One Stop Pallet Racking Pty Ltd and Comptroller-General of Customs
[2022] AATA 2881
•7 September 2022
One Stop Pallet Racking Pty Ltd and Comptroller-General of Customs [2022] AATA 2881 (7 September 2022)
Division:TAXATION AND COMMERCIAL DIVISION
File Number(s): 2020/6305
Re:One Stop Pallet Racking Pty Ltd
APPLICANT
AndComptroller-General of Customs
RESPONDENT
Decision
Tribunal:Senior Member A Poljak
Date:7 September 2022
Place:Sydney
The decision under review is affirmed.
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Senior Member A Poljak
Catchwords
CUSTOMS – decision to reject the applicant’s application for refund of duties paid in respect of steel pallet racking (subject goods) – whether the subject goods meet certain definitional criteria for the purposes of administering customs and anti-dumping measures – interpretation of terms – subject goods found to fall within the relevant scope – decision under review affirmed.
Legislation
Customs Act 1901 (Cth)
Customs Tariff (Anti-Dumping) Act 1975 (Cth)Cases
Paracella Pty Ltd ATF The Kelvin Flintoff Family Trust and Comptroller-General of Customs [2021] AATA 1988
REASONS FOR DECISION
Senior Member A Poljak
7 September 2022
One Stop Pallet Racking Pty Ltd, the applicant, imports into Australia steel pallet racking from China by Jiangsu Jracking Industry Ltd (Jracking Group) (subject goods). The applicant was required to, and did pay, special duties of Customs (dumping duty) on four shipments of the subject goods into Australia. The dumping duty was imposed by the Customs Tariff (Anti-Dumping) Act1975 (Cth) (Anti-dumping Act) because of a dumping duty notice published on 6 May 2019 (dumping duty notice) in relation to certain steel pallet racking exported to Australia from China and Malaysia. The applicant’s requests for a refund of the dumping duties paid were refused.
On 27 August 2020, following an internal review, the decisions to refuse the applicant’s refund requests were affirmed. This is the decision under review in these proceedings.
Dumping Duty Notice
On 13 November 2017 the Anti-Dumping Commissioner initiated an investigation regarding steel pallet racking exported to Australia from China and Malaysia (investigation). Following the completion of the investigation, on 6 May 2019, the Minister for Industry, Science and Technology (Minister) published the dumping duty notice pursuant to section 269TG of the Customs Act1901 (Cth) (Customs Act). The Minister accepted the recommendations, reasons, and material findings of fact in the Anti-Dumping Commissioner’s Report No. 441.
The dumping duty notice states:
The Goods
The goods the subject of the investigation are:
Steel Pallet racking, or parts thereof, assembled or unassembled, of dimensions that can be adjusted as required (with or without locking tabs and/or slots, and/or bolted or clamped connections), including any of the following – beams, uprights (up to 12m) and brace (with or without nuts or bolts).
Further information
The goods are adjustable static racking structures capable of carrying and storing
product loads, and components used to make static racking structures.Adjustable racking is a structure typically made from cold-formed or hot rolled steel structural members and includes components such as plates, rods, angles, shapes, sections, tubes and the like. Welding, bolting, or clipping are the typical methods used to assemble them. It may be racking installed within a building.
A typical storage configuration comprises upright frames perpendicular to the aisles and independently adjustable, positive locking beams parallel to the aisle, spanning between the upright frames, and brace designed to support unit load actions.
The racking layout and components used are designed to get the best efficiency for the shape and volume of the items stored. The applicable Australian Standard is AS4084-2012.
The dumping duty notice included a specific finding that exports from Jracking Group during the investigation period had a determined dumping margin of 60.1%, which was assessed pursuant to section 269TACB of the Customs Act.
On 6 May 2019, the Minister published Ministerial Exemption Instrument No. 1 of 2019 (exemption notice), pursuant to paragraph 8(7)(a) of the Anti-Dumping Act. The exemption notice exempted from the dumping duty notice “all components or parts of steel pallet racking, other than beams, braces and uprights”.
The dumping duty notice applied retrospectively to exports of goods and “like goods” on and from 19 June 2018.
“Like goods” is defined in section 269T of the Customs Act as follows:
like goods , in relation to goods under consideration, means goods that are identical in all respects to the goods under consideration or that, although not alike in all respects to the goods under consideration, have characteristics closely resembling those of the goods under consideration.
The Subject Goods and Consideration
The subject goods are those the subject of the import declaration for which duty was paid, and a refund was refused. In importation documentation, Jracking Group described the subject goods as:
UPRIGHTS OF DIMENSIONS THAT CAN NOT BE ADJUSTED AS REQUIRED,
BRACING OF DIMENSIONS THAT CAN NOT BE ADJUSTED AS REQUIRED,
BOX SECTION AND CONNECTORS OF DIMENSIONS THAT CAN NOT BE ADJUSTED AS REQUIRED.
BASE PLATES
FLOOR FIXINGS
NUTS BOLTS
WASHERS
BRACING BLOCKS
LEVELING PLATES
Upon a request for further information, Jracking Group provided a declaration from an engineer dated 18 November 2019 which stated:
…The dimensions of none of the pallet racking systems manufactured by Jracking and supplied to Australian customers, including [the applicant], are or have parts thereof, assembled or unassembled, of dimensions that can be adjusted as required.
If the dimensions were adjustable, this would adversely affect the structural integrity and strength of the rack and render it unsuitable for use and give rise to safety issues…
A letter from Rockfield Technologies Australia Pty Ltd dated 25 November 2019, stated that the beam lengths, bracing, and upright heights come in fixed lengths and are not adjustable. The upright frames have set geometry and are not adjustable and the upright type are not adjustable. The attached diagram to the letter showed these relevant dimensions. I note however that the letter and claims made therein do not amount to expert evidence. A formal expert report was not provided, and the author of the letter was not available for cross examination. The letter also makes no reference to the adjustable heights of the beams and storage levels.
The Jracking Group website states that the subject goods are 76.2mm pitch pallet racking produced by Jracking Group in China to the relevant Australian Standard AS 4084-2012: Steel Storage Racking. One of the features of the subject goods is “[e]asy beam adjustment accommodates variable pallet heights”.
Australian Standard AS 4084-2012 applies to:
…adjustable static pallet racking made of made of cold-formed or hot rolled steel structural members … [a] [s]torage system comprising upright frames perpendicular to the aisles and independently adjustable, positive locking pallet beams parallel to the aisles, spanning between the upright frames, and designed to support unit load actions…
[Emphasis added]
There are illustrations, diagrams, and photographs in respect of shipments of the subject goods in evidence. The adjustment of the physical structure of the pallet racking storage systems can be accomplished in two ways. Firstly, the height of the shelving (beams) can be raised/lowered in accordance with the notches in the uprights at pre-determined intervals, thereby altering the storage space above and below the beam. Secondly, during the design, manufacture, assembly and/or installation of the pallet racking storage system and, possibly, after installation to produce storage systems of different widths, heights and depths.
The applicant has provided numerous and detailed submissions in these proceedings. The applicant contends, in summary, that:
… on the plain, unambiguous and precise description of the goods in the DD Notice on a literal construction, the tax (dumping duty) is imposed on both pallet racking systems and parts of such systems both of whose dimensions must be adjustable as required. Consequently, the goods on which the Applicant paid interim dumping duty are not liable for that tax because none of the dimensions of the pallet racking systems and parts of such systems imported by it on presentation at the taxing point (i.e., importation) were adjustable, let alone adjustable as required. This reflected in a declaration made by its supplier, JRacking (China)Storage Systems, dated 18 November 2019 … and a letter from a structural engineering firm, Rockfield Technologies Australia Pty Limited and the accompanying diagram…
The applicant submits that the subject goods as imported do not meet the description of the goods in the dumping duty notice and states specifically:
(a) altering the height of beams within a pallet racking system does not adjust the dimensions (width, height and depth) of that system, which remain unchanged. Even if altering the height of beams does alter a dimension of the pallet racking system in some undisclosed way, other dimensions (e.g., width, height and depth) of the system are not ‘adjusted’ as a consequence but, again, remain unaltered and are un-adjustable;
(b) the selection of components of different dimensions in the design, manufacture, assembly and/or installation of a pallet racking system is a process of manufacture and not an ‘adjustment’ of an existing pallet racking system. It produces a new product with different components of different dimensions with different load bearing capacity with, consequently, different dimensions from other systems produced from different components. Similarly if the components of an existing pallet racking system are replaced with components of different dimensions, in which case the identity of the original system is subsumed by the production of the new, different pallet racking system that replaces the original;…
The applicant and Jracking Group have previously raised similar contentions to the Anti-Dumping Review Panel (ADRP) when they sought review of the Minister’s decision to publish the dumping duty notice. The ADRP published Report No.103 – Steel Pallet Racking exported from the People’s Republic of China and Malaysia (ADRP Report) regarding this review on 27 August 2019. The ADRP refers to, considers, and rejects claims that the imported steel pallet racking is not of dimensions that can be adjustable as required. And recommended that the Minister’s decision be affirmed. The Minister subsequently affirmed her decision on 26 September 2019. The ADRP relevantly stated in the ADRP report:
As referred to above, while there appears to be general agreement that adjustable
steel pallet racking is the goods being exported, the area of dispute focuses on one phrase in the goods description ‘dimensions that can be adjusted as required’. I have examined the dictionary meanings of ‘dimensions’ and ‘adjusted’ as follows:
‘Dimension’ means a measurable extent of any kind, as length, breadth, depth,
area, and volume or a measurement of something in a particular direction, especially its height, length or width. ‘Adjusted’ means arranged; put in correct order or position or to change something slightly, especially to make it more correct, effective or suitable.
A simple construction of these words means steel pallet racking that has length,
height, breadth or depth, that can be arranged or changed to be more suitable or
correct position. The ordinary reading of the words ‘dimensions that can be adjusted as required’ supports the view that the goods description conveys the same meaning as adjustable steel racking…
The ADRP Report noted that the imported goods from China are said to meet the Australian Standard AS 4084-2012: Steel Storage Racking; it is appropriate to consider the entire goods description in assessing whether goods produced by the Australian industry are like goods to those exported to Australia, not just the initial description; and, all pallet racking systems observed by the Anti-Dumping Commission featured evenly spaced slots along the upright upon which the beams and braces can be placed at the required height and adjusted to a different height as required. It further stated:
I do not consider the phrase ‘dimensions that can be adjusted as required’ is meant to restrict the goods covered or specify a particular type of pallet racking system. As Marine Power suggests ‘like goods’ ‘should not be interpreted in a narrow or restrictive manner’. In my view it is meant to convey that the pallet racking system can be adjusted, that is, it has some dimensions that can be changed, if not all of them. Accordingly, I do not think one phrase should detract from the overall and ordinary meaning conveyed by the goods description. There is no clear intent to provide a specialised meaning to these words in the goods description. In this case, adjustable steel pallet racking are the intended goods.
For the reasons outlined above I do not agree with Abbott or One Stop that the goods exported to Australia are not the goods as described in the ‘goods description’. Additionally, I do not agree that the use of the words ‘dimensions that can be adjusted as required’ in the goods description means that the steel pallet system do not exist and cannot be manufactured, particularly when it is commonly agreed that steel pallet racking is adjustable.
The recent decision of the Tribunal Paracella Pty Ltd ATF The Kelvin Flintoff Family Trust and Comptroller-General of Customs [2021] AATA 1988 (Paracella) involved the same kind of goods as the subject goods in this matter supplied by Jracking Group and dealt with the same issues raised in these proceedings. While I am not bound by this decision, it is relevant in terms of consistency in administrative decision making.
The applicant’s contentions here are inconsistent with the decision and reasons for decision in Paracella. At [41]-[43], Deputy President Boyle relevantly found:
The Tribunal does not accept the Applicant’s argument that the pallet racking does not meet the description of the goods or like goods in the ADN because it does not meet the criterion of adjustable “as required”. As Lockhart J noted in Marine Power Australia Pty Limited and Marine Power International Pty Limited v the Comptroller-General of Customs; Outboard Marine Australia Pty Limited and Yamaha Motor Australia Pty Limited at [60], the expression “like goods” should not be interpreted in a narrow or restricted fashion. While on one view the words “as required” might be considered to be superfluous, “as required” cannot be taken to mean infinitely or in any circumstances which is what the Applicant contends. The Applicant, in effect, argues that because the shelving cannot be adjusted once erected and loaded, or at least safely adjusted, means that the shelving cannot be adjusted “as required”. The Tribunal rejects that argument.
The fact that obvious steps, such as removing load, must be taken before the shelving can be adjusted safely does not mean that the racking system is not adjustable “as required”.
The Applicant’s argument also confuses the description of the goods, or a particular characteristic of the goods, in this case their adjustability, with the circumstances in which they can be adjusted. The fact that in certain operational applications it may not be possible, as a matter of fact, to adjust the shelving to accommodate some altered requirement, or to adjust the shelving safely, does not mean that the shelving is not adjustable as required. Its physical characteristics do not change. It simply means that steps may need to be taken before the shelving can be safely adjusted as required or to better suit a particular requirement.
…The words “as required” could not be taken in the context of the purpose of the legislative regime and the language of the relevant provisions to mean “infinitely adjustable”. Clearly any shelving system is going to be subject to certain constraints, whether they be a matter of centimetres because of the inherent nature of components that are supplied in an unassembled form or because of the laws of physics that make certain configurations impossible. To impose that gloss on the words “as required” is unwarranted and would render the description of the goods of no application. As the Respondent’s submissions pointed out, the meaning of the description of the goods, including the requirement that the steel pallet racking is “of dimensions that can be adjusted as required” must be ascertained by considering that phrase in the context of the whole instrument, and striving to give harmonious effect to all the words that are used, and giving effect to the purpose of the instrument, if that is possible: Project Blue Sky at [69]–[71]. If a proposed interpretation leads to a result that is absurd, in that it would render the provision futile, it should be avoided: Collector of Customs v Agfa-Gevaert Ltd at 401…
[Emphasis added]
The subject goods are clearly “steel pallet racking, or parts thereof” imported “unassembled”. The relevant parts imported include “beams” and “uprights” which respectively incorporate “locking tabs” and “slots”. “Brace” parts were also imported.
The subject goods are clearly “of dimensions that can be adjusted as required” applying the ordinary meaning of that term. That term construed in context and having regard to purpose of the dumping duty notice, clearly requires the pallet racking to have some adjustable dimensions. If some dimensional adjustments can be made, including just of storage level heights, that is sufficient for the subject goods to meet the description of the goods under consideration in the dumping duty notice. The heights of the racks where pallets can be stored are clearly important dimensions of a steel pallet racking system.
Decision
The decision under review is affirmed.
I certify that the preceding 23 (twenty-three) paragraphs are a true copy of the reasons for the decision herein of Senior Member A Poljak
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Associate
Dated: 7 September 2022
Date(s) of hearing: 8 December 2021 Date final submissions received: 13 December 2021 Solicitor for the Applicant: Mr A Percival, Percival Legal Solicitor for the Respondent: Mr R Northcote, Department of Home Affairs
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