Sheldon & Hammond Pty Ltd and Chief Executive of Customs

[2007] AATA 1929

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 1929

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2007/0499

GENERAL ADMINISTRATIVE DIVISION		)
Re		SHELDON & HAMMOND PTY LTD

Applicant

And CHIEF EXECUTIVE OF CUSTOMS

Respondent

DECISION

Tribunal Senior Member M D Allen

Date6 November 2007

PlaceSydney

Decision The decision under review is affirmed.

...................[sgd]........................

M D Allen
  Senior Member

CATCHWORDS

CUSTOMS – correct interpretation of tariff concession order – identification of subject goods – whether subject goods come within terms of tariff concession order – principles applied in framing commercial tariff concession orders are not the same as for tariff concession orders – principles of interpretation for interpretation of commercial tariff concession orders apply equally to tariff concession orders – practical wharfside test – decision under review affirmed.

LEGISLATION

Customs Act 1901 section 269P

Customs Legislation (Tariff Concessions and Anti-dumping) Amendment Act 1992

Industry Commission. Commercial Tariff Concession and By-Law Systems, Report No 9, 8 March 1991

Customs Tariff Act 1995 Schedule 1, 2 and 3

CASE LAW

Collector of Customs v Agfa-Gevaert Limited (1995-6) 186 CLR 389

Voxson Sales Pty Ltd v Collector of Customs (1993) 19 AAR 129

Chinese Food & Wine Supplies Pty Ltd v Collector of Customs (Vic) (1987) 72 ALR 591

Chief Executive Officer of Customs v ICB Medical Distributors Pty Ltd [2007] FCA 1538

REASONS FOR DECISION

6 November 2007	Senior Member M D Allen
Summary

1.      This matter raises three issues, namely:

(a)What is the correct way in which to interpret a Tariff Concession Order made pursuant to section 269P of the Customs Act 1901 (as amended);

(b)How are the subject goods to be identified; and

(c)Once identified, do the subject goods come within the terms of the TCO.

2.      The ability to and criteria for granting TCOs was inserted into the Customs Act 1901 by the Customs Legislation (Tariff Concessions and Anti-dumping) Amendment Act 1992 (Act No 89 of 1992). The system of TCOs was created following the report of the Industry Commission into the Commercial Tariff Concession and By-Law Systems, Report No 9, 8 March 1991.  As a result of that report the then existing commercial TCO system and the by-law system which allowed for the duty-free entry of imports were abolished and TCOs substituted in their stead.

3.      For this reason therefore some of the early Tribunal decisions that dealt with commercial TCOs, should be approached with care as the principles applied in framing commercial TCOs are not the same as for TCOs.

4.      Notwithstanding those reservations, the principles of interpretation laid down by the High Court and Federal Court for the interpretation of commercial TCOs apply equally to TCOs.

5.      In Collector of Customs v Agfa-Gevert Limited (1995-6) 186 CLR 389 at 398, the court pointed out that commercial TCOs were to be considered as a species of delegated legislation and the general principles relating to the interpretation of acts of parliament are equally applicable to the interpretation of delegated legislation: cf. Spender J in Voxson Sales Pty Ltd v Collector of Customs (1993) 19 AAR 129 at 137.

6. Given the principles of interpretation laid down by the High Court and the Federal Court, I reject the Applicant’s submission that resort may be had to the rules of interpretation found in Schedule 2 to the Customs Tariff Act 1995 in order to ascertain whether the subject goods can be brought within the TCO.

7.      As to the goods themselves, the “practical wharfside test” applies and one must look at the goods themselves and the condition in which they are imported (see Chinese Food and Wine Supplies Pty Ltd v Collector of Customs (Vic) (1987) 72 ALR 591). In characterising goods I am entitled to have recourse to commonsense (see Chief Executive Officer of Customs v ICB Medical Distributors Pty Ltd [2007] FCA 1538 at para 39).

8.      Exhibit A2 in these proceedings is a sample of the subject goods.  Other examples were also shown to me.  The goods may be described as glass jars which are held in a frame constructed of stainless steel or either wood or wood and metal (the items produced were all held by a stainless steel frame).  For Exhibit A2 the wording on the container in which the subject goods were contained referred to a “spice rack” and to my mind that term accurately describes the subject goods.  As I said in the course of argument, if I had walked into a kitchen supplies shop I would immediately have referred to the subject goods as “spice racks”.

9. There is no dispute that the goods are classified to subheading 7013.39.00 in Schedule 3 to the Customs Tariff Act 1995. The tariff item reads:

7013GLASSWARE OF A KIND USED FOR TABLE, KITCHEN, TOILET, OFFICE, INDOOR DECORATION OR SIMILAR PURPOSES (OTHER THAN OF 7010 OR 7018);

7013.3 – glassware of a type used for table (other than drinking glasses) or kitchen purposes other than of glass – ceramics;

7.13.39.00 ˉ ˉ  other

10.     The TCO that the Applicant claims to be met is TC 0103991 which reads:

GLASSWARE, being ANY of the following:

(a)jugs;

(b)dishes;

(c)bowls;

(d)ice buckets;

(e)wine coolers;

(f)trays;

(g)decanters;

(h)jars;

(i)cocktail shakers;

(j)cocktail mixers;

(k)plates;

…

11.     To my mind having regard to the plain words of the TCO it is not possible to bring the subject goods, which are spice racks, within the TCO.

12.     I do not accept the Applicant’s submission that the subject goods are simply glass jars with something else (mainly the frames) incidental to their function.  The frames are an integral part of the goods and indeed, give to the goods their character, namely that of being spice racks.

13.     Spice racks do not come within the TCO therefore the decision under review is affirmed.

I certify that the thirteen (13) preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member MD Allen

Signed:   ........[sgd]..............
               Mwela Kapapa, Associate

Date/s of Hearing:  26 October 2007
Date of Decision:  6 November 2007
Solicitor for the Applicant:                  Down Under Trade Group
Solicitor for the Respondent:             Australian Government Solicitor
Counsel for the Respondent:            Tariff Operations, Canberra