Vessel Repair; Tacoma, Washington, Vessel Repair Entry No. 110-0104243-8; dated December 27, 1991; M/V SEALAND EXPRESS Voyage 166; Application; Casualty; Heavy Weather; Survey; Evidence; Maintenance; Cleaning; Air Scavenger Spaces; 19 U.S.C 1446

HQ 112200 March 31, 1993 VES-13-18 CO:R:IT:C 112200 BEW CATEGORY: Carriers Deputy Regional Director Commercial Operations Pacific Region One World Trade Center Long Beach, California 90831-0700 RE: Vessel Repair; Tacoma, Washington, Vessel Repair Entry No. 110-0104243-8; dated December 27, 1991; M/V SEALAND EXPRESS Voyage 166; Application; Casualty; Heavy Weather; Survey; Evidence; Maintenance; Cleaning; Air Scavenger Spaces; 19 U.S.C 1446 Dear Sir: This is in reference to a memorandum that transmitted an application for relief from duties filed by Sea-Land Service, Inc., in relation to the above-referenced vessel repair entry, dated December 27, 1991. The entry and the application were timely filed. The vessel arrived at the port of Tacoma, Washington, on December 22, 1991. FACTS: The M/V SEALAND EXPRESS is a U.S.-flag vessel owned by Sea- Land Services, Inc. The record shows that the shipyard work in question was performed on the subject vessel in Tokyo, Japan, during the period of November 23 through November 28, 1991, and in Kaohsiung, R.O.C., on December 8, 1991. The applicant requests review for remission of duty on the following items: Item # JCF# Vendor 1 MHI doubler plate repairs 2 Posa Marine inspection doubler repairs 3 ABS survey inspection doubler repairs 16 OMI Engr. gangway repairs 11 Cleaning of air scavenger spaces The applicant states that the vessel encountered severe weather conditions while enroute from Tacoma, Washington to Tokyo resulting in heavy weather damage to the Deck Doubler Plate. 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 November 15 through November 22, 1991. A Marine Note of Protest was filed on November 25, 1991, when the vessel arrived at Tokyo, Japan. The file indicates that the vessel was inspected for heavy weather damage by the American Bureau of Shipping (ABS) in Yokohama, Japan. The applicant further claims that cleaning of the air scavenger spaces is not a maintenance and repair operation. It provides the following rational to support its position: The "scavenging belt" in a slow speed diesel engine is a trunk-like, fabricated steel chamber which is permanently attached to and an essential part of the engine. It receives the discharge air from the turbo-chargers and delivers the charge air to each cylinder of the engine via "reed valves" and the intake ports. (See attached diagram). In addition, air from the piston underside is pumped into the scavenging belt via "reed values" to supplement turbo-charge 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, thus cleaning the cylinder of spent energy and at the same time providing a clean air charge for the next fuel injection to use in its burning. During this process, which is repeated every revolution (approximately 98 per minute at sea), some gases containing unburnt carbon may be left and deposited in the scavenging spaces. Thus, the necessity for cleaning periodically is dependent upon the amount and rapidity of the accumulation. This cleaning is just that, cleaning to (a) prevent the possibility of a fire starting in the space, (b) lessen the possibility of a "backfire" of a cylinder with resultant damage and (c) assist in clean burning of fuel in the engine to reduce air pollution. The applicant alleges that this is strictly a cleaning operation performed to allow routine inspections of the engine cylinders of on an "as needed" basis. This cleaning is more or less akin to cleaning engine room bilges following an oil or fuel spill to cure a fire hazard and provide a clean atmosphere for men and machinery. 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. It is clear from the evidence submitted with the application that on November 15 through November 22, 1991, the vessel encountered severe weather conditions. The vessel's log shows that on the said dates the vessel was rolling and pitching in strong gale head winds, the seas were very rough, and that the vessel was pitching in very rough northwest seas and swells. The log also shows that the vessel encountered Force 7 through Force 9 winds. The applicant alleges that damage to items 1, 2, and 3 was the direct result of the heavy weather. It also alleges that the gangway was also damaged by heavy weather caused by force 7, 8, and 9 winds. The ABS surveyed the vessel for heavy weather damage when it arrive in Tokyo on November 23, 1991. ABS report No. YO26356 indicates that upon examination the butt weld of the main deck main-reinforcement inboard strap was fractured. This report does not contain any report on damage to the starboard gangway. The United States Coast Guard (USCG) is the controlling agency that determines questions of a vessel's fitness to proceed. The procedure by which the USCG renders such a determination is set forth in sections 2.01-15 and 31.10-25, USCG Regulations (46 CFR 2.10-15, 31.10-25). The former states that a vessel may not proceed from one port to another for repairs unless prior authorization is obtained from the USCG Officer-In-Charge, Marine Inspection (OCMI) either through the issuance of a USCG "Permit to Proceed to Another Port for Repairs" (CG-948) or a CG-835 that would specify the restrictions on, and duration of, any voyage undertaken prior to obtaining permanent repairs. The latter states that with respect to tank vessels, "No extensive repairs to the hull or machinery which affect the safety of a vessel shall be made without the knowledge of the Officer-In-Charge, Marine Inspection." Notwithstanding the clear wording of the above USCG Regulations, specifically 46 CFR 2.10-15 that does not distinguish between foreign or domestic locations, Customs has been informed by the OCMI, New York, New York, in a letter dated November 7, 1991, that "A formal Permit to Proceed is not normally issued to a vessel transiting foreign waters because the Certificate of Inspection (COI) would have to be removed from the vessel that would cause problems in transiting foreign waters." In addition, we have subsequently learned from the Chief, Merchant Vessel Inspection and Documentation Division, USCG Headquarters, in a letter dated April 14, 1992, that "Vessel operators often make casualty reports for U.S. flag vessels damaged overseas verbally to the proper Coast Guard Marine Inspection Office, followed by the required written report. The Coast Guard cannot always send a marine inspector to a damaged vessel overseas on short notice. In such cases, the Coast Guard may consider the classification society report and the report of the vessel's master to determine the required temporary repairs and voyage restrictions." It is clear from ABS report No. YO26356 that the vessel suffered damage to the butt weld of the main deck main- reinforcement. The inboard strap was fractured because of heavy weather. This report does not contain any report on damage to the starboard gangway. The entry shows that repairs to the gangway were made on December 15, 1991, when the vessel was at the port of Kobe. The file does not contain evidence that the vessel owners notified the USCG OCMI of the damage to the gangway or the USCG permitted that vessel to proceed from Tokyo to Kobe for repairs. In cases such as the one under consideration, (i.e., where a vessel that has been damaged foreign, proceeds in a state of disrepair between two foreign locations prior to being repaired foreign, and subsequently sails to its U.S. port of destination), notwithstanding any practice of verbally reporting foreign casualties to the USCG and that agency's subsequent verbal instructions, remission pursuant to 19 U.S.C. 1466(d)(1) will not be granted in the absence of documentary evidence that the casualty occurrence was timely reported to the USCG and that agency, directly or through the medium of a marine surveyor, permitted the vessel to proceed between two foreign locations in a damaged condition. The mere submission of a USCG Report of Marine Accident, Injury or Death (CG-2692), without accompanying documentation from the appropriate USCG OCMI (New York or Honolulu) authorizing the vessel to proceed in a damaged condition, will not suffice for granting remission pursuant to 19 U.S.C. 1466(d)(1). Accordingly, we found from the evidence submitted with the application that the damage was caused by a casualty, and that repairs to the butt strap, items 1, 2, and 3 were necessitated by heavy weather damage. However, with regard to the gangway repairs, we find no evidence the USCG permitted the vessel to proceed between two foreign locations in a damaged condition. The applicant has submitted evidence sufficient to substantiate its claim for remission under 1466(d)(1) with respect to items 1, 2, and 3. The evidence is insufficient to sustain a finding of a casualty as to the gangway repairs, item No. 16. We find this item to be dutiable. Item No. 11 - 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 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. The applicant states that "it is hoped that your find as you have done prior to 8/90, a cleaning activity and duty free". 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 sufficient to prove that the foreign repairs performed on the subject vessel were necessitated by a casualty occurrence, thus warranting remission pursuant to 19 U.S.C. 1466 with respect to items 1, 2, and 3. With regard to item no. 16, gangway repair, the evidence is insufficient to sustain that this repair was necessitated by a casualty occurrence. Accordingly, we find this item to be is dutiable. The application is denied as to the cost for item No. 16. 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