R v Mittal

[2023] SADC 77

DISTRICT COURT OF SOUTH AUSTRALIA

(Criminal: Application)

R v MITTAL

[2023] SADC 77

Reasons for Decision of his Honour Judge Stretton 

29 June 2023

CRIMINAL LAW - PROCEDURE - PLEAS - GENERAL PLEAS - PLEA OF GUILTY - WITHDRAWAL AND RESTORATION OF PLEA - AFTER COMMITTAL FOR SENTENCE ON PLEA OF GUILTY

TAXES AND DUTIES - CUSTOMS AND EXCISE - CUSTOMS TARIFF - CLASSIFICATION AND INTERPRETATION

The applicant pled guilty on 12 December 2022 to importing tobacco with the intention of defrauding the revenue. Five months later he applied to withdraw his plea on the basis that his importation was of 'chewing tobacco' which does not constitute a tobacco product for the purposes of section 233BABAD of the Customs Act (1901) (Cth), and hence the facts to which he pled do not support the charged offences and it would constitute a miscarriage of justice to allow the plea to stand.

Held: 'Chewing tobacco' is a 'tobacco product' within the meaning of the charged offence. The facts do support the charged offence and accordingly there is no basis upon which the plea should be set aside. The application is dismissed.

Customs Act 1901 (Cth) ss 4, 233BABAD(1); Criminal Code Act 1995 (Cth) s 11.2A; Criminal Procedure Act 1921 (SA) s 119; Customs Tariff Act 1995 (Cth) Schedule 2, 3; s 15; Customs (Prohibited Imports) Regulations 1956 (Cth) Schedule 12; regs 4DA, 4U, referred to.

Stropin v R [2021] SASCA 50, applied.

Controller General of Customs v Pharm-A-Care Laboratories Pty Ltd (2020) 270 CLR 494, considered.

R v MITTAL
[2023] SADC 77

1. This is an application for leave to withdraw a guilty plea entered by the second defendant in this matter on 12 December 2022 to count 1 of the Information.

   The charge

2. On 12 December 2022, the applicant pled guilty to the following offence:

   First Count

   Statement of Offence

   Import tobacco with the intention of defrauding the revenue, contrary to section 233BABAD(1) of the Customs Act 1901 (Cth) and section 11.2A(1) of the Criminal Code (Cth).

   Particulars of Offence

   Between about 1 February 2020 and 15 April 2020 at Plympton or elsewhere in the State of South Australia, Ajay Mittal and Rajiv Mittal jointly imported goods, being tobacco products contained within shipping container CDUX1580497, with the intention of defrauding the revenue.

3. The co-accused Ajay Mittal also pled guilty to that offence and to other offending.  His situation is not relevant for present purposes.

   Application to withdraw the guilty plea

4. On 14 April 2023, some 5 months after the plea of guilty, the applicant sought leave to withdraw his guilty plea on grounds set out in the affidavit of his solicitor dated 13 April 2023.  Those grounds are:

5. The accused cannot in law be guilty of count 1 on the Information because:

   1. The tobacco seized by investigators, the subject of count 1, was ‘chewing tobacco’.

   2.Chewing tobacco does not come within the definition of ‘tobacco products’ as defined by section 4 of the Customs Act 1901 (Cth).

   3.The accused did not therefore import ‘tobacco products’ within the meaning of that term in section 233BABAD(1)(b) of the Customs Act 1901 (Cth).

6. The application was supported by a second affidavit from the applicant’s solicitor dated 8 May 2023 attaching an expert’s report compiled by Associate Professor Steadman of The University of Queensland. That report expressed the opinion that the five products seized by officials forming the subject matter of count 1 were ‘chewing tobacco’.

7. No other evidence was called on the application.  However, the court also has regard to the filed declarations, which establish that the seized material is tobacco, in some instances mixed with flavourings. The court also has regard to the Prosecution Summary of Proposed Factual Basis for Sentencing insofar as it conveniently sets out a brief summary of the facts surrounding the charged offending.

   Factual background

8. The applicant and his co-accused are brothers who own or control a number of Indian grocery stores around Adelaide, including ‘Indian Traders’ at Plympton and ‘Indian Plaza’ at Enfield. 

9. On 9 April 2020, shipping container CDUX1580497, which originated in India, was x-rayed by Australian Border Force officers in Adelaide. Those x-rays disclosed organic material and on 14 April 2020 the cargo was examined, and 660.5 kilograms of tobacco was located inside the container. It is common ground that this tobacco was in packets labelled to indicate that it was for the purposes of chewing.  It is common ground that the applicant was a part of the knowing importation of this material.

   The issues

10. The applicant submits that on the facts before the court and having regard to the expert evidence he has obtained, that material constituted ‘chewing tobacco’. He argues that because of that fact he cannot in law be guilty of the offence to which he has pled guilty.

11. Whilst the applicant admits his importation of the items and the role he played as alleged by the prosecution, he contends that the alleged conduct does not constitute the charged offence of importing tobacco with the intention of defrauding the revenue within the meaning of s 233BABAD(1) of the Customs Act 1901 (Cth), as alleged.

12. The applicant submits firstly that the ‘chewing tobacco’ which was admittedly imported is not a ‘tobacco product’ as defined by the Customs Act1901 (Cth) and as the charged offence required proof that the imported material was a ‘tobacco product’ he cannot be guilty of the s 233BABAD(1) offence.

13. In short, the applicant submits that were ‘chewing tobacco’ intended to be covered by the definition of ‘tobacco product’ it would have been specifically mentioned in the definitional sections, and it is not mentioned.

14. He further submits that on a proper analysis of the legislation ‘chewing tobacco’ has the status of something that is prohibited, and which consequently does not attract duty. His argument is that as ‘chewing tobacco’ is a ‘prohibited import’, duty was never going to be chargeable and accordingly he cannot legally have had an ‘intention to defraud the revenue’. 

15. He therefore submits that as both a ‘tobacco product’ and an intention to defraud the revenue are elements of the offence and neither are present, he cannot be guilty of that offence, and he should be permitted to withdraw his plea.

    Withdrawal of plea – the test

16. Section 119 of the Criminal Procedure Act 1921 (SA) provides that a change of plea following committal for sentence may only occur with the permission of the court. In this instance the plea was made after arraignment in the District Court.

17. It is common ground that the longstanding common law principles governing when an applicant will be permitted to change his plea apply. These principles were conveniently set out by the Court of Appeal in Stropin v The Queen.[1] I adopt without repeating those principles.

    [1] [2021] SASCA 50 at [34].

18. There has been some debate before me whether the applicable test is that a change of plea will be allowed where it is in the interests of justice to do so, or whether the test is an arguably stricter one, that a change of plea will only be allowed where not to do so would result in a miscarriage of justice. 

19. It is unnecessary in the circumstances of this case to address that issue for the following reason. If the prosecution case at its highest could not amount to an offence as charged, unless there were some particularly unusual factor it would be both in the interests of justice to allow the application and a miscarriage of justice not to do so.

    Analysis

20. Section 4 of the Customs Act 1901 (Cth) defines the term ‘tobacco products’ used in s 233BABAD(1) as:

    tobacco products means goods classified to heading 2401, 2402 or 2403 or subheading 2404.11.00 of Schedule 3 to the Customs Tariff Act 1995 (except goods classified to subheading 2402.90.00 or 2403.99.10 of that Schedule).

21. As can be seen, the definition provides that goods that are ‘classified to’ Schedule 3 of the Customs Tariff Act 1995 (Cth) will be specifically defined as tobacco products.

22. Schedule 3 of the Customs Tariff Act 1995 deals with the classification of goods and provides for general and special rates of duty. Chapter 24 of Schedule 3 deals with tobacco and manufactured tobacco substitutes. Accordingly, items classified to headings 2401, 2402 and 2403 of this Schedule are defined as ‘tobacco products’ for the purposes of the Customs Act 1901 (Cth).

23. Those three headings within Chapter 24 of Schedule 3 to the Customs Tariff Act 1995 classify three categories of material as tobacco products.[2]

    [2]     Headings 2401, 2402 and 2403.

24. Firstly, heading 2401 classifies ‘UNMANUFACTURED TOBACCO; TOBACCO REFUSE’ which includes ‘Tobacco, not stemmed/stripped’ and ‘Tobacco, partly or wholly stemmed/stripped’ and ‘Tobacco refuse’ as a tobacco product.  In other words, all unmanufactured tobacco whether stemmed and stripped or not, or refuse of tobacco, are tobacco products.

25. Secondly, heading 2402 classifies ‘CIGARS, CHEROOTS, CIGARILLOS AND CIGARETTES, OF TOBACCO OR OF TOBACCO SUBSTITUTES’ as tobacco products as well.  It is unnecessary for present purposes to consider this category as it is common ground that material the subject of count 1 is not capable of satisfying that classification.

26. Thirdly, heading 2403 classifies ‘OTHER MANUFACTURED TOBACCO AND MANUFACTURED TOBACCO SUBSTITUTES; ‘HOMOGENISED’ OR ‘RECONSISTUTED’ TOBACCO; TOBACCO EXTRACTS AND ESSENCES’ as ‘tobacco products’.  That heading sets out a number of specified types of manufactured tobacco and tobacco substitutes such as ‘Smoking tobacco’, ‘Water pipe tobacco’, tobacco ‘In stick form’, and ‘homogenised’ or ‘reconstituted’ tobacco.  It then goes to include as a subcategory of the 2403 classification of manufactured tobacco ‘Other’. 

27. In other words, ‘Other’ manufactured tobacco is any manufactured tobacco that is not smoking tobacco, water pipe tobacco, stick form tobacco, homogenised or reconstituted tobacco. 

28. On a plain reading of the goods classified pursuant to heading 2403 of Schedule 3, any ‘Other’ manufactured tobacco than the matters specified, comes within the definition of goods classified to heading 2403 as a tobacco product.

29. As can been seen from the above analysis, all unmanufactured tobacco is defined by heading 2401 of Chapter 24 as a ‘tobacco product’. Heading 2403 of Chapter 24 classifies all manufactured tobacco of whatever kind as a ‘tobacco product’.

30. Accordingly, the language of the definitional framework, in its terms, defines all unmanufactured or manufactured tobacco as a ‘tobacco product’, within the scope of definitional s 4 of the Customs Act 1901 (Cth). 

31. It is clear from these provisions that the legislation is attempting to exhaustively cover all tobacco of a consumable nature and do so by a semi-extensive list, together with a catch-all provision ensuring that all other both unmanufactured and manufactured tobacco are within the definition of tobacco products and hence the regulatory framework. 

32. There is no logical or apparent reason why chewing tobacco, an equally consumable version of tobacco, would not have been intended by parliament to be covered. 

33. Further, as is clear from section 15 of the Customs Tariff Act 1995 (Cth), all goods imported to Australia are intended to fall within a given item in Schedule 3 of the Act, with the applicable duty if any determined by which heading or sub-heading of Schedule 3 the goods are classified to.[3]

    [3]     Controller General of Customs v Pharm-A-Care Laboratories Pty Ltd (2020) 270 CLR 494.

34. The intention that all goods be covered and that in particular, Chapter 24 Schedule 3 intends to cover all forms of tobacco is supported by the general rules for interpretation of Schedule 3 contained in Schedule 2 of the Customs Tariff Act 1995 (Cth).

35. Those rules include that any reference in a heading to an article will include a reference to that article incomplete or unfinished, will include mixtures or combinations of that material or substance with other materials or substances, and the rules even provide that ‘goods which cannot be classified in accordance with the above rules shall be classified under the heading appropriate to the goods to which they are most akin’. An intention to universally apply the Act to all goods importable into Australia could not be more clear.

36. Whilst the above is so clear that it is entirely sufficient to dispose of the application, in deference to defence counsel’s comprehensive arguments, it is necessary to deal with several matters. 

37. The applicant puts that because one of the regulations pursuant to the Customs (Prohibited Imports) Regulations 1956 (Cth), regulation 4DA, prohibits the importation of certain chewing tobacco and snuffs intended for oral use without permission of the Minister, and that regulation 4U provides that the importation into Australia of a number of goods mentioned in Schedule 12 of the Customs (Prohibited Imports) Regulations 1956 (Cth) including ‘chewing tobacco’ are prohibited unless the Minister has given written permission and such permission is produced to a collector, it is clear that chewing tobacco weighing more than 1.5 kilograms ‘is banned’.

38. The applicant puts that as ‘chewing tobacco’ is banned, it cannot lawfully be imported and accordingly cannot attract duty, and for that reason someone intentionally importing chewing tobacco cannot have an intention to defraud the revenue in circumstances where such importation would not attract duty, and an importation is consequently incapable of defrauding the revenue. 

39. The submission may be simply answered.  All tobacco products are prohibited from importation into Australia subject to a range of conditions, permissions and excise being levied.  Accordingly, chewing tobacco is in no different category to those substances, all of which attract excise and all of which can be imported with the intention of defrauding the revenue depending on the factual circumstances. 

40. Further, it is clear from these provisions that chewing tobacco can be lawfully imported in quantities less than 1.5 kilograms, or in any greater quantity with the permission of the Minister.  In these circumstances excise is chargeable pursuant to the prior mentioned definitions at a rate depending on which subcategory of tobacco product it may be.  Whether it is manufactured or unmanufactured,[4] it is common ground that in those circumstances excise would be chargeable and accordingly an intention to import a quantity of chewing tobacco, comprising as it does ‘tobacco product’ as set out in the legislation, without paying the requisite monies can constitute an intention to defraud the revenue.

    [4]     Which for present purposes it is unnecessary to decide.

41. The applicant also submits that the definition sections are so complex and unclear that the legislation fails what the defence categorise as the ‘test of certainty’ that requires legislation prescribing criminal liability to be clear and unequivocal.  That principle is so fundamental that I need cite no authority for it. However as earlier discussed, in my view the legislation is clear and unequivocal that chewing tobacco is a tobacco product and covered by the legislation.

42. The court has carefully considered the remaining arguments very comprehensively set out by the applicant in oral and written submissions. They do not alter the court’s view. The seized material is plainly a ‘tobacco product’ within the meaning of the statutory definition.

    Conclusion

43. For the above reasons the court concludes that the ‘chewing tobacco’ imported by the applicant was a ‘tobacco product’ as defined by the Customs Act 1901 (Cth), importation of which with the intention of defrauding the revenue constitutes an offence against s 233BABAD(1) of the Customs Act 1901 (Cth), as charged.

44. The applicant accepts that if chewing tobacco does come within the relevant definition, the goods imported do attract duty and there can be an intention to defraud the revenue despite no duty having been paid.  In those circumstances the applicant accepts that there would be no miscarriage of justice to permit the plea to stand, the application could be dismissed, and sentencing proceedings can be continued.

45. There being no other basis upon which the plea should be set aside, the application to withdraw the plea is refused.