Church & Dwight (Australia) Pty Ltd and Comptroller-General of Customs

[2017] AATA 1910

Church & Dwight (Australia) Pty Ltd and Comptroller-General of Customs [2017] AATA 1910 (25 October 2017)

Division:GENERAL DIVISION

File Number(s):      2017/3350

Re:Church & Dwight (Australia) Pty Ltd

APPLICANT

AndComptroller-General of Customs

RESPONDENT

DECISION

Tribunal:Deputy President J W Constance

Date:25 October 2017

Place:Sydney

The stay order requested by the Applicant is refused.

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J W Constance
Deputy President

CATCHWORDS

PRACTICE AND PROCEDURE – request for stay order – customs – tariff classification of goods – baby wipes – demand for payment of duty – payment under protest – duty not paid for all shipments – jurisdiction of the Tribunal – jurisdiction to stay the demand for payment – payment of duty a precondition of an application for review – the goods not a particular class of goods – stay refused

LEGISLATION

Administrative Appeals Tribunal Act 1975 (Cth) ss 25, 41(2)

Customs Act 1901 (Cth) subss 167(1), 273GA(2), (7)

Customs Tariff Act 1995 (Cth)

REASONS FOR DECISION ON APPLICATION FOR A STAY OF THE OPERATION OF A DECISION

Deputy President J W Constance

25 October 2017

INTRODUCTION

1. A dispute has arisen between the parties as to the correct tariff classification of goods, described as Baby Wipes, imported by the Applicant.  The tariff classification was determined under the Customs Tariff Act 1995 (Cth).

2. On 16 May 2017 a delegate of the Respondent decided that an earlier decision to demand payment of duty based on the Respondent’s classification of the goods should be maintained.  I will refer to the decision of 16 May 2017 as the “reviewable decision”.

3. On 25 May 2017 the Respondent issued to the Applicant a final demand letter seeking payment of unpaid customs duty and indirect tax in an amount of $1,803,328.31.  This demand was based on the reviewable decision.

4. On 8 June 2017 the Applicant applied to the Tribunal to review the reviewable decision.  The application indicated that duty in excess of $150,000.00 had been paid under protest in respect of ten shipments of Baby Wipes.  The payments were made between 9 March 2017 and 1 June 2017 inclusive.  The application also referred to two shipments in respect of which duty had not been paid.

5. At the same time as the Applicant lodged the application for review with the Tribunal it also lodged an application for an order “that the letter of demand dated 25 May 2017 be stayed under section 41(2) of the Administrative Appeals Tribunal Act 1975, until the determination of the application for review.”[1]

   [1] Request for Stay Order dated 7 June 2017.

6. After hearing the parties I decided that the stay order should not be made.  I now provide my reasons for this decision.

   LEGISLATION

   Payment of duty under protest

7. Subsection 167(1) of the Customs Act 1901 (Cth) provides:

   If any dispute arises as to the amount or rate of duty payable in respect of any goods, or as to the liability of any goods to duty, under any Customs Tariff, or under any Customs Tariff or Customs Tariff alteration proposed in the Parliament (not being duty imposed under the Customs Tariff (Anti Dumping) Act 1975), the owner of the goods may pay under protest the sum demanded by the Collector as the duty payable in respect of the goods, and thereupon the sum so paid shall, as against the owner of the goods, be deemed to be the proper duty payable in respect of the goods, unless the contrary is determined in an action brought in pursuance of this section.

   Review of decisions where amount of duty payable is in dispute

8. Subsection 273GA(2) of the same Act provides:

   Where a dispute referred to in subsection 167(1) has arisen and the owner of the goods has, in accordance with that subsection, paid under protest the sum demanded by the Collector, an application may be made to the Tribunal for review of the decision to make that demand and of any other decision forming part of the process of making, or leading up to the making of, that first mentioned decision.

   Power of the Tribunal to make a stay order

9. Subsection 41(2) of the Administrative Appeals Tribunal Act 1975 provides:

   The Tribunal may, on request being made by a party to a proceeding before the Tribunal (in this section referred to as the relevant proceeding), if the Tribunal is of the opinion that it is desirable to do so after taking into account the interests of any persons who may be affected by the review, make such order or orders staying or otherwise affecting the operation or implementation of the decision to which the relevant proceeding relates or a part of that decision as the Tribunal considers appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review.

   THE ISSUES

10. The issues for determination were whether the Tribunal had jurisdiction to stay the demand for payment made on 25 May 2017 and, if so, should a stay be granted.

    THE APPLICANT’S ARGUMENT

11. The Applicant argued that the letter of demand issued by the Respondent constituted the “operation or implementation” of the reviewable decision which is the subject of the application to the Tribunal and therefore the Tribunal has jurisdiction to grant the requested stay.  It was further argued that the jurisdiction is not limited to the particular goods before the Tribunal as it is being asked to review an administrative decision regarding the classification of the product (the baby wipes) described in the reviewable decision.

    DISCUSSION

12. The Tribunal was created by the Administrative Appeals Tribunal Act 1975 (Cth) and the only source of its powers is that Act. Unlike our common law courts it has no inherent powers. The Act itself does not grant jurisdiction to review any particular decision, rather its jurisdiction is determined by other statutes of the Commonwealth.

13. Section 25 of the Administrative Appeals Tribunal Act provides for jurisdiction to be granted:

    (1) An enactment may provide that applications may be made to the Tribunal:

    (a)for review of decisions made in the exercise of powers conferred by that enactment; or

    (b)for the review of decisions made in the exercise of powers conferred, or that may be conferred, by another enactment having effect under that enactment.

14. In this matter the Tribunal’s jurisdiction is granted by subsection 273GA(2) of the Customs Act 1901, set out in paragraph 8 of these reasons. The subsection is clear that the payment under protest of the sum demanded is a precondition to the making of an application to review the decision to make the demand or, to put it another way, to the Tribunal exercising the jurisdiction to review. It is to be noted that subsection 273GA(2) refers to “that” demand and that the demand being referred to is a demand under subsection 167(1) of the Customs Act.

15. Subsection 167(1) refers to “the sum demanded …… as the duty payable in respect of the goods ……” [emphasis added]. 

16. In this matter the Applicant has paid (under protest) the sum demanded in respect of specified shipments of goods, but has not paid the full amount demanded in the letter of demand.  It is not in dispute that part of the total sum demanded relates to imported goods in respect of which no duty has been paid.

17. The Respondent argued that as the reviewable decision relates to the classification of the baby wipes, these are the goods before the Tribunal.  For this reason the jurisdiction of the Tribunal is not limited to the particular shipments of the goods in respect of which duty has been paid under protest.

18. I do not accept this argument as it ignores the plain words of the statute granting jurisdiction. Subsection 273GA(2) of the Customs Act is clear that an application to review a decision as to the duty payable in respect of imported goods cannot be made unless the duty claimed has been paid.  For the Tribunal to purport to exercise jurisdiction over goods simply because they are the same as other goods in respect of which duty has been paid would be to go beyond the power granted to it by the Customs Act. Subsection 273GA(2) refers to the sum demanded in respect of “the  goods” [emphasis added], not to a particular class of goods.

19. The payment under protest of the sum claimed may provide a significant benefit to the Applicant should it not be successful in its application for review.  Subsection 273GA(7) provides:

    Where, on an application made under subsection (2), the Tribunal has made a decision reviewing a demand made by the Collector, the proper duty payable in respect of the goods concerned shall be deemed to be:

    (a)the sum determined to be the proper duty by, or ascertained to be the proper duty in accordance with:

    (i)     the decision of the Tribunal; or

    (ii)    an order of a court on appeal from that decision; or

    (b)the sum paid under protest;

    whichever is the less.

    This means that the duty payable is limited to the payment made, even if the Tribunal (or a court on appeal) determines that the duty otherwise payable would be a greater sum.  It is unlikely that Parliament intended that this benefit be extended to a situation where duty had not been paid.

20. The Tribunal does have jurisdiction to review the decision relating to those goods in respect of which duty has been paid; it does not have jurisdiction in respect of any other goods for which duty has not been paid. As the duty has been paid in respect of the goods over which the Tribunal has jurisdiction there is no reason to grant a stay in relation to that part of the reviewable decision.

    CONCLUSION

21. For the reasons stated I refused to make the stay order requested by the Applicant.

I certify that the preceding 21 (twenty -one) paragraphs are a true copy of the reasons for the decision herein of Deputy President J W Constance

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Associate

Dated: 25 October 2017

Date(s) of hearing:	3 July 2017
Solicitors for the Applicant:	Clayton Utz Lawyers
Solicitors for the Respondent:	Department of Immigration and Border Protection