Suspa Australia P/L v Collector of Customs (NSW)
[1991] FCA 474
•15 AUGUST 1991
Re: SUSPA AUSTRALIA PTY LTD
And: COLLECTOR OF CUSTOMS (NSW)
No. G638 of 1990
FED No. 474
Customs
14 AAR 166
COURT
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Black C.J.(1), Morling(2) and Wilcox(2) JJ.
CATCHWORDS
Customs - Tariff classification - Proper classification of backseat support and seatplate - Parts designed for inclusion in adjustable seat mechanism suitable for use in chairs such as barbers' chairs and dentists' chairs in which treatment is given to occupant but also suitable for use in office chairs - Whether goods were parts of "barbers' chairs and similar chairs, having rotating as well as both reclining and elevating movements".
Customs Tariff Act 1987, Schedule 3
HEARING
SYDNEY
#DATE 15:8:1991
Counsel for the Appellant: G.K. Downes, QC and A.W. Street
Solicitors for the Appellant: Werry Altobelli
Counsel for the Respondent: R.J. Webb
Solicitors for the Respondent: Australian Government Solicitor
ORDER
The appeal be dismissed.
The appellant pay to the respondent his costs of the appeal.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
JUDGE1
The appellant, Suspa Australia Pty Ltd ("Suspa"), applied to the Administrative Appeals Tribunal for a review of a decision by the respondent classifying certain chair parts for the purposes of the Customs Tariff Act 1987. The Tribunal found that the parts were correctly classifiable to subheading 9401.90.90 of Schedule 3 of the Act and affirmed the decision under review.
Suspa appealed from the Tribunal's decision to this Court. The question of law involved was the proper construction of heading 9402 of Schedule 3. The appeal was heard by Foster J. who concluded that no error of law by the Tribunal in the interpretation of the heading had been demonstrated and dismissed the appeal. Suspa now appeals from the decision of Foster J. contending, in substance, that his Honour was in error in the construction he placed upon heading 9402.
The goods in dispute before the Tribunal were parts of chairs. They were described as "backrest support" and "seatplate" and were components of a mechanism that will allow chairs to have three movements or adjustments - swivel, height adjustment and back reclining or back angle adjustment.
The relevant parts of Schedule 3 are headings 9401 (which the respondent contended was the correct heading) and 9402 (which Suspa contended was the correct heading). At the time of the entry of the goods the headings and subheadings were, omitting the rates of duty, in the following terms:
9401 SEATS (OTHER THAN THOSE OF 9402), WHETHER OR NOT CONVERTIBLE INTO BEDS, AND PARTS THEREOF: 9401.10.00 Seats of a kind used for aircraft 9401.20.00 Seats of a kind used for motor vehicles 9401.30.00 Swivel seats with variable height adjustment 9401.40.00 Seats other than garden seats or camping equipment, convertible into beds 9401.50.00 Seats of cane, osier, bamboo or similar materials 9401.6 Other seats, with wooden frames: 9401.61.00 - Upholstered
9401.69.00 - Other
9401.7 Other seats, with metal frames: 9401.71.00 - Upholstered
9401.79.00 - Other
9401.80.00 Other seats
9401.90 Parts:
9401.90.10 - - Of seats of a kind used for aircraft 9401.90.20 - - Of seats of a kind used for motor vehicles 9401.90.90 - - Other
9402 MEDICAL, SURGICAL, DENTAL OR VETERINARY FURNITURE (FOR EXAMPLE, OPERATING TABLES, EXAMINATION TABLES, HOSPITAL BEDS WITH MECHANICAL FITTINGS, DENTISTS' CHAIRS); BARBERS' CHAIRS AND SIMILAR CHAIRS, HAVING ROTATING AS WELL AS BOTH RECLINING AND ELEVATING MOVEMENTS; PARTS OF THE FOREGOING ARTICLES: 9402.10.00 Dentists', barbers' or similar chairs and parts thereof 9402.90.00 Other
Attention must first be directed to heading 9402 because goods classified to that heading are expressly excluded from heading 9401. Suspa contends, as it did before the Tribunal and before Foster J., that the goods in question were parts of
"BARBERS' CHAIRS AND SIMILAR CHAIRS, HAVING ROTATING AS WELL AS BOTH RECLINING AND ELEVATING MOVEMENTS".
The Tribunal examined the goods and heard evidence about the use to which they could be put. It found that whilst the goods might be incorporated in barbers' chairs and similar chairs they had a very much wider use for chairs which were neither barbers' chairs nor chairs which were similar to barbers' chairs. Office chairs, for which goods of the type in issue were predominantly used in Australia, could not, in the Tribunal's view, be regarded as similar to barbers' chairs even though office chairs may possess the capability of the three movements specified in heading 9402. Suspa submitted that as a matter of construction the similarity referred to in the expression in heading 9402 "Barbers' chairs and similar chairs, having rotating as well as both reclining and elevating movements" was a similarity in the capacity to make the three specified movements, not a similarity to a person or the action of a person using the goods. It was said that similarity in the capacity to make the specified movements must have been intended because it would otherwise be difficult, if not impossible, to make the objective identification of the goods that the law requires.
There is, however, a more straightforward similarity for the purposes of classifying goods than the suggested alternative of a similarity to a person (a barber) or the action of a person using the goods. The similarity is simply a similarity to a barber's chair.
"Barber's chair" or "barbers' chairs" are expressions used in ordinary language to describe chairs of a familiar type, identifiable by their appearance and attributes. Such a chair is illustrated in one of the exhibits before the Tribunal alongside the description "Barbers Chair". The Tribunal had no apparent difficulty with the expression or in finding, as it did, that a barber's chair was not similar to an office chair. It is worth noting too that the expression used in the heading is not "hairdressers' chairs", an expression that may describe chairs with a wider variety of characteristics, but the older and more specifically descriptive expression "barbers' chairs".
In my view, there is nothing in the language of the heading that would create such difficulties in objective classification at the customs barrier as to lead to the conclusion that a classification based fundamentally upon the capacity of a chair to make the three specified movements must have been intended.
More importantly, though, if it had been intended to include under heading 9402 all chairs having the capacity to make the three specified movements, the reference to barbers' chairs would have been completely unnecessary. The relevant part of the heading would have read: "Chairs having rotating as well as reclining and elevating movements". Moreover, the words used are not "other chairs" having specified movements, but "similar chairs" having those movements.
In these circumstances, I consider that the similarity to which heading 9402 refers is a similarity to a barber's chair. That conclusion is reinforced by the terms of sub-heading 9402.10.00:
"- Dentists', barbers' or similar chairs and parts thereof".
It was accepted that the question of construction is determinative of this appeal. The learned primary judge was correct in concluding that there was no error of law by the Tribunal in the construction of heading 9402 and it was accepted that if heading 9402 is not applicable the goods fell to be classified, as the Tribunal held, under subheading 9401.90.90.
As I have noted, there was evidence about the use to which the parts would, in Australia, ordinarily be put. The use to which an article might reasonably be expected to be put may be relevant: Blackwood Hodge (Australia) Pty Ltd v Collector of Customs (NSW) (1980) 47 FLR 131 at 155; Re Gissing and Collector of Customs (1977) 1 ALD 144 at 147; Re Tridon Pty Ltd and Collector of Customs (1982) 4 ALD 615 at 621 but the particular purpose the importer or the purchaser may have had in mind for the article is not relevant: Blackwood Hodge at 155. In Times Consultants Pty Ltd v Collector of Customs (Qld) (1987) 76 ALR 313 at 327, Morling and Wilcox JJ. said of the process of classification:
"The authorities make it clear that in determining what is the essential character of goods it is the state or condition of the goods at the time of importation that is the determining factor and that it is wrong to classify goods or to determine their essential character by reference to the purpose of the importer or of the purchaser. Regard must be had to the characteristics of the goods themselves, as they would present themselves to an informed observer: see Chandler and Co v Collector of Customs (1907) 4 CLR 1719 at 1729; Whitton v Falkiner (1915) 20 CLR 118 at 131; Blackwood Hodge (Australia) Pty Ltd v Collector of Customs
(1980) 47 FLR 131 at 155."
I do not consider that the approach taken by the Tribunal or by Foster J. on appeal was in any way inconsistent with these principles.
The appeal should be dismissed with costs.
JUDGE2
This appeal concerns the proper classification, for customs tariff purposes, of two chair components. Those components were referred to by the Administrative Appeals Tribunal as a "backrest support" and a "seatplate". The Tribunal found that each of the components was suitable for inclusion in a composite chair control system known as the "Unomanic mechanism". A chair fitted with that mechanism can be adjusted by the user, without rising from the chair, so as to rotate the chair or to recline or elevate it. The evidence given to the Tribunal showed that chairs so fitted were used in a variety of situations, including in offices, naval ships and by hairdressers, dentists and opticians: in Australia the mechanism is predominantly used in office chairs.
The tribunal held that the components fell within sub-heading 9401.90.90 of Schedule 3 to the Customs Tariff Act 1987 as being "Parts: Other" of "Swivel seats with variable height adjustment". The importer, Suspa Australia Pty Ltd, appealed to this Court against that decision, contending that the components should have been classified under sub-heading 9402.10.00 as being "Dentists', barbers' or similar chairs and parts thereof". But Foster J. agreed with the Tribunal, leading Suspa further to appeal to this Court.
Although another possibility was canvassed before the Tribunal, it was common ground before Foster J. that the subject goods fell within either sub-heading 9401.90.90 or sub-heading 9402.10.00. To put the issue in context, it is desirable to set out the two relevant headings and the sub-headings which appear under each of them:
"9401 SEATS (OTHER THAN THOSE OF 9402), WHETHER OR NOT CONVERTIBLE INTO BEDS, AND PARTS THEREOF: 9401.10.00 - Seats of a kind used for aircraft 9401.20.00 - Seats of a kind used for motor vehicles 9401.30.00 - Swivel seats with variable height adjustment 9401.40.00 - Seats other than garden seats or camping equipment, convertible into beds 9401.50.00 - Seats of cane, osier, bamboo or similar materials 9401.6 - Other seats, with wooden frames: 9401.61.00 - - Upholstered 9401.69.00 - - Other 9401.7 - Other seats, with metal frames: 9401.71.00 - - Upholstered 9401.79.00 - - Other 9401.80.00 - Other seats 9401.90 - Parts: 9401.90.10 - - - of seats of a kind used for aircraft 9401.90.20 - - - of seats of a kind used for motor vehicles 9401.90.90 - - - Other 9402 MEDICAL, SURGICAL, DENTAL OR VETERINARY FURNITURE (FOR EXAMPLE, OPERATING TABLES, EXAMINATION TABLES, HOSPITAL BEDS WITH MECHANICAL FITTINGS, DENTISTS' CHAIRS); BARBERS' CHAIRS AND SIMILAR CHAIRS, HAVING ROTATING AS WELL AS BOTH RECLINING AND ELEVATING MOVEMENTS; PARTS OF THE FOREGOING ARTICLES: 9402.10.00 - Dentists', barbers' or similar chairs and parts thereof 9402.90.00 - Other"
It will be noted that heading 9401 refers to "seats (other than those of 9402) ...". Accordingly, as is common ground between the parties, it is appropriate first to consider whether the subject goods fall within heading 9402. If they do, the question whether they are appropriately described by one of the sub-headings to heading 9401 does not arise; they would already be excluded from that sub-heading by the parenthetic words in the heading. If, on the other hand, the goods are not aptly described under heading 9402, it is necessary to return to heading 9401. And, in that connection, it is common ground that the goods were aptly described as "parts" of "swivel seats with variable height adjustment" and that the seats are not of a kind used for aircraft or motor vehicles. Accordingly, in that eventuality so that sub-heading 9401.90.90 would apply.
In considering the issue of construction presented by the case, it is important to remember the manner in which the Custom tariff Schedule is to be applied. We dealt with this in Times Consultants Pty Ltd v Collector of Customs (Qld) (1987) 76 ALR 313 at p 328:
"It must always be remembered that the classification of goods for tariff purposes is a practical "wharf-side" task. Upon some occasions it will be necessary for the classifier to obtain information to enable identification of the goods but it is entirely inappropriate that he or she should enter into inquiries upon matters such as cost, commercial advantage and purchaser preference which the tribunal undertook. It ought normally be possible to classify goods merely by looking at them and by considering their nature and the function which they were designed to serve."
This approach is equally applicable to goods which are not themselves entity, but which are imported for use as components of some end-product. On some occasions it will be possible for the classifier to say without elaborate inquiry that the goods are parts of an item which is specifically mentioned in the Schedule and to classify the goods accordingly. In other cases the classifier may conclude that, whilst the goods might be used as parts for an item which is specifically mentioned, they are equally suitable for use as components of some other item. In such a case it would not be correct for the classifier to resolve the matter by inquiry as to the actual intended use. This is a long-standing principle. To quote again from Times Consultants, this time at p 327:
"The authorities make it clear that in determining what is the essential character of goods it is the state or condition of the goods at the time of importation that is the determining factor and that it is wrong to classify goods or to determine their essential character by reference to the purpose of the importer or of the purchaser. Regard must be had to the characteristics of the goods themselves, as they would present themselves to an informed observer: see Chandler and Co v Collector of Customs (1907) 4 CLR 1719 at 1729; Whitton v Falkiner (1915) 20 CLR 118 at 131; Blackwood Hodge (Australia) Pty Ltd v Collector of Customs (1980) 47 FLR 131 at 155."
In the present case, the Tribunal accepted evidence that the subject goods were suitable for use in the manufacture of hairdressers', dentists' and optical chairs. It also accepted evidence that they were also suitable for use in office chairs; and that, in fact in Australia, office chairs was the predominant use. But, as we think the Tribunal recognised, the fact that these particular components would probably be used in office chairs could not assist the Collector's case, any more than the circumstance that a particular consignment might be intended for use in hairdressers' or dentists' chairs would advance the case for the importer. The relevant question must always be the essential nature of the goods as determined by inspection at the customs barrier.
Applying these principles, can it be said that the goods were parts for "barbers' chairs and similar chairs, having rotating as well as both reclining and elevating movements"? The goods were parts of the Unomanic mechanism, a mechanism designed to permit rotation as well as both reclining and elevating movements. But could it be said, by mere inspection of the goods and without enquiry as to the actual purpose of the importer, that the chairs in which that mechanism would be installed would be "barbers' chairs and similar chairs".
The parties agree that the similarity referred to in these words pertains to the word "chairs", not to the word "barbers'". But they differ as to the nature of the relevant similarity. Counsel for the appellant contend that the relevant similarity is one of function. They say that the words "rotating ... reclining and elevating movements" describe function and that these words, in effect, provide particulars of the similarity which the legislative had in mind. On this basis, counsel say that any chair which has a rotating as well as both reclining and elevating movements is similar to a barber's chair; and so within the description used in the heading.
We are not sure that "function" is the right word to describe what counsel have in mind. But the purpose of the submission is clear. The submission has the advantage of enabling a classification to be made solely by reference to certain specified physical attributes of the chair for which the mechanism is designed. It would not be necessary to inquire about other attributes and there would be no temptation to enter into inquiries as to actual intended use. But the submission encounters the difficulty that, if this were the intention of the legislature, it would have been sufficient for it merely to refer to "chairs having rotating as well as both reclining and elevating movements".
Historical circumstances may sometimes explain the use by the legislature of apparently unnecessary verbiage. Without any knowledge of the history of the Schedule, a reader might assume the reference to "barbers' chairs" to be a relic of the fact that barbers were early and well-known users of rotating chairs which were also capable of reclining and elevating movements; so that the term "barbers' chairs" long ago crept into the Schedule as a familiar description of chairs with certain characteristics, the words "and similar chairs" being added at some stage to indicate that the class was not to be confused to chairs used by barbers themselves. But the present description was inserted in the Schedule only in 1987. The words "barbers' chairs" did not appear in previous descriptions, at least as far back as 1966. So it seems that a deliberate decision was made to insert these words, at a time when rotating, reclining and elevating chairs were used by many people other than barbers.
In this situation it seems to us that the Court should eschew a tautologous interpretation of the heading. Contrary to the submission of counsel for the appellant, it is not possible to escape tautology by treating the reference to barbers' chairs as a mere example of a wider class. In numerous headings in the Schedule, including this very heading, examples are offered. But in each case they are inserted in parenthesis and introduced by the words "for example". We see no escape from the conclusion that Parliament intended to refer to a category of chairs more limited than all chairs with rotating as well as both reclining and elevating movements.
Counsel for the respondent points out that both the word "barbers'" and the segment of the heading which precedes this reference - that is, "medical, surgical, dental or veterinary furniture" - introduce the element of occupational use. He argues that, although the requisite similarity pertains to the chairs rather than the occupation of a barber, the concept intended by the second segment is that of a chair used in the same way as a barbers' chair; that is, a chair used by a person, in the course of his or her occupation, for the purpose of carrying out some personal treatment upon a client. We accept this submission. It gives meaning to all the words in the relevant description. It appears to be compatible with the other segments in the heading and the wording of the sub-heading. And we do not think that its adoption will cause practical difficulties. Although there will be differences between themselves, in relation to chairs within this category, they are likely as a class, to be distinguishable on inspection from chairs, such as office chairs, which are adjustable but which are not used in connection with the treatment of their occupants.
Counsel for the appellant accept that, upon this interpretation of the heading, the appeal must fail. It cannot be said that these components are suitable only for the purpose of manufacturing chairs suitable for use by a person rendering treatment to an occupant, so as to fall within the specific category provided by heading 9402. They are equally suitable for use in office chairs. They fall into more general category provided by heading 9401. The appeal should be dismissed with costs.
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