Tariff concession orders (TCOs) allow goods to be
imported without customs duty where there are no local
manufacturers producing substitutable goods.
Problems often arise where opinions differ about the correct
classification of the goods. The recent AAT decision in
National Oilwell v Comptroller-General of Customs
highlights the risks facing importers.
What happened in National Oilwell v
Comptroller-General of Customs?
You might have sympathy for the importer, given the
The goods were 'pony rods', also referred to as short
'sucker rods' – basically a component of an oil well
The sequence of events was as follows.
On 11 February 2009, an application for a TCO was made under
tariff item 8413.91.10.
There then appears to have been some internal consideration by
Customs about whether 8413.91.10 or 8413.91.90 was the correct
tariff item. The AAT referred to a Customs' minute paper but
did not discuss its contents.
However, on 25 February 2009, the original application for the
TCO was withdrawn and was re-listed under tariff item 8413.91.90.
Customs subsequently approved the TCO under that tariff item.
While not in the evidence, it is easy to imagine that Customs
communicated its view that it wouldn't approve a TCO under
8413.91.10 but would approve a TCO under 8413.91.90.
From 2009 to early 2014, goods were imported duty-free under
8413.91.90 quoting the approved TCO.
On 28 January 2014, Customs issued a tariff advice, stating
that the correct tariff item was actually 8413.91.10 – the
one that was the subject of the first (withdrawn) TCO
The effect of Customs' position
Customs' tariff advice on 28 January 2014 meant that the
previous imports of the pony-rods were not duty-free. This was
because the TCO could not apply to goods imported under a different
tariff item, regardless of whether the description matched.
Customs assessed the imports for duty.
National Oilwell applied for a corresponding refund of duty on
the basis that there was a TCO in force (or taken to have been in
force) at the time the goods were imported.
In its decision, the AAT commented that:
'Before goods can fit within a particular TCO they must be
within the tariff classification to which the TCO is keyed'
– Voxson Sales Pty Ltd and Collector of Customs
 FCA 609.
'In order to fall within a tariff concession order, the
goods must "precisely" meet the description of that
order' – Becker Vale Pty Ltd v Chief Executive
Officer of Customs  FCA 525.
There was no question that the description of the goods in the
TCO matched the actual goods precisely. However, the AAT held that
the TCO could not be applied to the imported goods – because
the TCO was keyed to 8413.91.90 and the goods were properly
imported under 8413.91.10.
On that basis, the AAT concluded that the TCO did not apply, and
the imported goods were dutiable.
What steps could the importer have taken to protect
After receiving the tariff advice on 28 January 2014:
a new TCO was granted for the goods under the correct tariff
item – 8413.91.10 – and the goods imported from that
date were not dutiable;
National Oilwell applied for a further tariff advice requesting
confirmation that the goods were covered by the TCO; and
Customs provided this confirmation in a second tariff
Unfortunately these steps were too late for the goods that had
already been imported.
With the benefit of hindsight, these steps should have been
taken in 2009. Assuming Customs indicated in February 2009 that the
correct tariff item was 8413.91.90 and not 8413.91.10 (as the
importer had concluded in their application), the importer should
have asked Customs for a tariff advice.
A tariff advice is binding on Customs for 5 years.
Cooper Grace Ward is a leading Australian law firm based in
This publication is for information only and is not legal
advice. You should obtain advice that is specific to your
circumstances and not rely on this publication as legal advice. If
there are any issues you would like us to advise you on arising
from this publication, please contact Cooper Grace Ward
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