Cruise Line's Summary Judgment Motion Was Granted As...
Cruise Line's Summary Judgment Motion Was Granted As To (1) The Retroactive Application Of The Harbor Maintenance Tax For Layover Stops, (2) The Inclusion Of "Port Taxes" And Other Federal Agency Charges; (3) The Inclusion Of Some Charges For Airfare And Land-Based Services, And (4) The Assessment Of "Pre-Billing" Interest On The Principal Owed For Harbor Maintenance Tax.
PRINCESS CRUISES, INC., Plaintiff, v. THE UNITED STATES, Defendant.
Consol. Court No. 94-06-00352, (98-03-00463)
UNITED STATES COURT OF INTERNATIONAL TRADE
2002 Ct. Intl. Trade LEXIS 99; SLIP OP. 2002-99
August 29, 2002, Dated
DISPOSITION: Princess's motion for summary judgment granted in part and Customs' cross-motion for summary judgment granted in part.
PROCEDURAL POSTURE: In this consolidated action, plaintiff cruise lines contested the assessment and calculation of the Harbor Maintenance Tax (HMT) on passenger cruise ships by defendant, the United States Customs Service (Customs), and Customs' assessment of pre-billing interest on allegedly underpaid HMT and Arriving Passenger Fee (APF) amounts. The matter was on remand from the Court of Appeals for the Federal Circuit.
OVERVIEW: Customs notified the cruise line that it had underpaid HMT and APF and owed substantial pre-billing interest on both amounts. The court had previously ruled the HMT unconstitutional, but was reversed on appeal. The appellate court ruled that the Customs' APF regulation and the HMT statute and regulation were entitled to Chevron deference. The court found that the cruise line was not liable for the HMT on cruises which made only layover stops at HMT covered ports prior to the issuance of the Customs' ruling resolving the ambiguity in the statute and regulation to include such stops. The court also held that Customs should not have included port taxes and charges for Customs and United States Immigration and Naturalization services in the cruise value on which the HMT was assessed, but was correct in assessing the HMT on the price paid for the cruise exclusive of land-based services and commissions. Thus, the cruise line was not liable for interest on those amounts, but it was liable for interest on the APF amounts.
OUTCOME: The cruise line's summary judgment motion was granted as to (1) the retroactive application of the Customs' assessment of the HMT for layover stops, (2) the inclusion of "port taxes" and other federal agency charges; (3) the inclusion of some charges for airfare and land-based services, and (4) the assessment of "pre-billing" interest on the HMT principal. Customs' cross-motion for summary judgment was granted as to all other issues.
