Annual Report March 31, 2014 - Chapter V

Chapter V Appeals

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. Certain procedures and time constraints are imposed by law and by the Rules; however, at the same time, the Tribunal strives to encourage a relatively informal, accessible, transparent and fair proceeding.

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 limits and procedural requirements. 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, when acknowledging receipt of the appeal, schedules a hearing date. 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 potential significance 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 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, 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 CBSA. The Tribunal may grant such an application after the CBSA has refused an application under section 60.1 or when 90 days have elapsed after the application was made and the person has not been notified of the CBSA’s decision. Under section 67.1, a person may apply 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 two orders under the Customs Act, denying the applications for extension of time. Four applications were withdrawn, and there were no requests under the Customs Act 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 no requests under the Excise Tax Act outstanding at the end of the fiscal year.

Appeals Received and Heard

During the fiscal year, the Tribunal received 61 appeals.

The Tribunal heard 45 appeals, 34 under the Customs Act, 1 under the Excise Tax Act and 10 under SIMA. It issued decisions on 42 appeals, which consisted of 33 appeals under the Customs Act, 1 under the Excise Tax Act and 8 under SIMA. All these decisions were issued within 120 days of the hearing, up from 90 percent the year before, despite an increase in the number of decisions.

Sixty-nine appeal cases were outstanding at the end of the fiscal year.

Appeals Before the Tribunal in Fiscal Year 2013-2014

Appeal No.

Appellant

Date of Decision

Status/Decision

Customs Act

 

 

 

AP-2009-064

Pexcor Manufacturing Company Ltd.

January 16, 2014

Withdrawn

AP-2009-065

Mathews Equipment Limited

 

In abeyance

AP-2010-062

Irwin Naturals

March 11, 2014

Withdrawn

AP-2011-014

De Ronde Tire Supply, Inc.

 

In abeyance

AP-2011-033

Costco Wholesale Canada Ltd.

 

In progress

AP-2011-059

Outdoor Gear Canada

 

In abeyance

AP-2011-060

Cycles Lambert Inc.

July 10, 2013

Dismissed

AP-2011-065

Proctor-Silex Canada

April 8, 2013

Dismissed

AP-2011-074

Corning Cable Systems LLC

 

In progress

AP-2011-076

Corning Cable Systems LLC

 

In progress

AP-2012-009

Volpak Inc.

 

In progress

AP-2012-011

High Output Sports Canada Inc.

July 30, 2013

Withdrawn

AP-2012-014

Spectra Premium Industries Inc.

May 31, 2013

Withdrawn

AP-2012-017

Oceaneering Canada Limited

February 19, 2014

Allowed

AP-2012-018

Helly Hansen Canada Limited

 

In abeyance

AP-2012-021

Fiberlinks Textiles Inc.

April 18, 2013

Withdrawn

AP-2012-022

Andritz Hydro Canada Inc. and VA Tech Hydro Canada Inc.

June 21, 2013

Dismissed

AP-2012-023

J. Hains

October 25, 2013

Dismissed

AP-2012-026

Euro-Line Appliances

August 12, 2013

Allowed

AP-2012-031

Curry’s Art Stores

April 29, 2013

Dismissed

AP-2012-034

Federal-Mogul Canada Limited

 

In abeyance

AP-2012-036

BalanceCo

May 3, 2013

Dismissed

AP-2012-037

Northern Amerex Marketing Inc.

 

In abeyance

AP-2012-041

Costco Wholesale Canada Ltd.

July 29, 2013

Dismissed

AP-2012-042

Costco Wholesale Canada Ltd.

July 29, 2013

Dismissed

AP-2012-043

Global Hydraulic Solutions Inc.

June 14, 2013

Dismissed

AP-2012-045

D. Andrews

April 11, 2013

Dismissed

AP-2012-049

CE Franklin Ltd.

September 16, 2013

Withdrawn

AP-2012-051

Brisk Industry Co., Ltd.

June 25, 2013

Withdrawn

AP-2012-052

Cross Country Parts Distributors Ltd.

 

In progress

AP-2012-053

Gregg Distributors Co. Ltd.

September 24, 2013

Withdrawn

AP-2012-054

J. E. Mondou Ltée

May 21, 2013

Withdrawn

AP-2012-055

L. Lavoie

September 6, 2013

Dismissed

AP-2012-056

Gestion Soprema Canada Inc./Holding Soprema Canada Inc.

March 14, 2014

Withdrawn

AP-2012-057

Costco Wholesale Canada Ltd.

September 17, 2013

Dismissed

AP-2012-058

Kinedyne Canada Ltd.

December 17, 2013

Allowed in part

AP-2012-060

Cycles Lambert Inc.

November 28, 2013

Dismissed

AP-2012-061

Groupe Procycle Inc.

December 2, 2013

Withdrawn

AP-2012-062

Cycles Marinoni Inc.

December 2, 2013

Withdrawn

AP-2012-063

Cycles Argon-18 Inc.

December 2, 2013

Withdrawn

AP-2012-064

Norco Products Ltd.

December 2, 2013

Withdrawn

AP-2012-065

R. Atkinson

November 20, 2013

Dismissed

AP-2012-066

Wolseley Canada

December 11, 2013

Allowed

AP-2012-067

Hudson’s Bay Company

March 21, 2014

Allowed

AP-2012-068

Costco Wholesale Canada Ltd.

November 19, 2013

Withdrawn

AP-2012-069

M. Olsen

November 22, 2013

Allowed

AP-2012-070

Cargill Inc.

 

In progress

AP-2012-071

Precision Flange Company Ltd.

September 24, 2013

Withdrawn

AP-2012-072

R. Christie

January 15, 2014

Dismissed

AP-2012-073

Skechers USA Canada, Inc.

December 13, 2013

Dismissed

AP-2013-001

Aquatherm CA, Inc.

September 24, 2013

Withdrawn

AP-2013-002

Just-In Case Fire Ltd.

September 24, 2013

Withdrawn

AP-2013-003

Costco Wholesale Canada Ltd.

February 13, 2014

Allowed

AP-2013-004

Ubisoft Canada Inc.

January 28, 2014

Dismissed

AP-2013-005

Philips Electronics Ltd.

September 11, 2013

Withdrawn

AP-2013-006

SMS Equipment Inc.

March 28, 2014

Allowed

AP-2013-007

Philips Electronics Ltd.

 

In abeyance

AP-2013-010

International Flavors and Fragrances Inc.

October 11, 2013

Withdrawn

AP-2013-011

Bacardi Canada Inc.

June 12, 2013

Withdrawn

AP-2013-012

Staples Business Depot

September 13, 2013

Withdrawn

AP-2013-013

Philips Electronics Ltd.

March 3, 2014

Dismissed

AP-2013-014

Hudson’s Bay Company

June 12, 2013

Withdrawn

AP-2013-015

Xerox Canada Ltd.

February 25, 2014

Allowed

AP-2013-016

G. Wilkie

January 20, 2014

Dismissed

AP-2013-017

Double J Fashion Group Inc.

March 14, 2014

Dismissed

AP-2013-018

KAO Canada Inc.

January 16, 2014

Dismissed

AP-2013-019

Philips Electronics Ltd.

 

In progress

AP-2013-020

Les Distributions Saeco Canada Ltée

 

In progress

AP-2013-021

Stylus Sofas Inc.

 

In progress

AP-2013-022

Stylus Atlantic

 

In progress

AP-2013-023

Stylus Ltd.

 

In progress

AP-2013-024

Terravest (SF SUBCO) Limited Partnership

 

In progress

AP-2013-026

Eastern Division Henry Schein Ash Arcona Inc.

February 19, 2014

Allowed

AP-2013-027

Maurice Pincoffs Canada Inc.

March 13, 2014

Allowed

AP-2013-028

Bluestein Enterprises Inc.

March 31, 2014

Dismissed

AP-2013-029

Eastern Division Henry Schein Ash Arcona Inc.

 

In progress

AP-2013-030

Aventure Airsoft Lanaudiere

March 3, 2014

Withdrawn

AP-2013-031

SPX Cooling Technologies Inc.

July 23, 2013

Withdrawn

AP-2013-032

Home Depot of Canada Inc.

 

In progress

AP-2013-033

Wolseley Canada Inc.

March 3, 2014

Withdrawn

AP-2013-034

Mattel Canada Inc.

 

In progress

AP-2013-035

Mountain Equipment Co-Operative

December 2, 2013

Withdrawn

AP-2013-036

Hunter Douglas Canada Limited Partnership

January 17, 2014

Withdrawn

AP-2013-037

R.C. Purdy Chocolates Ltd.

October 2, 2013

Withdrawn

AP-2013-038

Sunpan Trading & Importing Inc.

 

In progress

AP-2013-039

Dorel Distribution Canada

October 11, 2013

Withdrawn

AP-2013-040

Mattel Canada Inc.

 

In progress

AP-2013-041

IKEA Supply AG

January 21, 2014

Withdrawn

AP-2013-042

Canadian Tire Corporation Ltd.

 

In progress

AP-2013-043

Jupiter Industries, Inc.

December 17, 2013

Withdrawn

AP-2013-044

Worldpac Canada

February 10, 2014

Withdrawn

AP-2013-045

Shandex Sales Group Ltd.

 

In progress

AP-2013-046

Tenth Siding Trading Co. dba Rock Gear

 

In progress

AP-2013-047

T. Lysyshyn

 

In progress

AP-2013-048

Mountain Equipment Co-Operative

 

In progress

AP-2013-049

Dynatrac Sleep Products Ltd.

 

In progress

AP-2013-050

BMW Canada Inc.

 

In progress

AP-2013-051

DALS Lighting Inc.

 

In progress

AP-2013-053

IKEA Supply AG

 

In progress

AP-2013-054

Powertek Sport Inc.

March 6, 2014

Withdrawn

AP-2013-055

Kraft Canada Inc.

 

In progress

AP-2013-056

Hanesbrands Inc.

 

In progress

AP-2013-057

BSH Home Appliance Ltd.

 

In progress

AP-2013-058

Quagga Designs

 

In progress

AP-2013-059

A. Downey

 

In progress

AP-2013-060

Unitool Inc.

 

In progress

AP-2013-061

G&G Golf Company Inc.

 

In progress

Excise Tax Act

 

 

 

AP-2009-020

Laidlaw Carriers PSC Inc.

 

In abeyance

AP-2009-021

Laidlaw Carriers Bulk GP Inc.

 

In abeyance

AP-2009-022

Laidlaw Carriers Van GP Inc.

 

In abeyance

AP-2009-023

Laidlaw Carriers Flatbed GP Inc.

 

In abeyance

AP-2009-024

Transnat Express Inc.

January 17, 2014

Allowed in part

AP-2009-025

Golden Eagle Express Inc.

 

In abeyance

AP-2009-026

Le Groupe G3 Inc.

 

In abeyance

AP-2009-027

Vedder Transport Ltd.

 

In abeyance

AP-2009-028

Warren Gibson Ltd.

 

In abeyance

AP-2009-029

2810026 Canada Ltd.

 

In abeyance

AP-2009-030

Warren Gibson Ltd.

 

In abeyance

AP-2009-031

Q-Line Trucking Ltd.

 

In abeyance

AP-2009-032

GST 2000 Inc.

 

In abeyance

AP-2009-033

J & F Trucking Corporation

 

In abeyance

AP-2009-034

Reimer Express Lines Ltd.

 

In abeyance

AP-2009-035

Celadon Canada Inc.

 

In abeyance

AP-2009-036

Cobra Trucking Ltd.

 

In abeyance

AP-2009-037

Motrux Inc.

 

In abeyance

AP-2009-038

L.E. Walker Transport Ltd.

 

In abeyance

AP-2009-039

Distribution Marcel Dion Inc.

 

In abeyance

AP-2009-040

Reimer Express Lines Ltd.

 

In abeyance

AP-2009-041

Direct Integrated Transportation

 

In abeyance

AP-2009-042

Harris Transport Ltd.

 

In abeyance

AP-2009-043

Benson Tank Lines Ltd.

 

In abeyance

AP-2012-002

Imperial Oil Limited, McColl-Frontenac Petroleum Inc.

 

In abeyance

AP-2012-003

Imperial Oil Limited, McColl-Frontenac Petroleum Inc.

 

In abeyance

AP-2013-052

Montreal Gateway Terminals Partnership

 

In progress

Special Import Measures Act

 

 

 

AP-2012-010

Powers Industries Limited

April 22, 2013

Dismissed

AP-2012-025

Regal Ideas Inc.

May 27, 2013

Allowed

AP-2012-035

Canadian Tire Corporation

 

In progress

AP-2012-038

Colonial Élégance Inc.

September 11, 2013

Dismissed

AP-2012-039

Universal Consumer Products, Inc.

September 11, 2013

Dismissed

AP-2012-044

McLean Contracting

May 16, 2013

Withdrawn

AP-2012-047

Salzgitter Mannesmann International (Canada) Inc.

September 25, 2013

Allowed

AP-2012-048

Varsteel Ltd.

September 25, 2013

Allowed

AP-2012-050

LIV Outdoor (International) Inc.

September 11, 2013

Dismissed

AP-2012-059

Maine Ornamental, LLC

September 11, 2013

Dismissed

AP-2013-008

Ideal Roofing Company Limited

 

In progress

AP-2013-009

Havelock Metal Products Inc.

 

In progress

AP-2013-025

Aluminart Products Limited

July 11, 2013

Withdrawn

Summary of Selected Decisions

Of the many cases heard by the Tribunal, several decisions issued during the fiscal year stand out, either because of the particular nature of the product in issue or because of the legal significance of the case. Brief summaries of a representative sample of such decisions follow, including two appeals heard pursuant to the Customs Act, one appeal pursuant to SIMA and one appeal pursuant to the Excise Tax Act. These summaries have been prepared for general information purposes only.

AP-2012-073—Skechers USA Canada, Inc. v. President of the Canada Border Services Agency

This appeal was filed by Skechers USA Canada, Inc. (Skechers Canada) pursuant to subsection 67(1) of the Customs Act from decisions by the CBSA made pursuant to subsection 60(4), concerning the value for duty of footwear of various styles imported by Skechers Canada. The main issue was whether, applying the transaction value of the goods method of section 48, certain periodic payments made by Skechers Canada to the vendor, Skechers USA Inc., for research, development and design expenses must be included in the price paid or payable for the imported goods and, accordingly, their value for duty for the purposes of the Act. Skechers Canada argued that the payments were not part of the price paid or payable for the goods pursuant to subsections 45(1) and 48(4) because they are not in respect of the goods, but rather, in respect of intangibles, namely, developing the Skechers brand. On the evidence, the Tribunal determined that the imported goods could not have been produced without the research and design process in respect of which the payments were made and that the quantum of the payments was affected by the imported goods. Accordingly, the Tribunal found that the payments were made in respect of the imported goods and must be included in their price and their value for duty. The appeal was therefore dismissed.

AP-2012-036—BalanceCo v. President of the Canada Border Services Agency

This appeal was filed pursuant to section 67(1) of the Customs Act from a decision by the CBSA made pursuant to subsection 60(4). The decision affirmed an advance ruling under paragraph 43.1(1)(c) of the Customs Act in respect of the tariff classification of shredded Mozzarella cheese and sliced pepperoni, packaged together, imported by a third party, as a result of which classification the shredded Mozzarella cheese was not subject to Canada’s tariff rate quotas on dairy imports. BalanceCo, a not-for-profit corporation whose members are Canada’s 10 provincial milk marketing boards, acknowledged having requested the advance ruling for the purpose of ensuring the effective enforcement of the tariff rate quotas.

As paragraph 43.1(1)(c) of the Customs Act and the Tariff Classification Advance Rulings Regulations limit eligibility to apply for an advance ruling to members of prescribed classes of persons, including “importers of goods in Canada,” a preliminary issue arose as to whether BalanceCo was an “importer of goods in Canada” and, thus, an eligible applicant.

The Tribunal found that the legislative purpose of the advance ruling program was to assist persons interested in importing, by providing certainty and predictability as to how a given good would be treated on importation. However, the evidence indicated that BalanceCo had no interest in importing the goods that were the subject of its advance ruling request, with its application having been motivated by considerations extraneous to the purpose of the legislation. As such, BalanceCo was not an “importer of goods in Canada”. BalanceCo being a non-eligible applicant, the ruling issued to it under subsection 43.1(1) of the Customs Act and the decision made by the CBSA under subsection 60(4) were invalid. That being the case, the appeal was dismissed for want of jurisdiction.

AP-2012-039, AP-2012-050 and AP-2012-059—Universal Consumer Products, Inc., Liv Outdoor (International) Inc. and Maine Ornamental, LLC v. President of the Canada Border Services Agency

These appeals were filed under section 61 of the SIMA from 50 decisions of the CBSA made under section 59, affirming previous determinations made under section 57 that various imported aluminum products were of the same description as the goods subject to the Tribunal’s finding in Inquiry No. NQ‑2008-003, as amended in Inquiry No. NQ-2008-003R. The appellants argued that the imported products were kits exempted from the Tribunal’s finding or, alternatively, that they have been further worked to the point that they no longer shared the characteristics of the goods subject to the finding. The Tribunal found that the goods in issue were of the same description as the goods subject to the finding. Therefore, the appeals were dismissed.

AP-2009-024—Transnat Express Inc. v. Minister of National Revenue

This appeal was filed pursuant to section 81.19 of the Excise Tax Act from a decision made by the Minister of National Revenue (the Minister) with respect to a notice of objection pursuant to section 81.17. The dispute concerned the application by Transnat Express Inc. (Transnat) pursuant to paragraph 68.01(1)(b) for a payment equal to the amount of tax purportedly paid on diesel fuel used to generate electricity for purposes other than primarily in the operation of a vehicle. The issues before the Tribunal were the following: the period covered by Transnat’s application; whether diesel fuel used for refrigeration purposes qualifies for a payment under the Excise Tax Act; whether Transnat provided sufficient supporting documentation for its application; and whether certain receipts showing purchases of diesel fuel were in fact in respect of diesel fuel purchased and used by Transnat for qualified purposes.

The Tribunal found the following: the period covered by Transnat’s application is that period specified in the application; Transnat had the burden of proof and it failed to provide a basis upon which diesel fuel used for reefers qualifies for a payment under the Excise Tax Act; the only claims eligible for payment are those for which Transnat has met the record-keeping requirements of the Excise Tax Act, while the claims for which the documentary evidence had been destroyed are not eligible for payment; oral testimony provided by Transnat’s witnesses that certain invoices included in Transnat’s application relate to diesel fuel purchased and used by Transnat for qualified purposes warrants that the Minister make further attempts to verify these claims. Accordingly, the appeal was allowed in part.

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

Appeal No.

Appellant Before the Tribunal

Appellant Before the Court

File No./Status

AP-2011-018

HBC Imports c/o Zellers Inc.

HBC Imports c/o Zellers Inc.

A—306—12
Appeal dismissed
(June 24, 2013)

AP-2011-030

Grodan Inc.

President of the Canada Border Services Agency

A—381—12
Appeal dismissed
(May 1, 2013)

AP-2011-057 and AP-2011-058

Marmen Énergie Inc. and Marmen Inc.

Marmen Énergie Inc. and Marmen Inc.

A—64—13
In progress

AP-2009-046

Igloo Vikski Inc.

Igloo Vikski Inc.

A—65—13
In progress

AP-2010-002

Frito-Lay Canada Inc.

President of the Canada Border Services Agency

A—103—13
Appeal discontinued
(December 18, 2013)

AP-2012-004

Holland Hitch of Canada Limited

President of the Canada Border Services Agency

A—136—13
Appeal dismissed
(January 8, 2014)

AP-2011-065

Proctor-Silex Canada

Proctor-Silex Canada

A—223—13
In progress

AP-2012-066

Wolseley Canada

President of the Canada Border Services Agency

A—244—13
Appeal discontinued
(February 24, 2014)

AP-2012-036

BalanceCo

BalanceCo

A—262—13
In progress

AP-2011-060

Cycles Lambert Inc.

Cycles Lambert Inc.

A—286—13
In progress

AP-2012-022

Andritz Hydro Canada Inc. and VA Tech Hydro Canada Inc.

Andritz Hydro Canada Inc. and VA Tech Hydro Canada Inc.

A—291—13
In progress

AP-2012-026

Euro-Line Appliances

President of the Canada Border Services Agency

A—369—13
In progress

AP-2012-070

Cargill Inc.

President of the Canada Border Services Agency

A—408—13
In progress

AP-2012-073

Skechers USA Canada, Inc.

Skechers USA Canada, Inc.

A—121—14
In progress

Note: The Tribunal has made reasonable efforts to ensure that the information listed is complete. However, since the Tribunal does not always participate in appeals to the Federal Court of Appeal or the Federal Court, it is unable to confirm that the list contains all appeals or decisions rendered that were before the Federal Court of Appeal and the Federal Court.