone, does not qualify as an "other
casualty" under 19 U.S.C. 1466(d)(1).  Customs did consider the
engine's failure after only 3000 hours, and its "servicing" prior
to the voyage at issue; however, the circumstances still did not
warrant remission under the administrative casualty presumption
of ORR Ruling 192-71.

     As stated above, the record is analogous to HQ 105970 where
a casualty was not found.  Because the record does not contain
any additional evidence to establish the contrary, we are unable
to find that a casualty, as it is used in 19 U.S.C. 1466(d)(1),
occurred in this case.

HOLDING:

     The evidence presented is insufficient to sustain the
finding of a casualty, thus duties on the foreign repair costs
may not be remitted under 19 U.S.C. 1466(d)(1).

                                   Sincerely,




                                   B.James Fritz
                                   Chief
                                   Carrier Rulings Branch