The Canadian International Trade Tribunal has jurisdiction to determine whether the Canada Border Services Agency’s recapture of refunded customs duties is valid. In other words, if the CBSA issues a detailed adjustment statement (DAS) to claw back a refund, the affected importer may have a grounds for appeal if the DAS is issued too late.
In the June 1, 2012 decision in Grodan Inc. v. President of the Canada Border Services Agency (AP-2011-031), the Tribunal held it has jurisdiction beyond deciding matters of origin, valuation and tariff classification.
In this case, Grodan imported goods and used a tariff classification that resulted in duties being payable. Grodan filed B2 amendments after it determined that it was entitled to duty-free treatment under H.S. code 9903.00.00. The CBSA accepted the voluntary amendments and paid a refund of customs duties. More than 48 months later, the CBSA took the position H.S. code 9903.00.00 was not available and issued a DAS to recover the refunded customs duties. Grodan filed an appeal with the Canadian International Trade Tribunal.
The Department of Justice argued that the Canadian International Trade Tribunal did not have jurisdiction to consider whether the DASs were statute barred as beyond a 4 year limitation period.
In considering the scope of its own jurisdiction, the Tribunal noted:
- The Tribunal’s jurisdiction is limited by statute, whether explicitly or implicitly;
- Parliament intended to confer on the Tribunal broad appellate jurisdiction;
- The Tribunal’s authority is not limited merely to the narrow substantive question of correct tariff classification, origin or value for duty of imported goods;
- The Tribunal may make such order, finding or declaration as the nature of the matter require;
- The duties and functions of the Tribunal are, inter alia, to hear, determine and deal with all appeals … and all matters relating thereto;
- The Tribunal has authority to determine not only the correctness of a decision made under Section 60 but also its validity; and
- The Tribunal’s jurisdiction extends to jurisdictional matters.
On the issue of the Tribunal’s authority to make determinations relating to jurisdiction, the Tribunal held:
If a tariff classification decision made under Section 60 of the [Customs Act] is not correct on the merits, then it cannot stand. Likewise, if it is not valid on jurisdictional grounds, it should not stand. As such, the Tribunal is of the view that the validity of a decision under section 60 is a matter “related” to the correctness of such a decision and, therefore, the Tribunal is authorized to “deal with” it by making ‘…such order, finding or declaration as the nature of the matter require ….”
The Tribunal stated “[t]he Tribunal will not countenance an unjust outcome.” In the Groban case, the Tribunal held that the DASs were invalid because they had been issued more than 48 months after the deemed determination under subsection 58(2) of the Customs Act that occurred when the voluntary amends were filed.
This case is important because some aggrieved importers may incorrectly believe they have no legal redress when the CBSA makes an decision that is not a tariff classification, origin or valuation decision.