Annual Report March 31, 2012 - Chapter V

Introduction

The Tribunal hears appeals from decisions of the CBSA under the Customs Act and SIMA or of the Minister of National Revenue under the Excise Tax Act. Appeals under the Customs Act relate to the origin, tariff classification, value for duty or marking of goods imported into Canada. Appeals under SIMA concern the application, to imported goods, of a Tribunal finding or order concerning dumping or subsidizing and the normal value, export price or subsidy of imported goods. Under the Excise Tax Act, a person may appeal the Minister of National Revenue's decision on an assessment or determination of federal sales tax or excise tax.

The appeal process is set in motion when a written notice of appeal is filed with the Secretary of the Tribunal within the time limit specified in the act under which the appeal is made. The Tribunal strives to be informal and accessible. However, there are certain procedures and time constraints that are imposed by law and by the Rules.

Rules

Under the Rules, the person launching the appeal (the appellant) has 60 days to submit to the Tribunal a document called a “brief”. Generally, the brief states under which act the appeal is launched, gives a description of the goods in issue and an indication of the points at issue between the appellant and the Minister of National Revenue or the CBSA (the respondent), and states why the appellant believes that the respondent's decision is incorrect. A copy of the brief must also be given to the respondent.

The respondent must also comply with time and procedural constraints. Ordinarily, within 60 days after having received the appellant's brief, the respondent must file with the Tribunal a brief setting forth the respondent's position and provide a copy to the appellant. The Secretary of the Tribunal then contacts both parties in order to schedule a hearing. Hearings are generally conducted in public. The Tribunal publishes a notice of the hearing in the Canada Gazette to allow other interested persons to attend. Depending on the act under which the appeal is filed, the complexity and precedential nature of the matter at issue, appeals will be heard by a panel of one or three members. Persons may intervene in an appeal by filing a notice stating the nature of their interest in the appeal and indicating the reason for intervening and how they would assist the Tribunal in the resolution of the appeal.

Hearings

An individual may present a case before the Tribunal in person or be represented by counsel. The respondent is generally represented by counsel from the Department of Justice. In accordance with rule 25 of the Rules, appeals can be heard by way of a hearing at which the parties or their counsel appear before the Tribunal, by way of videoconference or by way of written submissions (file hearing).

Hearing procedures are designed to ensure that the appellant and the respondent are given a full opportunity to make their cases. They also enable the Tribunal to have the best information possible to make a decision. As in a court of justice, the appellant and the respondent can call witnesses, and these witnesses are questioned under oath or affirmation by the opposing parties, as well as by Tribunal members. When all the evidence is gathered, parties may present arguments in support of their respective positions.

The Tribunal, on its own initiative or at the request of the appellant or the respondent, may decide to hold a hearing by way of written submissions. In that case, it publishes a notice in the Canada Gazette to allow other interested persons to participate.

Within 120 days of the hearing, the Tribunal endeavours to issue a decision on the matters in dispute, including the reasons for the decision.

If the appellant, the respondent or an intervener disagrees with the Tribunal's decision, the decision can be appealed on a question of law to the Federal Court of Appeal or, in the case of the Excise Tax Act, the Federal Court (where the case will be heard de novo by the court).

Extensions of Time

Under section 60.2 of the Customs Act, a person may apply to the Tribunal for an extension of time to file a request for a re-determination or a further re-determination with the President of the CBSA. Such an application may be granted by the Tribunal after either the President has refused an application under section 60.1 or 90 days have elapsed after the application was made and the person has not been notified of the President's decision. Under section 67.1, a person may make an application to the Tribunal for an extension of time within which to file a notice of appeal with the Tribunal. During the fiscal year, the Tribunal issued seven orders under the Customs Act, granting extensions of time in five cases and denying the applications in two cases. There were four requests under the Customs Act that were outstanding at the end of the fiscal year.

Under section 81.32 of the Excise Tax Act, a person may apply to the Tribunal for an extension of time in which to serve a notice of objection with the Minister of National Revenue under section 81.15 or 81.17 or file a notice of appeal with the Tribunal under section 81.19. During the fiscal year, the Tribunal issued one order under the Excise Tax Act granting an extension of time. There were three requests under the Excise Tax Act that were outstanding at the end of the fiscal year.

Appeals Received and Heard

During the fiscal year, the Tribunal received 76 appeals, not counting an appeal that was received on remand from the Federal Court of Appeal for decision. The Tribunal heard 40 appeals, 36 of which were under the Customs Act and 4 under SIMA. It issued decisions on 35 appeals, which consisted of 33 appeals under the Customs Act (including a remanded case) and 2 under SIMA. Ninety-four appeal cases were outstanding at the end of the fiscal year.

Appeals Before the Tribunal in Fiscal Year

Summary of Selected Decisions

Of the many cases heard by the Tribunal, several decisions stand out, either because of the particular nature of the product in issue or because of the legal significance of the case. Specifically, there are three main categories of appeals under the Customs Act: tariff classification, value for duty and rules of origin. Brief summaries of a representative sample of such decisions follow, two appeals having been heard pursuant to the Customs Act and one pursuant to SIMA. These summaries have been prepared for general information purposes only and are intended to be of no legal value.

AP-2010-063—Toyota Tsusho America, Inc. v. President of the Canada Border Services Agency

As part of this appeal, the Tribunal held a two-day public hearing in Ottawa. There were 2 participants in the appeal, and 5 witnesses appeared before the Tribunal. The official record consisted of 35 exhibits.

This was an appeal pursuant to subsection 61(1) of SIMA from decisions made pursuant to section 59 concerning the assessment of anti-dumping duties on imports of hot-rolled steel plate containing a minute quantity of boron. The issue in this appeal was whether the goods constituted carbon steel plate and were therefore goods of the same description as the goods to which the Tribunal's order in Expiry Review No. RR-2007-001 (the Order) applied.

The case turned on whether the minute quantity of boron in the goods made them alloy steel instead of carbon steel. Toyota Tsusho America, Inc. (Toyota Tsusho) argued that the goods were alloy steel largely because of the fact that steel with similar quantities of boron were classified in heading No. 72.25 of the schedule to the Customs Tariff as “[f]lat-rolled products of other alloy steel”. Toyota Tsusho also relied on the opinion of an expert in materials science and metallurgical engineering from the University of Toronto. This expert testified that, in his opinion, steel with such quantities of boron are considered alloy steel according to steel industry standards. The CBSA relied on the expert testimony of a steel metallurgist who interpreted the steel industry standards as implying that the goods at issue were carbon steel.

The Tribunal acknowledged that the goods were classifiable as alloy steel, but held that tariff classification was not determinative in this case. Rather, it was the description of the goods in the Order that was determinative of whether imported goods should be subject to anti-dumping duties. Therefore, the Tribunal carefully examined the steel industry standards and the expert evidence. On the balance of the evidence, the Tribunal concluded that, at the time of importation, the goods were carbon steel. Therefore, the appeal was dismissed.

AP-2010-060—Outdoor Gear Canada v. President of the Canada Border Services Agency

As part of this appeal, the Tribunal held a half-day public hearing in Ottawa. There were 2 participants in the appeal, and 1 witness appeared before the Tribunal. The official record consisted of 17 exhibits.

This was an appeal pursuant to subsection 67(1) of the Customs Act from decisions of the CBSA made pursuant to subsection 60(4) concerning the tariff classification of assembled bicycle rims, spokes and hubs, without tubes, valves, nipples or tires. The issue in this appeal was whether the goods were properly classified under tariff item No. 8714.99.10 of the schedule to the Customs Tariff as bicycle wheels, as determined by the CBSA, or should have been classified under tariff item No. 8714.99.90 as other parts and accessories of vehicles of heading Nos. 87.11 to 87.13 (i.e. bicycles), as claimed by Outdoor Gear Canada (Outdoor Gear).

The CBSA argued that the goods were bicycle wheels because there was nothing in tariff item No. 8714.99.10 that limited the meaning of the term “bicycle wheels” to bicycle wheels with tires and tubes, and the goods were known as bicycle wheels in the bicycle industry.

Outdoor Gear based its position on the argument that the term “bicycle wheels” was ambiguous and that, therefore, the tariff items should be interpreted in its favour. Outdoor Gear also argued that the term “bicycle wheels” implicitly referred to bicycle wheels fitted with tires and tubes. It further argued that, without tubes, values and tires, the goods in issue lacked several of the essential features of a bicycle wheel.

The Tribunal considered both the ordinary meaning of the term “bicycle wheel” and the meaning of that term in the bicycle industry. The Tribunal observed that dictionary definitions of “wheel” referred to the hub and spokes, but not to tires and tubes. The Tribunal also noted that Outdoor Gear's own witness admitted that the term was understood in the industry as including both complete and incomplete bicycle wheels and that the goods in issue were marketed as “bicycle wheels”. Therefore, the appeal was dismissed.

AP-2010-065—Beckman Coulter Canada Inc. v. President of the Canada Border Services Agency

As part of this appeal, the Tribunal held a one-day public hearing in Ottawa. There were 2 participants in the appeal, and 1 witness appeared before the Tribunal. The official record consisted of 9 exhibits.

This was an appeal pursuant to subsection 67(1) of the Customs Act from a decision of the CBSA made pursuant to subsection 60(4) with respect to a request for review of an advance ruling on tariff classification. The issue in this appeal was whether Polyflex® V-belts were eligible to benefit from duty-free treatment under tariff item No. 9977.00.00 of the schedule to the Customs Tariff as articles for use in appliances used in medical sciences, as claimed by Beckman Coulter Canada Inc. (Beckman Coulter).

The parties agreed that the goods were “articles”, but disagreed on whether they were for use in appliances used in medical sciences. Beckman Coulter argued that the goods were “for use in appliances used in medical sciences” because they were incorporated into centrifuges. The CBSA admitted that the goods were incorporated into centrifuges, but relied on the fact that they could also serve in other applications.

The Tribunal found that the goods were in fact incorporated into the centrifuges and therefore were “for use in” them. The Tribunal also found that the centrifuges were “appliances used in medical sciences”, considering they satisfied the dictionary definition of “appliance”, and that there was evidence that they were designed for the market comprising customers such as Canadian Blood Services. Therefore, the appeal was allowed.

Appeal Cases Before the Federal Court of Appeal or the Federal Court