HYDRAULIC SOURCE INC.
Application No. EP-2012-002
Order and reasons issued
Friday, August 31, 2012
TABLE OF CONTENTS
IN THE MATTER OF an application made by Hydraulic Source Inc.,
pursuant to section 60.2 of the Customs Act, for an
order extending the time to file a request for a further
re-determination of tariff classification pursuant to section 60 of
the Customs Act.
The Canadian International Trade Tribunal denies the application
for an extension of time to file a request for a further
re-determination under section 60 of the Customs Act.
Stephen A. Leach
Stephen A. Leach
1. This concerns an application pursuant to section 60.2 of the
Customs Act1 made by Hydraulic Source Inc. (Hydraulic) for
an order extending the time to file a request for a further
re-determination under section 60.
2. On March 25, 2009, following a customs compliance
verification audit, the President of the Canada Border Services
Agency (CBSA) issued a notice of re-determination of tariff
classification for goods imported by Hydraulic between January 1
and December 31, 2007, pursuant to subsection 59(2) of the
3. On June 15, 2010, Hydraulic’s original customs broker, UTI
Canada Inc. (UTI), filed four “B2” voluntary blanket adjustment
statements, in compliance with subsection 32.2 of the Act,
in order to correct all transactions of the same goods as those
affected by the notice of re-determination dated March 25, 2009,
that had been imported by Hydraulic since January 1, 2007.
4. In response to these four blanket adjustment statements, the
CBSA issued notices of re-determination decisions on July 23 and
August 4, 2010, pursuant to subsection 59(2) of the Act.
It is these decisions that are at issue in the present
5. On September 22, 2010, Hydraulic retained MSR Customs &
Commodities Tax Group (MSR) to review its import compliance. UTI
continued to serve as Hydraulic’s customs broker until early
6. The 90-day deadline to request a further re-determination of
the CBSA’s decision of July 23, 2010, expired on October 21,
7. In February 22, 2011, MSR contacted the CBSA to request a
copy of the detailed adjustment statement (DAS) issued under
subsection 59(2) of the Act, and subsequently filed an
application with the CBSA under section 60.1 on September 2, 2011,
for an extension of time to make a request for re-determination of
8. On May 29, 2012, the CBSA dismissed the application.
9. On June 27, 2012, Hydraulic applied to the Canadian
International Trade Tribunal (the Tribunal) contesting that
decision, pursuant to section 60.2 of the Act.
10. Subsection 59(1) of the Act reads as follows:
59.(1) An officer, or any officer within a
class of officers, designated by the [CBSA] for the purposes of
this section may
(a) in the case of a determination under section
57.01 or 58, re-determine the origin, tariff classification, value
for duty or marking determination of any imported goods at any time
(i) four years after the date of the determination, on the
basis of an audit or examination under section 42, a verification
under section 42.01 or a verification of origin under
section 42.1, or
(ii) four years after the date of the determination, if the
Minister considers it advisable to make the re-determination;
(b) further re-determine the origin, tariff
classification or value for duty of imported goods, within four
years after the date of the determination or, if the Minister deems
it advisable, within such further time as may be prescribed, on the
basis of an audit or examination under section 42, a verification
under section 42.01 or a verification of origin under section 42.1
that is conducted after the granting of a refund under paragraphs
74(1)(c.1), (c.11), (e), (f) or
(g) that is treated by subsection 74(1.1) as a
re-determination under paragraph (a) or the making of a
correction under section 32.2 that is treated by subsection 32.2(3)
as a re-determination under paragraph (a).
11. Subsection 59(2) of the Act reads as follows:
(2) An officer who makes a determination under subsection
57.01(1) or 58(1) or a re-determination or further re-determination
under subsection (1) shall without delay give notice of the
determination, re-determination or further re-determination,
including the rationale on which it is made, to the prescribed
12. Subsection 60(1) of the Act stipulates as
60.(1) A person to whom notice is given
under subsection 59(2) in respect of goods may, within ninety days
after the notice is given, request a re-determination or further
re-determination of origin, tariff classification, value for duty
or marking. The request may be made only after all amounts owing as
duties and interest in respect of the goods are paid or
security satisfactory to the Minister is given in respect of
the total amount owing.
13. Subsection 60.1(1) of the Act specifies as
60.1(1) If no request is made under
section 60 within the time set out in that section, a person may
make an application to the [CBSA] for an extension of the time
within which the request may be made, and the [CBSA] may extend the
time for making the request.
14. Section 60.2 of the Act reads as follows:
60.2(1) A person who has made an
application under section 60.1 may apply to the [Tribunal] to have
the application granted after . . .
(a) the [CBSA] has refused the
application; . . . .
If paragraph (a) applies, the application under this
subsection must be made within ninety days after the application is
(2) The application must be made by filing with the [CBSA]
and the Secretary of the [Tribunal] a copy of the application
referred to in section 60.1 and, if notice has been given under
subsection 60.1(4), a copy of the notice.
(3) The [Tribunal] may dispose of an application by
dismissing or granting it and, in granting an application, it may
impose any terms that it considers just or order that the request
be deemed to be a valid request as of the date of the order.
(4) No application may be granted under this section
(a) the application under subsection 60.1(1) was
made within one year after the expiry of the time set out in
section 60; and
(b) the person making the application demonstrates
(i) within the time set out in section 60, the person was
unable to act or to give a mandate to act in the person’s name or
the person had a bona fide intention to make a
(ii) it would be just and equitable to grant the
(iii) the application was made as soon as circumstances
15. In this case, the CBSA refused the application on May 29,
2012, pursuant to section 60.1 of the Act. Hydraulic made
the present application on June 27, 2012, which is less than 90
days after the CBSA’s refusal and, therefore, within the required
time period under subsection 60.2(1)(a).
16. Subsection 60.2(4) of the Act lists the four
conditions that must be satisfied before the Tribunal can grant an
application under subsection 60.2(3). The Act clearly
establishes that each of these conditions is mandatory. Failure to
meet any one of them will cause the application to fail.
17. With respect to the first condition, the Tribunal notes that
the application was made within the time frame set out in
subparagraph 60.2(4)(a) of the Act. The CBSA does
not dispute that this condition has been met.2 The remaining
three conditions are disputed by the parties.
18. The Tribunal is of the view that Hydraulic’s application
does not meet the condition set out in paragraph
60.2(4)(b)(iii) of the Act. Hydraulic does not
dispute that it waited 11 months before making the application for
an extension of time to the CBSA under section 60. The Tribunal
must therefore determine if the circumstances permitted Hydraulic
to apply earlier.3
19. In this regard, Hydraulic submitted that it needed to “get
its house in order” before applying to the CBSA. Hydraulic refers
to what it claims was UTI’s failure to pursue a further
re-determination by the CBSA within the 90-day deadline, despite
Hydraulic’s instructions to do so. According to Hydraulic, MSR was
brought in to review its import compliance and it needed time to
properly assess the situation, which resulted in the termination of
Hydraulic’s relationship with UTI. Then, according to Hydraulic,
MSR needed to obtain an additional copy of the CBSA’s decisions at
issue (since, it appears, Hydraulic had lost its own copy), which
it says the CBSA failed to provide in a timely manner.4
20. The CBSA submitted that there is no evidence that Hydraulic
was prevented from applying for an extension of time before October
21, 2010.5 The CBSA added that Hydraulic’s claim of
competing priorities is irrelevant for the purposes of this
21. In the Tribunal’s view, Hydraulic has not demonstrated that
it was prevented from applying earlier. While Hydraulic has filed
copies of e-mails with UTI that demonstrates it had instructed UTI
to pursue the initial recourse with the CBSA, it has submitted no
such evidence with respect to a request for a further
re-determination under section 60 of the Act. All the
Tribunal has in this regard are Hydraulic’s
22. Moreover, even if the Tribunal were to give Hydraulic the
benefit of the doubt and accept that it had instructed UTI to
request a further re-determination, the Tribunal is of the view
that nothing reasonably prevented Hydraulic from applying for an
extension of time earlier. Hydraulic has not demonstrated that it
was unable to apply for an extension as early as, say, March 2011,
which was a few weeks after MSR requested a copy of the DAS from
the CBSA, or in mid-2011 after Hydraulic terminated UTI’s
23. With respect to Hydraulic’s assertion that MSR requested a
copy of the DAS from the CBSA “so we could appeal the
decisions”,7 to which it did not receive a timely
response, it seems that this request was for a second copy and, in
any case, the prudent course of action would have been to file an
application while waiting to receive another copy.
24. The filing of an application for an extension of time is not
an onerous step. As soon as Hydraulic realized that UTI had failed
to request a further re-determination, it should have filed an
application forthwith. Doing so would have preserved its right to
further recourse while allowing it to take the additional time it
claims it needed to finish sorting out its affairs.
25. The Tribunal is therefore of the view that the fourth
statutory condition has not been met. Accordingly, it is
unnecessary to deal with the second and third statutory conditions,
under subparagraphs 60.2(4)(b)(i) and (ii) of the
26. The application is dismissed.
. R.S.C. 1985 (2d Supp.), c. 1 [Act].
2 . CBSA’s submission at para. 15.
3 . See Volpak Inc. (2 February
2012), EP-2011-002 (CITT) at para. 25.
4 . Hydraulic’s submission, 6 July 2012, at
3-4; Hydraulic’s reply submission, 20 August 2012, at paras.
5 . CBSA’s submission at paras. 29-31.
6 . In the case of an alleged bona
fide intention to make a timely request, proof is required of
the intention to contest the specific decision at issue. See
Costco Wholesale Canada Ltd. (5 October 2006), EP-2005-008
(CITT) at para. 18. Likewise, proof of an intention to seek
recourse under section 59 is not sufficient to demonstrate an
intention to seek further recourse under section 60.
7 . Hydraulic’s submission, 6 July 2012, at