Supreme court | Customs and Excise
Duty
Classification decision of Canadian International Trade Tribunal should be restored
Respondent importer sought to import hockey gloves. Canada Border Services Agency classified these items as “(g)loves, mittens (or) mitts” under tariff item No. 62.16 and not item No. 39.26, which applies to various types of sporting equipment. Canadian International Trade Tribunal (CITT) upheld determination. CITT found goods met terms of heading No. 62.16 and that presence of plastic components did not deprive them of their character as gloves of textile fabric. CITT found dual classification was not applicable. Importer brought application for judicial review. Federal court of appeal held that determination did not meet standard of reasonableness. It held that goods had dual nature and CITT had not properly applied relevant rule. Court of appeal referred matter back to CITT. Crown appealed. Appeal allowed. Court of appeal misapprehended structure of General Rules of Customs Tariff (Can.). It did not appreciate conjunctive nature of application of R. 1 and R. 2 to determination of headings under which good is prima facie classifiable. Rules 1 and 2 are not mutually exclusive classification rules. Rule 1 simply provides that classification must be done according to headings and relevant section and chapter notes. Rule 2 deems that certain references in headings include unfinished goods or goods composed of different materials. Where R. 2 applies, it informs content of headings by which R. 1 directs that appropriate classification is to be determined. CITT’s decision is reasonable if its reasons “allow reviewing court to understand why tribunal made its decision and permit it to determine whether the conclusion is within the range of acceptable outcomes”. Further, court of appeal erred in supposing that R. 2(b) can be applied to extend scope of heading to include particular good where no part of that good falls within heading. Good must be described in whole or in part by heading, even if it may ultimately not be classified under that heading because of its unfinished or composite nature, before R. 2 can be applied. This is consistent with process of reasoning applied by CITT to this case, and reasonableness of its decision is unassailable on this basis. CITT’s decision classifying gloves under heading 62.16 was reasonable. CITT neither misapplied General Rules, nor interpreted heading 39.26 and its Explanatory Note in unreasonable manner. Classification decision of CITT should be restored.
Canada (Attorney General) v. Igloo Vikski Inc. (Sep. 29, 2016, S.C.C., McLachlin C.J.C., Abella J., Cromwell J., Moldaver J., Karakatsanis J., Wagner J., Gascon J., Côté J., and Brown J., 36258) Decision at 246 A.C.W.S. (3d) 594 was reversed. 270 A.C.W.S. (3d) 306.
Classification decision of Canadian International Trade Tribunal should be restored
Respondent importer sought to import hockey gloves. Canada Border Services Agency classified these items as “(g)loves, mittens (or) mitts” under tariff item No. 62.16 and not item No. 39.26, which applies to various types of sporting equipment. Canadian International Trade Tribunal (CITT) upheld determination. CITT found goods met terms of heading No. 62.16 and that presence of plastic components did not deprive them of their character as gloves of textile fabric. CITT found dual classification was not applicable. Importer brought application for judicial review. Federal court of appeal held that determination did not meet standard of reasonableness. It held that goods had dual nature and CITT had not properly applied relevant rule. Court of appeal referred matter back to CITT. Crown appealed. Appeal allowed. Court of appeal misapprehended structure of General Rules of Customs Tariff (Can.). It did not appreciate conjunctive nature of application of R. 1 and R. 2 to determination of headings under which good is prima facie classifiable. Rules 1 and 2 are not mutually exclusive classification rules. Rule 1 simply provides that classification must be done according to headings and relevant section and chapter notes. Rule 2 deems that certain references in headings include unfinished goods or goods composed of different materials. Where R. 2 applies, it informs content of headings by which R. 1 directs that appropriate classification is to be determined. CITT’s decision is reasonable if its reasons “allow reviewing court to understand why tribunal made its decision and permit it to determine whether the conclusion is within the range of acceptable outcomes”. Further, court of appeal erred in supposing that R. 2(b) can be applied to extend scope of heading to include particular good where no part of that good falls within heading. Good must be described in whole or in part by heading, even if it may ultimately not be classified under that heading because of its unfinished or composite nature, before R. 2 can be applied. This is consistent with process of reasoning applied by CITT to this case, and reasonableness of its decision is unassailable on this basis. CITT’s decision classifying gloves under heading 62.16 was reasonable. CITT neither misapplied General Rules, nor interpreted heading 39.26 and its Explanatory Note in unreasonable manner. Classification decision of CITT should be restored.
Canada (Attorney General) v. Igloo Vikski Inc. (Sep. 29, 2016, S.C.C., McLachlin C.J.C., Abella J., Cromwell J., Moldaver J., Karakatsanis J., Wagner J., Gascon J., Côté J., and Brown J., 36258) Decision at 246 A.C.W.S. (3d) 594 was reversed. 270 A.C.W.S. (3d) 306.
