Chapter V - Customs and Excise Appeals
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 amount of subsidy on 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 Registrar 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 file 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 Registrar 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.
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
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. A decision and its reasons are usually issued much sooner.
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 did not issue any orders under the Customs Act. There was one outstanding request under the Customs Act 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 did not issue any orders granting or denying extensions of time under the Excise Tax Act. There were no outstanding requests under the Excise Tax Act at the end of the fiscal year.
Appeals Received and Heard
During the fiscal year, the Tribunal received 52 appeals.
The Tribunal heard 31 appeals, 30 under the Customs Act and one under SIMA. It issued decisions on 29 appeals, which consisted of 24 appeals under the Customs Act, one under SIMA and four remand cases from the Federal Court of Appeal.
Thirty-nine appeal cases were outstanding at the end of the fiscal year. Several of these appeals were in abeyance at the request of the parties.
Appeals Before the Tribunal in Fiscal Year 2016-2017
|Appeal No.||Appellant||Date of Decision||Status/Decision|
|AP-2009-046R||Igloo Vikski Inc.||December 8, 2016||Closed|
|AP-2011-057R and AP-2011-058R||Marmen Énergie Inc. and Marmen Inc.||July 7, 2016||Dismissed|
|AP-2012-018||Helly Hansen Canada Limited||October 28, 2016||Withdrawn|
|AP-2012-037||Northern Amerex Marketing Inc.||October 13, 2016||Withdrawn|
|AP-2012-052R||Cross Country Parts Distributors Ltd.||August 19, 2016||Dismissed|
|AP-2013-038||Sunpan Trading & Importing Inc.||May 20, 2016||Withdrawn|
|AP-2014-018||Air Canada||January 24, 2017||Withdrawn|
|AP-2014-023||Dealers Ingredients Inc.||In progress|
|AP-2014-024||Globe Union (Canada Inc.).||September 30, 2016||Allowed|
|AP-2014-031||Conteneurs Shop Containers||November 29, 2016||Withdrawn|
|AP-2014-032||Les Services de Conteneurs A.T.S. Inc.||November 29, 2016||Withdrawn|
|AP-2014-041||Tri-Ed Ltd.||February 27, 2017||Allowed in part|
|AP-2014-044||Wolseley-Western Mechanical||April 15, 2016||Withdrawn|
|AP-2014-045||Les pièces d’auto Transbec||March 13, 2017||Withdrawn|
|AP-2015-001||Innovex Produits Techniques Inc.||August 22, 2016||Withdrawn|
|AP-2015-009||Les pièces d’auto Transit Inc.||March 13, 2017||Withdrawn|
|AP-2015-010||D. Josefowich||May 9, 2016||Dismissed|
|AP-2015-011||J. Cheese Inc.||September 13, 2016||Dismissed|
|AP-2015-013||Y. Gosselin||June 9, 2016||Dismissed|
|AP-2015-014||Costco Wholesale Canada Ltd.||In progress|
|AP-2015-018||Délices de la Forêt Inc.||May 26, 2016||Dismissed|
|AP-2015-020||Univar Canada Ltd.||April 14, 2016||Withdrawn|
|AP-2015-022||Schlumberger Canada Limited||In progress|
|AP-2015-023||Summer Infant Canada Ltd.||October 4, 2016||Withdrawn|
|AP-2015-026||Digital Canoe Inc.||August 22, 2016||Dismissed|
|AP-2015-027||Nestlé Canada Inc.||February 7, 2017||Dismissed|
|AP-2015-028||First Jewelry Ltd.||November 25, 2016||Dismissed|
|AP-2015-029||Sowa Tool and Machine Company Limited||September 23, 2016||Withdrawn|
|AP-2015-030||A. Waller||July 7, 2016||Withdrawn|
|AP-2015-031||G. Bradford||September 12, 2016||Dismissed|
|AP-2015-032||Rona Corporation||May 5, 2016||Withdrawn|
|AP-2015-033||Build.com Inc.||December 14, 2016||Dismissed|
|AP-2015-034||Best Buy Canada Ltd.||February 27, 2016||Allowed|
|AP-2015-035||CDC Foods Inc.||December 14, 2016||Dismissed|
|AP-2015-036||P & F USA Inc.||February 27, 2016||Allowed|
|AP-2016-001||LG Electronics Canada Inc.||February 27, 2016||Allowed|
|AP-2016-002||Premier Gift Ltd.||February 21, 2017||Allowed|
|AP-2016-003||Philips Electronics Ltd.||March 13, 2017||Dismissed|
|AP-2016-004||R.S. Abrams||December 21, 2017||Dismissed|
|AP-2016-005||Canac Marquis Grenier Ltée||February 22, 2017||Dismissed|
|AP-2016-006||Patrick Morin Inc.||In abeyance|
|AP-2016-007||LRI Lightning International Inc.||In progress|
|AP-2016-008||Artcraft Company Inc.||December 7, 2016||Withdrawn|
|AP-2016-009||T. Meunier.||In progress|
|AP-2016-010||Costco Wholesale Canada Ltd.||December 23, 2016||Withdrawn|
|AP-2016-011||Oakville Stamping & Bending Ltd.||October 14, 2016||Withdrawn|
|AP-2016-012||Patrick Morin Inc.||In abeyance|
|AP-2016-013||Medical Mart Supplies Inc.||In progress|
|AP-2016-014||E-Card ID Products Ltd.||In progress|
|AP-2016-015||CDC Foods Inc.||December 14, 2016||Dismissed|
|AP-2016-016||Les Industries Touch Inc.||March 27, 2017||Dismissed|
|AP-2016-017||RBP Imports Inc.||In progress|
|AP-2016-018||Implus Footcare LLC||December 13, 2016||Withdrawn|
|AP-2016-019||Hydraulic Source Inc.||In progress|
|AP-2016-020||Sonos Inc.||In progress|
|AP-2016-021||Skotidakis Goat Farm||In progress|
|AP-2016-023||Regional Medical Products Inc.||March 2, 2017||Withdrawn|
|AP-2016-024||Stryker Canada Holding Company||January 20, 2017||Withdrawn|
|AP-2016-025||Janicki & Associates Ltd.||In progress|
|AP-2016-026||Canac Marquis Grenier Ltée||In progress|
|AP-2016-027||Best BuyCanada Ltd.||In progress|
|AP-2016-028||Regional Medical Products Inc.||In progress|
|AP-2016-029||Ergomat Canada Inc.||February 13, 2017||Withdrawn|
|AP-2016-030||Rona Inc.||In abeyance|
|AP-2016-031||Rona Inc.||In progress|
|AP-2016-032||A. Lax||March 17, 2017||Withdrawn|
|AP-2016-033||B. Carr||In progress|
|AP-2016-034||Richelieu Hardware Ltd.||In abeyance|
|AP-2016-035||Partick Morin Inc.||In abeyance|
|AP-2016-037||R. Sulit||In progress|
|AP-2016-038||Alliance Mercantile Inc.||In progress|
|AP-2016-039||Worldpac Canada Inc.||In progress|
|AP-2016-040||Danson Décor Inc.||In abeyance|
|AP-2016-041||Danson Décor Inc.||In abeyance|
|AP-2016-042||Holland Imports Inc.||In abeyance|
|AP-2016-043||Canac Marquis Grenier Ltée||In abeyance|
|AP-2016-044||Sacs Industriels Inc.||In progress|
|AP-2016-046||A. Cowan||In progress|
|AP-2016-047||Johnston Research and Performance Inc.||In progress|
|AP-2016-048||Rona Inc.||In progress|
|AP-2016-049||Agrisac (6350747 Canada Inc.)||In abeyance|
|AP-2016-050||Gentec International||In progress|
|AP-2016-051||The Source (Bell) Electronics Inc.||In abeyance|
|AP-2016-052||J.F. Allard||In progress|
|Special Import Measures Act|
|EA-2015-003||Sistemalux Inc.||July 26, 2016||Dismissed|
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. These summaries have been prepared for general information purposes only.
AP-2014-009—Maples Industries, Inc.
This appeal concerned the conditions required to qualify for the benefits of the preferential United States Tariff (UST) established under NAFTA, specifically certain de minimis provisions of the NAFTA Rules of Origin Regulations for textile goods and the exception for self-produced materials.
The appeal was brought by Maples Industries, Inc. (Maples), a manufacturer and exporter of accent rugs used in homes located in the United States. The goods in issue were composed of synthetic filament nylon yarn, polypropylene mesh fabric (the backing), natural rubber latex, vulcanizing accelerators, chloride celling agents, nylon filament sewing thread, paints, colours and tints. Two components of the goods in issue, namely, the nylon filament sewing thread and the backing, originated from outside of a NAFTA country. The thread was used to serge the edges of the rug and comprised 0.22 percent of the total weight of the finished rug. The backing was made of woven polypropylene strips and comprised 6.71 percent of the total weight of the finished rug.
Maples argued that the goods in issue qualify for preferential tariff treatment pursuant to the UST. Maples submitted that the two non-originating materials used in the production of the goods in issue fall below the de minimis threshold of seven percent or less by weight found in subsection 5(6) of the NAFTA Rules of Origin Regulations and should thus be disregarded for the purposes of determining the origin of the goods in issue.
In the alternative, Maples argued that the goods in issue also qualify as originating goods under NAFTA by the combination of a “self-produced material” election for the tufted fabric and by application of the de minimis rule to the monofilament yarn. Maples took the position that the tufted fabric produced in the course of the production process is a “self-produced material”, which, if classified in heading No. 58.02, undergoes the necessary transformation into a finished rug of heading No. 57.03. Applying the “self-produced material” election with respect to the tufted fabric, the remaining non-originating material was the monofilament yarn, which the CBSA accepted as qualifying for the de minimis rule.
The parties disagreed on the tariff classification of the tufted fabric in its role as a self-produced material. Maples submitted that it was classified in heading No. 58.02 as a tufted fabric. According to the CBSA, the tufted fabric was an “unfinished carpet” that has all the characteristics of a floor covering and its textile materials serve as the exposed surface of the tufted fabric when in use. The fabric should therefore have been classified in heading No. 57.03 as a carpet or other textile floor covering. As such, it was the CBSA’s position that the tufted fabric does not undergo the required change in tariff classification in order to allow the goods in issue to qualify for preferential tariff treatment.
The Tribunal did not adopt Maples’ interpretation of the de minimis provision; however, it did rule that the tufted fabric was a self-produced material and that it should be classified in heading No. 58.02. The Tribunal therefore held that the goods in issue qualified for the preferential UST.
AP-2015-011—J. Cheese Inc.
The issue in this appeal was whether the goods in issue were considered cheese fondue under tariff item No. 222.214.171.124 of the schedule of the Customs Tariff, as claimed by J. Cheese Inc. (JCI), or whether they were considered grated cheese under tariff item No. 0406.20.92 (over access commitment), as determined by the CBSA. Although JCI described the goods as cheese fondue, the product, which consisted of several varieties of shredded cheese and certain minor constituents, was predominantly used as a pizza topping.
At issue was whether certain manufacturing processes and the inclusion of certain ingredients resulted in a product not having the character of cheese. This issue arose because the explanatory note to Chapter 4 indicated that heading No. 04.06 covered “all kinds of cheese”, including “grated or powdered cheese”. Furthermore, the Explanatory Notes to the Harmonized Commodity Description and Coding System (the Explanatory Notes) state that “[t]he presence of meat, fish, crustaceans, herbs, spices, vegetables, fruit, nuts, vitamins, skimmed milk powder, etc., does not affect classification provided that the goods retain the character of cheese.”
Canadian regulations prescribe the compositional standards that certain dairy products must adhere to in order to be sold in Canada. JCI took the view that because its product did not adhere to these standards, the goods ought not to be considered to be cheese. However, the Tribunal found that the Canadian regulations were of limited assistance in resolving the tariff classification issue, as they more narrowly define what a cheese is than do the Codex Alimentarius and the Explanatory Notes. The Tribunal found that while norms established by other regulatory frameworks, common industry usage, etc., can serve as guidance to the Tribunal, they must be considered secondary to the terms of the Customs Tariff.
The Tribunal also found that it is bound to determine tariff classification based on the General Rules of the Interpretation of the Harmonized System (the General Rules) irrespective of whether a good falls under a supply management regime. This issue was addressed again in Nestlé Canada Inc. (File No. AP-2015-027).
The Tribunal found that the goods in issue were comprised of cheese (at 99 percent), and that they were used, marketed and distributed as such. They could not be distinguished from cheese on a molecular level either. The Tribunal found that, notwithstanding the manufacturing processes employed by JCI or the additional ingredients included the goods in issue, they retained the character of cheese and, accordingly, the appeal was dismissed.
AP-2015-034—Best Buy Canada Ltd.
In Best Buy Canada Ltd. (AP-2015-034), which was heard together with P&F USA Inc. (AP-2015-036) and LG Electronics Canada Inc. (AP-2016-001), the Tribunal pronounced for the first time on the question whether a certificate signed by the user of a good was an essential requirement for the good to be classified under a conditional relief tariff item of the schedule to the Customs Tariff.
The appellants had applied for refunds of the duties paid on certain televisions, on the basis that the televisions were articles for use in automatic data processing (ADP) machines and units thereof, and, as such, should have benefited from duty-free treatment under tariff item No. 9948.00.00. The CBSA denied the claims. It took the view that the appellants had not substantiated the actual use of the goods in issue in ADP machines by providing records in accordance with the Imported Goods Records Regulations, which require a person who imports commercial goods that have been released free of duty because of their intended use to keep “a certificate or other record signed by the user of the commercial goods that shows the user’s name, address and occupation and indicates the actual use made of the commercial goods.”
On appeal, the Tribunal determined that the issue of whether goods are classified in a tariff item of Chapter 99 is not determined by the question, in itself, of whether the importer met its record-keeping obligations pursuant to the Imported Goods Records Regulations, as neither the Customs Act nor the Customs Tariff make such compliance a substantive condition for the tariff classification of goods. Instead, the Tribunal found that classification in a tariff item of Chapter 99 depends on the evidence an importer can adduce to show that the goods correspond to the description of the relevant tariff item, in accordance with sections 10 and 11 of the Customs Tariff. The Tribunal also determined that the relevant provision of the Imported Goods Records Regulations did not apply to goods that are not released free of duty.
The Tribunal reaffirmed that in order for goods to be classified under tariff item No. 9948.00.00, the goods must be shown to be (1) articles (2) for use in (3) one of the host goods identified in that tariff item. The Tribunal also reaffirmed that the expression “for use in”, as defined in subsection 2(1) of the Customs Tariff, requires evidence that shows, on the balance of probabilities, that the goods are actually used in conformity with the tariff item, but that this evidence is not restricted to certificates signed by the user of the goods.
The Tribunal found that the appellants had provided evidence that showed, on the balance of probabilities, that the imported televisions complied with the conditions for classification under tariff item No. 9948.00.00. Accordingly, the appeals were allowed.
The same issue also arose in Tri-Ed Ltd. (File No. AP-2014-041). However, the Tribunal concluded that the evidence did not show that the goods in issue in that case met the conditions for classification under tariff item No. 9948.00.00.
Canada (Attorney General) v. Igloo Vikski Inc.,  2 SCR 80, 2016 SCC 38 (CanLII)
On September 29, 2016, the Supreme Court of Canada (Côté, J., dissenting) allowed the appeal by the Attorney General, thereby confirming the Tribunal’s decision in File No. AP-2009-046 to classify imported hockey gloves under tariff item No. 6216.00.00 of the Customs Tariff as “gloves, mittens and mitts” (as the CBSA had originally determined). The Tribunal’s decision had been previously overturned by the Federal Court of Appeal. The Supreme Court determined that the Tribunal’s interpretation and application of Rules 1 and 2 of the General Rules were reasonable. Specifically, the Supreme Court held that the General Rules allow for the conjunctive application of Rules 1 and 2 to a determination of the heading(s) under which a good is prima facie classifiable.
Canada (Attorney General) v. Bri-Chem Supply Ltd.; Canada (Attorney General) v. Ever Green Ecological Services Inc.; Canada (Attorney General) v. Southern Pacific Resource Group, 2016 FCA 257 (CanLII)
In three decisions dated October 16, 2015 (Files No. AP-2014-017, AP-2014-027 and AP-2014-028), the Tribunal found that an importer may make revenue-neutral corrections to tariff treatment declarations on the basis of section 32.2 of the Customs Act. The Tribunal also found that the CBSA had committed an abuse of process by failing to apply the Tribunal’s earlier decision in Frito-Lay Canada Inc. (File No. AP-2012-002), and by relitigating the same issues that had been decided by that matter. The Attorney General of Canada appealed the three decisions. The appeals were dismissed by the Federal Court of Appeal on October 21, 2016.
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-2013-057||BSH Home Appliance Ltd.||BSH Home Appliance Ltd.||A—32—15
|AP-2012-009||Volpak Inc.||Volpak Inc.||A-197-15
|AP-2014-025||ContainerWest Manufacturing Ltd.||ContainerWest Manufacturing Ltd.||A-351-15
|AP-2014-017||Bri-Chem Supply Ltd.||Attorney General of Canada||A-534-15
|AP-2014-027||Ever Green Ecological Services Inc.||Attorney General of Canada||A-535-15
|AP-2014-021||Worldpac Canada Inc.||Worldpac Canada Inc.||A-154-16
|AP-2014-024||Globe Union (Canada) Inc.||Attorney General of Canada||A-477-16
|AP-2015-028||First Jewelry Ltd.||First Jewelry Ltd.||A-62-17
|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.|