Date: 20110415
Docket: A-223-10
Citation: 2011 FCA 138
CORAM: EVANS
J.A.
DAWSON J.A.
STRATAS
J.A.
BETWEEN:
WOLSELEY ENGINEERED PIPE GROUP
Appellant
and
PRESIDENT OF THE CANADA BORDER
SERVICES AGENCY
Respondent
REASONS FOR JUDGMENT
STRATAS J.A.
[1]
Wolseley
Engineered Pipe Group (“Wolseley”) appeals from a decision dated March 11, 2010
of the Canadian International Trade Tribunal (“Tribunal”) (appeal no.
AP-2009-010). The President of the Canada Border Services Agency (the
“President”) cross-appeals.
[2]
This
matter raises issues that are very similar to those in C.B. Powell Ltd. v.
President of the Canada Border Services Agency, 2011 FCA 137. Accordingly,
we heard and determined this matter alongside C.B. Powell.
A. The appeal
[3]
As
in C.B. Powell, the importer, Wolseley, declared a particular
origin/tariff treatment under the Customs Act, R.S.C. 1985, c. 1 (2nd
Supp.) for certain goods, here certain fusion machines.
[4]
The
Canada Border Services Agency (CBSA) later conducted an audit. Under subsection
59(1) of the Act, it changed the tariff classification and the value for duty
of the goods.
[5]
Under
subsection 60(1) of the Act, the appellant requested a further re-determination
of the tariff classification and value for duty of the goods and achieved
partial success. To this point, however, the appellant had not sought a
re-determination of the origin/tariff treatment for the goods.
[6]
The
appellant appealed to the Tribunal under subsection 67(1) of the Act, raising
only issues of the tariff classification and the value for duty of the goods.
Shortly afterward, it requested that the issue of origin/tariff treatment of
the goods be added to its appeal.
[7]
In
reasons substantially similar to those it gave in C.B. Powell, the
Tribunal declined to consider the issue of origin/tariff treatment of the
goods. In its view, there had not been any “decision” of the President on that
issue within the meaning of subsection 67(1) of the Act.
[8]
As
in C.B. Powell, the appellant submits that the Tribunal’s interpretation
of subsection 67(1) and its application to this case were unreasonable.
[9]
For
the reasons given in C.B. Powell, I am of the view that the Tribunal’s
interpretation and application of subsection 67(1) in this case was reasonable.
Indeed, in oral argument, counsel for the appellant conceded as much. Because
the appellant had not requested a re-determination or further re-determination
of the origin/tariff treatment of the goods under subsection 60(1), there was
no basis for finding an “implied” decision in this case.
B. The
cross-appeal
[10]
The
President’s cross-appeal concerns the tariff classification of the goods. Under
subsection 59(1) of the Act, the CBSA determined that the goods should be
classified within tariff item 8515.80.00 under the Customs Tariff, S.C.
1997, c. 36. Under subsection 60(1) of the Act, the President upheld tariff
item 8515.80.00 as the proper tariff classification.
[11]
Chapter
99 of the Customs Tariff provides special classification provisions that
allow certain good to be imported into Canada with tariff
relief. Wolseley appealed to the Tribunal under subsection 67(1) of the Act,
submitting that it was entitled to that relief because the goods fell within a
tariff item in chapter 99 of the Customs Tariff, namely tariff item no.
9953.00.00.
[12]
Although
that issue had not been raised before the President, the Tribunal held that it
had jurisdiction to consider it. In its view, the President had re-determined
an issue relating to tariff classification and so there was a “decision” on
tariff classification before it within the meaning of subsection 67(1) of the
Act. As the chapter 99 issue related to tariff classification, it could be
raised before the Tribunal as part of Wolseley’s submissions on tariff
classification. This aspect of the Tribunal’s decision is not under challenge
in this Court.
[13]
What
is challenged in the cross-appeal in this Court is the Tribunal’s finding in
favour of Wolseley that the goods in question fall within tariff item no.
9953.00.00 of the Customs Tariff.
[14]
The
Tribunal reached this decision by interpreting tariff item no. 9953.00.00. This
was an exercise in statutory interpretation of one of the Tribunal’s home
statutes. Accordingly, the Tribunal’s interpretation of tariff item no.
9953.00.00 must be reviewed under the deferential standard of reasonableness.
[15]
Tariff
item no. 9953.00.00 provides as follows:
|
Hydraulic equipment and articles for
use therein;
Articles for use in
compression-ignition internal combustion piston engines (diesel or
semi-diesel engines);
All the
foregoing for use in the manufacture of road graders or road scrapers.
|
Appareils hydrauliques et
articles devant servir dans ceux-ci;
Articles devant servir dans
des moteurs à piston, à allumage par compression (moteurs diesels ou
semi-diesels);
Tout ce qui précède devant
servir à la fabrication de niveleuses ou de
décapeuses
pour route.
|
[16]
The
Tribunal accepted that the goods in issue were “hydraulic equipment.” However,
they were not for the “use in the manufacture of road graders or road
scrapers.” The issue before the Tribunal was whether the goods had to be for
the “use in the manufacture of road graders or road scrapers” in order to fall
within tariff item no. 9953.00.00. This depended on whether the third clause of
tariff item no. 9953.00.00 modified “hydraulic equipment” in the first clause. The
Tribunal held that the third clause did not modify the first clause, and so the
goods, as “hydraulic equipment,” fell within tariff item no. 9953.00.00. In
reaching this decision, it examined the wording of tariff item no. 9953.00.00
in isolation, placing particular emphasis on the use of semi-colons in the
wording of tariff item no. 9953.00.00.
[17]
However,
if, as the Tribunal held, the third clause does not modify the first clause, it
has no meaning in tariff item no. 9953.00.00. Further, the Tribunal did not
examine other provisions in the Customs Tariff, in order to take into
account the statutory context of the tariff item in question when determining
its meaning. Had it done so, it would have appreciated that many of the tariff
items have a particular grammatical structure, a structure that Parliament also
used in tariff item no. 9953.00.00.
[18]
It
is clear that, in all those instances, the use provision limits the scope of
the description of the goods. Thus, in my view, on the basis of the text and
statutory context of tariff item no. 9953.00.00 the Tribunal’s interpretation
of it cannot be sustained, even under the deferential standard of
reasonableness. The only rational reading of tariff item no. 9953.00.00 is that
“hydraulic equipment,” such as the goods in question, must be “for use in the
manufacture of road graders or road scrapers.” In this case, the goods are not “for use in the
manufacture of road graders or road scrapers” and so they do not fall under tariff item
no. 9953.00.00.
C. Disposition
[19]
For
these reasons, I would dismiss the appeal, allow the cross-appeal, set aside the
Tribunal’s decision that the goods in issue should be classified under tariff
item no. 9953.00.00 and order direct that duty be calculated on the basis of
the remainder of the Tribunal’s decision. I would grant the President his
costs of the appeal and the cross-appeal.
"David
Stratas"
“I
agree
John M. Evans J.A.”
“I
agree
Eleanor R. Dawson J.A.”
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