Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2004] AATA 324
ADMINISTRATIVE APPEALS TRIBUNAL )
) No N2003/85
GENERAL ADMINISTRATIVE DIVISION ) Re EPSON AUSTRALIA PTY LTD Applicant
And
CHIEF EXECUTIVE OFFICER OF CUSTOMS
Respondent
DECISION
Tribunal Michael Sassella, Senior Member Date30 March 2004
PlaceSydney
Decision The decision under review is affirmed. [sgd] M J Sassella
Senior Member
Administrative
Appeals
Tribunal
ADMINISTRATIVE APPEALS TRIBUNAL )
) No N2003/85
GENERAL ADMINISTRATIVE DIVISION )
Re
EPSON AUSTRALIA PTY LTD
Applicant
And
CHIEF EXECUTIVE OFFICER OF CUSTOMS
Respondent
ORDER TO AMEND WRITTEN DECISION [2004] AATA 324
Tribunal Mr M J Sassella, Senior Member Date 30 March 2004
Place Sydney
WHEREAS:
1. The Tribunal released a written decision in this matter, which was dated 30 March 2004.
2. It has come to the Tribunal’s attention that there were some errors in the decision.
3. The Tribunal wishes to amend the written decision so as to rectify these errors and wishing to do so with the least cost and inconvenience to the parties, applies the provision of section 43AA of the Administrative Appeals Tribunal Act1975.
NOW THE TRIBUNAL THEREFORE ORDERS that the decision should be amended as follows:
Under the heading “Result” it should read:
The tribunal has decided that the inkjet printer cartridges are properly classified under heading 3215 as printing ink or inks. This means that the duty paid under protest is not refundable to Epson.
Paragraph 13 should read:
The s 37(1)(a) statement presents the identification as “shaped plastic containers, black and colour ink, plus sponges, without integrated circuitry, for use in Epson brand printers. The principal function of these goods is to provide ink to inkjet printers”. Customs presented as the possible Chapters in Schedule 3 within which the inkjet cartridges – black and colour – without integrated circuitry – may be classified as 32 (inks, inter alia) or 84 (machinery and mechanical appliances [including ADP machines] parts thereof).
Paragraph 32 should read:
In its written final submission Customs wrote at paragraph 47 and 48:
“The question in the present case is whether heading 3215 or 8473 more specifically describes the goods. Function is a relevant consideration to identify the goods (Cody p.355). Heading 3215 covers all inks. While there may be many different kinds of ink the function which ink performs is a narrow one. It is used to put legible marks on surfaces, usually paper. On the other hand the function which the class of things which are parts or accessories of heading 8473 perform is very broad given the huge variety of machines referred to in heading 8473. For example, heading 8473 would cover high tech parts for a computer, such as a hard drive or a computer chip, through to a spool for a cash register. Heading 3215 is therefore the more specific heading, notwithstanding the ink cartridge's suitability for Epson printers is not capable of identification from the heading.
“Therefore, to describe the goods as ink is to give them a much more specific description than to describe them as parts or accessories for machines of 8469 to 8472."
Paragraph 54 should read:
The present case is, however, distinguishable in that the description in heading 3215 is “printing, writing or drawing ink and other inks, whether or not concentrated or solid”. The heading in 9612 related specifically to products used solely for printing from printing machines. The emphasis in 3215 is to inks whether or not used in machine printing. This could involve a wider range of uses than use as an accessory to the range of machines in heading 8469 to 8472.
[sgd] M J Sassella
Senior Member
CATCHWORDS
CUSTOMS DUTIES – customs tariffs – printer cartridges for inkjet printers – printer cartridges composite goods – printer cartridges classified as printing inks – duty paid under protest not refundable – printer cartridges not properly classified as parts or accessories for automatic data processing machines for customs tariff purposes
WORDS AND PHRASES – “accessories”
Customs Tariff Act 1995 ss 3(1) (“Chapter”, “heading”, “Interpretation Rules”), (2), 4, 7(1), Schedule 2, Schedule 3
Customs Tariff Act 1966
Customs Act 1901 ss 163, 167
Administrative Appeals Tribunal Act 1975 s 37(1)(a)
Customs Regulations 1926 reg 126
Re Tridon Pty Ltd and Collector of Customs (1982) 4 ALD 615
Re Gissing and Collector of Customs (1977) 1 ALD 144
Chinese Food and Wine Supplies Pty Ltd v Collector of Customs (Vic) (1987) 72 ALR 591
Re National Panasonic (Australia) Pty Ltd and Collector of Customs (NSW) (1985) 7 ALD 647
Deputy Commissioner of Taxation v Polaroid Australia Pty Ltd (1971) 46 ALJR 32
Re Sharp Corporation of Australia Pty Ltd and Collector of Customs (AAT 8422, 11 December 1992)
Collector of Customs v Sharp Corp of Australia Pty Ltd (1993) 35 ALD 589
Sharp Corporation of Australia Pty Ltd v Collector of Customs (1995) 59 FCR 6
Chief Executive Officer of Customs v I P L Datron Ltd [1998] 1055 FCA
Re I P L Datron and Chief Executive Officer of Customs; Re Lexmark International (Aust) Pty Ltd and Chief Executive Officer of Customs (AAT no 12013, 7 July 1997)
Waterscheid Australia Pty Ltd v Collector of Customs (1988) 7 AAR 555
Re Transaction Australia Pty Ltd and Collector of Customs (Victoria) (1981) 4 ALN No 54
Zendel Australia Pty Ltd (trading as Glad Products of Australia) v Commissioner of Taxation (1993) 46 FCR 14
Chief Executive Officer of Customs v Boehringer Mannheim Australia Pty Ltd (1997) 26 AAR 375
Cody v Datacraft (Australia) Pty Ltd (1989) 10 AAR 346
Direct Alarm Supplies and Collector of Customs (unreported, Federal Court of Australia, 17 September 1992)
Mita Copystar America v United States 160 F 3d 710 (Fed Cir 1998)
REASONS FOR DECISION
30 March 2004 Michael Sassella, Senior Member RESULT
The tribunal has decided that the inkjet printer cartridges are properly classified under heading 3215 as printing ink or inks. This means a free tariff and that the duty paid under protest is not refundable to Epson.
BACKGROUND
1. On 8 November 2002 Epson Australia Pty Ltd (“the applicant”) lodged a tariff advice relating to goods described as “Epson brand computer printer inkjet cartridge Model S020034 without integrated circuitry”, claiming heading 8473 under the Customs Tariff Act 1995 (“the Act”)[1], Schedule 3 as applying to the goods. Classification of the goods under heading 8473:
[1] Extracts from the Act appear as Schedule 1 to these reasons.
“Parts and accessories (other than covers, carrying cases and the like) suitable for use solely or principally with the machines of 8469 to 8472”[2]
[2] The machines of 8469 to 8472 are (8469) typewriters and word-processing machines; (8470) calculating machines and the like; (8471) automatic data processing machines, etc; (8472) office machines such as hectographs, stencil duplicating machines, coin-sorting machines, stapling machines.
would mean that the goods would enter Australia tariff-free. The particular item under this heading was 8473.30.00:
“Parts and accessories of the machines of 8471.”
The full description of machines of 8471 in the Act is:
“Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data …”.
The particular item under the heading suggested by Epson was 8471.60.00:
“Input or output units, whether or not containing storage units in the same housing”.
2. On the same day the Australian Customs Service (“Customs”), on behalf of the Chief Executive of Customs (“the CEO”, “the respondent”), decided that the correct classification for these goods was under heading 3215:
“Printing, writing or drawing ink and other inks, whether or not concentrated or solid”,
and so liable for a 5% tariff. More particularly, Customs homed in on subheadings 3215.11.00 for black printing ink and 3215.19.00 for colour ink. Epson paid the required duty under protest as provided for in s 167 of the Customs Act 1901 (“the Customs Act”)[3].
[3] Epson challenged that decision and the decision was reviewed internally by Customs. It was not changed. Epson then applied to the Administrative Appeals Tribunal (“the tribunal”). If Epson is successful in this application it may be entitled to a refund of the duty paid under protest. Section 163 of the Customs Act provides for refunds of duty. The specific provisions for refunds are in the Customs Regulations 1926 (“the Regulations”)[4]. Regulation 126(1)(ea) would apply in that, if Epson succeeds in this application, the tribunal would hold that the amount of duty payable, namely nil, is less than the amount of duty demanded by Customs in consequence of the reviewable decision.
[4] would appear only one major issue:
Should the Epson computer printer inkjet cartridge model S020034 be classified under the Act as parts for computer printers or as printing ink?
This, however, masks an array of subordinate issues that are addressed under the next heading.
FINDINGS ON MATERIAL QUESTIONS OF FACT WITH REFERENCE TO THE EVIDENCE AND OTHER MATERIAL IN SUPPORT OF THOSE FINDINGS
Identification of the goods
5. The principles to be applied in resolving this issue emerge from the Act and from decided cases. A leading authority is Re Tridon Pty Ltd and Collector of Customs (1982) 4 ALD 615. The applicant imported windscreen wiper blade refills which consisted of a rubber blade made of unhardened vulcanised rubber, a flexible plastic spine and a metal clip. They were entered for duty under the Customs Tariff Act 1966 (“the 1966 Act”) and classification under paragraph 85.09.9 as parts for windscreen wipers was asserted, the duty being 17.5%. The Collector of Customs considered paragraph 40.14.9 to be the correct heading, “Other goods made of unhardened vulcanised rubber – other”, the duty being 25%. For the tribunal the difficulty was that the goods were clearly windscreen wiper blade refills which had been reidentified in accordance with Note 1(a) under Division XVI of Part II of the First Schedule. Division XVI contained headings “Chapter 84” and “Chapter 85”. Note 1(a) excluded the following goods, amongst others, from Division XVI:
“… goods of unhardened vulcanised rubber falling within item 40.14 that are of a kind used on machinery or mechanical or electrical appliances or for other industrial purposes.”
6. The tribunal held that it was necessary to have regard to the Rules of Interpretation in the First Schedule in ascertaining whether goods fell within an item, sub-item, paragraph or sub-paragraph. Rule 1(2) provided that regard was to be had, subject to rule 1(3), to the terms of items (including sub-items, paragraphs and sub-paragraphs) and of notes to Divisions and Chapters and, except where those terms otherwise require, to rules 2, 3 and 4. An equivalent provision currently appears as rule 1 of the General Rules of Interpretation in Schedule 2 of the Act.
7. The starting point was said to be (page 620) to identify the goods in their condition as imported. The principles with respect to identification of the goods were summarised as:
(a)Identification must be objective, having regard to the characteristics which the goods, on informed inspection, present.
(b)Identification of goods cannot be controlled by the descriptions of goods adopted in the nomenclature of the tariff.
(c)At the same time 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 task of classification.
(d)Knowledge of how those who trade in the goods describe the goods will usually be relevant but not necessarily conclusive.
(e)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.
(f)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 refer to the materials or substances from which the goods are manufactured.
(g)Identification will frequently extend to characterisation of goods by reference to their design features or by reference to their suitability for a particular use emerging from inspection of the goods as imported. The relevance of these characteristics and evidence regarding the use of the goods after importation will depend on the language of the tariff nomenclature.
(h)Composite goods, notwithstanding that they have components which are separately identifiable, may be identifiable in combination as a new entity if the identity of the separate units is subordinated to the identity of the combination.
8. The tribunal applied these principles by finding that the goods were identifiable as (i) specifically as windscreen wiper blade refills, (ii) referring to their use, ie as parts for electrical windscreen wipers; (iii) less specifically by reference to use as parts for a motor vehicle; and (iv) by reference to composition as goods partly of unhardened vulcanised rubber, partly of plastic and partly of metal. The tribunal said (page 621) that the “imported goods are not identifiable simply as articles of unhardened vulcanised rubber. … they are more than that. The rubber squeegee, plastic spine and metal clip in combination, produce a new article of commerce in which the identity of the individual components is subordinated to the identity in combination”.
9. The tribunal then moved to the second stage of the task which is classification. As the tribunal said, in classifying the goods regard must be had to the descriptions employed in the nomenclature of the tariff. Further, the “General Rules for the Interpretation of Schedule 3” in Schedule 2 of the Act are now employed. There was no tariff item specifically for windscreen wiper blade refills. The tribunal looked at possibilities in item 85.09 (“electrical windscreen wipers”), item 87.06 (“parts and accessories for motor vehicles”), item 40.14 (“other goods made of unhardened vulcanised rubber”), item 39.07 (“goods made of plastic”) and item 73.40 (“other goods made of iron or steel”). At page 622 the tribunal observed that item 85.09 was the most appropriate classification. “It is the most specific description of the goods [cf interpretative rule 3(1)(a)] and as between that item and all the other possible items (except item 40.14) there are divisional or chapter notes which would preclude classification otherwise than in Division XVI if the goods ‘fall’ to item 85.09.” The tribunal regarded item 40.14 as providing a far less specific description of the goods than item 85.09. The final decision was that the goods were classified under item 85.09.
10. This case followed Re Gissing and Collector of Customs (1977) 1 ALD 144. The tribunal in Gissing had held that the two-step approach applied, ie identification occurs first and then the tariff is construed to see which provision applies to the goods identified. In the course of its reasons for decision the tribunal framed the principles in [7(d) and (h)].
11. The full Federal Court endorsed the two-step approach in Chinese Food and Wine Supplies Pty Ltd v Collector of Customs (Vic) (1987) 72 ALR 591, 599.
12. The Customs officer in the present application who wrote the statement required under s 37(1)(a) of the Administrative Appeals Tribunal Act 1975 (“the AAT Act”)[5] explained the identification process as occurring independently of the terms used in the tariff, whilst being aware of its structure. The classification task is an objective “wharfside task” to be undertaken by the “informed observer”, taking into account the characteristics of the products and not the particular intentions of manufacturers, importers or purchasers.
[5] The s 37(1)(a) statement presents the identification as “shaped plastic containers, black and colour ink, plus sponges, without integrated circuitry, for use in Epson brand printers. The principal function of these goods is to provide ink to inkjet printers”. Customs presented as the possible Chapters in Schedule 3 within which the inkjet cartridges – black and colour – without integrated circuitry – may be classified as 32 (inks, inter alia) or 74 (machinery and mechanical appliances [including ADP machines] parts thereof).
14. The cartridges in question were the subject of comprehensive and helpful evidence from Mr M J O’Donnell, Epson’s Technical Services Manager (Customer Services). He also provided an affidavit dated 20 August 2003. The points he made were:
· Epson inkjet cartridges are all made outside Australia.
· Each Epson inkjet printer model accepts only specific inkjet cartridges.
· Epson inkjet cartridges may contain colour or black ink.
· Colour inkjet cartridges for a particular model have several equal-sized, parallel compartments moulded inside the cartridge body separating the colours. A black ink cartridge is generally smaller with a single compartment.
· Both retail and professional inkjet cartridges are involved in this application. A retail inkjet cartridge consists of:
A moulded plastic casing in two parts – a lid and the box-like body.
A permanent plastic label on the cartridge lid covering air passageways moulded into the lid. The label permits air that has entered the passageways to pass along the passageways and into the cartridge through air inlet holes while keeping out the ambient air.
A yellow temporary plastic tear-off strip covers the air entry inlets.
Sponges within each dedicated ink colour compartment are moulded into the container body. These sponges are made of high quality material to limit pieces of sponge from breaking away from the body of the sponge and entering the ink delivery system.
Rubber seal at ink outlet holes. Rubber rather than cheaper plastic is used to prevent break-away and entry into the ink delivery system.
Clear yellow plastic covers the ink outlet holes. Again the plastic is high quality to prevent break-away and entry into the ink delivery system.
A filter inside the case covering the outlet holes. This is made of high quality, fine material to trap as much as possible of potential contaminants.
Ink. This is absorbed into the sponges in each compartment. The ink is manufactured from ultra purified water and other chemicals.
· Retail cartridges are sold in an outer vacuum pack. When the cartridge is to be used the user first removes the outer vacuum pack. Then the user removes the yellow plastic tear-off strip. Air can be heard entering the cartridge which contains a vacuum when it leaves the factory.
· The cartridge is then connected to the printer carriageway in the printer body. It is clipped into place so as to perform two functions. First, it moves back and forth on the carriageway across the paper in order to deposit ink. The clips also force the cartridge onto needles in the print head surface in contact with the cartridge. The needles penetrate the plastic covering the cartridge outlet holes and pass through the rubber seal. The ink then passes through the needles into the print head.
· There is a crystal in the print head that draws ink out of the cartridge into the print head ink passageway. The ink leaving the cartridge is replaced by air which first enters through the cartridge lid covered by the permanent plastic label.
· A professional inkjet cartridge operates in a similar fashion. However, the ink in the cartridge is not absorbed into sponges. It is held in bladders. Another difference is in the delivery of the ink to the print head. When the outlet holes are pierced the ink is conveyed to the print head by tubes. The cartridge remains in a fixed position, connected by tubes to the print head which moves across the paper.
· Epson’s Piezo Electric inkjet ink delivery system is used to deliver the ink onto the paper. This differs from the more usual thermal system by which the ink is heated in a confined space and is forced out. The Piezo system utilises a varying electric charge which is applied to a flexible crystal in contact with ink in the printer head which distorts and twists the crystal that forces the ink with pressure through part of the ink delivery system in the print head, eventually leaving the print head through a hole and being deposited on paper. Variations in the electric charge correspond to the ink drop size which is reflected in the print provided to the paper.
· Because of the small sizes and tolerances keeping air and moisture from the ink delivery system is crucial to the operation of the Piezo electric inkjet computer printer. Adherence to the system as described ensures the correct ink viscosity and subsequent meniscus control which regulates drop size.
· In Epson Piezo electric inkjet print head technology the ink delivery system consists of both the print head (on the printer) and all components included in the cartridge. The cartridge is one part of the ink delivery system which, in turn, is one part of the printer. Without the control of the ink and delivery system provided by the cartridge the mechanical and software control of the ink output would not be possible.
· The cartridges are made in a manufacturing plant in sealed rooms with strictly controlled access, air conditioning and air filtering. Plant operators wear extensive protective clothing to limit contamination. The ink base is ultra-purified water.
15. That description leads to several observations. First, the technology is highly sophisticated and the cartridge and its operation can be said to be a precision technology. Second, it is difficult to see how, as a matter of identification, these cartridges could be described other than as the respondent suggests in [13] above. I find that description to be the appropriate identification of these goods. Where the parties differ is in the second process, classification.
Classification of goods
Respondent’s view
16. It may be instructive to consider in the first instance the respondent’s avowed reasons for regarding these products as ink rather than as printer parts. In the documents provided pursuant to s 37(1)(a) of the AAT Act at page 9 the respondent proceeds according to the following paraphrase:
Applying interpretation rule 1 from Schedule 2 of the Act, that rule states that 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 relevant section or chapter notes and according to interpretation rules 2 to 6, unless the headings or notes otherwise require.
A consideration of the headings and relevant notes reveals the following.
Chapter 32
Customs saw heading 3215 as appropriate because, although inkjet cartridges of this type are essential to the printing process and have a design use for a particular inkjet printer, they are not identified as a part of an inkjet printer but as a consumable having a separate identity in commerce from those recognised as printer parts. Inkjet cartridges featuring integrated circuitry are seen as a working part of the printer. These cartridges have no integrated circuit. However, the identification of the goods in [13] above saw them identified as composite goods. The composite elements were: plastic containers, inks and sponges. Because of Interpretation Rule 2(b) the composite elements mean that the goods cannot be classified to chapter 32 according to only interpretation rule 1. Rule 2(b) requires the use of rule 3 for composite goods.
Chapter 84
Customs considered but rejected heading 8473 because the subject goods are identified as a consumable of 3215 rather than a working part of a printer of 8471. The consumable nature of the goods prevents note 2(b) in section XVI from applying. Note 2(b) reads, “Other parts, if suitable for use solely or principally with a particular kind of machine [as these cartridges are], … are to be classified with the machines of that kind or in … 8473 … as appropriate. …” The composite elements in the identification again mean that the goods cannot be classified to a heading of chapter 84 according to only interpretation rule 1.
Using interpretation rule 2
Interpretation rule 2(b) in Schedule 2 of the Act provides that a reference to a material in a heading to an article shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances. Rule 2(b) then directs the use of rule 3 to classify. I take it that the identification of the goods, in that it refers to ink and to plastic containers and sponges means that the classification headings will pertain to a material or a combination of that material with other materials or substances.
Using interpretation rule 3
Interpretation rule 3 in Schedule 2 of the Act provides that, where by an application of rule 2(b), goods are, prima facie, classifiable under two or more headings, classification shall be effected according to rules 3(a) to (c). As we have seen, the goods are classifiable to two headings, as inks or as printer parts.
Customs tested rule 3(a) but found it inapplicable. Rule 3(a) says that the heading providing the most specific description shall be preferred to headings providing a more general description. Customs rejected heading 3215 because the "ink” description would describe only part of the subject goods and cannot be regarded as specific. Heading 8473 was held not to apply under rule 3(a) because, although it appeared to classify the whole of the object and so attract rule 1, the object is not a part of the printer and classification under rule 1 has already been excluded. It was therefore necessary to move to interpretation rule 3(b).
Rule 3(b) requires that goods that are mixtures, composite goods consisting of different materials or made up of different components which cannot be classified by reference to rule 3(a) are to be classified as if they consisted of the material or a component which gives them their essential character. Customs argued that it was the ink that gave the goods their essential character. The ink provides the major volume and value component of the goods. The cartridges, by their nature and function, were not significantly different from ink cartridges for fountain pens. Customs referred to notes in chapter 96 which have the effect of requiring fountain pen cartridges to be classified to chapter 32.
Customs’ second argument was based on the cartridge not being a part of the printer. Reference was made to Re National Panasonic (Australia) Pty Ltd and Collector of Customs (NSW) (1985) 7 ALD 647, 658 which referred to a High Court decision, Deputy Commissioner of Taxation v Polaroid Australia Pty Ltd (1971) 46 ALJR 32 which, in turn, dealt with a picture roll for a particular model of Polaroid camera, “The Swinger”. The picture roll was useable only in that type of camera and that type of camera could accommodate no other type of film pack. The pack was affixed in the camera by a strong clip. Gibbs J in the High Court found the film packs to be neither accessories nor parts of the cameras. He said at pages 34-35, “One thing does not become part of another simply because the latter thing cannot be put to proper use without the aid of the former, even if, in use, the two things are fixed together. In my opinion a film is not a part of a camera, nor a bullet of a gun, nor petrol of a motor vehicle. A Polaroid camera is a different thing from a film pack or a picture roll, and is complete even though it has no pack or roll in it.” Customs submitted at the hearing that these examples all involve the thing that is not a part being a thing that is consumed in the operation of the other thing.
Gibbs J also rejected an argument that the pack was an accessory to the camera, holding that an accessory is an “extra and additional part of the equipment of the camera itself, such as a light meter, a filter or a wide angle lens, and in the ordinary course of language a film would not be referred to as an accessory for a conventional camera, nor a film pack or a picture roll as an accessory for a Polaroid camera”.
If this analysis was correct then Customs’ next proposition was correct. That was that the goods had to be classified as if they consisted of the ink component because it was the ink that gave them their essential character.
17. I note that, if classification of the goods cannot be achieved under rules 3(a) and (b), rule 3(c) classifies them according to the heading which occurs last in numerical order among those which equally merit consideration. Rule 4, if all rules within rule 3 fail, requires classification by reference to the classification of goods to which they are most akin. The rules are presented in a cascade format.
18. By way of summary of Customs’ position, at the internal review stage, in a letter to Epson’s solicitor, dated 2 December 2002, Customs said that the goods were to be classified within heading 3215. The writer said that “ink jet cartridges of this type, although essential to the printing process and having a design use for a particular ink jet printer, are not identified as a part of an ink jet printer but as a consumable having a separate identity in commerce from those recognised as printer parts.”
19. Epson’s case for the cartridges’ classification to heading 8473, as represented in the s 37(1)(a) statement, was based on Tariff Precedent 15913900. However that precedent, said Customs, related to goods that featured an integrated circuit and so were different from the Epson cartridges. The precedent goods were regarded as more than printing ink. They were a functional part of the printer.
20. Epson claimed support for its position from the tribunal’s decision in Re Sharp Corporation of Australia Pty Ltd and Collector of Customs (AAT 8422, 11 December 1992)[6] which dealt with toner kits for laser printers. These kits consisted of a toner cartridge containing toner, a toner-collecting container that incorporated a fuse and roller cleaner. The holdings by the tribunal relied on by Epson were that the toner cartridge fulfilled two functions. It was a container for the toner until emptied into the developer cartridge which was a reservoir for the toner. It was also a seal between the developer cartridge and the rest of the machine. It prevented toner from escaping into the working parts of the machine with consequent disruption to the machine’s functioning. The tribunal said that the cartridge was a part of the laser printer. It was necessary to complete the whole. Without it the printer would not work at all or not efficiently. The full Federal Court ([35] below) upheld the tribunal’s decision.
[6] A copy of this decision can be found in the website: argued that the toner cartridge was entirely different in the Sharp case from the cartridges here. As Customs said in its internal review, “The subject of the Sharp Corporation dispute involved toner kits, consisting of a toner cartridge containing toner, a toner-collecting container that also incorporated a fuse and a roller cleaner (packed together in a shaped polystyrene container together with instructions). The Sharp Corporation goods were identified as a set, and it was found that the disparate uses of the components precluded any one component from giving the set its essential character. Accordingly the set was classified to heading 8473 by virtue of Interpretation Rule 3(c)”, the effect of which is at [17] above.
22. In that same review Customs referred to the Australian Federal Court decision by Whitlam J in Chief Executive Officer of Customs v IPL Datron Pty Ltd [1998] 1055 FCA as supportive of its stance. The goods were computer printer ribbons designed specifically for particular computer printer models. The tribunal had held that heading 8473 provided a more specific description of the goods than heading 9612 (typewriter and similar ribbons). Whitlam J held that, when regard was had to the plain language of the headings, heading 9612 provided a more specific description of the goods than did heading 8473. 9612 narrowed the area of choice and gave a much more specific indication of the function of the goods.
23. Whitlam J endorsed the arguments of Customs in that case. Customs argued that it is necessary under rule 3(a) to look at both of the contended for headings and see what range of things is covered by each heading. One then compares the identified goods with the range covered by each heading to determine which heading provides “the more specific description” of the goods. Heading 8473 referred to parts and accessories suitable for use solely or principally with machines of 8469 to 8472. This brought in accessories for all the machines covered by headings 8469, 8470, 8471 and 8472. Heading 8471 extended to all types of automatic data processing machines. The range of parts and accessories was accepted as “vast” by Whitlam J. On the other hand, the range of things covered by heading 9612 was comparatively small and focused. Its description of the goods was very specific. That heading reduced to the greatest extent the area within which the goods described were to be identified. Whitlam J stated that it could not be suggested that typewriter ribbons was not a more specific description than accessories for use with typewriters. Adapting that to the Datron case [22] he said that “similar ribbons … prepared for giving impressions” was a more specific description of the subject goods than “accessories for use … with [automatic data processing machines]”.
24. In its written submissions dated 21 November 2003 Customs argued strongly that the cartridges are not parts or accessories of the inkjet printers. As regards the meaning of “part”, Customs submitted that the Australian Concise Oxford Dictionary describes a part as a component of a machine, as in spare parts. That source also suggests that a part is an essential member of anything. The Macquarie Dictionary describes a part as some but not all of a thing. However, Customs referred me to Waterscheid Australia Pty Ltd v Collector of Customs (1988) 7 AAR 555, 564 where Davies J in the Federal Court held, following Gibbs J in the Polaroid case [16], that the proper test in relation to the word “part” is “something which with others makes up a whole”. Davies J refused to adopt an American principle that a part is an essential member of anything. Customs, in fact, relied heavily on the Polaroid case and the propositions derived from it set out above in [16]. From Polaroid Customs submitted in the present case:
· That a computer printer is still a whole computer printer even without its ink cartridge in the same way that a fountain pen is still a fountain pen without its ink cartridge.
· That the cartridge is essential to the operation of a computer printer does not make it part of a printer.
· That in providing the examples quoted in [16] above, ie a film, a bullet and petrol, Gibbs J in Polaroid identified as items that were not parts items that are nevertheless essential to the operation of a thing but which are consumed in the course of operating that other thing. The ink cartridges in the present case were said to be similar.
25. Customs argued that a decision, apparently against Customs, Re Transaction Australia Pty Ltd and Collector of Customs (Victoria) (1981) 4 ALN No 54, was distinguishable. In that case the tribunal held that empty reusable gas cylinders were parts of forklift trucks because they were essential to the operation of the trucks. However, beyond that they were so committed by design as to be identifiable as parts of forklift trucks. Customs noted that these items were not consumables.
26. As regards the inkjet printer cartridges possibly being “accessories” Customs again submitted dictionary definitions. The Oxford defined an accessory as an additional or extra thing; a small attachment or fitting. As an adjective it suggested “dispensable”. The Macquarie defined it as a subordinate part or object; something added or attached for convenience, attractiveness, etc, such as a spotlight, heater, driving mirror, etc for a vehicle. Customs drew from this that an accessory is not an indispensable part of the major thing. This was consistent with the examples in Polaroid [16], for a camera the accessories were exemplified as a wide angle lens, a light meter or a light filter.
27. Customs therefore argued that the indispensable nature of the printer cartridge ruled it out as being an accessory. Customs also noted that Gibbs J’s examples in Polaroid were not consumables.
28. Customs argued that several decisions which appear not to have followed the principles in [26] and [27] regarding accessories should not be applied for various reasons. These cases included Zendel Australia Pty Ltd v Commissioner of Taxation(trading as Glad Products of Australia) (1993) 46 FCR 14, Chief Executive Officer of Customs v Boehringer Mannheim Australia Pty Ltd (1997) 26 AAR 375 and Datron [22].
29. In the ultimate Customs’ argument was that, because the goods are indispensable to the operation of a printer they are not accessories, and because they are consumed in the course of the printer’s operation they are not parts. They are not, therefore, classifiable to heading 8473. Heading 3215 therefore remains the only option.
30. At the same time Customs noted that note 2 to Section XVI of Schedule 3 of the Act requires that they be classified to 8473 if found to be “parts”. If found to be “accessories” they can be classified under either 8473 or 3215. They will be classified to the heading which provides the most specific description of the goods (if any) within interpretation rule 3(a).
31. This returns us to some of the issues covered above in [22] – [23]. However, two additional decided cases are instructive.
· In Cody v Datacraft (Australia) Pty Ltd (1989) 10 AAR 346 Northrop and Keely JJ in the full Federal Court said at pages 350-351 that in considering which heading provides a more specific description of the subject goods it is not appropriate to take each word separately, give a meaning to that word, and apply the result of three separate words. “The words constitute a composite phrase and must be construed and applied accordingly. … Here it is necessary to determine which item has the more specific determining qualities or features describing the subject goods”. Burchett J in Cody said at page 353, “The question how specific a description is can only be answered by considering the extent to which the description reduces the area within which the thing described is to be identified. That depends very much on the range of things from which it is to be distinguished.” Customs then expressed concerns regarding how the majority applied the principles in this case. In Customs’ view they erred by reading a certain heading as applying only to the specific machines in issue when the heading referred to a list of machines.
· In Re Direct Alarm Supplies and Collector of Customs (unreported, Federal Court, 17 September 1992)[7] the items were programmable controllers for electronic security systems. Hill J stated that where the item is both a programmable controller and a part for a security control system, and there are a number of items which are parts for a security control system, it follows inexorably that the category of programmable controllers is a more specific category than that of parts for alarm systems. He considered that to identify the goods as parts for an alarm system would not identify the goods with any specificity. That description could apply equally to lights, bells and other items which make up a security control system. On the other hand, he said, to identify the goods as programmable controllers would be to give them a more specific description even if the purpose for which the controller was to be used was not identified.
[7] A copy of this decision can be found in the website: its written final submission Customs wrote at paragraph 47 and 48:
“The question in the present case is whether heading 3215 or 8473 more specifically describes the goods. Function is a relevant consideration to identify the goods (Cody p.355). Heading 3215 covers all inks. While there may be many different kinds of ink the function which ink performs is a narrow one. It is used to put legible marks on services, usually paper. On the other hand the function which the class of things which are parts or accessories of heading 8473 perform is very broad given the huge variety of machines referred to in heading 8473. For example, heading 8473 would cover high tech parts for a computer, such as a hard drive or a computer chip, through to a spool for a cash register. Heading 3215 is therefore the more specific heading, notwithstanding the ink cartridge's suitability for Epson printers is not capable of identification from the heading.
“Therefore, to describe the goods as ink is to give them a much more specific description than to describe them as parts or accessories for machines of 8469 to 8472."
33. If the goods could not be classified using rule 3(a) then Customs submitted that they are to be classified as if they consist of the material or component that gives them their essential character under rule 3(b). That component was said to be ink, “since it is for the purpose of allowing the printer to print the ink onto the paper that the cartridge is designed, purchased and used”. Customs saw no need to resort to rule 3(c).
Applicant’s view
34. Epson referred to a number of tariff rulings and court decisions from the USA where similar goods to those in issue were classified to heading 8473.
· In the USA a customs ruling on the same products classified them to heading 8473.30.500. The document dated 13 January 1999 (attached to Epson’s statement of facts and contentions dated 13 May 2003) provides the criteria relied on by USA customs decision-makers. These seem to have been: that the cartridge stays with the machine throughout the printing process; that when used up it is disposed of; that it is not designed for refilling; that once placed into the machine it becomes part of the ink system which includes also a pump mechanism, waste ink drain tank and wiping mechanism (with some variations for the professional printer). USA Customs noted that the cartridges contained no moving parts but did contain various compartments from which the ink was properly dispensed onto the printing paper. The writer recorded, “Since the cartridges are sold with the ink inside, remain with the ink throughout its use by the printer, are the standard device for providing ink to the printer, and are not designed for reuse, they would meet the critera of a ‘part’ as found in the recent U.S. Court of Appeals decision in” Mita Copystar America v United States 160 F 3d 710 (Fed Cir 1998).
· In the Mita case the court held that photocopier toner cartridges were “parts” of the photocopiers because the cartridges are sold with the toner packaged inside them, they remain with the toner throughout its use in the copier, they are the standard device for provision of toner to the copier and they are not designed for reuse.
· USA customs rulings on other computer printer inkjet cartridges without integrated circuitry classified them to 8473.30, not to 3215.11.00 as ink. They were regarded as “parts” for 8471 computer printers.
35. On 1 December 2003, after the hearing and pursuant to a tribunal direction, Epson made further written submissions. These were largely a response to the respondent's written submissions tabled at the hearing ([24] -–[33] above). Epson made a number of points:
· Customs had not fully described the complexity of the construction of the subject cartridges.
· Customs had not stated that the cartridges are designed and manufactured to fine tolerances.
· The cartridges are “one component of the computer printer ink delivery system”.
· The cartridges are refillable. [I observe that this is debatable. Oral evidence from Mr O’Donnell was that Epson does not recommend or promote the refilling of the cartridges and they are not made to be refilled when empty. However, a customer can have them refilled with generic inks at various outlets or using refill packs marketed by third parties. Mr O’Donnell said that a cartridge might be refilled only once to four times with poor quality ink. He said also that the printer head, a permanent part of the printer, can be fouled by poor quality ink.]
· The cartridges are “parts”. Note 2(b) to Section XVI of Schedule 3 of the Act means that the cartridges are classified to heading 8473.
· If the cartridges are found to be “accessories” and prima facie classifiable to two headings they are classified to heading 8473 in accordance with general rule of interpretation 3(a) in Schedule 2 of the Act because the more specific description is in 8473. “Accessories for automatic data processing machines” is more specific than “ink”, as in 3215.
· It is permissible to use cases from foreign jurisdictions because the “Harmonised Commodity Description and Coding System” and the general rules of interpretation are observed internationally. This is especially valid where goods have not yet been classified in Australia but have been overseas. Epson cited several Australian authorities, eg the Transaction Australia case [25], Waterscheid [24], and the Sharp case [20] where there was a readiness to consider foreign authorities.
· The labelling of the cartridges as “consumables” by Epson is irrelevant. “Consumable” is not a word used in the tariff classification principles. Further, the labelling of items was said to establish nothing in respect of customs classification.
· In relation to classification of the cartridges as “parts” Epson argues that the Polaroid principle ([24] above) is confined to the facts of the Polaroid case.
· A part can be consumed. Epson refers to the Sharp case [20] as an example of a toner cartridge classified as a part though the toner was consumed in the printing process. In its response on 22 December 2003 Customs noted that the tribunal in Sharp had not received argument addressing the toner cartridge’s status as a consumable item. The tribunal relied in its decision on the Transaction case [25] which, it will be recalled, dealt with gas cylinders for forklifts. The Federal Court in Collector of Customs v Sharp Corporation of Australia Pty Ltd (1994) 35 ALD 589, 596 held the tribunal to have erred in law in not identifying from the Transaction Australia case that something essential to the operation of something else may not be a part of that thing. Sharp then appealed to the full Federal Court in Sharp Corporation Pty Ltd v Collector of Customs (1995) 59 FCR 6. The full court upheld the tribunal’s approach. Customs’ view is that the court did not realise that the toner cartridges in that case were consumables. In yet another submission dated 15 December 2003 Epson argued that at the tribunal level in Sharp [20] the toner powder was distinguished from the toner cartridge itself. It saw the toner itself as consumable, in accordance with Polaroid. The toner was classified as a chemical preparation for photographic uses. The tribunal separately decided that the cartridge was a part of the laser printer. Epson argued from this that its ink within the cartridge is classifiable as ink but that the cartridge itself is a part.
· An accessory can be consumed. Epson cites the Datron case [22] where consumable printing ribbons were held to be accessories.
36. In its further submission dated 15 December 2003 Epson argued that the Transaction Australia case [25] is applicable in the present circumstances because of the analogy established between the refillable gas cylinders in that case and the refillable (even if not refilled by Epson) cartridges in the present case.
37. Epson argues also in the second submission that there is no authority affirmatively stating that something essential can never be an accessory. It cited the Datron case at the tribunal level as an example where an essential item had been classified as an accessory.
38. I have not referred to a number of the foreign authorities cited by Epson in the above submission because I consider the Australian attitude to these authorities to be that Australian authorities, to the extent they comment on an issue, are to be preferred to the authorities from other jurisdictions. Consistent with this I note that in its reply to Epson’s submissions (dated 22 December 2003) Customs noted that none of the USA, Canada or the European Union appears to have authorities that follow the Polaroid principle [24] that a consumable cannot be a part or an accessory. Customs also noted that the cartridges in the present case have been classified as other than ink in the European Community. Customs wrote that “[s]ince there is sufficient domestic authority for the Tribunal to make a decision in this case, the respondent submits that the Tribunal should not refer to foreign cases.”
Application of the principles
39. The Act in s 7(1) requires that I classify the goods under Schedule 3 of the Act using the Interpretation Rules, defined in s 3(1) of the Act as the rules set out in Schedule 2 of the Act. From these rules I ascertain that classification is to be determined according to the terms of the headings and any other relative section or chapter notes. There then follow a number of specific provisions to be applied unless a heading or note requires otherwise.
40. Within these specific provisions is rule 2(b) which provides that “[a]ny 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 according to the principles of Rule 3”.
41. I find that the printer cartridges in the present application consist of a mixture of materials, namely ink, sponges and plastic (see the identification in [13] above). Rule 3 therefore applies.
42. Rule 3 identifies that, following the application of rule 2(b), the goods may be classifiable under two or more headings. I therefore find that the goods in issue in this application may be classifiable under two or more headings in Schedule 3. Further, I find that the headings are:
· 8473 Parts and accessories (other than covers, carrying cases and the like) suitable for use solely or principally with the machines of 8469 to 8472; and
· 3215 Printing, writing or drawing ink and other inks, whether or not concentrated or solid.
These headings are accepted by the parties as the potential headings.
43. Rule 3(a) requires that a heading providing the most specific description is to be preferred to headings providing a more general description. There is something to be said for each heading in respect of this rule. However, several matters need to be considered.
44. First, rule 3(a) proceeds to state that, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods, or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. In the present case I find that heading 3215 refers only to the ink included as part of the materials or substances contained in what are mixed or composite goods and makes no reference to the plastic or sponge materials. At the same time I find that heading 8473, in referring to parts and accessories suitable for use with the machines of 8469 to 8472, prima facie describes the goods in their entirety.
45. The respondent’s view, however, is that the goods cannot be classified to heading 8473 because note 2(b) to section XVI cannot apply. As was seen in [16], Customs argued that the goods are consumables and so cannot be parts of the machines in heading 8471 as note 2(b) would require if the goods were to be classified to a heading of chapter 84. Can the printer cartridges in this application be regarded as parts of the computers classified to heading 8471? Polaroid [16] seems to me to stand clearly for a negative proposition only, ie that a thing is not a part of another thing merely because the latter thing cannot be put to proper use without the former thing. It was Customs’ gloss on Gibbs J’s remarks in Polaroid that held that an item consumed cannot be a part of another thing. It is not an unreasonable gloss, however, given Gibbs J’s holding that “a part is something which, with others, makes up a whole”. The tenor of the overall reasoning in Polaroid and in Waterscheid [24] was that a part would be something customarily with the principal object and not prone to regular exhaustion, even if it might need infrequent replacement.
46. Arguably the goods could be accessories of the printers classified under 8471. Gibbs J’s examples of accessories (light meters, filters and wide angle lenses) in Polaroid involved durable goods that were not essential (even if useful) to the operation of the major object. That did not prevent Lehane J in the Federal Court in Boehringer Mannheim ([28] above) at pages 383-384 from holding that test strips designed for use in a specific photometer used to measure blood sugar levels were accessories in relation to the photometers as things contributing to a subordinate degree to the general result which the photometer was designed to produce. The test strips were used only once. At page 376 their use was described. A diabetes sufferer deposited a drop of blood on the test strip which changed colour according to the approximate blood sugar count. Insertion of the used strip into the photometer yielded an exact measure of the blood sugar count. The tribunal had held the strips to be accessories and the applicant challenged this on the basis that the tribunal had used the wrong test. It had decided that the strips were an accessory as they contributed to the working of the photometer which, without them, would be inactive meters. Lehane J noted at page 382 that Gibbs J had held that an accessory is “an adjunct, which itself is defined as something joined to another, but subordinate, as auxiliary, or dependent on it”.
47. Lehane J referred to Zendel ([28] above) where the full Federal Court had sounded several warnings about readily concluding that an object is not an accessory. Lockhart and Gummow JJ are quoted as page 382 of Boehringer Mannheim as stating that the meaning of “accessory” must be discerned from the particular context in which it is used. Lockhart and Gummow thought an accessory item must contribute to the working of some principal item or its general effect or appearance. Whitlam J in Zendel was described by Lehane J at page 383 saying that reasoning by analogy, while a common and useful process, has dangers. “It is, perhaps, all too easy to say that a camera will not function without a film, a recorder without a tape or a motor car without petrol; a film is not an accessory of a camera, a tape of a recorder[8] or petrol of a motor car: because a photometer, in a similar way, will not function without a test strip, consistent with authority a test strip is not an accessory of a photometer. But to say that is to fall into precisely the error which Whitlam J identified in the reasons of the earlier tribunal”. Lehane went on to say that he did not think authority required that a thing essential to the performance of the principal function of another thing cannot be an accessory of that other thing, “If something contributes to the working of a principal item or its general effect or appearance and, furthermore, is manufactured specifically for use with that principal item, why should it be regarded as an accessory only if it is not necessary to enable the principal item to do what it is designed to do? Such a conclusion, in the context, seems to me by no means wholly rational.” Lehane J concluded that the strips could properly be described as performing a subordinate, though essential, role in the performance of the photometer’s function. “They may properly, therefore, be described as accessory things in relation to the photometers; things contributing in a subordinate degree to the general result which the photometer is designed to produce.”
[8] As was held by the tribunal in Re National Panasonic ([16] above).
48. In its submissions dated 21 November 2003 Customs counselled against readily applying the Zendel and Boehringer Mannheim decisions in the current context. Referring to Zendel Customs said that the full court, in stating that an accessory must contribute to the working of a principal item or its general effect or appearance, was referring to a crucial element of a part in that a part contributes to the working of the whole. Customs reasoned that, “for this comment to be read as distinguishing parts from accessories, it must be read as implying that the principle [sic] item can work without the accessory”. I am not certain that I agree with this proposition. It may be that both parts and accessories contribute to the working of the whole but that the function of an accessory is subordinate to that of a part. It would seem to me that a light meter, filter or wide angle lens, Gibbs J’s examples of accessories, do contribute to the improved operation of a camera, even if the camera will operate without them.
49. Referring to Boehringer Mannheim, Customs argued that, although Gibbs J’s comments in Polaroid were quoted, Lehane J did not analyse the Polaroid decision in any detail. Again, I am not certain that this submission is sufficient to justify me in lightly disregarding relatively recent authority of the Federal Court. The seriousness, level and depth of analysis of the court in Boehringer Mannheim compares favourably with the seriousness, level and depth of analysis by Gibbs J in Polaroid. My concern with easy acceptance of such propositions from Customs as “a part cannot be a consumable” and “an accessory cannot be essential to the operation of the principal object” is that it involves reading principles into a set of examples cited by Gibbs J which he did not rationalise by reference to these general principles.
50. While it may be true that the interpretation of “accessory” accepted by the court in Boehringer Mannheim departs from the clearest of the dictionary definitions, there is no reason why a word such as this cannot derive its jurisprudential meaning initially from a general dictionary meaning only to have that meaning refined by later authoritative decisions that address the use of the word in a variety of technical situations. This might mean that the word assumes a somewhat technical legal meaning as time progresses.
51. That having been said it is necessary to see whether the cartridges in the present case can be categorised as parts or accessories. In Boehringer Mannheim the court saw the strips as performing a subordinate though essential role in the performance of the photometer. It seems to me that the cartridge may perform a similar function as the strips in relation to the inkjet printer’s function. In the case of the photometer a relatively simple component, a strip with a spot of blood, was readied for analysis by the photometer. In the present case the inkjet printer receives prompts from the computer, processes these into reproducible text and, using the ink dispensed by the cartridge, reproduces the text on the printed page. There is sufficient sophisticated work for the printer to do, independent of the printer cartridge, for the role of the cartridge to be seen as accessory to the principal object. I therefore find that the cartridges in question in this matter are not parts but are accessories for the purposes of the Act.
52. Interpretation Rule 3(a) requires that the heading which provides the most specific description shall be preferred to headings providing a more general description. The decisions in Datron [22], Cody [31] and Direct Alarm Supplies [31] provide guidance on this matter. Datron (concerned with computer printer ribbons) addressed heading 8473 and noted that it applied potentially to parts and accessories of a vast range of machines, ie all those included in headings 8469 to 8472. While item 8473.30.00 refined the applications to machines under heading 8471, item 8473.30.00 is not a “heading” for the purposes of rule 3(a). It is subheading which, in accordance with s 4(1)(b) of the Act and Interpretation Rule 1, can be compared and contrasted only with other subheadings within that one heading. Whitlam J preferred heading 9612 which applied to “typewriter or similar ribbons, inked or otherwise prepared for giving impressions, whether or not on spools or in cartridges …”.
53. Whitlam J’s decision was clearly correct. The tribunal (Re I P L Datron and Chief Executive Officer of Customs; Re Lexmark International (Aust) Pty Ltd and Chief Executive Officer of Customs (AAT 12013, 7 July 1997)[9]) classified the ribbons to heading 8473 on the basis of the reference in a subheading of 8473 to the machines of heading 8471, a reference specifically to automatic data processing machines. This involved a breach of the rule described in [52] regarding how different headings are to be compared. The description in heading 9612 contemplated application of the heading to all ribbons used in machine printing, including those in cartridges. I agree with Whitlam J in that case that the description of the items as ribbons was preferable to their description as parts and accessories of a wide range of what were essentially office machines (see footnote 2 above).
[9] A copy of this decision can be found in the website: present case is, however, distinguishable in that the description in heading 3215 is “printing, writing or drawing ink and other inks, whether or not concentrated or solid”. The heading in 9612 related specifically to products used solely for printing from printing machines. The emphasis in 9612 is to inks whether or not used in machine printing. This could involve a wider range of uses than use as an accessory to the range of machines in heading 8469 to 8472.
55. In Cody [31] the goods in question were black switch boxes designed for use with automatic data processing machines. They were classified to item 85.19 whereas the importer thought 84.55 the appropriate classification. They were eligible for classification under both headings and so rule 3(1)(a) (as it then was) was applicable. 84.55 referred to “parts and accessories … of a kind used solely or principally with machines of a kind falling within” 84.51 – 84.54. The importer regarded the goods as accessories used solely or principally with machines coming within item 84.55. The switch boxes provided for a low voltage power feed to computer printers. 85.19 referred to “electrical apparatus for making and breaking electrical circuits, for the protection of electrical circuits, or for making connections to or in electrical circuits (including switches, relays, fuses, lightning arresters, surge suppressors, plugs, lamp-holders and junction boxes) …”.
56. Their Honours (in the full Federal Court) held that 84.55 was the more specific description of the goods. Burchett J perhaps best explained the court’s reasoning at pages 354-355 where he said that a description of the black boxes as switches gave only a very general idea of the nature of the function which they performed. He said that for matching the vast number of electrical devices in the modern world, there was a great variety of switches of quite different types and different degrees of sophistication and specialisation. To describe the black boxes as accessories of computers was at least to narrow them down to the adjuncts of a special and identifiable type of machine. He thought that in the case of an accessory which is tailor made for use with a particular machine, so that it could not be used otherwise, this should be regarded as a quite specific description. Unless it was so regarded, there would be difficulty in seeing how item 84.55 could ever have application to accessories for every accessory is likely to be described in some other item of schedule 3 by some description referring to its nature or function. In a practical sense, considered as items of commerce, what gave these goods their identity was their function as adjuncts of computers. They were so specialised to serve that function that to describe them simply as switches would convey a quite inadequate impression of them.
57. Clearly, if that reasoning is applied here there would be much in favour of classifying the printer cartridges under heading 8473 rather than as generic ink under 3215. Customs criticised the reasoning in this case, however, because Their Honours did not address the fact that heading 84.55 related to accessories for the same “vast” range of machines as Whitlam J had referred to in Datron ([22] and [52] above), referring instead only to the switch boxes being accessories for the automatic data processing machines in heading 84.53. They effectively “read down” the express wording in heading 84.55 in a manner not acceptable to Whitlam J. My view is that Whitlam J’s approach is more firmly based.
58. In Direct Alarm Supplies [31] the goods were “control communicators” for a certain type of security system. They might have been classified as either “programmable controllers” under classification 8537.10.10 of the tariff schedule then in force, or as “parts for alarms” under 8531.90.00. Hill J in the Federal Court held that they had been incorrectly classified as parts for alarms and that they were programmable controllers. In paragraph 17 of his reasoning Hill J said that, for the purpose of determining the application of rule 3(a), the question was not whether the goods were specifically within one heading or the other, but rather which heading provided the more specific description of the goods. To identify the goods in question as parts for an alarm system would not describe the goods with any specificity. It would be a description equally applicable to lights, bells, and other items which form part of alarm systems. On the other hand, to describe the goods as programmable controllers, would be to give the goods a more specific description, notwithstanding the purpose for which the programmable controller was to be used would not be capable of identification.
59. This decision favours Customs’ argument. In the present case, based on Hill J’s views, it might be said that classifying the cartridges as accessories for a range of office machines would not describe the goods with any specificity. It might also be said that classification according to function, supplying and applying ink, does provide specificity.
60. I have concluded on the basis of these authorities that, applying rule 3(a), the classification would be to heading 3215 but for the fact, conceded by Customs (at [16]), that the “ink” description would describe only part of the subject goods and could not be regarded as specific. Customs conceded at the same time that heading 8473 appeared to classify the whole of the object and so attract Interpretation Rule 1. However, the composite nature of the cartridge means, through rule 2(b), that classification must occur through rule 3. Within Interpretation Rule 3 it is rule 3(b) that applies in relation to composite goods. It requires an assessment of the material or component that gives the composite goods their essential character. As noted in [16], Customs’ argument is that it is the ink that gives the goods their essential character. The ink is said to provide the major volume and value component of the goods. The cartridges are said, by their nature and function, not to be significantly different from ink cartridges for fountain pens. As Customs said in paragraph 25 of the statement provided pursuant to s 37(1)(a), the Harmonized System Explanatory Notes for heading 9608 give guidance in the classification of fountain pen cartridges. The explanatory notes exclude fountain pens from heading 9608 and place them under the constituent material heading 3215.
61. I find Customs’ arguments convincing in relation to rule 3(b) and I endorse them. I find that the correct classification of the goods is under heading 3215.
CONCLUSION
62. The goods in question have been found to merit classification to item 3215.11.00 for black ink cartridges and to 3215.19.00 for coloured ink cartridges. This confirms the decision by Customs which was appealed by Epson.
63. In accordance with regulation 126 of the Regulations Epson will not receive a refund of the duty paid under protest.
DECISION
64. The decision under review is affirmed.
I certify that the 64 preceding paragraphs are a true copy of the reasons for the decision herein of Michael Sassella, Senior Member
Signed: .....................................................................................
AssociateDate of hearing 24 November 2003
Date of final submissions 22 December 2003
Date of decision 30 March 2004
Counsel for the applicant Mr G Cantelo
Solicitor for the applicant Geoffrey Cantelo, SolicitorCounsel for the respondent Mr L Kennedy, Australian Government Solicitor's Office
Solicitor for the respondent Australian Government Solicitor
SCHEDULE 1 – LEGISLATION
Relevant provisions from the Customs Tariff Act 1995, together with editorial comment, some drawn from the Explanatory Memorandum for the Customs Tariff Bill 1995, are as follows:
Definitions
3.(1) In this Act, unless the contrary intention appears:
…
Chapter means a Chapter of a Section in Schedule 3.
[Ed: Readers will notice below that the structure of Schedule 3 is hierarchical. At the apex is the “SECTION”. There may or may not be “Notes” relating to the whole of the su7cceeding section. Then there follow “CHAPTERS”, each of which may or may not contain Notes affecting that chapter. There are then “HEADINGS” of four numerals and sub-headings. This definition explains that any reference in the Act to a Chapter is to a Chapter in Schedule 3.]
…
Convention means the International Convention on the Harmonized Commodity Description and Coding System done at Brussels on 14 June 1983.
[Ed: This convention can be found at means a heading in Schedule 3.
[Ed: See comment regarding s 4 below.]
…
Interpretation Rules means the General Rules for the Interpretation of the Harmonized System provided for by the Convention, as set out in Schedule 2.
[Ed: Article 3.1(a)(ii) of the Convention provides for contracting parties’ adherence to the Interpretation Rules.]
…
(2) In Schedule 3, unless the contrary intention appears, Section means a Section of Schedule 3.
…
Headings in Schedule 3
4.(1) In Schedule 3:
(a) either:
(i) 4 digits in the first column; or
(ii) 8 digits in the first column not opposite to a dash or dashes in the second column;
indicate the beginning of a heading; and
(b) 5, 6, 7 or 8 digits in the first column opposite to a dash or dashes in the second column indicate the beginning of a subheading of the heading in which the digits appear.
(2) In this Act or in any Act that amends, or in any Tariff instrument that relates to, this Act:
(a) a heading may be referred to by the digits with which the heading begins; and
(b) a subheading of a heading may be referred to by the digits with which the subheading begins.
[Ed: The Explanatory Memorandum states that a hierarchical structure is necessary in Schedule 3 as the Interpretation Rules (in Schedule 2 of the Act) require that in classifying goods, headings be compared with other headings and not with subheadings, and that a subheading can only be compared with other subheadings of that heading at the same level (ie with the same number of dashes in the second column.]
…
Tariff classification
6. A reference in this Act to the tariff classification under which particular goods are classified is a reference to the heading or subheading:
(a) in whose third column a rate of duty is set out; and
(b) under which the goods are classified.
Rules for classifying goods in Schedule 3
7.(1) The Interpretation Rules must be used for working out the tariff classification under which goods are classified.
(2) If the letters "NSA" are specified in relation to a description of goods in the second column of a subheading of a heading, the goods described do not include any goods prima facie classified under a preceding subheading of that heading whose second column begins with the same number of dashes as the first-mentioned subheading.
(3) A reference in the Interpretation Rules to Notes includes a reference to Additional Notes.
[Ed: The Explanatory Memorandum states that the Interpretation Rules are an integral part of the Harmonized System Convention and have been drafted so that their application will ensure internationally consistent tariff classification of goods in the Harmonized System Nomenclature. Australia, as a national administration, is required to apply the rules and the World Customs Organization has provided administrations with Explanatory Notes to assist in this regard. The Explanatory Notes provide explanations and examples of the intended coverage of headings and subheadings of Schedule 3 and are therefore to be used as a guide in the classification of goods.]
…
Rates of duty—ad valorem duties
9.(1) Unless the contrary intention appears, if, in a rate column in Schedule 3 or 4, reference is made to a percentage in relation to goods or in relation to a part, component or ingredient of goods:
(a) the reference is to that percentage of the value of the goods, or of that part, component or ingredient of the goods, as the case may be; and
(b) the percentage is a rate of duty.
(2) The value of a part, component or ingredient of any goods for the purposes of this Act is, unless the contrary intention appears, such proportion of the value of the goods as the Chief Executive Officer determines.
…
Imposition of duties
15. Duties of Customs are imposed by this Act on:
(a) goods imported into Australia on or after 1 July 1996; and
(b) goods:
(i) imported into Australia before 1 July 1996; and
(ii) entered, or again entered, for home consumption on or after that day.
…
SCHEDULE 2 - GENERAL RULES FOR THE INTERPRETATION OF SCHEDULE 3 Section 7
Classification of goods in Schedule 3 shall be governed by the following principles:
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:
2. (a) Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also be taken to include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this Rule), presented unassembled or disassembled.
(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 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 or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods.
(b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, 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.
5. In addition to the foregoing provisions, the following Rules shall apply in respect of the goods referred to therein:
(a) Camera cases, musical instrument cases, gun cases, drawing instrument cases, necklace cases and similar containers, specially shaped or fitted to contain a specific article or set of articles, suitable for long-term use and presented with the articles for which they are intended, shall be classified with such articles when of a kind normally sold therewith. This Rule does not, however, apply to containers which give the whole its essential character;
(b) Subject to the provisions of Rule 5(a) above, packing materials and packing containers presented with the goods therein shall be classified with the goods if they are of a kind normally used for packing such goods. However, this provision is not binding when such packing materials or packing containers are clearly suitable for repetitive use.
6. For legal purposes, 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 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.
SCHEDULE 3 - CLASSIFICATION OF GOODS AND GENERAL AND SPECIAL RATES OF DUTY Section 7
[Ed: The Explanatory Memorandum states that this Schedule has been the subject of about 350 changes agreed by signatory countries to the HCDCS. By the application of national tariff splits to preserve the rates of duty previously legislated that number rose to some 550 changes. There were five commodities where existing duty rates were not able to be preserved or there was some doubt that the rates were not maintained. These commodities included, in the current context, “Input/output units for computers – Chapter 84”.]
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SECTION VI Products of the chemical or allied industries
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CHAPTER 32 Tanning or dyeing extracts; tannins and their derivatives; dyes, pigments and other colouring matter; paints and varnishes; putty and other mastics; inks
Notes.
1.-This Chapter does not cover:
(a) Separate chemically defined elements or compounds (except those of 3203.00.00 or 3204, inorganic products of a kind used as luminophores (3206), glass obtained from fused quartz or other fused silica in the forms provided for in 3207, and also dyes and other colouring matter put up in forms or packings for retail sale, of 3212);
(b) Tannates or other tannin derivatives of products of 2936 to 2939, 2941 or 3501 to 3504.00.00; or
(c) Mastics of asphalt or other bituminous mastics (2715.00.00).
2.-3204 includes mixtures of stabilised diazonium salts and couplers for the production of azo dyes.
3.-3203.00.00, 3204, 3205.00.00 and 3206 apply also to preparations based on colouring matter (including, in the case of 3206, colouring pigments of 2530 or Chapter 28, metal flakes and metal powders), of a kind used for colouring any material or used as ingredients in the manufacture of colouring preparations. The headings do not apply, however, to pigments dispersed in non-aqueous media, in liquid or paste form, of a kind used in the manufacture of paints, including enamels (3212), or to other preparations of 3207, 3208, 3209, 3210.00.00, 3212, 3213 or 3215.
4.-3208 includes solutions (other than collodions) consisting of any of the products specified in 3901 to 3913 in volatile organic solvents when the weight of the solvent exceeds 50% of the weight of the solution.
5.-In this Chapter, "colouring matter" does not include products of a kind used as extenders in oil paints, whether or not they are also suitable for colouring distempers.
6.-In 3212, "stamping foils" applies only to thin sheets of a kind used for printing, for example, book covers or hat bands, and consisting of:
(a) Metallic powder (including powder of precious metal) or pigment, agglomerated with glue, gelatin or other binder; or
(b) Metal (including precious metal) or pigment, deposited on a supporting sheet of any material.
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3215 PRINTING INK, WRITING OR DRAWING INK AND OTHER INKS, WHETHER OR NOT CONCENTRATED OR SOLID:
3215.1 -Printing ink:
3215.11.00 --Black 5%
3215.19.00 --Other 5%
3215.90.00 -Other 5%
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SECTION XVI Machinery and mechanical appliances; electrical equipment; parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles
Notes.
1.-This Section does not cover:
(a) Transmission or conveyor belts or belting, of plastics of Chapter 39, or of vulcanised rubber (4010); or other articles of a kind used in machinery or mechanical or electrical appliances or for other technical uses, of vulcanised rubber other than hard rubber (4016);
(b) Articles of leather or of composition leather (4204.00.00) or
of furskin (4303), of a kind used in machinery or mechanical appliances or for other technical uses;
(c) Bobbins, spools, cops, cones, cores, reels or similar supports, of any material (for example, Chapter 39, 40, 44 or 48 or Section XV);
(d) Perforated cards for Jacquard or similar machines (for example, Chapter 39 or 48 or Section XV);
(e) Transmission or conveyor belts or belting, of textile material (5910.00.00) or other articles of textile material for technical uses (5911);
(f) Precious or semi-precious stones (natural, synthetic or reconstructed) of 7102 to 7104, or articles wholly of such stones of 7116, except unmounted worked sapphires and diamonds for styli (8522);
(g) Parts of general use, as defined in Note 2 to Section XV, of base metal (Section XV), or similar goods of plastics (Chapter 39);
(h) Drill pipe (7304);
(ij) Endless belts of metal wire or strip (Section XV);
(k) Articles of Chapter 82 or 83;
(l) Articles of Section XVII;
(m) Articles of Chapter 90;
(n) Clocks, watches or other articles of Chapter 91;
(o) Interchangeable tools of 8207 or brushes of a kind used as parts of machines (9603); similar interchangeable tools are to be classified according to the constituent material of their working part (for example, in Chapter 40, 42, 43, 45 or 59 or 6804 or 6909);
(p) Articles of Chapter 95; or
(q) Typewriter or similar ribbons, whether or not on spools or in cartridges (classified according to their constituent material, or in 9612 if inked or otherwise prepared for giving impressions).
2.-Subject to Note 1 to this Section, Note 1 to Chapter 84 and Note 1 to Chapter 85, parts of machines (not being parts of the articles of 8484, 8544, 8545, 8546 or 8547) are to be classified according to the following rules:
(a) Parts which are goods included in any of the headings of Chapter 84 or 85 (other than 8409, 8431, 8448, 8466, 8473, 8485, 8503.00.00, 8522, 8529, 8538 and 8548) are in all cases to be classified in their respective headings;
(b) Other parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading (including a machine of 8479 or 8543) are to be classified with the machines of that kind or in 8409, 8431, 8448, 8466, 8473, 8503.00.00, 8522, 8529 or 8538 as appropriate. However, parts which are equally suitable for use principally with the goods of 8517 and 8525 to 8528 are to be classified in 8517;
(c) All other parts are to be classified in 8409, 8431, 8448, 8466, 8473, 8503.00.00, 8522, 8529 or 8538 as appropriate or, failing that, in 8485 or 8548.
3.-Unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines designed for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function.
4.-Where a machine (including a combination of machines) consists of individual components (whether separate or interconnected by piping, by transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function covered by one of the headings in Chapter 84 or Chapter 85, then the whole falls to be classified in the heading appropriate to that function.
5.-For the purposes of these Notes, "machine" means any machine, machinery, plant, equipment, apparatus or appliance cited in the headings of Chapter 84 or 85.
Additional Notes.
1.-In this Section, "computer control" means a controlling unit that incorporates at least one electronic microcircuit that is part of the microcircuitry of the controlling unit, being microcircuitry that enables the unit:
(a) to store and process, or manipulate, data;
(b) when programmed, to automatically control the operation of the appliance, machine or apparatus independently of human control;
(c) to wholly or substantially control the operation and movement of the appliance, machine or apparatus by the use of a numeric-servo closed loop; and
(d) to be re-programmable in respect of the unit's control of the appliance, machine or apparatus.
2.-For the purposes of Note 2(a) to this Section, "respective headings" does not include headings in which goods are classifiable as parts.
3.-For the purposes of Note 2(b) to this Section, "with the machines of that kind" means in the same heading as those machines unless there is a separate heading for parts of or for those machines (not being 8485 or 8548).
4.-"Accessories" in 8448, 8466, 8473 or 8522 does not apply to goods which are otherwise described in any of the headings of Chapters 84 and 85.
CHAPTER 84 Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof
Notes.
1.-This Chapter does not cover:
(a) Millstones, grindstones or other articles of Chapter 68;
(b) Machinery or appliances (for example, pumps) of ceramic material and ceramic parts of machinery or appliances of any material (Chapter 69);
(c) Laboratory glassware (7017); machinery, appliances or other articles for technical uses or parts thereof, of glass (7019 or 7020);
(d) Articles of 7321 or 7322 or similar articles of other base metals (Chapters 74 to 76 or 78 to 81);
(e) Electro-mechanical domestic appliances of 8509; digital cameras of 8525; or
(f) Hand-operated mechanical floor sweepers, not motorised (9603).
2.-Subject to the operation of Note 3 to Section XVI, a machine or appliance which answers to a description in one or more of 8401 to 8424 and at the same time to a description in one or other of 8425 to 8480 is to be classified under the appropriate heading of the former group and not the latter.
8419 does not, however, cover:
(a) Germination plant, incubators or brooders (8436);
(b) Grain dampening machines (8437);
(c) Diffusing apparatus for sugar juice extraction (8438);
(d) Machinery for the heat-treatment of textile yarns, fabrics or made up textile articles (8451); or
(e) Machinery or plant, designed for a mechanical operation, in which a change of temperature, even if necessary, is subsidiary.
8422 does not cover:
(a) Sewing machines for closing bags or similar containers (8452); or
b) Office machinery of 8472.
8424 does not cover:
Ink-jet printing machines (8443 or 8471).
3.-A machine-tool for working any material which answers to a description in 8456 and at the same time to a description in 8457, 8458, 8459, 8460, 8461, 8464 or 8465 is to be classified in 8456.
4.-8457 applies only to machine-tools for working metal, other than lathes (including turning centres), which can carry out different types of machining operations either:
(a) by automatic tool change from a magazine or the like in conformity with a machining programme (machining centres),
(b) by the automatic use, simultaneously or sequentially, of different unit heads working on a fixed position workpiece (unit construction machines, single station), or
(c) by the automatic transfer of the workpiece to different unitheads (multi-station transfer machines).
5.-(A) For the purposes of 8471, "automatic data processing machines" means:
(a) Digital machines, capable of:
(1) storing the processing program or programs and at least the data immediately necessary for the execution of the program;
(2) being freely programmed in accordance with the requirements of the user;
(3) performing arithmetical computations specified by the user; and
(4) executing, without human intervention, a processing program which requires them to modify their execution, by logical decision during the processing run;
(b) Analogue machines capable of simulating mathematical models and comprising at least: analogue elements, control elements and programming elements;
(c) Hybrid machines consisting of either a digital machine with analogue elements or an analogue machine with digital elements.
(B) Automatic data processing machines may be in the form of systems consisting of a variable number of separate units. Subject to paragraph (E) below, a unit is to be regarded as being a part of acomplete system if it meets all of the following conditions:
(a) It is of a kind solely or principally used in an automatic data processing system;
(b) It is connectable to the central processing unit either directly or through one or more other units; and
(c) It is able to accept or deliver data in a form (codes or signals) which can be used by the system.
(C) Separately presented units of an automatic data processing machine are to be classified in 8471.
(D) Printers, keyboards, X-Y co-ordinate input devices and disk storage units which satisfy the conditions of paragraphs (B)(b) and (B)(c) above, are in all cases to be classified as units of 8471.
(E) Machines performing a specific function other than data processing and incorporating or working in conjunction with an automatic data processing machine are to be classified in the headings appropriate to their respective functions or, failing that, in residual headings.
6.-8482 applies, inter alia, to polished steel balls, the maximum and minimum diameters of which do not differ from the nominal diameter by more than 1% or by more than 0.05 mm, whichever is less. Other steelballs are to be classified in 7326.
7.-A machine which is used for more than one purpose is, for the purposes of classification, to be treated as if its principal purpose were its sole purpose.
Subject to Note 2 to this Chapter and Note 3 to Section XVI, a machine the principal purpose of which is not described in any heading or for which no one purpose is the principal purpose is, unless the context otherwise requires, to be classified in 8479. 8479 also covers machines for making rope or cable (for example, stranding, twisting or cabling machines) from metal wire, textile yarn or any other material or from a combination of such materials.
8.-For the purposes of 8470, "pocket-size" applies only to machines the dimensions of which do not exceed 170 mm x 100 mm x 45 mm.
Subheading Notes.
1.-For the purposes of 8471.49.00, "systems" means automatic data processing machines whose units satisfy the conditions laid down in Note 5(B) to Chapter 84 and which comprise at least a central processing unit, one input unit (for example, a keyboard or a scanner), and one output unit (for example, a visual display unit or a printer).
2.-8482.40 applies only to bearings with cylindrical rollers of a uniform diameter not exceeding 5 mm and having a length which is at least three times the diameter. The ends of the rollers may be rounded.
Additional Notes.
1.-In this Chapter, the power of an internal combustion piston engine shall be taken to be the net output, expressed in kilowatts, that the engine is capable of delivering continuously at a stated crankshaft speed under standard operating conditions.
2.-For the purposes of this Chapter, "operating weight" means the combined weight of the machine, the driver and a tank full of fuel.
3.-8422 does not cover machines which collate and load, or merely load or unload, packs or units of goods (in one or more tiers or layers) onto pallets, slipsheets or the like (8428).
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8469 TYPEWRITERS OTHER THAN PRINTERS OF 8471; WORD-PROCESSING MACHINES:
8469.1 -Automatic typewriters and word-processing machines:
8469.11.00 --Word-processing machines Free
8469.12.00 --Automatic typewriters Free
8469.20.00 -Other typewriters, electric Free
8469.30.00 -Other typewriters, non-electric Free
8470 CALCULATING MACHINES AND POCKET-SIZE DATA RECORDING, REPRODUCING AND DISPLAYING MACHINES WITH CALCULATING FUNCTIONS; ACCOUNTING MACHINES, POSTAGE-FRANKING MACHINES, TICKET-ISSUING MACHINES AND SIMILAR MACHINES, INCORPORATING A CALCULATING DEVICE; CASH REGISTERS:
8470.10.00 -Electronic calculators capable of operation without an external source of electric power and pocket-size data recording, reproducing and displaying machines with calculating functions Free
8470.10 * * * * *
8470.10.10 * * * * *
8470.10.90 * * * * *
8470.2 -Other electronic calculating machines:
8470.21.00 --Incorporating a printing device Free
8470.29.00 --Other Free
8470.30.00 -Other calculating machines Free
8470.40.00 -Accounting machines Free
8470.50.00 -Cash registers Free
8470.90.00 -Other Free
8471 AUTOMATIC DATA PROCESSING MACHINES AND UNITS THEREOF; MAGNETIC OR OPTICAL READERS, MACHINES FOR TRANSCRIBING DATA ONTO DATA MEDIA IN CODED FORM AND MACHINES FOR PROCESSING SUCH DATA, NOT ELSEWHERE SPECIFIED OR INCLUDED:
8471.10.00 -Analogue or hybrid automatic data processing machines
Free
8471.30.00 -Portable digital automatic data processing machines, weighing not more than 10 kg, consisting of at least a central processing unit, a keyboard and a display Free
8471.4 -Other digital automatic data processing machines:
8471.41.00 --Comprising in the same housing at least a central processing unit and an input and output unit, whether or not combined Free
8471.49.00 --Other, presented in the form of systems Free
8471.50.00 -Digital processing units other than those of 8471.41.00 or 8471.49.00, whether or not containing in the same housing one or two of the following types of unit: storage units, input units, output units Free
8471.60.00 -Input or output units, whether or not containing storage units in the same housing Free
8471.70.00 -Storage units Free
8471.80.00 -Other units of automatic data processing machines
Free
8471.90.00 -Other Free
8472 OTHER OFFICE MACHINES (FOR EXAMPLE, HECTOGRAPH OR STENCIL DUPLICATING MACHINES, ADDRESSING MACHINES, AUTOMATIC BANKNOTE DISPENSERS, COIN-SORTING MACHINES, COIN-COUNTING OR WRAPPING MACHINES, PENCIL-SHARPENING MACHINES, PERFORATING OR STAPLING MACHINES):
8472.10.00 -Duplicating machines Free
8472.20.00 -Addressing machines and address plate embossing machines
Free
8472.30.00 -Machines for sorting or folding mail or for inserting mail in envelopes or bands, machines for opening, closing or sealing mail and machines for affixing or cancelling postage stamps Free
8472.90 -Other:
8472.90.10 ---Stapling machines 5%
DCS:4%
DCT:5%
8472.90.90 ---Other Free
8473 PARTS AND ACCESSORIES (OTHER THAN COVERS, CARRYING CASES AND THE LIKE) SUITABLE FOR USE SOLELY OR PRINCIPALLY WITH THE MACHINES OF 8469 TO 8472:
8473.10.00 -Parts and accessories of the machines of 8469 Free
8473.2 -Parts and accessories of the machines of 8470:
8473.21.00 --Of the electronic calculating machines of 8470.10.00, 8470.21.00 or 8470.29.00 Free
8473.21 * * * * *
8473.21.10 * * * * *
8473.21.90 * * * * *
8473.29.00 --Other Free
8473.30.00 -Parts and accessories of the machines of 8471 Free
8473.40.00 -Parts and accessories of the machines of 8472 Free
8473.50.0 -Parts and accessories equally suitable for use with machines of two or more of 8469 to 8472 Free
8473.50 * * * * *
8473.50.10 * * * * *
8473.50.90 * * * * *
Details
- AGLC
- Epson Australia Pty Ltd and Chief Executive Officer of Customs [2004] AATA 324
- Case
- [2004] AATA 324
- Decision Date
CaseChat Overview and Summary
Epson Australia Pty Ltd sought review of a decision to refuse a refund of customs duties paid under protest. The dispute involved the classification of printer cartridges for inkjet printers for the purposes of determining customs duties. The court was required to determine whether the cartridges were properly classified as printing inks or as parts or accessories for automatic data processing machines. The latter classification would have entitled Epson to a refund of the duties paid. The court examined the legislative framework including the Customs Tariff Act 1995, the Customs Act 1901, and the Customs Regulations 1926, as well as relevant case law.
The court considered whether the printer cartridges were composite goods and, if so, which component of the composite good should be used for classification purposes. The court found that the cartridges were composite goods, comprising both the physical cartridge and the printing ink contained within it. The court held that the printing ink was the dominant component of the cartridges for classification purposes. The court held that the cartridges could not be classified as accessories for automatic data processing machines, as they did not function as integral parts of such machines, but rather as consumables that could be used with various types of printers. The court affirmed the decision to refuse a refund of the customs duties paid under protest.
The court's decision was based on a detailed analysis of the relevant legislation and case law, as well as expert evidence about the nature and function of printer cartridges. The court held that the cartridges were properly classified as printing inks, which attracted customs duties at the relevant time. The court found that the cartridges did not meet the criteria for classification as accessories for automatic data processing machines, as they were not integral parts of such machines and could be used with a range of different printers. The decision under review was affirmed.Orders
Orders of the court
The decision under review is affirmed.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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