Orora Ltd and Comptroller-General of Customs - [2024] ARTA 48

Orora Ltd and Comptroller-General of Customs [2024] ARTA 48 (26 November 2024)
Applicant/s:  Orora Ltd
Respondent:  Comptroller-General of Customs
Tribunal Number:                2022/8930

Tribunal:General Member C. Willis
Place:Melbourne
Date:26 November 2024

Decision:The Tribunal affirms the decision under review.

...............................[SGD].......................................
General Member C. Willis
CATCHWORDS
CUSTOMS – Customs Act 1901 - tariff concession orders - classification to a single tariff heading – existence of a functional unit - whether goods described in terms of their intended use - whether goods described in terms other than generic terms – decision under review affirmed.
Legislation
Customs Act 1901 (Cth), Part XVA, Sections 269F, 269H, 269HA, 269SJ; Part XVII, Paragraphs 273GA(1)(m), 273GA(1)(ma)
Customs Tariff Act 1995 (Cth), Schedule 2; Schedule 3, Section XVI, Notes 3, 4 and 5 to Section XVI
Cases
Re Gissing and Collector of Customs (1977) 1 ALD 144
Re Tridon and Collector of Customs (1982) 4 ALD 615
Comptroller-General of Customs v ACI Pet Operations Pty Ltd (1994) 49 FCR 56
STI Tyres as trustee for On Track Tyre Trust v Chief Officer of Customs [2009] AATA 877
Comptroller-General of Customs v Pharm-A-Care Laboratories Pty Ltd [2020] HCA 2
Ceramic Oxide Fabricators Pty Limited and Comptroller-General of Customs [2021] AATA 2770
Secondary Materials
Replacement Explanatory Memorandum to the Customs, Excise and Bounty Legislation Amendment Bill 1995
Explanatory Notes to the International Convention on the Harmonized Commodity Description and Coding System (Harmonized System) (HSEN)
Statement of Reasons
INTRODUCTION

This matter involves a review of a decision by the Comptroller-General of Customs (the Respondent) to reject an application for a tariff concession order (TCO) under Part XVA of the Customs Act 1901 (Cth) (Customs Act). TCOs provide concessional customs duty treatment for imported goods where there is no known Australian manufacturer of those (or substitutable) goods.
Orora Ltd (the Applicant) is an Australian company which provides packaging products and services, including beverage cans. The Applicant lodged an application (the TCO Application) with the Respondent for a TCO in relation to goods described as a Can Conveyance System, being a component of a beverage can production line to be operated by the Applicant.
The TCO Application was refused by the Respondent on the basis that it was unable to classify the goods to a single tariff classification as required by the Customs Act. The Respondent said that the goods were not a single functional unit but comprised multiple sections of machines which would need to be classified separately and which therefore might fall under different sub-headings.
The Applicant sought a review of this decision. After lodgement of the application for review with the Administrative Appeals Tribunal (AAT), the Respondent outlined a further reason for refusing the TCO Application in its Statement of Facts, Issues and Contentions (SFIC). The Respondent said that the TCO Application described the goods in terms of their intended end use and the Customs Act prohibits a TCO being made on this basis.
This matter was originally listed for hearing on 26 April 2024. Just prior to the hearing the Applicant filed a Supplementary Statement of Facts and Contentions (SSFC), a Further Supplementary Statement of Facts and Contentions (FSSFC) and accompanying evidentiary material which addressed the ‘description by intended end use’ issue. The April hearing was discontinued to allow the Respondent to consider the further material filed by the Applicant, before being relisted before me.
The parties believe that both the ‘single tariff classification’ and ‘description by intended end use’ issues should be considered by the Tribunal.
On 14 October 2024 the AAT became the Administrative Review Tribunal (the Tribunal). Under the transitional provisions in the Administrative Review Tribunal (Consequential and Transitional Provisions No. 1) Act2024 (the Transitional Act), applications for review to the AAT that were not finalised before 14 October 2024 are taken to be applications for review to the Tribunal. The Transitional Act gives the Tribunal the authority to continue and finalise any aspect of the review not already completed by the AAT. This decision and statement of reasons is made by the Tribunal.
LEGISLATIVE FRAMEWORK
Australian customs legislation confers powers and functions on the Australian Border Force Commissioner, who is designated the Comptroller-General of Customs. The Australian Border Force sits within the Department of Home Affairs portfolio. Applications for TCOs are lodged with the Respondent via the Tariffs Concession Administration office of the Department.
The Tariff Act and classification of goods
Duties are imposed on imported goods under the Customs Tariff Act 1995 (Cth) (Tariff Act). Schedule 3 to the Tariff Act sets out the Principal Tariff, namely the classification of goods to particular headings and the rates of duty applicable to those headings. Schedule 2 sets out the general rules of interpretation for deciding the tariff classification within the Principal Tariff to which goods belong. Schedule 4 identifies classes of goods to which concessional rates may apply and specifies the concessional rates of duty potentially applicable.
The Customs Act and TCOs
Part XVA of the Customs Act governs TCOs. A person may apply to the Respondent for a TCO in respect of goods: section 269F(1).
Section 269F sets out requirements for an application for a TCO, including:
(2)An application must:
(a)be in writing; and
(b)be in an approved form; and
(c)contain such information as the form requires; and
(d)be signed in the manner indicated in the form.
(3)Without limiting the generality of paragraph (2)(c), a TCO application must contain:
(a)a full description of the goods to which the application relates; and
(b)a statement of the tariff classification that, in the opinion of the applicant, applies to the goods; and
(c)…
(d)particulars of the inquiries made by the applicant (including inquiries made of prescribed organisations) to assist in establishing that there were reasonable grounds for believing that, on the day on which the application was lodged, there were no producers in Australia of substitutable goods.
After the application is lodged a screening process is undertaken by the Respondent. Where the Respondent is satisfied that:
·the application complies with section 269F; and
·having regard to the information disclosed in the application and the particulars of the inquiries made by the applicant, there are reasonable grounds for believing that the applicant has discharged their responsibility under section 269FA; and
he or she is not aware of any producer in Australia of substitutable goods, then the Respondent must inform the applicant in writing that the application is accepted as valid: paragraphs 269H(1)(a)–(b).
However where the Respondent is not so satisfied, or is aware of an Australian producer, they must inform the applicant in writing that the application is rejected and provide the reasons for the rejection: paragraphs 269H(1)(c)–(d).
Further, under subsection 269SJ(1), the Respondent must not make a TCO in respect of goods:
(aa)described in terms other than generic terms; or
(b)described in terms of their intended end use; or
(c)declared by the regulations to be goods to which a TCO should not extend.
Where the Respondent is prevented from making a TCO under section 269SJ, he or she must reject the TCO application and notify the applicant in writing of the rejection and the reasons: section 269HA.
An application may be made to the Tribunal for review of:
·A decision under subsection 269H(1) to reject an application for a TCO: paragraph 273GA(1)(m); and
·A decision under section 269HA rejecting a TCO application: paragraph 273GA(1)(ma).
ISSUES
The parties agree that two key issues arise, namely whether the Respondent was required to reject the TCO Application:
·under section 269HA(1) because under section 269SJ(1)(a) the Respondent must not make a TCO in respect of goods described in terms of their intended end use; and/or
·under section 269H(1) because the Respondent was not satisfied that the application complied with section 269F, the goods not being covered by a (single) tariff classification for the purposes of section 269F(3).
BACKGROUND
The Can Conveyance System
The goods the subject of the TCO Application were described as a ‘can conveyance line’ and more fully as:[1]
[1] T3.4. References to T Documents are to the documents that were lodged by the Respondent under section 37 of the former Administrative Appeals Tribunal Act 1975 (Cth).
CONVEYANCE LINE, BELT, BEVERAGE CAN, having ALL of the following:
(a)cup conveyance unit, including ALL of the following:
(i)elevator in-feed conveyance unit;
(ii)vacuum cup elevator;
(iii)mechanical conveyance unit;
(b)wet can conveyance unit, including BOTH of the following:
(i)gripper elevators;
(ii)mechanical conveyance units;
(c)bright can conveyance unit, including ALL of the following:
(i)inverter feed conveyance unit;
(ii)bright can vacuum inverter;
(iii)mechanical conveyance units;
(iv)mechanical can flow divider conveyance unit;
(v)centre drive bi-directional accumulation conveyance unit;
(d)printed can system conveyance units;
(e)necker/flanger in-feed system conveyance unit, including ALL of the following:
(i)internal bake oven (IBO) mechanical discharge conveyance unit;
(ii)mechanical conveyance units;
(iii)bi-directional accumulation conveyance unit;
(iv)vacuum transfer unit;
(f)palletiser in-feed system mechanical conveyance units
An ‘Equipment Proposal ##PP-4413 New Line 2 Conveyance’ from Pride Conveyance Systems (Pride), a Californian company, to Orora Beverage Cans dated 14 April 2022 (the Pride Contract),[2] set out an extensive list of items of equipment to be supplied to the Applicant for a ‘new line 2 conveyance project’. Some of those items were to be manufactured in Poland (the Debno equipment), with others to be sourced from the United States and China.
[2] T4.1.
The TCO Application noted:
The subject conveyance line is specially designed for the movement of beverage cans through each stage of the manufacturing process in a can production line. Demand is too limited to justify local production.
Please note that, although the supplier’s quotation refers to numerous peripheral components within the line (such as mist collectors, filers, gravity tracks, lowerators etc.), the only items to which this TCO application applies are the actual specialised conveyors which move the cans from station to station during the production operation. These conveyors are made in Europe and the peripheral items NOT included in the TCO wording are to be supplied from the USA.[3]
[3] T3.1 at Question 8 of the TCO Application Form (‘Justification for application’).
The Applicant stated (and the Respondent accepted) that the TCO Application only covered items listed as sourced from Debno in Poland. That is, not all items ordered under the Pride Contract were to be covered by the TCO. Goods supplied from the United States or China received concessional treatment under other parts of the Australian customs and duties regime. However the parties do not agree on the characterisation of, and the relationship between, the items in the Pride Contract in the context of whether there was a valid TCO application for the purposes of Part XVA of the Customs Act.
Other components of the overall beverage can production line were the subject of separate TCO applications.
The TCO Application process
On 6 September 2022 Mr Rodda, representing the Applicant, emailed to the Respondent an application for a TCO ‘for a can conveyance system, which is the key component of a beverage can production line’. The following materials formed the original TCO Application and were provided to the Tribunal:
·Australian Government Department of Home Affairs Application for Tariff Concession Order (TCO) form B443, completed and signed by Mr Rodda for the Applicant (the TCO Application Form);[4]
·Scans of search results to confirm no local manufacturer of the goods existed;[5]
·A copy of the Pride Contract;[6] and
·Accompanying technical and illustrative descriptive material (IDM), including engineering diagrams.[7]
[4] T3.1.
[5] T3.2; T3.3; T3.5.
[6] T4.1.
[7] T4.2–T4.9.
The tariff classification identified in the Application was 8428.39.00. Heading 8428 relates to ‘OTHER LIFTING, HANDLING, LOADING OR UNLOADING MACHINERY (FOR EXAMPLE, LIFTS, ESCALATORS, CONVEYORS, TELERIFICS’ with subheading 8428.39.00 relating to ‘Other’.
The Respondent acknowledged receipt of the TCO Application and allocated it number 22282925. A screening of the TCO Application was undertaken by the National Trade Advice Centre (NTAC) of the Australian Border Force.
On 14 September 2022 NTAC requested additional information from the Applicant.[8] Clarification was sought in relation to which items set out in the TCO Application was intended to cover, and their functions, including any items in the line that did something other than simply conveying. They asked for an engineering diagram or other schematic showing the machine positions and process flow, including machines subject to the TCO Application as well as other machinery interspersed within the conveying line. The Applicant was also asked to identify any components or machines in the process that were not part of the imported goods.
[8] T6.
The Applicant responded on 16 September 2022 with drawings the conveying systems and descriptions of the types of conveyors covered by the TCO Application.[9] The Applicant explained that:
·Although the various items of equipment set out in the Pride Contract were to be manufactured in both Poland and the United States, the conveying system described in the TCO Application only comprised goods manufactured in Poland by Debno, which were to be shipped direct to Australia from Poland;
·Other items identified as originating in the United States would be shipped direct from the United States to Australia;
·There were further items (top covers) to be imported from the United States and China, but these were not viewed by the Applicant as being functioning components of the conveyors;
·An engineering team would assemble the complete production line in Australia once all of the components had been imported; and
·Items described as ‘spare parts’ were not included in the TCO Application and would be entered separately for customs purposes.
[9] T7.1; drawings at T7.2–T7.7.
After reviewing this material NTAC emailed the Applicant on 20 September 2022,[10] indicating that the TCO Application had been returned with a recommendation that the goods were covered by multiple tariff headings and therefore could not be classified. This was on the basis that the IDM/engineering diagrams showed sections of conveying or handling machines being separated by other machinery or plant, and the sections could not form a single continuous functional unit. Further, as some items were manufactured in and shipped from the United States, while others were manufactured in and shipped from Poland, this also prevented the items being classified to a single heading as a single functional unit.
[10] T8.
The Applicant provided further commentary in response to the NTAC position on 23 September 2022,[11] including an explanation from an engineer employed by the Applicant summarising the conveying system processes and identifying which items in the Pride Contract were utilised in those processes.
[11] T9.
Nevertheless, by email on 26 September 2022,[12] the Respondent advised that they maintained their position that the goods were not a single functional unit but were instead ‘multiple sections of handling machines interrupted by processing machines imported separately’. Each section of handling machines would need to be classified separately and might be covered by different subheadings. The Respondent asked the Applicant to withdraw the TCO Application, which the Applicant declined to do, requesting a formal rejection in writing.
[12] T10.
On 30 September 2022 the Respondent wrote to the Applicant to advise that under section 269H(1) of the Customs Act, the Respondent was not satisfied that application TC22282925 complied with section 269F and had therefore been rejected. The covering letter advised that the TCO Application had been rejected because: ‘Unable to classify to a single tariff classification’.[13]
[13] T12.1
Attached to the letter was a statement of Reasons for Decision which provided further detail for the rejection.[14] These Reasons for Decision, consistent with the covering letter, set out extracts from sections 269F and 269H, with emphasis on paragraph 269F(3)(b). The Respondent’s position was that:
·To claim a TCO the imported goods must be classifiable to the tariff classification to which the TCO is keyed and precisely meet the description given to the TCO; and
·Therefore a TCO can only have a single tariff classification and cannot be made unless a single tariff classification can be identified based on the information provided by the applicant for the TCO.
[14] T12.2.
The Respondent reiterated the advice from NTAC that the goods covered by the TCO Application were not a single functional unit but were multiple sections of handling machines interrupted by processing machines imported separately. The different sections of handling machines would need to be classified separately and might fall under multiple and different sub-headings.
Confusingly, the Reasons for Decision concluded that the TCO Application was rejected ‘pursuant to subsection 269HA’ and that the Applicant could seek review by the Tribunal of this decision under paragraph 273GA(1)(ma) of the Customs Act. Those provisions relate to a different basis for rejection of a TCO application. When the Respondent subsequently lodged their SFIC they raised section 269HA as an additional or alternative ground.
Application to the Tribunal
The Applicant lodged a Statement of Facts and Contentions (SFC) on 15 May 2023. Based on the Respondent’s Reasons for Decision, this SFC only addressed matters relating to coverage of the goods by a single tariff classification.
The Respondent filed its SFIC on 18 August 2023. In that document the Respondent confirmed that the TCO Application had been rejected at screening stage on the basis that the goods were not covered by a single tariff classification. However the Respondent further stated:
In addition, the TCO application must be rejected pursuant to s.269HA because the terms of the TCO describe the goods by reference to their intended end use, and other than in generic terms, both of which are prohibited by s.269SJ.[15]
[15] At [3].
Paragraph 273GA(1)(ma) of the Customs Act permits an application to the Tribunal for review of ‘a decision of the Comptroller-General of Customs under section 269HA’. Although reference to section 269HA was made in the Respondent’s Reasons for Decision, it is not clear from the text of that document that the Respondent had actually made a decision under section 269HA. The Respondent submitted that the obligation to reject a TCO application under section 269HA extends to the Tribunal if the Tribunal is satisfied that the application infringes section 269SJ, on the basis that the Tribunal ‘stands in the shoes’ of the Respondent. The Applicant did not disagree with this.

The parties have proceeded on the basis that both bases for rejecting the TCO Application are in contention and the Tribunal’s decision should cover both. For the reasons given below, I believe the Respondent’s case for rejection of the TCO is stronger in relation to the issue of classification to a single tariff heading, that is, the decision made under section 269H which was set out in its original written Reasons for Decision.
DESCRIPTION OF GOODS IN TERMS OF THEIR INTENDED END USE
A TCO cannot be made in respect of goods ‘described in terms of their intended use’: paragraph 269SJ(1)(a). Where the Respondent becomes satisfied that a TCO would be prohibited under section 269SJ, any application for the TCO must be rejected: subsection 269HA(1).
The Respondent contended that a TCO would describe goods in terms of their intended end use if the TCO referred to a particular use when those goods could be put to other uses. Although the Pride Contract was for the supply of equipment to a beverage can manufacturer, it did not specify or evidence that the equipment’s operational capability was limited to beverage cans. In the absence of more detailed identifying or descriptive technical material, the Respondent suggested that the machines (or at least some of them) could potentially be used to move other goods, such as food cans. Therefore, the inclusion of the words ‘beverage can’ in the description of the conveyance line in TC2228295 was a reference to intended end use.
The Respondent also highlighted other words in the sub-paragraphs of the TCO Application such as ‘wet can’, ‘bright can’ and ‘printed can’ as references to different stages of can production and not descriptions of the particular machines. Identifying or qualifying the equipment by reference to stages of production in the factory where the equipment was to be used was also an impermissible description of that equipment in terms of its intended end use.
The Respondent referred to a previous decision of the Tribunal, Ceramic Oxide Fabricators Pty Limited and Comptroller-General of Customs (Ceramic Oxide),[16] where goods were described in a TCO application as ‘KILNS, Alumina, gas powered, with or without ventilation units having ALL of the following…’ IDM documentation accompanying the TCO application did not specifically refer to alumina or sintering alumina, suggesting that the kilns could be used to heat other materials. The Tribunal concluded that if the kilns covered by the application were not specific to alumina then the use of the word ‘alumina’ was a description in terms of the intended end use of those kilns. The Tribunal rejected an argument that the reference to ‘alumina’ described the sintering function or process rather than the intended end use of the kiln.
[16] [2021] AATA 2770 at [3].
The Respondent accepted that a TCO could incorporate some reference to concepts of use, but only where this was directed to the task of identification of the particular goods covered by the TCO on the basis of objective characteristics. For example, the Tribunal had previously accepted that tyres described as ‘off-road’ had different characteristics to tyres that could be used ‘on [public] roads’.[17] This was consistent with the overall scheme of Part XVA which required a complete description of goods. Otherwise, in the Respondent’s view the prohibition in paragraph 269SJ(1)(a) applies on its terms. It was neither appropriate nor necessary to read in additional words beyond the text of the provision.
[17] See STI Tyres as trustee for On Track Tyre Trust v Chief Officer of Customs [2009] AATA 877 at [30]–[33]. The Respondent’s representative also appeared for the Chief Executive Officer of Customs in that matter.
Taking consideration, for example, of the ‘39 inch Wide’ conveyer belts listed in the Pride Contract,[18] the documents and information provided by the Applicant to the Respondent at the screening stage did not provide a basis for concluding that those conveyer belts were any different on an objective basis to other conveyer belts.
[18] T4.1: see items 2.1.4 (within the ‘Cup System Conveyance’ heading), 2.3.6 (within the ‘Bright Can System Conveyance’ heading), 2.5.3 and 2.5.4 (both within the ‘Printed Can System Conveyance’ heading).
The Applicant did not deny the potential use of the equipment beyond production of beverage cans. However the Applicant’s representative, Mr Rodda, said that the prohibition in section 269SJ had a much narrower scope. It would preclude making a TCO only where the use of goods for a specified purpose was a condition of the granting of the concession. The prohibition on descriptions of goods by reference to their intended end use was not for the purposes of differentiating those goods from goods of a similar kind falling within the same tariff classification, or to support the full description of goods.
Mr Rodda provided the Tribunal with extensive submissions about the historical policy and commercial considerations which formed the background to the introduction of section 269SJ in 1995. He described his previous employment with the (then) Customs Department and his participation in the 1982 Industries Assistance Commission Inquiry into the Commercial By-law System. He submitted that this gave him particular insight into the origins of the ‘end use’ statutory prohibition. He drew particular attention to statements in the Explanatory Memorandum to the Bill which introduced paragraph 269SJ(1)(a), which he believed were crucial to understanding the purpose behind that provision, and therefore applying the correct interpretation.
Section 269SJ was introduced into the customs legislation by the Customs Legislation (Tariff Concessions and Anti-Dumping) Amendment Act 1992 and further amended by the Customs, Excise and Bounty Legislation Amendment Act 1995. It was this latter Act which introduced paragraph 269SJ(1)(a). The relevant Explanatory Memorandum said:[19]
… Since 1983 it has been the Government's policy, in accordance with the advice of the Industry Commission, that TCOs should not be made with conditions as to the end use of the goods being included in the description of goods to which the TCO applies. There are substantial legal and administrative problems in managing end use TCOs which, once made, are available for the use of not only the original applicant, but any importers of goods under that description. It is considered that the Policy By-Law system under sections 271 and 272 of the Act and Schedule 4 of the Customs Tariff Act 1987 is the appropriate place for such end use concessions.
… the Federal Court in ACI Operations v the Comptroller -General of Customs found that there was power in Part XVA of the Act for the Comptroller to make TCOs which describe goods in terms of their intended end use.
… new paragraph 269SJ(1)(a) makes clear that the Government’s policy is that TCOs should not describe goods in terms of their intended end use by specifically preventing the CEO from making a TCO in such terms.
[19] Replacement Explanatory Memorandum to the Customs, Excise and Bounty Legislation Amendment Bill 1995, [349]–[351].
The Applicant acknowledged the outcome in Ceramic Oxide but argued that the Senior Member hearing that matter had not been presented with the history and policy background to section 269SJ. That is, that Tribunal did not have the benefit of all of the contextual material relevant to the interpretation of that provision when it made its decision.
The Respondent agreed that the Explanatory Memorandum was an appropriate extrinsic aid to the interpretation of paragraph 269SJ(1)(a),[20] although disagreed that it narrowed the application of that paragraph. The Respondent disputed the relevance of the other historic material provided by Mr Rodda.[21]
[20] The use of Explanatory Memoranda as an extrinsic aid to interpretation is generally not controversial: see Certain Lloyd’s Underwriters v Cross (2012) 248 CLR 378 at [68] per Crennan and Bell JJ; see also Harvey v Minister for Primary Industry and Resources [2024] HCA 1 per Gageler CJ.
[21] However, it is noted that some of the references from 1983 were considered by the Full Court of the Federal Court in making their decision in Comptroller-General of Customs v ACI Pet Operations Pty Ltd (1994) 49 FCR 56 (ACI Pet Operations).
Both parties accept that the Explanatory Memoranda may be considered in interpreting section 269SJ. The highlighted extracts from the Explanatory Memorandum contain very specific statements of the policy and purpose behind the introduction of paragraph 269SJ(1)(a), identifying legal and administrative issues which needed to be addressed. The Explanatory Memorandum also makes clear that the new provision was required to counter a potential consequence of a decision of the Federal Court (although the question of defining a class of goods by their end use arose in a different context in that case).[22]
[22] In ACI Pet Operations (n 21), the actual or intended use of the goods was noted as a factual matter that could provide guidance as to essential character of goods.
Therefore there is merit in the Applicant’s submissions that there are limitations to the scope of TCOs that can be refused under paragraph 269SJ(1)(a), and that previous Tribunals might not have had the opportunity to consider relevant extrinsic material when making their findings. Unfortunately, as this issue was not canvassed during the original screening and decision-making process there was limited evidentiary material available. However this may not determine the finding on this point.
If the Applicant is correct that section 269SJ only prohibits TCOs being made with ‘conditions’ as to the end use of the goods being included in the description of goods, then the description of the can conveyance line containing phrases such as ‘beverage can’, ‘wet can’, ‘bright can’ and similar does not present ‘conditions’ as to end use. Section 269SJ would not apply.
However, if the Respondent is correct that any description involving intended end use is prohibited unless it goes to identifying the goods on the basis of objective characteristics, I am not convinced that the reference to ‘beverage can’ breaches section 269SJ. The Respondent argued that it was possible that the resulting cans could be used to hold products other than beverages. However ‘beverage can’ might denote certain objective characteristics (size, shape or location of openings) that distinguishes it from other types of cans or tins, containing foodstuffs or otherwise, even if hypothetically it could be filled with a non-beverage product. The mere possibility of other uses for the cans would not be sufficient reason to reject TCO on this basis, and I am not convinced that adding the adjective ‘beverage’ went beyond what was necessary for a ‘full description of the goods’ for the purposes of section 269F.
Similarly, I agree with the submission of the Applicant that references such as ‘wet can’ and ‘bright can’ are not descriptions in terms of intended end use, in the sense of application by an end-user of the eventual product, but are used in describing stages of processing or production.
Accordingly, I do not believe that the use of the phrase ‘beverage can’ in the description of goods in the TCO Application, or the references to ‘wet can’, ‘bright can’ and similar in subsidiary paragraphs of the description would have breached section 269SJ, had this issue been considered during the screening process. Therefore the Tribunal cannot be satisfied that a decision maker was prevented from making a TCO, such that rejection of the TCO Application was required by section 269HA.
There was one further submission from the Applicant which should be addressed. The Applicant provided a list of TCOs which had been made by the Respondent in relation to other applications and applicants, which the Applicant argued should not have been made if the Respondent had applied the same interpretation of section 269SJ that it was seeking to take in relation to TC22282925. This does not assist the Applicant’s case. Absent an understanding of the particular facts and evidence relating to those other TCOs, it is difficult to identify how they might support the Applicant's contentions. Further, if those previous TCOs were made in contravention of section 269SJ, it would not be appropriate to repeat the same erroneous application of the law in relation to TC22282925 merely for the sake of consistency.
APPLYING A (SINGLE) TARIFF CLASSIFICATION TO THE GOODS
Although references to particular tariff classification headings and sub-headings were made in submissions, the present task for the Tribunal is not to perform a classification of goods, but to determine whether it is possible to identify goods that were able to be classified for the purposes of Part XVA of the Customs Act.
Under section 269H the decision maker must determine whether or not they are ‘satisfied’ with various matters, including whether the TCO Application complies with section 269F.
I agree with the Respondent that section 269F requires the identification of a single tariff classification to be applied to the goods described in the TCO Application, having regard to the words ‘the tariff classification’ in paragraph 269F(3)(b).
The Applicant characterised the relevant goods for classification (that is, the conveyance line system) as comprising six belt conveyors, together with other items of equipment or devices they viewed as ‘peripheral’ to the conveyors and which merely contributed to the conveying function (for example, by holding cans in position as they are conveyed between processing stations).
The TCO Application originally nominated Subheading 8428.39.00 as the tariff classification sought for the TCO for the specified goods.[23] In its SFC submitted to this Tribunal, the Applicant contended that the conveyance line contained both belt conveyors and continuous action conveyors which could be classified to Subheadings 8428.39.00 and 8428.33.00.
[23] T3.1.
Section XVI of Schedule 3 to the Tariff Act includes Chapter 84 and in particular Heading 8428: ‘OTHER LIFTING, HANDLING, LOADING OR UNLOADING MACHINERY (FOR EXAMPLE, LIFTS, ESCALATORS, CONVEYORS, TELEFERICS)’.
Notes 3, 4 and 5 to Section XVI state:
3. -Unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines designed for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function.
4. -Where a machine (including a combination of machines) consists of individual components (whether separate or interconnected by piping, by transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function covered by one of the headings in Chapter 84 or Chapter 85, then the whole falls to be classified in the heading appropriate to that function.
5. -For the purposes of these Notes, “machine” means any machine, machinery, plant, equipment, apparatus or appliance cited in the headings of Chapter 84 or 85.
Schedules 2 and 3 of the Tariff Act reflect text from an Annexure to the 1983 International Convention on the Harmonized Commodity Description and Coding System (Harmonized System) (Convention). Australia is a party to that Convention. The Explanatory Notes to the Convention (the HSEN) have been recognised by the High Court as available to be used in the interpretation of so much of the Tariff Act as transposes the text of the Convention:[24]
[24] Comptroller-General of Customs v Pharm-A-Care Laboratories Pty Ltd [2020] HCA 2 (Pharm-A-Care Laboratories Pty Ltd) at [58].
In relation to Note 4, the HSEN observes:
(VII) FUNCTIONAL UNITS
(Section Note 4)
This Note applies when a machine (including a combination of machines) consists of separate components which are intended to contribute together to a clearly defined function covered by one of the headings in Chapter 84 … The whole then falls to be classified in the heading appropriate to that function, whether the various components (for convenience or other reasons) remain separate or are interconnected by piping … by devices used to transmit power, by electric cables or other devices.
For the purposes of this Note, the expression “intended to contribute together to a clearly defined function” covers only machines and combinations of machines essential to the performance of the function specific to the functional unit as a whole, and thus excludes machines or appliances fulfilling auxiliary functions and which do not contribute to the function of the whole.
The HSEN also describe ‘more complex machines’ such as ‘conveyors’ (which are used for moving goods) and ‘elevators’ (used for raising a constant stream of goods or persons).
The Applicant’s position was that the conveyors constituted a ‘functional unit’ as described in Note 4. Since there was a ‘combination of machines’, all being conveying machines, and each of those conveying machines could be classified in Heading 8428, the conveyors together could be classified by reference to that function.
In their correspondence with the Respondent they had said that the line essentially operated as one machine, if any of the sections were removed they could not make cans, and the equipment could not be used for anything else. They characterised the makeup of the conveying line as United States supplied items being at the start and end of the conveying, with the section in the middle comprising Polish supplied items.[25]
[25] See the explanation at T9 from the Applicant’s Process Engineer.
If that was not correct, then the Applicant contended that classification to a single heading could be determined by reference to the rules set out in Schedule 2 of the Tariff Act for interpretation of classifications (Rules or IR). The Applicant cited the following Rules:
2.(b) Any reference in a heading to a material or substance shall be taken
to include a reference to … combinations of that material … with other materials … The classification of goods consisting of more than one material … 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 … contained in … composite goods … 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) … composite goods consisting of different materials or made up of different components … which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.
(c) When goods cannot be classified by reference to 3(a) or 3(b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration.
…
6. … the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings … and, mutatis mutandis, to the above Rules, on the understanding that only subheadings at the same level are comparable.
Under the Applicant’s interpretation of the Rules, where the conveyors represented a combination of materials which would otherwise be classifiable to two or more headings, they should be classified to the heading which provides the most specific description, or by reference to the component which gives them their essential character. This provided another path to classification for the purposes of section 269F.

The Respondent characterised the goods in a different manner, resulting in a different application (or non-application) of Note 4 and the Rules. The Respondent’s position was that the evidence provided by the Applicant did not support the identification of a functional unit or other relevant collective entity of units to which a single classification could be applied. They pointed to the Application covering only some of the conveyors within the conveyance system for the beverage can production line, and some of the goods described in the Application not being ‘belt conveyors’. They queried the ‘peripheral’ label applied by the Applicant to some items.
Several cases have considered the approach to tariff classification of goods under customs legislation. Two steps are required, the first being to identify the goods or entity to be classified and the second to determine which tariff or classification heading applies: see for example Re Gissing and Collector of Customs (Gissing).[26]
[26] (1977) 1 ALD 144 (Gissing) at 145–7; see also Pharm-A-Care Laboratories Pty Ltd (n 24) at [47].
The task of identifying goods was described in Gissing as follows:[27]
Identification of goods to be classified is often a simple exercise. When goods are separate units, each identical with the others, and possessing no distinctive feature by reason of their association, each unit may be identified self-evidently as the relevant entity for classification.
On the other hand, there is sometimes a relationship between or among various units of such a kind as to identify them as a combination rather than as separate units. The test to be applied is whether the identity of the units is subordinated to the identity of the combination.
[27] Gissing (n 26) at 145.
This approach is reflected in Note 4 and the HSEN which capture ‘combinations’ of machines, whether separate or interconnected by other devices, which are intended to contribute together to a clearly defined function.
However, it is not sufficient to simply point to a collection or combination of machines, even where those machines are connected and/or co-located in the same factory. That combination must contribute to a clearly defined function, and the approach outlined in Gissing assists in identifying that ‘functional unit’.
A difficulty faced by the Applicant is that the documentation provided with the original TCO Application, together with the material provided in response to requests for further information from the Respondent during the screening process, does not detail why:
·items described as ‘peripheral’ by the Applicant to the conveying system were merely peripheral and not integral to the system. The specifications of items in the Pride Contract identify what is to be supplied (for example quantity, size, material, inclusions and exclusions), but do not assist in the enquiry about their status in relation to the conveyer belts or the wider system. The response to the Respondent’s request for explanations of the Pride Contract and IDM/engineering drawings contained statements as to what items did in a practical sense (such as lifting cans) but did not explain how they were ‘peripheral’ or how to distinguish them from items material or important to the system.[28]
·the goods covered by the Application should be identified as a functional unit for classification purposes. The further explanatory comments prepared by the engineer from the Applicant helpfully outlined what the stages of the conveying process were and identified the items of machinery that were utilised in those stages. However, these comments did not explain how or why the items of machinery constituted a single functional unit of goods, in the sense of the identity of the individual machines being subordinated to an identified combination. They simply stated that conveying was ‘an integral part of the system’,[29] and that the different sections of conveying should be considered as components intended to contribute together per the HSEN. In fact, the further information highlighted the dispersal and inclusion of non-Debno/Polish equipment throughout the conveying system, and noted that although most of the conveying sections made a continuous system between the machines, there are components which were separate.[30]
[28] T9, pages 136–7.
[29] Ibid; T9.7.
[30] T9.7.
At the hearing the Applicant’s representative was invited to elaborate on how particular items (for example, elevators) which on their face appeared to be important to the operation of the conveying system, were determined to be merely peripheral. The Applicant reiterated the position that the items were peripheral, in that they assisted other items in the system. He referred to the existing information, without providing further explanation.
Similarly, on the issue of whether the goods should be identified as a functional unit, the Applicant acknowledged the relevance of the statements in Gissing, but did not articulate how these principles would apply to the goods the subject of this TCO Application. He reiterated his position that the six belt conveyors and peripheral items simply were a functional unit, noting that HSEN Note 4 stated that a functional unit takes into account peripheral devices.
Therefore it is difficult to see how the Respondent could reach a position of being ‘satisfied’ that the tariff classification identified by the Applicant, or another single tariff classification, was applicable on the basis of the material provided in the original TCO Application and the further information and explanation provided by the Applicant during the screening process.
In fact, these materials and information positively raised questions, such as the role and function of equipment that separated the TCO goods or were interspersed within the conveyance system when installed, that were not adequately addressed by the Applicant. It is possible that further technical or descriptive information might have provided sufficient material for the Respondent to identify a functional unit and make a TCO accordingly, but this was not supplied.
I do not agree with the Applicant’s suggested interpretation of the classification Rules. IR 2(b) applies to references in headings to a ‘material’ or ‘substance’, and is not relevant to the goods (machinery) the subject of this matter. Further, before the paragraphs of IR 3 can operate, there must be identification of ‘goods’ classifiable under two or more headings. IR 3 then directs classification by the heading which provides the most specific (as opposed to general) description for those goods, by the component that gives (composite) goods their essential character or by the last numbered heading where multiple headings merit equal consideration. I agree with the Respondent that IR 3 is a tiebreaker provision that requires goods with a collective or combined identity before it can operate.
Based on the materials that were provided and the submissions of the parties at the hearing, I am not satisfied for the purposes of section 269H that the TCO Application complied with section 269F of the Customs Act. In particular it was not possible to identify a functional unit in the form suggested by the Applicant to which a (single) tariff classification could be applied.
DESCRIPTION OF GOODS IN TERMS OTHER THAN GENERIC TERMS
The Respondent is also prohibited from making a TCO in respect of goods ‘described in terms other than generic terms’: paragraph 269SJ(1)(aa) and subsection 269SJ(1A).
This particular prohibition was not raised in the Reasons for Decision dated 30 September 2024, although the Respondent noted this provision in their SFIC. Just prior to the hearing the Applicant provided the Tribunal with a document ‘Summary of Bases for Rejection of TC22282925 and Comments in Response Thereto’ which briefly argued that this provision should not apply, referencing paragraphs from the Tariff Concessions Manual published by the Australian Customs Service describing the policy behind the prohibition. The Applicant also pointed to examples of other TCOs made which, in the Applicant’s view, appeared to breach this prohibition.
At the hearing the parties did not seek to take this issue further, and for the reasons given above it is not necessary for the Tribunal to make a finding on this point. However, it is noted again that examples offered by the Applicant of other TCOs that might breach Part XVA of the Customs Act do not by themselves provide support for the Applicant’s claims in respect of TC22282925. Any TCO application must be considered on its particular facts and by applying the relevant provisions of Part XVA to those facts.
CONCLUSION
Although I do not believe sections 269SJ and 269HA would have required rejection of the TCO Application, I find that it was not possible to be satisfied for the purposes of section 269H that the TCO Application complied with section 269F. This is because it was not possible to classify the subject goods to a (single) tariff classification.
The decision under review is therefore affirmed.

1. I certify that the preceding 87 (eighty-seven) paragraphs are a true copy of the reasons for the decision herein of General Member C. Willis

……………………[SGD]……………………….
Associate
Dated: 26 November 2024

Date(s) of hearing: 24 September 2024

Advocate for the Applicant: Mr Ian Rodda, Rodda Coburn & Co

Advocate for the Respondent: Mr Roger Northcote, Department of Home Affairs

Date(s) of hearing:	24 September 2024
Advocate for the Applicant:	Mr Ian Rodda, Rodda Coburn & Co
Advocate for the Respondent:	Mr Roger Northcote, Department of Home Affairs