Overview

The Tariff Concession Instrument No. 0718127, enacted in 2008, is an instrument under the Customs Act 1901, designed to provide tariff concessions for specific goods. This instrument was introduced to address the need for reducing customs duties on certain imported goods where Australian production does not exist or is not feasible. The Customs Act 1901, administered by the Commonwealth Parliament, allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) to provide lower rates of customs duty on goods specified in such orders. The policy objective behind this instrument is to facilitate the import of goods that are not produced domestically, thereby supporting industries that rely on imported components or materials. The instrument was made following an application by Bluescope Steel Ltd for tariff concessions on certain blast furnace valve parts, where it was determined that no substitutable goods were produced in Australia, satisfying the core criteria under the Customs Act. The concession provided a duty-free rate for these specific goods, effective from the date of the application, 24 October 2007. No submissions opposing the concession were received, and the rights of importers were positively impacted, allowing them to apply for duty refunds on imports from the effective date.

Scope and Application

The Customs Act 1901, specifically through Part XVA, establishes a framework for the Chief Executive Officer (CEO) of Customs to issue Tariff Concession Orders (TCO) that reduce the customs duty on certain goods. These orders apply to the goods specified in the order and are applicable across Australia, reflecting the national scope of the Customs Act. A TCO can be applied for by any person, but the Act explicitly excludes certain goods from eligibility, such as those listed in section 269SJ. The CEO's decision to issue a TCO hinges on the absence of substitutable goods produced in Australia at the time the application is lodged, as outlined in section 269C. The process involves publishing a notice in the Gazette to invite submissions, although no submissions were received in this case. The TCO comes into effect on the date the application is lodged, as per section 269S(1), and it does not retroactively affect the rights or impose liabilities on any person other than the Commonwealth. For instance, Instrument TCO No. 0718127, concerning blast furnace valve parts, was made effective from 24 October 2007, and importers of these goods can apply for a refund of duty from that date under the relevant regulations.

Key Provisions

The key sections of the Tariff Concession Instrument No. 0718127 (the Instrument) under the Customs Act 1901 (the Act) include section 269C, which sets the core criteria that must be met for a Tariff Concession Order (TCO) to be made. According to section 269C, a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. This is further defined in sections 269D and 269E, which explain what is meant by "goods produced in Australia" and "ordinary course of business" respectively. If the Chief Executive Officer of Customs (the CEO) is satisfied that these criteria are met, the CEO is required under section 269P(3) to issue a written TCO. The Instrument, TCO No. 0718127, applies to certain blast furnace valve parts, which are declared to be subject to a lower rate of duty as specified in item 50 of Schedule 4 to the Customs Tariff Act 1995 (the Tariff). This Instrument was made on 30 January 2008, and it came into force on 24 October 2007, the date the application was lodged. The Instrument imposes several obligations on the parties it governs. Firstly, the CEO must ensure that the core criteria set out in section 269C are satisfied before issuing a TCO. This involves verifying that no substitutable goods were produced in Australia in the ordinary course of business. The CEO must also publish a notice in the Gazette inviting any person who believes there are reasons why the TCO should not be made to lodge a submission (subsection 269K(1)). In this case, the CEO did not receive any submissions. Furthermore, the TCO must not affect the rights of any person, other than the Commonwealth, as at the date of registration so as to disadvantage that person or impose liabilities in respect of anything done or omitted to be done before the date of registration (subsection 269S(1)). The rights of importers will be beneficially affected, as they will be able to apply for a refund of duty on goods imported since the TCO came into force (paragraph 126(1)(r) of the Regulations). The Act does not explicitly state any specific offences, penalties, or consequences for breach in relation to the TCO process. However, any breach of the Customs Act 1901, including the provisions governing TCOs, may be subject to general penalties for non-compliance with customs legislation. For example, the Act provides for various civil and criminal penalties for offences such as making a false statement, smuggling, or failing to comply with a notice or direction. Under section 240 of the Act, a person who commits an offence against the Act is liable to a penalty. The maximum penalty for a corporation can be up to 10,000 penalty units (currently AUD 1.7 million), while the penalty for an individual can be up to 2,000 penalty units (currently AUD 340,000). Additionally, officers may seize goods that are the subject of an offence under the Act, and the seizure may be followed by prosecution.