CATCHWORDS CUSTOMS - Classification of goods for duty purposes - Construction of classification schedule - Interpretation rules relating to application of the more specific of two applicable items -- Whether goods are "similar goods" to specified articles. Customs Act 1901 s.167 Customs Tariff Act 1982 Sch.2:; Sch.3, Ch.73. Administrative Appeals Tribunal Act 1975 s.44(1), 44(3) Peacock v Zvfert (1983) 48 ABR 549 NSW G.284 of 1985 ACROW AUSTRALIA LIMITED v THE COLLECTOR OF CUSTOMS FOR THE STATE OF NEW SOUTH WALES Evatt, Sheppard and Wilcox JJ Sydney 3 July 1986 —3 JUL 1985 FEDERAL COURT OF AUSTRALIA PRINCIRAL yor ce ee IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY ween GENERAL DIVISION BETWEEN: ACROW AUSTRALIA LIMITED Applicant AND: THE COLLECTOR OF CUSTOMS FOR THE STATE OF NEW SOUTH WALES Respondent CORAM: EVATT, SHEPPARD and WILCOX JJ PLACE: SYDNEY DATE: 3 JULY 1986 No. G.284 of 1985 ON APPEAL from the General Administrative Division of the Administrative Appeals Tribunal MINUTES OF ORDER THE COURT ORDERS THAT: 1. The appeal be dismissed. NOTE The applicant pay to the respondent his costs of the appeal. Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. thee ye or aanperr oe "at yaw Ine et re ee + ow orpeense te eae ore oyt Pars aoe oS wy IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) No. G.284 of 1985 ) GENERAL DIVISION ) ON APPEAL from the General Administrative Division of the Administrative Appeals Tribunal BETWEEN: ACROW AUSTRALTA LIMITED Applicant AND: THE COLLECTOR OF CUSTOMS FOR THE STATE OF NEW SOUTH WALES Respondent CORAM: EVATT, SHEPPARD and WILCOX JJ PLACE SYDNEY DATE: 3 JULY 1986 | REASONS FOR JUDGMENT THE COURT: This case concerns the proper classification, for customs duty purposes, of some shipments of threaded rods imported into Australia by the applicant, Acrow Australia Limited. The rods were produced by a cold-drawing process. rr nr tS ea ae nese we ee -~f ee yet - a Ave ee ee Thread was then applied by cold-rolling. The principal use of such rods is for the securing of the roofs of houses in the cylcone areas of Australia. However, the rods are able to be cut to any required length and, with nuts attached, used as fasteners. The rods are imported in lengths of 8, 9 or 10 feet, if manufactured to imperial standards, or 2 or 3 metres, if manufactured in accordance with metric standards. All of the subject rods have diameters of less than 13 millimetres. Differences having arisen at the time of the importation between Acrow and the Collector of Customs for New South Wales, the respondent to this appeal, regarding the classification of the goods, duty was paid under protest, as provided for by s.167 of the Customs Act 1901. Application was subsequently made for review of the Collector's decisions pursuant to the Administrative Appeals Tribunal Act 1975. The Administrative Appeals Tribunal upheld the submission of the respondent that the goods fell within item 73.32 of Schedule 3 of the Customs Tariff Act 1982. The applicant now appeals to this Court against that decision. The decision having been given by a Tribunal containing a presidential member, the appeal is to a Full Court of this Court: see Administrative Appeals Tribunal Act s.44(3). The right of appeal is, of course, confined to matters of law -- see 3.44(1) of the Administrative Appeals Tribunal Act -- but the question whether goods, fully described, fall within a particular provision of the Schedule is a question of law: see Peacock v Zyfert (1983) 48 ALR 549 at pp.556 and 564. mee see meee , es om Ot ye wpe ane ee mA ve Be per or rr ry y amos wenprese rete It is common ground between the parties that the subject goods are included within Chapter 73 of Schedule 3 of the Customs Tariff Act. That Chapter is entitled "Iron and Steel and Articles Thereof". It commences with certain Chapter notes which include sub-notes (17) and (18) as follows: "(17) A reference in this Chapter to wire -- (a) shall be read as a reference to cold-drawn products of solid section of any cross-sectional shape of which no cross-sectional dimension exceeds 13 mm; ore (18) A reference in this Chapter to bars and rods (including wire rod) shall be read as a reference to -- (a) products of solid section (not being goods referred to in sub-note (10), (11), (12), (13), (14), (15), (16) or (17) that have a cross-section in the shape of a circle, a segment of a circle, an oval, an isosceles triangle, a rectangle, a hexagon, an octagon or quadrilateral with two sides parallel and the other two sides equal but not parallel; or (b) ..." Four items in the list of goods contained in Chapter 73 have been referred to in argument before us. We set out their terms as follows: "73.210 BARS AND RODS (INCLUDING WIRE ROD), OF TRON OR STEEL, HOT-ROLLED, FORGED, EXTRUDED, COLD-FORMED OR COLD-FINISHED (INCLUDING PRECISION-MADE); HOLLOW MINING DRILL STHEL: peer on yee ee 7 voy ee ee geo oe ee ee : TE Par 7 a _ i, ety met at LC 73.10.1 Bars and rods, as follows: (a) cold-drawn; (b) cold-rolled; (c) ground; or (d) turned 73.10.9 Other 73.14 IRON OR STEEL WIRE, WHETHER OR NOT COATED, BUT NOT INSULATED 73.32 BOLTS AND NUTS (INCLUDING BOLT ENDS AND SCREW STUDS), WHETHER OR NOT THREADED OR TAPPED, SCREWS (INCLUDING SCREW HOOKS AND SCREW RINGS), RIVETS, COTTERS, COTTER-PINS AND SIMILAR GOODS, OF IRON OR STEEL; WASHERS (INCLUDING SPRING WASHERS) OF IRON OR STEEL : 73.40 OTHER GOODS MADE OF IRON OR STEEL:" The applicant contends that item 73.14 applies; that is that the goods are "iron or steel wire". The evidence shows that, in normal parlance, rods would not be described as wire. But the applicant argues that this is immaterial since sub-note (17) defines wire, for the purposes of Chapter 73, in such a way as to include the goods. The contention is that sub-note (17) ascribes a special, artificial meaning to "wire", that -- wherever in the Chapter the word "wire" is used -- there is to be substituted the words "cold-drawn products of solid section of any cross-sectional shape of which no cross-sectional dimension exceeds 13 mm". It being conceded that the rods are all cold-drawn products, that they vere wane arts cistcey ote poe eee ap er pes cory one ye ree yolk are all of solid section and that no cross-sectional dimension of any rod exceeds 13 mm, it is submitted by the applicant that the application of sub-note (17) concludes the matter in favour of the applicant. The terminology used in sub-note (17) "(a) reference -.. to wire ... shall be read as a reference to" -- is not inappropriate to a "deeming" definition whereby a particular word is chosen as a shorthand method of referring to other words with which it is not necessarily synonomous. But the terminology does not point unequivocally in that direction. The formula, "shall be read as a reference", is not inconsistent with an intention to indicate that, for the purposes of the Chapter, the word "wire" is to be taken to refer only to such wire, as that commodity is ordinarily understood, as has the specified characteristics regarding method of production, solidity and size. Sub-note (18) provides guidance as to which of the two meanings was intended. The purpose of that sub-note is to define "bars and rods" -- referred to in item 73.10. The sub-note specifically excludes from that definition products falling within sub-note (17). On the applicant's interpretation of sub-note (17), it would exclude cold-drawn products of solid section not exceedings 13 mm in cross-sectional dimension. Yet the opening words of sub-note (18) specifically include "wire rod" in the definition of bars a eee sey ca . 7 opr ns and rods. Acceptance of the applicant's argument would lead to sub-note (18) being read as referring to bars and rods (including cold-drawn rods of solid section not exceeding 13 mm) but excluding cold-drawn products of solid section not exceeding 13 mm. As a rod is, of course, a product the position would be absurd. The alternative construction of sub-note (17) confines item 73.14 to wire, that is wire simpliciter and as that commodity is ordinarily understood, which has the characteristics described in sub-note (17). Wire rod, being rod made out of wire, in the usual meaning of that term but not having the characteristics mentioned in sub-note (17), would fall within sub-note (18) and be dealt with by item 73.10. We reject the first, and principal, submission of the applicant and hold that the subject rods do not fall within item 73.14. During the argument there was some discussion of the question whether the subject goods were covered by item 73.10. The application of that item depends upon proof that the goods were produced by one of the methods listed therein. The Tribunal made no finding in relation to that matter, the reason being that no party contended to it that the item was applicable. oe epee ee ie ree wooo. > yoo wor wre at ge oe The failure of the applicant to rely upon item 73.10 ~- which provides for a lower rate of duty than item 73.32 -- is presumably related to the terms of rule 3 of the interpretation rules set out in Schedule 2 of the Act. That rule provides that, where goods fall within two or more items and one item provides a more specific description of the goods than the other, the more specific item applies. Item 73.32 provides a more specific description than item 73.10. Consequently, if item 73.32 applies, it matters not whether item 73.10 also applies. The respondent argues that item 73.32 does apply. It is not contended that the rods are properly described as any of the articles specifically named in the description. But it is said that they are properly described as "similar goods" to those which are listed, the goods having the common characteristic of being fasteners. Counsel says that it is not correct -- as the applicant contends -- to read the words "and similar goods" as relating only to the last specified articles, that is to cotter-pins. The practice of the draftsman, throughout the Schedule, has been to introduce the last article in the list covered by each item with the word "and". It is consistent with that practice that he should have inserted the word "and" before "similar goods", in recognition of its existence as a yep oer eee ee ge E yee se eee category not limited to cotter-pins. Item 73.33 provides an example of a situation in which the draftsman has intended the reference to similarity to extend only to goods like a particular articie. In that case the list reads: "Needles for hand sewing ...hand carpet needles and hand knitting needles, bodkins, crochet hooks, and the like, and embroidery stilettos ... ". It might have been expected that, if he had intended to include in item 73.32 only goods which were like cotter-pins, the draftsman would have taken a similar course and have written "cotters, cotter-pins, and the like, of iron and steel". Furthermore, the separate mention of washers, after the semi-colon, is significant. This must be because the reference to similarity was to apply to all goods mentioned to that point but not to washers. The intention, it seems to us, was that articles were to fall within item 73.32 if they were similar to any of those described by name prior to the words "and similar goods". The Tribunal having found that the goods were similar to boits, it follows that the Tribunal correctly held that the goods fell within item 73.32. It follows, of course, that they did not fall within the residue item, item 73.40. In our opinion the Administrative Appeals Tribunal correctly concluded that the goods were governed by item 73.32. The appeal must be dismissed with costs. a wa — pac oe aie I certify that the eight (8) preceding pages are a true copy of the Reasons for Judgment of their Honours Mr Justice Evatt, Mr Justice Sheppard and Mr Justice Wilcox. Associate: haere Date: 3 July 1986 Counsel for the Applicant: Solicitors for the Applicant: Counsel for the Respondent: Solicitors for the Respondent: Date(s) of hearing: Mr E J Cooper Messrs Warren F Ball & Co Mr D Yates Australian Government Solicitor 2 June 1986 wees mae epee yn cat moot wey y prot PON I a ee te meee ennne Smet Stee ae re .e are : warm see mnie so epoe er e ts a han ao poeresae yhoo