Federal Appeal


Customs and Excise

DUTY
R&D payments were, in entirety, in respect of goods in issue

Appellant was in business of selling footwear. Respondent made seven decisions pursuant to s. 60(4) of Customs Act (Can.), concerning value for duty of footwear imported by appellant. Respondent determined that payments made by appellant to vendor, its parent company, for research, development and design expenses (R&D payments) must be included, in their entirety, in price paid or payable for goods in issue and their value for duty for purposes of Act. Appellant appealed. Tribunal dismissed appeal. Tribunal concluded that R&D payments, in entirety, were in respect of goods in issue and must be included in their value for duty purposes. Appellant appealed tribunal’s decision. Appeal dismissed. Standard of review was reasonableness. Appellant was asking Court of Appeal to re-weigh evidence before tribunal, which was beyond scope of court’s role. Tribunal’s decision was reasonable. It was reasonable for tribunal to conclude that R&D payments were, in entirety, in respect of goods in issue. Tribunal’s description of legal test was correct. In determining whether payment was in respect of certain goods, main question was whether there was sufficient link between payment and goods. Tribunal reasonably concluded that link between R&D payments and footwear imported by appellant was sufficient. Tribunal reasonably concluded that research, design and development process was interrelated, whole of which was require to produce goods. Appellant’s arguments as to how R&D costs were not in respect of goods were not accepted. Tribunal did not err in its use of authorities. Decision was transparent, intelligible and justifiable. Conclusion fell within range of possible, acceptable outcomes that were defensible in respect of facts and law.

Skechers USA Canada Inc. v. Canada (President of Border Services Agency) (Mar. 2, 2015, F.C.A., Eleanor R. Dawson J.A., Johanne Trudel J.A., and David G. Near J.A., File No. A-121-14) 250 A.C.W.S. (3d) 428.

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