R v Lyon

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.