Date: 20090623
Docket: A-195-08
Citation: 2009 FCA 215
CORAM: PELLETIER
J.A.
RYER
J.A.
TRUDEL
J.A.
BETWEEN:
GLADU TOOLS INC.
Appellant
and
PRESIDENT OF THE CANADA BORDER
SERVICES AGENCY
Respondent
REASONS FOR JUDGMENT
TRUDEL J.A.
INTRODUCTION
[1]
Did the
Canadian International Trade Tribunal (the Tribunal) properly determine that
the goods in issue on this appeal should be classified as “plates” in
subheading No. 8209.00 of the schedule to the Customs Tariff, S.C. 1997,
c. 36 (the Tariff), rather than as “knives and cutting blades” in heading No.
82.08, as claimed by the appellant?
[2]
This
question and this appeal flow from an earlier decision of this Court in The
President of the Canada Border Services Agency v. Gladu Tools Inc., 2007
FCA 213 [Gladu Tools] dated May 31, 2007. In that decision, this Court
allowed an appeal by the President of the Canada Border Services Agency (CBSA
or the respondent) from the Tribunal’s decision in AP-2004-018 of September 7,
2005 and directed the Tribunal to determine the proper classification of the
goods in issue on the basis that “both heading No. 82.08 and subheading No.
8209.00 are prima facie applicable to the goods in issue” (Gladu
Tools, supra, at paragraph 20). As a result, the Tribunal applied
Rule 3(a) of the General Rules for the Interpretation of the Harmonized
System (the General Rules) and determined that the goods in issue were
properly classified in subheading No. 8209.00 and, more specifically, under
tariff item No. 8209.00.92 (AP-2004-018R or reasons at paragraph 12).
[3]
In this
appeal, in addition to challenging the Tribunal’s determination, Gladu Tools
Inc. (the appellant) contends that the Tribunal erred by classifying the goods
according to Rule 3(a) and that Rule 1 alone applies to the goods (appellant’s
memorandum of fact and law (factum) at paragraphs 13 and 23).
ANALYSIS
[4]
The goods
in issue consist of cutters made of cermets imported by the appellant for use
with the Spiramax device, also imported by the appellant and used to make
straight cuts in the secondary woodworking industry (Gladu Tools, supra,
at paragraph 3). The goods in issue are imported separately or in excess of the
number required for assembling Spiramax (AP-2004-018 at paragraph 31). The
classification of Spiramax is not an issue on this appeal.
[5]
It is
unnecessary, for the purpose of this appeal, to reproduce at length the
headings and subheadings of the Tariff relevant to the goods in issue. Suffice
to say that the competing nomenclature reads as follows:
- 82.08 Knives
and cutting blades, for machines or for mechanical appliances.
- 8208.20.00 - For wood working
- 8209.00 Plates,
sticks, tips and the like for tools, unmounted, of cermets.
---
Other
- 8209.00.92 ---- Other carbide inserts and
bits
[6]
Paragraphs
9 and 10 of the impugned decision are at the core of the appellant’s arguments:
9. The Tribunal notes that the knives are
manufactured from “carbide plates”, which are ground to form a sharp edge on
all four sides (Tribunal Exhibit AP-2004-018R-4, at para. 2). In the Tribunal’s
view, this implies that the knives are made from plates (blanks) that have been
ground to form four sharp edges. The Tribunal is also of the view that there is
no doubt that the goods in issue are composed of the hard material called
“cermet” (Transcript of Public Hearing, 3 February 2005 at 38.64).
10. The Tribunal therefore finds that, in
accordance with the first sentence of Rule 3 (a) of the General Rules,
subheading No. 8209.00 is to be preferred over heading No. 82.08 because the
terms contained in the former provide the most specific description of the
goods in issue, whereas those in the latter offer only a more general
description. Thus, in accordance with the terms of subheading No. 8209.00, the
Tribunal finds that the evidence supports the description of the goods in issue
as “plates”, that they are certainly “for tools” (i.e. for the Spiramax
device), that they are “unmounted” and that they are made of “cermets”.
[7]
I find no
error in the fact that the Tribunal relied on Rule 3 to determine the
classification of the goods in issue. Under subsection 10(1) of the Tariff,
classification of goods is determined according to the General Rules for the
interpretation of the Harmonized System and the Canadian Rules set out
in the schedule. According to section 11 of the Tariff, the headings and
subheadings of the schedule are to be interpreted with regard to the Compendium
of Classification Opinions to the Harmonized Commodity Description and Coding
System and the Explanatory Notes to the Harmonized Commodity Description and
Coding System. The General Rules are structured in
cascading form: if and only if Rule 1 does not resolve the classification, then
regard must be had to Rule 2, and so on as necessary (Agri Pack v. Canada (Customs and Revenue Agency), 2005 FCA 414 at
paragraph 14). When by application of Rule 2 (b) goods are prima
facie classifiable under two or more headings, classification is
made according to Rule 3. According to Rule 3(a), the heading with the
most specific description is preferred to headings with a more general
description.
[8]
The
Tribunal was
bound by this Court’s direction that the goods were prima facie
classifiable under two headings, and therefore had to apply Rule 3 (Gladu
Tools, supra, at paragraph 20), which it did. There was ample and cogent
evidence in the record, supporting the Tribunal’s conclusion that the goods in
issue are unmounted plates for tools made of cermets. The Tribunal classified
them under the heading which, it found, contained the most specific description
of the goods in issue (AP-2004-018 at paragraphs 7 and 31; appeal book, volume
I at pages 108, 110-111 and 234-236; volume II at pages 318-336 and page 391 at
paragraph 17).
[9]
It is not
disputed that on appeal under subsection 68(1) of the Customs Act,
R.S.C. 1985, c. 1, construction and interpretation of the Tariff are questions
within the Tribunal’s expertise, attracting the standard of reasonableness (Jam
Industries Ltd. v. Canada (Border Services Agency), 2007 FCA 210 at
paragraph 16; Star Choice Television Network Inc. v. Canada (Customs and
Revenue Agency), 2004 FCA 153 at paragraph 7; Gladu Tools, supra, at
paragraph 13).
[10]
This being
said, I have not been persuaded by the appellant that the Tribunal’s decision
“does not stand up to a somewhat probing examination and therefore must be set
aside” (appellant’s factum at paragraph 18) for being unreasonable. The Tribunal’s
decision falls within a range of possible, acceptable outcomes which are
defensible in respect of the facts and the relevant provisions of the Tariff.
CONCLUSION
[11]
For these
reasons, this appeal will be dismissed with costs.
"Johanne
Trudel"
"I agree
J.D.
Denis Pelletier J.A."
"I agree
C. Michael Ryer J.A."
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