HQ 544874: Protest and Application for Further Review of Protest No.1001-90-002200; assists; incorporated in imported merchandise;belts; women's trousers

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                            HQ 544874

                        October 22, 1993



VAL CO:R:C:V 544874 CRS

CATEGORY:  Valuation

Area Director
U.S. Customs Service
J.F.K. Airport
Building 178
Jamaica, NY 11430

RE:  Protest and Application for Further Review of Protest No.
1001-90-002200; assists; incorporated in imported merchandise;
belts; women's trousers

Dear Sir:

     This is in response to your memorandum dated November 26,
1991, under cover of which you forwarded an application for
further review of the above-referenced protest, filed by Siegel,
Mandell & Davidson, on behalf of protestant Liz Claiborne, Inc.

FACTS:

     The protested merchandise consists of seven styles of
women's 100 percent cotton woven trousers manufactured in Hong
Kong.  The trousers were imported with PVC belts of foreign
origin that were supplied free of charge by the protestant (the
buyer) to the manufacturer (the seller).  Documentation
representative of the protested entries was submitted with the
instant protest.

     The protestant maintains the belts constitute an assist, the
value of which can be apportioned over the first shipment of a
given style.  However, you maintain that the belts do not
constitute an assist.  Moreover, even if they did, you contend
that protestant's method of apportionment is unacceptable since
it would be administratively complex and unwieldy for the value
of the assist to be apportioned on one entry, while the actual
merchandise to which the assist relates could be entered through
different ports.  Accordingly, you believe the trousers and belts
were correctly appraised on an entry-by-entry basis.

ISSUE:

     The issue presented is whether belts, provided by the buyer
to the seller, and imported with trousers, are assists such that
the total value of the belts may be apportioned over the first
shipment of the imported merchandise.

LAW AND ANALYSIS:

     Merchandise imported into the United States is appraised in
accordance with section 402 of the Tariff Act of 1930, as amended
by the Trade Agreements Act of 1979 (19 U.S.C.   1401a; TAA). 
The preferred method of appraisement is transaction value, which
is defined as the "price actually paid or payable for [imported]
merchandise when sold for exportation to the United States," plus
certain enumerated additions, including the value, apportioned as
appropriate, of any assists.  19 U.S.C.   1401a(b)(1)(A).

     The term "assists" includes materials, components, parts and
similar items incorporated in imported merchandise, and supplied
by the buyer use in connection with the production or sale for
export to the U.S. of the merchandise.  19 U.S.C.   1401a(h)(1). 
In the instant case, the protestant supplied belts of foreign
origin, procured from a third party, free of charge to the
manufacturer of the trousers.  The belts were placed through
loops on the trousers sized to accommodate the width of the belt
and were imported, and will be sold with, with the trousers.  It
is the position of this office that the belts are therefore
incorporated into the imported merchandise within the meaning of
section 402(h)(1)(A)(i) of the TAA.  Accordingly, the belts
supplied by the protestant to the seller of the imported trousers
constitute an assist.

     Pursuant to section 152.103(e), Customs Regulations (19 CFR
  152.103(e)), if the entire anticipated production in which an
assist is used is for exportation to the U.S., the total value of
the assist may be apportioned in one of several ways, to include
apportionment over the first shipment if the importer wishes to
pay duty on the entire value at once.  The belts are an assist,
the value of which should be added to the price actually paid or
payable for the imported trousers.  However, the method of
apportionment actually accepted by Customs will depend upon the
documentation submitted by the importer.  19 CFR   152.103(e)(1). 
Based on the documentation for a representative entry that was
attached to the instant protest we are unaware of anything that
would invalidate the protestant's method of apportionment. 
Accordingly, unless the balance of the entry documentation should
indicate to the contrary, protestant's method of apportionment is
acceptable.

     However, in certain instances such an apportionment might
not be acceptable.  For example, if in addition to the trousers,
the belts themselves were also subject to quota/visa requirements
(e.g., belts made of the same fabric as the trousers) the total
value of the assist could not be apportioned over the first
shipment of the imported merchandise since quota priority and
status are determined at the time of presentation of the entry
summary for consumption.  19 CFR   132.11(a).  Consequently, in
such a case the assist would have to be apportioned on an entry
by entry basis.

HOLDING:

     Belts incorporated in imported trousers constitute an
assist, the value of which may be apportioned over the first
shipment of a given style.

     You are instructed to allow the protest in full.  A copy of
this decision should be attached to the Form 19 Notice of Action.

                         Sincerely,





                         John Durant, Director