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HQ 115198

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April 3, 2001

VES-13-18 RR:IT:EC 115198 RSD

CATEGORY: CARRIER

Chief Residual Liquidation and Protest Branch U.S. Customs Service
6 World Trade Center
New York, New York 10048-0945

RE: Vessel Repair Entry No. WK9-0065938-4; M/V SEA-LAND PERFORMANCE; V-548; Travel, rental, and meals; 19 U.S.C. § 1466

Dear Sir:

This is in response to your memorandum dated October 20, 2000, forwarding a petition for review of your ruling on an application for relief from duties assessed pursuant to 19 U.S.C. § 1466. Our findings are set forth below.

FACTS:

The M/V SEA-LAND PERFORMANCE is a U.S.-flag vessel owned by U.S. Ship Management. Subsequent to completion of foreign shipyard work, the vessel arrived in Boston, Massachusetts on June 21, 2000.

An application for relief with supporting documentation was timely filed. Pursuant to a letter dated September 18, 2000, the Chief, Residual Liquidation and Protest Branch, New York, New York, denied in full the aforementioned application. A petition for review of this decision was timely filed seeking relief with respect to travel and rental expenses charges listed on ABB invoice incurred pursuant to cost for work carried out on board of the M/V SEALAND PERFORMANCE in Rotterdam.

ISSUE:

Whether the travel, rental, and meal charges for which the petitioner seeks relief are dutiable pursuant to 19 U.S.C. § 1466.

LAW AND ANALYSIS:

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

Petitioner contends that rental, travel and allowances are not actually labor performed on or materials used on the vessel and should be excluded from Customs duties.

While the petitioner’s position at one time reflected Customs position with respect such charges, pursuant to the decision of the U.S. Court of Appeals for the Federal Circuit (CAFC) in Texaco Marine Services, Inc., and Texaco Refining and Marketing Inc. v. United States, 44 F.3d 1539 (1994), it no longer represents Customs position in this matter. (See also Customs memorandum 113308, dated January 18, 1995, published in the Customs Bulletin on February 8, 1995 (Customs Bulletin and Decisions, vol. 29, no. 6 at p. 59), as clarified in Customs memorandum 113350, dated March 3, 1995, published in the Customs Bulletin on April 5, 1995 (Customs Bulletin and Decisions, vol. 29, no. 14, at p. 24)). It should be noted that in post-Texaco vessel repair entries such as the one currently under consideration, Customs has held travel and allowance charges to be dutiable (Customs ruling letter 115100 dated October 26, 2000). Furthermore, the submitted invoice from ABB lists charges for travel time and car mileage but does not specify any charges for meals.

Accordingly, the travel and allowance charges in question are dutiable.

HOLDING:

The rental/meals/travel expenses for which the petitioner seeks relief are dutiable pursuant 19 U.S.C. § 1466. Consequently, the petition is denied in full.

Sincerely,

Larry L. Burton
Chief

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