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HQ 115911

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May 9, 2003

VES-13-18-RR:IT:EC 115911 CK

CATEGORY: CARRIER

Supervisory Customs Liquidator
Residual Liquidation and Protest Branch
Bureau of Customs and Border Protection
1210 Corbin Street
3rd Floor- Conference Room
Elizabeth, New Jersey 07201

RE: Vessel Repair Entry No. 514-3006175-7; Protest No. 4601-02- 104193; M/V ENTERPRISE; V-032; Casualty; 19 U.S.C. § 1466

Dear Madam:

This is in response to your memorandum dated January 29, 2003 which forwarded for our review the above-referenced vessel repair protest. Our ruling on this matter is set forth below.

FACTS:

The M/V ENTERPRISE is a U.S.-flag vessel owned by E-Ships, Inc. Subsequent to the completion of foreign shipyard work, the vessel arrived at the Port of Elizabeth, New Jersey on September 10, 2001. A vessel repair entry was timely filed on September 18, 2001.

An application for relief was submitted with respect to this entry on October 10, 2001. The application for relief was denied by your office and the entry was liquidated on November 22, 2002. A protest, dated November 26, 2002, was timely filed seeking remission on the cost of engine repairs which, the protestant avers, are due to a casualty.

With respect to the casualty claim under consideration, the protestant states that the M/V ENTERPRISE was towed to the Cammell Laird facility, Gibraltar on August 15, 2001, to dock for engine repairs, which were the result of an explosion in the main engine scavenging air receiver, and which rendered the engine inoperable.

Protestant states that an examination of the main engine was carried out in Gibraltar, and it was determined that the cause of the explosion was the failure of the number 6 piston, which allowed cooling oil to enter the scavenging air receiver and ignite, which immediately caused the explosion.

Protestant also states that the failure of the piston was not the result of wear and tear, since all pistons were visually examined on August 1, 2001, while the vessel was in the Port of New York, and the number 6 unit had been removed for cleaning and maintenance on August 6, 2000, and still had almost 2000 operating hours to go before the next scheduled maintenance interval.

In support of its casualty claim the protestant has submitted the following documentation: The Salvage Association’s Survey Report Number LIS/01065 dated September 5, 2001; American Bureau of Shipping (ABS) Report CZ-14653-B dated August 26, 2001; a copy of a USCG Report of Marine Casualty (CG-2692); various repair invoices; and a Master’s statement.

We note protestant states in its submissions that it had attached log book pages, however, we did not come across these documents in our review of the file, nor did our inquiry of your office turn up these documents.

ISSUE:

Whether the protestant’s claim for remission due to a casualty should be granted pursuant to 19 U.S.C. § 1466(d)(1).

LAW AND ANALYSIS:

Title 19, United States Code, § 1466(a), provides in pertinent part for the payment of an ad valorem duty of 50 percent of the cost of "...equipments, or any part thereof, including boats, purchased for, or the repair parts or materials to be used, or the expenses of repairs made in a foreign country upon a vessel documented under the laws of the United States..."

Section 1466(d)(1) provides that the Secretary of the Treasury is authorized to remit or refund such duties imposed under § 1466(a) if the owner or master of 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. It is Customs position that “port of destination” means a port in the United States. (See, 19 CFR § 4.14(h)(2)(i))

The statute sets forth the following three-part test which must be met in order to qualify for remission under the subsection:

The establishment of a casualty occurrence.

The establishment of unsafe and unseaworthy conditions.

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 which, 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 casualty event, we must consider the repair to have been necessitated by normal wear and tear (Headquarters’ ruling letter 106159, dated September 8, 1983).

With respect to the claim in question, the protestant avers that the three above-listed criteria have been met. In support of this claim the protestant specifically references The Salvage Association’s Survey Report, as well as the ABS and USCG documentation submitted. While we are in accord with the protestant’s position as to the second and third of the above-listed criteria, it is our position that the record is deficient as to the first.

The Survey Report under the section entitled “Causation” states:

We consider that the damages noted could be reasonably attributable to a casualty of the nature alleged by Owners, that is main engine explosion due the piston skirt failure causing the ingress of lub-oil and subsequent ignition in the scavenging system.

We noted that the skirts were fitted to the piston with set-screws and washers and locked with a locking wire as recommended by the main engine manufacturers. We are of the opinion that one of these screws became loose and caused the skirt failure.

The ABS report states that the Surveyor examined and found:

. . . Main Engine damages, alleged to have been sustained on a consequence of the failure of the No. 6 piston skirt, which allowed piston cooling oil to enter the scavenging air spaces, which in turn caused the explosions in the scavenger air receiver which took place on 14 August 2001 at 1506 local time while the vessel was enroute (sic) in loaded condition from Cadiz, Spain . . . .

The USCG Report of Marine Accident, Injury or Death form, CG 2692, reports that the casualty element involved in this voyage was “machinery or equipment failure.”

Finally, the Master’s statement contains the following factual recitation, “. . . at about 1506, a series of rumbles were heard and felt on the bridge, emanating from the engine. Alarms sounded and heavy smoke started to pour from the stack. The engines called the bridge and requested that the ERT be put on stop. This was done. The propeller came to a stop, the vessel lost way. It was ascertained that there were no injuries nor fires in the engine room.” Due to the precariousness of the vessel’s position in the Strait of Gibraltar a tow was used to take the M/V Enterprise to the port to await evaluation.

In all three documents, quoted above, the main causal element for the explosion is the failure of the number six piston. In each description of the facts, and timelines, the number six piston failed, which leaked oil into the scavenger air receiver, which in turn caused the explosion felt and heard on deck. Because of the explosion and failure of the number six piston the main engines were shut down, and the vessel needed to be towed for repairs.

The term “casualty,” as can be seen above, has been interpreted to be something which, 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 . . . .Ibid.

In this case, the number six piston cracked and failed leading to the leak of oil into the scavenger air receiver causing the explosion. The explosion did not cause the failure of the number six piston or oil leak.

Also stated earlier, it is a well-established principle that in the absence of evidence of such casualty event, we must consider the repair to have been necessitated by normal wear and tear (See, Headquarters’ ruling letter (HRL) 106159, dated September 8, 1983; HRL 115536, dated January 31, 2002; HRL 115188, dated February 20, 2001; HRL 115135, dated November 8, 2000; HRL 11505, dated June 9, 2000; HRL 114494, dated October 20, 1998; HRL 113802, dated July 14, 1997; and HRL 113797, dated March 10, 1997). In this case, while protestant states that the pistons were visually examined and removed for cleaning and maintenance on August 6, 2000 no evidence has been submitted establishing that such maintenance work was done. HOLDING:

The protestant’s claim for remission pursuant to 19 U.S.C. § 1466(d)(1) is denied.

Accordingly, the protest is denied.

Sincerely,

Glen E. Vereb

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