HQ 109993: Dutiability of certain foreign shipyard operations performed on U.S.-flag LASH barges

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 109993

                          July 3, 1989

VES-13-18-CO:R:P:C 109993 GV

CATEGORY: Carriers

Deputy Assistant Regional Commissioner
Classification and Value Division
ATTN: Regional Vessel Repair Liquidation Unit
New York, New York 10048-0945

RE:  Dutiability of certain foreign shipyard operations performed
     on U.S.-flag LASH barges

Dear Sir:

     Reference is made to the November 30, 1987, application for
relief from vessel repair duties filed by Waterman Steamship
Corporation in relation to entry number 514-3003125-5, dated
October 21, 1987.  The entry was filed upon the arrival of the
vessel S.S. SAM HOUSTON, V-47, at the port of New York on October
17, 1987, whereupon duties were assessed upon the value of
foreign shipyard operations pursuant to 466, Tariff Act of 1930,
as amended (19 U.S.C. 1466).

FACTS:

     The vessel S.S. SAM HOUSTON is a Lighter Aboard Ship (LASH)
barge mother vessel.  A single vessel repair entry was filed to
cover repairs to numerous LASH barges, each of which should have
been the subject of a separate entry with a unique entry number.
The application for relief is submitted to cover fourteen (14) of
the barges, with no claim for relief having been submitted for
the remainder of the vessels.  Those barges for which relief is
sought are the following:

          WA-1-0049                     WA-1-0229
          WA-1-0068                     WA-2-0367
          WA-1-0095                     WA-1-0405
          WA-1-0158                     WA-1-0438
          WA-1-0259                     WA-1-0439
          WA-1-0279                     WA-2-0457
          WA-1-0295                     LB-810
                                   2

 ISSUE :

      Whether evidence is presented sufficient to prove that the
 repairs performed on the barges for which relief is sought, were
 necessitated by a casualty occurrence, thus warranting remission.

 LAW AND ANALYSIS:

      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 Stated to engage in foreign or coastwise trade, or vessels
 intended to engage in such trade.

      Paragraph (1), subsection (d) of 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.  Thus, it is necessary that in
 order to qualify for duty remission, the party seeking relief
 must show both the occurrence of a casualty, and that the repair
 was necessary for safety and seaworthiness.

      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, explosion 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 causing event, we must consider the
 repair to have been necessitated by normal wear and tear (ruling
 letter 105159, September 8, 1983).

      Owing to the factors peculiar to the operation of LASH
 barges, special standards of evidence are provided in the Customs
 Regulations when casualty claims are made concerning such vessels
 under 1466(d)(1).  Section 4.14(d)(1)(iii)(G), Customs
 Regulations (19 CFR 4.14(d)(1)(iii)(G)), provides that there must
 be submitted evidence showing that a barge was inspected
 immediately prior to being loaded upon its vessel of departure
 from the U.S., that it was found to be seaworthy at that time,
 that damage was discovered during the course of the foreign
 voyage, and that the repairs performed were necessary for the
 safety and seaworthiness of the barge to enable it to reach its
 U.S. port of destination.  Documents purporting to demonstrate
 these elements must have been prepared at the time that barges
 were placed aboard for foreign departure, and must have been
 prepared and signed by responsible persons in a position to
 attest to the veracity of the statements being made. Documents
 executed after the fact and/or by persons with no first-hand
                                 3

 knowledge of the actual condition of barges immediately prior to
 foreign departure are of no probative value, and are insufficient
 for the purpose for which they are submitted.

      In the present case, documents are contained in the file
 covering the 14 barges regarding which relief is being sought.
 The documents each contain the statement that various of the
 barges were found to be in sound condition upon being loaded on
 the outward-bound vessel, and are signed by the Master and the
 Chief Officer.  These statements are, however, undated.  There is
 no way for Customs to determine whether these statements were
 executed contemporaneously with the lading of the vessels, thus
 providing credible evidence, or whether they were prepared at
 some later date.

      Further in regard to this case, we note that the foreign
 work listed on the vessel repair entry (CF 226) for many of the
 barges in issue is not supported by adequate documentation (i.e.,
 invoices).  The fact that special standards of evidence for LASH
 barges are provided in section 4.14(d)(1)(iii)(G) in the event of
 a casualty claim does not obviate the requirement set forth in
 section 4.14(d)(1)(iii)(A), Customs Regulations to submit all
 itemized bills, receipts and invoices covering those items for
 which relief is sought.

      Accordingly, in regard to those invoices that were
 submitted, all charges listed thereon are dutiable with the
 exception of the following:

      Barge No. WA-1-0299 P.T. Intan Sengkunzit Invoice No.
      02/INREP/VIII/1987 (charges for towing are free as are the
      charges for mooring and having the barge on a slipway)

      Barge No. WA-1-0158 P.T. Rantai Laut Invoice No.
      17/BG/RL/VIII/1987 (charges for towing /drydock are free)

      Barge No. WA-1-0405 Then Engineering Invoice No.
      TES/D/2100/87/07 SD (charges for towing/drydock are free)

      Barge No. WA-1-0438 Then Engineering Invoice No.
      TES/D/2107/87/07 SD (charges for towing/drydock are free)

      Barge No. LB-810 Then Engineering Invoice No.
      TES/D/2117/87/07 SD (charges for towing/drydock are free)

      Barge No. WA-1-0049 Then Engineering Invoice No.
      TES/D/2116/87/07 SD (charges for towing/drydock and/or
      cleaning-cargo are free)
                                 4

      Barge No. WA-1-0295 Then Engineering Invoice No.
      TES/D/2114/87/07 SD (Charges for towing/drydock and/or
      cleaning-cargo are free)

      Barge No. WA-1-0068 Then Engineering Invoice No.
      TES/D/2111/87/07/ SD (charges for towing/drydock are free

 HOLDING:

      In light of the foregoing, we recommend that relief be
 denied for this application, with the exception of those
 expenditures noted above.

                            Sincerely,




                            B. James Fritz
                            Chief
                            Carrier Rulings Branch