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HQ 115415

September 27, 2001

VES-13-18-RR:IT:EC 115415 GG


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

RE: Vessel Repair Entry No. C27-0190132-7; M/V SEA-LAND DEFENDER; V-DN106; Transportation and Meal Expenses; 19 U.S.C. §1466

Dear Sir:

This is in response to your memorandum dated June 19, 2001, 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 DEFENDER 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 March 21, 2001. A vessel repair entry was timely filed.

An application for relief with supporting documentation was timely filed. Pursuant to a letter dated May 17, 2001, 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 transportation and meal expenses associated with the repairs in question.


Whether the transportation and meal expenses 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 transportation and meal 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 transportation and meals 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in Texaco Marine Services, Inc., and Texaco Refining and Marketing, Inc., v. United States, 44 F.3d 1539 (1994), it no longer represents Customs position in this matter.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 115231, dated February 20, 2001; 15135, dated November 8, 2000; 115100, dated October 26, 2000; and 113977, dated November 12, 1997.

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


The transportation and meal charges are dutiable pursuant to 19 U.S.C. §1466.


Larry L. Burton

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