Common sense prevails at the CITT where it did not at the CBSA, in Danby Products Ltd. v. President of CBSA, Appeal No. AP-2017-009.
Danby Products Limited (“Danby”) has successfully appealed its customs tariff classification for 21 models of compact refrigerators containing freezing compartments (the “mini fridges”).
The mini fridges are compact appliances used to refrigerate and freeze foods and beverages. They range in capacity from 1.60 cubic feet (45 L) to 4.40 cubic feet (126 L). They range in dimensions from 20″ to 33″ in height, 18″ to 21″ in width, and 18.5″ to 21″ in depth. They all have a single external door.
Internally, the mini fridges have a separate freezer compartment, which measures either half or the full width of the goods, depending on the model. The freezer compartment has a separate internal flap. Of course, all models have a refrigeration compartment as well. The goods freeze and cool foods and beverages by means of a compressor mechanism.
In May 2016, Danby requested an advance ruling of these mini fridges, to determine whether they would be classified under:
- 69, other refrigerating of freezing equipment, which carries no tariff;
- 21.00, compression-type household-type refrigerators, which carries an 8% tariff.
The CBSA gave its advanced ruling that the mini fridges were to be classified under tariff item no. 8418.21.00. Accordingly, Danby appealed the CBSA’s decision to the CITT.
The CBSA had claimed that the “principal function” of the mini fridges was refrigeration because the freezer did not have a separate door and was significantly smaller than the refrigerator part. The CITT was not persuaded that the freezer was “too small” and noted that people who buy these mini fridges want the functions of both the freezer and the fridge.
Moreover, the CITT was persuaded by Danby’s line of reasoning. Specifically, that the CITT’s decision in Euro-Line that which held that refrigerator-freezer units with separate external doors had no discernible principal function. The freezer and fridge compartments perform different functions, with neither being subordinate to the other.
In the end, the CITT overturned the CBSA’s decision, and classified the minifridges under 8418.69.90, which carries no tariff.
John Reiterowski, DS Lawyers Canada, LLP
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