Protest No. 0901-91-1-00487; Vessel Repair Entry No. C09-0014342-8; S/S KINSMAN INDEPENDENT; Casualty; Deferred Repairs; Underwater Damage; 19 U.S.C. 1466 (d)(1).

HQ 112544 February 11, 1993 VES-13-18-CO:R:IT:C 112544 DEC CATEGORY: Carriers Chief, Residual Liquidation Branch U.S. Customs Service 6 World Trade Center New York, New York 10048-0945 RE: Protest No. 0901-91-1-00487; Vessel Repair Entry No. C09-0014342-8; S/S KINSMAN INDEPENDENT; Casualty; Deferred Repairs; Underwater Damage; 19 U.S.C. 1466 (d)(1). Dear Sir: This is in response to your memorandum dated November 30, 1992, transmitting the above referenced protest and supporting documentation. Our ruling on this matter is set out below. FACTS: On or about August 25, 1989, the S/S KINSMAN INDEPENDENT was damaged as it departed from the Peavey and the Lake and Rail elevators on the Buffalo River in New York. The crew discovered some damage to the starboard tanks and noted that all tanks were tight and were not making water. No repairs were made. On November 24, 1990 (fifteen months later), the S/S KINSMAN INDEPENDENT ran aground and it was compelled to be put into Thunder Bay, Ontario, for repairs. While the vessel was in dry dock, the U.S. Coast Guard required that both the damage from the November 24, 1990, grounding as well as the damage caused on or about August 25, 1989, be repaired before the ship return to commercial service. Customs issued a ruling dated July 7, 1991, that the foreign repairs performed on the S/S KINSMAN INDEPENDENT which are attributable to the November 24, 1990, grounding were necessitated by a casualty occurrence. Accordingly, remission pursuant to 19 U.S.C. 1466(d)(1) was granted. However, repairs pertaining to damage which the record indicates was incurred on a prior voyage were deemed dutiable. Headquarters Decision VES- 13-18-CO:R:IT:C 111751 GEV. -2- The basis of this protest stems from the assessment of duties on repairs to the vessel's starboard side and bilge that were unrelated to the November 24, 1990, grounding. Kinsman is seeking remission of duties in the amount of $28,728.35, plus interest accrued from the date of liquidation (August 30, 1991). LAW AND ANALYSIS: Title 19, United States Code, section 1466 provides, in pertinent part, that: (d) If the owner or master of such vessel furnishes good and sufficient evidence that- (1) such vessel, while in the regular course of her voyage, was compelled, by stress of weather or other casualty, to put into such foreign port and purchase such equipments, or to make such repairs to secure the safety and seaworthiness of the vessel to enable her to reach her port of destination . . . then the Secretary of the Treasury is authorized to remit or refund such duties . . .. 19 U.S.C. 1466 (1992). Pursuant to Customs ruling VES-13-18-R:CD:C 102707 BJF, dated July 19, 1977, "...for the purpose of 19 U.S.C. 1466, a voyage begins when a ship, having departed a port is passing upon the seas to another port or to several ports." This holding is premised upon judicial precedent in conjunction with the general interpretation of section 3114, Revised Statutes (19 U.S.C. 1466(a)) that "the section is to be construed so as to give as much protection as possible against the competition of foreign labor." (see 33 Op. Atty. Gen. 432). Examination of this requirement, standing alone, supports a denial of the protest seeking remission of duty for the repairs related to the August, 1989. The S/S KINSMAN INDEPENDENT suffered the damage in question on the Buffalo River as it was pulling away from the Peavey and the Lake and Rail elevators prior to departing from a port and was not passing upon the seas when the resulting damage occurred. -3- Customs has determined: [T]hat the first condition laid down by the Statute (1466) is that the vessel must have been in the regular course of her voyage. This has been held to require that the stress of weather or casualty which necessitated the repairs must have been experienced during the course of the same voyage on which the repairs were made.. C.I.E. 1325/58, September 18, 1958. 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). Consequently, a casualty arises from an identifiable event of some sort. The statute is clear in requiring "good and sufficient evidence" of casualty. In the absence of evidence of such a casualty event, we must consider the repair to have been necessitated by normal wear and tear. Headquarters Decision, VES-13-18-CO:R:CD:C 106159 LLB, dated September 8, 1983. In the case at hand, the casualty claimed is the accident that occurred on the Buffalo River in August, 1989, but was not repaired until November, 1990. It is important to note that the Master of the S/S KINSMAN INDEPENDENT, in his statement dated April 9, 1991, and made a part of the record, determined that the damage to the ship on the starboard side could have only happened when he experienced difficulty on the Buffalo River. Notwithstanding the severity of the damage incurred in the August, 1989, incident, there is no evidence that the applicant- operators affected any repairs to the vessel while it remained in commercial service in its unrepaired condition. Furthermore, there is inferential evidence from the Master's statement that the damage found when the vessel was placed in dry dock could have only occurred, to the best of his knowledge, while on the Buffalo River. In accordance with C.I.E. 1262/60, September 20, 1960, relief is not warranted where repairs are deferred for a considerable period of time after inclement weather or other casualty occurs, and the vessel, nonetheless, remains in trade, in an unrepaired condition. -4- The fact that this protest involves damage that occurred below the water line does not cloud the final result. Having encountered the problems with underwater damage previously, Customs has stated that: Experience demonstrates damage to underwater parts of vessels, including propellers, is usually not easily detectable or susceptible of definite proof respecting the date and place of occurrence. Therefore, relief under section [1466] is granted in the absence of testimony showing that the vessel was grounded, struck bottom, or her propeller contacted some floating object capable of causing damage prior to the commencement of the voyage. C.I.E. 1202/59, August 20, 1959. The present situation involves damage that occurred during a previous voyage. The Master's statement as well as the applicant's admission of an earlier accident on the Buffalo River, absent any other evidence of a subsequent casualty occurrence, provides Customs no basis to remit the liquidated duty. While the damage that occurred from the August, 1989, episode may not have appeared too serious from a cursory investigation, there is no other evidence that the applicant offers to explain the damage which the U.S. Coast Guard required to be repaired. HOLDING: Accordingly, the applicant's protest seeking remission of duty in the amount of $28,728.35 plus interest accrued from the date of liquidation is hereby denied. The vessel did not depart from a port nor pass upon the seas when she suffered damage. Additionally, no sufficient explanation of an intervening event justifying remission for the deferred repairs was offered for consideration. Sincerely, Stuart P. Seidel Director, International Trade Compliance Division