Utex Corp. v. Canad (Deputy Minister of National Revenue)

Utex Corp. v. Canad (Deputy Minister of National Revenue) Court (s) Database Federal Court of Appeal Decisions Date 2001-03-07 Neutral citation 2001 FCA 54 File numbers A-28-00 Decision Content Date: 20010307 Docket: A-28-00 Neutral citation: 2001 FCA 54 CORAM: RICHARD C.J. STRAYER J.A. SHARLOW J.A. BETWEEN: UTEX CORPORATION Appellant and DEPUTY MINISTER OF NATIONAL REVENUE, THE COMMISSIONER OF CUSTOMS AND REVENUE Respondent Heard at Ottawa, Ontario, on March 7, 2001. Judgment delivered from the Bench at Ottawa, Ontario, on March 7, 2001. REASONS FOR JUDGMENT OF THE COURT BY: RICHARD C.J. Date: 20010307 Docket: A-28-00 Neutral citation: 2001 FCA 54 CORAM: RICHARD C.J. STRAYER J.A. SHARLOW J.A. BETWEEN: UTEX CORPORATION Appellant and DEPUTY MINISTER OF NATIONAL REVENUE, THE COMMISSIONER OF CUSTOMS AND REVENUE Respondent REASONS FOR JUDGMENT (Delivered from the Bench at Ottawa, Ontario on March 7, 2001.) RICHARD C.J. [1] This is an appeal from a decision dated October 27, 1999 made by the Canadian International Trade Tribunal (the Tribunal) in Appeal No. AP-98-085, pursuant to section 67 of the Customs Act, in which the Tribunal dismissed the appellant's appeals from re-appraisals of the value for duty of imported clothing made by the respondent pursuant to subsection 63(3) of the Customs Act, R.S.C. 1985, c. C-52.6, as amended (the Act). [2] The Tribunal correctly stated that the issue before it was whether commissions paid by the appellant to its agent, Fabco Trading Corp. (Fabco), should be added to the price paid or payable for imported garments pursuant to subparagraph 48(5)(a)(i) of the Act, as determined by the respondent. [3] Subparagraph 48(5)(a)(i) reads as follows: (5) The price paid or payable in the sale of goods for export to Canada shall be adjusted (5) Dans le cas d'une vente de marchandises pour exportation au Canada, le prix payé ou à payer est ajusté : (a) by adding thereto amounts, to the extent that each such amount is not already included in the price paid or payable for the goods, equal to a) par addition, dans la mesure où ils n'y ont pas déjà été inclus, des montants représentant : (i) commissions and brokerage in respect of the goods incurred by the purchaser thereof, other than fees paid or payable by the purchaser to his agent for the service of representing the purchaser abroad in respect of the sale, (i) les commissions et les frais de courtage relatifs aux marchandises et supportés par l'acheteur, à l'exclusion des honoraires versés ou à verser par celui-ci à son mandataire à l'étranger à l'occasion de la vente, [4] The respondent had re-appraised values for duty of the clothing, imported in 1996, 1997 and 1998, on the basis that commissions paid by the appellant to Fabco were part of the value for duty and were dutiable. [5] The appellant's position was that the amounts that it paid to Fabco are buying commissions that should not be added to the price paid or payable for the imported garments. [6] The Tribunal was not persuaded that the agent, Fabco, always acted in the interests of its principal, Utex Corporation, and therefore found that the fees paid to Fabco were dutiable. [7] We are all agreed that the Tribunal erred in law. [8] There is no evidence in the record that Fabco, in providing services to Utex Corporation, failed in some respects to act in the interests of the appellant but even if there were, that by itself would not be sufficient to establish that the fees paid to Fabco are outside the exception set out in subparagraph 48(5)(a)(i) of the Act as fees paid to the agent of a purchaser for the service of representing the purchaser abroad in respect of the sale. [9] The appeal is allowed with costs and the matter is referred back to the Tribunal for re-determination in accordance with this finding. "J. Richard" Chief Justice