The following commentary was kindly provided by Fran Smyth, Lawyer, Hunt & Hunt Lawyers
A recent Administrative Appeals Tribunal (the Tribunal) decision in Pacific Worldwide Pty Ltd and Chief Executive Officer of Customs [2015] AATA 25 (Pacific Worldwide) has seen Customs' decision that wontons and dumplings are classified as stuffed pasta set aside.
The issue in the case was whether won tons should be classified as stuffed pasta or as prepared or preserved crustaceans and other aquatic invertebrates. Despite the statements of Customs' expert food technologist and food safety auditor that, having regard to the method of manufacture and ingredients, the wrapping or skin of a dumpling is pasta, the Tribunal found that consumers do not understand a won ton or dumpling neither on their own, nor as an assembled product, to be pasta or stuffed pasta.
According to the Tribunal, consistent manufacturing process and ingredients used in the two products is not enough to classify those products to the same tariff heading. Rather, decision makers need to have regard to how the product is perceived in "ordinary colloquial speech".
The Tribunal looked at the common or ordinary meaning of the two products, their appearance, cultural origins and how they are prepared and consumed. The similarity between pasta and won tons and dumplings were found to end with the use of flour and water as the main ingredients used. The Tribunal was satisfied that consumers commonly identify pasta as being confined to Italian cuisine and the wontons and dumplings to Asian cuisine. The finding is supported by the examples listed under the tariff heading for pasta, such as spaghetti, macaroni, lasagne and ravioli, which are commonly understood as being of Italian style pasta products.
This is the second case this month where the AAT has overturned a decision made by Customs, following a string of uninterrupted wins for over a year. Hopefully the case demonstrates that despite an ever increasingly technical approach by Customs and the AAT, sometimes the ordinary meaning of words and commercial reality can win.