The Deputy Minister of National Revenue for
Customs and Excise (Appellant)
v.
Danfoss Manufacturing Limited, Techumseh
Products of Canada Limited, and John Inglis
Company Limited (Respondents)
Court of Appeal, Jackett C.J., Cameron and
Sweet D.JJ.—Ottawa, May 9 and 10, 1972.
Customs—Refrigerator parts—Classification of.
A number of compressors were imported into Canada
with a view to their sale to a manufacturer of refrigerators
to be used in making refrigerators. The compressors were,
however, equally suitable to be used as, for example, parts
in the manufacture of dehumidifiers. The Tariff Board
declared the compressors not to be "refrigerator parts"
under, item 41507-1 of the Customs Tariff but "machines,
n.o.p." under item 42700-1.
Held, dismissing an appeal—
(1) The Board was entitled to come to its conclusion on
the facts.
(2) The word "refrigerators" in tariff item 41507-1, which
appears under the heading "refrigerators, domestic or
store", cannot be construed as applying to the entire range
of commercial refrigerating equipment but only to the ordi
nary appliance used in the home and the store under that
name.
APPEAL from Tariff Board.
J. E. Smith for appellant.
Gordon Henderson, Q.C. and James Worrall,
Q.C. for Danfoss Manufacturing Limited.
D. D. Diplock, Q.C. for Techumseh Products
of Canada Limited.
The judgment of the Court was delivered by
SWEET D.J.—This is an appeal under section
45(1) of the Customs Act, as enacted by c. 26
of the Statutes of Canada of 1958 1 from a
declaration of the Tariff Board dated June 1,
1971 (Appeal No. 940) allowing an appeal to
that Board by the respondent Danfoss Manu
facturing Limited and declaring certain com
pressors imported by that respondent (hereinaf-
ter referred to as "Danfoss") during the period
from January 3, 1968, to May 22, 1968, not to
be "refrigerator parts" classifiable in item
41507-1 of the Customs Tariff but "machines,
n.o.p." classifiable in tariff item 42700-1.
By virtue of section 45(1), this appeal is an
appeal "upon any question of law".
The compressors in question were imported
by Danfoss for resale to third persons who used
them in the manufacture of refrigerators.
The tariff items in question read as follows:
British Most
Prefer- Favoured
ential Nation General
Tariff Tariff Tariff
Refrigerators, domestic or
store, completely equipped
or not:
41507-1 Refrigerator parts, of iron
or steel or of which iron or
steel or both are the com
ponent materials of chief
value 72 p.c. 20 p.c. 35 p.c.
42700-1 Machines, n.o.p., and ac
cessories, attachments, con
trol equipment and tools for
use therewith; parts of the
foregoing . 24 p.c. 15 p.c. 35 p.c.
Two questions were the subject of the hear
ing before the Tariff Board, namely:
1. Whether the compressors in question
were "Refrigerator parts ...", and
2. If they were refrigerator parts, were the
compressors in question parts "... of which
iron or steel or both are the component
materials of chief value".
The Tariff Board decided that the compressors
in question were not refrigerator parts and
therefore made no finding on the second ques
tion. To consider whether the decision on the
first question was correct, it will be necessary
to refer only to the facts that bear on that
question.
According to the Board's decision, the com
pressors in question are not "goods designed
and manufactured solely to be refrigerator parts
and bought and sold for this purpose only" but
are, rather, "goods designed and manufactured
for uses not restricted to refrigerators though
... they are designed, manufactured and actual
ly used in refrigerators as well as in other
things". The Board further held that, while
there were certain limitations upon the com
pressors in question, "such limitations would
not prevent the use of the compressors in vend
ing machines, farm milk coolers, water drinking
fountain coolers, rivet coolers in airplane facto
ries or dehumidifiers".
In the view of the Board, the expression
"refrigerator parts" in item 41507-1 "implies
goods which are either by their very nature
parts of a refrigerator or are, at the time of
importation, incorporated into a refrigerator or
packaged together with other parts of such a
refrigerator". The Board points out that the
item does not use words equivalent to "for use
as refrigerator parts" or "for use in making
refrigerators" and says that "It is an item
describing goods rather than indicating the use
to which they are put." As examples of what
would be "refrigerator parts" within the item,
the Board refers to "Certain insulated doors
and sides, certain door handles, certain
refrigerating compartments, certain shelving
and other things which, by nature and design,
are parts for refrigerators and generally are
committed to use as such".
By applying its views as to the meaning of the
words "refrigerator parts" to the facts as found
by it, the Board concluded that the compressors
in issue are not "refrigerator parts" within the
meaning of those words as used in tariff item
41507-1 but were "machines, n.o.p." within
tariff item 42700-1.
No attack was made on the Tariff Board's
findings of fact as set out above and, these facts
must therefore be accepted as correct.
The appellant's first contention was, in effect,
as I understood it, that the expression "refriger-
ator parts" includes, in addition to articles that
are so specialized as to have no use except in
refrigerators, "many parts designed for and gen
erally but not always used in refrigerators".
During the course of argument, counsel put it,
with some force, that where, over a period of
years, all the articles of a certain class have in
fact been imported to be used in the manufac
ture of refrigerators, it follows that such articles
are "refrigerator parts".
On this aspect of the appellant's case, the
difficulty that counsel could not overcome is
the fact that, when Parliament has intended to
determine the application of a tariff item by
reference to the actual use for which a particu
lar article was imported, it has done so by
framing what is generally referred to as an "end
use item". An example of such an item is found
in tariff item 41435-1, which reads as follows:
British Most
Prefer- Favoured-
ential Nation General
Tariff Tariff Tariff
41435-1 Complete parts of cash
registers when imported by
manufacturers of cash reg
isters for use in the manu
facture of such registers in
their own factories 121 p.c. 124 p.c. 25 p.c.
GATT 10 p.c.
It is the difference between such an item and
item 41507-1 which caused the Tariff Board to
say:
The item does not use words equivalent to "for use as
refrigerator parts" or "for use in making refrigerators". It is
an item describing goods rather than indicating the use to
which they are put.
Another obstacle to accepting this attack on
the Board's conclusion is that, in the absence of
some special direction in the statute to the
contrary, goods must be classified under the
Customs Act as they are at the time of entry.
See: The Deputy Minister of National Revenue
for Customs and Excise v. MacMillan & Bloedel
(Alberni) Limited [1965] S.C.R. 366, as applied
in The Deputy Minister of National Revenue for
Customs and Excise v. Ferguson Industries Ltd.
(1972) (unreported) per Pigeon J.
Having regard to the facts as found by the
Tariff Board, and even assuming that it be
accepted that compressors of the kind in ques
tion had never been used in Canada except in
the manufacture of refrigerators (which fact
does not appear to have been found by the
Tariff Board or established by the evidence),
this Court is of the view that the Tariff Board's
conclusion that the compressors in question
were not "refrigerator parts" was a conclusion
that was open to the Board. As they existed at
the time of importation, there was nothing to
cause the compressors in question to be classi
fied as "refrigerator parts" and not as
"dehumidifier parts" or parts for some other
equipment of the kinds enumerated by the
Board except the admitted fact that the pro
posed purchaser from the importer was a refrig
erator manufacturer who intended to use them
for making refrigerators. Another importation
of compressors that were exactly the same in all
respects might be, on the facts found by the
Board, for use in manufacturing dehumidifiers.
There would be no possible justification for
classifying such compressors differently
depending on their intended use. Attractive as
may be the argument that all such compressors
have heretofore been imported for making
refrigerators and that they must, therefore, be
regarded as "refrigerator parts", the law must
be construed by reference to the whole of its
possible field of application and not by consid
ering only the limited areas in which there has
heretofore been occasion to apply it.
The matter has been considered so far on the
assumption that the word "refrigerator" in the
tariff item means only the articles that are com
monly referred to as such and does not include
vending machines, farm milk coolers, water
drinking fountain coolers, rivet coolers in air
planes or dehumidifiers. The second ground of
attack of the Board's decision is put in the
appellant's memorandum as follows:
The statutory context in which the word appears shows that
it was intended to cover the entire range of commercial
refrigerating equipment as well, and would include such
devices as milk coolers and drinking fountain coolers in
which the Board found that compressors like those in issue
could also be used.
The short answer to this argument is that the
tariff item in question appears under a heading
that reads, in part:
Refrigerators, domestic or store ..
Even if taken by itself the word "refrigera-
tor" could in some contexts be regarded as
including anything that refrigerates; a reference
to a domestic refrigerator or a store refrigerator
cannot be considered as a reference to anything
other than the ordinary appliance that is used in
the home and in the store under that name.
Furthermore, in our view, in ordinary parlance,
one does not refer to every appliance that util
izes refrigeration as a refrigerator. Various
kinds of appliances have acquired names of
their own depending on the feature that was
uppermost in the mind when they acquired their
names. The word "refrigerator" is a word that,
in ordinary parlance in Canada, has the restrict
ed meaning with which it was used by the Tariff
Board.
The appeal will be dismissed.
As the proceedings in the Tariff Board and the decision
of the Board occurred before the coming into force of the
Revised Statutes of Canada, 1970, on July 15, 1971, I refer
to the statute law as it was before that time.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.