VES-13-18-CO:R:IT:C
Chief, Technical Branch
Commercial Operations
Pacific Region
One World Trade Center
Long Beach, California 90731
RE: Vessel Repair; 19 U.S.C. 1466; Travel Expenses; Handling &
Cartage Expenses; Cleaning
Dear Sir:
This is in response to your memorandum of May 14, 1991,
regarding vessel repair entry number C27-0011756-0.
FACTS:
The record reflects that the GREEN WAVE, voyage 36, arrived
at Port Huemene, California, on January 3, 1990. The vessel had
foreign repairs performed in September and November, 1989, which
were reflected on the vessel repair entry filed January 3, 1990.
The entry was liquidated on August 17, 1990. The subject of
this ruling is a protest dated November 15, 1990, in which the
protestant seeks relief for travel time and travel expenses,
handling and cartage expenses, fuel oil tank cleaning and pumping
off the slop oil tank.
ISSUES:
(1) Whether travel time and travel expenses are dutiable
under 19 U.S.C. 1466;
(2) Whether handling and cartage expenses are dutiable
under 19 U.S.C. 1466;
(3) Whether the cleaning in question is dutiable under 19
U.S.C. 1466?
- 2 -
LAW AND ANALYSIS:
Title 19, United States Code, section 1466(a), provides in
pertinent part for payment of duty in the amount of 50 percent ad
valorem on the cost of foreign repairs to vessels documented
under the laws of the United States to engage in the foreign or
coastwise trade, or vessels intended to be employed in such
trade.
The travel time and travel expenses are listed in H.M. Stein
Sohn Bill No. 89/10-0007, which is in German. The protestant has
submitted a translation of that document certified by the Modern
Language Institute to be a true translation. Customs has long
held that charges associated with travel are not considered
dutiable repairs pursuant to 19 U.S.C. 1466. See, C.I.E.
518/63. Accordingly, the travel expenses in question are non-
dutiable.
With regard to the handling and cartage charges listed on
Krupp Mak Invoice No. 407035, the protestant claims that
liquidation should be made from that invoice and not the German
invoice, since this is the actual invoice on which payment is
made. Despite protestant's argument, Customs has long held that
shipping, crating and packing is non-dutiable. See, C.D. 1830;
T.D. 56184(101). Accordingly, the handling and cartage charges
on Krupp Mak Invoice No. 407035 are non-dutiable.
The last item to be addressed is the A.H. Ship Chandling
Invoice, reflecting cargo related work on board the vessel at
Subic Bay, Zambales, R.P. The protestant claims that the
services provided in schedules III and IV are not repairs or
maintenance, but merely cleaning or transporting. The
explanation of the work in schedule III is as follows:
Open bolted manhole access cover in small
F.O.T. Removed oil and sludge from tank to
tank truck and clean thoroughly inside F.O.
tank. Clean deck in way of removal soogie &
clean oil spillage on deck of around engine
room. Furnish materials for removal and
delivered to vessel.
Schedule IV is described as follows:
Installed oil Hose to drain pipe on deck of
vessel ship to tank trucks at pier. Oil with
mixed water pumped off from slop oil tank to
tank trucks (Approx. 60 tons). Two (2) tank
trucks were used. Three (3) loads total out
of Base. Clean deck inway or removal.
Customs has consistently held that cleaning is not dutiable
unless it is performed as part of, in preparation for, or in
conjunction with dutiable repairs, or is an integral part of the
overall maintenance of the vessel. E.g., Headquarters Ruling
Letter 110841, dated May 29, 1990 (and cases cited therein).
Costs for cleaning that have no nexus to repairs must be
separately itemized to avoid duty. We have also held that
cleaning operations which remove rust and deterioration or worn
parts, and which are a necessary factor in the effective
restoration of a vessel to its former state of preservation,
constitute vessel repairs. See, C.I.E. 429/61.
The description in schedules III and IV indicate general
cleaning as opposed to maintenance to restore the vessel to her
former state of preservation. Moreover, we find that the
cleaning was not performed in conjunction with repairs to the
tanks. Thus, the cleaning is non-dutiable.
HOLDINGS:
(1) Travel time and travel expenses are non-dutiable under
19 U.S.C. 1466;
(2) Handling and cartage expenses are non-dutiable under 19
U.S.C. 1466;
(3) The cleaning in question is non-dutiable under 19
U.S.C. 1466.
Sincerely,
B. James Fritz
Chief
Carrier Rulings Branch