Anite Networks Pty Ltd v Collector of Customs [1999] FCA 26 (28 January 1999)

Last Updated: 29 January 1999

FEDERAL COURT OF AUSTRALIA

Anite Networks Pty Ltd v Collector of Customs [1999] FCA 26

CUSTOMS - identification and classification of goods - whether Administrative Appeals Tribunal erred in relying upon classification concepts to identify the goods subject to customs tariff - whether primary judge erred in finding that the Tribunal had not so erred.

Customs Tariff Act 1987 (Cth), ss 5, 9, 10, 21, 22(a), Sch 2, Sch 3

Collector of Customs v Savage River Mines (1988) 79 ALR 258 at 265 referred to

Rheem Australia Ltd v Collector of Customs (1988) 78 ALR 285 referred to

Sharp Corporation of Australia Pty Ltd v Collector of Customs (1995) 59 FCR 6 referred to

Cody v Datacraft (Australia) Pty Ltd (1989) 10 AAR 346 at 353 referred to

Commonwealth v Human Rights and Equal Opportunity Commission (1998) 76 FCR 513 at 519 referred to

ANITE NETWORKS PTY LIMITED (FORMERLY CRAY COMMUNICATIONS LIMITED) v COLLECTOR OF CUSTOMS

NG 213 OF 1998

EINFELD, CARR AND LEHANE JJ

28 JANUARY 1999

SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 213 OF 1998

BETWEEN:	ANITE NETWORKS PTY LIMITED (FORMERLY CRAY COMMUNICATIONS LIMITED) Appellant
AND:	COLLECTOR OF CUSTOMS Respondent
JUDGES:	EINFELD, CARR AND LEHANE JJ
DATE OF ORDER:	28 JANUARY 1999
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. The appeal be dismissed.

2. The appellant pay the respondent's costs.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 213 OF 1998

BETWEEN:	ANITE NETWORKS PTY LIMITED (FORMERLY CRAY COMMUNICATIONS LIMITED) Appellant
AND:	COLLECTOR OF CUSTOMS Respondent

JUDGES:	EINFELD, CARR AND LEHANE JJ
DATE:	28 JANUARY 1999
PLACE:	SYDNEY

REASONS FOR JUDGMENT

THE COURT:

Introduction

1 This is an appeal from the decision of a judge of this Court, on 27 February 1998, affirming the decision of the Administrative Appeals Tribunal to classify certain goods under subheading 8517.30.00 of Schedule 3 to the Customs Tariff Act 1987 (Cth) ("the Act"). The Tribunal had, on 27 September 1995, on review affirmed the respondent's decision.

2 The goods in question are known as "Multi-function Access and Backbone Switches Series 8425 and 8525" ("the Goods"). The Goods are also described as "Packet Switching Exchanges". The Tribunal found that the goods do two things. They multiplex and they packet switch. Multiplexing is an electronic function of combining several signals for transmission over the same single path in such a way that the original signals may be recovered by a (reversing) process known as demultiplexing. Packet switching is the breaking of data into "packets" of 100-200 octets before sending them through a network. The separate data streams can originate or terminate on a single device (normally a computer), or two or more devices (where each device may be a terminal or a computer). The data packets from many sources and to many destinations thus share the network's resources i.e. the communications lines and the switching processors.

Statutory Framework

3 Section 21 of the Act imposes Duties of Custom. We shall henceforth refer to those as customs duties. The rate applicable to the Goods has to be ascertained by reference to the general rate set out in the third column of the tariff classification under which the goods are classified: s 22(a). The relevant tariff classifications are contained in Schedule 3, extracts from which read as follows:

"8517 ELECTRICAL APPARATUS FOR LINE TELEPHONY OR LINE TELEGRAPHY, INCLUDING SUCH APPARATUS FOR CARRIER-CURRENT LINE SYSTEMS:
. . .

8517.30.0 - Telephonic or telegraphic switching apparatus

8517.40 - Other apparatus, for carrier-current line systems:

8517.40.10 - - - Goods, as follows:

(a) modems, of a type using digital to analogue modulation and analogue to digital demodulation, being goods of a kind having operational transmission speeds of 300 bits/second or greater;

(b) multiplexors, of the time division or statistical type, being goods of a kind having operational transmission speeds of not more than 2.5 megabits/second

8517.40.90 - - - Other

. . ."

4 Section 9 of the Act relevantly provides that a reference in the Act to the tariff classification under which goods are classified is a reference to the heading or subheading in whose third column a rate of duty is set out and under which the goods are classified. Section 5 of the Act provides that "heading" means a heading in Schedule 3 and "subheading" means a subheading of a heading. Section 10 provides that the "Interpretation Rules" shall be used for ascertaining the tariff classification under which goods are to be classified. Section 5 defines the Interpretation Rules as meaning the General Rules for the Interpretation of the Harmonized System provided by the International Convention for that system done at Brussels in 1983. The Interpretation Rules are set out in Schedule 2 to the Act. So far as relevant, the Interpretation Rules provide 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:
. . .

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.
. . .

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."

5 It is worth noting also that the effect of Interpretation Rule 1 includes giving precedence, in the classification process, to Section Notes over the Interpretation Rules. The relevant Section Notes are as follows:

"Notes
1.- . . .

2. . . .

3.- . . .

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 purposes of these Notes, "machine" means any machine, machinery, plant, equipment, apparatus or appliance cited in the headings of Chapter 84 or 85."

6 As mentioned, the respondent classified the Goods under subheading 8517.30.00, namely as telegraphic switching apparatus. The appellant contended that the correct item was 8517.40.10 being other apparatus, for carrier-current line system and in particular being multiplexors. As might be supposed, there was a substantial difference, in the order of 18%, between the customs duties payable under the two subheadings.

The Tribunal's Decision

7 The fundamental difference between the parties before the Tribunal was whether, as the respondent's expert witnesses said, the Goods were rather more than multiplexors and amounted to telegraphic switching apparatus or whether, as the appellant's experts contended, the primary function of the Goods was multiplexing so that its other capabilities were mere enhancements of that function, not being such as to make the machines anything other than multiplexors.

8 The Tribunal referred to Rule 1 of the Interpretation Rule, then to notes 3 and 4 of section XVI of the Third Schedule to the Act ("the Section Notes"). It then referred to authorities which established that the task of the classifier is objectively to identify goods then to match that identification with a heading or subheading in Schedule 3. The Tribunal referred to Times Consultants Pty Ltd v Collector of Customs (Qld) (1987) 16 FCR 449 at 463 for the proposition that the classification of goods for tariff purposes is a practical "wharfside" task. The Tribunal then turned to the evidence and drew its conclusions on the key question as follows:

"25. From the evidence quoted above what is clear is that the subject goods have a function over and above mere multiplexing. The view that this is so is strengthened by the reference to the third layer of functioning in the "Australian Standard".
...

29. As stated above the goods are more than multiplexors and they are described by the importer and witnesses as Packet Switching Exchanges. Although to carry out their functioning as Packet Switches they must multiplex, they also direct packets and thus operate as switches. It seems to us that what gives to the subject goods their essential character and purpose is the switching function and thus the sub-heading appropriate to their function is that of 8517.30.00 - Telephonic or telegraphic switching apparatus."

The Proceedings at First Instance

9 The appellant argued that the Tribunal made three errors of law, namely:

1. It confused the questions of identifying and classifying the Goods, impermissibly resorting to classification concepts to aid in the identification of the Goods;

2. In purporting to apply Note 4 of the Section Notes, the Tribunal failed to address necessary prerequisites for its application, notably whether it could be said that the Goods consisted of "individual components" and whether there was a "clearly defined function covered by one of the headings"; and

3. The Tribunal impermissibly compared subheadings of different levels (see Interpretation Rules, Rule 6), in particular, the Tribunal compared the first level subheading "8517.30.00 - Telephonic or telegraphic switching apparatus" with the third level subheading "8517.40.10 --- ... multiplexors ...".

10 The primary judge referred to Minister for Immigration & Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259 at 271-2, acknowledging that it was appropriate that the Tribunal's reasons should be read generously and not with an eye keenly attuned to the discernment of error.

11 His Honour had, earlier in his reasons, referred to paragraphs 26 to 28 of the Tribunal's reasons as consisting of an excursus on the meaning of the term "telegraphic" in subheading 8517.30.00 in the context of a reference to Note 4 of the Section Notes. His Honour said that had paragraph 29 immediately followed paragraph 25 (without such an excursus) so that there had not been the interposition of the reference to Note 4 in paragraph 26 and the discussion of the term "telegraphic" in paragraphs 27 and 28, then there would have been no basis at all for the appellant's submission that the Tribunal had confused the task of identification with the task of classification. His Honour rejected the first argument on the basis that it was both a practical and perfectly legitimate inquiry, whether or not Interpretation Rule 3(b) was applicable, to ask what was the essential character and purpose of the Goods and to answer that question by reference to whether either function of the Goods was distinctive. Furthermore, his Honour referred to the manner in which the case had been fought before the Tribunal. The appellant's representative had agreed with the respondent's advocate who (by reference to the Section Notes) had stressed that the function of the Goods was the important matter, but, so the appellant's representative had contended, function and essential character were effectively the same. His Honour said that if the Tribunal were in fact adverting, in paragraph 29 of its reasons, to the language of Interpretation Rule 3(b), "... this may well have been no more than a courteous nod of the head, as it were, in the direction of the applicant's submission."

12 His Honour rejected the appellant's argument that the Tribunal had failed to consider whether there was a clearly defined function of the Goods covered by one of the headings. He said that, on the contrary, that seemed to have been the purpose of the Tribunal's examination of the term "telegraphic" in paragraphs 26 to 28 of its reasons. However, in relation to the second alleged error, his Honour accepted that the Tribunal had failed to consider whether the Goods consisted of contributory "individual components" within the meaning of Section Note 4. But his Honour held that this was not an appellable error of law, because, in his view, it was only necessary to come to Section Note 4, if, without it, a classification could not be made. His Honour had found that the Tribunal had, upon an identification of the Goods without legal error, decided that they fell within subheading 8517.30.00 upon a consideration of its ordinary meaning and that was the end of the case. His Honour reasoned that a conclusion that the Goods fell within subheading 8517.30.00 necessarily had the result that they did not fall within subheading 8517.40.10. His Honour said that there was a choice between what was described in the former subheading and "[o]ther apparatus" of the kind described in heading 8517.

13 In relation to the complaint that the Tribunal compared unlike levels of headings, his Honour reached a similar conclusion i.e. that even if the Tribunal had done so (which his Honour did not decide) that would not have made any difference to the Tribunal's conclusion. This was because:

"... even if the Tribunal impermissibly asked whether the machines were to be classified as switching apparatus or multiplexors, the Tribunal also, necessarily and implicitly, asked: do the machines fall within the description "switching apparatus" or do they fall elsewhere? Here, there was nothing the machines might be called, in ordinary language, other than, on the one hand, a species of switching apparatus or, on the other, multiplexors. Hence there was necessarily a finding by the Tribunal, without regard to comparison of subheadings at any level, that the goods should be classified within item 8517.30.00. Thus the Tribunal's classification in this case was, in my opinion, legally unobjectionable, even if, technically, the Tribunal expressly asked itself the wrong question."

The Appeal

Whether the subheadings are mutually exclusive (Ground 1)

Appellant's submissions

14 The appellant submitted that the general position was that subheadings of equal standing are not mutually exclusive. It relied on Collector of Customs v Savage River Mines (1988) 79 ALR 258 at 265 for the proposition that rule 3 of the Interpretation Rules plainly contemplates the possibility that goods may fall within two or more classifications of equal standing. The appellant submitted that the position was no different where one of the subheadings refers to "other" goods falling within a heading. The appellant pointed to Rheem Australia Ltd v Collector of Customs (1988) 78 ALR 285 as a case illustrating that the word "other" simply describes the category of goods falling within a heading other than goods of the categories described in previous headings. In that case (at 294-295) a Full Court of this Court had used what it described as a "homely example" of a notional sub-item reading "Brazil nuts" and a later paragraph reading "other". In that case an admixture of Brazil nuts and peanuts (assuming peanuts not to be referred to by name) would result in the admixture of goods falling within both paragraphs. Applying that principle to the present case there was, so it was submitted, no reason why the goods, being electrical apparatus for line telegraphy, could not properly be described as both "telegraphic switching apparatus" and as some "other apparatus for carrier-current line systems". The goods would therefore be prima facie classifiable under both subheading 8517.30.00 and subheading 8517.40.

Respondent's submissions

15 The respondent submitted that the primary judge did not hold that if the Goods were capable of falling within subheading 8517.30.00, they could not also fall within subheading 8517.40. His Honour had simply referred to a conclusion by the Tribunal that the Goods fell within 8517.30.00 and had not said that Interpretation Rule 6 did not apply. The respondent contended that Collector of Customs v Savage River Mines did not involve the residual category of "other".

Whether the Tribunal in substance asked the right question (Grounds 2, 6 and 7)

Appellant's submissions

16 The appellant submitted that once it was accepted that subheading 8517.30.00 and subheading 8517.40 were not mutually exclusive categories, it became evident that the primary judge also erred in finding that the Tribunal in substance asked the right question. The appellant contended that on the evidence before the Tribunal it would have been open to the Tribunal to find that the Goods were properly described as:

(a) multiplexors (with some switching functions); or

(b) both switches and multiplexors; or

(c) switches (with some multiplexing functions).

17 It did not matter whether the description of goods by reference to their nature and the functions which they were designed to serve was an aspect of "identification" of goods or a step in the process of classification, once the goods had been identified: Savage River Mines at 265-266. What was essential, so the appellant submitted, was that the Tribunal should determine as a matter of fact and before purporting to apply any Interpretation Rules, whether the goods were properly described as switches only (in which case they were to be classified under subheading 8517.30.00) or multiplexors only (in which case they were to be classified under subheading 8517.40) or both switches and multiplexors (in which case it was necessary to apply the applicable Interpretation Rules to determine the ultimate classification of the Goods). It would only have been if the Goods were properly identified as both multiplexors and switches, so as to be prima facie classifiable to both subheadings, that resort to the Interpretation Rules would have been necessary or justified.

18 However, to choose and apply the appropriate Interpretation Rule, it would have been necessary for the Tribunal to have made a finding as to whether the Goods comprised a switching component and a multiplexing component or comprised an integrated whole (performing both switching and multiplexing functions). If the Tribunal had found that the Goods comprised a switching component and a multiplexing component, then it would have next been necessary under Section Note 4 to determine whether the components "contributed together to a clearly defined function". If so, Interpretation Note 4 would have required the Goods to be "classified in the heading appropriate to that function". If not, then it would have been necessary under Interpretation Rule 3(b) to determine whether either component gave the Goods their "essential character". If so, Interpretation Rule 3(b) would have required the Goods to have been classified as if they consisted of that component: Sharp Corporation of Australia Pty Ltd v Collector of Customs (1995) 59 FCR 6.

19 If, on the other hand, the Tribunal had found that the Goods comprised an integrated whole, it would have been necessary under Interpretation Rule 3(a) to determine whether subheading 8517.30.00 or item 8517.40 provided the "most specific description" of the Goods. If so, that sub-rule would have required the Goods to have been classified under the subheading providing the "most specific description": Cody v Datacraft (Australia) Pty Ltd (1989) 10 AAR 346 at 353. If none of those Interpretation Rules could be applied, Interpretation Rule 3(c) would have required the Goods to have been classified under subheading 8517.40, being the last in numerical order.

20 The appellant submitted that the problem was that the Tribunal appeared to have made no attempt to analyse the evidence with a view to finding the correct or preferable description of the goods. It had not answered the basic question of whether the goods were properly described as switches only or multiplexors only or as both switches and multiplexors. Alternatively, so it was argued, if the Tribunal could be seen to have found that the Goods were properly described as both switches and multiplexors (which the appellant contended was consistent with the primary judge's finding that the Tribunal in fact purported to apply Note 4), the Tribunal erred by failing to ask the questions and make the findings of fact necessitated by the application of the Interpretation Rules. The appellant contended that the primary judge erred in considering that the Tribunal's characterisation of the Goods by reference to their "essential character" amounted in substance to a finding of fact which demonstrated no error of law and which required the Goods to be classified under subheading 8517.30.00 and not under subheading 8517.40. The appellant argued that his Honour's approach may have been correct if the Tribunal had found that the Goods were properly described as switches only, but the Tribunal had not made that finding. On the contrary, so it was put, the Tribunal appeared repeatedly to have found or assumed that the Goods were both multiplexors and switches or were at least capable of being so regarded. That conclusion (if reached) should properly have led to a consideration of the applicable Interpretation Rule. The appellant submitted that the sales tax cases upon which the primary judge relied were inapplicable in the context of the customs tariff legislation. The sales tax legislation contained none of the Interpretation Rules by reference to which the customs tariff legislation must be construed.

Whether Material Error

21 As part of this submission, the appellant argued that if the primary judge were correct in finding that the Tribunal in fact purported to apply Section Note 4, then it followed that the Tribunal was proceeding on the basis that the Goods were both switches and multiplexors. It further followed that the Tribunal had failed properly to apply Note 4 by failing to determine whether the Goods comprised a switching component and a multiplexing component and, if so, whether those components contributed together to a clearly defined function covered by either subheading 8517.30.00 or subheading 8517.40. If it was correct that those subheadings were not mutually exclusive, then the error of law was material in that it could have affected the outcome of the case: Commonwealth v Human Rights and Equal Opportunity Commission (1998) 76 FCR 513 at 519.

Respondent's Submissions

22 The respondent submitted that the tasks of identifying and classifying goods were not mutually exclusive. It was not an error of law for a Tribunal of fact to have regard to "essential character and purpose" in deciding what the Goods were. The Tribunal had not, and nor had the primary judge, impermissibly resorted to classification concepts to aid in the identification of the Goods. His Honour was correct in holding that function was relevant to identification and that the matter had been presented to the Tribunal as being one in which the question of identification turned upon function. The Tribunal had held that the Goods were packet switches, it being common ground before the Tribunal that the Goods were electrical apparatus for line telegraphy and, thus, telegraphic. As the Tribunal had found that the Goods were telegraphic switching apparatus, the question of whether they were "other apparatus for carrier-current line systems" did not need to be decided. Rheem was quite a different case involving statutory extensions by Rule 2(2) of ordinary meanings of words. In any event, reference by the Tribunal to the possibility that the Goods were multiplexors reflected the submissions put to it and operated at the level of identification of the Goods. Furthermore, so it was submitted, the Tribunal had rejected the submission that the Goods were multiplexors and, implicitly, that the goods were "other apparatus" i.e. falling within a classification which includes multiplexors. The approach taken by the Tribunal followed the way in which the evidence was presented. The Tribunal had found correctly that "in this matter the difference is with respect to the level of functioning of the particular goods". The same conclusion would follow from a consideration of the headings which also refer to function.

23 The respondent's evidence, which the Tribunal accepted, was that the switching apparatus included but was more than a multiplexor (a packet switch or exchange being a higher level function than multiplexing). The Tribunal had relied on the manufacturer's description of the Goods as "multi-function access and backbone switches" and as "packet switching exchanges". There had been no reference in that material to the Goods as "multiplexors". The Tribunal also relied on the third layer of functioning referred to in the relevant Australian Standard; the evidence accepted by the Tribunal being that the Goods functioned in the third layer, and far beyond the functionality of a multiplexor. The reference, in paragraph 26 of the Tribunal's reasons, to Section Note 4 was immaterial, as was the discussion of telegraphy in paragraphs 27 and 28 since that was, of necessity, common ground. Even in relation to Section Note 4, whether or not the apparatus consisted of individual components, the evidence was that switching apparatus and multiplexors were distinguishable by function. The Tribunal found that the Goods had a function (switching) over and above mere multiplexing and thus fell within subheading 8517.30.00 as telegraphic switching apparatus. The reference to Section Note 4, so it was submitted, merely confirmed the "function" approach.

24 By a Notice of Contention the respondent submitted that the primary judge had erroneously decided against him that the Tribunal had applied Section Note 4.

Reasoning

25 If the second of the three questions which we have identified - whether the Tribunal in substance asked the right question - is answered favourably to the respondent, the other questions become academic. If, applying the proper tests, the Tribunal identified the Goods as packet switches (and only packet switches) and if it was open to the Tribunal to do so on the evidence, it does not matter whether the sub-headings in question are mutually exclusive and no question arises of comparison between sub-headings at different levels.

26 We accept the general proposition put by counsel for the appellant that the first step for the Tribunal was to identify the goods, as a matter of fact, notionally as a "wharfside" process. Classification (including any necessary application of the Interpretation Rules) was a later step, to be undertaken only once the Tribunal had decided what the Goods were. We do not, however, accept the submission that the Tribunal proceeded to classify the Goods before identifying them, or failed to make a finding as to whether they were properly to be described as packet switches or as multiplexors, or whether they might properly be described as either packet switches or multiplexors.

27 The Tribunal's brief reasons must be understood in the light of its analysis of the evidence. There was a contest between the appellant's experts (whose evidence was to the effect that the Goods were properly described as multiplexors) and the experts called by the respondent, who said that they were properly identified as switching systems. There was no doubt, on the evidence, that the Goods broke data into packets and directed those packets, thus performing a switching function; nor was there any doubt that they also performed a multiplexing function: they had to do that in order to perform the switching function. They might multiplex without switching, but could not switch without multiplexing.

28 Having analysed the evidence, the Tribunal made clear its understanding that its task in the light of that evidence, was to identify the Goods:

"The emphasis in identifying the goods must be upon the function they in fact perform."

29 Immediately following that statement (which counsel for the appellant accepted as unexceptionable) the Tribunal proceeded to the former of the two statements which we have already quoted:

"25. From the evidence quoted above what is clear is that the subject goods have a function over and above mere multiplexing."

30 The Tribunal, before proceeding to the later of the passages we have quoted, intrudes a reference to Note 4 to Section XVI and a discussion of the meaning of the word "telegraphic". It is not clear to us that either of those matters has any particular significance to the Tribunal's reasons, which continue (in the passage already quoted):

"29. As stated above the goods are more than multiplexors and they are described by the importer and witnesses as Packet Switching Exchanges. Although to carry out their functioning as Packet Switches they must multiplex, they also direct packets and thus operate as switches. It seems to us that what gives the subject goods their essential character and purpose is the switching function and thus the sub-heading appropriate to their function is that of 8517.30.00 - Telephonic or telegraphic switching apparatus."

31 That paragraph, we think, reflects two steps. First, the Tribunal asks, what are the Goods essentially and what is the essential function that they perform? The Tribunal answers that question by finding that essentially what they are and do is defined by the switching function. In other words, the Tribunal finds that the Goods are switches (and are not multiplexors). Having reached that point, the next step is classification, and that step is taken:

"... and thus the sub-heading appropriate to their function is ...".

32 There is no trace in that reasoning of any attempt to apply Note 4: the language used by the Tribunal by no means reflects that note. Paragraph 3(b) of the Interpretation Rules is nowhere mentioned in the Tribunal's reasons; the only basis for a suggestion that the Tribunal applied that paragraph, or had regard to it, is an expression of doubt early in the reasons, as to the applicability of Rules 2 and 3(a) and the use by the Tribunal, in the identification process, of the words "essential character", words which appear in the Interpretation Rule 3(b). But there is no suggestion that the Tribunal had it in mind that the Goods might be regarded as "mixtures, composite goods consisting of different material all made up of different components, [or] goods put up in sets for retail sale, which cannot be classified by reference to 3(a)". In referring to essential character and function, the Tribunal was, more colloquially, asking "what really are the Goods, and what really is it that they do?".

33 The Tribunal found that they were switches; there was ample evidence to support that finding; it was a finding of fact; it ought not to be disturbed.

Conclusion

34 For those reasons the appeal is dismissed. The appellant will pay the respondent's costs.

I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court.

Associate:

Dated: 28 January 1999

Counsel for the Appellant:	Mr S J Gageler with Mr C R Kennett
Solicitor for the Appellant:	Mr Ray Turner
Counsel for the Respondent:	Mr A Robertson SC
Solicitor for the Respondent:	Australian Government Solicitor
Date of Hearing:	10 November 1998
Date of Judgment:	28 January 1999