VES-13-18-R:IT:C 113404 GEV
Chief, Residual Liquidation and Protest Branch
Commercial Operations
U.S. Customs Service
6 World Trade Center
New York, N.Y. 10048-002980
RE: Vessel Repair Entry No. C04-0031468-5; TILLIE LYKES; V-39; Consumables;
Repairs; 19 U.S.C. 1466
Dear Sir:
This is in response to your memorandum dated April 7, 1995, forwarding for our review a
petition for review. Our findings in this matter are set forth below.
FACTS:
The TILLIE LYKES is a U.S.-flag vessel owned by Shawmut Bank Connecticut and
operated by Lykes Bros. The vessel incurred foreign expenses in Bremerhaven, Germany, in
November of 1994. The vessel subsequently arrived in the United States at Boston,
Massachusetts, on November 23, 1994. A vessel repair entry was timely filed.
An application for relief, dated January 9, 1995, was received by the New York Vessel
Repair Liquidation Unit (VRLU). By letter dated March 3, 1995, the VRLU granted in part and
denied in part the application for relief. Subsequently, a petition for review was received by the
VRLU on March 28, 1995. The petitioner requests that paint brushes and rollers listed on Kss-Odin invoice # 732 be considered non-dutiable as consumables. The petitioner further states that
the servicing of a U.S-purchased, newly-installed radar was done without charge pursuant to a
service agreement included in the original purchase price and therefore should be non-dutiable.
- 2 -
ISSUE:
Whether the costs for which the petitioner seeks relief are dutiable under 19 U.S.C.
1466.
LAW AND ANALYSIS:
Title 19, United States Code, 1466 (19 U.S.C. 1466), provides in pertinent part for
payment of duty in the amount of 50 percent ad valorem on the cost of equipment, or any part
thereof, 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 to engage in
foreign or coastwise trade, or vessels intended to engage in such trade.
With respect to consumables, Customs has long-held that such items are duty-free when
not used in connection with dutiable repairs (see C.I.E. 196/60). In regard to whether a particular
article is considered to be a non-dutiable consumable as opposed to dutiable equipment for
purposes of administering 19 U.S.C. 1466, the courts have held that "consumable supplies" are
"supplies for the consumption, sustenance, and medical needs of the crew and passengers during
the voyage." H.E. Warner, Trustee, American Mail Line, Ltd. v. United States, 28 CCPA 143, at
150, quoting from Southwestern Shipbuilding Co. v. United States, 13 Ct. Cust. App. 74, T.D.
40934 (1925).
Based on the above definition, the paint brushes and rollers for which the petitioner seeks
relief are not considered to be consumables but rather are equipment and therefore are dutiable
under the vessel repair statute. This determination is further bolstered by the fact that paint
brushes were specifically included in a list of articles that the court in Southwestern Equipment
Co. considered to be equipment.
In regard to the second item under consideration (i.e., servicing of the radar), the record
does not substantiate the petitioner's claim. The CF 226 indicates a charge of $480 for this work.
The only evidence submitted regarding this item is a copy of a handwritten sheet which indicates
the same cost, yet it also has a handwritten notation indicating that there is no charge to the
petitioner. This sheet is a plain piece of paper without any letterhead, without any reference to a
U.S.-purchase/ service agreement, and has the initials of an individual without the full name of the
person and his/her position. Accordingly, in view of the insufficiency of the evidence, we find the
charge for the servicing of the radar to be dutiable.
- 3 -
HOLDING:
The costs for which the petitioner seeks relief are dutiable under 19 U.S.C. 1466.
Accordingly, the petition is denied.
Sincerely,
Arthur P. Schifflin
Chief
Carrier Rulings Branch