 HQ 112651 |
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May 25, 1993
VES-13-18-CO:R:IT:C 112651 DEC
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; ABS Survey; Scavenger Cleaning; Heavy Weather Damage; Cleaning; Vessel Repair Entry No. C27-0082332-4 Date of Entry: December 21, 1992 Date of Arrival: December 19, 1992 Port of Arrival: Los Angeles, California Vessel: PRESIDENT JACKSON
Dear Sir:
This letter is in response to your memorandum dated March 25, 1993, which forwards for our consideration an application for relief from vessel repair duties filed in connection with the above- referenced vessel.
FACTS:
The record reflects that the PRESIDENT JACKSON, an American- flag vessel, arrived at Los Angeles, California, on December 19, 1992. Vessel repair entry, number C27-0082332-4, was filed on December 21, 1992, indicating that work was performed on the vessel while in Yokohama, Kobe, and Kao-Hsiung. An application for relief from the assessment of vessel repair duties was timely filed on March 5, 1993, after an extension to file proof of costs was granted. Various inspection and repair costs are claimed to be duty-free because they were the result of heavy-weather damage.
The applicant has submitted a copy of the vessel's log from November 23, 1992, a statement from the vessel's master detailing the damage, as well as all the relevant invoices from surveys and repairs performed on the subject vessel. The vessel log indicates that the vessel encountered force eleven winds for approximately twelve hours on November 23, 1992. The notes made in the log indicate that at various times the vessel was pitching heavily with water over the deck.
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The following items have been submitted for our determination:
Item Spreadsheet Description
01 ABS ABS Survey 02 Yoko Engineering Hawse Pipe Repair 05 ABS ABS Survey 06 OMI Engineering Hawse Pipe Repair 08 Hong Yang Marine Heavy Weather Damage Repair 12 Hong Tah Marine Scavenger Cleaning 13 Hong Tah Marine Forepeak Area Cleaning
The applicant's request for remission from vessel repair duties with respect to item twelve is based on the applicant's contention that scavenger cleaning is a necessary operation for routine inspections. The remainder of the items relate to inspections and repairs that are, allegedly, attributable to the heavy-water damage of November 23, 1993. Our ruling on the above-mentioned matters is set out below.
ISSUE:
1. Whether sufficient evidence is provided to substantiate the claim that the repairs were necessitated by weather-related damage and should, therefore, be exempt from vessel repair duties.
2. Whether the expense associated with the scavenger cleaning costs is dutiable pursuant to 19 U.S.C. 1466.
LAW AND ANALYSIS:
Title 19, United States Code, section 1466(a), provides in pertinent part, for payment of duty in the amount of fifty percent ad valorem on the cost of foreign repairs to vessels documented under the laws of the United States to engage in the foreign or coastwise trade, or vessels intended to be employed in such trade.
Heavy Weather Damage
Title 19, United States Code, subsection 1466(d)(1), states that the Secretary of the Treasury is authorized to remit or refund such duties if the owner or master of the vessel provides 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 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 -3-
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. See Headquarters Ruling 106159 (Sept. 8, 1983).
Customs Regulations require that certain supporting evidence be submitted with an application for relief for damages resulting from stress of weather. This evidence includes photocopies of the relevant parts of the vessel's logs, certifications 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 United States. 19 C.F.R. 4.14(d)(1)(iii)(D) - (F) (1992).
In Treasury Decision 78-180, Customs established guidelines to be used when relief is requested on the basis that the vessel encountered high winds. T.D. 78-180, 12 Cust. B. & Dec. 382 (1978). Customs held that winds of force nine on the Beaufort Scale, a numerical scale rating winds according to ascending velocity from zero (calm) to twelve (hurricane), accompanied by a reasonable description of the conditions and verified as required in the regulations, raise a presumption that damages caused were due to stress of weather (see Rene de Kerchove, International Maritime Dictionary 52 (2nd Ed. 1961).
The vessel log from November 23, 1992, indicates that the vessel encountered force nine or greater winds for nearly twenty- four hours and noted that the vessel pitched and rolled heavily. Additionally, it was reported in the log that the hawse pipe buckled and was punctured. Customs is satisfied that the proof submitted with respect to the repairs performed on the hawse pipe were necessitated by the heavy weather the PRESIDENT JACKSON encountered on November 23, 1992 (Yokohama Engineering Works, Ltd. Invoice 2F428). Consequently, remission with respect to this invoice is granted. Further, since the ABS heavy weather damage survey is directly related to the heavy weather damage, the cost associated with both parts of the ABS survey (Report No. Y026895 corresponding with ABS invoices numbered 6002199380 and 6002199431) is remitted.
Similarly, the costs associated with item #6, (OMI Engineering Company, Ltd. invoice number 92083), item #8 (Hong Yang Marine Service Company, Ltd.), and item #13 (Hong Tah Marine Service & Engineering Company, Ltd.) are not subject to duty because the applicant has met its burden of demonstrating that these items were sufficiently connected with the casualty event (heavy weather damage) that the vessel encountered on November 23, 1992. In support of their application of relief, the vessel operator has submitted the vessel's log, a statement from the master, and the corresponding invoices for the work performed.
Air Scavenger Cleaning
The applicant has submitted an invoice from Hong Tah Marine -4-
Service and Engineering Company, Ltd. for the cleaning of air scavenger spaces. While the Customs Service has consistently held that cleaning is not dutiable unless it is performed as part of, in preparation for, or in conjunction with dutiable repairs or is an integral part of the overall maintenance of the vessel (Headquarters Ruling 110841 (May 29, 1990), Customs, however, does consider work performed to restore a part to good condition following deterioration or decay to be a maintenance operation within the meaning of the term repair as it is used in the vessel repair statute (Headquarters Ruling 196543 (Feb. 27, 1984).
The dutiability of maintenance operations has undergone considerable judicial scrutiny. The United States Court of Customs and Patent Appeals, in ruling that the term "repair" as used in the vessel repair statute includes "maintenance painting," gave seminal recognition to the dutiability of maintenance operations. E.E.
Kelly & Co. v. United States, 55 Treas. Dec. 596, T.D. 43322 (C.C.P.A. 1929). The process of chipping, scaling, cleaning, and wire brushing to remove rust and corrosion that results in the restoration of a deteriorated item in preparation for painting has also been held to be dutiable maintenance. States Steamship Co. v.
United States, 60 Treas. Dec. 30, T.D. 45001 (Cust. Ct. 1931).
The applicant's conclusion that the cleaning of air scavenger spaces is not subject to duty simply because no subsequent repairs were performed is untenable. The applicant attempts to characterize the cleaning of air scavenger spaces as a simple cleaning needed only for inspection of the engine valves. This characterization fails, however, to include the threat of fire or explosion posed by the failure to properly maintain the scavenger spaces. It further fails to note the decline in efficiency of the engines that results from the collection of the carbon and oil deposits in the air scavenger spaces. As stated in our previous rulings, the collection of carbon and oil deposits results in a deterioration, as manifested in the safety and efficiency problems, that may only be corrected by cleaning the air scavenger spaces (Headquarters Ruling 111700 (Nov.
19, 1991). Therefore, the cleaning of air scavenger spaces is a dutiable maintenance operation.
HOLDING:
Following a thorough review of the evidence submitted and after a full review of the applicable law and precedents, we have determined that this application for relief from vessel repair duties should be granted, in part, and denied, in part, as detailed in the Law and Analysis section of this ruling.
Sincerely,
Acting Chief