H J Heinz Co Ltd and Chief Executive Officer of Customs
[2004] AATA 1063
•12 October 2004
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2004] AATA 1063
ADMINISTRATIVE APPEALS TRIBUNAL )
) No N2001/730
GENERAL ADMINISTRATIVE DIVISION ) Re H J HEINZ CO LTD Applicant
And
CHIEF EXECUTIVE OFFICER OF CUSTOMS
Respondent
DECISION
Tribunal Ms G Ettinger, Senior Member Date12 October 2004
Place Sydney
Decision The Tribunal affirms the decisions of the Respondent with regard to all the 101 processed tuna products for review.
[Sgd] Ms G Ettinger Senior Member
CATCHWORDS
CUSTOMS AND EXCISE – tariff classification of canned and pouch tuna – sandwich tuna, shredded tuna, chunk tuna, flake tuna and/or tuna mixed with flavouring and other ingredients - minced or fish in pieces – trade or industry meaning – ordinary meaning - decision affirmed.
LEGISLATION
Customs Tariff Act 1995 ss 16, 17, 18, 20, Schedule 2, Chapter 16 of Schedule 3 Heading 1604
CASE LAW
Grocery Holdings Pty Ltd and Chief Executive Officer of Customs (2003) 74 ALD 212
Grocery Holdings Pty Ltd and Chief Executive Officer of Customs [2004] FCAFC 85
Re Gissing and The Collector of Customs (1977) 14 ALR 555
Times Consultants Pty Ltd v Collector of Customs (1978) 16 FCR 449
Re Tridon Pty Ltd and Collector of Customs (1982) 4 ALD 615
Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389
Pepsi Seven-Up Bottlers v Commissioner of Taxation (1995) 62 FCR 289
Times Consultants Pty Ltd v Collector of Customs (Qld) (1987) 76 ALR 313
Re Freudenberg (Australia) Pty Ltd and Department of Business and Consumer Affairs (1978) ALD 295
Re Pacific Film Laboratories Pty Ltd & Collector of Customs (1979) 2 ALD 144
Re Sterns Playland Pty Ltd & Collector of Customs (No 2) (1982) 4 ALD 562
Re Ganchov v Comcare (1990) 19 ALD 541
Filter-Tex Media Pty Ltd v Chief Executive Officer of Customs [1998] 720 FCA
Australian Gas Light Co v Valuer-General (1940) 40 SR (NSW) 126
REASONS FOR DECISION
12 October 2004
BACKGROUND
Ms G Ettinger, Senior Member 1. The decision for review before the Administrative Appeals Tribunal (“the Tribunal”) was the appeal by H J Heinz Company Ltd (“Heinz”), (“the Applicant”), against the decision of the Chief Executive Officer of Customs (“the CEO”), the Respondent in these proceedings, to classify tuna products imported by the Applicant, to Tariff Item 1604.14.00 “Fish, whole or in pieces, but not minced” (Tuns, skipjack...). On 8 December 2000, the CEO accepted payment of additional duty paid under protest by Heinz. There were also refund applications which were rejected by the Respondent, a total of 101 entries in the two categories. The Statement of Findings on Material Questions of Fact and Reasons for Decision affirming the decision of the CEO, and dated 27 November 2001, was before the Tribunal at T2.
2. This matter commenced before me on 28 August 2002. I adjourned it after taking certain evidence, while a case dealing with related issues, and a different appellant, proceeded before Deputy President Forgie, being Grocery Holdings Pty Ltd and Chief Executive Officer of Customs (2003) 74 ALD 212. The decision in that case was handed down on 21 May 2003, and was appealed to the Full Federal Court, which handed down Grocery Holdings Pty Ltd and Chief Executive Officer of Customs [2004] FCAFC 85, on 1 April 2004. The Full Federal Court dismissed the appeal of Grocery Holdings Pty Ltd. After a number of Directions Hearings and further lodgement of documents, the Heinz matter resumed on 8, 9, and 10 September 2004. Written closing submissions were lodged with the Tribunal by both parties on 24 September 2004.
3. On the first day of Hearing of the application in 2002, the Applicant was represented by Mr I Rodda of Rodda Castle & Co Pty Ltd, and the CEO by Mr G Komora, solicitor, of the Australian Government Solicitor. At the 2004 Hearings, the Applicant was represented by Dr G Flick SC of counsel, instructed by Mr Rodda, and the Respondent by Mr Komora.
4. There was no dispute between the parties that Heinz imports a variety of prepared tuna products packed in cans and pouches. They are labelled amongst other things, as chunk, shredded and sandwich tuna, and certain of the products, as can be seen in the list of Exhibits, have flavouring such as olive oil, curry and vegetables added. The labels describe the added flavourings.
ISSUE BEFORE THE TRIBUNAL
5. The issue in this case is to which Tariff classification the goods imported into Australia by Heinz, the 101 cans/pouches of tuna, subject of this application, are properly classified, whether it is to Tariff classification Sub-heading 1604.14.00 as claimed by the Respondent, or to Sub-heading 1604.20.00 in Schedule 3 of the Customs Tariff Act 1995 (“the Customs Tariff Act”), as claimed by the Applicant.
LEGISLATIVE CONTEXT
6. Part II of the Customs Tariff Act provides for imposition of duties of customs. Section 15 of the Customs Tariff Act provides that duties of customs are imposed on goods imported into Australia on or after 1 July 1996, and on goods which are imported into Australia before 1 July 1996 and entered, or again entered, for home consumption on or after that day. The duty payable upon such goods is worked out in the manner provided for in sections 16, 17, 18, 20 and 22. Section 16(a) provides that:
“if the goods are not the produce or manufacture of a Preference Country - [the duty is worked out] by reference to the general rate set out in the third column of the tariff under which the goods are classified;”
7. A reference to Tariff under which the goods are classified is a reference to the Heading or Sub-heading in whose third column a rate of duty is set out and under which the goods are classified (section 6). The reference to a Heading and a Sub-heading is a reference to those appearing in Schedule 3 to the Customs Tariff Act (section 3(1)).
8. Chapter 16 of Schedule 3, which is headed “Preparations of meat, of fish or of crustaceans, molluscs or other aquatic invertebrates”, is relevant in this case. Heading 1604 relevantly reads:
“1604 PREPARED OR PRESERVED FISH; CAVIAR AND CAVIAR SUBSTITUTES PREPARED FROM FISH EGGS:
1604.1- Fish, whole or in pieces, but not minced:
…
1604.14.00-- Tunas, skipjack and bonito (Sarda spp) 5%
…
1604.20.00- Other prepared or preserved fish Free
…”
9. The tariff for goods coming under Sub-heading 1604.14.00 is 5 percent, and for those coming under Sub-heading 1604.20.00 is Free.
10. Schedule 2 of the Customs Act sets out the General Rules for the Interpretation of the Harmonized System provided for by the Convention ("Interpretation Rules"). Those Interpretation Rules must be used in working out Tariff classification under which goods are classified (section 7(1)). They are reproduced further on in these Reasons for Decision.
EVIDENCE BEFORE THE TRIBUNAL
11. The documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (“T-documents”) were admitted into evidence together with a number of other Exhibits as listed below. The tuna products were admitted into evidence on the first day of Hearing in 2002.
ITEM
DATE
NAME
Statement of M Moffat
19 April 2002
Exhibit A1
Statement of S Soroka
5 March 2002
Exhibit A2
Supplementary Statement of S Soroka with deletion
23 August 2002
Exhibit A3
170 g shredded, sandwich tuna
Exhibit A4
170 g can sandwich tuna
Exhibit A5
1 kg pouch sandwich tuna in spring water
Exhibit A6
95 g tomato & onion can of tuna (Thailand)
Exhibit A7
95 g tuna (tomato & onion); (canned in Australia)
Exhibit A8
150 g pouch flavoured tuna - sweet Thai chilli
Exhibit A9
425 g chunk tuna in brine – Seahaven
Exhibit A10
425 g can chunks in olive oil - Greenseas
Exhibit A11
180 g chunks in olive oil water - Greenseas
Exhibit A12
180 g chunks in spring water - Greenseas
Exhibit A13
180 g tuna in spring water - Weightwatchers
Exhibit A14
95 g chunks in brine – Greenseas
Exhibit A15
1 kg chunks in spring water – Greenseas
Exhibit A16
85 g pouch tuna chunks
Exhibit A17
400 g creamy Mornay tuna plus
Exhibit A18
200 g mild Indian curry tuna, gourmet
Exhibit A19
125 g tuna lunch kit (pack containing 95 g tuna) (can as in A15)
Exhibit A20
130 g tuna lunch kit (pack containing 85 g tuna)
Exhibit A21
125 g tuna slices, lightly smoked
Exhibit A22
Statement of T Real
9 August 2004
Exhibit A23
DVD – Bangkok processing factory
2004
Exhibit A24
Statement of H Peters & attachments
4 August 2004
Exhibit A25
Statement of Professor M Wootton
6 September 2004
Exhibit A26
Photographs of products which are also Exhibits of tuna products in this matter
2004
M.F.I. (1)
Section 37, T-documents, T1-T32 (pp1-113)
Exhibit R1
Statement of B Wailes (with deletions) and attachments
9 September 2004
Exhibit R2
Statement of B Jeffriess (with deletions) and attachments
9 September 2004
Exhibit R3
12. Oral evidence was given by:
· S Soroka, in 2002, General Manager of Pelagic Fish Processors at Eden (Exhibits A2 & A3); he had worked for Heinz for almost 30 years in various capacities;
· T Real, General Manager and Director, Starkist South East Asia Inc, Bangkok, (a wholly owned subsidiary of H J Heinz Overseas LLC, USA (Exhibit A23);
· M Wootton, Adjunct Associate Professor in Food Science and Technology, University of New South Wales, (Exhibit A26);
· B Wailes, Consultant in the food industry, Wailes and Associates, (Exhibit R2);
· B Jeffriess, who is President and CEO of the Tuna Boat Owners Association of Australia and holds several other private and Government appointments (Exhibit R3); and
· H Peters, Managing Director, Marine Product Marketing Pty Ltd, (Exhibit A25).
APPLICANT’S SUBMISSIONS
13. Dr Flick’s submissions were given immediately after the close of oral evidence on 10 September 2004, as well as by arrangement, in writing, (filed with the Tribunal, 24 September 2004). They were in summary, as follows.
14. Sub-heading 1604 relates to “Prepared or Preserved Fish” and is in Schedule 3 of the Customs Tariff Act and Sub-heading 1604.20.00 refers to “Other prepared or preserved fish”. Dr Flick submitted that the Applicant would succeed if the Tribunal was satisfied that the samples of tuna in question are “minced”, and/or if the Tribunal was satisfied that they are not “fish in pieces”.
15. He subsequently made the following submissions in his written closing submissions filed 24 September 2004.
1.“The approach of the Respondent exposes both legal and factual error, in that :-
(i)the Respondent impermissibly seeks to both :-
-construe as a discrete term the word “minced” as opposed to the construction of the composite statutory phrase “Fish, whole or in pieces, but not minced”; and
-to substitute for the term employed by the legislature, namely “minced”, the term “paste”[1]
[1]
The Tariff Precedent manifests the desire of the Respondent to secure by administrative definition a meaning which “deprives the fish flesh of its character as fish or pieces of fish.”
(ii)the Respondent then commits a factual error as to what constitutes “minced fish” and a further factual error as to what constitutes “fish … in pieces …”
2.As a matter of statutory construction, it is respectfully submitted that :-
(i)the term “minced” should not be separately defined and thereafter that definition simply added as a description of the kind of “fish” in issue;
(ii)the statutory phrase “Fish, whole or in pieces, but not minced” should be construed both as a whole and in the context of Item 1604;
(iii)the statutory phrase should also be construed in the context of Chapter 3 of the Tariff.
So construed, what becomes self-evident is that the draftsman of Item 1604 sought to identify fish by reference to whether such fish was :-
(a) a “whole” fish; or
(b) a “piece” of fish.
There is no classification of “minced fish” – that expression being used to
exclude what may otherwise be included within “Fish, whole or in pieces…”
Importantly, the fundamental distinction sought to be made is that fish which is “whole or in pieces” and fish which is to be classified by reference to :-
(c) “other prepared or preserved fish.”
That fish which is “other prepared or preserved fish” is not confined to “minced fish” – otherwise Item 1604.20.00 would have identified such fish as simply “minced fish.”
3.The approach of the Respondent in the present proceedings would deny any operation to Item 1604.20.0 – if the Respondent be correct, all fish – other than presumably “paste” – would fall to Item 1604.1; only “paste” would fall to Item 1604.20.0.
4.The approach of the Respondent, and the Tribunal in Re Grocery Holdings,[2] has been (with respect) erroneously dictated more by reference to Dictionary definitions of “minced”[3] rather than by looking for or searching for what was meant to be conveyed by subheading 1604 as a whole.
[2][3]
5.Moreover, the Applicant respectfully contends that :-
Ø separate consideration should be given to each of the categories of goods imported – one or other of those categories may fall for different consideration.
Subject to that qualification, the Applicant contends in general terms that:
Ø none of the goods imported, but more specifically the “shredded” tuna cannot be categorized as fish being “whole or in pieces” – and accordingly falls for entry pursuant to subheading 1604.20.0;
and, or in the alternative :-
Ø all of the fish imported is properly to be categorized as “minced” – and accordingly falls for entry pursuant to Item 1604.20.
6.The Applicant respectfully contends that for the purposes of Item 1604.1 the Tribunal should find that :-
(i)a “whole” fish refers to a whole round, or a fish which has been gutted and gilled or a fish which has been headed and gutted;[4]
[4]
(ii)“Fish .. in pieces” refers to that fish which has been filleted, or from which loins or cutlets or medallions have been removed;[5]
[5]
and
(ii) “minced” fish refers to that fish which has undergone a process of separating the fish meat from the skin and bone.
7.Even if there be dispute as to what constitutes fish which is “minced”, the former two findings would necessarily have the consequence that the Applicant’s products are neither :-
(i) “whole” fish; or
(i)fish “in pieces”
and must necessarily fall to subheading 1604.20.0 for characterization, namely:-
(iii) “other prepared or preserved fish.”
16. In relation to statutory interpretation, he emphasised the case of Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389.
17. Dr Flick referred me to paragraph 16 of Re Tridon Pty Ltd and Collector of Customs (1982) 4 ALD 615, where he submitted it was held that no one source of interpretation was decisive, and applying that principle in this case, a combination of the Codex, trade terminology, and dictionary meanings was required to be considered.
18. He submitted mincing to be a process whereby a whole or piece of fish is separated from the bone and skin, and a reduction in size occurs. Dr Flick referred to Mr Real’s evidence which he submitted was trade terminology, “Whole Round” being a whole fish with its head and tail ,“GG” being a whole fish gilled and gutted, and “HG”, a whole fish without its head, and gutted. He submitted that in the trade, a fillet or loin in a fish shop was referred to as “a piece of fish”, submitting this was rational, normal, easy to understand terminology. He referred in that regard to the evidence of Messrs Real and Jeffriess.
19. Dr Flick submitted that Mr Wailes had changed his approach in that in his early evidence in the Grocery Holdings case, he had not referred to “paste”, which he had now introduced into his evidence in regard to mincing. He submitted that if the legislation had contemplated paste or paste-like texture, it would have made provision for that, and that in fact in sub-heading 1604.20, there was no provision for paste.
20. Dr Flick also submitted, referring to the evidence of Mr Wailes and Professor Wootton, that cooking changes the character and texture of fish. He submitted that the tuna was cooked for commercial purposes, the skin, bone and red meat separated for use in pet food, and that the rest could be minced by whatever method, either by hand or by machine. This was not restricted, he submitted to the holeplate-knife mincer, neither the meat and bone separator. Shredding was also mincing he submitted, with the loss of integral structure occurring through the cooking process. Mince could be coarse or fine, and could be puree or paste, he submitted.
21. Dr Flick also referred to his questioning of Mr Wailes in regard to the attachments to Mr Wailes’ statement, in which he explored the contents of those documents. He submitted that Mr Wailes had no personal knowledge of those documents, and no experience in their application, and that accordingly his evidence was of limited value. He submitted neither Mr Wailes nor Mr Jeffriess had experience with the Codex, and submitted that the Respondent relied excessively on dictionary definitions.
22. Dr Flick also referred to the evidence of Mr Peters, asking the Tribunal to give weight to his evidence because of his, and others of the Applicant’s witnesses, who, in contrast to the Respondent’s witnesses, have had long involvement and experience in the tuna industry,
23. Dr Flick submitted that if recourse was to be had to the publications available to the Tribunal, he contended that the Tribunal should find as a fact that :-
· any kind of fish can be minced;
· mincing can be carried out either physically by hand or by mechanical devices;
· a variety of mechanical devices are in fact available to mince fish;
· either raw or cooked fish can be minced, although the fact of cooking will necessarily impact upon the characteristics of the fish as minced fish;
· mincing need not be confined to a product which has a paste-like texture but can include fish which has a coarse, fine or paste/puree texture;
· mincing simply refers to a process whereby the fish flesh is separated from the skin and bones.
24. He also submitted that the “affidavit” evidence of the Respondent provided a questionable and insufficient basis upon which the Tribunal should adopt any course other than making the findings of fact contended for by the Applicant, and as supported by the Annexures to the Respondent’s own evidence.
RESPONDENT’S SUBMISSIONS
25. Mr Komora’s submissions were given immediately after the close of oral evidence on 10 September 2004, as well as by arrangement, in writing, (filed with the Tribunal, 24 September 2004). They were, in summary, as follows.
26. He submitted that the Respondent did not wish to again detail the sequence of events described in paragraphs 1 – 20 of the section 37 Statement (T2), but submitted that as the chronology of events leading up to the appeal.
27. He submitted that the first step the Tribunal had to undertake in classification was to identify, and then classify the tuna fish subject of the appeal. Some cans and pouches were filled with a number of different sized pieces, he submitted, ranging from chunk to shreds. He submitted that the Tribunal accept the evidence of Mr Wailes.
28. Mr Komora also submitted that no one involved in this matter had identified the relevant goods as minced; some had identified them as pieces. He queried whether the Applicant was attempting through the evidence, to identify the goods, or to establish an industry or trade meaning to the terms pieces and minced.
29. Mr Komora agreed that the method of identification as set out in Re Tridon (supra) was appropriate. He submitted that there was no trade standard regarding minced tuna, and no concept of minced tuna. He referred to the evidence of Mr Soroka, who, he submitted, had given evidence that the concept of mince did not arise in the tuna industry, but that in the broader fish processing industry, there was such a product. He referred also to the statement of Mr Moffat (Exhibit A1), and submitted that neither Mr Peters nor Professor Wootton had agreed that there was an industry standard recognising minced tuna. Mr Komora submitted that the relevant tuna before the Tribunal be classified to Heading 1604.1 (“Fish whole or in pieces but not minced”), and in particular, Sub-heading 1604.14.00 “tunas, skipjack and bonito …”
30. Mr Komora also referred to the case of Re Freudenberg (Australia) Pty Ltd and Department of Business and Consumer Affairs (1978) ALD 295 out of which the principle has been enunciated, that in identifying or classifying goods, the process used is not to be taken into account, (for example meat and bone separators, and holeplate-knife machines, as in this case).
31. In his written submissions, Mr Komora gave considerable detail regarding the application of the indicia in Re Tridon (supra). As the indicia themselves are well established and not controversial, and as I am required in my consideration of the identification of the subject tuna to apply them, I have considered it unnecessary to reproduce Mr Komora’s submissions in full in that regard, and have noted them in applying the principles in Re Tridon (supra) further on in these Reasons for Decision. Mr Komora made similarly comprehensive written submissions regarding the task of Tariff classification.
32. Mr Komora emphasised that the concept to be considered was not “pieces of fish”, but rather, “fish in pieces”. He referred to paragraphs 36, 40 and 42 of Grocery Holdings (supra), where the Tribunal had referred to the ordinary English meaning of words for Tariff classification purposes. He submitted in that regard that the Federal Court, in reviewing the Tribunal in that case, had found no error of law. He referred to the case of Re Pacific Film Laboratories Pty Ltd & Collector of Customs (1979) 2 ALD 144 in regard to trade meaning. In his written submissions, he submitted as follows:
“18. The principle in relation to adopting a trade/industry meaning was summarised by the Tribunal in Re Pacific Film Laboratories Pty Ltd and Collector of Customs (1978) 2 ALD 144 at 156:
(vii) If the expression is not uniformly understood in a specialized sense in the trade, it cannot be assumed that Parliament has adopted or recognized that specialized meaning. In that event, the ordinary English meaning of the expression is applied, having regard to the legislative context;
19. The Tribunal in Pacific Film Laboratories at 154 and 155 listed as the type of evidence needed to prove a special meaning by trade usage:
the usage must rest on actual instances of use, and not on mere opinion …
trade manuals and technical publications …
evidence from technical experts …
trade usage from academics and technical educators in a specialized field.”
33. Mr Komora submitted that the Tribunal make the following findings:
1.1.The goods are identified as canned/pouched tuna pieces (not minced) and it is understood to be common ground between the parties that in respect of the flavoured and other ingredient products, it is the tuna that gives the goods their essential character (refer to Interpretative Rules 1, 2(b), 3(b) and 6).
1.2.There is no uniform trade/meaning for the word “pieces”. Even from a statutory construction perspective, the concept of “pieces” covering only products such as “loins” and “fillets” is unsustainable. If that was the case, there would have been no need for the legislators to include “minced” within the terms of subheading 1604.1. Further the specific inclusion of the term “fish fillets” under Chapter 3 of the Tariff (headings 0302, 0303 and 0304) suggests that “pieces” was not meant to be confined to goods such as fillets and the like.
1.3.There is no uniform trade/industry meaning for the word “minced”. The only possible trade/industry meaning which could be put on “minced” is if the Tribunal was satisfied that the term “minced” in subheading 1604 referred to the raw/fresh fish product known as “minced fish”. As a “minced” product it would follow that this product in its prepared or preserved form (ie. fish fingers, patties, balls) as required by the terms of heading 1604 would be excluded from the terms of subheading 1604.1. Therefore those formed products would be classified to subheading 1604.20.00 as “other prepared or preserved fish”.
2.Adopting the ordinary meaning of the words “pieces” and “minced” (as the Tribunal did in Grocery Holdings) the applicant’s goods are “fish … in pieces” and as they are not “minced”, they are therefore not excluded by the terms of subheading 1604.1. Further as prepared or preserved tuna products, the goods are correctly classified to subheading 1604.14.00 and the decision under review should be affirmed by the Tribunal.
THE TRIBUNAL’S CONSIDERATIONS AND CONCLUSIONS
34. I had to take into account the evidence, submissions of the parties, legislation and case law, to make the correct Tariff classification for the canned and pouched prepared tuna subject of the application before the Tribunal. I have noted earlier in these reasons that the goods, canned and pouched tuna, have been described on their labels variously as chunk, sandwich and shredded, and that some have other ingredients such as sauces, flavourings and vegetables mixed with them.
35. The Applicant wanted them classified according to Tariff classification 1604.20.00 as “Other prepared or preserved fish”. Dr Flick said that he was prepared for the Tribunal to also decide separately between the products, so that it might perhaps find that one or other of the products, for example chunk or shredded tuna, was either minced, or not minced. The Respondent on the other hand, submitted that all the tuna products under review be classified according to Heading 1604.1 as “Fish, whole or in pieces, but not minced”, and more specifically pursuant to Sub-Heading 1604.14.00, “Tunas, skipjack and bonito …” because they were yellowfin and skipjack.
36. There were many eminent witnesses before the Tribunal, and documents relating to standards in other countries (e.g. Annexures to the statement of Mr Wailes (Exhibit R2); Annexures to the statement of Mr Soroka (Exhibit A2); Annexures to the statement of Mr Jeffriess (Exhibit R3;). One must be mindful however, that the sheer weight of numbers, there were far more witnesses for the Applicant than for the Respondent, does not determine the issue.
37. I was mindful also of criticism of the witnesses on each side, Dr Flick for example, emphasising that Mr Wailes’ experience in the relevant industry was dated. I was satisfied that Mr Wailes had spent many years in the food industry, but that his experience in the tuna industry relevant to the issue before me was limited, and dated back to the late 1960s or early 1970s. That did not make it irrelevant. Dr Flick, did his best to discredit the evidence of Mr Wailes, in particular in relation to the witness’ knowledge of the contents of the attachments to his statement (comprising amongst others, the Australia New Zealand Food Standards Code, Ministry of Agriculture, Fisheries and Food, Torry Research Station, Torry Advisory Note No.79 (UK), and a Canadian Institute of Fisheries Technology paper on Minced Fish). I noted that Mr Wailes agreed he had carried out research on the internet, and attached his research, and that he had no personal knowledge of those international situations. However, I was satisfied that those documents could be taken on their face value and that they were informative.
38. Mr Komora, on the other hand, was intent on showing up Mr Real as knowing little about the Codex. Once again, the limited application of the Codex in this case did not depend on Mr Real’s knowledge, and as a person currently involved in producing tuna which is subject of these proceedings, his evidence was helpful.
39. I do not intend to refer further to the numerous other criticisms made of the various witnesses, and confined myself to using what of their evidence I was able, in order to assist to me in coming to the correct and preferable decision.
40. As to the documents referred to above, they are of interest, but not binding, although the Codex Standard for Canned Tuna and Bonito, Codex Stan 70-1981, Rev. 1-1995 (T30) (“Codex”) sets out a recommended international code of practice for minced fish prepared by mechanical separation and intended for human consumption, and is useful as a guide. It defines the following products:
· Solid - … fish cut into transverse segments which are placed in the can …The proportion of free flakes or chunks shall not exceed 18% of the drained weight of the container.
· Chunk – pieces of fish most of which have dimensions of not less than 1.2 cm in each direction and in which the original muscle structure is retained. …
· Flake or flakes – a mixture of particles and pieces of fish most of which have dimensions less than 1.2 cm in each direction but in which the muscular structure of the flesh is retained. …
· Grated or shredded – a mixture of particles of cooked fish that have been reduced to a uniform size in which particles are discrete and do not comprise a paste.
41. I was assisted by the DVD (Exhibit A24) which Mr Real showed of the processing of tuna in factories in Thailand, where a large amount of cooked tuna which is consumed in Australia is processed, including of course the majority of the Exhibits before the Tribunal in this matter. There were also other documents which described the various processes in processing both cooked and raw or fresh tuna, which I have noted (e.g. Attachments to R2).
42. I was mindful that this Tribunal was concerned with Tariff classification for cooked tuna in the context of this matter. In that regard the parties did not disagree, and I was satisfied that the tuna subject of this matter, comes under Heading 1604 in Schedule 3 in that it is “Prepared or Preserved Fish”.
43. Mr Real commented on the depictions in the DVD, the raw frozen tuna arriving in the factory, being eviscerated, and then being put on racks to steam cook. This was followed by removal of the skin, filleting and deboning, as well as removal of the muscle meat which he described as “full of blood”, “red meat which is basically for pet food.” Mr Real described the division of the tuna into quarters, called loins. The loins, he said, were either processed locally or sent overseas for further processing.
44. He said that the loins destined for local processing, and the “flakes” which fell off during the previous steps, then went to a “pack shaper”. That, he said, was the machine which took the cooked loins and flakes, and mechanically compressed the tuna into the shape of the cans. Mr Real said that this could also be called a “chunk filler”. Mr Real said that the tuna compressed into the shape of a can, then went to a filler which forced the tuna into a can mechanically, after which a knife would come down and make a cut. The can would then come off the conveyer. The can would then be filled with whatever media was being produced in that run, e.g. brine, oil or flavouring. The final process was assuring the weight was correct by hand filling further product into the can, after which it was sealed, and went to a retort for sterilisation of the contents of the can.
45. Mr Real referred also to another process for producing shredded tuna. The size of the particle was determined by the speed of the blade, he said, the faster the blade speed, the smaller the particle.
46. Mr Real said that the smaller sized particles were used for packing into pouches, and noted there was a difference in the size of the canned chunk tuna, and the pouched chunk tuna, although they were both referred to as chunk.
47. He said that the size reduction depicted in the DVD was to produce minced tuna.
48. I have reproduced passages from two of the several documents in evidence before me, the Torry Advisory Note No. 79 from the Ministry of Agriculture, Fisheries and Food (“Advisory Note”), (UK), headed “Minced Fish”, (Exhibit R2, Attachment 3) where various aspects of minced fish are discussed, and an extract from the Canadian Institute of Fisheries Technology (Exhibit R2, Attachment 4), describing the equipment that is used for mincing fish.
49. The operation of a bone separator in the Advisory Note is described as:
“Bone separators working on different principles are available commercially, but the kind most widely used for fish is of comparatively simple design. Fish, or pieces of fish, are fed from a hopper to pass between a moving rubber belt and the outside of a revolving perforated drum of stainless steel. The flesh is forced through the perforations into the drum from where it is expelled as a coarse mince by a fixed screw. Skin and bone are retained on the outside of the drum and removed continuously by a scraper blade. The drum perforations are commonly 5 mm in diameter, but drums with smaller or lager holes are available, which produce mince of different texture. Yield can be increased by increasing the tension on the belt, at the expense of some increase in the degree of fragmentation of the flesh, and in the amounts of bone, pieces of skin and black belly wall lining.”
50. This extract from the Canadian Institute of Fisheries Technology (Exhibit R2, Attachment 4), describes the equipment that is used for mincing fish and the resulting product:
“The choice and operation of equipment greatly influence the quality, yield and textural characteristics of mince fish. Product can range from a course mince to a fine paste depending on the source material, machine type and setting, and processing method. Baader and Bibun meat separators operate on a belt-drum principle whereby the fish is forced against a perforated drum (hole sizes can range from 1 to 10 mm in diameter). The flesh passes through the holes while the skin and bones are ejected through a discharge chute. Paoli machines break up the bones or shell and separate the flesh by a micro-groove principle, while Beehive machines use a feed-screw or auger and perforated drum to separate pre-chopped material. Using a high belt tension and large-hole drum generally maximizes product yield, as well as the amount and size of impurities. Following deboning, mince may be refined by passing it through a strainer which will remove bone fragments and small pieces of belly lining. The hole sizes in strainers typically range from less than 1 to 2 mm in diameter. Straining coarse minces will reduce the meat particle-size and produce a more homogeneous, pasty product. Blood and enzymes may be extracted by washing the mince, but this process increases the moisture content and may alter the products functional properties.”
51. Mr Real told the Tribunal that the tuna used in his products was skipjack and yellow fin. That was uncontroverted, and I accepted it.
52. I moved then to consider first, identification, followed by classification of the cooked tuna subject of these proceedings.
IDENTIFICATION AND CLASSIFICATION OF THE TUNA
53. The classification of the goods, under the Customs Tariff Act requires two steps to be taken. The first is to identify the goods, and the second is to construe the Tariff to determine which provision applies to the goods which have been identified. This is apparent from the reasons of the Tribunal in Re Gissing and The Collector of Customs (1977) 14 ALR 555, and also from the decision of Times Consultants Pty Ltd v Collector of Customs (1978) 16 FCR 449.
identification of the goods
54. The parties agreed with me, and it is uncontroversial that the manner in which the first step of identification is undertaken was considered by the Tribunal in Re Tridon (supra) at 620, 621, and should be followed. The Tribunal in Re Tridon (supra), identified eight principles as relevant in identifying the goods.
55. For the record, I note that the Exhibits before the Tribunal which I inspected along with the representatives of the parties and various witnesses, and which I understood all the witnesses had seen either in the Tribunal or separately, were a representative example of the 101 cans and pouches of tuna subject of the dispute. The cans and pouches before the Tribunal were labelled chunk, sandwich and shredded, and Exhibit A22 was labelled as “tuna slices”; some had various additives such as curry, vegetables and sauces which were described on the labels.
56. I was mindful that in considering whether the cooked tuna being considered fell within Tariff classification 1604.1, that is “Fish, whole or in pieces, but not minced”, several of the witnesses (Mr Peters, Professor Wootton, Mr Real), spoke of “pieces of fish”, which is not what I had to consider. An example was given of requesting a piece of fish in a fish shop, rather than discussing whether the products were either “fish, whole or in pieces” or fish in pieces but not minced” or “fish in pieces” or fish, minced”. The Applicant had submitted that the reference to “fish, whole or in pieces”, restricted it to whole fish or loins of fish.
57. It is noteworthy that none of the products is labelled, marketed or sold as “minced”. I was mindful that although this is not determinative, it is a factor to be considered.
58. I then moved to consider the eight principles from Re Tridon (supra), noting that not each applies in detail in this case, for example (vi) and (vii). Nevertheless, for the sake of completeness, the eight principles referred to have been reproduced here.
“(i)Identification must be objective, having regard to the characteristics which the goods, on informed inspection, present ...;
(ii)The identification of goods cannot be controlled by the descriptions of goods adopted in the nomenclature of the Tariff ...;
(iii)Nevertheless in identifying goods it is necessary to be aware of the structure of the nomenclature, the basis on which goods are classified and the characteristics of goods which may be relevant to the frequently complex task of classification ...;
(iv)In the identification of goods, knowledge of how those who trade in the goods describe them will usually be relevant, but not necessarily conclusive ...;
(v)All the descriptive terms, both specific and generic, by which the goods may fairly be identified may be relevant to the classification of the goods within the Tariff ...;
(vi)Descriptive terms may be of varying degrees of specificity (eg windscreen wiper blade refills, parts for a windscreen wiper or parts for a motor vehicle). Generic descriptions may be by reference to the materials or substances from which the goods are manufactured ...;
(vii)Identification will frequently extend to characterisation of goods by reference to their design features cf Re Virgo Manufacturing Co Pty Ltd and Collector of Customs (Vic) (1981) 3 ALN No 15, or by reference to their suitability for a particular use where those characteristics emerge from informed inspection of the goods as imported ... . The extent to which these characteristics may be relevant to the ultimate classification of the goods and whether evidence of the use to which goods are put after importation is relevant, will depend upon the language of the Tariff Nomenclature ...;
(viii)Composite goods, notwithstanding that they have components which are separately identifiable, may nevertheless be identifiable in combination as a new entity if the identity of the separate units is subordinated to the identity of the combination ...” (pages 620-621)”
59. The first step in identification as enunciated in Re Tridon (supra) is:
“(i) identification must be objective, having regard to the characteristics which the goods, on informed inspection, present ...;”.
60. In considering (i) above, I was mindful of the case of Re Sterns Playland Pty Ltd and Collector of Customs (No 2) 4 ALD 562. The case provides that:
“As always in tariff classification matters, the first step is to identify the imported goods [see Re Gissing and Collector of Customs (1977) 1 ALD 144 but cf Re Renault Wholesale Pty Ltd and Collector of Customs (No 3) (1978) 2 ALD 111 at 115]. Although the question of identification can often be resolved fairly readily by asking the question – what is it? – anyone with knowledge of the Tariff will be aware that in addition to the answer produced in response to that question, other matters may also need to be considered before one turns to the next task, namely classification in accordance with the Tariff. All the characteristics which goods present on informed inspection or even, in some cases, on scientific analysis, may have a relevance to this frequently complex task – particularly in those cases where the goods as identified to not conform to a description in the nomenclature which the Tariff employs [see, for example, Re Freudenberg (Aust) Pty Ltd and Department of Business and Consumer Affairs (1978) 1 ALD 295;…”
61. I noted Deputy President Forgie’s statement in Grocery Holdings (supra), that notwithstanding that the identification must be objective, having regard to the characteristics of the goods, the conclusions that a person draws from looking at them and considering their nature and function at the wharf-side may be influenced by his or her experience with, or knowledge of such goods and their functions. I don’t disagree with that statement and noted that Clause (i) from Tridon (supra) referred to identification on “informed inspection”, which implies the person identifying will bring to the task his or her knowledge or experience.
62. I noted also that notwithstanding the Applicant’s argument that various issues before me were different from those considered in Grocery Holdings (supra), it is worth noting also the submission of the Respondent with which I agreed, that the goods before this Tribunal closely resembled those which were before Deputy President Forgie in the Grocery Holdings case. She described them in paragraph 7 of the decision, and I observed the samples before me, which are now in evidence, both opened and unopened from their packaging, and read the labels. Deputy President Forgie said:
“There is no dispute between the parties that Grocery Holdings imports a variety of prepared tuna products in cans. Those products fall into three broad categories. The first category … comprises those that are described on their packaging as sandwich tuna … [a list followed]
The goods falling in the second and third categories of goods were those that were described as chunk tuna or as tuna mixed with flavourings and other ingredients such as vegetables [a list followed]
…
The products in each of the three categories are properly classified to Chapter 16 and, as they are “Prepared or Preserved Fish …”, they are properly classified under heading 1604.” ( Tribunal in Grocery Holdings (supra), paragraph 7)
63. On the basis of the inspection of the goods at the Tribunal which are representative of the goods subject of the claim before the Tribunal, their labelling, and noting that not one of the products is labelled minced, or described as minced on the label, and the submissions I have considered, I have decided that the 101 goods for Tariff classification as listed in the T-documents in this matter can be identified pursuant to heading 1604 as “Prepared or Preserved Fish”. They are tuna fish chunks, shredded tuna, and sandwich tuna of varying sizes in cans or pouches, some mixed with vegetables, flavourings or other ingredients.
64. I was mindful also that in Re Tridon (supra), it was stated that:
“(ii)The identification of goods cannot be controlled by the descriptions of goods adopted in the nomenclature of the Tariff ...;”
(iii)Nevertheless in identifying goods it is necessary to be aware of the structure of the nomenclature, the basis on which goods are classified and the characteristics of goods which may be relevant to the frequently complex task of classification ...;
65. Having decided that Tariff Heading 1604, “Prepared or Preserved Fish …” is the correct one in this case, I noted Deputy President Forgie’s reference in the Grocery Holdings case at paragraph 40 to various chapters in Schedule 3 which relate to fish and fish products. I am mindful that there are products other than those before me, which I accept fall into other Tariff Headings. There is for example smoked fish with which I am not concerned here, which is likely to fall into heading 0305, and Exhibit A22, smoked tuna slices, which it was not claimed was a minced product. Mr Soroka did not consider it was minced, and to me it clearly was not a minced product.
66. I was mindful that I was charged with then considering what Sub-heading the tuna subject of this inquiry falls within.
67. I noted that certain of the witnesses for example, Mr Peters, referred to pieces of fish, and whole smoked salmon, and am mindful that I am concerned only with whether the tuna before me was “Fish whole or in pieces, but not minced”, and not “pieces of fish”. I disregarded his evidence on that point.
68. I was mindful also that in Re Tridon (supra):
“ (iv)In the identification of goods, knowledge of how those who trade in the goods describe them will usually be relevant, but not necessarily conclusive ...;”
69. Clearly, whilst trade knowledge is important, (why otherwise would both parties have engaged so many impressive and knowledgeable witnesses), I accept that that knowledge is relevant, but not necessarily conclusive. However, I appreciated the assistance and knowledge of the witnesses in coming to my decision.
70. I have consulted, in this regard, and before making my decision the evidence before me of Messrs Soroka, Moffat, Real, Wootton, Wailes, Jeffriess and Peters.
71. Mr Soroka had an opportunity of looking at all the cans and pouches of tuna at the first day of Hearing, as they were opened, and taken into evidence. He described them as minced, regardless of their appearance, and of how they were labelled, except for one which was smoked slices of tuna (Exhibit A22). Mr Soroka told me that the definition of “minced” was that the fish had gone through a size reduction through an extended process which included compression, shearing and cutting, and to an extent, agitation. Mr Soroka stated that the appearance of the final product is determined by the particular machine in which the tuna loin is processed, and by the size of the plate-knife used in the size reduction process.
72. Mr Soroka stated at Exhibit A2, that the expression “minced” was not used in the tuna industry to describe fish products, notwithstanding its use in other sectors of the fish processing industry. This was corroborated by Messrs Moffat, Jeffriess and Real. Mr Soroka gave evidence that “despite the apparent differences in the various products from the consumer perspective, all products are produced by the same manufacturing process”, namely “size reduction”.
73. Mr Soroka (corroborated by Mr Moffat), stated that other fish such as hake is imported in frozen blocks for the manufacture, for example, of fish fingers. That, he said, was known in the industry as “minced hake”. Mr Soroka said that he disagreed with the statement of Mr Wailes that “mincing fish destroys texture”, stating that the texture of fish flesh in minced hake was clearly visible to the naked eye.
74. In his supplementary statement, (Exhibit A3), Mr Soroka was asked to comment on chunk-style tuna marketed in a pouch which he said had not been widely available at the time of his first statement. He explained that this was manufactured by the same size reduction process as canned chunk, or shredded or flake-style tuna, and that the size of the chunk was therefore irrelevant to identification because it was the “production process itself that determines how the end product is to be identified, not the size of the flesh particle.”
75. Annexed to Mr Soroka’s statement was the Codex Standard No 165 published by the United Nations Food and Agriculture Organisation (annexure to Exhibit A2). He said that Paragraph 1 of the Standard, describes “minced fish flesh” as a product intended for further processing, and Paragraph 2.1.2 as describing “minced fish flesh” as “particles of skeletal muscle which have been separated from and are essentially free from bones, viscera and skin.” He said it therefore follows that the products which fall within sub-heading 1604.1 in the Tariff are prepared or preserved fish which are either whole or in pieces such as slabs, fillets or loins, and that “minced fish” products are excluded and can be defined as in Paragraph 2.1.2.
76. Mr Real’s view of Clause 1604.1 was that a whole fish could be presented in three different ways, either as a WR, “Whole Round”, or G&G which is “Gilled and Gutted”, or H&G which is “Head Removed and Gutted”. He stated that this was his personal view of a whole fish, but that the terms noted above were also terms used in international trade. He considered that pieces were “recognisable parts” such as “loins, cuts, fillets portions, steaks etc”, but that all other products which had been through size reduction were “minced”. In his oral evidence Mr Real referred to the DVD, and described what he called the “mincing process”.
77. Mr Peters said in his statement that “fish in pieces” or “pieces of fish” referred in this context only to such pieces as are identifiable portions of a whole fish. He indicated these were not trade terms, where fillet or portion were used instead. He said that in his opinion, having regard to industry useage and practice, fish products that appeared in cans or pouches of the kind imported by the Applicant, (of which he had no experience), were not pieces or cuts of fish, and could not be identified as “fish in pieces” or “pieces of fish” or “cuts”.
78. Professor Wootton’s statement, (Exhibit A26), included dictionary definitions of mincing. He stated there that the process of mincing was size reduction, and could be achieved by various methods. He described in his statement, the impact of cooking on tuna flesh, and the processing of mincing raw, versus cooked fish. On the issue of whether the Heinz products fall into the category “Fish whole or in pieces”, Professor Wootton commented on the meaning in the industry, dictionary definitions, labelling, and his views about the perception of the general public.
79. Professor Wootton also said as follows:
“I must say, I initially had a lot of problem equating shredding with mincing or a shredded product with a minced product. I have sort of reconciled myself to a fair degree on that. I couldn’t stand up and honestly say: yes, they’re the same thing because I don’t think they are quite the same thing. Now if one looks at the distinction between – well -, the wooden definition of a piece of fish and fish mince or shredded fish, then I believe the latter two do not fit into the former category.”
80. I noted that he affirmed in re-examination his view that the Heinz tuna fish in the cans and pouches before the Tribunal were not pieces, but portions of fish. He said that in any one can, there could be a whole batch of portions, but not from an identifiable whole. The final question to Professor Wootton from Dr Flick, was as follows: “So whether it is a piece of fish or fish in pieces, you are still looking for, on your approach, an identifiable part of an identifiable fish?” Professor Wootton answered: “Yes”.
81. Mr Wailes stated that the products under review had not been minced, and referred to the Codex definition, which was that minced fish prepared by mechanical separation “is fish flesh produced by the mechanical separation from bones and skin of fish or by shredding with a resultant loss of integral structure.”
82. Mr Wailes explained that tuna did not go through a meat and bone separator because the red meat which is basically used for pet food and not human consumption, could not be separated in that way. He said that the meat and bone separator was used for raw fish, but not tuna. The DVD showed how easy it was to separate the backbone in the cooked fish he said.
83. Mr Wailes stated that there was still an identifiable structure in the tuna, subject of the Tribunal Hearing whether it was chunk, or shredded. That structure, he said, had to be looked at in the context of cooked fish, not comparable to the structure of raw fish. Cooking Mr Wailes explained, caused moisture loss, muscle tissue contraction and other chemical changes to take place, and so cooked tuna flesh was quite firm as compared to raw tuna flesh, which is soft and pliable. He described the careful handling of cooked tuna seen in the DVD to avoid damaging it, and mentioned the tuna flaking when it breaks apart. Mr Wailes commented that the shredded tuna shown in the DVD appeared to be handfilled on a pocket filling table, noting that there were machines available also for that task. Mr Wailes commented that “overworking” tuna in a machine would risk it forming a paste, whereas in shredding, discrete particles remained. He said that if you put cooked tuna through a holeplate-and-knife machine with large diameter holes, you would get some minced ground up tuna, and some paste, paste-like texture. The pouch products were similar to the canned products he said, in that one could see discrete particles, although they might be more compressed due to the mode of packaging.
84. Mr Jeffriess agreed with Messrs Real and Soroka that the term minced has no accepted meaning in the tuna processing industry.
85. On the basis of the evidence given before me, I was satisfied that a variety of terms were used to describe the tuna subject of the inquiry. Mr Real and Professor Wootton referred to portions, even describing the difference in size between the chunk tuna in cans to that in pouches. Mr Real told me that because all the tuna which had gone through the size reduction process and were size reduced by the same method, (notwithstanding the machine settings being changed to produce larger or smaller “portions”), they were all minced.
86. However, the samples were not universally known as minced, and none of the labels announced them as minced; rather the labels read chunk, shredded or sandwich, and as appropriate, included a description of the added flavourings or vegetables. Mr Wailes did not consider the tuna subject of the claim minced. Mr Soroka referred to shredded and flake tuna as particles, and Professor Wootton told me he had trouble equating the shredded product to a minced one.
87. Certain industry people (Peters, Real) referred to pieces of fish; Mr Peters said that pieces of fish were what one requested in a fish shop. Mr Real said that in the industry one would not place an order for pieces of fish, but that the terms used for large pieces were loins and fillets.
88. On the basis of the industry evidence, as noted above, I was satisfied that pieces of fish did not have a particular trade or industry meaning.
89. I was also satisfied that minced tuna was not a trade or industry term, (Jeffriess, Peters), but that minced fish is known in relation to raw/fresh hake, cod, mackerel or whiting used for further manufacture into fish fingers, patties and related products.
90. I was mindful also that in Re Tridon (supra):
“(v) All the descriptive terms, both specific and generic, by which the goods may fairly be identified may be relevant to the classification of the goods within the Tariff ...;”
91. I have considered all the evidence regarding the identification of the canned and pouched tuna, and noted that there was no mention of mince or reference to mincing on any of the labels. In addition to other considerations, I am entitled to take that into account.
92. I have noted also the arguments regarding size reduction of the tuna loins, and how that is achieved. The process can be carried out by hand, although more often it is mechanical, and can employ a holeplate-knife machine, or generally in the case of raw fish, a meat and bone separator. I was satisfied that the process by which size reduction is achieved, is not the determining factor. Those witnesses who have been involved in canning tuna such as Messrs Real and Wailes referred to adjustment of the machinery to produce either chunks, (larger pieces), or shreds and flakes.
93. Mr Soroka also referred to the Codex Standard for Canned Tuna and Bonito in which I noted the expression minced is not used to describe tuna products (T2, paragraphs 55 & 56). He told me that this was an accurate reflection of industry terminology relating to the canned tuna of the type before the Tribunal. (The Codex definitions are reproduced elsewhere in these Reasons for Decision.)
94. I noted with interest at T27, a letter from Heinz to the Australian Customs Service dated 23 June 1988 in which the then General Manager, Mr Bateman, described minced tuna as: “Minced describes the situation where tuna is squeezed though (sic) a plate with holes of one size. In this situation the structure of the fish is broken down giving a pasty appearance.”
95. In conclusion, I find that the products before me which are representative samples of the 101 samples of canned and pouched tuna, subject of the appeal, can be identified using the steps outlined in Re Tridon (supra), as cooked tuna, which has been labelled chunk, sandwich, or shredded. With respect to the products with additives, and those which include vegetables and other ingredients, it is my view, having considered the Interpretation Rules, that the tuna gives them their essential character.
96. I was also satisfied from the evidence of the industry people that there is no uniform trade term for “fish in pieces” or “minced tuna” although other fresh/raw fish such as hake, mackerel and cod are sold minced.
classification of the tuna
97. The next issue to consider was the classification of the subject goods. To do so, the Tariff has to be construed to determine which provisions include the goods to be identified. The General Rules for the Interpretation of Schedule 3 at Schedule 2 of the Customs Tariff Act must be followed. Interpretative Rule 1 requires that I consider the terms of the headings and any relative section or chapter notes (as relevant), and Interpretative Rule 6 applies similarly to sub-headings.
98. Chapter 16 of Schedule 3, which is headed “Preparations of meat, of fish or of crustaceans, molluscs or other aquatic invertebrates”, is relevant in this case, and I was satisfied that Heading 1604 which as relevant is reproduced below, applied to the products subject of this claim in that they were prepared or preserved fish.
“1604 PREPARED OR PRESERVED FISH; CAVIAR AND CAVIAR SUBSTITUTES PREPARED FROM FISH EGGS:
1604.1 - Fish, whole or in pieces, but not minced:
1604.14.00- Tunas, skipjack and bonito (Sarda spp) 5%
…
1604.20.00- Other prepared or preserved fish Free
…”
99. The tariff for goods coming under sub-heading 1604.14.00 is 5 percent, and for those coming under sub-heading 1604.20.00 is Free.
100. Schedule 2 of the Customs Tariff Act sets out the General Rules for the Interpretation of the Harmonized System provided for by the Convention ("Interpretation Rules"). Those Interpretation Rules must be used in working out tariff classification under which goods are classified (section 7(1)). As relevant, they are:
“1.The titles of Sections, Chapters and sub-Chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes do not otherwise require, according to the following provisions:
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 unfinished 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.
…
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.”
101. I was mindful of their Honours Morling and Wilcox who said in Times Consultants Pty Ltd v Collector of Customs (Qld) (1987) 76 ALR 313:
“… the classification of goods for tariff purposes is a practical ‘wharf-side’ task. … It ought normally be possible to classify goods merely by looking at them and by considering their nature and the function which they were designed to serve. …” (page 328)
102. Mr Komora submitted that the Tribunal in Grocery Holdings (supra) had construed the Tariff by adopting the ordinary meaning of the words “pieces” and “minced” at paragraphs 40 and 42 of the decision with reference to sub-heading 1604.1.
“41. Given the juxtaposition of the words in subheading 1604.1, it seems to me that the “pieces” may be of any size provided they are not so small that they are regarded as minced”. “Pieces”, in their ordinary meaning, are not limited to portions that might otherwise be described as fillets or steaks or even slices.
42. Having regard to each of the samples of products, I am satisfied that they are not “minced” but that they are “pieces” within the meaning of subheading 1604.1. The chunk style tuna retains its textural integrity of tuna that has been preserved. The sandwich tuna products and the flavoured tuna products comprise what may be described as flakes or shreds of tuna. For all that, each retains the textural integrity of preserved tuna. The essential characteristics of preserved tuna are still readily identifiable. None of them is chopped or ground so small that it may be described as having been “minced” in its ordinary meaning.”
103. I noted also Mr Komora’s submission that the Full Federal Court (at paragraph 8), in its review of the Tribunal decision in Grocery Holdings (supra), found that the Tribunal had not erred in its ordinary meaning construction of subheading 1604.1:
“It is not necessary to set out the dictionary definitions (to which the Tribunal earlier referred in its reasons) in order to see quite clearly that the Tribunal had regard to them in forming its own view of the ordinary meaning of the two words, so carefully placed in juxtaposition, in the terms of the subheading. The conclusion arrived at by the Tribunal was reasonably open on the facts found by it in light of the words used in the subheading.”
104. Mr Komora submitted that the Full Federal Court having approved of the Tribunal’s adoption of the ordinary meaning of the terms of subheading 1604.1 in Grocery Holdings (supra), the Tribunal in this matter should also adopt the same ordinary meaning for those words. Further, he submitted, it was the view of Finkelstein J in Grocery Holdings (supra), that identifying the meaning of words is a legal process. On this view, the Federal Court’s decision in Grocery Holdings as to the ordinary meaning of the words would be binding on the Tribunal, he submitted.
105. He submitted accordingly, that I be guided by Deputy President Forgie in her decision, and that there was no reason to deviate from her approach. He cited Re Ganchov v Comcare (1990) 19 ALD 541 at 469 in support of administrative consistency in decision making, which is of course a relevant consideration.
106. Dr Flick argued that I was not bound by the Grocery Holdings case because that case had dealt with different issues.
107. The Applicant’s submissions regarding the classification of the tuna, subject of the proceedings, and statutory construction were set out in the Applicant’s submissions which I have reproduced below:
“The approach of the Respondent exposes both legal and factual error, in that :-
(ii)the Respondent impermissibly seeks to both :-
-construe as a discrete term the word “minced” as opposed to the construction of the composite statutory phrase “Fish, whole or in pieces, but not minced”; and
-to substitute for the term employed by the legislature, namely “minced”, the term “paste”[6]
[6]
The Tariff Precedent manifests the desire of the Respondent to secure by administrative definition a meaning which “deprives the fish flesh of its character as fish or pieces of fish.”
(iii)the Respondent then commits a factual error as to what constitutes “minced fish” and a further factual error as to what constitutes “fish … in pieces …”
8.As a matter of statutory construction, it is respectfully submitted that :-
(i)the term “minced” should not be separately defined and thereafter that definition simply added as a description of the kind of “fish” in issue;
(ii)the statutory phrase “Fish, whole or in pieces, but not minced” should be construed both as a whole and in the context of Item 1604;
(iii)the statutory phrase should also be construed in the context of Chapter 3 of the Tariff.
So construed, what becomes self-evident is that the draftsman of Item 1604 sought to identify fish by reference to whether such fish was :-
(d) a “whole” fish; or
(e) a “piece” of fish.
There is no classification of “minced fish” – that expression being used to
exclude what may otherwise be included within “Fish, whole or in pieces…”
Importantly, the fundamental distinction sought to be made is that fish which
is “whole or in pieces” and fish which is to be classified by reference to :-
(f) “other prepared or preserved fish.”
That fish which is “other prepared or preserved fish” is not confined to “minced fish” – otherwise Item 1604.20.00 would have identified such fish as simply “minced fish.”
9.The approach of the Respondent in the present proceedings would deny any operation to Item 1604.20.0 – if the Respondent be correct, all fish – other than presumably “paste” – would fall to Item 1604.1; only “paste” would fall to Item 1604.20.0.
10.The approach of the Respondent, and the Tribunal in Re Grocery Holdings,[7] has been (with respect) erroneously dictated more by reference to Dictionary definitions of “minced”[8] rather than by looking for or searching for what was meant to be conveyed by subheading 1604 as a whole.
[7][8]
11.Moreover, the Applicant respectfully contends that :-
Ø separate consideration should be given to each of the categories of goods imported – one or other of those categories may fall for different consideration.
Subject to that qualification, the Applicant contends in general terms that:
Ø none of the goods imported, but more specifically the “shredded” tuna cannot be categorized as fish being “whole or in pieces” – and accordingly falls for entry pursuant to subheading 1604.20.0;
and, or in the alternative :-
Ø all of the fish imported is properly to be categorized as “minced” – and accordingly falls for entry pursuant to Item 1604.20.
12.The Applicant respectfully contends that for the purposes of Item 1604.1 the Tribunal should find that :-
(i)a “whole” fish refers to a whole round, or a fish which has been gutted and gilled or a fish which has been headed and gutted;[9]
[9](ii) “Fish .. in pieces” refers to that fish which has been filleted, or from which loins or cutlets or medallions have been removed;[10]
[10]
and
(iii) “minced” fish refers to that fish which has undergone a process of separating the fish meat from the skin and bone.
13.Even if there be dispute as to what constitutes fish which is “minced”, the former two findings would necessarily have the consequence that the Applicant’s products are neither :-
(i)“whole” fish; or
(ii)fish “in pieces”
and must necessarily fall to subheading 1604.20.0 for characterization, namely:-
(iii) “other prepared or preserved fish.”
108. In relation to statutory interpretation, he emphasised the principles in the case of Collector of Customs v Agfa-Gevaert (supra) which I have considered below.
109. I was also mindful of Tariff Precedent Number 15554100 (“Tariff Precedent”) relating to minced fish as it appears in Sub-heading 1604.20.00. It follows as relevant:
110. Dr Flick also drew to my attention Tariff Precedent Number 5609600, (below), a predecessor to Tariff Precedent 15554100 (which appears above), and sought to thereby support an argument that the wording of the earlier Tariff Precedent supported the Applicant’s case. I have noted that submission, and noted that the earlier Tariff Precedent referred to “the shredding process identifies the goods as minced tuna”, but am required to consider the Tariff Precedent in force at the time of the decision as a guide. I was mindful also that the Tariff Precedent relevant to the current matter before the Tribunal, refers to fish where the structure has not been destroyed, discrete particles may be discerned, and products which are not of a paste of minced fish, are not deemed to be minced for the purposes of the Sub-heading.
Tariff Precedent Number: 5609600
Type : 5 Date last changed: 11/12/2000
Description of Goods : Shredded tuna ►packed tuna in airtight tins.
Heading : 1604.20.00
Reason: HSEN to heading 1604 paragraph (2) state that the heading covers “Fish prepared or preserved in vinegar, oil etc.”
The ◄ tuna ► is not whole or in pieces. Classified to subheading 1604.20 as the shredding process identifies the goods as minced ◄ tuna.
VOIDED – CONFUSION IN THE INTERPRETATION OF THE WORD “MINCED”. C.O. IS INVESTIGATING.
Advice Status : F Date: 2/04/1991
Changed Status :V Date: 11/12/2000 Code: G
Other (Details attached)
111. I make no further comment on the Tariff Precedents except to say that they may be used as a guide, noting that they are administratively created documents and not part of the legislation.
112. I was mindful of the principles to follow when making the Tariff classification, and have noted that the general rule as to whether expert evidence may be admitted to establish the ordinary meaning of a word or phrase is that it may not be admitted. It is the Tribunal which must resolve the question. As Jordan CJ explained:
“The question what is the meaning of an ordinary English word or phrase as used in the statute is one of fact not of law … The question is to be resolved by the relevant tribunal itself, by considering the word in its context with the assistance of dictionaries and other books, and not by expert evidence … although evidence is receivable as to the meaning of technical terms … and the meaning of a technical legal term is a question of law …” (Australian Gas Light Co v Valuer-General (1940) 40 SR (NSW) 126 at 137)
113. I have noted however, that evidence of the meaning of a technical term can be given in certain circumstances. Those circumstances were summarised by Hill J in Pepsi Seven-Up Bottlers v Commissioner of Taxation (1995) 62 FCR 289:
“The general principle and apparent exceptions can be expressed in the following propositions which, to some extent, overlap. In construing a statute, evidence may be given of the meaning and usage of a word in a trade:
(1)where it is clear that a word in the statute is used in a specialised or trade sense and that usage differs from the ordinary English usage of the word (the courts will be more ready to conclude that the word is used in a specialised or trade usage where the statute to be construed is a revenue law directed to commerce);
(2)where the word is used in a specialised or trade sense in the statute, the word has an accepted trade usage and it is necessary to determine whether that trade usage differs from the ordinary English usage;
(3)where the word is used in a specialised or trade sense in the statute and it is necessary to determine whether there is an accepted trade usage as a preliminary to showing that that usage differs from the ordinary English usage;
(4)where the word used in the statute is directed to a particular trade and there has not been occasion for a widespread adoption by the general public of the word or a particular denotation of the word;
(5)where the trade usage assists in supplying the context or background of surrounding circumstances necessary to the construction of a word used in the statute;
(6)where the trade usage may assist the court by way of background to determine whether the word used in the statute is used in a specialised or trade usage or in accordance with ordinary English usage.” (pages 298-299)
114. I am mindful also of the following passage in Collector of Customs v Agfa-Gevaert Ltd (supra) which refers to construing statutes with the assistance of trade terms.
“When construing revenue statutes that utilise trade or technical terms, therefore, the law generally favours interpretation of the terms as they are understood in the trade to which the statute applies. In Herbert Adams Pty Ltd v Federal Commissioner of Taxation [(1932) 47 CLR 222 at 227. See also Whitton (1915) 20 CLR 118 at 127; Bell Basic Industries (1988) 20 FCR 146 at 156-157; Holt & Co v Collyer (1881) 16 Ch D 718 at 720; Unwin v Hanson [1891] 2 QB 115 at 119-120] Dixon J said:
‘A revenue law directed to commerce usually employs the descriptions and adopts the meanings in use among those who exercise the trade concerned.’
The courts have also said that it may be less difficult to establish a trade meaning which extends the ordinary meaning of an expression than one which limits the ordinary meaning in a specialised way [Herbert Adams at 228-229; Bell Basic Industries at 157-158]. However, the ‘presumption’ in favour of trade meaning in revenue statutes does not deny the possibility that words used in a revenue statute directed to commerce are to be understood in their ordinary meaning. [D & R Henderson v Collector of Customs for NSW (1974) 48 ALJR 132, Bell Basic Industries at 157]” (page 289)
…
Trade meaning and ordinary meaning do not necessarily stand at opposite extremities of the interpretative register. Professor Glanville Williams has described the distinction between primary (ordinary) meaning and secondary (trade) meaning as the distinction between, on the one hand, the ‘most obvious or central meaning’ of words, and on the other hand, ‘a meaning that can be coaxed out of the words by argument’ [Glanville Williams, ‘The Meaning of Literal Interpretation – I’ (1981) 131 New Law Journal 1128 at 1129]. Similarly, Professor Driedger describes this distinction as being that between ‘ “'the first blush” grammatical and ordinary sense ... [and] the “less” grammatical and “less” ordinary meaning’ [Driedger, ‘Statutes: The Mischievous Literal Golden Rule’ (1981) 59 Canadian Bar Review 780 at 785-786. See also Cross on Statutory Interpretation (3rd ed, 1995), pp 72-92.] Given this lack of necessary dissimilarity, there appears to be little reason for a rigid rule that disallows recourse to the trade meaning of a word that forms part of a composite phrase.”
115. Deputy President Forgie said in Grocery Holdings (supra):
“No doubt there are cases where a court or tribunal must interpret a composite phrase by reference to the ordinary meaning of the words taken as a whole without recourse to the trade meaning that one or more of its words may have. Much depends on the subject matter and context of the phrase. In the area of statutory interpretation and construction, courts must be wary of propounding rigid rules. Even the use of general rules carries dangers in this area because of the tendency for such rules to be given an inflexible application. [Cooper Brookes (Wollongong) (1981) 147 CLR 297 at 320] Nevertheless, when construing a composite phrase which does not have a trade meaning, it will ordinarily make sense for a court or tribunal to take notice of the trade meaning of a word or words within that expression, provided such an interpretation does not lead to a result which is absurd … “
116. Having noted the principles involved, and before making a decision about the interpretation of the Tariff, I moved to consider dictionary definitions of the various words and phrases which I am able to use as guidance.
dictionary meanings
117. I had to first consider the ordinary meaning of the particular phrases and words for classification, and am able to do so with the assistance of dictionary meanings. As relevant some follow:
“Whole” has been defined as:
“1. In good condition, sound… 5. Not divided into parts; not broken up or cut into pieces; entire… 6. Having all its parts or elements ; not lacking any part or element…” (The New Shorter Oxford English Dictionary, 3rd edition, 1993)
“1. Comprising the full quantity , amount, extent, number, etc., without diminution or exception; entire, full, or total. 2. Containing all the elements properly belonging; complete…” (The Macquarie Dictionary, 2nd edition, 1991)
“Pieces” have been defined as:
“… 1. A separate part of a material thing; any of the distinct portions or objects of which a material thing is composed. ME. b spec. Any of the irregular sections of a jigsaw or similar puzzle. …” (The New Shorter Oxford English Dictionary, 3rd edition, 1993)
“… 2. A quantity of some substance or material forming a mass or body. 3. one of the more or less definite parts or portions into which something may be divided: a piece of chocolate. 4. one of the parts, fragments, or shreds in which something may be divided or broken: to tear a letter into pieces. 5. one of the parts which, when assembled, form a combined whole: the pieces of a machine. 6. An individual article of a set or collection: a dinner service of 36 pieces. …” (The Macquarie Dictionary, 2nd edition, 1991)
“Mince” is defined as:
“1. Cut up or grind (esp. meat) into very small pieces…” (The New Shorter Oxford English Dictionary, 3rd edition, 1993)
“… -verb (t) 1. to cut or chop into very small pieces. 2. to subdivide minutely, as land, a subject, etc. …” (The Macquarie Dictionary, 3rd edition)
“1. a. trans. To cut or chop (meat, etc.) small, or in little pieces. …
b. To chop up or grind small with a knife or mincing-machine and cook (meat, usually the remains of a joint, etc., left from a previous meal). …” (The Oxford English Dictionary, 2nd edition, volume IX, 1989)“To cut or chop finely with a chopper, knife or mincer.” (The Macquarie Dictionary of Cookery, 1991)
“Shredded” is defined as follows:
“1. Trim, strip, prune, lop or cut off… 2. Cut or divide into small pieces… Cut or tear into shreds or thin strips, reduce finely…” (The New Shorter Oxford English Dictionary, 3rd edition, 1993)
“1. a piece cut or torn off, esp in a narrow strip. 2. a bit; scrap. 3. to cut or tear into small pieces, esp. small strips; reduce to shreds…” (The Macquarie Dictionary, 2nd edition, 1991)
“Chunk” is defined as follows:
‘1. n. a thick mass or lump of anything: a chunk of bread.’ (The Macquarie Dictionary, 2nd edition)
‘1. A thick lump (of wood, bread, cheese, etc.) cut or broken off.’ (The New Shorter Oxford English Dictionary, 3rd edition, 1993)
“Chunky” is defined as follows:
‘1. thick or stout; thickset; stocky. 2. in a chunk or chunks...’ (The Macquarie Dictionary, 2nd edition)
“Flake” is defined as follows:
‘1. a small, flat, thin piece of anything. 2. a small, detached piece or mass…’ (The Macquarie Dictionary, 2nd edition)
‘…b A small piece of down or fluff; something resembling this…2 A spot, a fleck, a blemish…10 In pl. Any of various kinds of breakfast cereal; esp. cornflakes.’(The New Shorter Oxford English Dictionary, 3rd edition, 1993)
118. As noted above, “whole fish” or “fish, whole”, in its common usage would mean a complete fish, “not divided into parts”, “comprising the full quantity”, although at the fish market or fish shop, it might be sold cleaned/gutted.
119. What was more difficult was the concept of “fish, in pieces”. I have noted that a common scenario for a “piece of fish” or “pieces of fish” would be what a customer requests either in a fish market or fish shop, either cooked or raw, although it is conceiveable that raw frozen fish in fish shop could be classified under Headings 0303 or 0304. I am satisfied that what the customer in the fish shop would expect, using the ordinary English language, would be bigger than a chunk the size of a chunk in a can or pouch of tuna, and certainly bigger than what could be described as a shred or flake, or what appears in the contents of a package of sandwich tuna.
120. The dictionary definitions above have defined “pieces” as “any of the distinct portions or objects of which a material things is composed” or “one of the parts, fragments or shreds in which something may be divided or broken …”
121. Further, the specific mention of the term “fish fillets” under Chapter 3 of the Tariff (Sub-headings 0302, 0303 and 0304) suggests that “pieces” was not meant to be confined to goods such as fillets and such like. A piece of smoked fish would likely be classified under heading 0305 encompassing, among others, smoked fish.
122. The Applicant sought to establish that “fish in pieces” was restricted to large pieces such as loins and fillets. If that were so, I understand that the Sub-heading would specify “large pieces”, which it does not. Accordingly, adopting the plain English meaning, I reject that argument.
123. I turned then to consider “fish, (whole), or in pieces”, to decide what “fish in pieces” means in terms of the Tariff classification. I noted that each of the chunk, sandwich, flake and shreds of tuna which I saw, has retained its structural integrity. Even the shredded tuna was in discrete particles. I also consulted the dictionary definitions which described a piece as “a distinct portion”, or “a separate part of a material thing”, (the tuna loin from which it is cut), or in the case of the shredded tuna, more a “fragment” or “shred”, and a chunk as a thick mass or lump … or a thick lump (of wood, bread, cheese, etc) ..” . I was mindful that mince was defined as “cut up or grind … into very small pieces” or “to cut or chop finely with a chopper, knife or mincer”.
124. I saw from my own inspection of the tuna, and the ordinary English meaning from the dictionaries I consulted, that the essential character of the cooked tuna was visible to the naked eye. Although there were varying sizes of pieces of tuna in each can and pouch, and I accepted from the evidence before me that it did not emanate from a particular loin, but could be a mixture of various tuna which had been processed, (Real, Wootton), not one sample was compressed or reduced to the extent that it had lost structural integrity. I was mindful that evidence was given about mincing raw or fresh fish, and that structural integrity could be retained in the case, for example, of coarse raw mince too. Cooked tuna, indeed cooked fish, has undergone serious chemical and structural changes in the cooking process (Wootton, Wailes), and would look entirely different from raw fish. I was referring above to cooked tuna, and I therefore could not classify what I saw, as “ground” (dictionary), or minced in the ordinary sense of the word.
125. Having inspected the Exhibits which are representative of the categories of tuna imported and under appeal in this matter, I was satisfied that in ordinary English, and using the dictionary definitions as a guide, the samples which are chunk, shredded, sandwich tuna and even the flake, are not minced tuna but that they are “fish in pieces” within the meaning of Heading 1604.1.
126. I am mindful that the Full Federal Court upheld Deputy President Forgie’s adoption of the ordinary meaning of the terms of Heading 1604.1, and that Finkelstein J, whilst agreeing with the other two Judges, emphasised in particular, that identifying the meaning of words was a legal process. Accordingly, I am bound by that decision.
127. I find that the ordinary meaning of “fish in pieces” is then recognisable or identifiable pieces, chunks, flakes or shreds, (which includes the sandwich tuna). I find they have not lost their integral structure, and that you can easily discern discrete particles even in shredded tuna; they are not minced. I am mindful that even though some minced fish such as raw/fresh minced fish (particularly coarsely minced), might retain some structural integrity, cooked tuna would assume a paste-like or paste texture if reduced to the extent of being minced. I did not see such texture in any of the chunk, shredded, sandwich or flakes of canned and pouched tuna I inspected. Therefore, the canned and pouched tuna subject of this matter, is not “minced”, and is “tuna in pieces”, which can be classified to Customs Tariff 1604.1. As there is no dispute that it is skipjack or yellowfin, in my opinion it falls to be classified under Sub-heading 1604.14.00.
128. However, in the alternative, there is a large amount of technical evidence from round the world in terms of written documentation, some of which was before me, and the evidence of witnesses who appeared at the Hearing, on whether there is a trade or industry meaning for the concept of minced tuna, and the words “pieces” and “minced”. I considered that evidence before coming to a final decision.
consideration of industry/trade views
129. I have noted the statement of the Court in Australian Gas Light Co v Valuer-General (1940) 40 SR (NSW) 126 at 137) in relation to decision making in this case, and the fact that expert evidence cannot be relied upon, “although evidence is receivable as to the meaning of technical terms”, and have had regard to that guidance in reviewing the evidence before me.
130. I was mindful of the submissions of Mr Komora with regard to Re Pacific Film Laboratories (supra). He submitted:
“18. The principle in relation to adopting a trade/industry meaning was summarised by the Tribunal in Re Pacific Film Laboratories Pty Ltd and Collector of Customs (1978) 2 ALD 144 at 156:
(vii) If the expression is not uniformly understood in a specialized sense in the trade, it cannot be assumed that Parliament has adopted or recognized that specialized meaning. In that event, the ordinary English meaning of the expression is applied, having regard to the legislative context;
19. The Tribunal in Pacific Film Laboratories at 154 and 155 listed as the type of evidence needed to prove a special meaning by trade usage:
the usage must rest on actual instances of use, and not on mere opinion …
trade manuals and technical publications …
evidence from technical experts …
trade usage from academics and technical educators in a specialized field.”
131. On that basis, even though I consider that the ordinary English meaning of the words “fish, whole or in pieces but not minced” is clear, I have considered what the people from the trade who gave evidence have told me in this matter about trade or industry meanings of the relevant phrase.
132. It was undisputed, and I was satisfied with the evidence of Professor Wootton and Mr Wailes regarding the changes which take place to tuna when it is cooked, including a serious change in texture and moisture content. Professor Wootton referred to molecular, cellular and muscular changes. It is of course cooked canned and pouched tuna which are the subject of this dispute.
133. The question of what is a whole fish was not really contentious, and I was satisfied with what Mr Real told me about that, being (“Whole Round”), (WR), a fish with its head and tail on; or “Gilled and Gutted”, (G&G), or “Head Removed and Gutted” (H&G). He did first say that that was his personal view, but later added that they were terms used in international trade. No other witness mentioned whole fish in those terms, but I was prepared to accept the above as the ordinary English meaning of a “fish, whole…”, noting that it also had connotations in the international fish trade. I was satisfied that that covered “fish, whole …” in Heading 1604.1.
pieces
134. Mr Real considered that “pieces” were “recognisable parts” such as “loins, cuts, fillets, portions, steaks etc”, but that all other products which had been through size reduction were “minced”. In his oral evidence Mr Real referred to the DVD, and described what he called the “mincing process” or size reduction, achieved either through manual processes, or a pack shaper, filler, shredder or flaker.
135. Mr Peters said in his statement that “fish in pieces” or “pieces of fish” referred in this context only to such pieces as are identifiable portions of a whole fish. He indicated these were not trade terms, where fillet or portion would be used. Mr Peters also referred to “pieces of fish” one might request in a fish shop, which are of course not relevant to this matter. He said that in his opinion, having regard to industry useage and practice, fish products that appeared in cans or pouches of the kind imported by the Applicant of which he had no experience, could be not be identified as “fish in pieces” or “pieces of fish” or “cuts”. As he does not have experience with canned or pouched tuna, his view regarding the subjects under review was not of great assistance in this regard.
136. Professor Wootton affirmed in re-examination his view that the Heinz tuna in the cans and pouches before the Tribunal were not pieces, but portions of fish. He said that in any one can, there could be a whole batch of portions, but not from an identifiable whole. The final question to Professor Wootton was from Dr Flick as follows: “So whether it is a piece of fish or fish in pieces, you are still looking for, on your approach, an identifiable part of an identifiable fish?” Professor Wootton answered: “Yes”.
137. Mr Wailes stated that the term “pieces” can be used to describe the small particles making up weight in the contents of canned and pouched tuna, and stated that they have an identifiable structure that would not be present had the tuna been minced.
minced
138. Mr Soroka described the Exhibits before the Tribunal as “minced”, regardless of their appearance, and of how they were labelled. He told me that the definition of “minced” was that the fish had gone through a size reduction through an extended process which included compression shearing and cutting, and to an extent, agitation. Mr Soroka explained that the appearance of the final product is determined by the particular machine in which the tuna loin is processed, and by the size of the plate/knife used in the size reduction process.
139. Mr Soroka said that he disagreed with the statement of Mr Wailes that “mincing fish destroys texture”, stating that the texture of fish flesh in minced hake was clearly visible to the naked eye. He added in his report that he agreed that products which have the appearance of fish paste or fish spread are usually produced by a mincing process, but that it did not follow that the only products that could correctly be described as minced fish, were fish paste and fish spread.
140. Messrs Soroka, Jeffriess, and Real agreed that the term “minced” has no accepted meaning in the tuna processing industry, notwithstanding its use in other sectors of the fish processing industry. Mr Soroka (corroborated by Mr Moffat), stated that other fish such as hake is imported in frozen blocks for the manufacture, for example, of fish fingers. That he said, was known in the industry as “minced hake”. (I noted that this was in reference to fresh or raw fish, and not cooked fish such as the tuna subject of this inquiry).
141. Professor Wootton commented that a minced product could vary in texture from coarse to fine, but that except in the case of dry foodstuffs, the products retained some measure of structural integrity. He referred in paragraph 23 of his statement to the statements of Messrs Wailes, Soroka, Real and Moffat, confirming the accuracy of the Codex definition and terminology generally, that minced fish is a product produced by the shredding of fish flesh. He stated that the physical characteristics of tuna flesh are such that the process is ordinarily only applied to cooked tuna, whereas with most other species, the flesh is minced raw.
142. Professor Wootton also said as follows:
“I must say, I initially had a lot of problem equating shredding with mincing or a shredded product with a minced product. I have sort of reconciled myself to a fair degree on that. I couldn’t stand up and honestly say: yes, they’re the same thing because I don’t think they are quite the same thing. Now if one looks at the distinction between – well -, the wooden definition of a piece of fish and fish mince or shredded fish, then I believe the latter two do not fit into the former category.”
143. Mr Wailes stated that the tuna products before the Tribunal had not been minced, and referred to the Codex definition, which was that minced fish prepared by mechanical separation “is fish flesh produced by the mechanical separation from bones and skin of fish or by shredding with a resultant loss of integral structure.”
144. I noted that the Codex Standard No 165 published by the United Nations Food and Agriculture Organisation describes at Paragraph 1 of the Standard, “minced fish flesh” as a product intended for further processing, and Paragraph 2.1.2 describes “minced fish flesh” as “particles of skeletal muscle which have been separated from and are essentially free from bones, viscera and skin.” Mr Soroka’s interpretation of the above was that it therefore follows that the products which fall within sub-heading 1604.1 in the Tariff are prepared or preserved fish which are either whole or in pieces such as slabs, fillets or loins, and that “minced fish” products are excluded and can be defined as in Paragraph 2.1.2.
size reduction equipment
145. Mr Soroka commented on chunk-style tuna marketed in a pouch, explaining that this was manufactured by the same size reduction process as canned shredded or flake-style tuna, and that the size of the chunk was therefore irrelevant to identification, because it was the “production process itself that determines how the end product is to be identified, not the size of the flesh particle.”
146. Professor Wootton commented in his statement on the statements of Messrs Wailes and Jeffriess. He wrote that:
“The description of a product as a “minced product” depends on its physical form, especially particle size, and not on the equipment used to produce it, or on the nature of the product before mincing, or on its end use. The size and shape of the resultant particles will depend on the method and severity of the size reduction process and the nature of the material prior to mincing.
In my opinion minced fish is fish which has undergone a size reduction process such that the structure of he muscle mass is no longer obvious.
I therefore conclude that the description of a product as a “minced product” depends on its physical form, especially particle size, and not on the equipment used to produce it.”
147. Mr Wailes explained that tuna did not go through a meat and bone separator because the red meat which is basically used for pet food and not human consumption, could not be separated in that way. He said that mincing was used for raw fish, and that the DVD showed how easy it was to separate the backbone and red meat in the cooked tuna.
148. Mr Wailes stated that there was still an identifiable structure in the tuna subject of the Tribunal Hearing, whether it was chunk, or shredded. That structure, he said, had to be looked at in the context of cooked fish, not comparable to the structure of raw fish. Cooking, Mr Wailes explained, caused moisture loss and other chemical changes and so cooked tuna flesh was quite firm as compared to raw flesh which is soft and pliable, and flakes when it breaks apart. Mr Wailes commented that “overworking” tuna in a machine would risk it forming a paste, or paste-like substance, whereas in shredding, discrete particles remained.
CONCLUSIONS
149. In conclusion, I have identified the products before me, by looking at the representative samples of the 101 samples of tuna, subject of the appeal, and using the steps outlined in Re Tridon (supra). The products are cooked tuna, canned and pouched tuna, which has been labelled chunk, sandwich, or shredded, and includes flakes of cooked tuna. With respect to the products with additives, and those which include vegetables and other ingredients, it is my view, having considered the Interpretation Rules, that the tuna gives them their essential character. I find that cooked tuna comes under Heading 1604, “Prepared or Preserved Fish; …”. That was not in issue between the parties.
150. I have applied the principles from Times Consultants Pty Ltd and Collector of Customs (supra), and the Interpretation Rules in order to classify the canned and pouched tuna according to the relevant Tariff classifications, that is whether it should be “Fish, whole or in pieces, but not minced” pursuant to Heading 1604.1 and hence, Sub-heading 1604.14.00, or “Other prepared or preserved fish” pursuant to Sub-heading 1604.20.00.
151. I find that the ordinary English meaning of whole tuna means just that, that is a whole tuna fish which has not been “divided into parts” or “cut into pieces” (The New Shorter Oxford English Dictionary, 3rd edition, 1993). I accepted further from Mr Real, who gave evidence that whole tuna is known in the industry as “Whole Round” or “Gilled and Gutted” (GG), or “Whole Fish without Head and Gutted” (HG). None of the other witnesses gave this evidence.
152. That covers “fish, whole …” in the consideration of Heading 1604.1, and as to “pieces”, I find in construing the Tariff, that the phrase is not “pieces of fish”, but rather “fish in pieces”. Pieces of fish, would I understand, be what one might request in a fish shop, (Peters), whereas the context of the sub-heading “fish, whole or in pieces”, would, to me, signify identifiable “pieces”, or “portions” or “particles”, but not be restricted to large pieces, or loin, or fillets as proposed by the Applicant, and supported by the argument of Mr Real. I consider that if the legislature had meant “fish in large pieces”, it would have so specified, and accordingly I reject that argument.
153. Accordingly, I considered chunk, shredded, flake and sandwich tuna in terms of whether they were “fish in pieces” or “minced” as claimed by the Applicant. I was satisfied from the evidence of Mr Real that no one can or package would contain the flesh of only one tuna, or indeed even one particular loin. That does not impact on what I have to decide.
154. I was satisfied that the tuna subject of the claim has in every case been cooked, and that structural integrity was discussed before the Tribunal. Professor Wootton and Mr Wailes both gave evidence of how the cooking process alters the structural integrity of the tuna. The result of that is obvious even to a lay person. The flesh colour and structure changes as a result of cooking. However there was further discussion before me, of whether, and how, the structural integrity of cooked tuna is either retained, or whether the size reduction process which the cooked tuna undergoes before packaging into cans and pouches, produces minced tuna. That was of course the Applicant’s argument, that the Heading 1604.1, “Fish, whole or in pieces but not minced” excludes the Heinz tuna because it is minced as a result of having undergone size reduction with a holeplate-and-knife process or through a meat and bone separator. They would accordingly have it classified to Sub-heading 1604.20.00 which is “Other prepared or preserved fish”.
155. Dr Flick also proposed that the various samples (chunk, flake, shredded and sandwich), could be considered separately. I accepted that the same size reduction processes using different sized attachments such as knives, adjusted to various sizes and settings are used to make chunk, flake, shredded and sandwich tuna. I was however satisfied that none of the products before me was minced in the ordinary English sense of the word although some of the packages had pieces of different sizes in them, so that chunk tuna for example might have added flakes or shreds which were put in at the end of filling process as seen in the DVD to make up the correct weight. I found that applying ordinary English meanings, the chunk was a different size from flakes or shreds and that all retained their structural integrity, even the shreds were discrete particles.
156. The dictionaries I consulted defined minced as cut up or ground or chopped into very small pieces. I accepted that minced products can be coarse or fine. However I was satisfied that minced tuna is not a concept in the tuna industry, although raw/fresh other fish such as hake, cod or mackerel is minced (often by using a meat and bone separator), for further processing into fish fingers or patties or related products, (Jeffries, Soroka, Moffat). Minced raw/fresh tuna may be coarse or fine, and may retain its structural integrity. I was satisfied however, from the evidence that tuna is not processed in that way, and that minced tuna is not a concept in the industry. (Soroka, Moffat, Wailes, Jeffriess and Real). There was no prohibition on mincing tuna as such. However, I was satisfied from the evidence before me that due to the difficulty of removing the red meat in a meat and bone separator, minced tuna would not be suitable human consumption. It appeared to be accepted universally that red tuna meat is removed after cooking, mixed with other parts not considered suitable for human consumption, and thus destined for the production of pet food.
157. I was mindful of the evidence that the machinery used for size reduction may be manual, a holeplate-and-knife machine or a meat and bone separator or similar equipment. I find from the evidence that the equipment used is not material, although its different (knife) settings may be. It is the product which emanates from the process which is to be classified. However, I noted that meat and bone separators would not generally be used for tuna because the process of meat and bone separation cannot separate out the red tuna meat which is not considered fit for human consumption (Wailes). Size reduction in tuna, as described at the Tribunal and shown in the DVD was carried out on cooked tuna once the red meat had been removed.
158. It is likely that if cooked tuna is minced, it would not retain its structural integrity, whereas the chunks, shreds, sandwich tuna and flakes which I saw in the Exhibits before the Tribunal did. Mr Wailes gave evidence about a minced product having gone through a process which included being compressed to the extent of being paste or paste-like. I was mindful that in Tariff Precedent Number 15554100, the Respondent has described minced fish as “the product resulting from fish which has been minced into a paste form” (my emphasis). I noted also that the definitions in the Codex specify sizes for the pieces such as chunk and flakes and refer to the muscular structure of the canned tuna. In relation to grated and shredded pieces, the Codex refers to a “mixture of particles of cooked fish that have been reduced to a uniform size in which particles are discrete and do not comprise a paste.”
159. I agreed with Mr Wailes who said he did not see paste in the Exhibits before the Tribunal, and that in examining the contents of the Exhibits, the tuna therein had identifiable structure (of the altered cooked tuna), which minced tuna would not have. I noted the evidence of Professor Wootton that minced fish was fish which had undergone a size reduction process to the point where muscle “mass” was no longer obvious. I agreed with him when he said that he was also unable to find that a shredded product equated to one which was minced.
160. I have had regard to the trade and industry meanings of what is minced. The evidence that I have regarding the use of the word “mince” in the fish and tuna trade or processing industry is that of Messrs Real, Soroka, Moffat, Peters, Wailes, Wootton and Jeffriess, and from the various publications which were tendered. The agreed view was that there is no concept of minced tuna in the industry.
161. Based on the evidence and the publications, I was satisfied that only fresh fish such as hake mackerel and cod are processed as minced fish, and that minced tuna is not a concept in the industry. (Soroka, Moffat, Wailes, Jeffriess and Real). That is not to say that it is technically impossible to mince fresh or even cooked tuna, but it appears not to be done. The evidence before me however, was that minced fish, such as hake, cod, mackerel, or whiting is imported frozen, destined for processing into fish fingers, patties, dip and other similar uses. I was satisfied that these products in their prepared or preserved form (ie. fish fingers, patties, balls) as required by the terms of Heading 1604 would be excluded from the terms of Sub-heading 1604.1, and would be classified to Sub-heading 1604.20.00 as “Other prepared or preserved fish.”
162. Mr Soroka said that he disagreed with the statement of Mr Wailes that “mincing fish destroys texture”, stating that the texture of fish flesh in minced hake was clearly visible to the naked eye. He added in his report that he agreed that products which have the appearance of fish paste or fish spread are usually produced by a mincing process, but it did not follow that the only products that could be correctly described as minced fish were fish paste and fish spread.
163. I was satisfied from the evidence that the texture of what is described as minced fish may vary from a fibrous consistency, be it coarse or fine, to a paste-like or puree like texture. The extent of the breakdown of the structural integrity was not agreed upon. It may have bone or it may not. It may be of white meat only or it may have some red meat or other part of the fish to a greater or lesser extent. It is produced with the aid of a mechanical device which may be either a meat and bone separator or a holeplate-and-knife or other mincer of some type. It may be produced by the separation of bones and skin from the rest of the fish. It is my understanding that the type of machinery is not relevant to my decision making. However tuna is not mentioned in the industry as a fish that is minced.
164. Accordingly, the product in question here is cooked tuna which is not sold minced. The evidence before me indicated that minced (cooked) tuna would be paste-like, and will have lost its structural integrity, so that the products before me, chunk, flake, sandwich and shredded tuna where structural integrity can be seen, cannot be classified as minced.
165. Therefore, I was satisfied that each of the 101 tuna products, subject of the claim are not “minced” but that they are “fish in pieces” within the meaning of Sub-heading 1604.1. The chunk style tuna retains its textural integrity of tuna that has been preserved. The sandwich tuna products and the flavoured tuna products comprise what may be described as flakes or shreds of tuna. These are quite small pieces, but each retains the textural integrity of preserved tuna. The essential characteristics of preserved tuna are still readily identifiable, and none of the samples have lost their structural integrity, and none has become paste or paste-like. None of them can be described as having been “minced” in its ordinary meaning. Therefore the correct subheading is 1604.1. As the products are tuna, the conclusion must be that the goods are properly classified under sub‑heading 1604.14.00.
166. I have noted Dr Flick’s submission regarding the non-binding nature of another Tribunal Member’s decision He is right to a certain extent. There are however, two issues here, first of all I was satisfied that the products subject of this review appeared to closely resemble those before the Deputy President. And secondly, a Deputy President’s decision is, unless, there are compelling grounds not to follow her, persuasive. In addition, the Full Federal Court by which I am bound, upheld the Tribunal’s Grocery Holdings decision.
167. Finally, what I have done is make an independent decision on identification and classification of the canned and pouched tuna subject of this dispute, based on the description of the goods before me, informed inspection, applying the Interpretation Rules, and following the principles espoused in the various cases.
168. I have also noted Mr Komora’s submissions with regard to the WCO Convention of the Harmonized Commodity Description and Coding System, and Australia’s commitment to it. He correctly submitted that: “Although the way in which the rest of the world classifies goods cannot be used by the Tribunal to pre-empt its classification task, it is still of some comfort after that task is completed to find that Australia is adhering with the aims of the Harmonized System.”
169. I have made my findings and decision, and accordingly, the Tribunal affirms the decisions of the Respondent with regard to all the 101 processed tuna products for review.
I certify that the 169 preceding paragraphs are a true copy of the reasons for the decision herein of
Ms G Ettinger, Senior Member
Signed: Neil Glaser
AssociateDates of Hearing28 August 2002 & 8, 9,10 September 2004; written submissions 24 September 2004
Date of Decision 12 October 2004
Counsel for the Applicant Dr G Flick SC
Solicitor for the Applicant Mr I Rodda, Rodda Castle & Co Pty Ltd
Solicitor for the Respondent Mr G Komora, Australian Government Solicitor
Section 37 Statement at para 58.
Tariff precedent Number 15554100 thus provides as follows :-
Contrast the wording of the earlier Tariff – and the practice long endorsed by Customs – as follows :-
[2003] AATA 460 at [29] and [40], 37 AAR 249, 74 ALD 212
Section 37 Statement at para 31
During Mr. Komora’s questioning of Mr. Real, the following exchange thus occurred (Transcript 26) :-
Okay. If I can just -thank you. If I can just take you to paragraph 40 of your statement, you talk about whole fish? ---Yes.
And you say that you still could have a whole fish if the head, skin and/or tail was removed? ---Yes.
Is that just your own opinion? ---Yes.
So it is not based on anything that the industry believes? ---Well, tuna can be purchased in many -internationally, tuna can be purchased in various forms. One is whole round which is the fish with head, guts, tails, everything, frozen and then transported to the cannery .Another form is H and H, which is also considered whole. And H and a means headed and gutted, which means the head is taken off, the guts are out and the tail can be trimmed. That's another form that fish is purchased in the whole form. The third one is GG, which is gilled and gutted. The head is on, the gills are taken out and the guts are taken out. So those are all forms that tuna is sold internationally, which would all be considered whole.
See : Transcript at 42 (Mr Peters)
Section 37 Statement at para 58.
Tariff precedent Number 15554100 thus provides as follows :-
Contrast the wording of the earlier Tariff – and the practice long endorsed by Customs – as follows :-
[2003] AATA 460 at [29] and [40], 37 AAR 249, 74 ALD 212
Section 37 Statement at para 31
During Mr. Komora’s questioning of Mr. Real, the following exchange thus occurred (Transcript 26) :-
Okay. If I can just -thank you. If I can just take you to paragraph 40 of your statement, you talk about whole fish? ---Yes.
And you say that you still could have a whole fish if the head, skin and/or tail was removed? ---Yes.
Is that just your own opinion? ---Yes.
So it is not based on anything that the industry believes? ---Well, tuna can be purchased in many -internationally, tuna can be purchased in various forms. One is whole round which is the fish with head, guts, tails, everything, frozen and then transported to the cannery .Another form is H and H, which is also considered whole. And H and a means headed and gutted, which means the head is taken off, the guts are out and the tail can be trimmed. That's another form that fish is purchased in the whole form. The third one is GG, which is gilled and gutted. The head is on, the gills are taken out and the guts are taken out. So those are all forms that tuna is sold internationally, which would all be considered whole.
See : Transcript at 42 (Mr Peters)
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