## Facts

- Texas Apparel Co. imported wearing apparel from Mexico in 266 entries made between July 1, 1980 and May 29, 1981.
- The United States Customs Service appraised the merchandise using computed value under § 402(e) of the Tariff Act of 1930, as amended (19 U.S.C. § 1401a(e)).
- In calculating computed value, Customs added an amount for sewing machines used in Mexico to manufacture the apparel, along with repair parts and repair expenses for those machines.
- Customs treated the sewing machines, parts, and repair expenses as an “assist” under 19 U.S.C. § 1401a(h)(1)(A)(ii) (covering “tools, dies, molds, and similar items used in the production of the imported merchandise” when supplied by the buyer).
- Texas Apparel contended the sewing machines were general-purpose equipment and therefore fell outside the “tools, dies, molds, and similar items” language, which it argued was limited to special-purpose equipment (such as molds) with a dedicated use.
- Texas Apparel sought a refund of duties it claimed were overpaid (plus interest) due to Customs’ inclusion of the sewing machine-related amounts.
- The case came before the U.S. Court of International Trade on cross-motions for summary judgment regarding whether the sewing machines and related repair costs were properly included as assists in computed value.

## Issues

1. Whether sewing machines furnished by the importer for use by the foreign manufacturer in producing the imported apparel are “tools, dies, molds, and similar items used in the production of the imported merchandise” and therefore dutiable “assists” under 19 U.S.C. § 1401a(h)(1)(A)(ii).
2. Whether the “cost or value” of that assist properly includes the machines’ repair parts and repair expenses.

## Decision

- The Court of International Trade held that the sewing machines used to produce the imported apparel were properly treated as “assists” under 19 U.S.C. § 1401a(h)(1)(A)(ii).
- The court rejected Texas Apparel’s proposed rule that would exclude “general-purpose” machinery from the assist definition based on a special-purpose-only reading of “tools, dies, molds, and similar items.”
- The court sustained Customs’ inclusion of the repair parts and repair expenses as part of the “cost or value” of the sewing-machine assist.
- The court upheld Customs’ computed-value appraisement and denied Texas Apparel’s request for a duty refund (with interest) based on excluding the sewing machines and related costs.

## Legal Principles

- For computed value under 19 U.S.C. § 1401a(e), the valuation must reflect required additions mandated by statute, including applicable “assists” provided by the buyer for use in producing the imported merchandise.
- Under 19 U.S.C. § 1401a(h)(1)(A)(ii), an assist includes “tools, dies, molds, and similar items used in the production of the imported merchandise”; the statutory text does not impose a blanket exemption for equipment that can be used for more than one manufacturing task.
- When the buyer supplies production equipment for use by the foreign producer in making the imported goods, the equipment’s cost or value may be added to customs value as an assist so that the appraised value reflects what it took to make the merchandise.
- The “cost or value” of production equipment treated as an assist may include associated repair parts and repair expenses where those costs relate to keeping the equipment operative for production of the imported merchandise.
- On summary judgment in a customs valuation dispute, where the material facts about what was furnished and how it was used are not genuinely disputed, the court may resolve the legal question of whether the items fall within the statutory assist definition.

## Conclusion

Texas Apparel Co. v. United States held that sewing machines furnished by the importer to the Mexican manufacturer and used to produce the imported apparel, along with related repair parts and repair expenses, were dutiable assists within 19 U.S.C. § 1401a(h)(1)(A)(ii) and were properly included by Customs in computed value under 19 U.S.C. § 1401a(e).


Texas Apparel Co. v. United States, 698 F. Supp. 932 (1988)