Re Gregg Prechelt - [1999] QSC 36

IN THE SUPREME COURT
OF QUEENSLAND
  OS No. 119332 of 1998
Brisbane
Before Mr Justice Muir

[Re Gregg Prechelt]

IN THE MATTER OF Order 64 of the Rules of the Supreme Court

and

IN THE MATTER OF the Customs Act 1901 and the Customs Tariff Act 1995

and

IN THE MATTER OF an application by GREGG PRECHELT in relation to certain goods imported from Norfolk Island the subject of Master Air Waybill 777-19706735 and House Air Waybill 334

REASONS FOR JUDGMENT - MUIR J
Judgment delivered 3 March 1999

CATCHWORDS: Customs Act 1901, Customs Tariff 1995 - relationship between s. 132 of the Customs Act and ss. 15 and 16 of the Customs Tariff Act 1995 - whether customs duty payable on goods not liable for entry for home consumption - statutory construction.

Counsel:J.A. Logan for the applicant
F.W. Redmond for the respondent

Solicitors:Shand Taylor Lawyers for the applicant
Australian Government Solicitor for the respondent

Hearing Date:              15 January 1999
IN THE SUPREME COURT
OF QUEENSLAND
  OS No. 119332 of 1998
Brisbane
Before Mr Justice Muir

[Re Greg Prechelt]

IN THE MATTER OF Order 64 of the Rules of the Supreme Court

and

IN THE MATTER OF the Customs Act 1901 and the Customs Tariff Act 1995

and

IN THE MATTER OF an application by GREGG PRECHELT in relation to certain goods imported from Norfolk Island the subject of Master Air Waybill 777-19706735 and House Air Waybill 334

REASONS FOR JUDGMENT - MUIR J
Judgment delivered 3 March 1999

The issue for determination on this application is whether customs duty is payable on a consignment of 25 cartons of cigarettes imported into Australia by the applicant from Norfolk Island on 13 December 1998. It is common ground that these goods fall within s.68(1)(f) of the Customs Act 1901 (“the Customs Act”).
The release of the goods by the Australian Customs Services (“Customs”) was declined and the applicant was informed of the determination of the Customs in a letter from Customs of 18 December 1998 stating that -
(a)the goods would not be authorised for delivery into home consumption until the duties imposed by section 15 of the Customs Tariff Act 1995 (“the Tariff Act”) had been paid;
(b)section 68(1)(f) of the Customs Act was applicable to the goods and no formal customs entry for home consumption was required before Customs would be able to authorise delivery of the goods;
(c)upon provision of the information required by s.71(1) of the Customs Act in relation to the goods, duties imposed by s.15 of the Tariff Act could be paid by the applicant; and
(d)the applicant was required to supply sufficient information to allow a customs officer to determine the value of the goods in accordance with s.68(5) of the Customs Act.
Mr Logan, who appears for the applicant, submits that since the coming into force of the Customs and Excise Legislation Amendment Act 1992 (Act No. 34 of 1992) (“the 1992 Amendment Act”) there has been no provision in the Customs Act or the Tariff Act which imposes customs duty on such goods.
Relevant statutory provisions - Customs Act
“68 Entry of imported goods
(1)This section applies to:
(a)goods that are imported into Australia; and
(b)goods that are intended to be imported into Australia and that are on board a ship or aircraft that has commenced its journey to Australia;
(c)a ship or aircraft that is intended to be imported into Australia and that has commenced its journey to Australia;
but does not apply to:
(d)goods that are accompanied or unaccompanied personal or household effects of a passenger, or a member of a crew, or a ship or aircraft; and
(e)goods, other than prescribed goods:
(i)that are included in a consignment consigned through the Post office by one person to another; and
(ii)that have a value not exceeding $250 or such other amount as is prescribed; and
....
(5)For the purposes of paragraphs (1)(e) or (f), the value of goods must be ascertained or determined under Division 2 of Part VIII.”
Division 2 contains elaborate provisions for the valuation of imported goods.
71. Information in relation to goods not requiring import entry
“(1)The owner of the goods of a kind referred to in paragraphs 68(1)(d), (e), (f) or (i) must, in any circumstances specified in regulations, provides such information:
(a)   at such time; and
(b)   in such manner and form;
as the regulations specify.”
(2)Subject to subsection (3), if goods of a kind referred to in subsection (1) are imported into Australia, Customs must, having regard to any information given to Customs in accordance with the regulations and any further information supplied under section 196C, by notice in writing:
(a)   authorise the delivery of those goods into home consumption; or
(b)   refuse to authorise the delivery of those goods into home consumption and give reasons for its refusal.
(3)Customs must not authorise the delivery of goods of a kind referred to in paragraph 68(1)(f) into home consumption unless:
(a)   the person liable to pay screening charge in respect of those goods pays that charge; or
(b)   the person liable to pay that charge is entitled to pay that charge in accordance with subsection 64ABD(2); or
(c)   the person liable to pay that charge is entitled to pay that charge in accordance with an arrangement in force under subsection 64ABD(1) or (3).”
“132 Rate of import duty
(1)Subject to this section and to section 132B, the rate of any import duty payable on goods is the rate of the duty in force when the goods are entered for home consumption.
(2)Where goods are entered for home consumption more than once before import duty is paid on them, the rate at which the import duty is payable is the rate of the duty in force when the goods were first entered for home consumption.
(3)For the purposes of this section, if an entry for home consumption in respect of goods is withdrawn under section 71F and the goods are subsequently entered for warehousing, the entry for home consumption is to be disregarded.”
Section 64ABC explains the meaning of the term “screening charge”. It provides -
Liability for screening charge
“(1)a person who communicates to Customs a report (whether documentary or electronic):
(a)that is, or is part of, a cargo report of goods that are intended to be, or have been, and shipped from an aircraft at a particular airport; and
(b)that relates, in whole or in part, to a consignment of goods that do not require entry; and
(c)that provides particulars of a consignment; and
(d)that identifies a person who has a beneficial interest in the goods in that consignment;
is liable to pay screening charge, additional to any cargo report processing charge that may be payable under section 64ABB, in respect of the documentary or electronic report.
(2)In this section: goods that do not require entry means goods that, because they are included in paragraph 68(1)(f), are not goods to which section 68 applies.”
Regulation 41 provides -
“Information in relation to goods not requiring import entry
If a Collector requires an owner of goods to provide information under section 71 of the Act:
(a)the owner must provide the information in an approved form or an approved statement; and
(b)the owner must provide the information required by that form or statement; and
(c)the form or statement must be signed in the manner required by that form or statement; and
(d)the completed approved form or approved statement must be given to a Collector.”
A form, described as an “Informal Clearance Document”, has been approved pursuant to Regulation 41.
Relevant statutory provisions - Tariff Act
“Imposition of duties
15. Duties of Customs are imposed by this Act on:
(a)goods imported into Australia on or after 1 July 1996; and
(b)goods:
(i)imported into Australia before 1 July 1996; and
(ii)entered, or again entered, for home consumption on or after that day.”
“Calculation of Duty
16. Subject to sections 17, 18, 20 and 22, the duty in respect of goods must be worked out as follows:
(a)if the goods are not the produce or manufacture of a Preference Country - by reference to the general rate set out in the third column of the tariff classification under which the goods are classified;
(b)if the goods are the produce or manufacture of New Zealand:
(i)if a rate of duty that applies in relation to New Zealand is set out in the third column of the tariff classification under which the goods are classified - by reference to that rate of duty; or
(ii)otherwise - Free; ...”
Transitional
22. Despite section 15, if:
(a)goods were imported into Australia, and first entered for home consumption, before 1 July 1996; and
(b)the goods are again entered for home consumption on or after that day so that duties of Customs are imposed on the goods under section 15; and
(c)because of section 132 of the Customs Act 1901, the rate of duty in respect of the goods is the rate in force when the goods were first entered for home consumption;
the duty in respect of the goods is the duty that would have been payable in respect of the goods if this Act had not been enacted.”
The applicant’s submissions
The applicant contends that, although s.15 of the Tariff Act imposes customs duties and s.16 of that Act prescribes the way in which the rate of duty is to be calculated, s.132 of the Customs Act fixes a rate of duty for all goods by reference to a date on which such goods are “entered for home consumption”. Unless goods are “entered for home consumption”, it is submitted, no rate of customs duty is set in respect of those goods and no duty is payable. In support of the applicant’s contentions, Mr Logan points to the fact that prior to the 1992 amending Act, s.71A of the Customs Act, coupled with Regulation 42 of the Customs Regulations, had the effect that goods falling within s.68(1)(f) were “deemed to be entered for home consumption on the day the approval of the Collector was granted in relation to the goods”. Section 132 was thus capable of application in respect of such goods. The deeming provisions were not continued in the legislative amendments made by the 1992 Amendment Act.
Although the wording of s.132 of the Customs Act has varied from time to time, it has always provided, in substance, that duties are to be paid at the rate of duty applicable when goods are entered for home consumption. In Customs Law of Australia by Wallaston 1904, the learned author observed of s.132 in its original form-
“This section disposes for many purposes of the question so often raised under other Acts, as to what constitutes the exact date of importation. Seeing that duties are leviable under the tariff on importation and become a debt due to the Crown immediately on importation, a change in the tariff after importation, but before payment of duty, frequently raised the question under the State laws, as to what duties were payable.
The above settles the point as regards the rate of duty. Liability to or freedom from duty is determined by the law in force at the date of entry for home-consumption, not the date of importation.”
The concept of “entry for home consumption” plays a central role in the operation of the legislation. For example, s.167 of the Customs Act contains the mechanism by which determinations of the collector of customs concerning customs duty may be challenged. The section is based on the premise that goods have been or will be entered for home consumption (if not being entered for warehousing or transshipment). It assumes that either a “documentary import entry” or a “computer import entry” will have been made. Section 4 defines “import entry” as “... a computer import entry or a documentary import entry within the meaning of section 71A”. Section 71A describes “an import entry” as a communication to the customs of information concerning goods to which s.68 applies that are intended to be entered for home consumption, warehousing or transshipment and also “warehoused goods that are intended to be entered for home consumption”.
Section 22 of the Tariff Act assumes that duty is imposed by reference to the entering of goods for home consumption.
The respondent’s submissions
Mr Redmond, who appears for the respondent, submits that -
“a.Section 132 of the Customs Act does not impose customs duties, that is the function of section 15 of the Customs Tariff Act;
b.the obligation to pay duty on imported goods arises at the time of importation;
c.the subject goods are not exempt from duty under Schedule 3 to the Tariff Act;
d.section 132 only applies to goods which are in fact entered for home consumption;
e.section 71 provides a code for dealing with goods to which section 68(1)(f) applies;
(f)Customs by notice in writing dated 18 December 1998 refused to authorise delivery of the goods into home consumption and gave reasons for the refusal.”
The Legislative framework
Customs duties are imposed by ss.15 and 16 of the Tariff Act. Cadbury Fry-Pascall Pty Ltd v F. C. of T (1944) 70 CLR 362 and Minister for Industry and Commerce v Tooheys Ltd (1982) 60 FLR 325. Section 16 prescribes the manner in which customs duties are to be calculated by reference to the rates of duty set out in “the third column of the tariff classification under which (the) goods are classified”. Schedule 3 of the Tariff Act contains a classification of the goods the subject of the Act and specifies the duties, if any, applicable to such goods. Section 19 of the Tariff Act provides for the rate of duty in respect of certain specified items of excise to be increased in accordance with increases in duty on excise items on like goods by operation of s.6A of the Excise Tariff Act 1921. The goods under consideration fall within one such specified item.
As a general proposition, the owner of goods imported into Australia who wishes those goods to be discharged for use or deployment within Australia must enter the goods for home consumption. (Customs Act s.68(2)). Section 71A makes provision for the owner of goods to make a “documentary import entry” or for a person on behalf of the owner to make a “computer import entry” in respect of the goods. Such entries communicate prescribed information to Customs in respect of the goods. Section 71B makes provision for the release into home consumption of goods which have been the subject of an import entry advice by means of a documentary import entry or a computer import entry upon payment of the prescribed duties.
Section 72 provides, in respect of goods required to be entered and not entered within the prescribed period, that they may be sold or disposed of by Customs.
The general regime imposed by ss. 71A, 71B and 72 in respect goods not expressed to be exempt from the general operation of s.68 has no application to the subject goods. Section 71 makes express provision for “goods of a kind referred to in paras. 68(1)(d), (e), (f) [and] (i)” in the circumstances specified in that section. But it does not contemplate that such goods be entered for home consumption. The obligation imposed on Customs by s.71(2) where it is unable to refuse to authorise delivery of the goods into home consumption is to “authorise the delivery of those goods into home consumption”. In my view, it is significant that the entry for home consumption regime has no application to the goods coming within s.68(1)(f). That regime is established with a view to ensuring that assessable duties are paid on dutiable goods. An example of this is provided by s.72 which entitles Customs, where goods are required to be entered but not entered, to remove such goods to a warehouse and sell them in the event that duty has not been paid. That provision does not apply to s.68(1)(f) goods.
Where information referred to in sub-section (1) of section 71 is required to be provided by regulation, Customs is required to have regard to the information so provided by such owner (and to any other information which may be obtained pursuant to s.196C) and either -
(a)authorise the delivery of the goods into home consumption; or
(b)refuse to so authorise and give reasons for the refusal.
By virtue of sub-section (3), Customs may not authorise the delivery of para.68(1)(f) goods into home consumption unless -
(a)any person liable to pay a screening charge in respect of the goods has paid it; or
(b)the person liable to pay such screening charge is entitled to pay it in accordance with subsection 64ABD(ii); or
(c)the person liable to pay such charge is entitled to pay it in accordance with an arrangement in force under subsection 64ABD(i) or (iii).
It is not contended that that Regulation is invalid or that a request to provide information was not duly made under s. 71.
Section 132A, which deals with prepayment of duty, operates on the assumption that suitable goods will be entered for home consumption as do other sections of the Act. Mr Logan points, in particular, to s.22 of the Tariff Act and s. 167 of the Customs Act. Section 22 certainly assumes that the imposition of duty on imported goods occurs at the time of entry for home consumption. It provides, inter alia -
“(b) ... if the goods are again entered for home consumption on or after that day so that duties of customs are imposed on the goods under section 15.” (emphasis added)
It is implicit in s.167 that, in respect of goods the subject of a dispute about customs duty, there will have been a “documentary import entry” or “a computer import entry”. It will be recalled that “import entry” is required for goods “intended to be entered for home consumption, for warehousing, or for transhipment” but not for s.68(1)(f) goods.
Conclusion
The strength of the respondent’s case lies in the plain words of sections 15 and 16 of the Tariff Act. They impose Customs duties and the authorities state that fact. But, in my view, the Customs Act and the Tariff Act should be construed as together setting up an overall scheme for the collection of customs duties on imported goods.
Although customs duties are imposed on imported goods by ss. 15 and 16 of the Tariff Act, those provisions operate in conjunction with other provisions of the Customs Act and Tariff Act. For example, rates of duty specified in the third column of Schedule 3 to the Tariff Act fluctuate with amendments to that Schedule and, in certain cases, by indexation effected by s.19 of the Tariff Act. It is apparent that it is inappropriate to look only at sections 15 and 16 of the Tariff Act, as Customs seeks to do, in order to establish liability to duty. Although there is nothing in either Act which expressly provides that it is to be read together with and in the light of the other, it is plain, in my view, that the two Acts comprise an overall legislative scheme and should be construed accordingly. c.f. Sweeney v Fitzhardinge (1906) 4 CLR 716 at 726 and Commissioner of Stamp Duties v Permanent Trustee Co. Ltd. (1987) 9 NSWLR 719 at 723-4. Section 132 of the Customs Act performs the function of stipulating the rate of duty applicable to imported goods. It fixes the rate by reference to the date of entry for home consumption. The submission that s. 132 applies only in respect of goods entered for home consumption is accurate in a sense, but only because the underlying assumption of the section and others, which I have earlier identified, is that duty is payable only in respect of goods entered for home consumption. Section 132(1) makes that relatively plain by providing-
“... the rate of any import duty payable on goods is the rate of the duty in force when the goods are entered for home consumption.”
Section 132 performs the critical function of identifying the amount of tax to be calculated and assessed. Absent such a provision, there is no mechanism by which tax imposed in a general way by ss. 15 and 16 can attach to particular goods.

The fact that the scheme of the legislation, since its inception shortly after Federation, has been to fix the rate of duty by reference to the date of entry for home consumption (so as to avoid the difficulties mentioned in Customs Law of Australia (supra) also suggests that the applicant’s submissions are correct. For all of these reasons I conclude that the subject goods are not dutiable.
I was invited by Mr Redmond, in the event that I identified what he described as a “gap” in the legislation, to fill it by reference to principles of construction discussed in the judgment of Mason and Wilson JJ in Cooper Brookes (Wollongong) Pty Ltd v the Federal Commission of Taxation (1980-1981) 147 CLR 298. But I see nothing “capricious or irrational” or “inconvenient or unjust” in the conclusion which I have reached. To arrive at a contrary conclusion would be to effect a judicial re-amendment of the legislation by reinstating the deeming provisions in relation to s.68(1)(f) which existed prior to the 1992 amending Act. Without such drastic surgery, the result of concluding that s.68(1)(f) goods were liable to duty would be to subject the importers of such goods to duty without access to the provisions of the Act enabling Customs decisions to be challenged.
I will hear submissions on the appropriate form of order and costs.