Pharm-A-Care Laboratories Pty Limited and Comptroller-General of Customs
[2017] AATA 1816
•19 October 2017
Pharm-A-Care Laboratories Pty Limited and Comptroller-General of Customs [2017] AATA 1816 (19 October 2017)
Division:GENERAL DIVISION
File Number(s): 2016/4386; 2017/0881; 2017/4878
Re:Pharm-A-Care Laboratories Pty Limited
APPLICANT
AndComptroller-General of Customs
RESPONDENT
DECISION
Tribunal:Deputy President J W Constance Deputy President B W Rayment
Date:19 October 2017
Place:Sydney
The decisions under review are set aside and remitted with a direction that the goods are classifiable under heading 3004, within subheading 3004.50.00 as to the vitamin preparations and subheading 3004.90.00 as to the garcinia preparations.
.............................[sgd]...........................................
Deputy President J W Constance
Catchwords
CUSTOMS – identification of imported goods – correct tariff classification – classification of goods under appropriate heading – whether items in dispute constitute ‘vitamin supplements’ – duty paid under protest – decision set aside and remitted
WORDS AND PHRASES – ‘food’, ‘food supplements’, ‘vitamin’, ‘vitamin supplements’
Legislation
Administrative Appeals Tribunal Act 1975, s 43(1)
Customs Act 1901, ss 167, 273GA
Customs Tariff Act 1955, s 7, Sch 2 & 3Therapeutic Goods Act 1989
Cases
BASF Australia Ltd and Anor and Chief Executive Officer of Customs [2015] AATA 140
Chinese Food and Wine Supplies Pty Ltd, Re v Collector of Customs (Vic) (1987) 72 ALR 591; 12 ALD 313
Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd [1979] FCA 21; 41 FLR 338; 24 ALR 307; 2 ALD 1
Collector of Customs v Chemark Services Pty Ltd [1993] FCA 291; 42 FCR 585; 17 AAR 424; 114 ALR 531
Deputy Canada (Minister of National Revenue) v. Yves Ponroy Canada (File no: A-97-98)
Flora Manufacturing & Distributing Ltd. v. Deputy Canada (Minister of National Revenue) (File no: A-720-98)
Forever Living Products Australia Pty Ltd, Re and Collector of Customs [1986] AATA 20; 9 ALD 271
Gissing, Re and Collector of Customs [1977] AATA 4; 1 ALD 144; 14 ALR 555
Her Majesty’s Customs and Excise v Cedar Health Ltd (unreported) 21 May 1998
NSW Associated Blue-Metal Quarries Ltd v Federal Commissioner of Taxation [1956] HCA 80; 94 CLR 509; [1956] ALR 286
Primaplas Pty Ltd v Chief Executive Officer of Customs [2016] FCAFC 40; 242 FCR 268
Shi v Migration Agents Registration Authority [2008] HCA 31; 235 CLR 286; 103 ALD 467; 248 ALR 390
Trustee for the Kurowski Family Trust, Re and Chief Executive Officer of Customs [2010] AATA 974; 118 ALD 688
Unigreg Ltd v Her Majesty’s Customs and Excise [1998] EWHC Admin 725Vernon-Carus Australia Pty Ltd and anor v Collector of Customs [1995] FCA 1283; 21 AAR 450
Secondary Materials
Macquarie Dictionary Online, 2016, Macquarie Dictionary Publishers
Collocott M.A. and Dobson A.B., Chambers Science and Technology Dictionary (Revised edition, W & R Chambers, 1984)
International Convention on the Harmonized Commodity Description and Coding SystemPearce D.C. and Geddes R.S., Statutory Interpretation in Australia (8th ed, LexisNexis Butterworths, 2014)
REASONS FOR DECISION
Deputy President J W Constance
Deputy President B W Rayment
19 October 2017
BACKGROUND
The applicant imported from Germany goods described as pastilles containing vitamins manufactured according to a specification agreed between it and the manufacturer, which it markets in Australia under the trade mark “VitaGummies” and under its “Nature’s Way” umbrella brand. Seven categories of VitaGummies branded products are marketed to adults and six are marketed for consumption by children. We will call those goods, when referred to as a group, the vitamin preparations.
The applicant also imports from the same manufacturer two categories of weight loss gummies, which do not contain vitamins, but do contain garcinia cambogia, the scientific name of which is hydroxycitric acid. We will call those goods the garcinia preparations.
These proceedings are brought before the Tribunal in accordance with s 273GA of the Customs Act 1901 (the Act) to determine the correct tariff classification of the goods. Duty has been paid under protest by the applicant in accordance with s 167 of the Act.
All of the goods are imported in bulk as either sea or air cargo. As imported they are contained in thick plastic sealed bags within a fibre board shipper, each containing some 5,000 pastilles and weighing approximately 10.5 kilograms. Each shipment is accompanied by one or more Certificates of Analysis which confirm that the goods comply with the agreed specification. That is, in the case of each category of the vitamin preparations, they record the results of tests conducted for the purpose of showing that they contain relevant quantities of vitamins and other substances in accordance with its product specification, and the smell, taste and appearance of the goods. In the case of the garcinia preparations they show, inter alia, the relevant quantity of hydroxycitric acid, and the smell, taste and appearance of the pastilles imported.
In the case of all the goods with which this review is concerned, the pastilles contain sucrose, glucose syrup, gelatin, flavours and other substances. They are either dusted with sugar or oiled, apparently to facilitate separation.
The vitamin preparations are all listed on the Australian Register of Therapeutic Goods as complementary medicines and are regulated by regulations made pursuant to the Therapeutic Goods Act1989. The garcinia preparations are not complementary medicines and are not so regulated.
The goods in all categories arrive in bulk and, after importation they are packaged in plastic bottles and labeled by the applicant in Australia.
In addition to the proper classification of the goods under the customs tariff, if the duty payable is as determined by the respondent, a further issue has been argued before us concerning the date from which the applicant became liable to pay such duty.
It was explained by Brennan J and two members of this Tribunal in Gissing, Re and Collector of Customs [1977] AATA 4; 14 ALR 555; 1 ALD 144 that the identification of the goods as imported is to be distinguished from the step which follows, namely the determination of the correct classification of the goods in the tariff. The Tribunal said at 146:
Although it will frequently be possible to apply a descriptive word to the combination which is established as the entity, the naming of the entity is not an essential step in the process of identification. Identification is concerned with goods, not with the description of goods.
The identification of the goods is not difficult in this case, particularly since the active ingredients are described in the Certificates of Analysis accompanying the goods at the time of importation. Samples of the certificates for each category of the goods are in evidence before us, and in the case of the vitamin preparations, the certificates show which vitamin or vitamins are contained in the products and in what proportions, and which other active substances (such as zinc and the like) if any, are included in the products. The same is true of the garcinia preparations, which are accompanied by certificates showing the presence and quantities of garcinia within the products. Resort may be had if necessary to the literature to determine the known effects of particular vitamins and the garcinia. The presence of sucrose, glucose syrup, flavours and the like is also known from the specifications in evidence. They are correctly described in our opinion as vitamin preparations and garcinia preparations respectively.
In order to identify the goods, it is not necessary to know how the goods are labeled by the applicant after importation. This may not be relevant in any event.[1] The identification step involves focusing on the goods as imported and on what would be objectively ascertainable by an informed observer.
[1] See Times Consultants Pty Ltd v Collector of Customs (Qld) (1987) 15 FCR 449, 462-463; Vernon-Carus Australia Pty Ltd v Collector of Customs [1995] FCA 1283; (1995) 21 AAR 450, 454.
We will deal with the proper classification under the Customs tariff of the vitamin preparations first, then with the proper classification of the garcinia preparations, and then with the further issue to which we have referred in paragraph [8] above.
THE VITAMIN PREPARATIONS
There are two inconsistent prior decisions of this Tribunal bearing upon the proper classification of the vitamin preparations and at least two inconsistent overseas judicial authorities bearing upon the same or a similar issue arising overseas where the same statutory language is used. We were invited by the applicant to follow the earlier Tribunal decision in Re Trustee for the Kurowski Family Trust and Chief Executive Officer of Customs [2010] AATA 974; 118 ALD 688, and by the respondent to follow the later Tribunal decision in BASF Australia Ltd and Anor and Chief Executive Officer of Customs [2015] AATA 140.
The customs tariff is set out in Schedule 3 to the Customs Tariff Act 1955 (the Tariff Act). A Note to section 7 of that Act states that the text in Schedule 3 is based on the wording in the “Harmonized Commodity Description and Coding System” that is referred to in the International Convention on the Harmonized Commodity Description and Coding System done at Brussels on 14 June 1983. Australia is a party to that convention as are many other countries.
Schedule 2 to the Tariff Act contains rules under which the tariff is to be interpreted. Section 7(1) of the Act requires that the Interpretation Rules, found in Schedule 2, be used for working out the tariff classification under which the goods are classified. Schedule 3 divides the tariff into Sections, Chapters and sub-Chapters. Within Sections or Chapters there are often Section Notes and Chapter Notes and within Chapters, there are headings and subheadings, sometimes accompanied by their own Notes.
Rule 1 of the Interpretation Rules provides:
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: …
We will refer to other rules as they may become relevant in these reasons. As to subheadings, Rule 6 provides:
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.
The main submission of the applicant is that, contrary to the respondent’s decision, the vitamin preparations fall within Chapter 30 of the tariff, within heading 3004, MEDICAMENTS (EXCLUDING GOODS OF 3002, 3005 OR 3006) CONSISTING OF MIXED OR UNMIXED PRODUCTS FOR THERAPEUTIC OR PROPHYLACTIC USES, PUT UP IN MEASURED DOSES (INCLUDING THOSE IN THE FORM OF TRANSDERMAL ADMINISTRATION SYSTEMS) OR IN FORMS OR PACKAGING FOR RETAIL SALE and sub-heading 3004.50.00. The respondent submits that Chapter 30 does not apply to the goods because of Note 1(a) and also, in the event that the Note is inapplicable, that they are not within the heading 3004 and subheading relied upon by the applicant.
The respondent submits that the goods fall within heading 1704, SUGAR CONFECTIONERY (INCLUDING WHITE CHOCOLATE), NOT INCLUDING COCOA, or alternatively heading 2106, FOOD PREPARATIONS NOT ELSEWHERE SPECIFIED OR INCLUDED.
If the goods fall within Chapter 30, then they cannot fall within Chapter 17. Note 1(c) to Chapter 17 is explicit in this regard.
By Note 2 to Section VI (which includes Chapter 30) goods classifiable in 3004, amongst other headings, by reason of being put up in measured doses or for retail sale are to be classified in those headings and in no other heading of Schedule 3.[2]
[2] As to which, see Vernon-Carus Australia Pty Ltd and anor v Collector of Customs [1995] FCA 1283; 21 AAR 450.
Heading 2936, PROVITAMINS AND VITAMINS, NATURAL OR REPRODUCED BY SYNTHESIS (INCLUDING NATURAL CONCENTRATES) DERIVATIVES THEREOF USED PRIMARILY AS VITAMINS, AND INTERMIXTURES OF THE FOREGOING, WHETHER OR NOT IN ANY SOLVENT was not relied upon by the applicant (or the respondent) because a Chapter Note to Chapter 29 restricted its scope to provitamins and vitamins and their derivatives when imported as pure chemical products, or as solutions in water or other solvents for the purposes of safety and transport. The vitamin preparations in the present case are not so imported.
We take first the Chapter note to Chapter 30 which governs the headings and subheadings of that Chapter.
Note 1 to Chapter 30 includes the following:
1.- This Chapter does not cover:
Foods or beverages (such as dietetic, diabetic or fortified foods, food supplements, tonic beverages and mineral waters), other than nutritional preparations for intravenous administration (Section IV);
There is no definition of any of the terms used in the Note in the statute, and no evidence was led by either party to suggest that any of the expressions used in Note 1(a) has a special trade meaning. We are therefore to consider the meaning of its terms as ordinary English words, albeit in their context.
In Kurowski what was in issue was whether effervescent vitamin tablets, identified by the Tribunal as vitamin supplements, should be classified within Chapter 30 and particularly within heading 3004 and subheading 3004.50.00. The goods contained in addition to active ingredients of vitamins, excipients to bind the ingredients, to make the tablets effervescent when dissolved in water, and to add sweetness, flavour and colour. When dealing with the issues arising under Note 1(a) the Tribunal said:
[22] We note that “food” is defined in the Macquarie Dictionary in terms of “what is eaten, or taken into the body, for nourishment”. ‘Nourishment’ is that which sustains. A ‘supplement’ is “something added to complete a thing, supply a deficiency, or reinforce or extend a whole”. ‘Diet’ is “food considered in terms of its qualities, composition, and its effects on health”. ‘Dietary’ means “relating to diet”. A ‘vitamin’ is defined as:
… any of a group of food factors essential in small quantities to maintain life, but not themselves employing energy. The absence of any one of them results in a characteristic deficiency disease.
[23] In the Tribunal’s view, these definitions indicate that ‘vitamins’ do not fall within the ordinary meaning of the word ‘food’. Vitamins are certainly contained in food and a vitamin supplement could be said to reinforce the quantity of vitamins taken into the body as part of everyday food consumption. However, we are not satisfied that products such as the goods, containing specific vitamins, should be identified as food or food supplements. This is not how such products would be identified by the reasonable person. As Mr Milsom said, such a person would not eat vitamin tablets as food for the purpose of sustenance, but rather to supplement the vitamin content of food eaten. As he also pointed out, products of this kind which are sold in tablet form with a recommended unit dosage and with health-related claims would not ordinarily be thought of as food.
[24] Given that a vitamin deficiency could lead to disease associated with that deficiency, a vitamin supplement taken to address such a deficiency will also in such an instance come within the definition of a ‘medicine’, meaning a substance used in treating disease.
[25] We are therefore satisfied that the goods should be identified as vitamin supplements and not as food or food supplements. Our finding is reinforced by the fact that the goods are listed under the Therapeutic Goods Regulations 1990 as complementary medicines. We note that while the classification attributed to a product in a statutory scheme is not definitive of meaning, it is, nevertheless, an indication of meaning and it would be anomalous if a product is classified according to a specific meaning under one statutory scheme and according to a different meaning under another statutory scheme unless there is good reason for doing so.
No evidence such as was given before the Tribunal by Mr Milsom in Kurowski was called before us. Evidence was apparently called in Kurowski from him and another witness, amongst other things, as to how words used in Note 1(a) would be or were used in Australia. The admissibility of such evidence in construing ordinary English words has often been denied.
The Tribunal in Kurowski, at paragraph [25] of its reasons set out above made reference to the fact that the goods were listed under the Therapeutic Goods Regulations 1990 as complementary medicines and treated that fact as reinforcing the finding made in paragraph [24] about the meaning of heading 3004. We will return to this issue, and to the question of the relevance of the local regulatory regime later in these reasons. The Kurowski decision was subject to comment in the later decision in BASF.
In BASF, Note 1(a) was again in issue and the goods in that case were plant sterol products, used to reduce cholesterol absorption by humans. In construing Note 1(a) and discussing Kurowski, the Tribunal said:
[36] When words are used in their ordinary English meanings rather than in technical or trade meanings and there is no suggestion that their meaning has changed over the course of a particular period in question, it is not appropriate to have regard to evidence directed to their meaning. There has been no suggestion from the parties or that appears inherent in Schedule 3 to the CT Act that the word “food” has any trade or technical meaning. In so far as they are relevant, the ordinary meanings of the word include:
“... 1 a substance taken in by a living organism that provides it with energy and materials for growth, maintenance and repair of tissues. 2 solid as distinct from liquid nourishment □ food and drink. ...”
When read with the meanings of the words “nourishment”, “nourish” and “nutriment”, the word “food” is defined in similar terms in the Macquarie Dictionary. Those definitions read, in so far as they are relevant:
“food ... 1. what is eaten, or taken into the body, for nourishment. 2. more or less solid nourishment (as opposed to drink). ...”
“nourishment ...1. that which nourishes; food, nutriment, or sustenance ...”
“nourish ... 1. To sustain with food or nutriment; supply with what is necessary for maintaining life. ...”
“nutriment ... 1. any matter that, taken into a living organism, serves to sustain it in its existence, promoting growth, replacing loss, and providing energy. ...”
[37] When they are analysed, the Macquarie Dictionary and Chambers both define “food” in very similar terms. Their only real difference is one of form with Chambers stating succinctly what is drawn from the Macquarie Dictionary when regard is had to the meaning of the words used to define “food”. Therefore, it seems to me that, when used in its ordinary sense in relation to people, the word “food” means “... a substance taken in ... that provides energy and materials for growth, maintenance and repair of tissues ...” but is not taken in the form of liquid nourishment. Apart from not being in the form of liquid nourishment, there is nothing in that definition that suggests the form in which the substance be taken in. So, for example, flour would be regarded as a food just as burghul would be. One is a finely processed version of wheat grain and the other a much less processed version. One has to be mixed or combined with other ingredients in a certain way to become a food that is palatable e.g. a pastry made with flour, shortening and water. The other may be combined with other ingredients but it may also be eaten alone as a cereal.
[38] Is there a role for the introduction of what a “reasonable person” would consider to be food? The Tribunal in Kurowski thought that there was but I have concerns about it. My first concern arises from the fact that the headings in Schedule 3 do not introduce that concept. They are descriptions. My second concern arises from the fact that the headings in Schedule 3 to the [Customs Tariff Act] reflect classifications agreed upon internationally as part of a harmonised scheme. A person does not have to travel beyond the Asia Pacific region in which Australia is located to know that what is regarded and sold as food in other countries may not be regarded as such in Australia. That is so even though it would be acknowledged that items consumed in other countries provide a source of nutrients, (such as protein) providing energy and materials for growth, maintenance and repair of tissues that would not currently be regarded as food by many Australians. Given that the classifications are included in Australian domestic law, would the reasonable person be expected to know that many products or life forms are consumed by people even though other people may not be aware of it or find their consumption distasteful or even unimaginable? It is true that Australia’s quarantine laws might not permit some of these products to enter the country but the quarantine laws are not determinative of the question which is only asked if the products are permitted entry into Australia and their tariff classification becomes relevant.
[39] Issues of this sort lead me to think that the introduction of the reasonable person may be adding an element that has not been provided by Parliament. That does not mean that the fact that an item or product is, or is not, consumed is irrelevant. It does remain relevant as is the reason for its being consumed. There will be some items and products that are clearly eaten and known to be eaten but others may have to be the subject of evidence. The fact that they may be eaten alone or only after having been mixed or combined with other ingredients is not relevant if they have the attributes of food that I have identified.
What is a “food supplement”?
[40] The expression “food supplement” is not defined or referred to in either Dictionary but both define the word “supplement” in similar terms. I will refer to that in Chambers:
“supplement ... 1 something that is added to make something else complete or that makes up a deficiency □ vitamin supplement ...”
[41] The word “food” is used as an adjective in the expression “food supplement”. Its use in that way suggests that a “food supplement” is a substance that provides energy and materials for growth, maintenance and repair of tissues. The word “supplement” in that expression suggests that it is something in addition to what might otherwise be present in the food, or combination of foods, consumed by a person and so in that person’s diet.
In BASF, the Tribunal referred to evidence about plant sterols led before it and concluded that the goods were not food, but were food supplements within the meaning of Note 1(a): see paragraphs [43]-[51] of the reasons. Unstated assumptions appear to be involved in such a conclusion.
In BASF, the Tribunal’s reasoning process about the meaning of the ordinary English word “foods” and about the expression “food supplements” depends almost exclusively upon dictionary definitions. A preliminary step of first seeking to ascertain context was not expressly taken. We will return to this point after discussing the overseas authorities.
Those authorities are in conflict and do not suggest that there is any uniform international approach to the issues with which this Tribunal is concerned. Nor, of course, does either bind us. They nevertheless may provide assistance in this review.
The English authorities
The English High Court decision in Unigreg Ltd v Her Majesty’s Customs and Excise [1998] EWHC Admin 725, decided by Moses J, concerned a vitamin preparation and involved an appeal from the decision of the VAT & Duties Tribunal (VD Tribunal). Unigreg dealt with two specific questions. The first related to the refusal of the VD Tribunal to classify the vitamin preparation under heading 30.04 (corresponding to 3004 in the Australian tariff) and the second related to the classification of the goods within heading 21.06 (corresponding to heading 2106 in Australia).
It was decided that some food supplements fell within and some fell outside heading 30.04. No findings were made which appear to us to take account of Note 1(a) in that regard, although his Lordship referred to an earlier decision in Her Majesty’s Customs and Excise v Cedar Health Ltd (unreported) 21 May 1998 which had referred to that Note: see paragraph [3] of the judgment at sub-paragraph (6).
At paragraph [8] of his judgment in Unigreg, Moses J treated the fact that the vitamin preparation was regulated as a medicine as being of so little weight in the classification of the goods as a medicament as to be of no assistance. That may be material by analogy here.
The decision in Unigreg, affirming the VD Tribunal decision on heading 3004 appears to have been based at least in part on decisions of the European Court of Justice: see paragraphs [5](2), [6] and [18] of the judgment.
Not only does the decision relating to heading 3004 rest upon principles established in the European Court of Justice, it seems not to take into account Note 1(a) to Chapter 30 and establishes a criterion of application of heading 3004 that may well contravene the rules as understood in this country about identification of goods at the notional wharfside. No indications or claims are made about the subject goods in this case, at the time of importation. Labels and the like are affixed after importation in the present case. To make classification depend on indications given to consumers by importers seems not to be feasible in Australia.[3]
[3] See the decision of the Full Court of the Federal Court in Collector of Customs v Chemark Services Pty Ltd [1993] FCA 391 at [26]-[28]; 42 FCR 585; 17 AAR 424; 114 ALR 531.
The second question dealt with by Moses J in Unigreg relates to whether the vitamin preparation fell within heading 21.06 as a food preparation not elsewhere specified or included. The arguments of both parties mentioned at paragraphs [29]-[31] depend on the HSEN, a resource to which regard may be had in this country usually only if the tariff is ambiguous.
Paragraph [35] of the judgment appears to be inconsistent with Note 1(a) to Chapter 30. If something is a food supplement within the meaning of Note 1(a) it seems that it cannot be a medicament within heading 3004 in the Australian tariff.
At paragraph [36] of the judgment the Court found that the vitamin preparation was only able to cure or to prevent malnutrition; curing malnutrition is the function of nutrition; that which provides the function of nutrition or nourishment is food. The conclusion from that chain of reasoning appears to be that within the meaning of heading 2106 there is a food preparation. That question may be different from whether a vitamin preparation is a food.
The applicant points out that the European Economic Community adopted additional explanatory notes to those available in this country, the Combined Nomenclature Explanatory Notes (CNEN) and that references to the HSEN and the CNEN are part of the classificatory process and are not subject to the restrictions on use which apply to the HSEN in Australia. The CNEN were legally binding on the English High Court.[4] Additional Notes for Chapter 30 included within the CNEN stated that vitamins “are used to treat or prevent specific diseases, ailments or their symptoms” and, as the applicant submits, it seems likely that the CNEN for Chapter 30 significantly influenced the outcome and reasoning in Unigreg. We turn next to the Canadian cases.
[4] Unigreg at [4].
The Canadian authorities
The two cases decided by the Federal Court of Appeal in Canada are Flora Manufacturing & Distributing Ltd. v. Deputy Canada (Minister of National Revenue) decided on 24 July 2000 (File no: A-720-98)[5] and Deputy Canada (Minister of National Revenue) v. Yves Ponroy Canada also decided on 24 July 2000 (File no: A-97-98).[6]
[5] Accessible from:
[6] Accessible from: >
The Court was concerned in Flora Manufacturing with certain liquid vitamin and iron supplements.
At [12] the Court considered the significance of registration as a “drug” under the Food and Drugs Act, noting that the word “medicament” is wider than the definition of “drug” and that no categorical rule could be stated for all cases of reliance on registration as a drug.
At paragraph [15] the Court referred to Canadian International Trade Tribunal (CITT)’s use of the HSEN notes in construing Chapter 29. As already noted, the circumstances in which reference to the HSEN notes is permissible in this country are more restricted than appears to be the case in Canada (and the United Kingdom).
At paragraph [17] the Court found that if, as the Tribunal accepted, the ingestion of vitamins and minerals prevents or reverses a deficiency that may lead to a disease or ailment, it must follow that the purpose of ingesting vitamins and minerals is to prevent that disease or ailment. Accordingly the court found that the goods should be classified within heading 3004.
The provisions of Note 1(a) are not expressly discussed in those reasons. In Yves Ponroy, the Federal Court of Appeal heard four Crown appeals together from decisions of the CITT. The Court decided that the criterion on which appeals should be dealt with from the CITT in Customs matters was reasonableness, and rejected a submission by the Crown that the criterion was correctness.
The contest between the parties was whether vitamin preparations fell within heading 30.03 or 30.04 as medicaments, or heading 21.06 as food preparations.
Sharlow JA, with whom the other members of the Court agreed, referred to Note 1(a) to Chapter 30 (without analysis of it) and continued:
[42] The CITT referred to the explanatory notes and other relevant provisions, and interpreted the language of the headings 30.03 and 30.04 as requiring only an indication of the use of the product for the prevention or treatment of a disease or ailment, not proof of medical efficacy. In each of the four appeals, evidence was presented to the CITT that the products were so used, and the CITT so concluded.
[43] Having considered carefully the arguments of the Crown and the authorities cited, I have been unable to detect any basis for finding the CITT’s interpretation of “medicament” to be unreasonable. I conclude that the decisions of the CITT disclose no error of law that warrants the intervention of this Court. I would dismiss these appeals with costs.
Discussion
We now express our own opinions concerning Note 1(a) and heading 3004. In the construction of Note 1(a) we first ask ourselves whether its language or any other provision of the tariff contains any context relevant to its interpretation.
Note 1(a) may itself contain relevant context. Immediately following the words “Foods or beverages” the words in brackets appear. The enumeration in the brackets begins with the words “such as”. Those words mean “for example” and are words which would ordinarily suggest that each of the items which follow are themselves foods or beverages in the ordinary English sense. Putting to one side the words “food supplements”, each of the other items in the enumeration refers to a food or to a beverage properly so-called. In our opinion that suggests that the expression “food supplements” also refers to things which are either of “Foods or beverages”. We prefer the view that “food supplements” as used in Note 1(a) must refer to a food (or no doubt in some cases, to a beverage). If that is correct the view would not be open that something is not a food (or a beverage), but yet is a food supplement within Note 1(a). If the view of context which we prefer is correct, then in order to conclude that goods are a food supplement within the meaning of Note 1(a), one would also need to conclude that the goods are food, or a beverage.
The respondent submitted that the words “such as” really mean the same as “including” and suggests that the Convention was not drafted by English lawyers. We do not know the composition of the drafting committee for the English version of the Convention, and neither party has been able to provide us with the travaux préparatoires for the Convention. We do not read the expression as contended for by the respondent in this respect and take the provisions of Schedule 3 to mean what they say.
The other possible view is that the legislature has used the words “Foods or beverages” followed by the words in brackets so as to indicate that whether or not food supplements are foods or beverages in the ordinary sense, all of the expressions within the brackets will be within Note 1(a). If so, the legislature has not chosen any usual way of indicating that fact.
If “food supplements” had a meaning which would ordinarily be understood to extend to things which were neither a food nor a beverage then there might be a case for reading Note 1(a) differently, although we think the matter would still be debatable. For completeness we will also consider the question of whether the goods are a food supplement below.
It may be noted that the French text of the Convention, said to be equally authentic, does not begin with the French equivalent of the words “Foods or beverages” but rather lists the enumeration contained within brackets in the English text without commencing words. That seems to us to be a very doubtful aid to construction of the English text, and an insufficient basis on which to resolve a doubt about the language of the Tariff Act. More to the point we do not think that the French text can be resorted to in order to raise such a doubt. In any event, as the respondent’s submissions point out, there is another difference between the two texts, namely the omission of the words “other than nutritional preparations for intravenous administration (Section IV)”. The notion that the French text in fact means the same as the English seems quite unjustified.
We doubt whether it is necessary to resort to a dictionary to find out whether something is or is not a food, at least when that thing is a regular item of commerce, such as a vitamin preparation. As is pointed out in Pearce D.C. and Geddes R.S., Statutory Interpretation in Australia, (8th ed, LexisNexis Butterworths, 2014) pp 154 at [4.8], “[t]he House of Lords said that courts should be cautious of subjecting words in legislation that have an ordinary, everyday meaning to intensive analysis. Commonsense, experience of the world and local knowledge should guide the interpretation of such provisions”.[7]
[7] Citing Seay v Eastwood [1976] 1 WLR 1117 at 1121 and Cozens v Brutus [1973] AC 854. See also Collector of Customs v Agfa Gevaert Ltd [1996] HCA 36; 186 CLR 389; 141 ALR 59, 67.
The word “food” is not apt to describe a vitamin preparation in this country in our opinion. A vitamin preparation would not ordinarily be so described, in our understanding of the sense in which that expression is ordinarily used. It would be described as a vitamin preparation or by some similar words embodying the word “vitamin” or “vitamins” or multi-vitamins. Other goods might well be described as a food supplement and as foods, such as a powder product sold in gyms as a supplement to foods, to be mixed with water and used build up muscle and the like. On the other hand, to our understanding it would not be a usual use of language to describe a vitamin preparation as food.
Kitto J in NSW Associated Blue-Metal Quarries Ltd v Federal Commissioner of Taxation [1956] HCA 80; 94 CLR 509; [1956] ALR 286, having set forth his reasons for concluding that the recovery of blue-metal is not an object of underground mining and therefore that “mining operations on mining property” (in the ordinary sense of those words) were not involved in the appellant’s operations, added this at page 114:
I do not go so far as to say that a view favourable to the appellant in this case could not reasonably be held. But in the end the conclusion must depend on one’s own understanding of the sense in which words are currently used, and although Dr. Johnson in his day defined a “quarry” as a “stone mine”, it seems to me an unnatural and inapt use of language to apply the term “mining operations” to the getting of stone such as blue-metal by open excavation, and to call the land on which those activities are conducted “a mining property”. [footnotes omitted]
Of course, no question arises in this case of a change in the meaning of the words “foods” and “food supplements” since the first enactment of Schedule 3 to the Tariff Act.
The respondent submitted that the vitamin preparations in this case are “food” in the ordinary sense because of the excipients contained in them. The submission was that because the goods are chewable, containing 70%-80% sucrose and gelatin, and flavours, they qualify as food. In our opinion, the essential feature of the goods, and that which should be used to characterise them, is the vitamins that they contain. The excipients no doubt are part of what may make the goods more attractive than other vitamin preparations to consumers, but that does not detract from what we regard as their essential character or purpose, which is to deliver vitamins.
The expression “food supplement” has no dictionary definition in this country and we think there is room for difference of opinion about its complete denotation. The differences between the two earlier Tribunal decisions to which we have referred illustrate that fact. The BASF decision contains reasoning which depends on dictionary definitions of the nature of food and the meaning of “supplement” and propositions of science, rather than on an understanding of how the expression “food supplements” is actually used. The Kurowski decision, on the other hand, appears to depend on the view that vitamin preparations would not ordinarily be described as food or food supplements.
We do not think that vitamin preparations would naturally or normally be described as food supplements in this country. We do not regard the fact that vitamins are found in traces in food as a sufficient reason to reach a different view. If vitamins are seen as an end in themselves by many persons who buy them, their intention would be focused on the vitamins themselves rather than supplementing their food intake. But whatever the reason may be, we think that a vitamin preparation would naturally be referred to as such rather than as a food supplement.
The respondent drew attention to overseas uses of the expression “food supplement”. We think that it is unsafe to make reference to materials emanating from the European Union, where “food supplements” are regulated as foods: see for example, Directive 2002/46/EC. Such directives are issued in a number of languages, including English. The English language version may depend on literal translations from other languages, including French, where “compléments alimentaires” may have a different denotation or connotation than the ordinary English expression “food supplements”. In Australia, the vitamin preparations are not regulated as foods in any event.
Therefore we would respectfully not follow BASF and we reach the same conclusions about the meaning in Australia of Note 1(a) as does Kurowski, although we have preferred to state our own reasons for those conclusions.
We have not found it helpful to refer in our analysis of the meaning of the word “foods” to resort to the Explanatory Notes issued by the World Customs Organisation (HSEN). The word “foods” is not ambiguous and it is not necessary or appropriate to refer to the HSEN to discover its meaning. There are certain uses of the words “food supplements” in the Explanatory Notes, but since we have not found them helpful it is not necessary to consider whether existing authority[8] permits us to take them into account.
[8] Summarised in Primaplas Pty Ltd v Chief Executive Officer of Customs [2016] FCAFC 40 at [72]; 242 FCR 268.
Should the vitamin preparations be classified within heading 3004?
The next question is whether the vitamin preparations are to be classified within the heading ‘3004, MEDICAMENTS (EXCLUDING GOODS OF 3002, 3005 OR 3006) CONSISTING OF MIXED OR UNMIXED PRODUCTS FOR THERAPEUTIC OR PROPHYLACTIC USES, PUT UP IN MEASURED DOSES (INCLUDING THOSE IN THE FORM OF TRANSDERMAL ADMINISTRATION SYSTEMS) OR IN FORMS OR PACKAGING FOR RETAIL SALE.
The questions arising are whether the goods are medicaments and whether they are for therapeutic or prophylactic purposes, or, perhaps, as the applicant submits, whether they are medicaments for therapeutic or prophylactic purposes, considered as a composite expression. “Medicament” is defined in the Macquarie Dictionary as a curative or healing substance. The first meaning given for “therapeutic” is relating to the treating or curing of disease; curative, and the first meaning given for “prophylactic” is defending or protecting from disease, such as a drug. We think that it is sufficient to adopt those definitions, and if we were to look at the composite expression, we would reach no different conclusion.
In Kurowski, the Tribunal dealt with the questions as follows:
[31] The chapter notes for Ch 30, “Pharmaceutical Products”, state that the Chapter does not cover foods, including food supplements. Heading 3004 refers to medicaments for therapeutic or prophylactic uses put up in measured doses. According to the Macquarie Dictionary, the word “medicament” can be used as a synonym for the word “medicine”, any substance or substances used in treating disease. “Therapeutic” means “relating to the treating or curing of a disease”. “Prophylactic” means “1. defending or protecting from a disease, as a drug. 2. preventive; preservative; protective”.
[32] Mr Northcote said that in relation to heading 3004 and whether the goods in question are medicaments for therapeutic or prophylactic purposes, the approach adopted by the tribunal in Re Forever Living Products Australia Pty Ltd and Collector of Customs (1986) 9 ALD 271 (Forever Living) is still appropriate. In that case, at [41]–[42], the tribunal said that its task was not to undertake a comprehensive scientific examination of the properties of a substance, but rather to consider the bona fide claims made for the goods by the seller and the purposes for which consumers purchase the product.
[33] The retail packaging for the goods typically states that the tablets contain “a balanced formulation of B group vitamins plus vitamin C” (Amcal and Pharmacy Choice label goods). In our view, vitamin supplements have both therapeutic and prophylactic qualities: a vitamin supplement can be used to treat a disease arising from a deficiency of that vitamin; and vitamin supplements can be used to supplement the intake of vitamins from food — vitamins being essential in small quantities for the maintenance of life — and thereby prevent or protect against the development of diseases associated with vitamin deficiencies. While, undoubtedly, vitamin supplements are used by consumers who do not, in fact, need an additional intake of particular vitamins, consumers commonly take vitamin supplements as a preventive or protective measure, in order to ward off or avoid disease.
[34] Mr Northcote referred us to the explanatory notes to the Harmonized System published by the World Customs Organization (4th ed, 2007) as an aid to how we should interpret the meaning of the provisions of Sch 3. He noted that the Full Federal Court has recognised that the explanatory notes are an acceptable extrinsic aid for construing the headings in the Act: see, for example, Barry R Liggins Pty Ltd v Comptroller-General of Customs (1991) 32 FCR 112; 103 ALR 565 (Barry Liggins). We note, however, that in Barry Liggins at FCR 120 ; ALR 573, Beaumont J said:
…although it may be permissible to refer to extrinsic material where the statute is ambiguous, it does not follow that extrinsic material can be used to contradict the meaning of an Act of parliament, that meaning being taken from its proper statutory context.
[35] The tribunal in Forever Living, at [45], adopted a similar approach, following what was said by the tribunal in O R Cormack Pty Ltd and Collector of Customs (1983) 6 ALN N15 , where the tribunal stated that the correct approach to interpreting the domestic legislation is to take as a starting point the ordinary language used and:
… it is simply not open by resort to extrinsic materials, in this case the Explanatory Notes, to create a doubt as to the meaning of the Tariff and to seek then to resolve that doubt by going to the self-same materials, here the Notes, already used to create the doubt.
[36] Thus, in interpreting legislation, in this instance the relevant provisions of Sch 3 of the Act, the tribunal must first consider the ordinary meaning of the words in issue in the context in which they are used. Reference to extrinsic material can be for the purpose of confirming the ordinary meaning conveyed by the text of the provision taking into account its context, or to determine the meaning of the provision when its meaning is ambiguous or obscure, or if the ordinary meaning conveyed by the text of the provision taking into account its context and the purpose or object underlying the Act leads to a result that is manifestly absurd or unreasonable: s 15AB(1) of the Acts Interpretation Act 1901.
That analysis is comparable to the view taken in Canada in the Flora Manufacturing case: see paragraph [46] of these reasons. We would treat the English decision in Unigreg as distinguishable for the reasons set out in paragraphs [34]-[37] and [41] of our reasons.
In BASF, the Tribunal was not satisfied on the evidence led before it that the plant sterols involved in the importation were medicaments or that they had therapeutic or prophylactic properties.
For present purposes, the particular vitamins contained in each category of the goods are as follows, which we have taken from the Certificates of Analysis:
(a)Nature’s Way Vita Gummies Family Multi Caps:
oVitamin C
oNiacin
oVitamin E (di-alpha tocopheryl acetate)
oVitamin B6
oFolic Acid
oBiotin
oVitamin D3
oVitamin B12
oVitamin B1
oVitamin B2
oCalcium
oIodine
oMagnesium
oZinc
(b)Nature’s Way Kids Smart Vita Gummies Adult Vit D Caps:
oVitamin D3
(c)Hair Skin Nails:
oVitamin C
oVitamin E
oBiotin
oZinc
(d)B Complex:
oVitamin C
oNiacin
oFolic Acid
oVitamin B6
oBiotin
oVitamin B12
oVitamin B1
oVitamin B2
(e)Nature’s Way Kids Smart Vita Gummies Family Vit C Caps:
oVitamin C
(f)Men’s Gummy:
oVitamin C
oNiacin
oVitamin E
oVitamin B6
oFolic acid
oBiotin
oVitamin D3
oVitamin B12
oVitamin B1
oVitamin B2
oMagnesium
oIodine
oZinc
oSelenium
oChromium
oInositol
oBoron
(g)Women’s Gummy:
oVitamin C
oNicotinamide
oVitamin E
oVitamin B6
oFolic Acid
oBiotin
oVitamin D3
oVitamin B12
oIodine
oZinc
oChromium
oIron
oCalcium
oPhosphorus
(h)Nature’s Way Kids Smart Vita Gummies Multi-vitamin + Vegies:
oVitamin A
oVitamin B6 (Pyridoxine HCl)
oNiacin
oVitamin B12
oBiotin
oVitamin C
oVitamin D3
oVitamin E
oSpinacia oferacea (spinach) powder
oLycopersicom esculentum (tomato) powder
oDancus carota (carrot) powder
oBeta vulgaris (beetroot) powder
oCynara scolymus (artichoke) powder
(i)Nature’s Way Kids Smart Vita Gummies Multivitamin + Omega:
oVitamin C
oNiacin
oVitamin E (di-alpha tocopheryl acetate)
oVitamin B6
oBiotin
oVitamin D3
oVitamin B12
oVitamin B1
oVitamin B2
oVitamin A
oIodine
oDHA
(j)Nature’s Way Kids Smart Vita Gummies Vit C + Zinc:
oVitamin C
oZinc
(k)Calcium Raspberry Vanilla Gummies Caps:
oVitamin D3
oCalcium
(l)Nature’s Way Kids Smart Vita Gummies Fussy Eaters Caps:
oVitamin C
oNiacin
oVitamin E
oVitamin B6
oFolic Acid
oBiotin
oVitamin D3
oVitamin B12
oVitamin B1
oVitamin B2
oCalcium
oIodine
oMagnesium
oZinc
oSpinacia oferacea (spinach) powder
oLycopersicom esculentum (tomato) powder
oDancus carota (carrot) powder
oBeta vulgaris (beetroot) powder
oCynara scolymus (artichoke) powder
(m)Nature’s Way Kids Smart Gummies Cough and Cold:
oSambucus nigra
oVitamin C
oZinc
According to Chambers Science and Technology Dictionary, 1974 (reprinted 1984), “vitamins” are:
[o]rganic substances required, in relatively small amounts, for the proper functioning of the animal organism. They (or in some cases their immediate predecessors) must be present in the food. Lack causes certain deficiency diseases, curable by administration of the appropriate vitamin; partial lack may cause minor disturbances or less well-defined ill-health. Some vitamins have a valuable therapeutic action when given in relatively large doses.
The work then lists particular vitamins including most of those which we have listed in paragraph [71] and, for the most part, the diseases which a lack or partial lack of them cause. That information shows, in our opinion, that the vitamin preparations are medicaments and that they have prophylactic and therapeutic properties.
Information collected and retained by the applicant for purposes connected with the Therapeutic Goods Administration records (which are before us as exhibit “MDH-14” to Mr Halter’s statement of 21 March 2017) also shows both that the vitamin preparations are medicaments and that they have prophylactic and therapeutic properties.
The listing of the vitamin preparations in the Therapeutic Goods Register as a complementary medicine is not in conflict with our conclusion, but the fact of the registration does not materially assist us to reach that conclusion.
Collector of Customs v Chemark Services PtyLtd [1993] FCA 291; 42 FCR 585; 17 AAR 424; 114 ALR 531 makes the reliance placed by the respondent upon statements made by the applicant on the labels affixed by the applicant very difficult, and the control exercised by the Therapeutic Goods Administration may affect significantly the claims that may be made for the vitamin products on the labels in any event. Statements made by Mr Halter in cross-examination which confirmed claims made upon the labels do not cause us to qualify what we have found in paragraphs [72] to [74] of these reasons.
Findings – the vitamin preparations
We have concluded that the correct classification of the vitamin preparations is within heading 3004. Heading 2106 is therefore inapplicable because of Note 2 to Section VI and heading 1704 is inapplicable because of the same Note. It is also inapplicable because of Note 1(c) to Chapter 17.
It remains to consider what subheading applies to the goods. Subheading 3004.50.00 reads “-Other, containing vitamins or other products of 2936”. That subheading is appropriate for the vitamin preparations.
THE GARCINIA PREPARATIONS
We now turn to the garcinia preparations. These products are designed to enable weight loss. They appear to us not to be within Note 1(a) to Chapter 30. A weight-loss preparation would not ordinarily be described as a food or as a food supplement in our opinion. Neither the description of one of the products as a “formulated supplementary sports food” on its packaging, nor Mr Halter’s agreement in cross-examination with that description of the goods cause us to alter this opinion. In any event the labeling was placed on the goods after importation. Whether they are medicaments gives rise to different considerations however. Persons who wish to lose weight may do so for health reasons, or out of a desire to appear more attractive to others. Weight-loss may be beneficial for certain diseases, such as diabetes. The efficacy of garcinia for the purpose of weight-loss is in dispute, as we understood the evidence before us.
The applicant submits that the garcinia preparations are not for eating and that they are therefore not foods or food supplements. The applicant submits that heading 3004 (alternatively 3003) extends to goods other than traditional medicines and that consistently with Re Forever Living Products Australia Pty Ltd and Collector of Customs [1986] AATA 20; 9 ALD 273, other products that are sold and used for therapeutic purposes are within the heading, provided that there are reasonable grounds for believing that the importer bona fide believes that the goods are suitable for therapeutic purposes. The Tribunal held that the products, which contained aloe vera, were sold for no other purpose but in connection with the health of the proposed purchaser. One of the conditions nominated by the Tribunal for this purpose was that the goods be packaged to indicate directly or by inference that they are being sold by retail for therapeutic purposes. The Tribunal accepted that alternative medicine prescribed by a traditional medicine practitioner is a medicament for the purposes of heading 3004 or 3003.
The packaging of the garcinia preparations make claims for the product. The “FatBlaster Gummies” labels state that “Just 6 FatBlaster Max Gummies contain the recommended daily dose of Garcinia Cambogia and Green Coffee Bean to boost your metabolism and help you achieve the body you want”. The “Skinny Gummie” bottle calls the product a “Weight Loss Gumm[ie]” and adds “The ultimate treat to fire up your fat burn”. It then states:
helps rev up your diet, exercise and:
Activates fat burning
Boosts metabolism
Reduces Hunger
It also, as noted above, includes the words “Formulated supplementary sports food”.
The respondent submits that Forever Living was wrongly decided insofar as it depended on claims made on the packaging or in marketing the goods, and insofar as it depended on beliefs bona fide held by the importer. The respondent submits that the intentions (or beliefs) of the importer are irrelevant and that it is the actual uses to which the goods are put in Australia which are relevant. The respondent cited the following paragraph from the reasons of the Full Court of the Federal Court in Re Chinese Food and Wine Supplies Pty Ltd v Collector of Customs (Vic) (1987) 72 ALR 591; 12 ALD 313:
Whether the goods in suit properly fall within Item 30.03 of the Customs tariff is determined by an objective test not by the intentions of the manufacturer in China or of the exporter or the importer. The test is applied at the port of entry of the goods and at the time of entry. The characteristics of the goods, their get-up, colour, decoration, labeling and packaging are all relevant considerations. In some cases, a visual inspection of the goods and their packaging will disclose characteristics of the goods and enable a judgment to be made as to whether they are for therapeutic or prophylactic use. But visual inspection will not necessarily provide the answer in each case. Tests may have to be carried out and inquiries made to ascertain the relevant characteristics of the goods. In the present case, samples were taken and sent for chemical analysis. As the tribunal noted, the paucity of the information contained in the labeling of the goods necessitated further inquiries being made in respect of them.
The respondent submits that the garcinia preparations contain no reference to treating disease and that there is nothing in the claims made on the packaging that could lead the Tribunal to conclude that the products are medicaments for therapeutic or prophylactic purposes.
We doubt that a weight-loss product, as such, is for a therapeutic or prophylactic purpose, and we doubt that the product is properly described as a medicament. It would be different if it treated or prevented obesity or some related disease or ailment. The main purpose of the garcinia preparations appear to us to be cosmetic.
Therefore we need to look at other headings within which the goods are classifiable.
The other candidates suggested are again headings 1704 and 2106. Heading 1704 seems an inappropriate classification of the goods since they would be regarded as weight-loss products rather than confectionery, despite the contents of the excipients. Heading 2106 food preparations seems inappropriate for reasons we have already mentioned in rejecting a submission that Note 1(a) to Chapter 30 applies.
Findings – the garcinia preparations
The present appears to be a case for the application of rule 4 of Schedule 2, which calls for a determination of the classification to which the goods are most akin. We would reject 2106 as a category to which the goods are akin. The choice of heading then is between heading 1704 and heading 3004. It seems to us that heading 3004 is one to which the goods are more akin than heading 1704, because there is often a significant health advantage to weight loss, and a good example of that is with type 2 diabetes. On the other hand the excipients in the product seem wholly incidental to the main purpose of the goods, and to their proper classification.
Subheading 3004.90.00 (–Other) is appropriate to the garcinia preparations.
TARIFF ADVICE 21346600
The further issue argued before us referred to in paragraph [8] of these reasons does not arise according to the way we have dealt with the other issues. We have nevertheless been asked to deal with it, since these proceedings may go further.
The applicant gave evidence that it relied on Tariff Advice 20299300 of December 2011 until December 2015, rather than until that Tariff Advice was replaced by 21346600, in June 2015. The respondent has demanded duty on all of the goods from June 2015 pursuant to the later Advice. The applicant submits that the respondent ought to have exercised its discretion to refrain from demanding duty until it notified the applicant of its changed advice. The applicant puts its case on the requirements of good government, relying on Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd [1979] FCA 21; 41 FLR 338; 24 ALR 307 at 335; 2 ALD 1. The applicant submits that the Tribunal may substitute its own exercise of discretion for that of the respondent if it considers that to be the preferable decision.[9]
[9] Shi v Migration Agents Registration Authority [2008] HCA 31; 235 CLR 286 per Kiefel J at [140]; 103 ALD 467; 248 ALR 390; McKinnon v Secretary, Department of Treasury (2006) 228 CLR 423.
The power of the Tribunal to exercise discretions vested in the original decision-maker is made express in s 43(1) of the Administrative Appeals Tribunal Act 1975. In Shi v Migration Agents Registration Authority [2008] HCA 31; 235 CLR 286; 103 ALD 467; 248 ALR 390, Kiefel J[10] and other members of the High Court referred with approval to the statement of Smithers J in Brian Lawlor that it is for the Tribunal to determine whether the decision is acceptable, when tested against the requirements of good government.
[10] At page 327, [140].
If it was open to the original decision-maker to excuse the applicant from liability to pay duty because the applicant had relied upon a Tariff Advice and had not learned of its amendment, then such a discretion would be available to the Tribunal. If some legal principle, such as the law of estoppel, bound the decision-maker, then it would similarly bind the Tribunal. On the other hand, we do not read the statement of Smithers J in Brian Lawlor to suggest that the Tribunal or the original decision-maker has a discretion, where none is otherwise conferred.
The response of the respondent to the submissions of the applicant draws attention to suggested deficiencies of proof of the applicant’s case as to reliance. That evidence was given by Mr Halter in his statement dated 21 October 2016 at paragraphs [46]-[51]. He gave limited additional evidence orally before us. He was cross-examined by Mr Northcote for the respondent but not on the paragraphs or additional evidence to which we have referred.
Mr Halter’s evidence shows that the applicant’s management did not become aware of the amended Tariff Advice of June 2015 until December of that year.
The respondent submits that the applicant has not shown that its broker did not receive email advice about the amended Tariff Advice in June 2015. That email is before us at page 53 of the T-Documents. It enclosed the amended Tariff Advice 21346600. It was forwarded to the applicant’s broker who had authority as the applicant’s agent.
We conclude that the applicant had notice through its agent that the earlier Tariff Advice was amended by the respondent. Therefore we would reject the applicant’s alternative ground for objection to the respondent’s decision, even if, as we assume, there was a discretion to excuse the applicant from payment between June and December 2015.
DECISION
In the result, we will set aside the decisions under review and remit them to the respondent with a direction that the goods were all classifiable under heading 3004, within subheading 3004.50.00 as to the vitamin preparations and subheading 3004.90.00 as to the garcinia preparations.
I certify that the preceding 98 (ninety-eight) paragraphs are a true copy of the reasons for the decision herein of Deputy President J W Constance and Deputy President B W Rayment
................................[sgd]........................................
Associate
Dated: 19 October 2017
Date(s) of hearing: 6 & 26 July 2017 Date final submissions received: 22 September 2017 Counsel for the Applicant: Mr J Slonim Solicitors for the Applicant: Clayton Utz Solicitors for the Respondent: Legal Services Division, Department of Immigration and Border Protection
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