Biocontrol Limited and Chief Executive Officer of Customs
[2004] AATA 1381
•22 December 2004
CATCHWORDS – CUSTOMS – Tariff classification – whether subject goods are “insecticides” – whether similar products – whether comprise mixture of material - identification of essential character – decision set aside
Customs Tariff Act 1995 – Sch 3, Ch’s 29, 38, Headings 2905.29.00, 2937.90.00, 2942.00.00, 3808.10.90, 3808.90.00
Customs Act 1901 – ss 167, 167(4)(a), 273GA(1)(haaa), 273GA(2)
Health Act 1958 (Vic), s. 3(1)
Pesticides Act 1999 (NSW), ss 3, 4, 5
Acrow Australia Ltd v Collector of Customs for the State of New South Wales (1986) 12 FCR 129
Barry R Liggins Pty Ltd v Comptroller General of Customs (1991) 32 FCR 112
Blackwood Hodge (Australia) Pty Ltd v Collector of Customs, New South Wales (No. 2) (1980-81) 3 ALD 38
Collector of Customs v Chemark Services Pty Ltd (1993) 114 ALR 531
Diethelm Manufacturing Pty Ltd v Commissioner of Taxation (1993) 44 FCR 450
Dyson v Pharmacy Board (2000) 50 NSWLR 523
Federal Commissioner of Taxation v ICI Australia Limited (1971-72) 127 CLR 529
Gardner Smith v Collector of Customs Victoria (1986) 66 ALR 377
HR Products Pty Ltd v Collector of Customs (1990) 20 ALD 340
Liebert Corporation Australia Pty Ltd v Collector of Customs (1993) 23 AAR 287
Nairne v Stephen Smith and Co Ltd and the Pharmaceutical Society of Great Britain [1943] 1 KB 17
Pepsi Seven-Up Bottlers v Commissioner of Taxation (1995) 62 FCR
R v Peters (1886) 16 QBD 636
Re Bayer Australia Limited and Collector of Customs, New South Wales, No. 84/110
Re Gissing and Collector of Customs (1977) 1 ALD 144, 14 ALR 555
Re Nylex Corporation Ltd and Collector of Customs No. V86/504, 9 April, 1987, CAI 232
Re Phillips and House Group and Collector of Customs (1979) 2 ALD 704
Re Tridon Pty Ltd and Collector of Customs (1982) 4 ALD 615
Thomson Australian Holdings Pty Ltd v Commissioner of Taxation (1988) 20 FCR 85
Times Consultants Pty Ltd v Collector of Customs (1987) 16 FCR 449
Toyota Tsusho Australia v Collector of Customs VG113 of 1991, No. 282
Vernon-Carus Australia Pty Ltd and Thomas Creevey & Associates v Collector of Customs (1995) 21 AAR 450
Yager v R (1977) 13 ALR 247
Walterschied Australia Pty Ltd v Collector of Customs (1988) 7 AAR 555
Whitten v Falkiner (1915) 20 CLR 118
DECISION AND REASONS FOR DECISION [2004] AATA 1381
ADMINISTRATIVE APPEALS TRIBUNAL )
) V2003/261, V2003/864,
GENERAL ADMINISTRATIVE DIVISION ) V2003/880, V2003/935,
V2003/1022, V2003/1097,
V2003/1017 & V2004/1062
Re BIOCONTROL LIMITED
Applicant
AndCHIEF EXECUTIVE OFFICER OF CUSTOMS
Respondent
DECISION
Tribunal: Deputy President S A Forgie
Associate Professor J.H. Maynard (Member)
Date: 22 December 2004
Place: Melbourne
Decision:The Tribunal:
1.sets aside the decision of the respondent; and
2.substitutes a decision that the subject goods are classified to sub-heading 2905.29.00 of Chapter 29 of Schedule 3 of the Customs Tariff Act 1995.
S A FORGIE
Deputy President
REASONS FOR DECISION
This is a case about the classification of four insect mating disruption products, which are generally known as isomates, (“subject goods”) pursuant to the Customs Tariff Act 1995 (“CT Act”). The applicant, Biocontrol Limited (“Biocontrol”) imports the subject goods from Japan. A delegate of the respondent, the Chief Executive Officer (“CEO”), decided that they should be classified under sub-heading 3808.10.90 in Chapter 38 of Schedule 3 of the CT Act. In general terms, that sub-heading relates to insecticides. He now contends in the alternative that they should be classified under sub-heading 3808.90.00 (i.e. “Other”) in Chapter 38. Biocontrol contends that the subject goods should be classified under sub-heading 2905.29.00, which in general terms relates to unsaturated monohydric alcohols, or alternatively, under sub-heading 2942.00.00, which relates to other organic compounds. It has abandoned its contention that it should be classified under sub-heading 2937.90.00 as a hormone. We have decided that the subject goods should be classified under sub-heading 2905.29.00.
At the hearing, Biocontrol was represented by its barrister and solicitor, Mr Gross and the CEO by his solicitor, Mr Komora. Documents lodged pursuant to s. 37 of the Administrative Appeals Tribunal Act 1975 (“T documents”) were admitted in evidence. Also admitted were samples of the subject goods, labels used on the subject goods, a bundle of letters and witness statements by Mr Stephen Sexton and Associate Professor Ann Campbell Lawrie. Oral evidence was given by Mr Stephen Sexton on behalf of Biocontrol. Associate Professor Lawrie gave oral evidence on behalf of the CEO.
THE ISSUES
In resolving this case, we must decide:
whether the subject goods are “insecticides” as that word is used in sub-heading 3808;
whether they are “similar products” within the meaning of sub-heading 3808;
whether the subject goods comprise a mixture of material; and
the essential character of the subject goods.
In resolving these issues, it is irrelevant to have regard to issues such as whether a particular classification will ultimately lead to increased costs for farmers or horticulturalists using the product so that they will be deterred from using the subject goods. Equally, it is irrelevant to have regard to the possibility that reduced use of the subject goods will have adverse effects for workers’ workplace health and safety or for the environment.
THE WITNESSES
Mr Sexton is the founder and Managing Director of Biocontrol. He holds a Bachelor of Agricultural Science from LaTrobe University. That was a four year degree. He has undertaken extensive studies in chemistry equating with two years of a three year chemistry degree. He has 34 years experience in both basic research work in entomology and the commercial development of biological and semiochemical agents for pest control. In addition, he has worked on a number of aspects of non-chemical control of insect pests. In particular, he has worked on the introduction of the vasillis larvae in Australia for the control of mosquitoes, feeding stimulants of certain kinds of beetles, turning raw active ingredients of insects into chemical products, wasps for attacking aphids and parasitic nematodes for attacking a range of insects. He is not a synthetic chemist.
Dr Ann Lawrie is an Associate Professor in Applied Microbiology with the Department of Biotechnology and Environmental Biology at the Bundoora Campus of the RMIT University. Her experience lies with plant pathology and not with insects. She does not have any experience with insects apart from their involvement in plant pathology.
Mr Stephen Tancred was not called to give evidence but wrote a report. He is a senior horticultural consultant based in Queensland servicing the fruit and vegetable industry. Among his formal tertiary qualifications are a Bachelor of Agricultural Science (Hons) degree completed in 1993 and a Postgraduate Diploma in Agricultural Studies. He is a Certified Practising Agriculturalist and a Qualified Person under the Plant Breeders’ Right Act 1994. In the past, he has spent ten years with the Queensland Department of Primary Industries undertaking research and providing advisory services to fruit and vegetable growers.
JURISDICTION
As it is permitted to do under s. 167 of the Customs Act 1901 (“Customs Act”), Biocontrol, paid customs duty under protest in respect of multiple entries of the subject goods. It then sought review of the CEO’s decisions to demand the duty it had paid under protest. In respect of all but one of the entries, Biocontrol sought that review within six months of its paying the duty under protest. The Tribunal, therefore, has jurisdiction to review those decisions according to s. 273GA(2) of the Customs Act (Customs Act, s. 167(4)(a)). In respect of the one further entry in relation to which the Tribunal does not have jurisdiction under s. 273GA(2). Biocontrol applied instead for a refund of the duty it had paid under protest. The Tribunal has jurisdiction to review the CEO’s decision in relation to an application for a refund (Customs Act, s. 273GA(1)(haaa)). All of the CEO’s decisions were made on the basis that the subject goods should be classified under sub-heading 3808.10.90.
THE REVIEW PROCESS
In considering the proper classification of the subject goods, the first step is to identify those goods. Only when that has been done is it appropriate to construe the tariff classifications to determine to which tariff classification the goods should be classified. This follows from the Tribunal’s decision in Re Gissing and Collector of Customs (1977) 1 ALD 144, 14 ALR 555 (Brennan J, President, Mr Skermer and Mr Stock, Members) and also from the later decision of Times Consultants Pty Ltd v Collector of Customs (1987) 16 FCR 449 (Morling and Wilcox JJ, Fox J dissenting).
The manner in which the first step of identification is undertaken was considered by the Tribunal in Re Tridon Pty Ltd and Collector of Customs (1982) 4 ALD 615 at 620 (Mr Hall, then Senior Member and Mr Wickens and Mr Prowse, Members). Referring to the authorities, the Tribunal in Re Tridon identified eight principles as relevant in identifying the goods:
“(i) Identification must be objective, having regard to the characteristics which the goods, on informed inspection, present ...;
(ii) The identification of goods cannot be controlled by the descriptions of goods adopted in the nomenclature of the Tariff ...;
(iii) Nevertheless in identifying goods it is necessary to be aware of the structure of the nomenclature, the basis on which goods are classified and the characteristics of goods which may be relevant to the frequently complex task of classification ...;
(iv) In the identification of goods, knowledge of how those who trade in the goods describe them will usually be relevant, but not necessarily conclusive ...;
(v) All the descriptive terms, both specific and generic, by which the goods may fairly be identified may be relevant to the classification of the goods within the Tariff ...;
(vi) Descriptive terms may be of varying degrees of specificity (eg windscreen wiper blade refills, parts for a windscreen wiper or parts for a motor vehicle). Generic descriptions may be by reference to the materials or substances from which the goods are manufactured ...;
(vii) Identification will frequently extend to characterisation of goods by reference to their design features cf Re Virgo Manufacturing Co Pty Ltd and Collector of Customs (Vic) (1981) 3 ALN No 15, or by reference to their suitability for a particular use where those characteristics emerge from informed inspection of the goods as imported ... . The extent to which these characteristics may be relevant to the ultimate classification of the goods and whether evidence of the use to which goods are put after importation is relevant, will depend upon the language of the Tariff Nomenclature ...;
(viii) Composite goods, notwithstanding that they have components which are separately identifiable, may nevertheless be identifiable in combination as a new entity if the identity of the separate units is subordinated to the identity of the combination ...” (pages 620-621)
The task of identifying goods was further considered by the Full Court of the Federal Court in Times Consultants Pty Ltd v Collector of Customs. The majority noted that:
“ It must always be remembered that the classification of goods for tariff purposes is a practical ‘wharf-side’ task. Upon some occasions it will be necessary for the classifier to obtain information to enable identification of the goods but it is entirely inappropriate that he or she should enter into inquiries upon matters such as cost, commercial advantage or purchaser preference … It ought normally be possible to classify goods merely by looking at them and by considering their nature and function which they were designed to serve. In the case of goods made up in sets, it may be that there is no single essential character; in which case r 3(1)(b) will be inapplicable and reference will need to be made to the arbitrary rule contained in r 3(1)(c).” (at 463)
Earlier in their judgement, they had addressed another aspect of the wharf-side task:
“ The authorities make it clear that in determining what is the essential character of goods it is the state or condition of the goods at the time of importation that is the determining factor and that it is wrong to classify goods or to determine their essential character by reference to the purpose of the importer or of the purchaser. Regard must be had to the characteristics of the goods themselves, as they would present themselves to an informed observer: see Chandler & Co v Collector of Customs (1907) 4 CLR 1719 at 1729; Whitton v Falkiner (1915) 20 CLR 118 at 131; Blackwood Hodge (Australia) Pty Ltd v Collector of Customs (1980) 47 FLR 131 at 155.” (page 462)
IDENTIFICATION OF THE SUBJECT GOODS
Background
On the basis of the evidence, which was consistent on these matters, we make the findings of fact set out in this section of our reasons. The subject goods are three insect mating disruption products and are generally described as isomates. They were developed in Australia jointly by the CSIRO and Mr Sexton. They were first used experimentally in Australia in 1973. Since 1983, they have been used commercially. On the basis of Mr Sexton’s evidence, we find that the subject goods are non-toxic even to the targeted moth, do not harm beneficial insects such as bees and ladybirds and do not present any environmental hazard. Approximately half of apple growers in eastern Australia now use one of the isomates that is available on the market for the particular apple variety they grow instead of the organophosphate sprays they previously used to control moths in their crops. Almost all peach growers in northern Victoria use one of them. The subject goods are now manufactured for Biocontrol in Japan by Shin Etsu Chemicals Co Ltd.
Identification
The parties were in agreement as to the identification of the subject goods and we have made our findings on that basis and on the basis of the evidence. The subject goods are dispensers consisting of two parallel tubes. One tube contains a piece of wire to provide stiffness and the other is filled with a controlled release formulation consisting of a synthetic pheromone and sealed. The subject goods are presented in two forms: a pair of parallel tubes as described or a pair of parallel tubes of a slightly smaller diameter that have been twisted into twist-tie dispensers.
The controlled release formulation has been manufactured under the same process but there are some variations among their non-active constituents. Each has a common active ingredient in the sense that each contains a moth pheromone. That active ingredient is different in each of the goods, though, for each contains a pheromone specific to a particular type of moth. The subject goods target the following moths in the following fruits:
Isomate C Pheromone Codling Moth in apples and pears
Isomate CTT Pheromone Codling Moth in apples and pears
(twist ties)
Isomate LBAM Plus Pheromone Light Brown Apple Moth in apples and grapes
Isomate OFM Rosso Pheromone Oriental Fruit Moth in peaches and nectarines
The synthetic pheromone in each is chemically identical to the natural pheromone, which is produced by a particular moth. That pheromone is a chemical signal which causes a reaction upon reception by another moth of the same species. In insects, including moths, pheromones consist of highly specific agents that are generally derivatives of natural fatty acids closely related to the aromas of fruit. Pheromones are used by insects for sexual attraction, aggregation, dispersion, oviposition (egg laying) and alarm or warning. Synthetic pheromones are used in a number of ways for controlling insects. They do so either by attracting insects to traps or toxicants or by deterring insects from laying eggs.
The subject goods are twisted around the branches of fruit trees each spring. Over the following six or seven months, they release very large quantities of pheromone through their plastic tubing. The pheromone evaporates from the surface of the plastic tubing and is released into the air in the orchard. The pheromone that is released forms false trails for male moths, which become distracted by them. As a consequence, they are unable to locate females easily. In low moth populations, the male moths may never find the female moths. As a consequence, there is no or little mating and the female moths either do not lay eggs or lay very few. Without eggs, there are no grubs and so no grub infested fruit. In high moth populations, the false trails means that the male moths find the female moths only by chance. By the time they do, though, the female moths have used up most of their eggs as they are an energy reserve. The result of delayed mating is that few, if any, fertile eggs are laid.
THE TARIFF CLASSIFICATIONS AND THE RULES
Part II of the CT Act provides for imposition of duties of customs. Section 15 provides that duties of customs are imposed on goods imported into Australia on or after 1 July, 1996 and on goods which are imported into Australia before 1 July, 1996 and entered, or again entered, for home consumption on or after that day. The duty payable upon such goods is worked out in the manner provided for in ss. 16, 17, 18, 20 and 22. Section 16(a) provides that:
“if the goods are not the produce or manufacture of a Preference Country – [the duty is worked out] by reference to the general rate set out in the third column of the tariff classification under which the goods are classified;”
A reference to the tariff classification under which the goods are classified is a reference to the heading or subheading in whose third column a rate of duty is set out and under which the goods are classified (s. 6). The reference to a heading and a subheading is a reference to those appearing in Schedule 3 to the CT Act (s. 3(1)).
The classifications under consideration
The CT Act sets out the tariff classifications under which goods are classified. All of the classifications contended for by the parties come within Section VI of Schedule 3. It is headed “Products of the chemical or allied industries”. In so far as it is relevant, Note 2 of the notes to that Section provide:
“… goods classifiable in … 3808 by reason of being put up in measured doses or for retail sale are to be classified in those headings and in no other heading of this Schedule.”
Sub-headings 2905.29.00 and 2942.00.00 come within Chapter 29, which is headed “Organic chemicals”. The notes to Chapter 29 provide, in part:
“1. Except where the context otherwise requires, the headings of this Chapter apply only to:
(a)Separate chemically defined organic compounds, whether or not containing impurities;
(b)Mixtures of two or more isomers of the same organic compound (whether or not containing impurities), except mixtures of acyclic hydrocarbon isomers (other than stereoisomers), whether or not saturated (Chapter 27);
(c)…
(d)The products mentioned in (a), (b) or (c) above dissolved in water;
(e)The products mentioned in (a), (b) or (c) above dissolved in other solvents provided that the solution constitutes a normal and necessary method of putting up these products adopted solely for reasons of safety or for transport and that the solvent does not render the product particularly suitable for specific use rather than for general use;
(f)The products mentioned in (a), (b), (c), (d) or (e) above with an added stabiliser (including an anti-caking agent) necessary for their preservation or transport;
(g)The products mentioned in (a), (b), (c), (d), (e) or (f) above with an added anti-dusting agent or a colouring or odoriferous substance added to facilitate their identification or for safety reasons, provided that the additions do not render the product particularly suitable for specific use rather than for general use;
(h)The following products, diluted to standard strengths, for the production of azo dyes: diazonium salts, couplers used for these salts and diazotisable amines and their salts.
2. …
3.Goods which could be included in two or more of the headings of this Chapter are to be classified in that one of those headings which occurs last in numerical order.
4.…
5.…
6. …
7. …
8.…
Subheading Note.
1.Within any one heading of this Chapter, derivatives of a chemical compound (or group of chemical compounds) are to be classified in the same subheading as that compound (or group of compounds) provided that they are not more specifically covered by any other subheading and that there is no residual subheading named "Other" in the series of subheadings concerned.
Additional Note.
1. In 2920, ‘esters of inorganic acids’ are to be taken to include carbonic and peroxocarbonic esters.”
Sub-heading 2905.29.00 comes within Sub-Chapter II, which is headed “Alcohols and their halogenated, sulphonated, nitrated or nitrosated derivatives”. It reads:
“2905 ACYCLIC ALCOHOLS AND THEIR HALOGENATED, SULPHONATED, NITRATED OR NITROSATED DERIVATIVES
2905.2- Unsaturated monohydric alcohols:
2905.22.0-- Acyclic terpene alcohols Free
2905.29.00 -- Other Free”
Sub-heading 2937.90.00 comes within Sub-Chapter XI entitled “Provitamins, Vitamins and Hormones”. It reads:
“2937 HORMONES, NATURAL OR REPRODUCED BY SYNTHESIS; DERIVATIVES THEREOF, USED PRIMARILY AS HORMONES; OTHER STEROIDS USED PRIMARILY AS HORMONES:
2937.90.0– Other Free”
Sub-heading 2942.00.00 comes within Sub-Chapter XIII entitled “Other Organic Compounds”. It reads:
“2942.00.00 OTHER ORGANIC COMPOUNDS Free”
Sub-headings 3808.10.90 and 3824.90.90 come within Chapter 38, which is entitled “Miscellaneous chemical products”. Note 1(a)(2) of the Notes to that Chapter reads:
“This Chapter does not cover:
(a)Separate chemically defined elements or compounds with the exception of the following:
…
(2)Insecticides, rodenticides, fungicides, herbicides, anti-sprouting products and plant-growth regulators, disinfectants and similar products, put up and described in 3808.”
Sub-heading 3808.10.90 reads:
“3808 INSECTICIDES, RODENTICIDES, FUNGICIDES, HERBICIDES, ANTI-SPROUTING PRODUCTS AND PLANT GROWTH REGULATORS, DISINFECTANTS AND SIMILAR PRODUCTS, PUT UP IN FORMS OR PACKINGS FOR RETAIL SALE OR AS PREPARATIONS OR ARTICLES (FOR EXAMPLE, SULPHUR-TREATED BANDS, WICKS AND CANDLES, AND FLY-PAPERS):
3808.10- Insecticides
-- Goods, as follows:
3808.10.10 (a) camphor; )
(b)fly-papers; ) Free
(c)mosquito spirals and coils )
3808.10.90 -- Other 5%”
Sub-heading 3824.90.90 reads:
“3824 PREPARED BINDERS FOR FOUNDRY MOULDS OR CORES; CHEMICAL PRODUCTS AND PREPARATIONS OF THE CHEMICAL OR ALLIED INDUSTRIES (INCLUDING THOSE CONSISTING OF MIXTURES OF NATURAL PRODUCTS), NOT ELSEWHERE SPECIFIED OR INCLUDED:
3824.90.90--- Other 5%”
The Interpretation Rules
Schedule 2 of the CT Act sets out the General Rules for the Interpretation of the Harmonized System provided for by the International Convention on the Harmonized Commodity Description and Coding System 1983 (“Convention”) ("Interpretation Rules"). Those Interpretation Rules must be used in working out tariff classification under which goods are classified (s. 7(1)). In so far as they are relevant, they are:
“1. The titles of Sections, Chapters and sub-Chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes do not otherwise require, according to the following provisions …”
that are then set out. In so far as they are relevant in this case, those provisions are found in the following Rules:
“2. (a) …
(b)Any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances. Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance. The classification of goods consisting of more than one material or substance shall be determined according to the principles of Rule 3.
3.When, by application of Rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows:
(a)The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods … those headings are to be regarded as equally specific in relation to those goods, even if one them gives a more complete or precise description of the goods.
(b)Mixtures, composite goods consisting of different materials or made of differing components … which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.
(c)When goods cannot be classified by reference to 3(a) or 3(b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration.
4.Goods which cannot be classified in accordance with the above Rules shall be classified under the heading appropriate to the goods to which they are most akin.
…
6… the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related Subheading Notes and, mutatis mutandis, to the above Rules, on the understanding that only the subheadings at the same level are comparable. For the purposes of this Rule the relative Section and Chapter Notes also apply, unless the context otherwise requires.”
THE EVIDENCE
The manner in which the subject goods act on moths
Mr Sexton said that the pheromone molecules in Isomate are chemically identical to those produced by female moths. The female moths have been attracted to the orchard by the smell of the trees. The pheromone molecules lock onto the specific pheromone receptors on the antennae of the male moths. The amount of pheromone that is released by the subject goods is greater than that released by the female moth. Taken on a per hectare basis, the subject goods are emitting the equivalent of a million female moths. In some orchards that are heavily infested by moths, there may be millions of moths but the subject goods emit their pheromones over a long period of time i.e. six months. Each dispenser has ten to twenty thousand times the pheromone of an individual virgin female moth. Somewhere between 500 and 1,000 dispensers are spread through each hectare of an orchard but the number all depends on the density of the trees. Some have 250 trees per hectare and others 2,500. The pheromone can spread to a distance equivalent to two, three or four rows outside the orchard.
Mating is disrupted when the quantity of pheromone is very high and the antennae receptors are reoccupied as quickly as they are cleared. In that way, the male moths generate a constant electrical signal for themselves. Their antennae or brains or both become overloaded with that signal. They either lose their responsiveness to pheromone or they become extremely excited and aimlessly follow false leads through the orchard. The subject goods are not an attractant. Male moths do not flock to them. In essence, the subject goods prevent the male moths from finding the female moths and birth control is a consequence. They distract and confuse male moths. They are so overwhelmed that they cannot find the violinist for the orchestra. There are no pathological effects on the male moths. Once they have left the orchard, their antennae clear and they can find females again and mate. Before they leave, they are very confused. There is no effect at all on the female moths as they are attracted by the smell of the trees.
In further evidence, Mr Sexton said that unlike pheromones in the subject goods insect growth regulators refer to chemicals that have a toxic effect one way or another e.g. nerve poisons or hormone mimics that disrupt growth. They have a lethal effect one way or another. Without exception, all are chemical compounds that “muck up” the normal development of insects. Pheromones in the subject goods release a natural compound from point sources. When a moth is anywhere near that point source, the enzymes in its antennae break the pheromone down but it is immediately replaced. When the pheromone gets onto the antennae, a chemical reaction stimulates a chemical signal down the nerves to the moth’s brain. Some moths lose interest and some become excited. Their response depends on their species. About 20 minutes after the moth leaves the orchard, its antennae begin to function freely again. There is no evidence that its life span is reduced. There is no lymph involvement. A moth’s normal lifespan is about 7 days but it may be 10.
Signals are sent to the brain in the same way as receptors in the eye send an electrical signal to the brain. When a light is shone on the eye, it is the brain that tells a person to flinch and not the eye. The moth’s reaction to the pheromone can be equated with a person’s trying to read in bright light. A person cannot read when there is a blinding white light but can when it is turned off. In either case, it is to do with the way the brain processes the signals it receives. The person is not rendered blind by the light and there is no physiological or pathological change to the eye.
Dr Lawrie considers that the subject goods are an attractant of Codling Moth. It attracts so much that the male moths do not know where to go. They naturally follow the directional track made by the subject goods but their antennae become so sated that they do not know where to go. It is an attractant for all that.
Dr Lawrie was asked to comment on the following definition of a pheromone. A pheromone is an “intercellular chemical messenger”:
“secreted into the environment: modifies physiology and behaviour of other individuals” (Anatomy & Physiology, Rod R Seeley, Trent D Stephens & Philip Tate, 2nd edition, 1982)
Dr Lawrie said that she was not happy with that definition in so far as it described a pheromone as a “chemical messenger”. The moths’ flying activity is not interfered with but the direction of their flying is. She could not say that this was as a result of any impact on the moth’s brain. When asked how a moth’s direction of flying could be interfered with if there were no kind of effect, Dr Lawrie replied that she could not answer that question exactly. The pheromone is read by the antennae on the male moth and makes him fly in the direction of the greatest concentration of product.
In cross-examination, Dr Lawrie said that the male moths are not attracted to the product itself, apart, perhaps, from the first few minutes when the product is concentrated. After that, it is dispersed. Dr Lawrie regarded it as both an attractant and a confusing agent. Disruption of mating is consequent upon the moths’ confusion.
Dr Lawrie said that pheromones are hormone like substances but, in order to be a hormone, they must be transported in the blood or in the lymph system. A plant works differently. It has growth substances that are transported in the circulatory system of the plant. Those substances are water and sugars and are very different from pheromones. A receptor is different from the place in which they are produced.
The chemical composition of the subject goods
Mr Sexton said that the principal ingredients in each of the pheromones are:
Codling Moth Pheromone:
E,E 8, 10 Dodecadien-1-ol 60% (unsaturated monohydric alcohol)
Dodecan-1-ol (Lauryl alcohol) 32% (saturated monohydric alcohol)
Tetradecan-1-ol 8% (saturated aliphatic alcohol and chemically very close to Dodecan-1-ol)
Neither of the saturated alcohols is the principal defining compounds in the pheromone blend and neither is effective on Codling Moth without the unsaturated monohydric alcohol.
Oriental Moth Pheromone:
Z, 8 Dodecen-1-ol acetate 93%
E, 8, Dodecen-1-ol acetate 6%
Z, 8, Dodecen-1-ol 1%
Lightbrown Apple Moth Pheromone:
E, 11 Tetradecen-1-ol acetate 68%
E, E 9,11, Tetradecadien-1-ol acetate 3%
Z, 11 Tetradecen-1-ol acetate 29% (present as an impurity)
Mr Sexton said that a monohydrated unsaturated alcohol has at least one double covalent bond and a single OH or hydroxyl group. Taking E,E 8, 10 dodecadien-1-ol as an example, it can be expressed in the following formula with the double covalent bonds occurring between groups 11 and 10 and 9 and 8:
CH3-CH2=CH-CH=CH-CH-CH2-CH2-CH2-CH2-CH2-CH2-OH
12 11 10 9 8 7 6 5 4 3 2 1
As carbon atoms all form four covalent bonds, oxygen two and hydrogen one, the presence of double bonds means that the carbon chain does not incorporate the maximum number of hydrogen atoms it could theoretically incorporate. Therefore, the presence of double covalent bonds means that it is unsaturated. The presence of a single hydroxyl group means that it is an alcohol.
With this in mind, Mr Sexton said of the subject goods:
Isomate C Pheromone and Isomate CTT Pheromone products are mixtures of unsaturated monohydric alcohol (E,E 8, 10 dodecadien-1-ol) and saturated alcohols (Dodecan-1-ol and Tetradecan-1-ol). The unsaturated alcohol is recognised as the principal active ingredient in the blend. The saturated alcohols are inactive on their own but they lower the melting point so that the pheromone is liquid at room temperature. This means that the products are released at cooler temperatures.
Isomate LBAM Plus Pheromone and Isomate OFM Rosso Pheromone products are acetate ester derivatives of unsaturated monohydric alcohols. An ester is the result of the combination of an organic alcohol with an organic acid. The resulting ester does not have the properties of either the organic alcohol or the organic acid but it has its own properties:
(1)expressed as a percentage of the total weight of each molecule, the following products comprise unsaturated monohydric alcohols:
(a) Isomate OFM Rosso Pheromone product for Oriental Fruit Moth: 85%;
(b) Isomate LBAM Plus Pheromone for Light Brown Apple Moth: 87%
(2)the unsaturated monohydric alcohols combine with acetic acid (CH3COOH) to give the ester derivative as follows:
Z, 8 Dodecen-1-yl alcohol + Acetic Acid
= Z, 8 Dodecen-1-yl acetate + water
Isomate OFM Rosso Pheromone product is a mixture of the isomates of 8, Dodecen-1-ol acetate with a small quantity of the alcohol (Z, 8, Dodecen-1-ol) as an impurity. A compound is an isomer of another if they have the same number and kinds of atoms but those atoms are arranged differently;
Isomate LBAM Plus Pheromone product is a mixture of isomers of 11 Tetradecen-1-ol acetate (E 11 Tetradeen-1-ol acetate and E, E 9, 11 Tetradecadien-1-ol acetate) with a small quantity of the diene (Z, 11 Tetradecen-1-ol acetate) as an impurity;
The pheromone is an attractant but the subject goods are not.
Mr Sexton said that he was aware of Note 1(b) to Chapter 29 of the CT Act:
“Mixtures of two or more isomers of the same organic compound (whether or not containing impurities), except mixtures of acyclic hydrocarbon isomers (other than stereoisomers), whether or not saturated …”
In his opinion, the subject goods meet the description in that note. They are not acyclic hydrocarbons. Each has an isomer that is not an impurity. That is the way that chemistry is: there is always a mixture of isomers. All contain a small proportion of stabilisers, in the form of antioxidants and UV stabilisers, that are necessary to protect the chemicals from breaking down. The subject goods contain other impurities that have not been listed as each is present in quantities less than 0.1% of the whole. The Codling Moth Pheromone, for example, contains 30 impurities. That makes it a mixture of molecules but, of the molecules listed, it is an unsaturated monohydric alcohol. If talking about three molecules, it cannot be said to be a mixture of isomers but two are diluents for the third. The result is a reduced melting point for the third. Originally, it was thought that the two diluents were active ingredients but it is now known that they are not. The labels were prepared and they were included as active ingredients at a time when it was thought to be so (Exhibits E and G). Those labels were approved by the Australian Pesticides and Veterinary Medicines Authority, which is a regulatory body formerly known as the National Registration Authority.
When asked if the Codling Moth Pheromone is made up of isomers of the same organic compounds, Mr Sexton replied that, if regard was had to the three compounds listed, it is not a mixture of isomers. If regard is had to the defining ingredient, it is the ingredient that is listed first and the others are impurities. In that sense, it is a mixture. If regard is had to the whole mixture, it is not a mixture of isomers of the same organic compounds. Mr Sexton does not reach that conclusion on the basis of the labels on the subject goods but on the basis of the analyses he receives from Shin Etsu Chemicals Co Ltd in Japan.
The Oriental Fruit Moth Pheromone is a mixture of two or more isomers: Z, 8 Dodecen-1-ol acetate and E, 8, Dodecen-1-ol acetate. The only difference between the two is that there is one bend in the opposite direction. The alcohol is there as an impurity but it is declared as an active ingredient. Mr Sexton thinks that there is a reasonable prospect that it may have some activity. That is why it is specified as an active ingredient on the label (Exhibit D). There will always be minor ingredients as impurities. It is possible to achieve greater purity in the subject goods but that does not alter their effectiveness and is much more expensive.
The Light Brown Apple Moth is not a mixture of two or more isomers of the same organic compound as it is a mixture to the extent of 97% of its contents but 3% is another compound and an impurity. Z, 11 Tetradecen-1-ol acetate is an impurity and is not listed on the label (Exhibit F) as an active ingredient. Only active ingredients need be listed.
Are the subject goods insecticides?
Mr Sexton said that he did not claim that the subject goods were non-chemical in nature. He claims only that they are not insecticides. He understands insecticides to have a toxic effect one way or another. They may, for example, be nerve poisons or hormone mimics that disrupt growth. In the case of apples and pears, organic phosphate poisons have been most used in the past.
Dr Lawrie said that all definitions of an insecticide that she had found included in the common elements that it is a “substance used to kill, repel or control insects…” (Exhibit 2, at 5). None of the definitions that she had found had mentioned its being an attractant. An insecticide has an element of control. Control ranges from being able to kill individual insects to being able to control whole populations of insects. In the case of the subject goods, they release ten or eleven times the amount of pheromone released by the female moths. It is a volatile compound that gets into the atmosphere and the male moths have no directional track to follow. Therefore, because they have no progeny, the insect population is essentially killed out. The species is lost. Individual insects are not killed but the subject goods are an insecticide. Individual moths die of old age without mating but they do not die as a result of the pheromone. Individual insects are not affected detrimentally by the pheromone.
Mr Tancred said in a letter dated 10 June 2003 (Exhibit H) that pheromones used in insect pheromone dispensers in Australia are not insecticides. They just mimic the naturally occurring pheromones produced by the moths. They do not kill insects but simply confuse their communication. The net result is a gradual decline in the size of the moth population and, eventually, near extinction, as they fail to breed.
The use made of mating disruption pheromones
Attached to Mr Tancred’s letter were two letters from Apple & Pear Australia Limited and another from the Victorian Peach & Apricot Growers’ Association. One letter from Apple & Pear Australia Limited was an open letter and the other two letters were addressed to the Minister for Justice and Customs. Each of the letters emphasises the writer’s view that mating disruption goods are used extensively by apple and pear growers, are non-toxic even to the targeted pests and have no adverse effects on beneficial insects such as bees and ladybirds. Their use has been a major factor in reducing the number and volume of insecticides in Australian orchards and has made a significant contribution to the “clean and green” image of Australian horticultural products. Pheromones are more expensive than insecticides and, were there to be an increase in their cost, orchardists could be forced back to insecticide use. No pheromones are manufactured in Australia and so tariffs need not be imposed to protect any Australian industry.
Queensland’s Department of Primary Industries confirmed in its letter of 30 August 2002 that it promotes the subject goods as safe alternatives to, and replacement for, toxic insecticides (T documents, page 21). The subject goods do not kill insects but do delay their mating. The Department was concerned that classification of the subject goods as insecticides would increase their cost to farmers, who may then revert to toxic insecticides and raise workplace health and safety and environmental issues. Similar sentiments were expressed by the Tasmanian Department of Primary Industries, Water and Environment (T documents, page 23).
The benefits of the subject goods
The benefits of using the subject goods include the reduction in the use of insecticides, no residue on the fruit, no insects in the fruit, no withholding period for the harvest of the fruit, no secondary pests and safer working conditions for workers.
CLASSIFICATION OF THE SUBJECT GOODS
The exclusory notes
We will begin with Note 2 to Section VI and Note 1(a)(2) to Chapter 38. Reading those notes in light of Rule 1 of the Interpretation Rules, it is clear that we must first consider whether the subject goods come within heading 3808 before considering whether they come within any other heading. That follows from the fact that Rule 1 of the Interpretation Rules provides that it is only if the “…headings or Notes do not otherwise require …” that regard may be had to the remaining Interpretation Rules. In the words of the Full Court in Liebert Corporation Australia Pty Ltd v Collector of Customs (1993) 23 AAR 287 at 290 (Wilcox, O’Connor and Drummond JJ), “… if the goods are so classifiable, that is an end of the matter even if they could also be classified to a heading …” elsewhere in Schedule 3.
Are the goods classifiable to a sub-heading in heading 3808 as insecticides?
The question whether the subject goods are classifiable in one of the sub-headings in heading 3808 depends in part on whether they are “put up in forms or packings for retail sale …”. Having examined the subject goods, we are satisfied that they are put up in measured doses. Each dispenser is a measured dose and 400 dispensers have been grouped in packages for retail sale. Having made that decision, we are left with the first question i.e. whether the subject goods come within one of the sub-headings in heading 3808.
The other relevant question is whether the subject goods are insecticides. Mr Gross submitted that the word “insecticide” does not have any trade or technical meaning. On the evidence that we have been given, we agree that there is none. Mr Gross submitted that the ordinary meaning of the word should be adopted and that meaning excluded the subject goods from its compass. Mr Komora referred to a significant body of technical literature in the T documents and to Dr Lawrie’s report to argue that the meaning of the word “insecticide” had extended to include substances used to kill, repel or control insects. Although this evidence may not indicate that the word has a trade or technical meaning, there is sufficient ambiguity to enable the Tribunal to have regard to the Explanatory Notes prepared as an aid to the interpretation of the Harmonized Commodity Description and Coding System (“HSEN”) on which the classifications in Schedule 3 of the CT Act are based. Mr Gross rejected that approach submitting that additional material could not be relied on to introduce an ambiguity into the meaning of a word well understood in modern language.
We will begin with the ordinary meanings of “insecticide” as they are given in two commonly used dictionaries:
“… A noun 1 A person who or thing which kills insects; spec. a substance used to kill insects. …
2 The killing of insects. rare …” (Shorter Oxford English Dictionary, 5th edition, 2002 (“SOE”))
“… n 1. a substance or preparation used for killing insects. 2. the killing of insects. …” (Macquarie Dictionary, 3rd edition, 1997 (“Macquarie”))
Dr Lawrie has collected a number of definitions of “insecticide” from the internet by using the search engine, “Google”. As she says in her report, “All had common elements: substance used to kill, repel or control insects” (Exhibit 2, at 5). Although the web site address is given for each definition, we have not been given any material on which we can assess the status and quality of the entries on each site. We are reluctant to go to the websites and to make our own assessment of them for two reasons.
The first is that the parties will not know what we have read at any given point of time to form our opinion. They will not have the opportunity to comment on it if they should wish to do so. The second arises from the general principle that we should be able to understand legislation by reference to the rules of ordinary language supplemented by a handful of rules that are appropriate to the interpretation of legislation. As DC Peace and RS Geddes said in an earlier edition of their book:
“ Legislation is, at its heart, an instrument of communication. For this reason, many of the so-called rules of interpretation are no more than commonsense and grammatical aids that are equally applicable to any document by which one person endeavours to convey a message to another. … In an endeavour to comprehend correctly that message, resort should be had to grammar texts and standard dictionaries. …The courts have, furthermore, expounded a number of useful guides that, while in some cases being little more than paraphrases of grammatical rules, are nevertheless particularly apposite to the understanding of legislation.” (Statutory Interpretation, 3rd edition, 1988 at [4.1])
That leads us to consider the English language dictionaries to which we may have regard. While there is no authoritative dictionary, there can be said to be a range of dictionaries that are standard. That is so even though some will prefer one dictionary to another and even one edition of a particular dictionary to another edition. The same can be said of grammar texts. A court or tribunal is free to choose from among those standard dictionaries for instruction (R v Peters (1886) 16 QBD 636 at 641 per Lord Coleridge). In Nairne v Stephen Smith and Co Ltd and the Pharmaceutical Society of Great Britain [1943] 1 KB 17, Atkinson J referred to a number of dictionaries as well as to the British Pharmaceutical Codex.
Although the internet is widely available to the public and widely used, its availability has not yet led to the conclusion that their various sites have withstood the test of public scrutiny so that they have become regarded as indicative of the use of the English language as dictionaries. Regard may be had to dictionaries for instruction without further question. The form in which those dictionaries exist is inconsequential. Therefore, for example, it would be appropriate to refer to the internet versions of the Oxford and Macquarie Dictionaries as they are simply versions of dictionaries already regarded as standard. We do not have any material on which we can conclude that the internet sites from which the searches were drawn are simply different forms of dictionaries.
Without specifically putting the results of Dr Lawrie’s searches on Google as evidence of a trade or technical meaning of “insecticide”, Mr Komora hinted in his submissions that they went some way to demonstrating that it had such a meaning even though the results might not have actually done so. Determining whether a word has a trade or technical meaning is a question of fact and evidence is admissible (Whitten v Falkiner (1915) 20 CLR 118 per Isaacs J at 127 and see also HR Products Pty Ltd v Collector of Customs (1990) 20 ALD 340 at 342 per Lee J and Pepsi Seven-Up Bottlers v Commissioner of Taxation (1995) 62 FCR per Hill J at 299). Whether or not that word is intended to be given that trade or technical meaning or another is a question of law (HR Products Pty Ltd at 342 and see also Yager v R (1977) 13 ALR 247, Barwick CJ, Gibbs, Stephen and Mason, Murphy JJ dissenting, per Barwick CJ at 249).
If Dr Lawrie’s searches are put forward as evidence of a trade or technical meaning, we find that it has not been established. Faced with the search results alone, we cannot assess the evidence and, for the reasons we have already given, it would not be appropriate for us to make our own enquiries and effectively gather further evidence.
If Dr Lawrie’s searches are put forward as evidence of the ordinary meaning of the word “insecticide” but not on the basis that they are dictionaries, they are not admissible. The Tribunal is not bound by the rules of evidence (AAT Act, s. 33(1)(c)) but it is bound by the rules of statutory interpretation. One of those rules is “the common law rule that evidence cannot be given as to the meaning of an ordinary English word used in a modern statute …” (Pepsi Seven-Up Bottlers v Commissioner of Taxation at 299 and Dyson v Pharmacy Board (2000) 50 NSWLR 523 at 532; [2000] NSWC 981 at [36]).
The authoritative sources in the T Documents to which Mr Komora referred are:
the definition of “household insecticide” in s. 3(1) of the Health Act 1958 (Vic) to mean:
“… a substance or compound which--
(a)is sold for use for destroying or repelling insects or other similar pests which affect or are likely to affect any person or domestic animal or any article or material found in any private dwelling-house or in any premises registered under this Act or in licensed premises within the meaning of the Liquor Control Reform Act 1998; or
(b)is declared by proclamation to be a household insecticide--
but does not include any substance or compound which is sold for use for primary production purposes”
the definition of “pesticide” in s. 4 of the Pesticides Act 1999 (NSW) defines the word by reference to s. 5. Although not included in the T documents, s. 5 provides:
“(1) In this Act, "pesticide" means:
(a)an agricultural chemical product within the meaning of the Agvet Code, or
(b)a veterinary chemical product (within the meaning of the Agvet Code) that is represented as being suitable for, or is manufactured, supplied or used for, the external control of ectoparasites of animals.
The Agvet Code defines an “agricultural chemical product” to be a substance or a mixture of substances that is represented, imported, manufactured, supplied or used as a means of directly or indirectly:
(a)destroying, stupefying, repelling, inhibiting the feeding of, or preventing infestation by or attacks of, any pest in relation to a plant, a place or a thing, or
(b)destroying a plant, or
(c)modifying the physiology of a plant or pest so as to alter its natural development, productivity, quality or reproductive capacity, or
(d)modifying an effect of another agricultural chemical product, or
(e)attracting a pest for the purpose of destroying it.
The term also includes insect repellants (sic) for use on human beings.
(2)…”
The “Agvet Code” is contained in the Schedule to the Agricultural and Veterinary Chemicals Code Act 1994 and applied by State legislation in New South Wales (Pesticides Act, s. 4(1)).
Generally, regard may not be had to definitions in other legislation as:
“A statutory definition exists for the purposes of a particular statute in which it is contained, unless it appears in a statute expressed to have a more general application, such as the Acts Interpretation Act. …” (Yager v R (1977) 13 ALR 247 at 256 per Mason J)
There are exceptions (see generally Statutory Interpretation in Australia, 5th edition, 1988 at [3.35]). One of those was referred to by Gibbs J in Federal Commissioner of Taxation v ICI Australia Limited (1971-72) 127 CLR 529 (Barwick CJ, McTiernan, Menzies and Gibbs JJ):
“… State legislation cannot control the interpretation of a Commonwealth statute, but the fact that the obtaining of salt in this way is treated as a mining operation by the State legislation that applies to the case is relevant in considering whether it is also a mining operation within the meaning of the Act [Income Tax Assessment Act 1936] (see Australian Slate Quarries Ltd v Federal Commissioner of Taxation; Federal Commissioner of Taxation v Henderson; North Australian Cement Ltd v Federal Commissioner of Taxation.” (at 581)
We do not consider that the State legislation can assist us in the interpretation of the word “insecticide” in this case. Neither defines the word. One defines the arguably related but broader word, “pesticide”. The other couples “insecticide” with “household” to make “household insecticide”. Neither is the term with which we are concerned. Whether or not they have any application to the subject goods is open to question. It would be surprising if the subject goods in this case were regarded as household insecticides. The terms and their definitions have been chosen by two State Parliaments to suit the context and purpose of legislation they had passed. That is a context quite different from that of tariff classification. In the case of the Pesticides Act 1999 (NSW), its object in general terms is “… to promote the protection of human health, the environment, property and trade in relation to the use of pesticides, having regard to the principles of ecologically sustainable development …” and to regulate their use in a collaborative fashion (s. 3). The purpose of the Health Act 1958 (Vic) is self evident. In the circumstances, the meanings the State Parliaments have adopted is not relevant and cannot be used to reflect on the ordinary meaning of the words used by the Commonwealth Parliament in the CT Act.
The HSEN were developed by the committee established by the Convention on Nomenclature for the Classification of Goods in Customs Tariffs, Brussels in 1950. Note (I) of the HSEN dealing with sub-heading 38.08 states that:
“Insecticides include not only products for killing insects, but also those having a repellent or attractant effect. The products may be in a variety of forms such as sprays or blocks (against moths), oils or sticks (against mosquitoes), powder (against ants), strips (against flies), cyanogen gas absorbed in diatomite or paperboard (against fleas and lice).
Many insecticides are characterised by their mode of action or method of use. Among these are:
-insect growth regulators: chemicals which interfere with biochemical and physiological processes in insects.
-fumigants: chemicals which are distributed in the air as gases.
-chemosterilants: chemicals used to sterilise segments of an insect population.
-repellents: substances which prevent insect attack by making their food or living conditions unattractive or offensive.
-attractants: used to attract insects to traps or poisoned baits.” (T documents, 70-71)
Gardner Smith v Collector of Customs Victoria (1986) 66 ALR 377 at 383-4, Barry R Liggins Pty Ltd v Comptroller General of Customs (1991) 32 FCR 112 at 118-120 and Toyota Tsusho Australia v Collector of Customs (VG113 of 1991, No. 282 , 14 May, 1992 at paragraphs 22-30) have all considered the application of the HSEN in the interpretation of Schedule 3 of the CT Act. Beaumont J, with whom Lockhart and Gummow JJ agreed, reviewed previous authority in Barry R Liggins Pty Ltd and concluded:
“… although it may be permissible to refer to extrinsic material where the statute is ambiguous, it does not follow that the extrinsic material can be used to contradict the meaning of the language of an Act of Parliament, that meaning being taken from its proper statutory context. Put differently, as EJ Cooper points out in his work Customs and Excise Law, (Cumulative Supplement to 30 June 1985), p 9:
‘… [the Brussels Notes] are a secondary guide only and cannot displace the plain words of the statute … or be used when there is no ambiguity in the legislation, eg a doubt cannot be created by the use of the Explanatory Notes and then have the doubt settled by reference to the same notes.’
In my opinion, these comments are equally applicable in the present case.” (at 120)
A differently constituted Full Court of the Federal Court took the matter one step further in Toyota Tsusho Australia. Black CJ, Gray and Heerey JJ said:
“ In our view, the Explanatory Notes are of assistance in confirming that the meaning of heading 8419 and the relevant sub-heading is the ordinary meaning conveyed by the text of the provision taking into account its context.” (at 28)
The practical consequence of these two cases is that we must first consider whether or not there is any ambiguity in the meaning of the word “insecticide”. If there is an ambiguity, we may we turn to the HSEN. We may not use the HSEN either on its own or with other material as the basis for a conclusion that there is any ambiguity. The only other use that may be made of HSEN is to confirm that the meaning of a heading is its ordinary meaning taking into account its context.
Both Mr Gross and Mr Komora drew our attention to two cases in their submissions regarding “insecticide”. In Collector of Customs v Chemark Services Pty Ltd (1993) 114 ALR 531 (Spender, Einfeld and Lee JJ), the Full Court of the Federal Court focused on whether eighty 250 kg drums of metham sodium, which is used by professional horticulturalists, had been imported for “retail sale”. The Tribunal that had decided the matter had found that it was manufactured for use as a fumigant in horticulture. The Full Court appears to have accepted that the metham sodium was an insecticide (at 540). The Full Court decided that, had the metham sodium not been imported for retail sale and had Note 2 to Section VI not existed, it would have thought that the metham sodium would have been more accurately classified to sub-heading 2930.20 rather than to sub-heading 3080.90.00 as it did.
In Re Bayer Australia Limited and Collector of Customs, New South Wales, No. 84/110 (Deputy President Todd, Dr Howell and Mr Taylor, Members), the Tribunal considered the classification of Technical Flumethrin. Its active ingredient is acaricide used in the destruction of cattle tick. Solvents and emulsifiers are added to the Technical Flumethrin. They have no effect on its ability to kill insects. The Tribunal considered that:
“… We consider that it is clear that flumethrin mixture is an insecticide even though it is further substantially diluted or mixed with emulsifiers before being sold by retail. This accords with the view taken by Griffith CJ in Markwell v Wollaston (1906) 4 CLR 141 at p. 148 where he said:
‘In my opinion, the term insecticide, as commonly used in English, means, or at any rate includes, any preparation in the nature of a drug or chemical adapted solely or mainly to the destruction of insect life, and the effect of which is produced either by immediate contact with the insect or by some influence fatal to insect life inherent in or emanating from the preparation’.
In that case, the question arose as to whether the mixture of oil and resin to be smeared on paper was a preparation. …” (at par. 13)
The meaning adopted by Griffith CJ in Markwell v Wollaston focuses on the destruction of insect life. His Honour then gives two ways in which that may be achieved. One way leads to death upon contact with the product and the other as a result of some influence that the product has and that is fatal to insect life. Although he speaks of “insect life”, we do not consider that he can be read as meaning that the product is fatal to the species’ existence. He is looking more narrowly at the life of the insect and that is clear from his reference in the same passage to the death of “the insect” by immediate contact. The meaning adopted by Griffiths CJ and so by the Tribunal in Re Bayer Australia Limited accords with the ordinary meanings given for the word “insecticide” in the dictionaries i.e. a substance or preparation for the killing of insects either by direct or indirect means.
The word “insecticide” must be read in its context and that context is heading 3808 in the CT Act. What are the ordinary meanings of the other words used in that heading? Their ordinary meanings in everyday speech are:
rodenticide
“… a poison used to kill rodents …” (SOE)
fungicide
“… An application or chemical for destroying fungi …” (SOE)
“… an agent, such as spray or dust, used for destroying fungi …” (Macquarie)
herbicide“… A substance toxic to plants and used to destroy unwanted vegetation, esp. weeds. …” (SOE)
“… a chemical or biological agent which kills plants or inhibits their growth.” (Macquarie)
anti-sprouting products
This is not defined in the dictionaries to which we have referred but the meanings of “sprout” include “… Grow or emerge as a sprout or sprouts; shoot forth or spring up (as) by natural growth …” (SOE) and “… to begin to grow; shoot forth, as a bud from a seed or stock … to put forth buds or shoots …” (Macquarie). The prefix “anti-” means “… in BIOLOGY & MEDICINE designating substances which counteract or inhibit the effect of another substance …” (SOE) or “… the opposite or reverse of …” (Macquarie). Having regard to these meanings, “anti-sprouting products” refer to products that inhibit the growth of plants.
plant growth regulators
This is not defined by a “growth regulator” is defined in the SOE when used in biology as “…any natural or synthetic substance, such as hormone or auxin, which regulates growth …”. A plant growth regulator is a substance regulating the growth of a plant.
disinfectant
“… An agent (usu. chemical) used for disinfection. …” (SOE)
“… any chemical agent that destroys bacteria. …” (Macquarie)
Taken as a whole, the two features that recur in the ordinary meanings of these words show those of killing and elements of control but they do not appear consistently in each word. Killing and not control are the features of insectides, rodenticides and fungicides. Their suffix “-cide” is from the Latin root “-cidium”, which, in turn, is from “caedere” meaning to cut or to kill. “Disinfectant” does not have a Latin suffix but its ordinary meaning is that of destroying bacteria. The Latin suffix is present also in “herbicide”. The SOE restricts that word to those that are toxic to plants and so will kill them but the Macquarie extends its meaning to those that inhibit their growth as well. Given the Latin root of the word, confining its meaning to killing is to be preferred but it makes no difference to our analysis. Control, rather than killing, is the flavour of anti-sprouting products and plant-growth regulators.
In interpreting the meaning of the words in heading 3808, it is necessary not only to have regard to the manner in which they are set out in that heading but also to the way in which they are grouped in the sub-headings. When that is done, it becomes clear that those that kill are separated from those that control (or control and/or kill). Given their separation, there is no need to read down or to extend the ordinary meanings of all or any of the words to accommodate the others. There is no ambiguity or lack of clarity in its meaning. “Insecticide” should be given its ordinary meaning i.e. a substance or preparation for the killing of insects either by direct or indirect means.
We have reached that conclusion in this way. There are five separate groupings of the seven specific items referred to in the heading. Insecticides are on their own in sub-heading 3808 as are fungicides in sub-heading 3808.20.00 and disinfectants in sub-heading 3803.40.00. Rodenticides are not mentioned but are presumably within the province of “Other” in sub-heading 3808.90.00. Insecticides and disinfectants kill non-plant material as do rodenticides. Fungicides kill fungi that are “… any of a large division of organisms … which lack chlorophyll, reproduce as cryptograms, and grow on and obtain nutriment from organic matter …” (SOE). In sub-heading 3808.30.00, herbicides are grouped with anti-sprouting products and plant-growth regulators. Given their ordinary meanings and adopting the wider meaning of “herbicide”, all of them have aspects of control but “herbicide” also has aspects of killing. It is clear from the manner in which the words are grouped that those meaning to kill are separated from those that mean control or to control and/or kill. Those meaning to control or to control and/or kill are grouped together. Their very separation in this way leads to the conclusion that each was intended to be given its ordinary meaning and not to be qualified or discounted in any way by the meanings given to the others with whom they find themselves in heading 3808.
Therefore, “insecticides” are not to be qualified by reference to those words that have elements of control and as well as those of killing. The killing of insects must be as a result of the product’s immediate contact with the insect or as a result of some effect that the product has upon the insect.
Are the subject goods insecticides? We do not consider that they are. Therefore, they are not classifiable to heading 3808 on that basis. On the evidence, we are satisfied that they do not kill insects either directly or indirectly. The moths live out their ordinary life spans. We are satisfied that the subject goods do lead to a reduction in the size of the moth population at least in the area in which it is used. It does not do that by killing the moths or producing a pathological process or with a permanent irreversible response. Instead, we find, it has its effect by overwhelming them with pheromone to which they have their normal reaction but at a heightened level. The result is that the male moths cannot find the female moths. Whether that is as a result of their losing their responsiveness to pheromone or of their becoming extremely excited is not clear. We find that the moths resume their normal actions and reactions when they are removed from the presence of the subject goods. There is no evidence that there is any effect on the male moth’s ability to fertilise the female moth if he finds her outside the orchard and so outside the reach of the pheromone in the subject goods.
We find that there is a dramatic reduction in the size of the population of the next generation of moths that are born of moths in the orchard. The subject goods act as a form of birth control. That birth control is imposed upon the moths but it cannot be said to have killed any of the moths either in the generation exposed to them or in the subsequent generation that was hoped for but that either came about not at all or only in greatly reduced numbers.
If we are incorrect in our conclusion that there is no ambiguity in the meaning of the word “insecticide” and we should have regard to Note (I) of the HSEN, we would reach the same conclusion. We would have to consider whether the subject goods have a “repellent or attractant effect” as those words are used in Note (I). “Insecticide” is defined by its mode of action and, when two of those modes are explained later in the note, we consider that those explanations should be adopted. That is to say, for the subject goods must be “substances which prevent insect attack by making their food or living conditions unattractive” to be repellents or “used to attract insects to traps or poisoned baits” to be attractants. On the evidence, we find that they are not repellents. They do not have any effect on the moths’ food or living conditions let alone make them unattractive. Both Dr Lawrie and Mr Sexton agreed that they are not repellents.
They did not agree on whether they are an attractant but neither was given Note 1 of the HSEN to comment upon. Their disagreement centred on the effect of the pheromone and whether it attracted them so that they became confused. There is no evidence that they attract moths to traps or poisoned baits and we find that they do not.
Mr Gross has submitted that the subject goods are not insect growth regulators, fumigants or chemosterilants as well as not having attractant or repellent effects. These are the modes of action or methods of use that Note (I) states characterise many insecticides. The modes of action or methods of use do not determine what is an insecticide for the purpose of Note (I). Insecticides include products for killing insects and those having an attractant and repellent effect. This is an extension of the ordinary meaning of “insecticide”. Reference to their being such things as insect growth regulators or fumigants is a reference to the way in which they act or the way in which they are used to achieve their killing or attractant or repellent effect. It is not a further extension of the meaning of “insecticide”. As we have found that the subject goods do not come within the description of an “insecticide” in Note (I), it is to no point to consider whether they have a mode of action or method of use that may characterise an insecticide.
What are the parameters for determining “similar products” in heading 3808: are they by reference to disinfectants alone or to all or some of the products listed?
Mr Komora submitted that heading 3808 incorporates the concept of “similar products”. It does so when it refers to “and similar products”: “insecticides, rodenticides, fungicides, herbicides, anti-sprouting products and plant-growth regulators, disinfectants and similar products”. The inclusion of the words “and similar products” after the word “disinfectant” requires us to find the class or genus of goods common to all of the words preceding those words (Vernon-Carus Australia Pty Ltd and Thomas Creevey & Associates v Collector of Customs (1995) 21 AAR 450 (Northrop and Jenkinson JJ, Branson J dissenting) at 457). The inclusion of “and” between the words “anti-sprouting products” and “plant-growth regulators” does not mean that the words “similar products” relate only to disinfectants. The class or genus common to the goods in heading 3808 is that they all relate to controlling living organisms.
Mr Gross submitted that the insertion of “and” between the words “anti-sprouting products and plant-growth regulators” means that it introduces the last article in the list covered by those items. “Similar products” can refer only to “disinfectants”.
Both Mr Gross and Mr Komora referred to the judgment of the Full Court of the Federal Court in Acrow Australia Ltd v Collector of Customs for the State of New South Wales (1986) 12 FCR 129 (Evatt, Sheppard and Wilcox JJ). The Full Court considered sub-heading 73.32, which reads:
“BOLTS AND NUTS (INCLUDING BOLT ENDS AND SCREW STUDS), WHETHER OR NOT THREADED OR TAPPED, SCREWS (INCLUDING SCREW HOOKS AND SCREW RINGS), RIVETS, COTTERS, COTTER-PINS AND SIMILAR GOODS, OR [sic] IRON OR STEEL; WASHERS (INCLUDING SPRING WASHERS) OF IRON OR STEEL;”
It was argued that “and similar goods” related to the cotter-pins and not to all of the words preceding those words.
The Full Court concluded that the articles fell within the sub-heading if they were similar to any of the goods described by name prior to the reference to the words “and similar goods”. It reached that conclusion by applying grammatical rules of construction and by examining the drafter’s practice elsewhere in the heading:
“ The practice of the draftsman, throughout the schedule, has been to introduce the last article in the list covered by each item with the word ‘and’. It is consistent with that practice that he should have inserted the word ‘and’ before ‘similar goods’, in recognition of its existence as a category not limited to cotter-pins. … It might have been expected that, if he had intended to include in item 73.32 only goods which were like cotter-pins, the draftsman would have taken a similar course and have written ‘cotters, cotter-pins, and the like, of iron and steel’. Furthermore, the separate mention of washers, after the semi-colon, is significant. This must be because the reference to similarity was to apply to all goods mentioned to that point but not to washers. The intention, it seems to us, was that articles were to fall item 73.32 if they were similar to any of those described by name prior to the words and ‘similar goods’. …”
As the Full Court considered Schedule 3 of the Customs Tariff Act 1982 (“1982 CT Act”), its conclusions as to the use of language cannot be applied unquestioningly to Schedule 3 in its current form. Cotter-pins are now the subject of heading 7318, which is in terms different from item 73.33. What is clear from Akrow is that we must look to the language and structure of the heading in the context of the Schedule.
When we look at Schedule 3, we find that there is no longer a consistent “practice of the draftsman, throughout the schedule, … to introduce the last article in the list covered by each item with the word ‘and’.” Some headings do:
“6215 TIES, BOW TIES AND CRAVATS”
Others do not and choose a semicolon where an “and” could arguably be used:
“5308 YARN OF OTHER VEGETABLE TEXTILE FIBRES; PAPER YARN”
Reference to “similar articles” or “the like” may be placed at the end:
“6207 MEN’S OR BOY’S SINGLETS AND OTHER VESTS, UNDERPANTS, BRIEFS, NIGHTSHIRTS, PYJAMAS, BATHROBES, DRESSING GOWNS AND SIMILAR ARTICLES”
“6602 WALKING-STICKS, SEAT-STICKS, WHIPS, RIDING CROPS AND THE LIKE”
or elsewhere:
“6908 GLAZED CERAMIC FLAGS AND PAVING, HEARTH OR WALL TILES; GLAZED CERAMIC MOSAIC CUBES AND THE LIKE, WHETHER OR NOT ON A BACKING”
“7016 PAVING BLOCKS, SLABS, BRICKS, SQUARES, TILES AND OTHER ARTICLES OF PRESSED OR MOULDED GLASS, WHETHER OR NOT WIRED, OF A KIND USED FOR BUILDING OR CONSTRUCTION PURPOSES; GLASS CUBES AND OTHER GLASS SMALLWARES, WHETHER OR NOT ON A BACKING, FOR MOSAICS OR SIMILAR DECORATIVE PURPOSES; LEADED LIGHTS AND THE LIKE; MULTICELLULAR OR FOAM GLASS IN BLOCKS, PANELS, PLATES, SHELLS OR SIMILAR FORMS”
The placement of the semicolons and commas as well as the use of the word “and” will determine the manner in which each of these headings is read. We venture to suggest that headings 6207 and 6602 suggest that the class or genus of all of the goods will have to be identified to determine the similar or like goods. The placement of the semicolon in heading 6908 arguably leads to the conclusion that “the like” goods are determined by the class or genus of goods to which cubed mosaic tiles, whether or not on a backing, belong. Similar reasoning would lead to the conclusion that “the like” depends on the class or genus of leaded lights and not on all of the goods to which reference is made in heading 7016.
What of heading 3808? Like the examples above, it lists a number of products. It separates them with commas rather than semicolons. Reading it with the normal rules of grammar and punctuation in mind as well as the structure adopted in the rest of Schedule 3, we have concluded that “similar products” must be read as relating to all seven products that precede it. The grouping of “anti-sprouting products and plant-growth regulators” and their separation from the others in the list by commas does not alter our view. They have been grouped as the only two products that clearly interfere with plant growth but do not have, or do not necessarily have as in the case of fungicides, the characteristic of killing plants. The list ends with an “and” between the penultimate product and the catch all of “similar products”.
If we were to take the view advocated by Mr Gross, there would be no conjunction between the products or groups of products. Taking his submission literally, “insecticides, rodenticides, fungicides, herbicides, anti-sprouting products and plant-growth regulators” complete one list and “disinfectants and similar products” are part of the next so that “subject products” refer only to disinfectants. That reading means that there is no conjunctive “and” between the two lists and no semicolon to indicate that they are indeed separate. That does not accord with the structure in the other headings and we do not accept it. A less literal interpretation of Mr Gross’s submission is that the penultimate grouping comprises “anti-sprouting products and plant-growth regulators” and the last comprises “disinfectants and similar products”. This again suffers from the same lack of either an “and” or a semicolon. Again, that does not accord with the structure in the other headings and we do not accept it as the proper interpretation.
What is the class or genus to which the products in heading 3808 belong?
We must determine what is common class in all of the words in heading 3808. What is common is that the all have a pathological effect on either plant or insect life. In the case of those that kill (insecticides, rodenticides, fungicides, some herbicides and disinfectants), that pathological effect is fatal. In those that control (other herbicides and anti-sprouting products, plant growth regulators), that pathological effect inhibits or regulates growth. Inhibition or regulation relates to the growth of the plant itself. It does not extend to such matters as its reproduction even though inhibition or regulation may lead to its not reproducing by the production of seed, tubers or otherwise. Pathological effect on an organism produces growth changes, disease or death in that organism.
Are the subject goods “similar products” within heading 3808?
We have already found that the subject goods do not have any pathological effect on the moths to either kill them or to inhibit or regulate their growth. Their effect is only physiological and, once outside the range of the subject goods, not ongoing. Therefore, the subject goods are not of the class or genus to which the products in heading 3808 belong.
In view of our earlier findings, this means that the subject goods are not classifiable to heading 3808 or, in particular, sub-heading 3808.10.90 and we may look to other headings in Schedule 3.
Are the subject goods classifiable to another heading?
Interpretation Rule 2(b) provides that a reference in a heading to goods of a given material must be taken to include goods consisting wholly or partly of that material. On the evidence, we are satisfied that the subject goods comprise a mixture of compounds set out Mr Sexton’s evidence at paragraphs 34 to 36 above as well as plastic and wire. We will take each of the subject goods in turn but will begin our detailed analysis with the two Codling Moth subject goods.
Isomate C Pheromone and Isomate CTT Pheromone products
Sub-heading 2905.2 refers to part (or parts) only of the two subject goods relating to Codling Moth (Isomate C Pheromone and Isomate CTT Pheromone products). That part is the unsaturated monohydric alcohols in each of them. It is E,E 8, 10 dodecadien-1-ol. The other two ingredients in the subject goods are saturated alcohols. Sub-heading 2905.17 is not relied on by either party but is also a heading that refers to a part of the Isomate C Pheromone and Isomate CTT Pheromone products being their Dodecan-1-ol (Lauryl alcohol). The plastic component of the subject goods is another part and is potentially classifiable under sub-heading 3926.90.90 being “Other” under heading 3926: “OTHER ARTICLES OF PLASTIC AND ARTICLES OF OTHER MATERIALS OF 3901 TO 3914.00.00”.
The subject goods also comprise chemical products within heading 3824 but can it be said that they wholly comprise “chemical products”? They cannot for, even if the plastic were thought to be chemical products, they contain wire. The wire is not a chemical product. We have doubts whether the plastic is a chemical product in the context of heading 3824 but do not need to take the matter any further.
The subject goods also comprise organic compounds within the meaning of sub-heading 2942.00.00. Again they do not wholly comprise those organic compounds for they contain wire. Wire is not an organic compound even though the plastic and the chemical mixture confined by the plastic are organic compounds.
The upshot is that each of the headings refers only to a part or parts of the materials contained in the subject goods. That means that each heading is regarded as equally specific by virtue of Interpretation Rule 3(a).
Rule 3(b) comes into play. It requires that, in so far as it is applicable, the subject goods be classified as if they consisted of the material or component giving them their essential character. The qualification is not relevant in this case but how is the “essential character” of the subject goods determined?
There are a number of cases that answer this question. As is clear from Rule 3(b) itself, the notion of the “essential character” itself and from the authorities such as Walterschied Australia Pty Ltd v Collector of Customs (1988) 7 AAR 555 at 565-566 (Davies J), it has nothing to do with completeness or functionality of the whole that is made up of the parts. It has to do with an “essential character” and that is an issue regarding a quality rather than a function. As French J said in Diethelm Manufacturing Pty Ltd v Commissioner of Taxation (1993) 44 FCR 450 (French, Hill and Whitlam JJ) after referring to the judgement of Davies J in Thomson Australian Holdings Pty Ltd v Commissioner of Taxation (1988) 20 FCR 85:
“… As explained by his Honour at 86, the essential character of goods is ‘what essentially the goods are, not some characteristic that the goods might have. Essential character derives from the basic nature of the goods, from what they are, though composition, function and other factors necessarily play a part’.” (page 462)
It is not a test of merely judging the character of the goods on a visual inspection of them (Re Phillips and House Group and Collector of Customs (1979) 2 ALD 704 at 708, Senior Member Todd and Mr Skermer and Mr Stock, Members).
The purpose for which the subject goods have been imported or for which they may be purchased does not play a role in determining essential character for:
“ The authorities make it clear that in determining what is the essential character of goods it is the state or condition of the goods at the time of importation that is the determining factor and that it is wrong to classify goods or to determine their essential character by reference to the purpose of the importer or the purchaser. Regard must be had to the characteristics of the goods themselves, as they would present themselves to the informed observer …” (Times Consultants Pty Ltd v Collector of Customs at 462, per Morling and Wilcox JJ)
In Blackwood Hodge (Australia) Pty Ltd v Collector of Customs, New South Wales (No. 2) (1980-81) 3 ALD 38 (Smithers, Fisher and Sheppard JJ), the Full Court considered whether certain vehicles had the essential character of lifting, loading or unloading machinery. Smithers J said:
“ It appears to me that in the context of the schedule the expression ‘essential character’ is used with respect to the physical character or make-up of the article in question. When it is contemplated by the terms of the schedule that an article may be treated as lifting machinery even if it be an incomplete item of such machinery, clearly the reference is to its physical condition. When the terms of the schedule proceed to limit the circumstances in which lifting machinery physically incomplete will qualify as lifting machinery, by stipulating that the machine must have the essential character of lifting machinery, it is to my mind, still referring to the physical condition of the article in question. In the absence of the essential feature of a lifting machine, namely basic gear by which things may be lifted it is difficult to think that the unit has the essential character of lifting machinery.
‘A thing may be said to be essential to an entity, if that entity would not be what it is to be, or is, or was, if the part in question were wanting.’ (Fowler’s English Usage 1961 p 150). It is only when it is considered as an entity which includes the mast that this machine qualifies as lifting machinery at all. Without the mast, as it appears to me, it does not have the character of a site fork lift truck. Without the mast that which is left does not have the essential character of machinery equipped for lifting, handling, loading or unloading materials. It is not a case, for instance, in which the unit was imported with the mast attached but inoperative because of the absence of some part, the absence of which did not, from a physical point of view, deprive the machine of the basic elements of a materials lifting machine.” (page 41)
This theme was also at the heart of the later decision in the Tribunal in Re Nylex Corporation Ltd and Collector of Customs (No. V86/504, 9 April, 1987, CAI 232, Deputy President Thompson and Mr Cohn and Mr Wilson, Members). Under consideration was the classification of Parafil Rope and its essential character. The Tribunal said:
“10. Arguments were addressed to us in which it was postulated that the sheath of the subject goods might exist without the core or the core without the sheath. The arguments then related to the respective properties of the sheath without the core and of the core without the shaath [sic]. In our view, that is not the correct manner in which to decide which of the materials of which the subject goods are comprised gives to them their essential character. We are not concerned with goods comprising only a sheath or goods comprising only a core; we are concerned with the subject goods, which comprise both the sheath and the core. Nor is the question to be decided on the basis that either material is functionally indispensable to the product. For a material to give to a product its essential character it must have a dominating influence upon the essence of that product Re UEB Industries (Australia) Pty Limited and Collector of Customs (Qld) (Decision No. 3105: 18 December 1986). The evidence before us, and in particular the technical notes provided the manufacturer, establishes that Parafil Ropes have a high tensile strength, which results from the core, and properties of resistance to abrasion and environmental attack, which result from the sheath. The essential character of the subject goods, we are satisfied, is the present case to be discovered by reference to their use. They are used to secure two objects to one another, where tensile strength is required and also resistance to abrasion and environmental attack. If they failed to secure the objects to one another, the properties of resistance to abrasion and environmental attack would serve little, if any, useful purpose. Although undoubtedly all the properties of the subject goods are important in relation to their use, we have no doubt that their essential character is given to them by the material of their core.” (paragraph 10,232.5)
We are satisfied that the essential character of the Isomate C Pheromone and Isomate CTT Pheromone products is their ability to confuse male Codling Moths to such an extent that they cannot find and so cannot mate with their female counterparts. Without that character, the subject goods would not be what they are. What is it that gives the subject goods that essential character? It is, we are satisfied, the monohydric alcohol being E,E 8, 10 dodecadien-1-ol. We accept Mr Sexton’s evidence that, without E,E 8, 10 dodecadien-1-ol, the subject goods would not have the effect of confusing male Codling Moths. They would be ineffective. It is listed on the label as an active constituent.
The other two ingredients, the Dodecan-1-ol (Lauryl alcohol) and the Tetradecan-1-ol do not have the effect of confusing the male Codling Moths. They simply lower the melting point of the subject goods so that the product in the plastic tubes is released at lower temperatures than would otherwise be the case. We have made this finding despite the two ingredients being listed on the labels as active ingredients. We accept Mr Sexton’s evidence that they were originally thought to be so but are not now.
The plastic tubes and the wire do not give the Isomate C Pheromone and Isomate CTT Pheromone products their essential character and nor does the fact of plastic being a chemical product.
In view of our conclusions, we have decided that the Isomate C Pheromone and Isomate CTT Pheromone products are properly classifiable under sub-heading 2905.2 and more particularly under sub-heading 2905.29.00 being “Other”.
Isomate OFM Rosso Pheromone product
Sub-heading 2905.2, when read with the Subheading Note to Chapter 29 refers to part (or parts) only of the Isomate OFM Rosso Pheromone product. Those parts are the isomers of an acetate of an unsaturated monohydric alcohol (Z, 8 Dodecen-1-yl) being Z, 8 Dodecen-1-ol acetate and E, 8, Dodecen-1-ol acetate. The plastic component of the subject goods is another part and is potentially classifiable under sub-heading 3926.90.90 being “Other” under heading 3926: “OTHER ARTICLES OF PLASTIC AND ARTICLES OF OTHER MATERIALS OF 3901 TO 3914.00.00”.
The subject goods also comprise chemical products within heading 3824 but cannot be said to wholly “chemical products for they contain wire. The wire is not a chemical product. Again we have doubts whether the plastic is a chemical product in the context of heading 3824.
The subject goods also comprise organic compounds within the meaning of sub-heading 2942.00.00. Again they do not wholly comprise those organic compounds for they contain wire. For the reasons we have already given, wire is not an organic compound even though the plastic and the chemical mixture confined by the plastic are.
The upshot is that each of the headings refers only to a part or parts of the materials contained in the subject goods. That means that each heading is regarded as equally specific by virtue of Interpretation Rule 3(a).
Rule 3(b) comes into play and we must determine the essential character of the Isomate OFM Rosso Pheromone product. We are satisfied that it is its ability to confuse male Oriental Fruit Moths to such an extent that they cannot find and so cannot mate with their female counterparts. Without that character, the subject goods would not be what they are. What is it that gives the subject goods that essential character?
We are satisfied that the Isomate OFM Rosso Pheromone product contains the isomers of an acetate of an unsaturated monohydric alcohol (Z, 8 Dodecen-1-yl) being Z, 8 Dodecen-1-ol acetate and E, 8, Dodecen-1-ol acetate. Again these are two of the three ingredients listed on the label as active constituents. The third, Z, 8 Dodecenol, is also listed but again we accept Mr Sexton’s evidence that it is present as an impurity. It plays no part in confusing male Oriental Fruit Moths. The ingredients that do that are Z, 8 Dodecen-1-ol acetate and E, 8, Dodecen-1-ol acetate and they are the ingredients that give the product its essential character. They are listed on the label as an active constituent. Without them, it would not have the effect of confusing male Oriental Fruit Moths. The product would be ineffective.
The plastic tubes and the wire do not give the Isomate OFM Rosso Pheromone product its essential character and nor does the fact of its being a chemical product.
As isomers, the Z, 8 Dodecen-1-ol acetate and E, 8, Dodecen-1-ol acetate are derivatives of a chemical compound and so we must have regard to the Subheading Note to Chapter 29. That requires us to classify the goods in the same sub-heading as the compound unless they are more specifically covered by another sub-heading and there is no residual sub-heading of “Other”. In this instance, the chemical compound from which they are derived is a monohydric alcohol that would be classified under sub-heading 2905.29.00. That is already the residual sub-heading being “Other” and there is no other sub-heading more specifically covering them. Therefore, we have concluded that the Isomate OFM Rosso Pheromone product should be classified under sub-heading 2905.29.00.
Isomate LBAM Plus Pheromone product
Sub-heading 2905.2, when read with the Subheading Note to Chapter 29 refers to part (or parts) only of the Isomate LBAM Plus Pheromone product. Those parts are the isomers, E, 11 Tetradecen-1-ol acetate and E, E 9,11, Tetradecadien-1-ol acetate, of a monohydric alcohol. The plastic component of the subject goods is another part and is potentially classifiable under sub-heading 3926.90.90 being “Other” under heading 3926: “OTHER ARTICLES OF PLASTIC AND ARTICLES OF OTHER MATERIALS OF 3901 TO 3914.00.00”.
The subject goods also comprise chemical products within heading 3824 but cannot be said to wholly “chemical products for they contain wire. The wire is not a chemical product. Again have doubts whether the plastic is a chemical product in the context of heading 3824.
The subject goods also comprise organic compounds within the meaning of sub-heading 2942.00.00. Again they do not wholly comprise those organic compounds for they contain wire. For the reasons we have already given, wire is not an organic compound even though the plastic and the chemical mixture confined by the plastic are.
The upshot is that each of the headings refers only to a part or parts of the materials contained in the subject goods. That means that each heading is regarded as equally specific by virtue of Interpretation Rule 3(a).
Rule 3(b) comes into play and we must determine the essential character of the Isomate LBAM Plus Pheromone product is its ability to confuse male Light Brown Apple Moths to such an extent that they cannot find and so cannot mate with their female counterparts. Without that character, the subject goods would not be what they are. What is it that gives the subject goods that essential character?
We are satisfied that Isomate LBAM Plus Pheromone product
is a mixture of isomers of 11 Tetradecen-1-ol acetate with a quantity of Z, 11, Tetradecen-1-ol acetate as an impurity. On the basis of Mr Sexton’s evidence, we find that the isomers, E, 11 Tetradecen-1-ol acetate and E, E 9,11, Tetradecadien-1-ol acetate, retain their character as acetates of a monohydric alcohol. They are the active ingredients listed on the product’s label. Mr Sexton’s evidence is also to that effect. We accept that evidence and find that, those isomers of the acetate of the monohydric alcohol are those that confuse male Light Brown Apple Moths. Without them, it would not have the effect of confusing male Light Brown Apple Moths and would be ineffective.
Again, the plastic tubes and the wire do not give the Isomate LBAM Plus Pheromone product its essential character and nor does the fact of its being a chemical product.
Applying the same reasoning as we have in relation to the Isomate OFM Rosso Pheromone product and the application of the Subheading Note to Chapter 29 (paragraph 106 above) we have concluded that the Isomate LBAM Plus Pheromone product should be classified under sub-heading 2905.29.00.
Relevance of United States Ruling No. NY B85947
In reaching this conclusion, we have come to our conclusion without regard to United States Ruling No. NY B85947 (“Ruling”). On the basis of a letter attached to Mr Komora’s submission, we understand that the subject goods in that ruling are PB-ROPE (pink bollworm) and APM-ROPE (artichoke plume moth). They consist of pheromone dispensers comprising 20cm long polyethylene tubes. An aluminium wire or rope is inserted into each tube. The wire or rope contains formulation based on the pheromone of either the pink bollworm or the artichoke plume moth. Both pheromones are organic substances. When the dispensers are placed in fields, they attract the specific insects for which they are designed. Each insect satisfies it urge to mate and so loses its interest in mating with other insects.
The Ruling is not a convention of the type referred to by Barrett J in Siemens v Schenker [2001] NSWSC 658. The CT Act, however, is enacted to give force to the Convention. It follows that the construction given to that Convention by the international community will be of some weight because:
“… as a broad principle, it is obviously desirable that expressions used in international agreements should be construed, so far as possible, in a uniform and consistent manner by both municipal courts and international courts and panels to avoid a multitude of divergent approaches in the territories of the contracting parties on the same subject matter.” (Rocklea Spinning Mills Pty Ltd v Anti-Dumping Authority (1995) 56 FCR 406 per Spender, Einfeld and Tamberlin JJ at 421)
As far as we are aware, the Ruling has not been made by a court or by a panel. Even if it were, there is insufficient information available on its face to enable us to understand how the word “insecticide” was interpreted or to reach the view that PB-ROPE (pink bollworm) and APM-ROPE (artichoke plume moth) are like products to the subject goods. One difference that appears on the face of the documents is that pink bollworms and artichoke plume moths lose their interest in mating after exposure to the product. On the evidence that we have, we find that is not the case in relation to the subject goods. The male Codling Moths, Oriental Fruit Moths and Light Brown Apple Moths all retain a very healthy interest as do the females who are destined to “… sojourn here Alone and palely loitering” (La Belle Dame sans Merci, John Keats).
For the reasons we have given, we:
1.set aside the decision of the respondent; and
2.substitute a decision that the subject goods are classified to sub-heading 2905.29.00 of Chapter 29 of Schedule 3 of the Customs Tariff Act 1995.
I certify that the one hundred and twenty two preceding paragraphs are a true copy of the reasons for the decision herein of Deputy President S A Forgie,
Signed: ...............................................................
O. Sarrinikolaou Associate
Date of Hearing 15 and 16 April 2004
Date of Decision 22 December 2004
Solicitor for the Applicant Mr L. Gross
Louis Gross & Associates
Solicitor for the Respondent Mr G. Komora,
Australian Government Solicitor
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