Alstom Transport Australia Pty Ltd and Comptroller-General of Customs - [2021] AATA 3816

Alstom Transport Australia Pty Ltd and Comptroller-General of Customs [2021] AATA 3816 (19 October 2021)
Division:TAXATION AND COMMERCIAL DIVISION
File Number(s): 2018/3711
Re:Alstom Transport Australia Pty Ltd
APPLICANT

AndComptroller-General of Customs
RESPONDENT

DECISION
Tribunal:Deputy President B W Rayment OAM QC
Date:19 October 2021
Place:Sydney

The TCO application of the applicant should be accepted, and the matter will be remitted to the respondent with a direction to that effect.
.................................[sgd].......................................
Deputy President B W Rayment OAM QC
CATCHWORDS
CUSTOMS – tariff concession order – whether the core criteria were met on the day the TCO application was lodged – whether substitutable goods were produced in Australia in the ordinary course of business – to what use or uses are the TCO goods described in the application put or can they be put – no relevant substitutable goods found to exist – decision under review set aside and remitted
LEGISLATION
Customs Act 1901 (Cth) ss 269C, 269D, 269E, 269F, 269FA, 269H, 269HA, 269P, 269SJ
CASES
Alstom Transport Australia Pty Ltd and Comptroller-General of Customs [2019] AATA 1308
Alstom Transport Australia Pty Ltd v Comptroller-General of Customs [2020] FCAFC 43; (2020) FCR 652
Chief Executive Officer of Customs v Toyota Material Handling Australia Pty Ltd and Anor [2012] FCAFC 78; (2012) 203 FCR 129
Colorado Group Ltd v Strandbags Group Pty Ltd (2007) 164 FCR 506
Comptroller-General of Customs v Vestas – Australian Wind Technology Pty Ltd [2015] FCAFC 185: (2015) 236 FCR 499
Dow Agroscience Australia Ltd and Chief Executive Officer of Customs and Nufarm Australia Ltd (Party Joined) [2010] AATA 859
Nufarm Australia Ltd v Dow AgroSciences Australia Ltd (No. 2) (2011) 123 ALD 21
Re Bag & Jute (Tamworth) Pty Ltd and Comptroller-General of Customs and Southcorp Australia Pty Ltd (1995) 38 ALD 357
Re Downer EDI Rail Pty Ltd and Chief Executive Officer of Customs (2010) 118 ALD 454
Re Thirco Pty Ltd and Comptroller of Customs and Bowater Tissue Ltd (1994) 35 ALD 665
Re Vulcan Australia Pty Ltd and Comptroller-General of Customs [1994] AATA 150; (1994) 34 ALD 773
Tetra Pak Imports Pty Ltd and Chief Executive Officer of Customs and J. Gadsden Pty Ltd [1996] AATA 446
Toyota Material Handling Australia Pty Ltd and Chief Executive of Customs [2011] AATA 600
REASONS FOR DECISION
Deputy President B W Rayment OAM QC
19 October 2021

The Full Court of the Federal Court (Davies, Markovic and Steward JJ) allowed an appeal from the Tribunal’s first decision on this review, which concerns the respondent’s refusal of the applicant’s application for a tariff concession order (TCO) pursuant to s.269P of the Customs Act 1901 (Cth) (the Act). The Full Court’s decision is reported at [2020] FCAFC 43; (2020) 275 FCR 652. The Full Court remitted the matter to the Tribunal to be re-determined in accordance with law.
The ultimate question on this re-determination is whether the “core criteria” were met on the day on which the TCO application was lodged. Section 269C of the Act provides that the core criteria were met on that day if “no substitutable goods were produced in Australia in the ordinary course of business”. Goods are taken to be produced in Australia if the goods are wholly or partly manufactured in Australia, as further explained in s.269D of the Act. The expression “ordinary course of business” has two definitions in s.269E of the Act. For goods which are not made to order capital equipment, subsection (1) applies. Goods which could be produced in Australia, and which would be made-to-order capital equipment, and comply with other requirements specified in subsection (2) are also taken to be goods produced in Australia in the ordinary course of business. Both limbs of s.269E are in dispute in this case. Unless the applicant succeeds on both limbs, it will fail to cause the reviewable decision to be set aside and will fail in its application for a TCO.
The parties were represented before the Tribunal as they had been before the Full Court. Mr I.G.B Roberts SC and Ms J. Wright appeared for the applicant, instructed by HFW Australia and Mr S.B Lloyd SC and Ms H. Younan SC appeared for the respondent, instructed by the Australian Government Solicitor. Both parties referred to the transcript and evidence which had been led before the Tribunal on the first occasion and made submissions in the light of that evidence.
The medium neutral reference to the Tribunal’s first decision is [2019] AATA 1308. These are my reasons on re-determination of the review.
The background
As Mr Sheldon Young of Alstom says in his witness statement, modern trains are categorised by the transport industry as mainline or intercity trains, suburban trains and metro trains, and there are also light rail trains, the latter being similar to trams.
Mainline and intercity trains are long distance and intercity trains in this country all have drivers.
Suburban trains are the most common trains in Australia, generally transporting passengers from a city’s outer suburbs into its CBD. Suburban lines often share traffic with mainline trains. Cities in Australia other than Sydney at the present time utilise suburban trains, with drivers, for the transportation of passengers within the confines of the cities.
Metro systems are traditionally a more European styled system which is generally a closed network which transports passengers within the confines of a city. That kind of system was established by the New South Wales government in Sydney. Alstom has built such systems in Shanghai, Hong Kong, Singapore and Switzerland.
Alstom built the trains which it imported for the Sydney metro system in India and the tariff concession order which it applied for, and was refused by the respondent, was applied for in an effort to make its importation of the trains in question to be free of customs duty. Sydney at the present time also utilises suburban trains with drivers in stations (including stations in Sydney’s CBD) not served by the Sydney metro system.
The Sydney metro system is different from any of the suburban trains used in other cities and in those parts of the Sydney system not so far converted to the metro system in that all suburban trains have drivers and the Sydney metro system trains do not have drivers. Instead the Sydney metro trains are monitored by controllers at a train control centre which communicates with the trains digitally. All platforms at which the Sydney metro trains stop have platform screen doors, making loading and unloading safer and faster.
The evidence of Mr Devanahalli of Alstom shows that the trains imported are constructed at the highest grade of automation, GOA (pronounced gow-a) 4 level. The four levels of automation are set out in an international standard known as Standard IEC 62290-1: 2014. The acronym IEC stands for International Electrotechnical Commission.
The Standard describes twelve basic functions of train operation in six categories. The grades 1 to 4 are determined by the number and type of basic functions that are automated.
All four levels of automation include three basic functions to ensure the safe movement of trains, which are carried out by the Automatic Train Protection (ATP) system. Those functions ensure a safe route, ensure safe separation of trains on the line, and ensure safe speed. That last mentioned function is only partly supervised for GOA1 trains.
Trains which lack ATP are classed as GOA0 trains, which depend for safety on the driver and pre-set rules of operation.
GOA1 is the standard for non-automated trains, which have a driver but a certain level of automation. The system ensures a safe route, ensures safe separation of trains and in part supervises ensuring safe speed.
As the level of automation ranges from GOA1 to GOA4 the level of automation increases.
Table 1 to clause 4.2.1.1 of the Standard is a table which summarises differences between GOA0, GOA1, GOA2, GOA3 and GOA4. It is set out in schedule 1 to these reasons.
Clauses 4.2.1.2 to 4.2.1.6 are as follows:
4.2.1.2 Grade of automation 0 (GOA0): On-sight train operation
In this grade of automation, the driver has full responsibility and no system is required to supervise his activities. However, points and single tracks can be partially supervised by the system.
4.2.1.3 Grade of automation 1 (GOA1): Non-automated train operation
In this grade of automation, the driver is in the front cabin of the train observing the guideway and stops the train in the case of a hazardous situation. Acceleration and braking are commanded by the driver in compliance with wayside signals and cab-signal. The system supervises the activities of the driver. This supervision may be done at specific locations, be semi-continuous or continuous, notably in respect of the signals and the speed. Safe departure of the train from the station, including door closing, is the responsibility of the operations staff.
4.2.1.4 Grade of automation 2 (GOA2): Semi-automated train operation
In this grade of automation, the driver is in the front cabin of the train observing the guideway and stops the train in the case of a hazardous situation. Acceleration and braking is automated and the speed is supervised continuously by the system. Safe departure of the train from the station is the responsibility of the operations staff (door opening and closing may be done automatically).
4.2.1.5 Grade of automation 3 (GOA3): Driverless train operation
In this grade of automation, additional measures are needed compared to GOA2 because there is no driver in the front cabin of the train to observe the guideway and stop the train in case of a hazardous situation.
In this grade of automation, a member of the operations staff is necessary onboard. Safe departure of the train from the station, including door closing, can be the responsibility of the operations staff or may be done automatically.
4.2.1.6 Grade of automation 4 (GOA4): Unattended train operation
In this grade of automation, additional measures are needed compared to GOA3 because there are no onboard operations staff.
Safe departure of the train from the station, including door closing, has to be done automatically.
More specifically, the system supports detection and management of hazardous conditions and emergency situations such as the evacuation of passengers. Some hazardous conditions or emergency situations, such as derailment or the detection of smoke or fire, may require staff interventions.
Two tenderers bid for the NSW contract, which stipulated that the trains supplied would comply with the requirements for GOA4 trains.
Alstom supported one of the two tenderers for the NSW contract, and contracted with that tenderer to supply the required GOA4 trains.
The description of the goods contained in the TCO (set out below at [28]) is apt to describe a GOA4 train. There is a dispute between the parties as to whether it is also apt to describe a GOA3 train.
GOA2, GOA3 and GOA4 trains have never been built in Australia. Downer, a competitor of Alstom, has built GOA1 trains for the purposes of the Perth system. It gave evidence to the effect that it would accept an order for the supply of one or more GOA3 or GOA4 trains, although it has never built one. For that purpose it says that it would provide the rolling stock, by which it means the non-automated parts of the trains and would contract with a non-Australian supplier for the design production and integration with the rolling stock of those parts of the trains which are necessary to make them compliant with the GOA3 or GOA4 level of automation. That is what it did when it built the GOA1 trains. Apart from the question whether the TCO description covers GOA3 trains, there are questions as to whether Downer satisfies other conditions necessary under provisions of the Act before a finding could be made that there are substitutable goods for the TCO goods.
The respondent submits that the GOA1 trains which Downer has manufactured qualify as substitutable goods, and for this purpose it seeks a finding that the goods described in the TCO application have a use which also extends to Downer’s GOA1 trains. It makes an alternative case that Downer is prepared to accept an order for a GOA3 or GOA4 train.
The statutory provisions
The relevant provisions of the Customs Act are set out conveniently in the Full Court’s decision at paragraphs [3]-[12] which also quotes an explanatory memorandum as follows:
[3] Section 269P of the Act permits the Comptroller to make, in general terms, a TCO if the Comptroller is “satisfied” that the TCO application “meets the core criteria”. That provision provides:
The making of a standard TCO
(1) If a TCO application in respect of goods, other than goods sent out of Australia for repair, has been accepted as a valid application under section 269H, the Comptroller-General of Customs must decide, not later than 150 days after the gazettal day, whether or not he or she is satisfied, having regard to:
(a) the application; and
(b) all submissions lodged with the Comptroller-General of Customs before the last day for submissions; and
(c) all information supplied and documents and material produced to the Comptroller-General of Customs in accordance with a notice under subsection 269M(4); and
(d )any inquiries made by the Comptroller-General of Customs;
that the application meets the core criteria.
(2) If the Comptroller-General of Customs fails to make a decision under subsection (1) in respect of a TCO application within 150 days after the gazettal day, the Comptroller-General of Customs is taken, for the purposes of subsection (1), at the end of that period, to have made a decision that he or she is not satisfied that the application meets the core criteria.
(3) If the Comptroller-General of Customs is satisfied that the application meets the core criteria, he or she must make a written order declaring that the goods the subject of the TCO application are goods to which a prescribed item specified in the order applies.
(4) The TCO must include:
(a) a description of the goods the subject of the order including a reference to the Customs tariff classification that, in the opinion of the Comptroller-General of Customs, applies to the goods; and
(b) a statement of the day on which the TCO is to be taken to have come into force; and
(c) if subsection 269SA(1) applies in relation to the TCO - a statement of the day on which it ceases to be in force.
[4] Section 269C of the Act sets out the “core criteria” as follows:
Interpretation - core criteria
For the purposes of this Part, a TCO application is taken to meet the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business.
[5] The term “substitutable goods” is defined in s 269B(1) of the Act as follows:
substitutable goods, in respect of goods the subject of a TCO application or of a TCO, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application or of the TCO can be put.
[6] The following additional provisions are relevant to determining what is, and what is not, a “substitutable good”. First, s 269B(3) of the Act provides:
In determining whether goods produced in Australia are put, or are capable of being put, to a use corresponding to a use to which goods the subject of a TCO, or of an application for a TCO, can be put, it is irrelevant whether or not the first mentioned goods compete with the second mentioned goods in any market.
[7] Secondly, s 269F describes how an applicant is to make a TCO application. It provides:
Making a TCO application
(1) A person may apply to the Comptroller-General of Customs for a tariff concession order in respect of goods.
(2) An application must:
(a) be in writing; and
(b) be in an approved form; and
(c) contain such information as the form requires; and
(d) be signed in the manner indicated in the form.
(3) Without limiting the generality of paragraph (2)(c), a TCO application must contain:
(a) a full description of the goods to which the application relates; and
(b) a statement of the tariff classification that, in the opinion of the applicant, applies to the goods; and
(c) if the applicant is not proposing to make use of the TCO to import the goods to which the application relates into Australia on the applicant’s own behalf — the identity of the importer for whom the applicant is acting; and
(d) particulars of all the inquiries made by the applicant (including inquiries made of prescribed organisations) to assist in establishing that there were reasonable grounds for believing that, on the day on which the application was lodged, there were no producers in Australia of substitutable goods.
(4) A TCO application may be lodged:
(a) by leaving it at a place that has been allocated for lodgement of TCO applications by notice published on the Department’s website; or
(b) by posting it by prepaid post to a postal address specified in the approved form; or
(c) by sending it by fax to a fax number specified in the approved form;
and the application is taken to have been lodged when the application, or a fax of the application, is first received by an officer of Customs.
(5) The day on which an application is taken to have been lodged must be recorded on the application
[8] Thirdly, relevant to the power to grant a TCO, and the form of an application for such a concession, are s 269SJ(1) and (1A) of the Act, which provide as follows:
TCOs not to apply to goods described by reference to their end use or certain goods
(1) The Comptroller-General of Customs must not make a TCO in respect of goods:
(aa) described in terms other than generic terms; or
(a) described in terms of their intended end use; or
(b) declared by the regulations to be goods to which a TCO should not extend.
(1A) Without limiting the meaning of the reference in paragraph (1)(aa) to goods described in generic terms, goods are taken not to be so described if their description, either directly or by implication, indicates that they are goods of a particular brand or model, or that a particular part number applies to the goods.
[9] Sections 269SJ(1)(aa) and (1A) were inserted into the Act by the Customs Amendment Act 1996 (Cth.). The Explanatory Memorandum which accompanied the introduction to Parliament of the Customs Amendment Bill1996 (Cth.), described these amendments in the following terms:
Items [sic] 32 - Before paragraph 269SJ(1)(a)
This item amends subsection 269SJ(1) to insert a new paragraph (aa) which provides that the [Chief Executive Officer of Customs (“CEO”)] must not make a TCO which describes goods in other than generic terms. The amendment, in combination with the clarification proposed in item 33, is intended to prevent TCOs being made which apply to particular products of a manufacturer, rather than goods of that description generally .
The current provisions of section 269HA of the Customs Act will allow the CEO to reject an application at any stage of processing if it becomes apparent that goods are described in non-generic terms. Decisions of the CEO under that section of the Customs Act are reviewable by the AAT under existing paragraph 273GA(1)(ma).
Item 33 - After subsection 269SJ(1)
This item inserts new subsection 269SJ(1A) into the Customs Act to provide examples of descriptions of goods which will not be acceptable under new paragraph 269SJ(1)(aa) proposed in item 32. If a description, either directly or by implication, indicates that the goods are of a particular brand or model, or of a particular part number, it will not be considered to be in generic terms.
For example, a TCO application which describes goods as “starter motors manufactured by XYZ Company” would not be acceptable. An example of an offensive description which by implication indicates that the goods are of a particular brand would be “washing machines of 5kg capacity, having 6 wash cycles chosen by a black and chrome knob, 3 temperature combinations selected by red plastic switches, stainless steel tub with 450 water holes, nylon lint filter which measures 3.5 x 10cm attached to a moulded green plastic frame, etc” would be a description of goods which goes to such specificity as to imply that it can only be a washing machine model ABC of XYZ Company.
(Emphasis added.)
[10] Fourthly, the Comptroller has a power to screen and if necessary to reject applications for a TCO that do not comply with the Act. Section 269H of the Act provides:
Screening the application
(1) Not later than 28 days after a TCO application is lodged, the Comptroller-General of Customs must:
(a) if he or she is satisfied:
(i) that the application complies with section 269F; and
(ii)that, having regard to the information disclosed in the application and to the particulars of the inquiries made by the applicant, there are reasonable grounds for believing that the applicant has discharged the responsibility referred to in section 269FA; and
(b) if he or she is not aware of any producer in Australia of substitutable goods;
by notice in writing given to the applicant, inform the applicant that the application is accepted as a valid application; and
(c) if he or she is not so satisfied; or
(d) if he or she is aware of such a producer;
by notice in writing given to the applicant, inform the applicant that the application is rejected and of the reasons for the rejection.
(2) If the Comptroller-General of Customs has not, within that period, accepted or rejected the application, this Part has effect as if the Comptroller-General of Customs had, immediately before the end of that period, informed the applicant, by notice in writing, that the application is accepted as a valid application.
[11] Fifthly, s 269FA provides that it is the responsibility of an applicant for a TCO to establish that there are reasonable grounds for asserting that an application meets the core criteria. The failure to meet this onus will result in the TCO application itself being rejected (s 269H(1)(a)). In such circumstances any exercise of the power to accept or reject a TCO application pursuant to s 269P of the Act is never reached. Section 269FA of the Act provides:
The applicant’s obligation
It is the responsibility of an applicant for a TCO to establish, to the satisfaction of the Comptroller-General of Customs, that, on the basis of:
(a) all information that the applicant has, or can reasonably be expected to have; and
(b) all inquiries that the applicant has made, or can reasonably be expected to make;
there are reasonable grounds for asserting that the application meets the core criteria
[12] Sixthly, the Comptroller has the power to reject applications that do not comply with s 269SJ. Section 269HA of the Act provides:
Comptroller-General of Customs may reject a TCO application in relation to goods referred to in section 269SJ
(1) If, at any time during the period starting from the receipt of a TCO application and ending with the making of a TCO, the Comptroller-General of Customs becomes satisfied that the goods to which the application relates are goods in respect of which, under subsection 269SJ(1), the Comptroller-General of Customs is prevented from making a TCO, the Comptroller-General of Customs must:
(a) reject the application; and
(b) by notice in writing given to the applicant, inform the applicant that the application is rejected and of the reason for the rejection.
(2) If, at any time after the publication of a notice in the Gazette under subsection 269K(1), the Comptroller-General of Customs rejects the application to which the notice relates under subsection (1), the Comptroller-General of Customs must, as soon as practicable after rejecting the application, publish a notice in the Gazette stating that the application has been rejected and giving the reason for the rejection.
The questions to be addressed

The following questions are to be to be dealt with in these reasons, in accordance with the reasons of the Full Court:
(i)What are the TCO goods?
(ii)To what use or to what uses are they put or can they be put?
(iii)What are the goods claimed to be substitutable?
(iv)To what use or to what uses are they put or are they capable of being put?
(v)Are the uses in (ii) or (iv) or any of them corresponding uses?
Those questions were described by Robertson J in Nufarm Australia Ltd v Dow AgroSciences Australia Ltd (No. 2) (2011) 123 ALD 21 at [57] as a practical analysis. That case is further discussed below.
The Full Court laid down certain principles to be utilised in answering some those questions, and suggested possible answers to some of them. I will take the questions in turn.
(i) What are the TCO goods?
The TCO application, as gazetted, was for:
TRAINS, driverless, single deck, including ALL of the following:
(a) six integrated AND interdependent AND electronically interfaced cars including ALL of the following:
(i) two trailer cars;
(ii) two motor cars;
(iii) two motor cars with pantograph,
(b) maximum carrying capacity of NOT less than 1540 passengers;
(c) under-frame mounted driverless train control AND management systems interfaced with ALL of the following:
(i) traction AND braking system;
(ii) door operation system;
(iii) remote train control AND monitoring system,
(d) closed circuit television;
(e) passenger announcement AND information display units with route maps;
(f) roof mounted heating AND ventilation AND air conditioning (HVAC) with a cooling capacity of NOT less than 35 kW per unit AND a heating capacity of NOT less than 10 kW per unit;
(g) maximum speed NOT less than 100 km/h
The Full Court explored the steps taken between the applicant and the respondent before the TCO application for the TCO was gazetted in paragraph [52]. The Full Court said:
[52] The foregoing statutory regime may be seen as one which requires goods to be described fully but generically (or generally, to use the language of the Explanatory Memorandum) in a TCO application and which gives specific powers to the Comptroller to screen and then reject such an application for non-compliance with s 269F or s 269SJ. Notably, here, neither power was ever exercised by the Comptroller. Notably also, the regime ascribes great importance to the way goods are to be described in a TCO application and gives the Comptroller power to check and then address unsatisfactory descriptions before he or she ever gets to exercise the power to issue or not issue a TCO pursuant to s 269P of the Act. All of this supports the primacy of the description of the goods in the TCO application once it has been accepted as valid by the Comptroller.
(ii) To what use or uses are the TCO goods put and can they be put?
The Full Court stressed that the answer to this question must pay close regard to the terms of the TCO itself. That is because of the following three matters mentioned in [51] of the Full Court’s reasons:
(a)we know from s.269F that the TCO application must contain a “full description of the goods” and must state which tariff classification applies to those goods. In that respect, for a TCO to be valid, pursuant to s.269FA it is the applicant’s responsibility to demonstrate that there are “reasonable grounds” for asserting that the application meets the “core criteria”;
(b)S.269H gives the Comptroller the power to reject a TCO application if he or she is not satisfied, amongst other things, that the application complies with s.269F; and
(c)Pursuant to s.269SJ(1) the Comptroller must not make a TCO in respect of goods which have not been described in “generic terms” and he or she must not make a TCO for goods described in terms of their intended use. Section 269SJ(1A) tells one that goods will not be described in “generic terms” if their description indicates, either directly or by implication, that “they are goods of a particular brand or model, or that a particular part number applies to the goods”. The Comptroller has a specific power to reject a TCO if he or she is satisfied that s.269SJ(1) applies to prevent him or her from making the TCO (s.269HA).
At paragraph [13] of the Full Court’s reasons it is noted that it was not suggested that the TCO application made here did not comply with the requirements of s.269F, s.269FA or s.269SJ of the Act. The TCO application must state a full description of the goods, yet must be generic and must not be described in terms of the intended end use of the goods. Those requirements are sometimes no doubt difficult to manage together.
The Full Court concluded that the regime gave great importance to the description of the goods in the TCO application. In paragraph [52], having referred to the regime including s.269F and s.269SJ, the Full Court said: “All of this supports the primacy of the description of the goods in the TCO application once it has been accepted as valid by the Comptroller.” The Full Court referred to Chief Executive Officer of Customs v Toyota Material Handling Australia Pty Ltd and Anor (2012) 203 FCR 129 at 130 [4] where the Full Court said that the definition of “substitutable goods” calls for a comparison to be made as follows:
The comparison required is not only between actualities but also between potentialities. And so far as the potentialities are concerned what it requires is a focus, on the one hand, on what the goods described in the proposed TCO can be used for and, on the other, the uses to which the suggested local goods can be put. The comparison which the provision calls for between the potential uses of the TCO goods and the local goods is not one, however, in which any conceivable use will suffice. A spoon may be used to dig a trench but Parliament cannot have intended for a spoon to be substitutable goods for an excavator. The potential uses to which the definition adverts are, therefore, only reasonable ones .
(Emphasis supplied.)
I take the Full Court to have emphasised the first passage in that excerpt from Toyota on the basis that it is the goods “described in the TCO” which will determine or be relevant to question (ii).
At [54] the Full Court said:
[54] Here, the Tribunal did not adopt the foregoing process. It did not make findings about the use to which the particular trains described in the TCO application can be put and it did not make findings about the uses to which the Downer trains are put or are capable of being put. Having failed to make these findings, it therefore failed to undertake a determination of whether there were corresponding uses. Moreover, expressing the use of the applicant’s goods as being for the transportation of passengers by rail did not address the usages of the applicant’s goods, precisely because those goods were never described in the TCO application as passenger trains, without more. The Tribunal, with great respect, accordingly erred. It misunderstood its statutory task and it failed to make the necessary findings of fact.
As will appear, that paragraph has very important implications for the determination of question (ii) in the practical analysis described in [25] above.
The Full Court also found an analogy for its reasoning in some of the language used by Allsop J (as his Honour then was) sitting as a member of the Full Court in a trade mark case, Colorado Group Ltd v Strandbags Group PtyLtd (2007) 164 FCR 506 at [89]-[90]. The language came from a passage quoted in [55] by the Full Court as follows:
… The aim of the enquiry is not to find some broad genus in which some common functional or aesthetic purpose can be identified. Nor is it an enquiry about the type of trade in which concurrent use might cause confusion. Rather, it is identifying, in a practical, common sense way, the true equivalent kind of thing or article. For example, use of a mark on hatchets or small axes, created proprietorship in relation to axes: Jackson v Napper 35 Ch D 160. This approach recognises ownership or proprietorship in a mark beyond the very goods on which the mark is used, to goods “though not identical… yet substantially the same” (Hemming HB, Sebastian’s Law of Trade Marks (4th Ed) p 91) or “goods essentially the same… though they pass under a different name owing to slight variations in shape and size” (Kerly DM and Underhay FG, Kerly on Trade Marks (3rd Ed) p 206). This approach is conformable with the terms of the 1995 Act.
That backpacks are a type or style of bag does not answer the question as to whether they should be viewed as essentially the same goods as any bag or receptacle. The backpack is a bag with straps to be worn on the back. It is not essentially the same or the same kind of thing as other bags, handbags, purses or wallets. The task is not to identify the genus into which the goods upon which the mark was used fall, but to identify the goods.
In [56] the Full Court said that Allsop J’s observation that the task is not to identify the genus of the goods but the goods themselves is apposite to the appeal. The Tribunal’s task, the Court said, is not to identify a broad genus of use but the use of the goods described in the TCO application.
Reasoning in the first Tribunal decision which was overruled in the Full Court was to the effect that in both the goods as described in the TCO application, and the putative substitutable goods (trains with a driver used on metropolitan tracks, which were produced in Australia) the use, or ultimate use, of both was to carry passengers by rail, so that each had a corresponding use. That finding answered questions (ii) (iii) (iv) and (v) together. The Full Court stressed in [54] that such reasoning was erroneous even though the relevant facts were correct because in answering question (ii) “expressing the use of the applicant’s goods as being for the transportation of passengers by rail did not address the usages of the applicant’s goods, precisely because those goods were never described in the TCO application as passenger trains, without more”.
The Full Court observed at [56] that it may well be found in this review that the uses to which the applicant’s trains, as described in the TCO application, can be put are those to transport passengers on a high capacity, high frequency, driverless metropolitan train line system.
The Full Court was referred by the respondent to cases in the Federal Court and in the Tribunal which the respondent submitted supported a comparison of a higher ultimate use of goods for the purpose of s.269C of the Act. Reference was made to the notion of “ultimate use” in cases dealing with sections 269C and 269B of the Act. Those cases had been mentioned in the first Tribunal decision.
Both parties referred to such cases in submissions made to the Tribunal on this re-determination. One question which was not the subject of submissions by the parties before the Tribunal on the re-determination is the extent to which those cases or any of them are still good law in the light of the reasons of the Full Court, which did not expressly discuss that question. As mentioned below, I sought further written submissions from both parties on that question.
In Comptroller-General of Customs v Vestas – Australian Wind Technology Pty Ltd [2015] FCAFC 185: (2015) 236 FCR 499, the Full Court of the Federal Court construed ss 269B to 269E of the Act, considering aspects of the provisions of Part XVA from 1983 onwards, and certain extrinsic materials: see paragraphs [11]-[40] of the reasons in that case. As the Full Court observed at paragraph [37] of its reasons, the words “or are capable of being put” were inserted by amendment in 1996 to s.269B’s definition of “substitutable goods”, after the decisions in Vulcan and Bag & Jute mentioned below, and prior to the decisions in Nufarm, Downer and Toyota. At the same time in 1996, provisions considered in Vulcan and Bag & Jute requiring as a condition of eligibility for a TCO in addition to substitutability of the goods that the TCO goods also have a significantly adverse effect on the market for the substitutable goods were removed from s.269C of the Act. The Full Court discussed s.269B(3) current provisions provide that competition between the TCO goods and the putative substitutable goods in any market is irrelevant: see s.269B(3). Since Vestas, further amendments have been made to Part XVA of the Act.
The respondent referred in the Full Court and before the Tribunal on this re-determination to the Tribunal decision in Re Vulcan Australia Pty Ltd and Comptroller-General of Customs [1994] AATA 150; (1994) 34 ALD 773, the Tribunal decision in Re Bag & Jute (Tamworth) Pty Ltd and Comptroller-General of Customs and Southcorp Australia Pty Ltd (1995) 38 ALD 357, the Federal Court decision in Nufarm Australia Ltd v Dow AgroSciences Australia Ltd (No. 2) (2011) 123 ALD 21 and the Tribunal decision in Re Downer EDI Rail Pty Ltd and Chief Executive Officer of Customs (2010) 118 ALD 454.
In Vulcan the Tribunal was constituted by DP Forgie and two other members.
The terms of the TCO granted to Dimplex (the TCO applicant, Vulcan being an objector) in Vulcan were as follows, as appears from the introductory words of the case as reported at [1994] AATA 150. It was for “HEATERS, space, liquid fuel, domestic portable which do NOT require connection to any external fuel source or electricity supply”. The applicable legislation at that time was in significantly different terms to the current legislation.
Under the legislation as it then stood s.269C provided that the core criteria were taken to be met “if, on the day occurring 28 days before the day on which the application was lodged:
(a)no substitutable goods were produced in Australia in the ordinary course of business; or
(b)substitutable goods were produced in Australia in the ordinary course of business but the granting of the TCO was not likely to have a significant adverse effect on the market for the substitutable goods”
The term “substitutable goods” was defined in s.269B(1) in the following terms: “substitutable goods”, in respect of goods the subject of the TCO application or of a TCO, means goods produced in Australia that are put to a use that corresponds with a use (including a design use) to which the goods the subject of the application or of the TCO can be put”.
The Tribunal examined dictionary definitions of the word “use” and concluded in [45] as follows:
45. What is apparent from both of these definitions is that the focus of the word "use" when used in isolation without reference to a context is upon the end result i.e. the purpose, object or service. It is not upon the means of achieving that purpose, object or service. If the word is intended to encompass those means, it must come from the context in which the word "use" appears. When we look at the context in which the word is used in the Act, we can find nothing which suggests that we should give the word "use" anything other than its ordinary meaning. The definition of substitutable goods refers to "a use (including a design use) to which (TCO) goods ... can be put". Clearly, the definition is not simply confining itself to a use for which the TCO goods were designed but is looking to the use to which they can be put. There seems to be no suggestion in this that the means by which that use is achieved have any relevance at all.
At [46] the Tribunal added:
46. We also note that the definition refers to the goods produced in Australia being "put to a use ... that corresponds with a use" to which the TCO goods can be put. Again the emphasis is upon the ultimate use and not the means by which it is achieved and this is not altered by the use of the word "corresponds". That word has been defined, again in so far as it is relevant, in the Shorter Oxford Dictionary as
“1. To answer to something else in the way of fitness; to agree with; be comformable to; be congruous or in harmony with. 2. To answer to in character or function…”
and in the Macquarie Dictionary as
“1. to be in agreement or conformity (aft. fol. by with or to): his words and actions do not correspond. 2. to be similar or analogous; be equivalent in function, position, amount etc …”
These definitions do focus in part on the function or process but that is not the appropriate focus of the word "correspond" in the definition of "substitutable goods". Reference must be made to the two things which must correspond. Those two things are the use to which the TCO goods can be put and a use of the substitutable goods. The ordinary meaning of "correspond" in that context is that one use conforms with or is in harmony with the other use. It would be reading too much into the words "corresponds with" to say that the function or process of the use of one must conform with or be in harmony with the other. It follows that, we can find no suggestion in the definition that the means by which the goods achieve any such use is of any relevance at all. We consider, therefore, that we should give the word "use" its ordinary meaning.At [47] the Tribunal found that the use to which the TCO goods can be put is for providing domestic space or room heating. At [47] and [48] the Tribunal said:
47. Having done that, we must decide the use (including a design use) to which the goods described in the TCO can be put. We find that they are used for providing domestic space or room heating. In determining their use, we have not included a reference to their use of liquid fuel for that is the means by which they achieve that use and not the use itself. We have reached the same conclusion in respect of their connection to any external fuel although that aspect, in so far as it impinges upon portability, has caused us more concern. We have concluded, however, that the aspect of portability relates essentially to the way in which the TCO goods achieve their overall purpose of providing domestic heating of a space or room rather than to a use to which they can be put.
48. The use to which Vulcan's goods may be put is also that of domestic space or room heating. They have, therefore, the same use and it is not relevant that the goods achieve that use in different ways. If Vulcan's goods have the same use, they must have a use "that corresponds with" a use to which the TCO goods can be put. As we have already found that Vulcan's goods are produced in Australia, they are substitutable goods within the meaning of the definition.
Thus the Tribunal reached a conclusion about the uses to which the TCO goods can be put which, far from paying close attention to the TCO itself, or giving primacy to the TCO description, actually put to one side some of its terms. Amongst the objector’s goods found to be substitutable were electric heaters which required to be plugged into an electric power point, unflued gas heaters and column heaters (presumably also requiring to be plugged in to an electricity supply).
In Re Thirco Pty Ltd and Comptroller of Customs and Bowater Tissue Ltd (1994) 35 ALD 665 the Tribunal followed Vulcan’s holding that the definition of “substitutable goods” in s.269B focused upon the ultimate use of the goods and not upon the means by which that use is achieved. The TCO application described the goods as “woven fabric, cotton body huckaback weave with polyester cotton selvedges, not exceeding 28 cm in width”. The use of the TCO goods was that they be installed in specially designed dispensers for the operation of drying hands in washrooms located in industrial, hospital or commercial premises. Thus, paper towels and hot air dryers were identified as substitutable goods, despite the difference between paper towels and hot air dryers on the one hand and the cloth fabrics described in the TCO application. The TCO applicant (applicant in the Tribunal) admitted that substitutable goods were produced in Australia (noted at [22]). Thus the issue arising, as the legislation then stood, was whether the TCO would likely have a significant adverse effect on the market for substitutable goods produced in Australia.

In Bag & Jute the statutory context was the same as in Vulcan and in Thirco.
There were two TCOs relevant, in the following terms set out at [3] in the reasons of the Tribunal as follows:
(3) The Tariff Concession Orders applied for are No 9209466 by Bag & Jute which reads:
bags, woven polypropylene, one side laminated, incorporating a valve opening, which seals automatically by internal pressure of the product, being designed for fertilizer filling from a rotary nozzle automatic machine at a rate of up to 2000 bags per hour but not including any of the following:
(a)open mouth pillow bags with or without gussets;
(b)lenzing bags;
(c)other open mouth block bottom bags.
No 9308048 by Incitec:
bags, block bottomed end valve sack type, designed for the packing of granule and prill materials on automatic bag placing, filling and palletizing machinery, having all of the following characteristics:
(a)composed of woven polypropylene with a polythene or polypropylene laminated liner on the inside or outside surface;
(b)a holding capacity range of 25–55 kg inclusive;
(c)meeting vertical impact test standard AS2582 when dropped from a height of 1.6 m
The putative substitutable goods were open mouth polypropylene bags, that is, not incorporating a valve opening, and not of an end valve type.
In reasoning to the conclusion that substitutable goods were produced in Australia, the Tribunal followed Re Thirco, and thus Vulcan.
At [26] the Tribunal concluded:
(26) The tribunal finds therefore that the genus for which substitutable goods should be sought is not woven polypropylene valve sacks but bags for fertiliser and other products, not exceeding 55 kg capacity, and that there were goods produced in Australia in the ordinary course of business which were “substitutable goods”.
The Tribunal’s ultimate conclusion was that there was no likelihood of the total market for the substitutable goods being significantly affected.
In Nufarm, the legislative regime then in force included s.269B(3) in the following terms: “substitutable goods, in respect of goods the subject of a TCO application or of a TCO, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application or of the TCO can be put”. S.269B(3) is in the same terms in the current legislation. Some other provisions in the legislation as it then stood no longer appear in the same terms in the Act. One example is s.269D(1) set out by Robertson J in [9]. Section 269(1) then said:
(1) For the purposes of this Part, goods, other than unmanufactured raw products, are taken to be produced in Australia if:
(a) the goods are wholly or partly manufactured in Australia; and
(b) not less than ¼ of the factory or works costs of the goods is represented by the sum of:
(i) the value of Australian labour; and
(ii) the value of Australian materials; and
(iii) the factory overhead expenses incurred in Australia in respect of the goods.
As appears from [3] of the reasons for judgment, the TCO goods were ultimately identified as:
PRECURSERS, HERBICIDE, having BOTH of the following:
(a) Not less than 96% trifluralin; and
(b) nitrosamine NOT greater than 0.4 parts per million.
The putative substitutable goods were (a) a product of which the first stage of manufacture was trifluralin technical, which was blended with emulsifiers and solvents to produce a concentrated liquid formulation (Trifur X), which when mixed with water could be sprayed over the soil and (b) a product that did not contain trifluralin, but contained another chemical compound, 2, 4-Dichlorophenoxyaceic acid (2,4-D acid). The Tribunal had held that because trifluralin technical was not produced in Australia, those goods were not substitutable. Trifluralin technical was not permitted in Australia to be applied directly to the soil, and the Tribunal held that possibility (a) should be rejected on that ground.
The Tribunal noted that both Nufarm and the Chief Executive Officer of Customs argued that 2,4-D were substitutable for the TCO goods (that is, possibility (b) mentioned in the previous paragraph of these reasons), although they were a post-emergent, acting upon the roots of the weeds by being absorbed through the leaves. They said that both were herbicides, that is, they killed weeds.
The Tribunal rejected that argument and concluded that the means by which 2,4-D killed weeds was different from the means by which the TCO goods killed weeds, and therefore that the goods were not substitutable for the TCO goods. (See the same case before the Tribunal (Dow Agroscience Australia Ltd and Chief Executive Officer of Customs and Nufarm Australia Ltd (Party Joined) [2010] AATA 859 at [24])).
The Tribunal accepted that both the TCO goods and the putative substitutable goods were precursors: see the Tribunal decision at [16].
Of course, it is apparent that 2,4-D was not trifluralin, and the substitutable goods containing 2,4-D contained no trifluralin. The words “having … not less than 96% trifluralin” from the TCO description were not satisfied in the case of the putative substitutable goods.
The Federal Court set aside the Tribunal decision. At [50], Robertson J said:
[50] In my view the present tribunal could not reason as it has done to find that the goods were not substitutable goods. Merely to say that one herbicide operates in a different manner to another does not establish that the goods were not substitutable because it leaves open that the goods have a corresponding use, that is, in killing the same weeds in the same crops.
Robertson J added at [51]:
[51] The relevant register (see Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389 at 398–402 ; 141 ALR 59 at 65-9 ; 43 ALD 193 at 198-202) is not science but trade and commerce.
At [60], his Honour said:
[60] In my opinion, the failure by the tribunal to ask itself the right question is confirmed by its failure to address the issue of whether the same weeds in the same crops were or could be killed or controlled by the goods in question or their formulations. It was necessary for the tribunal to deal with that because it was raised on the evidence and it was also argued by the CEO and by Nufarm before it but not dealt with except perhaps at [19] in relation to sugarcane. There the tribunal said it did not see that material as affecting the issues. I infer that this was because the tribunal looked only at the times and means of killing weeds and on that insufficient basis concluded that the goods were not substitutable.
Thus Robertson J held that it was insufficient for the Tribunal to reject the submission that the goods were substitutable and for the Tribunal to find that the both goods operated in a different way, because that finding left open that there was a corresponding use in killing the same weeds in the same crops. His Honour remitted the matter for re-determination, indicating that the practical test required was as set out at paragraph [57] of the reasons.
His Honour did not deal with the question whether the fact that the putative substitutable goods did not accord with the description of the goods in the TCO in that they contained no trifluralin. That submission, which would have been consistent with the reasons of the Full Court in this case, seems not to have been made by the parties to Robertson J.
In Downer (decided under a legislative regime the same as obtained in Nufarm), the Tribunal (the Hon. B.J. Tamberlin QC, DP and Senior Member Ettinger) considered a TCO for “Trains, Passenger, electric, double deck, comprising BOTH of the following: (a) minimum of one driver trailer car without driver cab module; (b) NOT greater than six passenger cars.”
The question was whether the words “without driver cab module” meant that complete trains, with driver cab module, such as were at the relevant time produced in Australia were substitutable goods for the TCO goods.
The Tribunal applied Vulcan (supra) and also the decision of the Tribunal in Tetra Pak Imports Pty Ltd and Chief Executive Officer of Customs and J. Gadsden Pty Ltd [1996] AATA 446 (Senior Member M.D. Allen). The Senior Member had said in Tetra Pak at [17] and [18]:
17. In Re Vulcan Australia Pty Ltd and Comptroller-General of Customs and Anor [1994] AATA 150; 20 AAR 116 at 129 the Tribunal said: "Section 269C(b) has limited the market to which we may have regard and that is the market for substitutable goods. These goods are identifiable by means of their uses and not by reference to factors such as the manner in which they achieve that use or their cost. If we were to take such factors into account and so identify a sub-market we consider that we would be stepping beyond the limits permitted by the Act." See also Stirling J in British Motor Syndicate Ltd v Taylor and Son [1900] 1 Ch 577 at 583, namely" "The first meaning assigned to the word 'use' in Johnson's Dictionary is 'to employ to any purpose'; it is therefore a word of wide signification ..."
18. In my opinion S 269C in its definition of substitutable goods, by requiring a reference to the use to which goods are put, envisages that regard must be had to the ultimate end use of the goods. In this matter the use in question is that of asceptic packaging for fluids.
In Downer the Tribunal said at [32]-[35]:
[32]  Although the definition of “substitutable goods” has been amended since the decision of Vulcan by the insertion of the words “or are capable of being put”, which if anything broadened the definition, in our view those remarks are apposite in the present case.
[33]  We note, in particular, the reference to “ultimate use” in Vulcan. In Re Tetra Pak Imports Pty Ltd and Chief Executive Officer of Customs (AAT 11466, 11 December 1996) the tribunal also considered, in the context of an application for a TCO in respect to goods that would undergo further manufacture upon import into Australia, that the definition of substitutable goods required that regard had to be had to the ultimate end use of the goods.
[34]  Further, we consider that the reference to the expression “corresponds with a use” is pertinent in this case because in our view the “use” of the TCO train sets, although incomplete, which contain everything except the driver’s cab module are capable of use which is conformable to, congruous with or in harmony with use as a completed passenger train. There is no requirement in the concept of “correspond” that the goods should be identical or exactly limited in use or exactly the same use. It is common ground that evidentiary questions of fact and degree are significant in determining the issue.
[35]  The concepts of “design use”, corresponding use, and capacity to use all point to a liberal approach to the interpretative exercise.
In Toyota Material Handling Australia Pty Ltd and Chief Executive of Customs [2011] AATA 600 (Downes J, president of this Tribunal) the cases of Vulcan and Thirco were referred to with implicit approval at [46]. Paragraph [46] was described as “not essential to [the] decision” although it tended to support the result. In paragraph [46] it was noted that the forklifts described in the TCO application were operator driven, whereas the putative substitutable goods were pedestrian driven.
The Full Court allowed an appeal on other grounds in Chief Executive Officer of Customs v Toyota Material Handling Australia Pty Ltd [2012] FCAFC 78; (2012) 203 FCR 129. This case is discussed further below.
In this case, the submissions of the applicant as to Downer in paragraph 26 of the applicant’s Outline of Submissions were to the effect that in its reference to the “ultimate use” the word “ultimate” was used in a temporal sense. That submission is, in terms, limited to the use of the words “ultimate use” in the Downer decision and not in relation to the other cases mentioned above. In Downer, the words “ultimate use” were taken from Vulcan, where they do not appear to me to have a temporal sense. I gather that in subsequent written submissions the applicant no longer submitted that the ultimate use mentioned in Downer used “ultimate” in a temporal sense.
In the respondent’s Outline of Submissions at paragraphs 81-98 the following submissions are made:
The uses to which the local goods can be put
81. The use to which the Australian goods can be put includes the transport by rail, of up to 603, 1206 or 1809 passengers at any one time (as 3, 6 or 9 car sets, respectively), at speeds of up to 130km/h.
Corresponding use of the TCO goods and the local goods
82. If the characterisation of use of the TCO goods and the local goods proposed by the respondent is accepted by the Tribunal, then clearly those uses “correspond”, that is, they are “conformable to, congruous with or in harmony with” each other, even though the uses are not identical in all respects.
83. Contrary to the submission of the applicant (at AS [22]), it is not the case that, if the approach in Toyota were adopted here, then there would be no corresponding use between the TCO goods and the local goods. The respondent does not suggest that the potential use of the TCO goods should be characterised as “transporting passengers for transit from point A to point B” (akin to the generic purpose of forklifts of “lifting objects for stacking”: AS [21]).
84. In Toyota, the issue was whether the TCO driver-operated forklift trucks had a corresponding use with the Australian produced pedestrian-operated forklift trucks. The description of the TCO goods specified a load capacity of not less than 1200kg with maximum lift height not less than 5m (Toyota at [6]).
85. The Full Court held that both forklift trucks could lift 1200kg loads to heights of up to 5m. On that basis, the Australian forklift trucks were “substitutable goods” since “they can be used to do the same thing” as the TCO goods, and “there is plainly an overlap in the work which the two kinds of reach truck can undertake.”
86. Importantly, that was so even though the Tribunal found that the TCO goods:
(a) could lift heavier loads to higher heights than the local goods; and
(b) would only be used in a warehouse with racks extending higher than the Australian forklifts could reach.
87. In Vulcan, the issue was whether Australian produced domestic gas and electric heaters, which required attachment to a gas line or electric power point to operate, were substitutable goods for portable domestic kerosene heaters. The Tribunal determined they were, finding that the relevant use was domestic space or single room heating, but not central heating of multiple rooms. The claimed distinguishing aspects of the TCO goods, being portability and kerosene as a fuel, were only the means by which that heating use was achieved, and as such were irrelevant to the characterisation of use.
88. That finding of the Tribunal in Vulcan that the focus of the definition of “substitutable goods” is on the “ultimate use and not the means by which it is achieved”, has been repeatedly applied by the Tribunal in subsequent cases, including Downer EDI Rail, where the Tribunal found that the relevant characterisation of the use of the TCO goods was “as a passenger train”, and that the goods manufactured in Australia corresponded with such a use.
89. The applicant argues that the reference in Downer EDI Rail to the “ultimate” use of the goods is a temporal reference (AS at [26]), and that a comparison of the TCO goods and the local goods does not involve a temporal issue, such as was the case in Downer EDI Rail (AS at [29]).
90. First, the applicant’s submission does not capture the reference of the Tribunal in Vulcan to the “end result i.e. the purpose, object or service” of the goods. The applicant’s submission is concerned with the finding in Vulcan, as it was applied in Downer EDI Rail, where the question was whether a nearly complete imported passenger train, imported with everything except the driver’s cab module which was installed after importation, had a corresponding use with passenger trains produced in Australia.
91. Secondly, the applicant’s submission does not address the aspect of the Tribunal’s reference (in Vulcan) which focuses on the “means” by which the use is achieved. That cannot be negated by relying on the temporal aspect of “ultimate” use (as in the case of Downer EDI Rail, a reference to use of the completed product). Accordingly, the fact that a comparison of the TCO goods and local goods in this case “does not involve a temporal issue such as was the case in EDI Rail” (AS [29]), does not mean that the finding of the Tribunal in Vulcan (that the definition of “substitutable goods” is not concerned with the means by which use is achieved) can or should be ignored.
92. Furthermore, the applicant states that, in Vulcan, both heaters were capable of being used to heat the same space, and in Downer EDI Rail, both train sets were capable of being used on the same network (AS [28]). First, the applicant has not demonstrated that that is not the case here. Secondly, the applicant has not demonstrated that use in the same space or network is an essential predicate to a finding of corresponding use.
93. The applicant seeks to draw an analogy with Vestas-Australian Wind Technology Pty Ltd v Comptroller-General of Customs [2017] AATA 791 (Vestas AAT) (AB Tab I) on the basis that the relevant use of a gearbox in that case was “use by a wind turbine generator to produce a power output of 3MW”. The applicant contends that, similarly, the use of the TCO goods is “in a complex automated driverless rail network” (AS [30]- [31]). The respondent submits that there is no relevant analogy with, and it is difficult to see what the applicant gains from, Vestas AAT, where the Tribunal determined that the characterisation of use of the TCO goods by reference to use by “generators” is to “state their use too broadly”, and thereby qualified that characterisation by reference to use by a “wind turbine generator”.
94. Rather, a closer analogy may be found in Bag and Jute, where the TCO goods were woven propylene end-valve sacks that (the Tribunal found) could only be used at one automated bagging plant in Australia. Notwithstanding this, and that the plant could not use any locally produced bags, the Tribunal held that the local goods were substitutable goods for the TCO goods, on the basis that both were “bags for fertilizer and other products, not exceeding 55kg capacity.” Similarly, while it is contended by the applicant that the TCO goods can only be used on the SMNW, and that the local goods cannot, nevertheless (and even if that contention is accepted) both the TCO goods and the local goods can achieve the same practical use, that is, transport by rail, of at least 1540 passengers at any one time, at a maximum speed of at least 100km/h.
Conclusion on corresponding uses
95. There is plainly a significant overlap in the work that the TCO goods and the local goods can do, since both goods are capable of transporting over 1,000 passengers at once on an electric rail line, at maximum speeds of over 100km/h.
96. That remains so, even if the Tribunal finds that they cannot operate on the same rail lines, just as it did not matter that the Toyota forklift trucks would not be used in the same warehouses, or the Bag & Jute bags could not be used on the same filling machinery. In order to find “substitutable goods” for the TCO goods, it is not necessary that the local goods operate in the same way or on the same network.
97. Both the TCO goods and the local goods (viz., Downer’s Perth B trains) are electric, multiple-unit passenger trains that are used for mass and frequent transport on electric rail networks. While the TCO goods encompass driverless trains, that is a difference with the local goods that is concerned with the means of controlling the respective trains, and not the ultimate use (that is, the purpose, object or service) to which those trains are put.
98. The Tribunal should find the local goods are put, or are capable of being put, to a use that corresponds with a use to which the TCO goods (as described in the TCO application) can be put, as per s 269B(1) of the Customs Act, and as such, they are “substitutable goods” for the purposes of s 269C.

It seems to me that none of the ultimate use cases had made the point that because the TCO description had not been rejected by the respondent under s.269SJ(1) or otherwise, the TCO description should govern the question of ultimate use.
A difficulty I have with the submissions of the respondent on the “use” point is that, sitting as a Tribunal bound by the Full Court decision between the present parties, it seems to me that I am bound not to make a finding in answer to question (ii) as to the uses to which the goods described in the TCO application are put or are capable of being put which does not treat as part of that use that the trains are driverless trains. The use described in the previous Tribunal decision was found to be erroneous “precisely because” the goods are not described in the TCO application as passenger trains without more, as the Full Court said in paragraph [54].
The purpose of the respondent’s submission in paragraph 81 and following of its Outline of Submissions is to submit in answer to question (iii) of the practical analysis questions that the GOA1 (driver operated) trains manufactured in Australia by Downer and its partner Bombardier are substitutable goods, thus causing the applicant to fail the test mentioned in s.269E(1) of the Act. The respondent identifies the (GOA1 driver-operated) Downer/Bombardier trains now operating in Perth as the putative substitutable goods in order to answer question (iii) consistently with s.269E(1).
If paragraph [54] of the Full Court’s reasons is inconsistent with earlier authority, or not, it seems to me that the task which I must perform is not to make a finding inconsistent with what has been said by the Full Court in paragraph [54]. Any use of a train which is not a use of a driverless train will not be an answer properly given to question (ii) consistently with the Full Court’s decision.
Moreover, the finding which the respondent urges upon me in answer to question (ii) set out in paragraph 81 of its Outline seems to me, with respect, to be erroneous for the reasons identified by the Full Court. The finding sought by the respondent is a finding of a true fact, but it fails to give primacy to the TCO description because that description is not of a passenger train simpliciter, but of a driverless passenger train.
As mentioned above, when initially considering these reasons, I invited submissions from both parties as to whether the use/ultimate use cases were not impliedly overruled by the Full Court in this case. Each party filed submissions on that question, which I have decided to include as a schedule to these reasons since, although it seems to me that whatever view I came to on those matters, I am bound by the statements made by the Full Court in paragraph [54] of the reasons, and therefore it is neither necessary nor desirable in this case that I should decide the implied overruling questions. I decided that the submissions should be made a schedule to these reasons out of respect for the diligence with which they were prepared, and because they may be useful in later litigation about Part XVA of the Act.
I therefore reject the submission of the respondent set out in paragraph [81] of its Outline of Submissions, as an answer to question (ii) and for that reason I reject the respondent’s proposed answer to question (iii) based upon s.269E(1).
I mention one thing which I noticed about the Full Court decision in Toyota, with which the respondent did not join issue, because of the different way in which the parties understood the Tribunal’s request. The applicant submitted that nothing in Toyota was inconsistent with the Full Court decision in this case. It seems to me to be arguable that there is tension between the two decisions, especially since the Full Court in Toyota disposed of the matter for itself rather than remitting it for re-determination. That is because the Tribunal decision in Toyota put some stress upon the fact that the TCO description required that the (motorised) forklift be operator-driven and the putative substitutable goods were to be operated by pedestrians. Discussing that point in paragraph [42] of the Tribunal’s decision, Downes J, then President of the Tribunal, referred to Vulcan and Thirco with approval and said that the point, while not essential to his decision, tended to support his conclusion. The Full Court noted the fact that the TCO description referred to the forklift as driver-operated, and that the putative substitutable goods were pedestrian-operated, yet held that the relevant goods were substitutable goods.
I return to deal directly with question (ii) in the light of the evidence.
Driverless trains, to be used, need the things mentioned in paragraph (c) of the TCO description, that is, a remote train control centre and monitoring system. Otherwise they cannot be driverless. They need a supporting system involving a number of things: They need a remote control centre to communicate with the train and give it digital instructions. Second, according to the evidence in this case they need the under-frame mounted driverless train control and management systems interfaced as mentioned in paragraph (c) of the TCO description, or perhaps other equivalents. The TCO goods have certain minimum speeds and carrying capacity. The precise speeds and carrying capacities may presumably vary as between different driverless trains.
As to the suggestion made by the Full Court that it may well be found by the Tribunal that, as the applicant submitted in the Full Court, the TCO goods can be used to transport passengers on a high capacity, high frequency, driverless metropolitan train line system, the particular goods imported by Alstom certainly satisfy that description. Whether all goods complying with the TCO description must satisfy that description needs to take account of the fact that the TCO description says nothing about whether the trains are “high frequency”. On the other hand, high frequency capabilities are one of the main advantages of a driverless train, and permits trains to be brought to stations frequently and safely, with greater frequency than driver-operated train services. It is a selling feature of driverless trains, even though they are more expensive than trains which need a driver, and need expensive associated technology. In practice therefore, driverless trains will have the advantage of being high frequency.
I am for those reasons content to adopt the suggestion made by the Full Court as a statement of the uses to which the TCO goods are put, and are capable of being put. It should be observed that in some parts of the world, driverless trains and trains with a driver are able to travel along the same tracks, being tracks fitted with or accompanied by technology for the driverless trains and also signals and the like required for trains with drivers. In other words, that part of the Full Court’s suggested language which I adopt is not intended to entail that the “driverless metropolitan train system” excludes such a dual purpose rail system.
Thus far in these reasons I have dealt with the present case insofar as one considers the actually produced goods proposed by the respondent as an answer to question (iii) of the practical analysis questions. The alternative case made by the respondent depends on a made to order goods case, under s.269E(2). The respondent submits that the substitutable goods to be considered as an answer to question (iii) for this purpose are made to order goods which Downer has not yet made.
(iii) What are the goods claimed to be substitutable?
Section 269E(2) and (3) are in the following terms:
(2) For the purposes of this Part, substitutable goods, in respect of goods the subject of a TCO application, are taken to have been produced in Australia in the ordinary course of business if:
(a) a producer in Australia could produce substitutable goods, in respect of goods the subject of the TCO application, with existing facilities; and
(b) the substitutable goods the producer could produce would be made‑to‑order capital equipment; and
(c) in the 5 years before the application was lodged, the producer has made goods requiring the same labour skills, technology and design expertise as the substitutable goods the producer could produce; and
(d) the producer is prepared to accept an order to supply substitutable goods in respect of goods the subject of the TCO application.
(3) In this section:
made‑to‑order capital equipment means a particular item of capital equipment:
(a) that is made in Australia on a one‑off basis to meet a specific order rather than being the subject of regular or intermittent production; and
(b) that is not produced in quantities indicative of a production run.
Section 269D, also within Part XVA, provides as follows:
269D Interpretation—goods produced in Australia
(1) For the purposes of this Part, goods, other than unmanufactured raw products, are taken to be produced in Australia if the goods are wholly or partly manufactured in Australia.
(2) For the purposes of this Part, goods are to be taken to have been partly manufactured in Australia if at least one substantial process in the manufacture of the goods was carried out in Australia.
(3) Without limiting the meaning of the expression substantial process in the manufacture of the goods, any of the following operations or any combination of those operations does not constitute such a process:
(a) operations to preserve goods during transportation or storage;
(b) operations to improve the packing or labelling or marketable quality of goods;
(c) operations to prepare goods for shipment;
(d) simple assembly operations;
(e) operations to mix goods where the resulting product does not have different properties from those of the goods that have been mixed.
The submissions of the applicant deny that Downer is a producer of substitutable goods because in the past it has done only the partial manufacture of GOA1 trains, to which Bombardier added the GOA1 technology, and similarly, says that Downer alone cannot accept an order to provide GOA3 or GOA4 trains, so that s.269E(2)(d) is not complied with. I will take these submissions first.
One question necessary to be answered before one can answer the question posed by s.269E(2) is: who is the producer in Australia? For that producer, each of the elements in s.269E(2) and (3) must then be considered.
The submissions of the respondent proceed on the basis that the relevant producer in Australia is Downer, that is, Downer EDI Limited. For example, the respondent submitted at paragraphs 150-155 of the Outline of Submissions as follows:
150. Messieurs Spink and Smith gave evidence that, since 17 July 2017, Downer has been prepared to accept an order to produce electric passenger trains in Australia, including for GoA1, GoA2, GoA3, and GoA4, and that depending on quantity, specifications and other matters, it is prepared to accept such an order by itself, or in conjunction with one of its strategic partners.
151. That evidence should be accepted, and should be regarded as sufficient to satisfy s 269E(2)(d). Paragraph 269E(2)(d) requires only that the producer in Australia is prepared to accept an order to supply substitutable goods. It does not prescribe the manner in which the order is to be accepted (for example, with or without conditions).
152. Contrary to the submission of the applicant (at AS [61]), it is not evident that Mr Smith “qualified” his evidence, by explaining that Downer may accept such an order for the same number of trains as the SNMW project “that could have been GoA4” if they had the right partners for the project. This is consistent with the evidence provided in Mr Smith’s statement, as cited above.
153. Mr Spink gave evidence that Downer’s strategic partners in relation to design expertise include Hitachi, Bombardier and CRRC, each of whom are known to have experience in relation to driverless trains. Hitachi and Bombardier are known suppliers of train automation and signaling systems.
154. Further, Downer would be taken as being the relevant “producer” of trains in Australia, if the trains are manufactured by Downer in its Australian facilities, even if that is done under contract with a consortium. That is consistent with s 269D(1)-(2), which relevantly provides that goods are produced in Australia if they are partly manufactured in Australia, which is taken to occur if at least one substantial process in the manufacture of the goods is carried out in Australia. Downer’s production of the Perth B trains at Maryborough, which included production of the car bodies from basic steel materials, the production of several other components, and full assembly of the vehicle, clearly meets the requirements of s 269D.
Conclusion on s 269E(2)
155. The Tribunal should find that substitutable goods that are driverless electric passenger trains are taken to have been produced in Australia in the ordinary course of business, as each of the requirements in s 269E(2) is satisfied.
Similarly, the applicant’s submissions identify Downer as the putative producer in Australia.
The evidence is that Downer makes the chassis of a train but requires a partner to add automation. Downer made the GOA1 train now used in Perth with an international partner known as Bombardier. Mr Spink’s statement says as follows in paragraphs 6.1, 6.3 and 6.4:
6. The following electric passenger trains have been manufactured in Australia at Downer’s facilities since 2012, or are in the course of being manufactured, with an Australian content of 60% or more:
6.1. 64 x 3 car trains (192 passenger cars) were manufactured at our Maryborough Queensland facility, in partnership with Bombardier for Queensland Rail. These were 3-car Suburban Multiple Units, SMU 260, and 3-car Interurban Multiple Unit IMU 160 trains. The contract for this project was awarded in 2006. The first train was delivered in 2007 and the last train was delivered in January 2012.
…
6.3. 204 B-series passenger cars were manufactured at our Maryborough facility in partnership with Bombardier for the Passenger Transport Authority (PTA) in Western Australia. The contract for this project was awarded in 2005. The first cars were manufactured in 2006 and the last cars were delivered in 2015. Please see [13] below for a description of the manufacturing operations conducted by Downer at Maryborough.
6.4. A further 30 B-series passenger cars have been ordered and are being manufactured at our Maryborough facility in partnership with Bombardier for the PTA in Western Australia. The contract for this project was awarded in 2016. 9 x 3 out of the total 10 x 3 cars have so far been delivered to the PTA. The remaining 3 x car set will be delivered in early 2019.
At paragraph [10] he said:
10. Each of these facilities can produce various components to assemble and fit-out complete passenger electric trains. Our best equipped manufacturing facility is at Maryborough which is further described below. These three manufacturing facilities are also used for various maintenance and life extension programs. Downer also owns or operates several other rolling stock maintenance facilities in Australia which are not used to manufacture new rolling stock.
At [15] he said:
15. Downer has considerable rail rolling stock design expertise and currently employs about 100 people with experience in engineering and design work. However, the design expertise that has been used to manufacture rolling stock at Downer’s manufacturing facilities in Australia is not all Downer’s. Our strategic partners who include Hitachi, Bombardier and CRRC have contributed considerable design expertise to the projects they have participated in with Downer. The design of the trains mentioned at 6.1, 6.3, and 6.4 above were based on international Bombardier models, with Bombardier and Downer contributing to the final design. The design of the Melbourne HCMT trains is based on the China A-type train. Downer had overall responsibility for the design of the Waratah trains, but there was considerable input from Hitachi and from CRRC. Our public transport authority customers make significant contributions to the design of the passenger trains, sometimes informed by public consultation efforts as has occurred with the Melbourne HCMT project. Downer will continue to access design expertise from its strategic partners and potentially other companies in relation to the design of electric passenger trains that will built at our manufacturing facilities in Australia.
At paragraphs [16]–[18] he said:
16. The manufacture of electric passenger trains has been a significant part of Downer’s rail business, and will continue to do so. Subject to agreement on price and other conditions, Downer was on 17 July 2017 and at all times since, been prepared to accept an order to produce electric passenger trains in Australia, including for GoA1, GoA2, GoA3 and GoA4 trains. Depending on quantity, specifications and other matters Downer would either accept such an order itself, or in conjunction with one or more of its strategic partners.
17. Downer could produce such trains at any of its existing manufacturing facilities at Maryborough Queensland, Cardiff New South Wales, or Newport Victoria. The particular facility chosen would depend on production schedules and negotiation with the relevant public transport authority.
18. Downer could produce such trains at any of its manufacturing facilities using the same labour skills, technology and design expertise that has been and is being used to produce the electric passenger trains at those manufacturing facilities mentioned above, either alone, or in conjunction with strategic partners.
Mr Spink gave oral evidence on the third day of the hearing before me.
He described Bombardier as a French-Canadian company.
He said in evidence that EDI Rail – Bombardier Transportation is an incorporated joint venture that exists between the two entities to deliver the trains in Queensland and Perth. He also said that the objector was Downer EDI Rail Pty Ltd and that Downer had briefed Bombardier on the objection. In the objection document Downer said that the substitutable goods (presumably relying on s.269E(1)) were “the EDI Rail Bombardier Transportation Pty Ltd single deck series of trains of which there are currently 58 three-car sets operating in Perth with a further ten sets on order”. The objections was expressed to be made by Downer EDI Rail Pty Ltd on behalf of EDI RAIL-Bombardier Transportation Pty Ltd, a company which Mr Spink described as having its headquarters in Dandenong, Victoria.
Mr Smith is Train Design Manager- Major Projects for Downer EDI Limited. At paragraph 7 of his statement he said:
7. From the point of view of a train manufacturer such as Downer which does not manufacture any electronic control systems, but acts as a system integrator, the actual manufacture of a train to GoA 2, 3 or 4 is not greatly different from producing a train to GoA 1 or with no automation features. The automated train operation system is one of many systems to be integrated into the train. All modern trains incorporate a number of electronic and electrical components and systems, including sensors, controls and communication equipment, which are supplied by component and system manufacturers. With higher degrees of automation, the train must incorporate additional electronic and electrical components. These include additional sensors and the ability to control the motors, brakes and doors automatically and/or remotely (usually from an operational control centre) instead of only being able to control these functions manually via driver controls or other manual controls.
At paragraph [10] Mr Smith said:
10. Downer has strong working relationships with a number of the leading automation suppliers including Hitachi, Bombardier, Thales and Alstom which supply “off-the-shelf”, configurable automation systems for the different GoA. IEC 62290 at page 19 sets interoperability goals that will enable trains with on-board communication and control systems from supplier X to operate with trackside equipment from supplier Y. However, to minimise integration issues it is common for one automation supplier to provide both on-board and trackside communications and control equipment for a particular line or network. Bombardier, for example, supplies on-board and trackside components of its Cityflo 450 and Cityflo 650 systems (as it is doing for Melbourne’s High Capacity Signalling (HCS) system – refer point 16).

The difference between Mr Smith and Mr Spink was that one said Downer would accept an order for a GOA3 train and the other said Downer would accept an order for a GOA3 train or a GOA4 train. A GOA3 train is easier to build than a GOA4 train. But the differences between the two appear not to affect the work of Downer but the work of the proposed but unidentified joint venturer partner. This a matter not much explored in the evidence. In my opinion, it does not matter in the resolution of this re-determination. The question whether Downer would accept a relevant order is hypothetical in any event.
There was no evidence led that if Downer purported to accept an order for a GOA3 or GOA4 train it would direct that order into the existing joint venture vehicle with Bombardier. Rather, so far as the evidence reveals, another partner may be chosen as joint venturer or supplier of automated technology for such an order. Paragraph 154 of the respondent’s Outline of Submissions suggests that Downer will or might be party to a contract with “a consortium” which would supply a GOA3 or GOA4 train. However the train (with no added technology to make it a driverless train) would not be substitutable goods for the TCO goods, as I have answered question (ii). Substitutable goods are required for each of s.269E(2) (a)(b)(c) and (d). In paragraph 154 of the respondent’s Outline the producer in Australia has to be the “consortium”, and not one of its subcontractors. The producer has to be prepared to accept an order under s.269E(2)(d) and no consortium has been identified or has given evidence that it is prepared to accept an order.
The “same labour skills, technology and design expertise” as the substitutable goods, required by s.269E(2)(c) is not, on the evidence, possessed by Downer. It described itself not as such a provider of automated technology or designer of it but as an integrator. Nor does Downer have the facilities for the production of a driverless strain. For example, it lacks a test track which the evidence suggests is necessary for the construction of a driverless train.
Also, I am not satisfied that the trains made by Downer are not the subject of regular or intermittent production, as s.269E(3)(a) requires. To take the example of the Perth trains, so far 58 of them have been provided and ten more are on order. That production is at least intermittent.
It therefore seems to me that the case made by the respondent relying upon s.269E(2) fails. No relevant substitutable goods exist so as to satisfy s.269E(2) and questions (iv) and (v) do not arise.
It follows that the TCO application of the applicant should be accepted, and the matter will be remitted to the respondent with a direction to that effect.

I certify that the preceding 112 (one hundred and twelve) paragraphs are a true copy of the reasons for the decision herein of Deputy President B W Rayment OAM QC

...............................[sgd].........................................
Associate
Dated: 19 October 2021

Date of hearing: 17 May 2021

Date final submissions received: 27 August 2021

Counsel for the Applicant: Mr I Roberts SC, Ms J Wright

Solicitors for the Applicant: Mr N Watts, HFW Australia

Counsel for the Respondent: Mr S Lloyd SC, Ms H Younan SC

Solicitors for the Respondent: Mr R Northcote, Department of Home Affairs
SCHEDULE 1
Table 1 – Grades of automation

Basic functions of train operation
On-sight train operation Non-automated train operation Semi-automated train operation Driverless train operation Unattended train operation

GOA0 GOA1 GOA2 GOA3 GOA4

Ensure safe movement of trains Ensure safe route
X

(points command/control in system)
system system system system

Ensure safe separation of trains

X

system

system

system

system

Ensure safe speed

X

X

(partly supervised by system)

system

system

system

Drive train

Control acceleration and braking

X

X

system

system

system

Supervise guideway

Prevent collision with obstacles

X

X

X

system

system

Prevent collision with persons on tracks

X

X

X

system

system

Supervise passenger transfer Control passengers doors X X X X system

Prevent injuries to persons between cars or between platform and train

X

X

X

X

system

Ensure safe starting conditions

X

X

X

X

system

Operate a train

Put in or take out of operation

X

X

X

X

system

Supervise the status of the train

X

X

X

X

system

Ensure detection and management of emergency situations

Detect fire/smoke and detect derailment, detect loss of train integrity, manage passenger requests (call/evacuation, supervision)

X

X

X

X

system and/or staff in OCC

NOTE x = responsibility of operations staff (may be realised by UGTMS system) system = shall be realised by UGTMS system
SCHEDULE 2
APPLICANT’S SUBMISSIONS PURSUANT TO REQUEST OF THE TRIBUNAL
DATED 27 AUGUST 2021

The Tribunal has invited submissions from the parties “as to whether the use (or ultimate use) cases, including those discussed by the Full Court at paragraphs [37]-[44] are not impliedly overruled by the Full Court’s decision in this case, insofar as the cases appear to determine use without close regard to the terms of the TCO or TCO application, and insofar as they involve a distinction between use and means insofar as regard is had to the terms of the TCO or the TCO application.”
The Applicant understands that the Tribunal is asking the following question:
To the extent that the cases discussed by the Full Court, including at paragraphs [37]-[44]:
(a) determine use without close reference to the terms of the TCO application; or
(b) distinguish between use and means as described in the TCO application,
are they overruled by the Full Court’s decision?
The Applicant understands that its rephrasing of the question at paragraph 2 above, is not contentious and the Respondent takes a similar view.
The cases discussed by the Full Court[1] are:
[1] Alstom Transport Australia Pty Ltd v Comptroller-General of Customs [2020] FCAFC 43, at [37]-[44] and also [49]
(a)Chief Executive Officer of Customs Toyota Material Handling Australia Pty Ltd (2012) 203 FCR 129;
(b)Nufarm Australia Ltd v Dow Agrosciences Australia Ltd (No 2) (2011) 123 ALR 21;
(c)Re Downer EDI Rail Pty Ltd and Chief Executive Officer of Customs (2010) 118 ALD 454;
(d)Re Bag & Jute Co (Tamworth) Pty Ltd and Comptroller-General of Customs and Southcorp Australia Pty Ltd (1995) 38 ALD 357; and
(e)Re Vulcan Australia Pty Ltd and Comptroller-General of Customs (1994) 34 ALD 773.
The relevant findings of the Full Court, to be considered when answering the question set out at paragraph 2 above, are the following:
(a)the Act is concerned with the particular way goods, as described in a TCO application, are to be used[2];
[2] At [53]
(b)the regime ascribes great importance to the way goods are to be described in a TCO application, which supports the primacy of the description of the goods in the TCO application once it has been accepted as valid by the Comptroller[3];
[3] At [52]
(c)it is necessary to make findings about the use to which the particular goods described in the TCO application can be put and findings about the uses to which the local goods are put or are capable of being put[4];
[4] At [54]
(d)the Tribunal’s task is to identify the use of the actual goods described in the TCO application[5].
[5] At [56]
Toyota
As extracted at [49] of the Full Court’s decision, Toyota required a comparison between what the goods described in the proposed TCO can be used for and the uses to which the suggested local goods can be put[6]. It is not the case that “any conceivable use” will suffice. The Tribunal is required to assess the goods the subject of the TCO application for their actual uses or those to which they could reasonably be put and to ask whether any Australian goods were, or could reasonably be, used for any of those purposes[7].
[6] At [4]
[7] At [5]
Toyota:
(a)does not:
(i)determine use without close reference to the terms of the TCO application; or
(ii)distinguish between use and means as described in the TCO application,
(b)is in any event, consistent with the Full Court’s decision and is therefore not overruled by it.
Nufarm
As extracted at [53] of the Full Court’s decision, Nufarm established the “practical analysis” that must be undertaking to establish the particular way goods, as described in a TCO application, are to be used[8].
[8] At [53]
Nufarm:
(a)does not:
i.determine use without close reference to the terms of the TCO application; or
ii.distinguish between use and means as described in the TCO application,
(b)is in any event, consistent with the Full Court’s decision and is therefore not overruled by it.
Downer
Downer, (following Vulcan), discussed use by reference to “ultimate use”[9] and also discussed the characteristics and features of the TCO goods[10]. It is not clear whether those characteristics came from the description of the TCO goods in the TCO application, although it seems to have come at least in part from the evidence given in cross-examination[11].
[9] At [33]-[34]
[10] At [36]-[38]
[11] See [36]
It is not clear whether Downer is inconsistent with the Full Court. If and to the extent that it is, then in the Applicant’s submission it is overruled by it.
Vulcan
Vulcan involved a detailed comparison of the local and TCO goods without any clear reference to use being determined by reference to the TCO application[12]. A distinction was drawn between “means” and “use”[13] and reference was made to the “ultimate use”[14] without any reference to the terms of the TCO application.
[12] See [43]
[13] At [45]
[14] At [46]
In the Applicant’s submission, to this extent, Vulcan is overruled by the Full Court.
Bag & Jute
This case determined use without reference to the terms of the TCO application.[15]
[15] See [7]-[10]
In the Applicant’s submission, to this extent, Bag & Jute is overruled by the Full Court.
SCHEDULE 3
RESPONDENT’S FURTHER SUBMISSIONS IN THE REMITTER
Introduction
These submissions are provided in response to the Tribunal’s request for supplementary submissions by the parties:
“… as to whether the use (or ultimate use) cases including those discussed by the Full Court at paragraphs [37]-[44] are not impliedly overruled by the Full Court’s decision in this case, insofar as the cases appear to determine use without close regard to the terms of the TCO or TCO application, and insofar as they involve a distinction between use and means insofar as regard is had to the terms of the TCO or TCO application.”
These submissions adopt the abbreviations used in the Respondent’s primary submissions to the Tribunal dated 6 April 2021 (RS).
The cases cited at paragraphs 37-44 of Alstom FFC comprise three tribunal decisions (Vulcan, Bag & Jute, Downer EDI Rail) and one decision of the Federal Court (Nufarm).
In relation to the characterisation of “use” for the purposes of s 269B(1) of the Customs Act, and the consideration of the means by which use is achieved, these cases represent a consistent line of authority that includes the decision of the Full Court in Toyota, on which the Full Court relied in Alstom FFC (at [49]).
The ‘ultimate use’ cases determined use with due regard to the TCO
The first premise of the question is that this line of cases determined use without close regard to the terms of the TCO or TCO application. In terms of this premise, the Respondent submits that it cannot be said that the decisions referred to above determined use without close regard to the terms of the TCO or TCO application. The Full Court in Alstom FFC certainly made no such finding. Ultimately, the use or uses of a given good is a matter of fact, to be determined with regard to the circumstances of the individual case. Furthermore, as Robertson J observed in Nufarm at [48], there is no precedent value in findings of fact.
(a)In Vulcan, the Tribunal (which included Deputy President Forgie) determined that the TCO goods were used for providing domestic space or room heating. The Tribunal had regard to the description of the TCO goods (viz., “HEATERS, space, liquid fuel, domestic portable which do NOT require connection to any external fuel source or electricity supply”), but did not include reference to their use of liquid fuel, or their connection to any external fuel, for that is the means by which they achieve their use (at [47]).
(b)In Bag & Jute, on the basis of a detailed description of the TCO goods (at [3]), the Tribunal determined that the genus for which substitutable goods should be sought was not woven polypropylene valve sacks, but bags for fertiliser and other products, not exceeding 55 kg capacity (at [26]). The Tribunal did so with regard to the terms of the TCO, but not commensurate with the particularity of the TCO, because to do so would have been to have regard to a sub-market, an approach which was rejected by the Tribunal in Vulcan (at [25]).
(c)In Downer EDI Rail, having regard to the evidence as to the nature and characteristics of the TCO goods (at [37]), the Tribunal (which included Deputy President Tamberlin) determined that the relevant characterisation of the use of the TCO goods (viz., “TRAINS, PASSENGER, electric, double deck, comprising BOTH of the following: (a) minimum of one driver trailer car without driver cab module; (b) NOT greater than six passenger cars”) is as a passenger train (at [42]). The Tribunal reached this conclusion having regard to the need for a purposive approach and to ordinary usage of the terms used in the definition of “substitutable goods”.
As a matter of principle, the particularity of the description of the TCO goods does not preclude a broad characterisation of their use (that is, the uses to which the goods can be put for the purposes of s 269B(1) of the Act).
On that basis, the Respondent submits that the cases cited above pay due regard to the description of the TCO goods for the purposes of determining the uses to which those goods can be put. In order to determine whether there are ‘substitutable goods’ for the purposes of s 269B(1), it is not necessary that the characterisation of use replicates the TCO description. There are good reasons why that may not be so. One such reason is that the description may contain a reference to the means by which the use is achieved, which does not delimit the characterisation of use.
The ‘ultimate use’ cases observe that means does not delimit use
The second premise in the Tribunal’s question is that this line of case involves a distinction between use and means insofar as regard is had to the terms of the TCO or TCO application.
In Nufarm, Robertson J found (at [50]) that saying that goods operate in a different manner to another does not establish that the goods are not substitutable because it leaves open that the goods have a corresponding use. That statement of principle was reinforced by the finding that the Tribunal erred in looking only at the times and means of killing weeds and on that insufficient basis concluded that the goods were not substitutable (Nufarm at [60]).[16]
[16] In Nufarm, the TCO goods were described as: “PRECURSERS, HERBICIDE, having BOTH of the following: (a) NOT less than 96% trifluralin; and (b) nitrosamine NOT greater than 0.4 parts per million”.
The principle that the characterisation of use is not delimited by the means by which that use is achieved, has been observed consistently by this Tribunal since Vulcan.
The Full Court in Alstom FFC did not advert to this principle, and there is nothing in that decision that casts doubt on the proposition.
The Full Court did not overrule the ‘ultimate use’ cases
The Applicant did not submit to the Full Court that any of the previous decisions were wrongly decided or that they should be overturned. In fact, as the Full Court observed at [46]:
“Senior Counsel for the applicant submitted that many of the foregoing cases supported his contention that the definition of substitutable goods directs one’s attention to the specific use of the goods in question. In ToyotaMaterialHandlingAustralia Pty Ltd, it was lifting goods weighing up to 1,200 kg to a height of five metres. In Nufarm Australia Ltd, it was killing the same weeds. In Vulcan it was heating the same space.”
That position was continued in the remitter.[17]
[17] Applicant’s Outline of Submissions (AS) at [19]-[27], which placed reliance on the decisions of the Full Court in Toyota, and the Tribunal in Vulcan and Downer EDI Rail; cf. RS at [57], [59], [82]-[97].
In its disposition of the matter, the Full Court found that the characterisation of use of the goods was referable to the train described in the TCO application, and not “just any passenger train” (at [53]).
This is not a point of departure with previous cases (on which the Full Court relies at [53]). It is a comment on the specificity of the characterisation of use of the goods in this case.
This is underscored by the fact that the Court did not determine: the uses of the TCO goods; or of the locally produced goods; or whether there was a corresponding use in this case; but remitted the matter to be determined by this Tribunal. The error identified by the Full Court was not that the Tribunal had proceeded on the basis of bad law, but that it had not followed the ‘practical analysis’ outlined in Nufarm, and specifically that it had not made findings about the uses to which the Downer trains (as distinct from a generic passenger trains) are put or capable of being put (at [54], [56]).
The Full Court indicated that, upon remittal, it may be found that the uses to which the TCO goods can be put are those described by the applicant as being “to transport passengers on a high capacity, high frequency, driverless metropolitan train line system” (at [56]). Even so, that characterisation may account for one use (and not necessarily all uses) of the goods that answer the description of the TCO application. These are matters for this Tribunal to determine.
The passage in Toyota at [4], on which the Full Court in Alstom FFC relied at [49], is both expansive and limiting. It indicates that the comparison called for by the definition of “substitutable goods” is not only between actualities, but also between potentialities. However, these potential uses must be “reasonable ones”. No party in this case disputed that the uses are of the goods described in the TCO, or that the characterisation of a “reasonable” use would be informed by that description.
Importantly, in Toyota, the Full Court embraced a broad approach to the characterisation of use by finding that the use to which the TCO goods can be put is not a reference to “sensible commercial uses” at [19]. The Full Court in Alstom FFC did not disavow, or depart from, that approach.
It is evident that the Full Court in Alstom FFC did not expressly overrule any previous decisions. The Full Court will overturn the decision of another Full Court only in exceptional circumstances, and not unless it is convinced that it is “clearly or plainly wrong”.[18] While the Full Court is not bound by the decisions of lower courts and tribunals, if the decision is of long-standing authority, an appellate court will exercise particular caution in overturning that decision, requiring some “exceptional reason” to justify a reversal.[19] When there is such a reason, one would expect to see it reflected in the reasons for judgment if such decisions are overturned.
[18] See, e.g., Chamberlain v The Queen (1983) 72 FLR 1 at 8-9; Nguyen v Nguyen (1999) 169 CLR 245 at 268-269; Binetter v Deputy Commissioner of Taxation [2012] FCAFC 125; 206 FCR 37 at [27]-[29].
[19] Babaniaris v Lutony Fashions Pty Ltd [1987] HCA 19; 163 CLR 1 at 13-14, 29-30; South Australia v Teachers Appeal Board [2011] SASCFC 3; 109 SASR 168 at [82].
The Full Court decision is not inconsistent with previous decisions

The Respondent submits that the real question is whether the decision of the Full Court in Alstom FFC is necessarily inconsistent with previous decisions.[20] On that question, obviously, the Full Court proffered no opinion. The question is one for the following court or tribunal considering the matter. However, caution by a lower court or tribunal is urged.[21] The Respondent submits that it is only where the decision of the superior court is not capable of being followed consistently with previous and long-standing authority, that the Tribunal should consider that the decision has ‘impliedly overruled’ the foregoing authority.
[20] See, e.g., AEK15 v Minister for Immigration and Border Protection [2016] FCCA 1060 at [13].
[21] Jacob v Utah Construction & Engineering Ltd (1996) 116 CLR 200 at 207.
The Respondent submits further that that is not the case here. It is possible to follow both the decision of the Full Court in Alstom FFC and the previous line of authority.
The Full Court in Alstom FFC did not place any limitation on the characterisation of “use”, other than to embrace the notion of “reasonable use” in Toyota (at [49]), and to observe that the Act is concerned with the use of the actual goods described in the TCO application (at [53], [56]). In that regard, there is no inconsistency with previous authority.
The Full Court did not determine that the particularity of the TCO description dictates the particularity of use. The Respondent submits that such an approach would be narrower than that of other courts and tribunals. However, the Full Court expressly declined to determine that the description of use in the TCO application dictated the characterisation of use to which the TCO goods could be put (Alstom FFC at [56]), indicating that such a finding would be a matter of fact to be determined by the Tribunal.
Furthermore, the Full Court did not make any finding or offer any opinion on whether the means by which use is achieved delimits the characterisation of use.
Rather, the Full Court in Alstom FFC was dissatisfied with the manner in which use was determined by the Tribunal (that is, in the absence of the process outlined by Robertson J in Nufarm and, therefore, in the absence of making the necessary findings of fact) (Alstom FFC at [53], [56]). The Full Court determined that the matter should be remitted to the Tribunal in order to follow that process and to make those findings.[22]
[22] This is reinforced by the decision of the High Court to dismiss the application for special leave, on the basis that it was an inappropriate vehicle in the absence of findings of fact concerning the use to which the goods can be put or the use to which the proposed substitute goods can be put or are capable of being put: Comptroller-General of Customs v Alstom Transport Australia Pty Ltd [2020] HCASL 154 at [1].
The Full Court in Alstom FFC also considered that the characterisation of use by the Tribunal was not specific to the description of the TCO goods (Alstom FFC at [56]). That is a finding of fact. In so finding, the Court did not overrule any previous decision by suggesting that those decisions did not attain the “correct level of specificity” (cf. Alstom FFC at [39]). Rather, the Full Court called for greater specificity in the characterisation of the uses of the goods in this case by reference to their description in the TCO application. That particularity may be achieved even by reference to the characteristics of the goods that embrace a “higher ultimate use” (Alstom FFC at [40]) that does not implicate the means by which that use is achieved (RS [58]-[76]).
Ultimately, the “correct level of specificity” will be a matter of fact to be determined by the Tribunal in the individual case. While the Full Court did not ultimately accept the Respondent’s submission that a number of authorities supported a comparison of a higher ultimate use of goods for the purposes of s 269C of the Act (Alstom FFC [40]-[45]), the rejection of that submission did not have the effect of denying the authorities on which the Respondent relied. Rather, the Full Court did not appear to accept that the findings in those other cases supported the Tribunal’s characterisation of use of the particular goods in this case (i.e., “as described in the TCO application”).
The leading tribunal case on the definition of “substitutable goods” is Vulcan, which was decided more than a quarter of a century ago. The relevant finding of the Tribunal in Vulcan that the focus of the definition of “substitutable goods” is on “the ultimate use and not the means by which it is achieved”, has been repeatedly applied by the Tribunal since that time, including in Downer EDI Rail, Bag & Jute,[23] and Re Thirco Pty Ltd and Comptroller of Customs (1994) 35 ALD 665 at 671 [28].
[23] RS at [87]-[88], [94].
That approach is adopted in Nufarm, where the Court inferred (at [60]) that the error of the Tribunal in failing to address the issue of whether the same weeds in the same crops were or could be killed or controlled by the goods in question “was because the Tribunal looked only at the times and means of killing weeds and on that insufficient basis concluded that the goods were not substitutable”.
Similarly, the approach of the Full Court in Toyota is consistent with that line of authority. The TCO goods were rider operated forklift trucks. The local goods were pedestrian operated forklift trucks. On the Tribunal’s factual findings, the Full Court found that the two kinds of forklift trucks were “substitutable goods”, since they “could be used to do the same thing, to stack shelves up to 5 m high with loads of up to 1,200 kg”, and, on that basis, there was an overlap in the work which the two kinds of trucks could undertake.[24] That was so even though that would not occur in the same warehouses.[25] This is similar to the Tribunal’s decision in Bag & Jute, where the Tribunal held that TCO bags and locally produced bags were substitutable goods on the basis that both were “bags for fertilizer and other products, not exceeding 55kg capacity” even though the respective bags could not be used on the same automated bagging plant.[26]
[24] Toyota at [9], [18]-[19]
[25] Ibid at [12]. See RS at [85]-[86], [96].
[26] See RS at [94] and Bag & Jute at [23]-[26].
Unlike in Toyota, the Full Court in this case was not able to make a determination as to whether or not the TCO and local goods were “substitutable goods” because “the necessary findings of fact have yet to be made” (Alstom FFC at [56]).
The Full Court made no comment about the findings in previous decisions. It did not suggest that previous courts and tribunals had determined use without close regard to the terms of the TCO, or that they had erroneously observed a distinction between use and means. A broad characterisation of use does not itself indicate that the court or tribunal did not pay close attention to those terms.
Finally, while the tribunal is not bound by previous tribunal decisions, unless persuaded that those decisions are contrary to a binding precedent or wrong, the Tribunal should defer to those decisions.[27] This is especially so where the previous decisions represent a settled view of the law that can be regarded as having been consistently applied, and in respect of individual decisions, where the Tribunal is constituted by presidential members or a judge of the Federal Court, such as in Vulcan (DP Forgie) and Downer EDI Rail (DP Tamberlin).[28] That prescription is reinforced by way of the Federal Court authority of Nufarm and Toyota, which followed the approach adopted in earlier tribunal decisions in focusing on the ultimate use of goods, irrespective of the means by which that use is achieved.
[27] See, e.g., Muthubalasuriyar v Comcare (2013) 59 AAR 330; [2013] AATA 147 at [44]. See also Drake v Minister for Immigration and Ethnic Affairs (No 2) [1979] ALD 634 at 639 (Brennan J).
[28] See, e.g., Re Ganchov and Comcare (1990) 11 AAR 468; 19 ALD 541 at 469.

Date of hearing:	17 May 2021
Date final submissions received:	27 August 2021
Counsel for the Applicant:	Mr I Roberts SC, Ms J Wright
Solicitors for the Applicant:	Mr N Watts, HFW Australia
Counsel for the Respondent:	Mr S Lloyd SC, Ms H Younan SC
Solicitors for the Respondent:	Mr R Northcote, Department of Home Affairs

Basic functions of train operation		On-sight train operation	Non-automated train operation	Semi-automated train operation	Driverless train operation	Unattended train operation
Basic functions of train operation		GOA0	GOA1	GOA2	GOA3	GOA4
Ensure safe movement of trains	Ensure safe route	X (points command/control in system)	system	system	system	system
	Ensure safe separation of trains	X	system	system	system	system
	Ensure safe speed	X	X (partly supervised by system)	system	system	system
Drive train	Control acceleration and braking	X	X	system	system	system
Supervise guideway	Prevent collision with obstacles	X	X	X	system	system
Supervise guideway	Prevent collision with persons on tracks	X	X	X	system	system
Supervise passenger transfer	Control passengers doors	X	X	X	X	system
	Prevent injuries to persons between cars or between platform and train	X	X	X	X	system
	Ensure safe starting conditions	X	X	X	X	system
Operate a train	Put in or take out of operation	X	X	X	X	system
Operate a train	Supervise the status of the train	X	X	X	X	system
Ensure detection and management of emergency situations	Detect fire/smoke and detect derailment, detect loss of train integrity, manage passenger requests (call/evacuation, supervision)	X	X	X	X	system and/or staff in OCC
NOTE x = responsibility of operations staff (may be realised by UGTMS system) system = shall be realised by UGTMS system