Vessel Repair; Los Angeles Vessel Repair Entry No. C27- 0067801-1; dated May 3, 1992; M/V PRESIDENT WASHINGTON; Voyage 88; Application; Casualty; Heavy Weather; Survey; Evidence; Maintenance; Cleaning; Air Scavenger Spaces; 19 U.S.C 1446

HQ 112364 February 24, 1993 VES-13-18 CO:R:IT:C 112364 BEW CATEGORY: Carriers Deputy Regional Director Commercial Operations Pacific Region One World Trade Center Long Beach, California 90831-0700 RE: Vessel Repair; Los Angeles Vessel Repair Entry No. C27- 0067801-1; dated May 3, 1992; M/V PRESIDENT WASHINGTON; Voyage 88; Application; Casualty; Heavy Weather; Survey; Evidence; Maintenance; Cleaning; Air Scavenger Spaces; 19 U.S.C 1446 Dear Sir: This is in reference to your memorandum of June 25, 1992, which transmitted an application for relief from duties filed by American President Lines, Ltd., in relation to the above- referenced vessel repair entry, dated May 3, 1992. The entry and the application were timely filed. The vessel arrived at the port of Los Angeles on May 2, 1992. FACTS: The M/V PRESIDENT WASHINGTON is a U.S.-flag vessel owned by American President Lines, Ltd. The record shows that the shipyard work in question was performed on the subject vessel in Kaohsiung, R.O.C., during the period of February 14 through February 16, 1992. The applicant requests review for remission of duty on the following items: Item # JCF# Vendor 02 WA088-139 Hong Yang Marine (Cleaning of Air Scavenger Spaces) 04 WA088-141 Hong Yang Marine 06 WAO88-144 China Shipbuilding 07 WAO88-143 American Bureau of Shipbuilding Report No. KS 7522 The applicant states that the vessel encountered severe weather conditions while enroute to Guam resulting in heavy weather damage to the AFT frame 87 port side. It claims that foreign repairs became necessary immediately to ensure the safety and seaworthiness of the vessel. The applicant has also submitted copies of relevant pages from the ship's log containing the sea conditions on January 31, 1992, and a damage report dated February 2, 1992. A note of protest was filed on February 10, 1992, when the vessel arrived at Apra, Guam. The file indicates that the vessel was inspected for heavy weather damage by the American Bureau of Shipping (ABS) in Guam, however, no report of this inspection has been included with the application. The applicant further claims that cleaning of the air scavenger spaces is necessary for routine inspection of the main engine internals of the scavenging air chambers, and that these inspections are not possible without the internal cleaning. The scavenging spaces of a diesel engine are steel chambers that are permanently attached to the cylinders of the engine. The scavenging spaces serve two functions. First, the scavenging spaces receive the discharge from the turbo-chargers and deliver the charged air to each cylinder via reed valves and intake ports. Second, air from the piston underside is pumped into the scavenging space via reed valves to supplement turbo-charger- delivered air. This air enters the cylinders via inlet ports uncovered when the piston gets to the bottom end of its stroke and serves to "scavenge" the burnt gases out of the cylinder. This process cleans the cylinders of spent energy and provides a clean air discharge for the next fuel injection. As a result of this process, some gases containing unburnt carbon may be left and deposited in the scavenging spaces. These carbon deposits and other oily deposits in the scavenger spaces may result in fire or explosion. They also reduce the efficient operation of the engine. Diesel engine maintenance manuals therefore require periodic cleaning of the scavenger spaces to permit the safe and efficient operation of the vessel. The maintenance of a scavenger space involves removing access plates and scraping, wire brushing, and wiping the inside of the space. This operation is labor intensive and would take a single worker up to two working days to clean a single cylinder. The applicant claims that the cleaning of the air scavenger spaces is not subject to duty under 1466. ISSUES: 1. Whether sufficient evidence is presented to establish that the subject repairs were necessitated by a "casualty" which is remissible under the vessel repair statute (19 U.S.C. 1466). 2. Whether removing carbon and oil deposits from diesel engine air scavenger spaces constitutes a nondutiable cleaning or a dutiable maintenance operation under 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 50 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. 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 that must be met in order to qualify for remission under the subsection, this 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 that, like stress of weather, comes with unexpected force or violence, such as fire, 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). 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. Customs Regulations require that certain supporting evidence be submitted with an application for relief from duties on repairs resulting from stress of weather. 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 United States (19 C.F.R. 4.14(d)(1)(iii)(D)-(F)). Treasury Decision 78-180, sets out 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)). It was held that evidence of winds of force 9 on the Beaufort Scale, a numerical scale rating winds according to ascending velocity from zero (calm) to twelve (hurricane), verified as required in the regulations, and accompanied by a reasonable description of the conditions, raise a presumption that severe weather conditions caused the damage. (See also Rene de Kerchove, International Maritime Dictionary 52 (2nd Ed. 1961). The applicant claims that the invoices submitted relate to the repairs necessary because of a casualty. The file contains copies of internal documents relating to storm damage. These documents amount to reports of the presence of damage, but provide no evidence as to how the damage occurred. The vessel log dated January 31, 1992, shows that the vessel encountered force 7 Northwest winds and Westerly swells of force 7. The ABS Report No. KS 7522, dated February 16, 1992, reports that: Note: a) Reference is made to Guam Report Mo. GM537 dated February 10, 1992 recommending permanent repairs for heavy weather damage to be dealt with prior completion of Special Periodical Survey of Hull No. 2. Guam Report No. GM537 has not been submitted with the application. The evidence is insufficient to support a finding that the vessel encountered heavy weather conditions during the period of January 31, 1992, that caused the alleged damage which we presume occurred while the vessel was enroute from Oakland to Guam during the period of January 31 through February 10, 1992. Absent clear proof of an identifiable event to show the cause of the alleged damage, the cost of repairs is not remissible (see C.I.E. 1826/58). We note that in this case we have been asked to grant remission for a vessel which incurred damage while enroute to U.S. waters, and departed U.S. waters to obtain foreign repairs. We have previously denied such requests regarding any vessel exiting U.S. waters (and consequently bypassing U.S. yards) in view of the fact that such a vessel could not have been "...compelled ...to put into such foreign port... to secure the safety and seaworthiness of the vessel...." With regard to the Item No. 7 - ABS survey Report No. KS 7522, covering the repairs listed in Item Nos. 4 and 6, Customs has held that where periodic surveys are undertaken to meet the specific requirements of a classification society, insurance carrier, etc., the cost of the surveys is not dutiable even when dutiable repairs are effected as a result thereof; however, in the liquidation process Customs should go beyond the mere labels of "continuous" or "ongoing" before deciding whether the item is dutiable. If an inspection or survey is conducted as a part of an ongoing maintenance and repair program labelled "continuous" or "ongoing" the cost is dutiable. Also, if the survey is to ascertain the extent of damage sustained, or to ascertain if the work is adequately completed, the costs are dutiable as part of the repairs which are accomplished pursuant to holdings in C.I.E. 429/61, C.S.D. 79-2, and C.S.D. 79-277. Accordingly, we find that the survey relating to Report No. KS7522 is dutiable. The application is denied as to the cost for item No. 7. Item No. 2 - Cleaning of Air Scavenger Spaces In analyzing the dutiability of foreign vessel work, 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. (E.g., Headquarters Ruling Letter 110841, dated May 29, 1990 (and cases cited therein)). The Customs Service considers work performed to restore a part to good condition following deterioration or decay to be maintenance operations within the meaning of the term repair as used in the vessel repair statute. (See generally, Headquarters Ruling Letter 106543, dated February 27, 1984; C.I.E. 142/61, dated February 10, 1961.) 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). Most recently, the United States Customs Court examined whether the scraping and cleaning of Rose Boxes constituted dutiable repairs. Northern Steamship Company v. United States, 54 Cust. Ct. 92, C.D. 1735 (1965). Rose Boxes are parts fitted at the ends of the bilge suction to prevent the suction pipes from being obstructed by debris. The court determined that the removal of dirt and foreign matter from the boxes did not result in the restoration of the boxes to good condition following deterioration and consequently held that the work was not subject to vessel repair duties. Id. at 99. The precise issue presented is whether the cleaning of air scavenger spaces may be characterized as simple cleaning or as maintenance, not whether cleaning or maintenance operations are dutiable or non-dutiable. The applicant's conclusion that the cleaning of air scavenger spaces is a "simple" cleaning and is a fortiori not subject to duty based on the decisions cited is untenable. The applicant attempts to characterize the cleaning of air scavenger spaces as "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--of the air scavenger spaces that may only be corrected by cleaning the air scavenger spaces. (See generally Headquarters Ruling Letter 111700, dated November 19, 1991.) We therefore reaffirm our position that cleaning air scavenger spaces is a maintenance operation that is subject to duty under 19 U.S.C. 1466. The Customs Service first addressed the issue of cleaning air scavenger spaces in Headquarters Ruling Letter 110911 BEW, dated December 3, 1990. The applicant has failed to cite a ruling or to demonstrate otherwise that the Customs Service had in fact established a position on the dutiability under 19 U.S.C. 1466 of the cleaning of air scavenger spaces prior to Headquarters Ruling Letter 110911. Moreover, as shown in the previous paragraph, we do not believe that the applicant has demonstrated that the holding in Headquarters Ruling Letter 110911 deviates from existing judicial decisions or results in a reversal or modification of any of the existing administrative rulings. We submit that the reasoning and conclusion of that letter and subsequent rulings on the issue are consistent with the precedent identified in those ruling letters and by the applicant. Finally, the applicant contends that the Customs Service has not held the cleaning of air scavenger spaces to be dutiable since 1982. Headquarters Ruling Letter 110911 was issued in response to an application for relief forwarded by the New York Vessel Repair Liquidation Unit (VRLU) following which we learned that from 1982 to 1990 the San Francisco VRLU had not been assessing duty whereas the two other regional VRLU's were. Absent a ruling letter or a published statement of position, we hold that the applicant cannot rely on determinations made by the San Francisco VRLU to establish a position of the Customs Service. (See Superior Wire v. United States, 7 Fed. Cir. (T) 43, 45-46, 867 F.2d. 1409, 1412-13 (1989).) HOLDINGS: 1. The evidence presented is insufficient to substantiate that the subject repairs were necessitated by a casualty. The foreign work for which the applicant seeks remission is therefore dutiable under 19 U.S.C. 1466. 2. The removal of carbon and oil deposits from the main engine scavenger spaces is a maintenance operation, the cost of which is subject to duty under 19 U.S.C. 1466. Sincerely, Acting Chief Carrier Rulings Branch