Toyota Tsusho Australia Pty Ltd v Collector of Customs

[1992] FCA 282

Re: TOYOTA TSUSHO AUSTRALIA PTY. LTD. and NIPPONDENSO AUSTRALIA PTY. LTD.
And: COLLECTOR OF CUSTOMS
No. V G113 of 1991
FED No. 282

COURT

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
Black C.J.(1), Gray(2) and Heerey(1) JJ.

CATCHWORDS

Customs - Customs Tariff - Classification of Goods - Condenser unit and evaporator cooling units - whether classified as "parts" of air conditioning machine or as heat exchange units - "machinery" - "machine" - use of extrinsic materials as an aid to interpretation - use of Explanatory Notes prepared under the Brussels Convention on Nomenclature for the Classification of Goods.

Acts Interpretation Act 1901 s.15AB(1)

Customs Tariff Act 1987

Schedule 3, ch.84, items 8415.90.00, 8418, 8419, 8419.50.

Schedule 3, s.XVI, note 2.

Customs Act 1901 s.273GA(2)

Barry R. Liggins Pty. Limited v Comptroller-General of Customs and Ors. (1991) 103 ALR 565. applied.

Gardner-Smith Pty. Limited v Collector of Customs, Victoria (1986) 66 ALR 377. applied.

HEARING

MELBOURNE

#DATE 14:5:1992

Counsel for the appellants: Mr N.J. Young QC with

Mr Reicher

Solicitors for the appellants: Louis Gross and Associates

Counsel for the respondent: Mr T. Ginnane

Solicitor for the respondent: Australian Government

Solicitor

ORDER

The Court orders that:

1. The appeal be allowed.

2. The order made by Olney J. on 1 May 1991 be set aside and that the decision of the Administrative Appeals Tribunal made on 1 August 1989 also be set aside; and in lieu thereof -

3. It be declared that the condenser units and evaporator cooling units, the subject of the application to the Administrative Appeals Tribunal, are to be classified under Item 8419.50 of the Third Schedule of the Customs Tariff Act 1987.

4. The respondent classify the said condenser and evaporator cooling units under Item 8419.50 of the Third Schedule of the Customs Tariff Act 1987.

5. The respondent pay the appellants' costs, including the costs of the appeal from the Administrative Appeals Tribunal.

JUDGE1

This is an appeal from an order made by a judge of this court dismissing the appellants' appeal against a decision of the Administrative Appeals Tribunal in which the Tribunal held that condenser and evaporator units imported by the appellants for incorporation into automotive air-conditioning systems were properly classifiable under sub-heading 8415.90.00 of Schedule 3 of the Customs Tariff Act 1987 ("the Act").

1. The question in this appeal is a narrow one, involving the interpretation of heading 8419 in Chapter 84 of Schedule 3 of the Act. It is common ground that if the goods are not to be classified under heading 8419 they are to be classified, as the Tribunal found, under sub-heading 8415.90.00.

2. Heading 8415 relates to air-conditioning machines. It is in the following terms:
   

"AIR CONDITIONING MACHINES, COMPRISING A MOTOR-DRIVEN FAN AND ELEMENTS FOR CHANGING THE TEMPERATURE AND HUMIDITY, INCLUDING THOSE MACHINES IN WHICH THE HUMIDITY CANNOT BE SEPARATELY REGULATED:"

1. Sub-heading 8415.90.00 is "-Parts".

2. Heading 8419 and its sub-headings are as follows:
   

"8419 MACHINERY, PLANT OR LABORATORY EQUIPMENT, WHETHER OR NOT ELECTRICALLY HEATED, FOR THE TREATMENT OF MATERIALS BY A PROCESS INVOLVING A CHANGE OF TEMPERATURE SUCH AS HEATING, COOKING, ROASTING, DISTILLING, RECTIFYING, STERILISING, PASTEURISING, STEAMING, DRYING, EVAPORATING, VAPORISING, CONDENSING OR COOLING, OTHER THAN MACHINERY OR PLANT OF A KIND USED FOR DOMESTIC PURPOSES; INSTANTANEOUS OR STORAGE WATER HEATERS, NON-ELECTRIC: 8419.1 -Instantaneous or storage water heaters, non-electric:

8419.11.00 -Instantaneous gas water heaters 8419.19.00 -Other

8419.20.00 -Medical, surgical or laboratory sterilisers 8419.3 -Dryers:

8419.31.00 -For agricultural products 8419.32.00 -For wood, paper pulp, paper or paperboard

8419.39.00 -Other

8419.40.00 -Distilling or rectifying plant 8419.50.00 -Heat exchange units 8419.60.00 -Machinery for liquefying air or gas 8419.8 -Other machinery, plant and equipment: 8419.81 -For making hot drinks or for cooking or heating food: 8419.81.10 -Hot drink dispensing machines 8419.81.90 -Other

8419.89.00 -Other

8419.90.00 -Parts".

1. The facts as found by the Tribunal and as a summarised by the learned primary judge are as follows. In 1989 Toyota Tsusho Australia Pty. Ltd. ("Toyota") imported into Australia two kinds of goods, described respectively as condenser units and evaporator cooling units. The goods were entered for home consumption classified under sub-heading 8419.50.00 of Schedule 3, that is, as heat exchange units. The Respondent rejected that classification and instead classified the goods under sub-heading 8418.99.00 as "Parts -Other" of the goods described under heading 8418 and demanded duty accordingly. The duty was paid under protest. Toyota then applied to the Tribunal under S.273GA(2) of the Customs Act 1901 for a review of the decision to demand duty on the basis of that classification. The second appellant, Nippondenso Australia Pty. Ltd., was joined as a party to the proceedings by consent of the other parties.

2. It has not been in dispute that the goods are components for use in automotive air-conditioning systems, and the Tribunal found that they are unsuitable for any other use. The essential components of an automotive air-conditioning system are a condenser, an evaporator, a compressor, and a thermal expansion valve. Some of the goods are condensers, the others are evaporators. Obviously, the components of the air-conditioning system must be linked by pipes and refrigerant put into the system.

3. The refrigerant is in a liquid state when cold and in a gaseous state when hot. The compressor compresses vapour which then flows under high pressure to the condenser where it condenses into liquid. It moves to the evaporator in a liquid state. Within the evaporator it is heated so that it leaves the evaporator in a gaseous state. In its gaseous state, now under low pressure, it moves to the compressor. The cycle is continuous. Both the condenser and the evaporator are heat exchangers.

4. The cooling medium of the condenser is air from the atmosphere which passes over the fins of the condenser as a result of the movement of the motor vehicle, the movement of the air possibly being supplemented by a fan. The heating medium for the evaporator is heat from the vehicle's engine. So that it may fulfil its function, the condenser has to be contained in a rigid metal frame with brackets on it to enable it to be bolted to the vehicle in front of the radiator. The condensers include a metal frame and brackets and also inlet and outlet pipes for the valves that maintain the pressure of the refrigerant within the condenser. The evaporator has to be contained in an appropriate housing so that the heat can be directed to and through it. The evaporators are complete with the housing, which is made of plastic. Like the condensers, the evaporators have inlet and outlet valves. Each also has fitted to it a thermal expansion valve which acts as a thermostat, controlling the extent of the heat exchange effected by the evaporator. The air that has been cooled as a result of the heat exchange from the evaporator is blown into the cabin of the motor vehicle.

5. The Tribunal found that the goods did not fall under heading 8418 and that they had therefore been inappropriately classified by the Respondent. This was essentially because the degree of cooling brought about by the system of which the goods were parts was not such as to bring them within the heading of refrigerators, freezers and other refrigerating or freezing equipment. That finding was not challenged before the judge and it has not been challenged on appeal.

6. The essential question before the judge and before the Court on appeal arises out of the application of the rules for the classification of parts of machines contained in Note 2 to S.XVI of Schedule 3. Note 2 is in the following terms.
   

"2.- Subject to Note 1 to this Section, Note 1 to Chapter 84 and to Note 1 to Chapter 85, parts of machines (not being parts of the articles of 8484, 8544, 8545, 8546 or 8547) are to be classified according to the following rules:

(a) Parts which are goods included in any of the headings of Chapters 84 or 85 (other than 8485 and 8548.00.00) are in all cases to be classified in their respective headings;

(b) Other parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading (including a machine of 8479 or 8543) are to be classified with the machines of that kind. However, parts which are equally suitable for use principally with the goods of 8517 and 8525 to 8528 are to be classified in 8517;

(c) All other parts are to be classified in 8485 or 8548.00.00."

1. The effect of Note 2(a) is, broadly, that if parts such as the subject goods (assuming for the moment that they are machinery) constitute an article covered by one of the headings of Chapters 84 or 85 (other than those excluded) then they are to be classified under that heading and not under the heading appropriate to the machine for which they were suitable. Thus, in the present case, the subject goods of both types are parts of air-conditioning machines which, if complete, would be classified under heading 8415. The appropriate sub-heading for such parts is 8415.90.00: "-Parts". If, however, the parts are properly to be classified under another heading, such as heading 8419 (as was contended by the appellants), then that is the appropriate heading for classification of the goods.

2. Accordingly, if the goods are properly to be classified within heading 8419 to sub-heading 8419.50.00 "-Heat exchange units" that is the appropriate classification, notwithstanding that the goods could also be described as parts of air-conditioning machines within sub-heading 8415.90.00.

3. At first sight, one might hesitate before concluding that the evaporators and condensers are devices "for the treatment of materials". Their operation, however, used a process "involving a change of temperature such as ...evaporating ...(and) ...condensing or cooling ..." and, on a closer consideration of heading 8419 in its context its applicability becomes clearer, and the Tribunal held that the goods did "treat" a "material", namely the refrigerant. The Tribunal held, however, that heading 8419 was inapplicable because, in its view, the goods were not plant or laboratory equipment and they were not "machinery" because, the Tribunal considered, "machinery" implies the application of mechanical power. The function of the goods, the treatment of the refrigerant, was not a mechanical function and mechanical power was not applied.

4. The issue before the judge was whether the Tribunal erred in law in concluding that the goods, although heat exchangers, were not "machinery" within the meaning of heading 8419.

5. The judge considered dictionary definitions of "machinery", as had the Tribunal. He noted that the Tribunal was of the view that the Shorter Oxford English Dictionary meanings of "machinery" all implied the application of mechanical power and he said that it was difficult to say that this conclusion was incorrect. His Honour then said that a full consideration of the material led him to the conclusion that in the context of Schedule 3 of the Act, the ordinary meaning of machinery conveyed by the text of heading 8419 encompassed the concept of a complete unit, capable of performing the type of function identified in the heading. He distinguished a complete unit from an object, or combination of objects, which was merely a component part and which, in the absence of other components, was incapable of performing that function. He concluded that in ordinary contemporary English usage a condenser for an automotive air-conditioning unit, taken by itself, was not aptly described as "machinery", nor was an evaporator. Notwithstanding that each might properly be classified as a "heat exchanger", neither was capable of performing that function when separated from the other components of the automotive air-conditioning system of which it was intended to form a part and would therefore not be aptly described as a "heat exchange unit". Accordingly, his Honour concluded, both the components were parts for "air-conditioning machines" of the type referred to in heading 8415. The judge therefore held that the Tribunal did not err in concluding that the goods were not included in heading 8419.

6. The appellants argued that neither the language nor the context of heading 8419 justified the construction placed upon it by the judge. They drew attention to the distinction between "a machine" and "machinery" and contended that the term "machinery" encompasses both an entire machine and components whose purpose is to perform particular functions. They contended that a component part of a machine may constitute machinery notwithstanding that it is incapable of performing its function when separated from other components of the entire machine. And they suggested that the judge had erroneously equated the purposive expression "for the treatment of materials ..." with a requirement that the article must have the capacity to perform its stipulated function when separated from all other components of the system of which it was intended to perform a part.

7. What, then, is the meaning of "machinery" in the context in which the word appears in heading 8419? The machinery to which heading 8419 applies is machinery that has a purpose. It is machinery "for" the treatment of materials by a process involving a change of temperature such as (amongst other examples given in the heading) evaporating or condensing. There is no express requirement in heading 8419 that the identified purpose should be capable of fulfilment by the machinery in question standing alone and we do not consider that the use of the word "machinery", in its context, carries with it any implication of such a requirement. Machinery designed to treat materials by a process involving a change of temperature is still machinery "for" that treatment when it stands alone and is presented separately.

8. It is important to observe that, in its particular context, "machinery" is used in heading 8419 in a sense in which it would not readily be used in everyday speech. It may be accepted that an evaporator or a condenser for an automotive air-conditioning unit might not be described as machinery in everyday speech, but then neither would a medical steriliser (8419.20.00). Yet a medical steriliser is obviously encompassed by the expression unless, as would seem most unlikely, only those medical sterilisers that could be described as plant or as laboratory equipment were intended to fall within 8419.20.00. So too, it is contemplated that hot drink dispensers are machines (8419.81.10) and are within the concept of machinery unless, as again seems most unlikely, only those hot drink dispensers that could be described as plant were intended to be included within 8419.81.10. We return later to examine the breadth of the word "machinery" in its present context when we consider the conclusion of the Tribunal that the word implies the application of mechanical power.

9. The policy revealed by Note 2(a) to S.XVI of Schedule 3, to which earlier reference has been made, points away from the conclusion to which the judge came. It is common ground that the effect of Note 2(a) is that, subject to exceptions, parts of machines within Chapters 84 or 85 may properly fall to be classified under headings in Chapters 84 or 85 and that, if they do, they are to be classified under those headings and not under the heading appropriate to the machine for which they, as parts, were suitable. In these circumstances there is no reason of policy why "machinery" should be interpreted to exclude a heat exchange unit standing alone from the larger and more complicated piece of machinery of which it was to form a part. On the contrary, Note 2(a) envisages classifications that will describe goods that are suitable for use as parts of machines classified under other headings. It would therefore not be in the least surprising to find parts, appropriately classifiable under a particular heading, that would not be capable of fulfilling their function when standing alone.

10. In these circumstances, we consider that the word "machinery" in heading 8419, whilst it can encompass the concept of a complete unit, does not require that a unit be capable of performing the function identified in the heading in a stand-alone state.

11. Counsel for the appellants sought to rely upon the Explanatory Notes to the Harmonized Commodity Description and Coding System ("the Explanatory Notes") published by the Customs Co-operation Council, as an aid to the construction of Schedule 3 of the Act. Counsel for the respondents did not deny that the Explanatory Notes were capable of being used for such a purpose but contended that it was inappropriate to use them in this case because the meaning was clear and unambiguous.

12. The Customs Tariff Act 1987 was intended to give effect to the International Convention on the Harmonized Commodity Description and Coding System (Brussels, 14 June 1983) which entered into force for Australia on 1 January 1988. The Explanatory Notes are prepared as an aid to the interpretation of the Harmonized System by the Harmonized System Committee under the authority of Article 7(1)(b) of the Convention and are approved, or are deemed to be approved, by the Customs Co-Operation Council in accordance with the terms of Article 8. The Explanatory Notes are updated from time to time but the consequence of that need not be considered in this case since the notes that the appellant sought to rely upon were published prior to the enactment of the Customs Tariff Act 1987. It may be noted in passing that only limited extracts of the notes were placed before the Tribunal. Fuller reference to them was made before the judge and before the Court on this appeal.

13. It is established by decisions of Full Courts of this court that s.15AB of the Acts Interpretation Act 1901 permits, in the manner allowed by s.15AB(1), reference to be made to the Explanatory Notes to assist in the interpretation of the Customs Tariff Act: Barry R. Liggins Pty. Ltd. v Comptroller-General of Customs and Ors., (1991) 103 ALR 565. In Gardner Smith Pty. Ltd. v Collector of Customs, Victoria (1986) 66 ALR 377, the Full Court of the Federal Court approved the use of the Explanatory Notes to the Brussels nomenclature as an aid to the interpretation of Schedule 3 to the Customs Tariff Act 1982, to which the same principles apply.

14. The limitions on the use of extrinsic materials must of course be kept in mind. In Barry R. Liggins Pty. Ltd. v Comptroller-General of Customs at 573, Beaumont J., with whom Lockhart and Gummow JJ. agreed, quoted with approval a passage from E.J. Cooper, Customs and Excise Law, (Cumulative Supplement to 30 June 1985 at 9) where it is said:
    

"... (The Brussels Notes) are a secondary guide only and cannot displace the plain words of the statute ... or be used when there is no ambiguity in the legislation, eg a doubt cannot be created by the use of the explanatory notes and then have the doubt settled by reference to the same notes."

1. Beaumont J. also drew attention to the observations of Mason C.J., Wilson and Dawson JJ. in Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 517-8 about the use of extrinsic material.

2. The appellants sought to rely upon the Explanatory Notes to confirm that the meaning of the relevant provision was the ordinary meaning conveyed by the text (s.15AB(1)(a)) but they contended that if there was any ambiguity (the respondent contended that there was none) then reference might be made to the Explanatory Notes to determine the meaning of the ambiguous provision (s.15AB(1)(b)(i)).

3. In our view, the Explanatory Notes are of assistance in confirming that the meaning of heading 8419 and the relevant sub-heading is the ordinary meaning conveyed by the text of the provision taking into account its context.

4. The Explanatory Notes to S.XVI include notes to heading 8415 (certain types of air conditioning equipment). Motor vehicles are given as an example of the uses to which the air-conditioning machines are put. The Notes to heading 8415 conclude with a section on parts as follows:
   

" Parts If presented as separate elements, the components of air conditioning machines are classified in accordance with the provisions of Note (2)(a) to Section XVI (headings 84.14, 84.18, 84.19, 84.21 84.79, etc.) whether or not they are designed for building into a self-contained unit. Other parts for air conditioning machines fall to be classified in their own appropriate headings in accordance with the provisions of Note 2(b) or 2(c) to Section XVI depending on whether or not they are identifiable as suitable for use solely or principally with those machines." (Our emphasis)

1. The Notes 2(a), (b) and (c) referred to in the extract from the Explanatory Notes are in the same terms as Notes 2(a), (b) and (c) to Section XVI of Schedule 3 of the Act. It is apparent from this specific reference in the Explanatory Notes to heading 84.19 that their authors contemplated that there will be components of airconditioning machines of a type classifiable, as a whole machine, to heading 8415 which, if presented as separate elements, and notwithstanding that they are designed for building into a self-contained unit, will be classifiable under heading 8419. This is inconsistent with the meaning of "machinery" in heading 8419 being such as to exclude parts on the footing they are incapable of independent performance of the functions of which 8419 speaks. In our view the Notes confirm the conclusion that the word "machinery" does not, in its context, carry with it the limitations that the learned primary judge found and upon which he based his decision.

2. It will be recalled that the Tribunal held that "machinery" implied the application of mechanical power. Counsel for the respondent, whilst prepared to accept that this might have been too narrow a view, nevertheless contended that it is an essential attribute of machinery that it be something that is activated by power whether, as he put it, it be mechanical or electronic impulse or some other force. He relied upon this approach to support his primary argument that the separate components did not constitute machinery.

3. We do not consider that the Tribunal was correct in concluding that, in its context, the word machinery carries an implication that there is to be an application of mechanical power. We have earlier referred to the sub-headings relating to medical and surgical sterilisers (8419.20.00) and hot drink dispensing machines (8419.81.10). Reference might also be made to machinery, plant and equipment for making hot drinks or for cooking or heating food (8419.81). The reference to goods of this nature in the sub-headings suggests that mechanical power was not intended to be an essential ingredient of the term "machinery" in the context of heading 8419. Indeed, the very process upon which 8419 turns, a process involving a change in temperature such as heating, cooking etc., point strongly against any requirement of mechanical power.

4. Insofar as the current usage of the word "machine" bears upon the question it is to be noted that, in contemporary usage, devices that do not involve the application of mechanical power are now called machines. Examples in the Oxford English Dictionary, 2nd ed. (1989) include a computer: see the definition of "machine", 4(b). See also the reference to an "espresso machine" in the notes following the definition of "espresso". The definition of "machine" (1) in the Australian Concise Oxford Dictionary (1987) is another example of the word being applied to a computer.

5. The same broader usage may be found within Chapter 84 itself. Heading 8470 refers, relevantly, to calculating machines that encompass electronic calculators capable of operation without an external source of power (8470.10.00) and other electronic calculating machines (8470.2); see also 8471, automatic data processing machines.

6. Also, note 2(e) to Chapter 84 refers to certain machinery or plant "designed for mechanical operation". The absence of any such words in heading 8419 suggests that the heading is not confined to machinery or plant that requires the application of mechanical power.

7. This conclusion is confirmed by reference to the Explanatory Notes. The notes to heading 8419 state:
   

"The machinery and plant classified in this heading may or may not incorporate mechanical equipment."

1. The broader contention that a working machine must be activated by some form of energy does not, in our view, support the conclusion, contended for by the respondent, that "machinery" does not encompass stand-alone components.

2. Finally, it was argued on behalf of the respondent that even if the subject goods were items of machinery, nevertheless the Tribunal was in error because it found that what was treated was the refrigerant whereas, it was said, the material treated by the goods was air and air is not a material. This argument was apparently not advanced before the judge. Quite apart from the difficulties that lie in the way of the argument by reason of the Tribunal's findings of fact, we see no difficulty in treating air as a material that may, within the meaning of heading 8419, be heated or cooled. If confirmation be needed, it is again to be found in the Explanatory Notes which, as noted, contemplate that separate components of airconditioning machines may fall to be classified under heading 8419; that is to say, separate components of airconditioning machines may be classified as machinery or plant for the treatment of "materials".

3. It follows that on the true construction of heading 8419, and on the findings of fact made by the Tribunal, it should have been held that the goods were to be classified under heading 8419 and in particular to sub-heading 8419.50.00: heat exchange units. In our view, on the proper construction of the relevant heading and on the facts found by the Tribunal, the Tribunal was obliged to reach that conclusion.

4. We would therefore allow the appeal and set aside the order made by the learned primary Judge. Instead, we would declare that the condenser and evaporator cooling units, the subject of the application to the Administrative Appeals Tribunal, are to be classified under sub-heading 8419.50 of the Third Schedule of the Customs Tariff Act 1987 and that the respondent should classify the goods accordingly.

5. We would order that the respondent pay the appellants' costs, including the costs of the appeal from the Administrative Appeals Tribunal.

JUDGE2

The essential question of law in this appeal from a single judge of this Court is as to the proper construction of the word "machinery" in heading 8419 in chapter 84 of schedule 3 of the Customs Tariff Act 1987. The facts as originally found by the Administrative Appeals Tribunal, and the relevant parts of the legislation, are set out in the joint reasons for judgment of the Chief Justice and Heerey J., which I have been privileged to read in draft form, and it is unnecessary for me to repeat them.

1. In my view, the word "machinery" in heading no. 8419 is not intended to have any meaning other than its ordinary meaning. It was not submitted by counsel for either party that the word was used in any technical or special sense. Nor does its context disclose any intention to adopt any meaning other than the ordinary one. There is a danger in reasoning as to the meaning of "machinery" by reference to items specified in various subheadings of heading no. 8419, when those items might be intended to be either "plant" or "laboratory equipment" instead of "machinery", and when the Court does not have the necessary findings of fact to enable it to pronounce upon the nature and function of the items specified in those subheadings. Nor does reference to any other heading in schedule 3 compel the conclusion that "machinery" is used in any other than its ordinary sense; those other headings are consistent with my view of the ordinary meaning of the word.

2. It must be remembered in construing the heading that the word used is "machinery" and not "machine". A particular item might constitute machinery without itself being a machine, i.e. without it being capable of performing the whole function which a machine might perform. There is also a danger in using the phrase "a piece of machinery". An item might be a piece of machinery, without itself constituting machinery. A piece of machinery might include an individual bolt, which has the function of helping to fasten together items which make up machinery, or a piece of pipe, which has no function other than acting as a conduit within machinery.

3. The learned judge at first instance relied on dictionary definitions of the words "machinery", "machine" and "apparatus". This reliance led to his view that machinery requires the application of mechanical power. If by this his Honour meant the application of energy for some process, I have no difficulty in accepting the proposition. If on the other hand reliance on dictionary definitions compels some narrower meaning of the word machinery, then it is my view that the word has acquired an expanded meaning in recent times. There is no difficulty in referring to devices which utilise in various processes minute amounts of energy, in the form of electrical impulses, as machines or machinery. Examples are electronic calculators and micro-processors. It is even easier to characterise as machinery items such as hot drink dispensers and appliances for heating food or drinks or for cooking. In each case, energy in the form of heat is transferred to some substance which, at the outset, is of a lower temperature. The temperature of that substance is thus raised. The heat source may be an electrical element, or the combustion of some gas or solid fuel. It may even be energy derived from solar light or heat.

4. It is not essential to the description of something as machinery that it contain its own source of the production of energy used in its process. For example, a bicycle is regarded as machinery, even without its rider. The process which it carries out is to translate energy, in the form of the force applied by the rider onto pedals, into circular motion of the wheels.

5. The findings of fact made by the Administrative Appeals Tribunal reveal that the function of the condensers and evaporators the subject of this proceeding is to bring into close proximity two substances of different temperatures, namely refrigerant and air. The two substances are separated by a material which conducts heat. Energy in the form of heat passes from one substance to the other, raising the temperature of the substance which had the lower temperature at the beginning of the process, and lowering the temperature of the other substance. Thus, in each case, there is a process involving the application of energy. One of the substances, refrigerant, is brought into each of the condenser and evaporator by means of a compressor. The other substance, air, is brought in either as a result of the motion of the vehicle in which the air conditioner is mounted, or by means of a fan. These external sources of power are irrelevant to the question whether each of the condenser and evaporator is machinery, on the proper construction of that word. What is important is that there is within each of the condenser and the evaporator a process, utilising energy in the form of heat. A good analogy is a boiler, in which hot gases, heated by a furnace, are brought into close proximity to water, and energy in the form of heat is passed through a conductive material, to raise the temperature of the water and vaporise it. In ordinary usage, such a boiler would be described as machinery.

6. I am therefore of the view that the condensers and evaporators the subject of the application before the Administrative Appeals Tribunal are machinery, within the meaning of that word as used in heading no. 8419. My view as to the ordinary meaning of that word is confirmed by reference to passages from the Explanatory Notes to the Harmonised Commodity Description and Coding System, set out in the reasons for judgment of the Chief Justice and Heerey J.

7. I do not believe that this Court can go beyond deciding this question of law. In particular, I do not believe that it is possible for this Court to allocate the condensers and evaporators to any subheading within heading no. 8419. The Tribunal did not make any findings of fact which might be relevant to classification under the subheadings. Possible subheadings are no. 8419.50.00 -Heat exchange units, no. 8419.89.00 --Other, or even no. 8419.90.00 -Parts.

8. In my view, therefore, this Court should allow the appeal and remit the matter to the Administrative Appeals Tribunal for determination in accordance with these reasons for judgment. Of course, it will only be necessary for the Tribunal to make a determination as to subheadings if the parties cannot agree that a particular subheading is applicable. The respondent should pay the appellant's costs of the appeal and of the appeal to the single judge.