EXPLANATORY STATEMENT
CUSTOMS ACT 1901
CUSTOMS REGULATIONS (AMENDMENT)
STATUTORY RULES 1990 NO. 189
ISSUED BY THE AUTHORITY OF THE MINISTER OF STATE FOR SMALL BUSINESS AND CUSTOMS
Section 270 of the Customs Act 1901 (“the Act”) provides in part that “The Governor-General may make regulations not inconsistent with this Act prescribing all matters which by this Act are required or permitted to be prescribed or as may be necessary or convenient to be prescribed for giving effect to this Act…”
Subsection 163(1) of the Act provides that refunds, rebates and remissions of duty may be made in such circumstances, and subject to such conditions and restrictions as are prescribed. The relevant prescription occurs in regulations 126-128C of the Customs Regulations.
Background
In circumstances where the Administrative Appeals Tribunal has jurisdiction to hear a dispute in relation to customs duty through the payment under protest mechanism (subsections 167(1) and 273GA(2) of the Act refer), and as a consequence of its decision the proper duty payable is less than that originally paid under protest (subsection 273GA(7)), there is currently no circumstance prescribed under which a refund of the difference may be paid.
The Statutory Rules prescribe a new refund circumstance in respect of such decisions of the Administrative Appeals Tribunal and the conditions under which such refunds may be paid.
Details of the amendments are as follows:
Regulation 1: provides that the Regulations are taken to have commenced on 1 January 1990.
• This retrospective commencement does not offend subsection 48(2) of the Acts Interpretation Act 1901 because the amendments confer a benefit (see also the commentary in relation to Regulation 6).
Regulation 2: amends regulation 126 by inserting a new paragraph (ea) in the regulation to prescribe a refund circumstance where a decision referred to in subsection 273GA(2) of the Act (ie. a decision in relation to a payment under protest pursuant to subsection 167(1)) has been reviewed by the Administrative Appeals Tribunal and the Tribunal, a court on appeal from the Tribunal, or
a Collector on remission from the Tribunal, has decided that the amount of duty payable is less than the amount demanded.
• The new refund circumstance is intended to resolve any doubt about the ability to pay refunds in respect of the duty difference resulting from decisions of the Administrative Appeals Tribunal that less duty is payable than that paid under protest, and addresses the concerns expressed by Giles J in the Supreme Court decision in Dahlia Mining Co Ltd and Another v. Collector of Customs 90 ALR 193 at 197-8 that regulation 126(e) was insufficient to ground a refund in respect of the above circumstance. In particular, the Court considered the circumstance which has historically been relied upon to pay a refund following an AAT decision supporting the applicant (ie., Regulation 126(e), which prescribes a refund circumstance where “duty has been paid through manifest error of fact or patent misconception of the law”) was inappropriate.
Regulation 3: amends regulation 127 by inserting a new subregulation (4A) which imposes conditions on the payment of a refund under the new circumstance in regulation 126(ea). The conditions impose a temporal restraint on the payment of refunds, by providing that a refund is not payable until:
i) the time within which an appeal to the Federal Court from a decision of the Administrative Appeals Tribunal may be lodged, has elapsed (new subparagraph 127(4)(a)(i)); or
ii) the time within which an application may be made to the High Court for special leave to appeal from the Federal Court has elapsed and such special leave has not been granted or been rescinded (new subparagraph 127(4A)(a)(ii))
- The above conditions are also generally qualified by any grant of an extension of time within which appeals may be lodged.
In addition to the conditions outlined above, a refund is not payable where:
iii) an appeal is pending in the Federal Court in respect of the Tribunal’s decision (new paragraph 127(4A)(b)); or
iv) an appeal is pending in the High Court in respect of any determination of the Federal Court on an appeal of a kind mentioned in paragraph (a) (new paragraph 127(4A)(c)).
Regulation 4: amends regulation 128 to make it clear that it is not necessary to apply for a refund in respect of a regulation 126(ea) circumstance, in contradistinction to other refund circumstances in regulation 126.
• This amendment is intended to have the effect of making refunds under the new circumstance virtually automatic upon the completion of the administrative review/appeal process.
The refund is payable by force of the decision rather than by the mechanism of application.
Regulation 5: amends regulation 128A in consequence of the amendment to regulation 128 effected by regulation 4. The amendment provides a qualification to the requirements generally applicable to the time within which an application for refunds must be made and reflects the fact that the appeal process may affect the normal time within which applications for refund would be lodged.
Regulation 6: is a savings provision which ensures that subsection 48(2) of the Acts Interpretation Act 1901 is not offended. The regulation provides that notwithstanding the creation of a new refund circumstance on and from 1 January 1990, the new circumstance is additional to and not in derogation of, any other right to proceed for recovery of monies paid as duty.
• This means that anyone who seeks to recover moneys paid as duty to which they may be prima facie entitled by reason of a decision delivered before 1 January 1990, may still avail themselves of common law actions for recovery such as that initiated in the Dahlia Mining case referred to previously.