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HQ 115569

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February 14, 2002

VES-13-18-RR:IT:EC 115569 RSD

CATEGORY: CARRIER

Chief, Residual Liquidation and Protest Branch ATTN: Vessel Repair Unit
Newark/New York Area
1210 Corbin Street
3rd Floor
Elizabeth, New Jersey 07201

RE: Vessel repair; Vessel SEA-LAND INTEGRITY V.554; Vessel Repair Entry No. WK9-0065534-1; Travel and allowance charges; 19 U.S.C. §1466

Dear Sir:

This is in response to your memorandum dated December 3, 2001, forwarding a petition for review of your ruling on an application for relief assessed pursuant to 19 U.S.C.§1466. U.S. Ship Management, Inc. submitted the petition on behalf of the vessel operator. Our findings are set forth below.

FACTS:

The SEA-LAND INTEGRITY is a U.S.-flag vessel owned by U.S. Ship Management. Subsequent to completion of foreign shipyard work, the vessel arrived at the port of Boston, Massachusetts on July 5, 2000.

An application for relief with supporting documentation was filed on September 27, 2000. Pursuant to a letter dated October 20, 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 submitted on November 1, 2000, seeking relief with respect to travel and allowances for engineers to attend to the vessel in Bremerhaven, Germany in June 2000.

ISSUE:

Whether the travel and allowance 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 part or material to be used, or expenses of repairs made in a foreign country upon a vessel document under the laws of the United States”

Petitioner contends that travel charges 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in Texaco Marine Services, Inc., and Texaco Refining and Marketing Inc. v. United States, 44 F.3d 1539 (1994), it no longer represents Customs position in this matter.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 and Customs ruling letter 152000 dated April 2, 2001). Petitioner has not submitted any documentation in support of this position.

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

HOLDING:

The travel and allowances 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

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