PRESIDENT OF THE CANADA BORDER SERVICES AGENCY
Appeal No. AP-2004-011
Decision and reasons issued
Tuesday, September 13, 2005
TABLE OF CONTENTS
IN THE MATTER OF an appeal heard on January 10, 2005, under
subsection 67(1) of the Customs Act, R.S.C. 1985 (2d Supp.),
AND IN THE MATTER OF a decision of the President of the Canada
Border Services Agency dated April 20, 2004, with respect to a
further re-determination under subsection 60(4) of the
THE PRESIDENT OF THE CANADA BORDER SERVICES AGENCY
OF THE TRIBUNAL
The appeal is allowed.
Meriel V. M. Bradford
Meriel V. M. Bradford
Place of Hearing:
Date of Hearing:
January 10, 2005
Ellen Fry, Presiding Member
Zdenek Kvarda, Member
Meriel V. M. Bradford
Counsel for the Tribunal:
Clerk of the Tribunal:
Michael Kaylor, for the appellant
Yannick Landry, for the respondent
Please address all communications to:
Canadian International Trade Tribunal
Standard Life Centre
333 Laurier Avenue West
Telephone: (613) 993-3595
Fax: (613) 990-2439
STATEMENT OF REASONS
1. This is an appeal under subsection 67(1) of the Customs
from a further re-determination dated April
20, 2004, of the President of the Canada Border Services Agency
(CBSA) pursuant to subsection 60(4) of the Act. The
decision concerns tablecloths, runners, placemats and napkins with
a Christmas motif2
that were imported on September 25, 2001
(the goods in issue). The goods in issue were classified under
tariff item No. 6302.53.90 of the schedule to the Customs
The CBSA maintained this classification
following a re-determination on December 18, 2001, and a further
re-determination on April 20, 2004.
2. The issue in this appeal is whether the goods in issue are
properly classified in subheading No. 6302.53 as table linen
of man-made fibres, as determined by the CBSA, or under tariff item
No. 9505.10.00 as articles for Christmas festivities, as
claimed by Decolin Inc. (Decolin).
3. The nomenclature concerning the CBSA's classification in
Chapter 63 of the Customs Tariff reads as follows:
63.02 Bed linen, table linen, toilet linen and kitchen
6302.53 --Of man-made fibres
4. Note 1 to Section XI of the Customs Tariff, which
includes Chapter 63, entitled "Textiles and Textile Articles",
reads in part as follows:
This Section does not cover:
. . . .
(t) Articles of Chapter 95.
. . . .
5. No samples of the goods in issue were tendered in evidence.
Exhibits A-1 to A-4 were sample goods with Christmas motifs;
however, they were made of cotton-polyester rather than polyester
with metallic thread as indicated in the commercial invoice and the
Canada Customs invoice.4
Decolin therefore acknowledged that they
were not the goods in issue, but indicated that they were goods
currently sold that are similar to the goods in issue. Decolin also
acknowledged that photographs from retail catalogues that it had
were not identical to the goods in issue
because they featured goods imported subsequent to the importation
date at issue. The Tribunal heard that the Christmas motifs change
somewhat from year to year; thus, these physical exhibits were
unlikely to have the same motif as the goods in issue. The Tribunal
accepts the evidence that Exhibits A-1 to A-4 and the photographs
from retail catalogues are goods similar to the goods in issue and
also relies on the description of the goods that appears on the
commercial invoice and the Canada Customs invoice for transaction
No. 14183108585803: "DECK THE HALLS 99% POLYESTER + 1% METALLIC
YARN-DYED WOVEN TABLECLOTHS, NAPKINS, RUNNERS, PLACEMATS,
6. Mr. Allen Mendel, President of Decolin, testified on behalf
of Decolin. He was responsible for the importation of various goods
for home furnishing, including the goods in issue, and their
subsequent distribution to major Canadian retailers for in-store
and catalogue sales. He indicated that Christmas goods of this
nature have a short selling season. Retailers require Christmas
goods in early November of each year and attempt to sell them
before Christmas because they are difficult, if not impossible, to
sell after Christmas. He also explained that the goods in issue are
not disposable and that the consumer may choose to use them again
in subsequent seasons after laundering and storage. To keep track
of these Christmas goods, Decolin assigns them marketing code "25",
a code used only for Christmas goods, and tracks them through its
computer system from purchase order through transit and eventual
7. Mr. Murray Wall, a partner in Beddington's Bed & Bath,
which purchased goods similar to the goods in issue, also testified
on behalf of Decolin. He said that the regular sales season for
Christmas goods of this nature is limited to the period from the
beginning of December to Christmas. After Christmas, the goods are
discounted or returned to the warehouse. In Mr. Wall's view, fabric
tablecloths are "100 per cent decorative" or at least primarily
decorative, rather than protective or utilitarian. He said that
other products are sold to protect the wood surface of tables, such
as protective table pads and vinyl liners.
8. Ms. Sheila Brady, the Home Section Editor for the Ottawa
Citizen newspaper, also testified on behalf of Decolin. She
testified that, in her opinion, the use of Christmas tablecloths
and napkins is indeed seasonal.
9. Mr. Dan Halden, the Executive Chef at the Embassy West Hotel
Conference Centre, testified on behalf of the CBSA. He testified
that tablecloths are used in his restaurant and hotel for
decorative purposes and to protect tables and offer a clean,
useable surface. The tablecloths are laundered after use because of
food spills, grease, wine, or anything else that might get on the
table during a meal.
10. The CBSA argued that, based on Rule 1 of the General
Rules for the Interpretation of the Harmonized
the goods are properly classified under
tariff item No. 6302.53.90 as woven polyester table linen of other
man-made fibres. It referred to the fact that the Explanatory
Notes to the Harmonized Commodity Description and Coding
to heading No. 63.02 indicate that the
heading covers table linen, including tablecloths, table mats and
runners, and napkins that are sometimes made of man-made fibres
that are normally of a kind suitable for laundering. The CBSA also
argued that the goods could not be properly classified in heading
No. 95.05 because an amendment to the Explanatory Notes
dated August 2003 indicates that the heading does not cover
festive articles with a utilitarian function.
11. Decolin took the position that, based on Rule 1 of the
General Rules, the goods are properly classified under
tariff item No. 9505.10.00 as articles for Christmas festivities.
It argued that the dominant feature of the goods is decorative and
that the goods were bought for and used during the Christmas
season. Decolin also argued that the amendment to the
Explanatory Notes to heading No. 9505 is not applicable
because it was adopted in 2003, some time after the goods were
imported, and that it is more than a clarification, in view of the
fact that it implements a substantive change.
12. Subsection 10(1) of the Customs Tariff reads as
10.(1) Subject to subsection (2), the classification of imported
goods under a tariff item shall, unless otherwise provided, be
determined in accordance with the General Rules for the
Interpretation of the Harmonized System and the Canadian Rules set
out in the schedule.
13. Rule 1 of the Canadian Rules
reiterates that "the
classification of goods in the tariff items of a subheading or of a
heading shall be determined" according to the General Rules.
Rule 1 of the General Rules provides that, "classification
shall be determined according to the terms of the headings and any
relative Section or Chapter Notes".
14. The General Rules are structured in a
cascading form. If the classification of a product cannot be
determined in accordance with Rule 1, then each of the other rules
should be applied in sequence until the heading or subheading that
most precisely covers the product is identified.
15. Section 11 of the Customs Tariff reads as
11. In interpreting the headings and subheadings, regard shall
be had to the Compendium of Classification Opinions to the
Harmonized Commodity Description and Coding System and the
Explanatory Notes to the Harmonized Commodity Description and
Coding System, published by the Customs Co-operation Council (also
known as the World Customs Organization), as amended from time to
16. In order to determine if the goods should be classified in
heading No. 95.05, it is necessary to examine the terms of the
heading and the corresponding Explanatory Notes.
17. The relevant nomenclature of Chapter 95 reads as
95.05 Festive, carnival or other entertainment articles,
including conjuring tricks and novelty jokes.
9505.10.00 -Articles for Christmas festivities
18. According to the wording of the Explanatory Notes to
heading No. 95.05 on the date of importation of the goods in issue,
the heading covered:
(A) Festive, carnival or other entertainment articles,
which in view of their intended use are generally made of
non-durable material. They include:
(2) Articles traditionally used at Christmas festivities, e.g.,
artificial Christmas trees (these are sometimes of the folding
type), nativity scenes, Christmas crackers, Christmas stockings,
imitation yule logs.
19. The Explanatory Notes to heading No. 95.05 were
amended in August 2003, a few years after the goods in issue were
imported and after the CBSA's re-determination, but before its
further re-determination. The amendment inserted the following
The heading also excludes articles that contain a festive
design, decoration, emblem or motif and have a utilitarian
function, e.g., tableware, kitchenware, toilet articles, carpets
and other textile floor coverings, apparel, bed linen, table linen,
toilet linen, kitchen linen.
20. Subsection 45(3) of the Interpretation
provides that the "amendment of an
enactment . . . shall not be deemed to be or to involve any
declaration as to the previous state of law." Although the
Explanatory Notes are not enactments within the meaning of
subsection 2(1) of the Interpretation Act,11
Tribunal is directed explicitly by the Customs Tariff to
have regard to them. Therefore, the Tribunal considers that
amendments to the Explanatory Notes should be treated
analogously to federal enactments and the 2003 amendment therefore
shall not be deemed to involve any declaration as to the meaning of
the Custom Tariff as it existed when the goods in issue were
21. In order for the August 2003 amendment to have any effect on
the goods in issue, it would need to operate retroactively. In
Benner v. Canada (Secretary of State),12
Supreme Court of Canada stated that a retroactive statute operates
as of a time prior to its enactment, with the result being that it
changes the law from what it was. Whether or not a statute or an
amendment has retroactive effect depends on the intent of the
22. An important way to try to discern Parliament's intention in
this case is by reviewing the legislative scheme. In Deputy
M.N.R.C.E. v. Ferguson Industries Limited,14
Supreme Court of Canada considered whether the former Tariff Board
erred in law by finding that components of motors that entered
Canada at different times should have been given the same tariff
classification. Section 43 of the former Customs Act
indicated that the time for determining tariff classification was
at the time of entry of the goods into Canada. The Supreme Court of
Canada set aside the Tariff Board's determination, holding that, as
a result of this provision, it was proper to classify the goods
separately in accordance with their nature at their respective
dates of entry.
23. The Tribunal observes that section 58 of the current
Customs Act has a similar provision, which provides that the
time for determining tariff classification is at or before the time
the goods are accounted for under subsection 32(1), (3) or (5).
These subsections require that goods not be released by a customs
officer until they have been accounted for, unless the goods will
be accounted for within a prescribed time. Sections 7.1 to
10.1 of the Regulations Respecting the Accounting for Imported
Goods and the Payment of Duties
indicate that the amount
of time that may be prescribed for accounting is no more than a
matter of days or weeks after the goods have been released through
customs. Given that the goods in issue were imported in September
2001, the principle in Ferguson dictates that their tariff
classification ought to be determined in accordance with the
wording of the Customs Tariff as it existed in the fall of
2001 when they were accounted for, not August 2003 when the
Explanatory Notes were amended.
24. The Tribunal finds further support for this conclusion in
Hornby. In that case, the British Columbia Court of Appeal
A statute should not be given retroactive construction that has
adverse effects, . . . unless it is clear that the legislature
intended that the legislation should have such a construction. The
reason is that the legislature should not be presumed to have
enacted a statute that treats those it affects, or some of them,
not just adversely, but unfairly, with respect to acts they have
undertaken in the past.
Applying this principle to the facts in issue, the Tribunal is
of the view that it would be unfair to give retroactive effect to
the August 2003 amendment. Decolin imported the goods with a
reasonable expectation that they would be classified in accordance
with the terms of the Customs Tariff, including the relevant
Explanatory Notes, at the time of importation. To impose
retroactively a different tariff classification is, in the
Tribunal's view, contrary to natural justice and principles of
25. Having concluded that the August 2003 amendment of the
Explanatory Notes has no retroactive effect on the goods in
issue, the Tribunal now turns to whether it has any relevance as an
aid to interpreting the Customs Tariff as it existed in the
fall of 2001. In Metro-Can Construction Ltd. v.
the Federal Court of Appeal held that a
subsequent amendment may be relevant to interpreting an enactment
as it previously read, but only insofar as it is part of the
general legislative history of the enactment and not if it is too
26. For all these reasons, the Tribunal finds that the August
2003 amendment is not applicable to the goods in issue.
27. The CBSA did not argue that the goods in issue are not
"articles" as referred to in heading No. 95.05, and the
Tribunal considers that the goods are articles within the normal
meaning of the word. Accordingly, the Tribunal must determine if
these goods are "festive" within the meaning of heading
No. 95.05 and "Articles for Christmas festivities" as referred
to in subheading No. 9505.10. The Oxford English
defines "festive" as being "[o]f a place
or season: Appropriated to feasting. the festive season:
spec. = `Christmas-tide'."18
defined as "the season of Christmas, Christmas-time."19
Tribunal's view, because goods of this type are essentially sold
only for the Christmas season these goods are "festive", are
"traditionally used for Christmas festivities" as contemplated by
the Explanatory Notes, and "Articles for Christmas
festivities" as referred to in heading No. 9505.10.
28. The Explanatory Notes indicate that goods classified
in heading No. 95.05 "are generally made of non-durable
material" [emphasis added]. Given that the Explanatory Notes
do not exclude goods that are made of durable material, the
Tribunal does not need to determine whether the goods in issue are
made of durable or non-durable material.
29. Therefore, pursuant to Rule 1 of the General Rules,
the Tribunal finds that the goods in issue are festive articles
that are properly classified in heading No. 95.05. More
specifically, these goods are "[a]rticles for Christmas
festivities" within the scope of subheading No. 9505.10.
30. Finally, in light of Note 1 to Section XI of the Customs
Tariff, the goods in issue, being articles under Chapter 95,
cannot be classified in Chapter 63.
31. For the foregoing reasons, the appeal is allowed. The goods
in issue are properly classified in subheading No. 9505.10.
1 . R.S.C.
1985 (2d Supp.), c. 1 [Act].
2 . The
use of the term "motif" here refers to Christmas illustrations
rather than Christmas colours. Although the appeal originally
included some goods without a Christmas motif, Decolin Inc.
withdrew its appeal with respect to those goods.
3 . S.C.
1997, c. 36.
Respondent's Brief, Tab 2.
Appellant's Brief, Tabs 24 and 25.
6 . The
Canada Customs invoice (Respondent's Brief, Tab 2) for transaction
No. 14183108585803 indicates "vinyl" placemats; however, testimony
by Mr. Allen Mendel indicates that the placemat had been classified
as vinyl rather than cloth (Transcript of Public Hearing, 10
January 2005, at 39).
Supra note 3, schedule [General Rules].
Customs Co-operation Council, 2d ed., Brussels, 1996
Supra note 3, schedule.
R.S.C. 1985, c. I-21.
"[A]n Act or regulation or any portion of an Act or
 1 S.C.R. 358.
Hornby Island Trust Committee v. Stormwell (1989), 53 D.L.R.
(4th) 435 [Hornby].
 S.C.R. 21 [Ferguson].
 F.C.J. No. 994.