Question: The Video Assembly Co. (VAC), a company organized in State Z, entered into an agreement with the U.S. government to assemble video cassette recorders from foreign manufactured parts inside a U.S. FTZ. Before this could be done, however, VAC had to set up an assembly plant. Rather than using an American facility, it imported a completely prefabricated plant. The plant consisted of the building, all of the assembly and packaging equipment, and all of the ancillary tools. The U.S. Customs Service claims that the plant itself did not qualify for exemption from customs duties at the time it came into the FTZ because it was not "merchandise" for assembly, as required by U.S. law, and the Customs Service levied duties on the plant. VAC has appealed to the U.S. Court of International Trade, asking for an order compelling the Customs Service to return the duties it collected. How should the court rule? Discuss.