CHIEF EXECUTIVE OF THE NEW ZEALAND CUSTOMS SERVICE v DB BREWERIES LIMITED [2017] NZCA 307

CHIEF EXECUTIVE OF THE NEW ZEALAND CUSTOMS SERVICE v DB BREWERIES LIMITED [2017] NZCA 307 [19 July 2017]IN THE COURT OF APPEAL OF NEW ZEALANDCA516/2016[2017] NZCA 307BETWEEN CHIEF EXECUTIVE OF THE NEWZEALAND CUSTOMS SERVICEAppellantAND DB BREWERIES LIMITEDRespondentHearing: 24 May 2017Court: Harrison, Cooper and Winkelmann JJCounsel: P H Courtney for AppellantJPH Barker and HMZ Ford for RespondentJudgment: 19 July 2017 at 12 pmJUDGMENT OF THE COURTA The appeal is allowed.B The decision of the High Court, and consequently the decision of the Customs Appeal Authority, are set aside.C The respondent must pay the appellant costs for a standard appeal on a band A basis and usual disbursements.D Costs in the High Court and the Customs Appeal Authority are to lie where they fall.____________________________________________________________________REASONS OF THE COURT(Given by Cooper J)Introduction[1] This appeal raises an important issue concerning the meaning and effect of s 20(1)(a) of the Customs and Excise Act 1996 (the Act). Under its terms, imported goods are subject to the control of the New Zealand Customs Service (Customs)from the time of their importation until the time they are "lawfully removed forhome consumption from a Customs controlled area". In the circumstances of this case, s 20(1)(a) has to be applied in a way that reflects s 20(2), which provides: "For the purposes of subsection (1), goods that are removed from a Customs controlled area to another Customs controlled area are not removed for home consumption."[2] The goods in question (cider and alcoholic ginger beer) were removed from one Customs controlled area at the Port of Auckland (the Ports of Auckland Customs controlled area) and voluntarily placed in different Customs controlled areas either accessible to or owned by DB Breweries Ltd (DBBL). While they were in these different Customs controlled areas the goods deteriorated to the point where they could not be sold. They were abandoned to the Crown. Excise-equivalent duty had been paid, and DBBL sought a refund under s 113 of the Act.[3] Section 113(1) empowers the Chief Executive to refund any duty when satisfied that imported goods have deteriorated in condition or have been abandoned to the Crown for destruction prior to their release from the control of Customs. DBBL asserts that because the deteriorated state of the goods was discovered when they were in a Customs controlled area and the goods were then abandoned to the Crown for destruction the refund is payable.[4] The Chief Executive denies that is so. She says the goods had been lawfully removed for home consumption when DBBL uplifted them from the Ports of Auckland Customs controlled area. They had therefore deteriorated after their release from the control of Customs. DBBL relies on s 20(2) as the answer to that response, claiming the removal of the goods from one Customs controlled area to another was not removal for home consumption.[5] The appeal turns on which of these contentions is correct.Proceedings to this pointThe Customs Appeal Authority[6] Argument was first joined in the Customs Appeal Authority (the Authority) to which DBBL appealed after the Chief Executive decided the beverages were no longer subject to the control of Customs when the deterioration in condition occurred.[7] The Authority decided that the beverages had remained in the control of Customs until their destruction, holding that if they had deteriorated, diminished in value, or been abandoned by DBBL to the Crown, that had occurred while they were subject to the control of Customs.1 Consequently, it allowed DBBL's appeal.[8] The Chief Executive then appealed to the High Court. The Act provides for such appeals to be on the basis of a case setting out questions of law or fact for the determination of the High Court, which has been submitted to the Authority and signed by it.2 In the present case, the appeal raised only questions of law. The facts were agreed, and recited in the case stated by the Authority. They included the following:3. Between April 2013 and September 2014, the Respondent imported several consignments of the Goods into New Zealand by sea.4. Prior to the Goods landing in New Zealand, the Respondent's agententered the Goods by submitting the requisite electronic import entry clearances, and paid the excise-equivalent duty due.5. Customs cleared all of the Goods before they landed in New Zealand at the Ports of Auckland Customs Controlled Area (CCA).6. Within a few days of importation the Respondent uplifted the consignments of Goods from the Ports of Auckland and transferred them initially to a contracted storage facility (the First Customs Controlled Area).7. From the First Customs Controlled Area DB transported consignments of the Goods to its own manufacturing facilities, one in the North Island and the other in the South Island (the North and South Island Customs Controlled Areas).1 DB Breweries Ltd v Chief Executive of the New Zealand Customs Service [2016] NZCAA 2.2 Customs and Excise Act 1996, s 272.8. Customs had issued Licences and Procedure Statements for each of the Ports of Auckland CCA, First Customs Controlled Area, and North and South Island Customs Controlled Areas.9. The Goods had a shelf life of between 1.5 and 2 years (depending on the product); and were accordingly labelled by the manufacturer with a best-before date for the expiry of that time period.10. The Respondent found that it could not sell any of the Goods before their best-before dates expired.11. While being stored in the facilities to which the Goods had been transported the best-before date on all of the Goods expired.[9] Paragraph 22 of the case referred to additional "undisputed facts" establishedat the hearing:22.1 The Goods were legally entered and duty paid by the Respondent.22.2 After being passed for entry, the Goods remained within or in transit between the First Customs Controlled Area, the North Island or the South Island Customs Controlled Areas at all times.22.3 The Goods deteriorated or diminished in value while within or in transit between the First Customs Controlled Area, the North Island or the South Island Customs Controlled Areas.22.4 Storage of the Goods after payment of duty in the Customs Controlled Areas was not in breach of any terms, conditions or restrictions imposed in relation to those Customs Controlled Areas under section 12(2) of the Act.[10] The case also stated that the deterioration of the goods was not due to any wilful act or negligence on the part of DBBL. It confirmed that the goods had been abandoned to the Crown while within the Customs controlled areas to which they had been transferred after being uplifted from the first Customs controlled area.[11] Neither the case nor the Authority's decision stated how long the goodsremained in the Customs controlled areas after removal from the Ports of Auckland Customs controlled area. Nor did the case on appeal or the decision identify the dates on which the goods were placed in the first Customs controlled area and then in the other Customs controlled areas, or for how long and for what reason the goods remained there. However, a chronology provided by Ms Courtney, counsel for the Chief Executive, stated the goods were imported on various dates between April 2013 and September 2014, and were removed from the Ports of AucklandCustoms controlled area within a few days of their arrival. It was not until April 2015 that DBBL applied for a refund. Since the goods had a shelf-life of between 1.5 and 2 years, and that the best-before dates expired, it may be inferred that they remained in the other Customs controlled areas for many months.[12] Four separate questions of law were asked. All related to the Authority'sreasons for concluding that the goods had not been lawfully removed for home consumption, so as to enable a refund to be paid under s 113(1) of the Act. We do not consider the questions need to be separately addressed.The High Court[13] The High Court dismissed the Chief Executive's appeal.3 Agreeing with the Authority, Faire J held that the plain meaning of s 20(1)(a) and 20(2) was that the goods had never been lawfully removed for home consumption. They remained in a Customs controlled area when their deterioration was discovered. Applying s 20(2), the fact that they had been removed from one Customs controlled area to another meant that they had not been removed for home consumption. In reaching that view, Faire J rejected the argument advanced to him by the Chief Executive that the goods ceased to be under the control of Customs when they were entered and cleared forhome consumption. He summarised the Chief Executive's argument as follows:[39] Customs' proposed interpretation is essentially that the words of s 20(1)(a) should be taken as meaning that goods are subject to the control of Customs while Customs has legal authority over those goods and that is until the time the goods are able to be lawfully removed for home consumption orexportation from a Customs controlled area. That time passed, in Customs'submission, once the goods had been cleared for entry (including the issue of Import Delivery Orders) and duty had been paid. Customs submitted that from that point, although DB chose to store the goods within CCAs, Customs no longer had any legal authority or control over the goods.[14] The Judge preferred DBBL's contentions not only because of his view of theplain meaning of ss 20(1)(a) and (2) but also because he considered the purpose ofthe legislation supported the Authority's conclusion. He recorded DBBL'ssubmission that it would be inconsistent with the purpose of the Act to impose duty on goods that are not consumed and never enter into circulation for consumption in3 Chief Executive of the New Zealand Customs Service v DB Breweries Ltd [2016] NZHC 2181.New Zealand.4 He held that s 113 of the Act provides a mechanism to refund excise-equivalent duty in certain situations and the purpose of the provision must be to allow a refund where, although it has been paid or has been due to be paid, one of the circumstances listed in the section applies.5[15] He concluded, upholding the Authority's decision, that the goods hadremained in the control of Customs until their destruction and that DBBL was eligible for a refund of the duty paid pursuant to s 113 of the Act.The appeal[16] The written submissions provided by the parties essentially rehearsed the arguments that had been made before the Authority and the High Court. For the Chief Executive, Ms Courtney contended that goods were lawfully removed for home consumption when, after the importer entered them for home consumption, Customs had passed the entry and all duty due had been paid. She noted that after those steps are taken, an importer is notified by Customs that it has no further legal authority or interest in the goods by the issue of a delivery note or import delivery order. She submitted that once that occurs, the goods are legally released from the control of Customs and could be uplifted by the importer.[17] She then relied on s 41 of the Act, which provides that:41 Imported goods to be dealt with according to entryGoods in respect of which entry has been made and passed must forthwith be dealt with in accordance with the entry and with the provisions of this Act in respect of the goods so entered.[18] She submitted that, in the present case, the goods were essentially available to be uplifted when they landed because the necessary steps including the payment of the duty had already taken place. They had ceased to be under the control of Customs as soon as they arrived in the Ports of Auckland Customs controlled area.4 At [36].5 At [45].[19] For DBBL, Mr Barker provided a detailed response to that submission, relying on and elaborating the reasoning that had prevailed before the Authority and the High Court. His essential argument commenced with the proposition that goods did not leave the control of Customs until they were lawfully removed from a Customs controlled area for the purposes of home consumption. The goods could not be released from the control of Customs at a point where they were still subject to the control of Customs. That issue was determined by s 20(1)(a) under which the goods remain subject to the control of Customs from the time of importation until they are lawfully removed for home consumption from a Customs controlled area. Section 20(2) in effect acted as a proviso to s 20(1)(a) stipulating that goods removed from one Customs controlled area to another were not removed for home consumption. That applied in the present case, where the goods deteriorated and were abandoned while still in a Customs controlled area.[20] Mr Barker submitted this approach conformed to the purpose of the Act. Relevantly, that was to implement an excise system including the relevant controls supporting that system, excise and excise-equivalent duty being a form of indirect tax on consumption in a Customs controlled area. The duty should not be payable if the goods deteriorate before they can be consumed.[21] During the hearing, as a result of exchanges with the Court, Ms Courtney advanced a new argument, as an alternative. It was based on what was common ground between counsel that DBBL chose at a time when Customs had no further lawful interest in the goods to store them in Customs controlled areas within its own premises and for its own purposes. The new argument was that the goods were removed for home consumption at the point that they were removed from the Ports of Auckland Customs controlled area. At that point Customs had no further interest in the goods, or need to control them. Ms Courtney submitted that what happened to the goods after that point was irrelevant. Their subsequent placement in Customs controlled areas was not to meet any requirement of Customs or the relevant statutory scheme, but simply a voluntary act by DBBL.[22] For reasons which we will address, we are satisfied that Ms Courtney's newargument, which is different to the argument that the Chief Executive urged on theAuthority and the High Court, is correct. Before explaining why that is so, it will be helpful if we set out the relevant elements of the statutory scheme and address the statutory purpose.The statutory scheme[23] Part 7 of the Act provides for the imposition of excise duty and excise-equivalent duty. The former is imposed on manufactured goods specified in Part A of the Excise and Excise-equivalent Duties Table. Excise-equivalent duty is imposed on the goods specified in Part B of the Excise and Excise-equivalent Duties Table. Such duties are payable on imported goods.6[24] Under s 76 of the Act, excise duty is a debt due to the Crown. Where the goods have been manufactured in a manufacturing area licensed under the Act, theexcise duty is payable "immediately on removal of the goods for home consumption in accordance with s 72".7 If they have been manufactured outside a licensed manufacturing area the excise duty is payable immediately on manufacture.8[25] Under s 86(1), the duty on all goods imported constitutes a debt due to theCrown "immediately on importation of the goods". The debt becomes due andpayable under s 86(3)(a) when "goods have been entered in accordance with section 39 and the entry has been passed for home consumption".9[26] Section 39 deals with the entry of imported goods. Section 39(1)(a) provides that subject to any regulations made under s 40, goods that are imported or are to beimported must be entered by the importer "in such form and manner (including by electronic means into a computer or other device) as may be prescribed". The entry must be made "within such time as may be prescribed or such further time as thechief executive may allow".10 Under s 39(4) duty becomes due and payable on the goods, and the goods may be sold or otherwise disposed of by the Chief Executive, if6 Customs and Excise Act, s 75(1).7 Section 76(1)(a).8 Section 76(1)(b).9 There are other paragraphs within s 86(3) but they need not be mentioned for present purposes.10 Section 39(1)(b).the goods are not entered as required,11 or claimed within such period as may be prescribed.12 The prescribed period is in reg 22 of the Customs and Excise Regulations 1996, which provides that the period within which imported goods must be claimed for the purposes of s 39(4)(b) is three months after the date of their importation.[27] There is no definition of entry in the Act. However, reg 23 of the Customs and Excise Regulations provides:23 When entry of imported goods deemed to be madeAn entry of goods to which section 39(1) of the Act applies is deemed to have been made for the purposes of the Act,—(a) in the case of an entry made by means of an electronic message, on the date and at the time that the JBMS generates a lodgement number in respect of the receipt of that message; and(b) in any other case, when the entry has been received by the Customs.The reference in reg 23(a) to "JBMS" is to the Joint Border Management System, acomputer system described in s 131A(a) of the Act as an "integrated bordermanagement computer system designed for the collection, storage, and use of border information". Registered JBMS users are able to supply information bymaking inputs to the JBMS in a complying form. And where border information has to be provided to Customs, s 134C(2) requires that the information be provided "by using the JBMS" or "another means approved in writing by the chief executive".[28] Ms Courtney explained that once an entry is received it is checked by Customs to ascertain whether there may be prohibited items or whether there has been any under-assessment of value. If no further action is required after the checking process is completed, the entry is deemed passed. Formally, reg 24(a) provides that, in the case of an entry for home consumption, an entry of goods to which s 39(1) applies is deemed to have been passed "when the JBMS debits the11 Section 39(4)(a).12 Section 39(4)(b).importer's deferred payment account, or raises a cash account in respect of the duty payable".[29] As noted above, the agreed facts set out in the case stated by the Authority recited that prior to the goods being landed, the appropriate electronic entry was made, and the goods were cleared by Customs.13 Further, the duty was paid.[30] Section 41 of the Act provides:41 Imported goods to be dealt with according to entryGoods in respect of which entry has been made and passed must forthwith be dealt with in accordance with the entry and with the provisions of this Act in respect of the goods so entered.[31] Section 46 provides that except as permitted by the Chief Executive, no goods subject to the control of Customs shall be placed in any vehicle fortransportation within New Zealand "until entry has been made in accordance withsection 39(1)".[32] Section 47 then provides:47 Removal of goods from Customs controlled area(1) Goods that are subject to the control of the Customs must not be delivered or removed from a Customs controlled area except—(a) as provided by this Act; or(b) subject to subsection (3), with the permission of a Customs officer after entry has been made and passed in the prescribed form and manner; or(c) pursuant to a permit or other authorisation granted by the chief executive in respect of those goods, subject to such conditions as the chief executive may determine; or(d) by a Customs officer in the performance of his or her duties under this Act.(2) The chief executive may, by notice in writing, vary or revoke any conditions to which a permit granted by the chief executive under subsection (1)(c) is subject, or may revoke those conditions and impose new conditions or may revoke the permit completely.13 Above at [8]–[9].(3) Notwithstanding subsection (1)(b) of this section, while goods remain subject to the control of the Customs, the Chief Executive may revoke any notice of delivery given in respect of those goods.(4) A person who is dissatisfied with a decision of the chief executive under subsection (1)(c) or subsection (2) may, within 20 working days after the date on which notice of the decision is given, appeal to a Customs Appeal Authority against that decision.[33] As can be seen from s 47(1), goods that are subject to the control of Customs must not be removed from a Customs controlled area except pursuant to paras (a)‒(d). Paragraph (b) says that subject to subs (3) goods may be removedwith the permission of the Customs officer after entry has been made and passed in the prescribed form and manner. Although the drafting is less than clear, subs (3) apparently contemplates that the permission of the Customs officer will be given in the form of a notice of delivery. We were told by Ms Courtney (and we did not understand Mr Barker to disagree) that there is no statutory form of the notice of delivery. The note evidently connotes delivery to the Customs controlled area, from which goods may be uplifted by the importer as its agent. Presentation of the notice at the Customs controlled area facilitates collection of the goods.[34] Against this background, we turn to s 20, which deals with the issue of when goods are subject to the control of Customs. For present purposes the relevant provisions are as follows:20 Goods subject to control of Customs(1) Goods are subject to the control of Customs,—(a) where the goods have been imported, from the time of importation until the time the goods are lawfully removed for home consumption or exportation from a Customs controlled area; or(e) where the goods are manufactured in a Customs controlled area, from the time of manufacture until the goods are lawfully removed for home consumption from a Customs controlled area, or the goods are exported to a point outside New Zealand, whichever happens first; or[35] Paragraph (a) is the one that applies in this case, but Mr Barker referred to para (e) as part of his argument based on the need to treat goods manufactured inNew Zealand and subject to excise duties in the same way as imported goods having regard to obligations under the General Agreement on Tariffs and Trade (GATT). There are eight further paragraphs in s 20(1) describing additional situations where the goods are subject to the control of Customs.[36] As has been seen, s 20(2) then provides:(2) For the purposes of subsection (1), goods that are removed from a Customs controlled area to another Customs controlled area are not removed for home consumption.[37] Finally, we refer to s 113(1), which provides:113 Other refunds and remissions of duty(1) Subject to any prescribed exceptions, restrictions, or conditions, the chief executive may refund or remit any duty where the chief executive is satisfied that imported goods, or goods manufactured in New Zealand, as the case may be,—(a) have been damaged, destroyed, pillaged, or lost, or have diminished in value or deteriorated in condition, prior to their release from the control of the Customs; or(b) are of faulty manufacture; or(c) have been abandoned to the Crown for destruction or other form of disposal prior to their release from the control of the Customs.[38] DBBL relies on s 113(1)(a) and (c) claiming a refund of duty on the basis that the goods deteriorated in condition and were abandoned to the Crown for destruction prior to their release from the control of Customs.The statutory purpose[39] The Act does not contain a comprehensive statement of purpose such as is commonly found in statutes of more recent enactment. The long title simply refers to objectives of reforming the law relating to customs, excise and other duties, providing for the administration and enforcement of Customs controls at the border, repealing previous legislation and providing for related matters.[40] However, it is possible to discern the legislative purpose sufficiently for present purposes on the basis of the provisions that we have discussed above. The purpose is clearly to collect excise and excise-equivalent duty and to do so, as Mr Barker submitted, in a way that conforms with New Zealand's internationalobligations under the GATT. It may also be said that the Act intends that where excise is levied upon domestically manufactured goods, an equivalent duty is levied upon imported goods of the same type. This is inherent in the concept of excise-equivalent duty.[41] We accept Mr Barker's submission that while excise and excise-equivalent duty are levied, respectively, upon certain goods that are domestically manufactured and imported, they do not amount to an absolute tax upon the manufacturing or importation of the goods. Rather, the tax is imposed upon the goods that are available for home consumption. The duty is an indirect tax on consumption, imposed on the importer and manufacturer but ultimately passed on to the consumer.14 Consequently, if the goods are not available for consumption, there is no basis for the tax. Mr Barker claimed it would be inconsistent with the Act and inherently unfair to impose such duty on goods that are not consumed or even entered into circulation for consumption in New Zealand. He submitted that is why the Act provides mechanisms for an importer to claim remission, refund or drawback of excise-equivalent duties in respect of goods never available for consumption in New Zealand, either because they are exported or because they are no longer fit for sale.[42] Mr Barker also emphasised that duties on domestically manufactured and imported goods were intended to be equivalent. That would ensure conformity with New Zealand's international obligations under art 3 of the GATT, which relevantly requires that, except in the case of import tariffs agreed in the GATT, imported products should be treated no less favourably than domestically produced products.[43] While we agree with that, s 41 of the Act must reflect a legislative intent that goods in respect of which entry has been made and passed should be retrieved for the purpose for which they have been imported and not be left for long periods in a14 Terminals (NZ) Ltd v Comptroller of Customs [2013] NZSC 139, [2014] 1 NZLR 121 at [7].Customs controlled area, which the importer is simply using as a storage area within its own manufacturing facility. The refund provisions in s 113(1) are consonant with the concept that the duties are payable in respect of goods available for home consumption, but no legislative purpose would be served if a refund were available in circumstances where the importer has simply chosen to leave the goods in a Customs controlled area. Such an approach would conform neither with s 41 nor s 39(4)(b) and the three month period prescribed by regulation 22 of the Customs and Excise Regulations.Analysis[44] It is unnecessary for us to subject the reasoning of the Authority and the High Court to close analysis as we are deciding the Chief Executive's appeal on adifferent ground from that which was advanced below.[45] It must be remembered that the drafting of s 20(1)(a) requires the whole of that provision to be considered. It is not a case, as sometimes arises, where a word is defined in an interpretation section and it is necessary simply to ascertain the meaning of the definition without regard to the word defined. Here, although thewords "lawfully removed for home consumption" are important, it is necessary first to note that ascertaining the statutory meaning must start with the words "subject tothe control of the Customs", with which s 20(1) commences. In our view, they mean that to be covered by the subsection, the goods must be subject to some form of control.[46] The Oxford English Dictionary Online gives a number of meanings of thenoun "control". Those most relevant are "the action or fact of holding in check or restraining; restraint" and "the fact or power of directing and regulating the actions of people or things; direction, management; command". The idea common to both isthat there will be a person restraining or directing another person or thing. Thatmeaning is enhanced by the word "subject" used adjectivally. The Oxford English Dictionary Online gives as the relevant meaning "under the control, rule, or influence of something; subordinate". The expression "subject to the control of the Customs" is therefore to be construed as referring to goods in respect of whichCustoms has some remaining regulatory role to perform whether by way of checking, inspection or ensuring that duty has been paid. This would include allsteps preparatory to the goods being "passed". But once the goods are no longersubject to any of the regulatory powers of Customs, they are not in any real or tangible sense subject to the control of Customs.[47] As a matter of practicality, since the statutory scheme requires imported goods to be placed in a Customs controlled area, s 20(1)(a) must be taken as envisaging that there will be a period between the completion of the steps that Customs needs to take in relation to the goods and their being uplifted by the importer or its agent. The statute therefore provides that the goods are subject to the control of Customs until they are lawfully removed for home consumption from the Customs controlled area. But the Act does not envisage that that will be for a lengthy period of time; on the contrary, as noted above, s 41 of the Act requires that"Goods in respect of which entry has been made and passed must forthwith be dealt with in accordance with the entry". "Forthwith" is a strong word. The Oxford English Dictionary Online defines it, relevantly, as "immediately, at once, without delay or interval". And the combined effect of s 39(4)(b) and reg 22 is that if the imported goods remain in a Customs controlled area for more than three months after the date of their importation they may be sold or otherwise disposed of by the Chief Executive. The three month period must elapse before sale and disposal byCustoms; it does not indicate that "forthwith" in s 41 should have anything other than its normal meaning.[48] The idea that "subject to the control of the Customs" connotes some form ofregulatory control under the Act is underlined by s 113(1)(a). This subsection authorises the Chief Executive to refund duty where she is satisfied that importedgoods have been damaged (amongst other things) "prior to their release from the control of the Customs". The concept of "release from control of" is stronger than other words that could have been used, for example "release by", and requiressomething more than mere presence in a Customs controlled area while awaiting removal by the importer.[49] Mr Barker submitted that the plain meaning of s 20(1)(a) and (2) read together is that goods do not lawfully leave the control of Customs until they are removed from a Customs controlled area (other than to another Customs controlled area), the removal is for home consumption and is otherwise lawful. We accept, for the reasons set out above, that s 20(1)(a) envisages that goods will be in the Customs controlled area pending the completing of any necessary regulatory procedures and for a brief period after that pending their removal by the importer. In this case, DBBL uplifted the goods from the Ports of Auckland Customs controlled area. Theonly inference available from DBBL's decision is that the company removed thegoods for its own commercial purposes. We consider that it was at that point that the goods were lawfully removed for home consumption. The fact that they were subsequently placed in other Customs controlled areas, initially in a contract storage facility and then within its own manufacturing facilities, was the voluntary act of DBBL, not necessary to meet any discernible purpose of the Act and not required by any of its relevant provisions.[50] Although s 20(2) provides that goods removed from a Customs controlled area to another Customs controlled area are not removed for home consumption, we consider that subsection can only have effect in relation to goods that remain subject to the control of Customs in the sense that some further steps are necessary for the purposes of the Act. In this case, they did not remain subject to the control of Customs once they were lawfully removed from the Ports of Auckland Customs controlled area. We consider this approach to be in accord with the plain meaning of s 20(1)(a). It can be harmonised with s 20(2) on the basis that the latter has the effect of ensuring that movement between Customs controlled areas does not of itself constitute removal for home consumption, provided the goods remain subject to the control of Customs. We are also satisfied that this approach meets the relevant purposes of the Act.[51] Mr Barker referred in his written submissions to the fact that s 20(2) was added by the Customs and Excise Amendment Act (No 2) 1998. The explanatorynote to the Statutes Amendment Bill (No 2) 1997, which first introduced the provision that became s 20(2), said:15The effect of the amendment is to make goods subject to the continued control of Customs when they are removed from a Customs controlled area and taken to another Customs controlled area.Mr Barker submitted that the amendment was consistent with Parliament seeking to ensure that Customs maintained jurisdiction over goods so as to be able to exercise its statutory powers in respect of such goods. While that may be the case it does not justify a reading of s 20(2) that preserves the jurisdiction of Customs for a period when it has no interest in exercising that jurisdiction or a need to do so. DBBL'sargument suggests that Customs derives some benefit from the continued presence of the goods in a subsequent Customs controlled area that it would not have were they treated as taken for home consumption when removed from the Ports of Auckland Customs controlled area. But any benefit is illusory.[52] Mr Barker submitted that Customs retains control over duty-paid goods stored in a Customs controlled area through provisions that clearly empower it to exercise enforcement and inspection powers over the goods. In this respect, he referred first to s 19G of the Act, which provides that certain search powers may be exercised in the case of goods that have been brought into Customs approved areas for storing exports (called CASEs). The powers in question, however, relate to goods that are in a vehicle and allow the vehicle to be stopped and searched where a Customs officer has reasonable cause to suspect they are subject to the control of Customs.16 We see this as a particular provision dealing with a different subject, and we note that nothing in the provision limits s 20.17[53] Mr Barker referred next to s 150. Under that section, Customs may enter any part of a Customs controlled area and examine the goods there. We accept that is a power that could be exercised with respect to goods that have been moved from one Customs controlled area to another. However, the possible exercise of this power in circumstances where duty has been paid and the goods have been passed for entry is15 Statutes Amendment Bill (No 2) 1997 (45-1) at x.16 Customs and Excise Act, s 144(3).17 Section 19G(2).an unconvincing basis for interpreting s 20(1)(a) in a way that treats goods that are available to be uplifted as subject to the control of Customs. The same observation applies in respect of s 151, on which Mr Barker also relies. That section provides that a Customs officer may examine or test goods subject to the control of Customs or goods that the officer has reasonable cause to suspect are subject to the control of Customs. Were this power to be exercised in respect of goods that have been moved to another Customs controlled area after being entered and passed, as occurred in this case, it would be merely fortuitous that the power was able to be exercised in the Customs controlled area. However, s 151 does not refer to the goods being in a Customs controlled area and for that reason does not assist in ascertaining the point at which goods are lawfully removed for home consumption for the purposes of s 20(1)(a).[54] Next, Mr Barker raised another argument based on s 47 of the Act, focusing on the stipulation in subs (1)(b) that goods may not be removed from a Customs controlled area except with the permission of a Customs officer after entry has been made and passed in the prescribed form and manner. As has been seen, that rule is subject to subs (3). The latter provides that while goods remain subject to the control of Customs, the Chief Executive may revoke any notice of delivery given in respect of the goods. Mr Barker submits that this indicates that the goods remained under the control of Customs even though a delivery order had been issued. However, s 47 relates to goods that are subject to the control of Customs. If they are goods in respect of which entry has been made and passed and they have already been removed from the initial Customs controlled area, they are no longer subject to the control of Customs.[55] Consequently, none of the provisions to which Mr Barker referred offer a convincing basis for construing the statute on the basis that imported goods in respect of which duty has been paid and entry passed should be regarded as subject to the control of Customs when they are removed by the importer in placing goods voluntarily in another Customs controlled area within its own manufacturing facility for reasons unrelated to any outstanding Customs requirements. Customs has no further interest in the goods and need take no further steps in relation to them. In these circumstances their removal from the initial Customs controlled area isnecessarily for home consumption and to hold otherwise would be to rob s 41 of its plainly intended effect.[56] The result of the High Court judgment, and the Authority's decision, waseffectively to put Customs in the position of underwriting the merchantable quality of the goods while DBBL made a commercial decision as to the timing of their removal from the subsequent Customs controlled areas. We do not consider that would be justified by the relevant statutory provisions.[57] It is appropriate now to deal with the argument advanced by Mr Barker that the approach advocated by the Chief Executive would result, inappropriately, in the different treatment of manufacturers and importers. He submitted that manufacturers of excisable alcoholic beverages are eligible for remission of duty up to the point in the supply chain when the goods actually become available for home consumption by leaving a Customs controlled area and entering the retail distribution network. This is the result of the ability to transfer the goods from the Customs controlled area where manufacture has taken place to another Customs controlled area if they cannot be physically accommodated within the original area, provided for in regs 6(a) and 52A of the Customs and Excise Regulations. The latter provides that, subject to certain provisos, an entry does not have to be made in respect of the removal of specified alcoholic products by the licensee of the Customs controlled area and may instead be made by the owner of the specified alcoholic products.[58] However, reg 52A only applies where the beverages are moved to another Customs controlled area pursuant to an approval given by the Chief Executive18 and reg 56 applies to enable the removal to occur without the goods being entered. If the beverages can be fitted into this suite of provisions they will be able to be retained in the Customs controlled area and remain subject to the control of Customs until the entry is made by the owner of the goods. This is a very different situation from cases such as the present where the removal from the initial Customs controlled area has occurred after the entry has been made. We do not consider this possibility should alter the manner in which s 20(1) and (2) are to be interpreted.18 See ss 10(f) and 72(a); and Customs and Excise Regulations 1996, reg 6(a).[59] For the reasons we have discussed, we conclude that a decision that duty should be refunded to DBBL under s 113(1) would not be in accordance with the language of the statute, or with the purpose of the statutory scheme.Result[60] The appeal is allowed. We set aside the decision of the High Court and, consequently, the decision of the Authority.[61] We have not found it necessary to deal separately with the four questionsanswered by the High Court and the Chief Executive's appeal did not seek relief other than the setting aside of the High Court's decision.[62] The Chief Executive is entitled to her costs. DBBL must pay the Chief Executive costs for a standard appeal on a band A basis and usual disbursements. We are satisfied that costs in the High Court and in the Authority should lie where they fall as the Chief Executive succeeded in this Court on a ground that was not directly raised below.Solicitors:Crown Law Office, Wellington for AppellantJohn Barker Law, Auckland for Respondent