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HQ 115232

February 20, 2001

VES-13-18-RR:IT:EC 115232 GG


Chief, Liquidation Branch
U.S. Customs Service
Post Office Box 2450
San Francisco, CA 94111

RE: Vessel Repair Entry No. C27-0171441-5; M/V SEA-LAND ENDURANCE; V-0004; Travel and Allowance Charges; 19 U.S.C. § 1466

Dear Sir:

This is in response to your memorandum dated November 16, 2000, forwarding a petition for review of your decision on an application for relief from duties assessed pursuant to 19 U.S.C. § 1466. Our findings are set forth below.


The M/V SEA-LAND ENDURANCE is a U.S. flag vessel owned by United States Ship Management, Inc., of Charlotte, North Carolina. Subsequent to the completion of foreign shipyard work, the vessel arrived in Los Angeles, California, on July 11, 2000. A vessel repair entry was timely filed.

An application for relief with supporting documentation was timely filed. Pursuant to a letter dated October 11, 2000, your office granted in part and denied in part the aforementioned application. A petition for review of this decision was timely filed seeking relief from the imposition of vessel repair duties on travel, allowance and equipment rental expenses associated with the repairs in question.


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


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 . . .”

With regard to the travel, allowance and rental 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 “[w]e feel travel, rental, and allowances 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in Texaco Marine Services, Inc., and Texaco Refining and Marketing, Inc., v. United States, 44 F.3d 1539 (1994), it no longer represents Customs position in this matter.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 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. See Headquarters Ruling Letters 115135, dated November 8, 2000; 115100, dated October 26, 2000; and 113977, dated November 12, 1997.

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


The travel, allowance and equipment rental charges are dutiable pursuant to 19 U.S.C. § 1466.


Larry L. Burton
Entry Procedures and Carriers Branch

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