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 Smoothflow  Australia Pty Ltd and Comptroller-General of Customs [2020] AATA 1890 (23 June 2020)

Last Updated: 23 June 2020

 Smoothflow  Australia Pty Ltd and Comptroller-General of Customs [2020] AATA 1890 (23 June 2020)

Division: TAXATION AND COMMERCIAL DIVISION

File Number(s): 2018/7359

Re:  Smoothflow  Australia P/L

APPLICANT

And Comptroller-General of Customs

RESPONDENT

DECISION

Tribunal: Deputy President B W Rayment OAM QC

Date: 23 June 2020

Place: Sydney

The Tribunal decides that the reviewable decision be set aside, and the matter be remitted to the respondent with the direction that heading 7308 applies to the goods and the duty should be recalculated accordingly.

....................................[sgd].......................................

Deputy President B W Rayment OAM QC

CATCHWORDS

CUSTOMS AND EXCISE – Customs duty – identification of goods – correct tariff classification under appropriate heading – where English and French text of the Harmonized Commodity Description and Coding System contains differences – whether appropriate to use explanatory notes – whether Canadian approach should be supported in Australia – where General rules for interpretation applied – where more specific description available – decision set aside and remitted

LEGISLATION

Acts Interpretation Act 1901 (Cth) s 15AB

Customs Act 1901 (Cth)

Customs Tariff Act 1995 (Cth) Schs 2, 3

CASES

Attorney-General of Canada and RBP Imports Inc [2018] FCA 167

Barry R Liggins Pty Ltd v Comptroller-General of Customs (1991) 32 FCR 112

Canada (Attorney-General) v Suzuki Canada Inc [2004] FCA 131

Chinese Food & Wine Supplies Pty Ltd v Collector of Customs (Vic) (1987) 72 ALR 591

Comptroller-General of Customs v Pharm-A-Care [2020] HCA 2; (2020) 94 ALJR 182

Primaplas Pty Ltd v Chief Executive Officer of Customs [2016] FCAFC 40; (2016) 242 FCR 268

RBP Imports Inc v President of the Canada Border Services Agency (11 February 2019), AP-2016-017R (CITT)

Re Gissing and the Collector of Customs (1977) 1 ALD 144; [1977] AATA 4; 14 ALR 555

Re Sterns Playland Pty Ltd and Collector of Customs (No 2) (1982) 4 ALD 562

Toyota Tsusho Australia Pty Ltd v Collector of Customs [1992] FCA 282

Vernon-Carus Australia Pty Ltd and Thomas Creevey and Associates v Collector of Customs [1995] FCA 1283; (1995) 21 AAR 450

SECONDARY MATERIALS

International Convention on the Harmonized Commodity Description and Coding System (1983) 1503 UNTS 168

Standards Australia, ‘AS 1074–1989 Steel tubes and tubulars for ordinary service’ (1989)

Standards Australia, ‘AS 2118.1:2017 Automatic fire sprinkler systems General systems’ (2017)

Standards Australia, ‘AS 2419.1:2017 Fire hydrant installation System design, installation and commissioning’ (2017)

Standards Australia ‘AS 4118.2.1–1995 Fire sprinkler systems – Piping – General’ (1995)

REASONS FOR DECISION

Deputy President B W Rayment OAM QC


23 June 2020

1.  Smoothflow  Australia P/L (‘ Smoothflow ’) imported pipes made in China and was assessed both to anti-dumping duty and Customs duty. It paid, under protest, Customs duty as assessed by the respondent under the Customs Tariff Act 1995 (Cth) (‘the Tariff Act’) on the relevant goods.  Smoothflow  applied under the Customs Act 1901 (Cth) to the Tribunal for review, seeking a determination that the goods were not liable to Customs duty under heading 7306, but rather under heading 7308, which, at the relevant time, was at a lower rate. If the applicant succeeds, it would follow that anti-dumping duty is also not payable. The amount of anti‑dumping duty far exceeds the amount of Customs duty.
2. The dispute between the parties comes down to whether heading 7308 or heading 7306 in Sch 3 to the Tariff Act applies to the importation. The statutory premise is that all goods are classifiable under a uniquely applicable tariff classification.
3. Sch 3 to the Tariff Act adopts the structure and the English text of the Harmonized Commodity Description and Coding System (‘the Harmonized System’) as set out in the annex to the International Convention on the Harmonized Commodity Description and Coding System (1983) 1503 UNTS 168 (‘the Convention’) and as amended in accordance with the procedure for amendment prescribed by the Convention in Arts 7(1)(a), 8(1) and 16.^[1]

THE IDENTIFICATION OF THE GOODS

4. The conventional two-staged approach to tariff classification explained in Re Gissing and the Collector of Customs (1977) 1 ALD 144 at 146 involves making findings about the identification of the goods in the condition in which they were imported, including as to the composition of the goods and the functions which the goods were designed to serve. Having performed that task, the Tribunal seeks to apply the tariff to the entity imported.
5. As Lockhart J (with whom Woodward and Ryan JJ agreed) pointed out in Chinese Food and Wine Supplies Pty Ltd v Collector of Customs (Vic) (1987) 72 ALR 591 at 599, ‘the characteristics of the goods, their get-up, colour, decoration, labelling and packaging are all relevant considerations’ for the purposes of identification.
6. The characteristics of the goods should be ascertained as they would present themselves to an informed observer. In some cases, scientific analysis of the goods may be necessary: see the reasoning of the Tribunal approved by Northrop J in Vernon-Carus Australia Pty Ltd and Thomas Creevey and Associates v Collector of Customs [1995] FCA 1283 at [19]; [1995] FCA 1283; (1995) 21 AAR 450. See also Re Sterns Playland Pty Ltd and Collector of Customs (No 2) (1982) 4 ALD 562 at 565–6.
7. In the present case, the subject goods were pipes of 5.8 m in length. The pipes had printed on them references to Australian standard AS 2419.1 and certification marks from international certification bodies FM Global and Underwriting Laboratories (UL) showing that the goods were constructed so as to comply with requirements for fire protection systems in buildings. The pipes also had printed on them references to AS 1074, a mandatory standard applicable to all steel tubes and tubulars for ordinary service. That standard says little as to the purpose for which the goods were prepared, in contrast to the references to AS 2419.1. The parties agree that the markings on the pipes show that they are designed to comply with standards applicable to both fire hydrants and fire sprinkler systems in high-rise buildings.
8. It is alleged by the applicant, and not disputed by the respondent, that the goods are suitable for installation in fire protection systems. Fire protection systems (both sprinkler systems and internal and external hydrants) are required by the standards in question to be included in certain high-rise buildings and the pipes are required to meet the specifications which are set out in AS 2419.1 and AS 4118.2.1.
9. The applicant submitted that insofar as the subject pipes are for use in fire hydrant installations, they are for use only inside a building. Commenting on that submission, Mr Northcote, for the respondent, submitted that the fire hydrant pipes could be adapted for use in fire hydrants not associated with buildings, by being cut down from their 5.8 m length to shorter lengths of 1.5 m or less, and being covered with petrolatum tape. It emerged that the respondent was not submitting that the pipes as imported had not been prepared for use within high-rise buildings, but rather was denying that they could be used only for that purpose.
10. Automatic fire sprinkler systems are dealt with by AS 4118.2.1 and AS 2118.1. Insofar as the subject pipes are for use in fire sprinkler systems, there is no dispute that they are for use in buildings.
11. So I proceed on the basis that the fire sprinkler pipes will be put to use within buildings, and that the fire hydrant pipes will likely be used within buildings, and were prepared for such use, but they may also be used in connection with fire hydrants including fire hydrants not associated with buildings if appropriately cut down and covered in petrolatum tape.

Headings 7306 and 7308

12. Heading 7306 in Sch 3 to the Tariff Act is in the following terms:

OTHER TUBES, PIPES AND HOLLOW PROFILES (FOR EXAMPLE, OPEN SEAM OR WELDED, RIVETED OR SIMILARLY CLOSED), OF IRON OR STEEL

13. Heading 7308 is in the following terms:

STRUCTURES (EXCLUDING PREFABRICATED BUILDINGS OF 9406) AND PARTS OF STRUCTURES (FOR EXAMPLE, BRIDGES AND BRIDGE‑SECTIONS, LOCK‑GATES, TOWERS, LATTICE MASTS, ROOFS, ROOFING FRAMEWORKS, DOORS AND WINDOWS AND THEIR FRAMES AND THRESHOLDS FOR DOORS, SHUTTERS, BALUSTRADES, PILLARS AND COLUMNS), OF IRON OR STEEL; PLATES, RODS, ANGLES, SHAPES, SECTIONS, TUBES AND THE LIKE, PREPARED FOR USE IN STRUCTURES, OF IRON OR STEEL

14. As in Comptroller-General of Customs v Pharm-A-Care [2020] HCA 2; (2020) 94 ALJR 182 (‘Pharm-A-Care’), it will be necessary when construing headings 7306 and 7308 to consider not only the English text (as set out in Sch 3 to the Tariff Act) but also the French text of Chapter 73 as annexed to the Convention, because the Convention provides that both texts are equally authentic. As will appear there are differences between the two versions of heading 7308.
15. The French text for heading 7308 is as follows:

Constructions et parties de constructions (ponts et éléments de ponts, portes d'écluses, tours, pylônes, piliers, colonnes, charpentes, toitures, portes et fenêtres et leurs cadres, chambranles et seuils, rideaux de fermeture, balustrades, par exemple), en fonte, fer ou acier, a l'exception des constructions préfabriquées du n° 94.06; tôles, barres, profilés, tubes et similaires, en fonte, fer ou acier, préparés en vue de leur utilisation dans la construction.

16. The main difference between the English and French text of heading 7308 relates to the expression “dans la construction” in the French text in place of the English expression “in structures”. The respondent provided the Tribunal with a translation of the French text prepared by Ms Lorraine David, a NAATI certified level 4 advanced translator in French to English.
17. Like the parties, I am satisfied to act on Ms David’s translation of the French text, which is as follows:

Structures and parts of structures (bridges and bridge sections, lock gates, towers, pylons, pillars, columns, framework, roofing, doors and windows and their frames, window-sills and thresholds, shutters, balustrades, for example) in cast iron, iron or steel, except for prefabricated structures as per n° 94.06; sheet metal, bars, profiles, tubes and similar, in cast iron, iron or steel, prepared for use in the construction industry.

18. In Pharm-A-Care the High Court observed at [35] and [36] as follows:
    35. Transposition of the English text of the Harmonized System into the text of Sch 3 to the Tariff Act attracts the principle of statutory construction identified by Brennan CJ in Applicant A v Minister for Immigration and Ethnic Affairs:

"If a statute transposes the text of a treaty or a provision of a treaty into the statute so as to enact it as part of domestic law, the prima facie legislative intention is that the transposed text should bear the same meaning in the domestic statute as it bears in the treaty. To give it that meaning, the rules applicable to the interpretation of treaties must be applied to the transposed text and the rules generally applicable to the interpretation of domestic statutes give way".

36. By operation of Art 33 of the Vienna Convention on the Law of Treaties, not only is the French text of the Harmonized System Convention equally authoritative with the English text, but each term of the Harmonized System Convention is presumed to have the same meaning in each text. Application of that presumption "requires that every effort should be made to find a common meaning for the texts before preferring one to another", from which "[i]t follows that the treaty interpreter should seek the meaning that gives effect, simultaneously, to all the terms of the treaty, as they are used in each authentic language".

(citations omitted)

19. The word ‘tubes’ in both the English and French texts include pipes, as is common ground between the parties.
20. The French text and the English text must be read in context. The words ‘use in the construction industry’ would not be thought to refer to any general use in the construction industry. The subject matter is, to use Ms David’s translation, ‘sheet metal, bars, profiles, tubes and similar’ or in the English text, ‘plates, rods, angles, shapes, sections, tubes and the like.’ Those subject matters are physical objects capable of being used in the construction of structures, such as a building, and use in the construction industry which seems to involve the use of the objects in connection with the building of structures.
21. The English text, referring to the objects ‘prepared for use in structures’ also seems to be apt to capture objects prepared for use in connection with the building of structures. The word ‘in’ in the English text, like ‘dans’ in the French text, is not so precise as to exclude use in connection with structures, and in the search for a common meaning between the English and the French texts, the adoption of a requirement for a connection with the building of structures appears to be within the test stated by the High Court in Pharma-a-Care at [36].
22. Neither the French text nor the English text seems to require that the objects, when used, necessarily form part of the structure or structures involved. That is because the heading commences with the words ‘structures ... and parts of structures.’ There would be no need to add the words in question if the objects would always form parts of structures.
23. In the application of the common meaning, it is necessary to ask concerning the subject pipes, as at the date of their importation were they prepared for use in connection with the construction of structures.
24. The pipes for use in sprinkler systems imported by the applicant complied with standards which are mandatory for relevant structures, namely high-rise buildings. Being so constructed as to comply with mandatory standards for relevant buildings, it seems to me that, within the common meaning of the two texts, they were prepared for use in connection with the building of structures.
25. The word ‘prepared’ in the concluding words of heading 7308 plainly comprehends goods designed and manufactured so as to comply with the applicable Australian standards. Those standards are identified directly and indirectly on the exterior of the pipes. The indirect identification on the pipes are by the certifications by the international certifiers (eg. FM 3057135), which indicates that the pipes were designed and manufactured for fire sprinkler use.
26. The standards in question apply to fire protection systems (both fire sprinkler systems and fire hydrant systems) required to be installed in high-rise buildings. High-rise buildings are ‘structures’ to use the language of the English text. Their installation is part of work necessary to be done in high-rise buildings as part of the construction industry. Importantly, within the common meaning of the English and French texts they were prepared for use in connection with the construction of structures, that is, high-rise buildings.

Use of the Harmonized System Explanatory Notes

27. Submissions were put by both parties for various purposes arising from the terms of the Harmonized System Explanatory Notes (‘HSEN’) for headings 7306 and 7308. The HSEN, in this country, are sometimes useful as extrinsic material to which, in appropriate cases, resort may be had to resolve doubts about the meaning of tariff classifications. Thus, if ambiguity or a lack of clarity exists within relevant tariff classifications, the HSEN may be used as an aid to interpretation: see the cases referred to in Primaplas Pty Ltd v Chief Executive Officer of Customs [2016] FCAFC 40 at [72]; [2016] FCAFC 40; (2016) 242 FCR 268. I have not found any ambiguity or lack of clarity and therefore I have not resorted to the HSEN as extrinsic material. Moreover, as Black CJ and Heerey J observed in Toyota Tsusho Australia Pty Ltd v Collector of Customs [1992] FCA 282 (‘Toyota Tsusho’) at [24]:
    24. It is established by decisions of Full Courts of this court that s.15AB of the Acts Interpretation Act 1901 permits, in the manner allowed by s.15AB(1), reference to be made to the Explanatory Notes to assist in the interpretation of the Customs Tariff Act: Barry R. Liggins Pty. Ltd. v Comptroller-General of Customs and Ors. In Gardner Smith Pty. Ltd. v Collector of Customs, Victoria, the Full Court of the Federal Court approved the use of the Explanatory Notes to the Brussels nomenclature as an aid to the interpretation of Schedule 3 to the Customs Tariff Act 1982, to which the same principles apply.

(citations omitted)

Similarly, in Barry R Liggins Pty Ltd v Comptroller-General of Customs (1991) 32 FCR 112 (‘Barry R Liggins’) at 120, Beaumont J (with whom Lockhart and Gummow JJ agreed) said:

[A]lthough it may be permissible to refer to extrinsic material where the statute is ambiguous, it does not follow that the extrinsic material can be used to contradict the meaning of the language of an Act of parliament, that meaning being taken from its proper statutory context. Put differently, as E J Cooper points out in his work “Customs and Excise Law” (Cumulative Supplement to 30 June 1985 at p 9):

... [the Brussels Notes] are a secondary guide only and cannot displace the plain words of the statute ... or be used when there is no ambiguity in the legislation, eg a doubt cannot be created by the use of the explanatory notes and then have the doubt settled by reference to the same notes.

28. The respondent referred to the fact that the HSEN for heading 7306 includes the following paragraph:

This heading includes, in particular, line pipes of a kind used for oil or gas, casing and tubing of a kind used in drilling for oil or has, tubes and pipes suitable for use in boilers, superheaters, heat exchangers, condensers, feed-water heaters for power stations, galvanised or black tubes (so-called gas tubes) for high or medium pressure steam or water distribution in buildings, as well as tubes for water or gas street distribution mains.

29. The subject pipes clearly fall, prima facie, within heading 7306. I have also concluded that, prima facie, they fall within heading 7308. There being no Section or Chapter Notes which resolve the question upon which heading applies, the interpretation rules set out in Sch 2 to the Tariff Act, which are the General Rules for the Interpretation of the Harmonized System (‘the GIRs’), must be used to resolve which heading applies to the goods.
30. The HSEN do not perform that purpose and it would be an error to resort to the HSEN for the purpose of resolving which of two headings, each of which prima facie covers the goods, does apply to the goods. In any event, the language upon which the respondent relies upon would, if relevant, establish that heading 7306 applies, but not that heading 7308 does not apply. Moreover, to resort to the HSEN as an aid to construction of heading 7306 or heading 7308 would only be permissible if the language were ambiguous or unclear.

Canadian approach on the use of the HSEN

31. The respondent referred to Canadian authority in RBP Imports Inc v President of the Canada Border Services Agency (11 February 2019), AP-2016-017R (CITT) relating to heading 7610. The decision was that of the Canadian International Trade Tribunal (‘CITT’) on remission from the Canadian Federal Court of Appeal (‘the Federal Court of Appeal’) in Attorney-General of Canada and RBP Imports Inc [2018] FCA 167.
32. The Federal Court of Appeal overruled an earlier decision of the CITT. The Court held that the earlier CITT decision had misconstrued the explanatory note to heading 7308, which in turn was incorporated by reference as the explanatory note to heading 7308. Thus, if relevant, the Federal Court of Appeal decision stands as in this country as persuasive authority about the meaning of the explanatory note to heading 7308.
33. The remarks of the Federal Court of Appeal about heading 7308 and its meaning may well not be of application in this country, for two main reasons. In the first place, in Canada, the HSEN play a different role in that country than they play in this country. In Canada, as the Federal Court of Appeal noted at [5] of its reasons for judgment, the HSEN are required by a provision of a Canadian statute to be ‘considered in interpreting the headings and subheadings.’ The HSEN must be considered as written and should be followed ‘unless there is a good reason to do otherwise’ as had been earlier decided by the Federal Court of Appeal in Canada (Attorney-General) v Suzuki Canada Inc [2004] FCA 131.
34. The Australian position is very different, as the summary in [‎27] above indicates. The HSEN in this country are extrinsic material to which resort may be had in circumstances described in s 15AB of the Acts Interpretation Act 1901 (Cth).
35. A submission was made by the respondent which seems to suggest that the High Court altered the law about the proper use of the HSEN in Pharm-A-Care at paragraph [58] of its reasons. At [58] the High Court said:
    58. The effect of the proviso's subordination of each of GIRs 2, 3, 4 and 5 to a contrary requirement of a heading or of any relative Section Note or Chapter Note is emphasised in the Harmonized System Explanatory Notes ("the Explanatory Notes"). The Explanatory Notes are prepared and approved under the Harmonized System Convention as a guide to the interpretation of the Harmonized System. In consequence, they are available to be used in the interpretation of so much of the Tariff Act as transposes the text of the Harmonized System Convention.

(citations omitted)

Footnote 58 to the above paragraph refers to the reasons of Beaumont J with whom Lockhart and Gummow J agreed in Barry R Liggins. I have set out part of those reasons from page 120 of the report at [‎27] above. Beaumont J referred with approval to the remark of E J Cooper, which was to the same effect as explained in Toyota Tsusho, also set out in [‎27] above. The HSEN may not be used to create a doubt about a statute which its words otherwise do not suggest. With respect to the respondent’s submissions, I do not take the High Court in Pharm-a-Care to have suggested otherwise.

36. In the second place, it should be noticed about the decision of the Federal Court of Appeal that the Court did not undertake the task which is necessary in this country in the light of the High Court’s reasons in Pharm-A-Care of seeking to reconcile the different language in the French and English texts, as I have sought to do in [‎14]–[‎24] above. In particular, it is by no means clear to me that the Federal Court of Appeal took account of the difference in the French text which uses the words ‘dans la construction’ instead of ‘in structures’ used in the English text. It also does not appear that the parties addressed any submission to that matter or to the Vienna Convention on the Law of Treaties.
37. The Federal Court of Appeal noted that heading 7610 was a counterpart to heading 7308, which is true also in Sch 3 to the Tariff Act, and in the Convention itself. Heading 7610 is in the following terms:

Aluminium structures (excluding prefabricated buildings of heading 94.06) and parts of structures (for example, bridges and bridge-sections, towers, lattice masts, roofs, roofing frameworks, doors and windows and their frames and thresholds for doors, balustrades, pillars and columns); aluminium plates, rods, profiles, tubes and the like, prepared for use in structures.

By contrast heading 7604 is in the following terms:

Aluminium bars, rods and profiles.

38. The part of the HSEN to heading 7308, which was relevant to the decision of the Federal Court of Appeal, was in the following terms:

This heading covers complete or incomplete metal structures, as well as parts of structures. For the purpose of this heading, these structures are characterised by the fact that once they are put in position, they generally remain in that position. They are usually made up from bars, rods, tubes, angles, shapes, sections, sheets, plates, wide flats including so-called universal plates, hoop, strip, forgings or castings, by riveting, bolting, welding, etc. Such structures sometimes incorporate products of other headings such as panels of woven wire or expanded metal of heading 73.14. Parts of structures include clamps and other devices specially designed for assembling metal structural elements of round cross-section (tubular or other). These devices usually have protuberances with tapped holes in which screws are inserted, at the time of assembly, to fix the clamps to the tubing.
Apart from the structures and parts of structures mentioned in the heading, the heading also includes products such as:
Pit head frames and superstructures; adjustable or telescopic props, tubular props, extensible coffering beams, tubular scaffolding and similar equipment; sluice-gates, piers, jetties and marine moles; lighthouse superstructures; masts, gangways, rails, bulkheads, etc., for ships; balconies and verandahs; shutters, gates, sliding doors; assembled railings and fencing; level-crossing gates and similar barriers; frameworks for greenhouses and forcing frames; large-scale shelving for assembly and permanent installation in shops, workshops, storehouses, etc.; stalls and racks; certain protective barriers for motorways, made from sheet metal or from angles, shapes or sections.
The heading also covers parts such as flat-rolled products, “wide flats” including so-called universal plates, strip, rods, angles, shapes, sections and tubes, which have been prepared (e.g., drilled, bent or notched) for use in structures.
The heading further covers products consisting of separate rolled bars twisted together, which are also used for reinforced or pre-stressed concrete work.

39. The reasoning which led to the setting aside of the earlier CITT decision was set out in paragraphs [17]–[19] of the decision of the Federal Court of Appeal, as follows:
    17. The text of the heading is set out above in paragraph 6. On a plain reading, and as the [CITT] noted, the heading includes goods that are (1) structures, (2) parts of structures, or (3) aluminum plates, rods, profiles, tubes and the like, prepared for use in structures.
    18. But the portion of the explanatory note that includes the reference to “assembled railings,” set out above in paragraph 9, begins with the words, “[a]part from the structures and parts of structures mentioned in the heading” (emphasis added). The reference to “assembled railings” can therefore apply only to those two categories of goods – structures and parts of structures – and cannot apply to the third category – aluminum plates, rods, profiles, tubes and the like, prepared for use in structures. However, as set out above in paragraph 10, the [CITT] treated the list of “apart from” goods in the explanatory note, including “assembled railings,” as applicable to all three categories, and thus to the whole of heading 76.10.
    19. By treating the reference to “assembled railings” in the explanatory note as qualifying all of heading 76.10, the [CITT] in effect rewrote the explanatory note. This rendered its decision unreasonable. It was based on this rewriting that the [CITT] concluded that the reference to “assembled railings” was “entirely dispositive of the appeal.” And as a consequence of its treatment of the explanatory note, the [CITT] never addressed, other than by describing the submissions on point as “of limited value” and “not dispositive,” the application of the third category in heading 79.10 as required by [GIR] 1. Nor did it address the portion of the explanatory note that states that the heading “also covers” various parts “which have been prepared (e.g., drilled, bent or notched) for use in structures.”

(emphasis original)

The matter was remitted to the CITT to be re-determined.

40. Hearing the remitted matter, the CITT held that the concluding words of heading 7610 ‘aluminium plates, rods, profiles, tubes and the like prepared for use in structures’ was to be distinguished from aluminium plates etc prepared for use in parts of structures. Since the objects in question before the CITT were prepared for use in parts of structures, the CITT concluded that heading 7610 was inapplicable.
41. It is doubtful whether the holding of the CITT or of the Federal Court of Appeal is applicable in this country, especially because the reasons do not take account of the different provisions of the French text.
42. However, in the present case, the fire protection systems are to be applied to the whole of the high-rise buildings to which the standards are applicable. Fire protection systems apply to each floor of a high rise building and not just to parts of high-rise buildings. Thus, with respect, the Canadian decisions do not, even if otherwise applicable, assist either party in these proceedings.

Applying the interpretation rules

43. The resolution of these proceedings will depend on the GIRs, repeated in Sch 2 to the Tariff Act, since each of headings 7306 and 7308 are prima facie applicable.
44. The GIRs are as follows:
    1. The titles of Sections, Chapters and sub‑Chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes do not otherwise require, according to the following provisions:

2 (a) Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also be taken to include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this Rule), presented unassembled or disassembled.

(b) Any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances. Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance. The classification of goods consisting of more than one material or substance shall be according to the principles of Rule 3.

3. When by application of Rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows:

(a) The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods.

(b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.

(c) When goods cannot be classified by reference to 3(a) or 3(b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration.

4. Goods which cannot be classified in accordance with the above Rules shall be classified under the heading appropriate to the goods to which they are most akin.
5. In addition to the foregoing provisions, the following Rules shall apply in respect of the goods referred to therein:

(a) Camera cases, musical instrument cases, gun cases, drawing instrument cases, necklace cases and similar containers, specially shaped or fitted to contain a specific article or set of articles, suitable for long‑term use and presented with the articles for which they are intended, shall be classified with such articles when of a kind normally sold therewith. This Rule does not, however, apply to containers which give the whole its essential character;

(b) Subject to the provisions of Rule 5(a) above, packing materials and packing containers presented with the goods therein shall be classified with the goods if they are of a kind normally used for packing such goods. However, this provision is not binding when such packing materials or packing containers are clearly suitable for repetitive use.

6. For legal purposes, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related Subheading Notes and, mutatis mutandis, to the above Rules, on the understanding that only subheadings at the same level are comparable. For the purposes of this Rule the relative Section and Chapter Notes also apply, unless the context otherwise requires.

45. Rule 3(a) resolves the issue arising in this case. Heading 7308 is a more specific description of the goods than the general terms of heading 7306. Heading 7306 is attracted because pipes are involved, but 7308 is attracted because of the purpose for which the pipes were designed, or as the heading says ‘prepared.’

DECISION

46. Accordingly, in my opinion, the reviewable decision should be set aside, and the matter should be remitted to the respondent with the direction that heading 7308 applies to the goods and duty should be recalculated accordingly.

...................................[sgd].....................................
Associate

Dated: 23 June 2020

^[1] The Convention identifies headings with a heading number and an H.S. code. The headings in Sch 3 of the Tariff Act adopts the H.S. Code in the Convention, however the heading number may be used interchangeably. For example, heading 7306 in the Tariff Act corresponds to heading number 73.06 in Chapter 73 of the Convention.