Simplott Australia Pty Ltd and CEO of Customs
[2008] AATA 566
•2 July 2008
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 566
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2007/3265
GENERAL ADMINISTRATIVE DIVISION ) Re SIMPLOTT AUSTRALIA PTY LTD Applicant
And
CEO of CUSTOMS
Respondent
DECISION
Tribunal Dr Gordon Hughes Date2 July 2008
PlaceMelbourne
Decision The decision under review is affirmed. .
...................[Sgd].....................
Dr Gordon Hughes
Member
Application for refund – Thai Australia Free Trade Agreement – safeguard goods – whether the Applicant entitled to refund where it failed to claim concessional rates at time of import
Customs Act 1901 sections 153ZA, 163
Customs Tariff Act 1995 section 16A
Customs Regulations 1926 126, 126B
REASONS FOR DECISION
2 July 2008 Dr Gordon Hughes, Member 1. The Applicant was seeking review of a decision by the Respondent to reject a refund of customs duty paid in respect of a shipment of canned tuna imported from Thailand in 2007.
2. In essence, the Applicant asserted that its import declaration had been incorrectly filled out and that it should have been entitled to a refund on the basis that duty had been paid through an error of fact or misconception of the law. The Respondent's contention was, in essence, that the relief sought by the Applicant was precluded by the Customs Regulations 1926.
Background
3. On 14 May 2007 the Applicant lodged import declaration number AAG7763LR. The declaration described the goods as tunas, skipjack and bonito in air-tight containers. The quantity was 13,200 kilograms. The Respondent assessed customs duty by reference to a classification determined by a table set out in section 16A of the Customs Tariff Act 1995 (the Tariff Act) - in this instance, the classification was 1604.14.00 and as a consequence attracted a general duty rate of 5% because they were goods of Thai origin. Classification 1604.14.10 determines the rate of duty applicable to certain goods, known as safeguard goods, imported into Australia during a particular calendar year in excess of a particular quantity.
4. It was not disputed that the duty had been correctly assessed on the basis of the import declaration. The Applicant's contention was that its broker had been acting under a misapprehension when completing the declaration and should have requested a preferential rate available under the Thai-Australia Free Trade Agreement.
5. A month after lodging the original import declaration and paying the assessed customs duty, the Applicant's representative lodged an amended declaration claiming the goods were eligible for the preferential rate of duty; and on this basis sought a refund under regulation 126(1)(e) which applies in circumstances where duty has been paid through manifest error of fact or patent misconception of the law.
6. The Applicant's representative was advised by the Respondent, however, that the amended import declaration had to be submitted pursuant to regulation 126B and the declaration was accordingly further amended by the Applicant. Regulation 126B entitles an importer to a refund of duty in certain circumstances – relevantly, circumstances in which duty has been paid on Thai originating goods other than safeguard goods.
7. The Respondent subsequently rejected the Applicant's application under regulation 126B for a refund on the grounds that the goods were safeguard goods.
8. There was no dispute that the goods were Thai originating goods. The Applicant raised a query as to whether the goods were safeguard goods, although it did not pursue this argument vigorously at the hearing before the Tribunal. Principally, the Applicant's concern was that it should have been entitled to pursue a refund pursuant to regulation 126(1)(e).
Relevant legislation
9. Section 16A of the Tariff Act prescribes special safeguards for Thai originating goods.
10. It was not disputed that the goods were Thai originating goods as defined in Section 153ZA(1) of the Customs Act 1901 (the Customs Act).
11. Section 16A(7) of the Tariff Act defines safeguard goods as meaning Thai originating goods that:
(a) are classified to a sub heading in Schedule 3 that is specified in column 2 of item 1 or 3 of the table in this section…
12. The table referred to in the definition of safeguard goods is set out in Section 16A(2) of the Tariff Act . Relevantly, it includes the following;
Safeguard goods
Column
1
Item
Column 2
Subheading
In Schedule 3
Column 3
Quantity
1
1604.14.00
2005: 21,366,277 kilograms
2006: 22,434,591 kilograms
2007: 23,556,320 kilograms
2008: 24,734,136 kilograms
13. At the date of the entry for home consumption of the subject goods, the following headings and subheading were in operation:
1604PREPARED OR PRESERVES FISH; CAVIAR AND CAVIAR SUBSTITUTES PREPARED FROM FISH EGGS:
1604.1-- Fish, whole or in pieces, but not minced:
1604.11.00-- Salmon Free
1604.12.00-- Herrings Free
1604.13.00-- Sardines, sardinella and brisling or sprats Free
1604.14.00-- Tunas, skipjack and bonito 5%
1604.15.00-- Mackeral Free
1604.16.00-- Anchovies Free
1604.19.00-- Other Free
14. It was against the above classification that the Applicant's imports attracted a 5% duty.
15. Section 163(1)(b) of the Customs Act provides that
Refunds… of duty may be made…in such circumstances, and subject to such conditions and restrictions…as are prescribed.
16. For the purposes of Section 163(1), regulation 126 prescribes circumstances under which refunds, rebates and remissions are made. Of relevance to this application is paragraph 126(1)(e):
126(1) Each of the following circumstances is prescribed for the purposes of section 163 of the Act, namely where:
… (e) duty has been paid through manifest error of fact or patent misconception of the law.
17. The Applicant asserted that the error by its broker in inadvertently failing to claim the concessional duty for goods covered by the Thai-Australia Free Trade Agreement fell squarely within paragraph 126(1)(e).
18. Paragraph 126(1)(e) is qualified by regulation 126B(3) which, for context, must be read in conjunction with paragraphs 126B(1) and (2);
126B Other circumstances under which refund, rebates and remissions are made – Free Trade Agreements
(1) For subsection 163 (1) of the Act, the following circumstances are prescribed:
(a) duty has been paid on Thai originating goods (other than goods mentioned in subregulation (2));
(b) duty has been paid on goods (other than goods mentioned in subregulation (2));
(i) that would have been Thai originating goods if, at the time the goods were imported, the importer held a Certificate of Origin or a copy of a Certificate of Origin for the goods; and
(ii) for which the importer hold a Certificate of Origin or a copy of a Certificate of Origin at the time of making the application for the refund.
(2) Subregulation (1) does not apply to:
(a) safeguards goods; and
(b) goods that would have been safeguard goods if, at the time the goods were imported, the importer held a Certificate of Origin or a copy of a Certificate of Origin for the goods.
(3) A person may not apply for duty to be refunded under paragraph 126(1) (e) in respect of:
(a) goods mentioned in subregulation (1), to the extent that an application for a refund related to 1 or more of the factors that determine whether the goods are Thai originating goods; or
(b) goods mentioned in subregulation (2), to the extent that an application for a refund related to 1 or more of the factors that determine whether the goods are Thai originating goods.
19. The Respondent asserted that the Applicant was not entitled to a refund under regulation 126B(1) because the goods in question were safeguard goods which are specifically excluded by regulation 126B(2)(a). The Respondent further contended that the Applicant was unable to rely upon regulation 126(1)(e) because this option was expressly excluded by regulation 126B(3)(b).
Decision
20. The Applicant's principal contention was that it was entitled to a refund under regulation 126(1)(e) and that its entitlement to this refund was not precluded by regulation 126B(3). The Respondent did not contest the assertion that there had been a manifest error of fact or patent misconception of the law for the purposes of regulation 126(1)(e) but maintained that this remedy was precluded by the wording or regulation 126B(3)(b).
21. There is some superficial attraction in the Applicant's argument that regulation 126B(3)(b) is not relevant in this instance because the refund did not relate to the factors that determine whether the goods are Thai originating goods, given that there was no dispute as to whether the goods were Thai originating goods. This argument does not, however, survive close analysis. The relevant wording is in fact referring to factors which determine whether goods are eligible for a refund on the basis that they are Thai originating goods – otherwise the regulation would serve no purpose.
22. The intention of regulation 126B is to preclude a refund in respect of Thai originating goods in circumstances where, due to the volume of imports of the specified goods in questions, a preferential rate of customs duty is no longer payable at the general rate in a particular calendar year. The purpose of regulation 126B(3), as evidenced by the Explanatory Memorandum for the 2004 amendments which introduced regulation 126B, is to prevent importers relying upon the manifest error exception in regulation 126(1)(e) as a means of artificially circumventing the imposition of duty on safeguard goods – this could be achieved by delaying refund claims until the subsequent calendar year and thereby preventing potentially significant volumes of imports from counting towards the special safeguards volume triggers. Whilst there is no suggestion that the Applicant had any ulterior motive, the regulation is framed in its current form in order to address this precise scenario.
23. For the above reasons, I find in favour of the Respondent. A claim for a refund pursuant to regulation 126(1)(e) is not available to the Applicant as it is excluded by regulation 126B(3). A refund under regulation 126B(1) is not available because the goods are safeguard goods and a refund is expressly excluded by regulation 126B(2).
I certify that the 23 preceding paragraphs are a true copy of the reasons for the decision herein of Dr Gordon Hughes, Member.
Signed: ...............[Sanjiv Shah]...................
AssociateDate of Hearing 1 April 2008
Date of Decision 2 July 2008Representative for the Applicant Shame Miller
Solicitor for the Respondent Roger Northcote
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