Docket: A-223-13
Citation: 2014 FCA 116
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CORAM:
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MAINVILLE J.A.
NEAR J.A.
SCOTT J.A.
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BETWEEN:
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PROCTOR-SILEX CANADA
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Appellant
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and
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PRESIDENT OF THE CANADA BORDER SERVICES AGENCY
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Respondent
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REASONS FOR
JUDGMENT
SCOTT J.A.
[1]
This is an appeal from a decision of the Canadian
International Trade Tribunal (CITT) pursuant to subsection 68(1) of the Customs
Act, R.S.C. 1985, c. 1. The CITT upheld a decision of the President of the
Canada Border Services Agency (CBSA) refusing the appellant Proctor-Silex Canada’s (the appellant) request to classify cordless electric kettles (the goods) under tariff item
No. 8516.10.90 as “immersion heaters”.
[2]
The issue in this appeal is the classification
of the goods at the subheading level. More specifically, whether they qualify
as “other electro-thermic appliances”, tariff item No. 8516.79.90, or as
“immersion heaters”, tariff item No. 8516.10.90, as both parties acknowledge
that electric kettles are properly classified in heading 85.16.
[3]
For the reasons that follow, I am satisfied that
it was reasonable for the Tribunal to classify the goods as “other
electro-thermic appliances” under tariff item No. 8516.79.90.
[4]
The goods which are the object of this appeal
consist of a plastic container, oval in shape, with a closed plastic handle and
hinged flip-back lid equipped with a thermostat, power cord, on-off switch and
heating element.
[5]
The Customs Tariff, S.C. 1997, c. 36
gives legal effect to Canada’s obligations under the International Convention
on the Harmonized Commodity Description and Coding System which harmonizes the
classification of all trade commodities among signatory nations. Goods brought
into Canada are classified under the Customs Tariff.
[6]
Subsection 10(1) of the Customs Tariff
specifies that the classification of goods must be effected in accordance with General
Rules for the Interpretation of the Harmonized System (General Rules) and
the Canadian Rules as set out in the Schedule.
[7]
The General Rules comprise six rules.
Classification begins with Rule 1, which provides that classification shall be
determined according to the terms of the headings and any relevant section or
chapter notes and, unless such headings or notes do not specify otherwise,
according to the other rules.
[8]
As the dispute between the parties is related to
classification at the subheading level, the CITT determined that the
classification was to be made by reference to Rules 1 and 6 of the General
Rules in the schedule and the applicable section or chapter notes. After
consideration of the Explanatory Notes to heading No. 85.16, it found
that the goods could not be classified as immersion heaters and rejected the
appellant’s arguments for the following reasons:
1. Classification should be based on the goods as a whole rather than
their individual components;
2. A component of the goods does meet the definition of immersion heaters
found in paragraph 3 of note (A)(5) of the Explanatory Notes to heading
No. 85.16 but the immersion heater is only one of the components of the goods,
and more importantly, that paragraph only directs classification at the heading
level.
[9]
Rather, the Tribunal found that the goods could
be classified under subheading No. 8516.79 as other electro-thermic appliances
based on:
1. The dictionary definitions of “electro-thermal” and “appliances”;
2. The testimony of an expert witness; and
3. Note (E) of the Explanatory Notes to heading No. 85.16 which
lists kettles as electro-thermic appliances.
[10]
The standard of review to be applied to
decisions of the CITT in customs tariff classification appeals is
reasonableness (see Suzuki Canada Inc. v. Canada (Customs and Revenue
Agency), 2004 CAF 131, [2004] F.C.J. No. 615 (QL), at para. 11 [Suzuki]
and Helly Hansen Leisure Canada Inc. v. Canada (Border Services Agency),
2009 FCA 345, [2009] F.C.J. No. 1541 (QL), at para. 9).
[11]
At the hearing the appellant argued that the
CITT erred by declining to properly engage in the analytical exercise necessary
to determine the purpose of paragraph 3 of Explanatory Note (A)(5) once
it found that the assembly in that paragraph described the goods in issue.
Moreover, the appellant argues that the CITT ignored the preamble to the Explanatory
Notes to Group A of heading 85.16 which specifies that: “this group
includes.”
[12]
I find that the appellant has provided an
alternative interpretation for the scope of the third paragraph of Explanatory
Note (A)(5). Based on the applicable standard of review, it was nonetheless
open to the CITT to conclude that paragraph 3 of Explanatory Note (A)(5)
does not expand the definition of an immersion heater to include assemblies.
The wording in that note only refers to classification at the heading level and
not at the subheading level. This interpretation “falls within a range of
possible, acceptable outcomes which are defensible in respect of the facts and
law” (see Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190, at
para. 47).
[13]
Consequently, I would dismiss this appeal with
costs.
"A.F. Scott"
“I
agree.
Robert M. Mainville J.A.”
“I agree.
D.G. Near J.A.”
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