United States International Trade Commision Rulings And Harmonized Tariff Schedule

faqs.org  Rulings By Number  Rulings By Category  Tariff Numbers

faqs.org > Rulings and Tariffs Home > Rulings By Number > 2001 HQ Rulings > HQ 115296 - HQ 115412 > HQ 115349

Previous Ruling Next Ruling
HQ 115349

---

May 23, 2001

VES-13-18-RR:IT:EC 115349 GEV

CATEGORY: CARRIER

Chief, Liquidation Branch
U.S. Customs Service
Post Office Box 2450
San Francisco, CA 94126

RE: Vessel Repair Entry No. C27-0171494-4; SEA-LAND EXPLORER; V-0006; Transportation and Travel Charges; 19 U.S.C. § 1466

Dear Sir:

This is in response to your memorandum dated April 3, 2001, 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 SEA-LAND EXPLORER is a U.S.-flag vessel operated by U.S. Ship Management, Inc., of Charlotte, North Carolina. Subsequent to the completion of foreign shipyard work, the vessel arrived in Los Angeles, CA on December 20, 2000. A vessel repair entry was timely filed.

An application for relief with supporting documentation was timely filed. Pursuant to a letter dated March 13, 2001, your office denied in part and granted in part the aforementioned application. A petition for review of this decision was timely filed seeking relief with respect to transportation and travel charges for technicians to attend the vessel in Japan in November 2000 (entry items 1 and 2).

ISSUE:

Whether the transportation and travel 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 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..."

In regard to the transportation and travel charges at issue, the petitioner does not dispute the fact that these costs were incurred pursuant to dutiable repairs. Rather, the petitioner’s sole claim for relief is that, "We feel travel and transportation are not actually labor performed on or materials used on the vessel and they should be excluded from Customs duties."

While the petitioner’s statement at one time reflected Customs position with respect to 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)). Furthermore, it should be noted that in post-Texaco vessel repair entries such as the one currently under consideration, Customs has held such charges incurred pursuant to dutiable repair work to be dutiable. (Customs ruling letter 115100, dated October 26, 2000)

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

HOLDINGS:

The transportation and travel charges for which the petitioner seeks relief are dutiable pursuant to 19 U.S.C. § 1466.

Accordingly, the petition is denied in full.

Sincerely,

Larry L. Burton

Previous Ruling Next Ruling