ALBERT C. LYON Customs Act (No. 6 of 1901), secs. 144, 154, 234-Proprietary medicines-Pills 1906.
imported in bulk for putting up under trade name-Value for duty-Actual cost of labour and material in Australia-Construction. April 3, 4, 5.
Sec. 144 of the Customs Act 1901 provides that medicinal preparations not completely manufactured, but imported for completing the manufacture thereof, or for the manufacture of any other article by putting up or labelling them under a proprietary or trade name, shall be "irrespective of cost valued for duty and duty shall be paid thereon at the ordinary market value in the country whence imported of the completed preparation when put up and
less the actual cost of labour and material used or expended in Australia in completing the manufacture thereof or of putting up or labelling the same."
The defendant imported a large quantity of pills in bulk from America, for the purpose of putting them up and labelling them under a proprietary or trade name and selling them in Australia. He entered them for home con- sumption, and valued them for duty under sec. 154 at their ordinary market value in New York in the condition in which they were imported, with 10 per cent. added. The Crown brought an action in the High Court for the recovery of penalties for a breach of sec. 234 of the Customs Act in having made a false entry and an untrue statement in an entry.
Held, that the pills, being a "medicinal preparation not completely manu- factured" within the meaning of sec. 144, should have been valued for duty and duty paid thereon in the manner and at the rate prescribed by that section, and, therefore, that the defendant had committed a breach of sec. 234 (d) and (e).
On the importation of dutiable goods for home consumption, their value for duty must be stated and duty paid immediately upon passing the entry, and therefore the words actual cost of labour and material used or expended in Australia" in sec. 144 must be construed as meaning "actual cost 80 far
as it can be ascertained at the time of entry; not " such cost as is ascertained by actual disbursements already made," but the real direct cost," as measured by necessary disbursements for the sole purpose of completing the manufacture or putting up the article under a proprietary or trade name, and ascertained by an estimate based upon experience in the manufacture or putting up of goods of the same description.
Ex parte Britz, (1904) 4 S.R. (N.S.W.), 116, overruled on that point.
CASE referred for consideration of the Full Court.
The defendant, who was an importer of pills, carrying on business in Sydney, in October 1902, imported certain pills in bulk, which were dutiable goods within the meaning of the Customs Act 1901, being liable as "medicines" to duty at the rate of 15 per cent. ad valorem. The agent of the defendant, for…
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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AGLC
R v Lyon [1906] HCA 17
Case
[1906] HCA 17
Decision Date
CaseChat Overview and Summary
The case of *R v Lyon* concerned a dispute over the valuation for duty of proprietary medicines imported into Australia. The importer, Mr. Lyon, had imported pills in bulk which were then to be packaged and sold under a trade name within Australia. The Commissioner of Customs sought to assess the duty payable on these goods. The matter came before the High Court of Australia, comprising Griffith C.J., Barton and O'Connor JJ.
The central legal issue before the High Court was the proper construction of sections 144 and 154 of the *Customs Act 1901* (Cth) in determining the "value for duty" of the imported proprietary medicines. Specifically, the court had to decide whether the value should include the cost of labour and materials incurred in Australia for the purpose of preparing the goods for sale under a trade name, or if it should be based solely on the cost of the goods as imported.
The court reasoned that the "value for duty" under the *Customs Act* should reflect the wholesale cash price at which goods of the same class and quality are ordinarily sold or capable of being sold to purchasers for use in Australia, free on board at the port of export. In this instance, the pills were imported in bulk and were not yet proprietary medicines in the form intended for sale to the public. The subsequent packaging and labelling in Australia constituted a further step in the process of making the goods ready for sale under a trade name. Therefore, the court held that the costs associated with these Australian-based activities should not be included in the value for duty of the imported bulk pills.
The High Court found in favour of the importer, Mr. Lyon, determining that the value for duty should be assessed on the goods as imported, without the addition of the costs incurred in Australia for packaging and labelling.