R v Comptroller-General of Customs - [1935] HCA 37

53 CLR 308

THE COMPTROLLER-GENERAL OF CUSTOMS AND Ex PARTE WOOLWORTHS LIMITED AND ANOTHER. Customs-Ad valorem duties-Imported goods-Dutiable value--Ascertainment-

Inclusion of buying commission-Proof--" Protection of the revenue of the Customs '-Security required by department-Form-Authority-Conditions SYDNEY,

Forfeiture to the Commonwealth-Payment under protest-Customs Act 1901-1930 March 28:

(No. 6 of 1901-No. 6 of 1930), secs. 42, 167, 216*.

The Collector of Customs, not being satisfied of the genuineness of a buying commission which appeared upon an invoice but was not included in the calculation of the value for duty shewn upon the entry, refused to pass the entry unless the importer deposited an amount equal to the additional duty upon the terms of a departmental form of security, the condition of which * The Customs Act 1901-1930, pro-

sum demanded by the Collector as the vides by sec. 42 The Customs shall

duty payable in respect of the goods, have the right to require and take

and thereupon the sum so paid shall, as securities for compliance with this Act

against the owner of the goods, be and generally for the protection of the

deemed to be the proper duty payable revenue of the Customs, and pending

in respect of the goods, unless the con the giving of the required security in

trary is determined in an action brought relation to any goods subject to the

in pursuance of this section. (2) The control of the Customs may refuse to

owner may, within the times limited in deliver the goods or to pass any entry

this section, bring an action against the relating thereto." By sec. 167 -

Collector, in any Commonwealth or

53 CLR 309

was that if proof should within a limited time be produced to and to the satis- faction of the Collector that the goods were in the entry properly described and valued for duty, the deposit should be returned, otherwise it should be the property of the Commonwealth. The Collector declined to accept an entry at the increased amount of duty tendered under protest pursuant to sec. 167, but claimed to retain the goods unless and until the cash security was given. In taking this course the Collector relied on secs. 216 and 42 of the Customs Act

Held that the Collector could not refuse to assess the duty and to pass an entry. It is not open to him to refrain from demanding duty and at the same time to demand a deposit against that duty in case it should be demanded, and then to forfeit the deposit, still without demanding duty. Sec. 216 enables the Collector to retain goods pending proof, that is, during the adduction of evidence and possibly during any time reasonably required for an investigation, but it does not entitle him to defer for ever the levying of duty. Sec. 42 enables him to require any security for the ultimate payment of duty found to be due, and to obtain money upon a condition that it shall be applied to satisfy…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1935] HCA 37
Decision Date: 4 June 1935

CaseChat Overview and Summary

This case concerned a dispute between Woolworths Limited and the Comptroller-General of Customs and the Collector of Customs for New South Wales regarding the assessment of customs duties on imported goods. Woolworths Limited sought a writ of mandamus to compel the customs officials to pass entries for goods without including a "buying commission" in their dutiable value, or alternatively, to allow payment of any additional duty under protest. The core of the dispute lay in the customs department's refusal to accept the importer's valuation and their insistence on a cash security deposit pending further proof of the commission's genuineness, rather than definitively assessing and demanding the duty.

The legal issues before the High Court were whether the Collector of Customs was entitled to refuse to assess and pass an entry for imported goods, and to demand a cash security deposit under section 42 of the *Customs Act 1901-1930* pending proof of valuation under section 216, instead of levying duty or allowing payment under protest as provided by section 167. Specifically, the court had to determine if the Collector could retain goods and demand a deposit on terms that the deposit would become the property of the Commonwealth if the importer failed to satisfy the department of the correct valuation, without first making a definitive demand for duty.

The Court held that the Collector could not refuse to assess duty and pass an entry. It reasoned that the Collector could not simultaneously refrain from demanding duty and demand a deposit against a potential future duty, with the deposit subject to forfeiture without a formal assessment. Section 216 permits the Collector to retain goods pending the adduction of evidence or reasonable investigation, but not to indefinitely defer the levying of duty. Section 42 allows for security for the ultimate payment of duty found to be due, but not for a deposit to be forfeited if the importer fails to satisfy the department's satisfaction regarding valuation, as opposed to a court's determination. The Court found that the departmental practice, as evidenced by the security form, attempted to conflate the powers under sections 42 and 216 in a manner that unlawfully deprived the importer of their right to have duty assessed and to challenge that assessment through legal action under section 167.

The Court made absolute the rule nisi for mandamus. It ordered that the Collector of Customs for New South Wales be directed to pass and enter the goods in question so as to enable the applicants to pay any additional duty that might be payable in relation to the buying commission under protest, or to pass and enter the goods at a value that did not include the buying commission. Furthermore, the Collector was ordered to indicate what further proof was required under section 216 regarding the valuation of goods for which deposits had been made, and to specify the respects and reasons why the goods were alleged to be not properly valued.

Orders