IN THE MATTER OF appeals heard on January 9, 2014, pursuant to subsection 67(1) of the Customs Act, R.S.C., 1985, c. 1 (2nd Supp.);
AND IN THE MATTER OF 11 decisions of the President of the Canada Border Services Agency, dated May 8 and 23, 2013, with respect to a request for review of an advance ruling on tariff classification and requests for re-determinations and further re‑determinations pursuant to subsection 60(4) of the Customs Act.
The appeals are dismissed.
MACHINERY AND MECHANICAL APPLIANCES; ELECTRICAL EQUIPMENT; PARTS THEREOF; SOUND RECORDERS AND REPRODUCERS, TELEVISION IMAGE AND SOUND RECORDERS AND REPRODUCERS, AND PARTS AND ACCESSORIES OF SUCH ARTICLES
. . .
3. Unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines designed for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function.
4. Where a machine (including a combination of machines) consists of individual components (whether separate or interconnected by piping, by transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function covered by one of the headings in Chapter 84 or Chapter 85, then the whole falls to be classified in the heading appropriate to that function.
5. For the purpose of these Notes, the expression “machine” means any machine, machinery, plant, equipment, apparatus or appliance cited in the headings of Chapter 84 or 85.
(VI) MULTI-FUNCTION MACHINES AND COMPOSITE MACHINES
(Section Note 3)
In general, multi-function machines are classified according to the principal function of the machine.
Multi-function machines are, for example, machine-tools for working metal using interchangeable tools, which enable them to carry out different machining operations (e.g., milling, boring, lapping).
Where it is not possible to determine the principal function, and where, as provided in Note 3 to the Section, the context does not otherwise require, it is necessary to apply General Interpretative Rule 3 (c); . . . .
Composite machines consisting of two or more machines or appliances of different kinds, fitted together to form a whole, consecutively or simultaneously performing separate functions which are generally complementary and are described in different headings of Section XVI, are also classified according to the principal function of the composite machine.
. . .
For the purposes of the above provisions, machines of different kinds are taken to be fitted together to form a whole when incorporated one in the other or mounted one on the other, or mounted on a common base or frame or in a common housing.
Assemblies of machines should not be taken to be fitted together to form a whole unless the machines are designed to be permanently attached either to each other or to a common base, frame, housing, etc. . . .
. . .
Note 3 to Section XVI need not be invoked when the composite machine is covered as such by a particular heading, for example, some types of air conditioning machines (heading 84.15).
. Philips purchased Saeco in 2010 and currently manages the Saeco brand. See Exhibit AP-2013-019-07A at para. 5, Vol. 1; Exhibit AP-2013-019-09A at para. 7, Vol. 1B.
. R.S.C., 1985, c. 1 (2nd Supp.) [Act].
. Exhibit AP-2013-019-07A, tab 1, Vol. 1.
. Ibid. at 1; Exhibit AP-2013-019-09A at 3, Vol. 1B.
. Exhibit AP-2013-019-09A, tab 1, Vol. 1B.
. Exhibit AP-2013-019-07A, tab 8, Vol. 1.
. Exhibit AP-2013-019-04, Vol. 1.
. Transcript of Public Hearing, 9 January 2014, at 9.
. The relevant CBSA decisions in these appeals repeatedly referred to model “R19822/47” [bold added for emphasis]; however, it is clear from the materials filed by Philips and Saeco that the goods in issue are correctly identified as model “RI9822/47” [bold added for emphasis]. For example, see Exhibit AP-2013-019-07A, tabs 16, 17, Vol. 1; Exhibit AP-2013-019-09A, tab 10, Vol. 1B.
. Exhibit AP-2013-019-07A at 4-5, 144, Vol. 1; Exhibit AP-2013-019-07B at 160, 168, Vol. 1A; Exhibit AP‑2013‑019-09A at 2, 15, Vol. 1B.
. Canada is a signatory to the International Convention on the Harmonized Commodity Description and Coding System, which governs the Harmonized System.
. S.C. 1997, c. 36, schedule [General Rules].
. S.C. 1997, c. 36, schedule.
. World Customs Organization, 2d ed., Brussels, 2003 [Classification Opinions].
. World Customs Organization, 5th ed., Brussels, 2012 [Explanatory Notes].
. See Canada (Attorney General) v. Suzuki Canada Inc., 2004 FCA 131 (CanLII) at paras. 13, 17, where the Federal Court of Appeal interpreted section 11 of the Customs Tariff as requiring that the Explanatory Notes be respected unless there is a sound reason to do otherwise. The Tribunal is of the view that this interpretation is equally applicable to the Classification Opinions.
. Rules 1 through 5 of the General Rules apply to classification at the heading level.
. Rule 6 of the General Rules provides that “. . . 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 [i.e. Rules 1 through 5] . . .” and that “. . . the relative Section and Chapter Notes also apply, unless the context otherwise requires.”
. Rule 1 of the Canadian Rules provides that “. . . the classification of goods in the tariff items of a subheading or of a heading shall be determined according to the terms of those tariff items and any related Supplementary Notes and, mutatis mutandis, to the [General Rules] . . .” and that “. . . the relative Section, Chapter and Subheading Notes also apply, unless the context otherwise requires.” The Classification Opinions and the Explanatory Notes do not apply to classification at the tariff item level.
. Rule 3 (a) of the General Rules provides as follows: “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.”
. Rule 3 (b) of the General Rules provides as follows: “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 Rule 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.”
. In order to arrive at Rule 3 (b) of the General Rules, the CBSA argued that Rule 2 does not apply to the goods in issue and that Rule 3 (a) provides limited guidance because each heading refers to only certain components of the goods in issue and that, therefore, neither heading provides a more specific description.
. Transcript of Public Hearing, 9 January 2014, at 138-39.
. Costco Wholesale Canada Ltd. v. President of the Canada Border Services Agency (19 January 2012), AP‑2011‑009 (CITT) [Costco] at para. 38.
. Costco at para. 39.
. Costco at para. 41.
. It is well established in Tribunal jurisprudence that, when there is a single relevant exclusionary note precluding the prima facie classification of goods in both headings at issue in an appeal, the analysis should begin with the heading that is excluded. For example, see Costco Wholesale Canada Ltd. v. President of the Canada Border Services Agency (29 July 2013), AP-2012-041 and AP-2012-042 (CITT) at para. 47.
. For example, see Weil Company Limited v. Deputy M.N.R.C.E. (10 May 1993), AP-92-096 (CITT) at 3; Proctor‑Silex Canada Inc. v. Deputy M.N.R.C.E. (11 January 1994), AP-92-225 (CITT) at 4.
. Philips and Saeco claimed that espresso is not the same thing as traditional coffee, in that it is an almost syrupy beverage with a layer of crema—a foam layer topping on espresso coffee that is produced by the emulsification of oils in ground coffee beans when highly pressurized hot water passes through them to make espresso. See Exhibit AP-2013-019-07B at 219-20, Vol. 1A. The CBSA relied on dictionary definitions and product marketing materials to establish that “espresso” is a type of coffee. See Exhibit AP-2013-019-09A at 145, 148, 150, Vol. 1B; Exhibit AP-2013-019-09A, tab 10, Vol. 1B.
. Shorter Oxford English Dictionary, 5th ed., s.v. “espresso”. See Exhibit AP-2013-019-07B at 233, Vol. 1A.
. Canadian Oxford Dictionary, 2nd ed., s.v. “espresso”, Exhibit AP-2013-019-09A at 145, Vol. 1B.
. Exhibit AP-2013-019-07B at 159, 166, 167, Vol. 1A.
. Exhibit AP-2013-019-07A at 137, 140, Vol. 1.
. Transcript of Public Hearing, 9 January 2014, at 13, 14.
. Exhibit AP-2013-019-07B at 159, 166, 193, Vol. 1A.
. Exhibit AP-2013-019-07A at para. 49, Vol. 1.
. The Tribunal notes that the amendment of tariff item No. 8419.81.10 on January 28, 2009, pre-dated the 10 transactions at issue, with the exception of one transaction dated January 19, 2009. See Exhibit AP-2013-019-09A at 41, Vol. 1B.
. Exhibit AP-2013-019-07A at para. 22, Vol. 1.
. Transcript of Public Hearing, 9 January 2014, at 40, 42, 47, 48, 59.
. Exhibit AP-2013-019-07B at 220, Vol. 1A.
. Transcript of Public Hearing, 9 January 2014, at 57, 92.
. Ibid. at 18, 72-73; Exhibit AP-2013-019-016A, tab A at paras. 18-20, Vol. 1C.
. Transcript of Public Hearing, 9 January 2014, at 56.
. Exhibit AP-2013-019-07B at 221, Vol. 1A.
. Transcript of Public Hearing, 9 January 2014, at 51, 63.
. Ibid. at 29-32, 46.
. Exhibit AP-2013-019-09A, tab 23, Vol. 1B.