Minister of National Revenue (Customs and Excise) v. Gen-Lite Industries Ltd., (1986) 7 F.T.R. 61 (TD)

• Judge: Denault, J.
• Court: Federal Court (Canada)
• Case Date: December 03, 1985
• Jurisdiction: Canada (Federal)
• Citations: (1986), 7 F.T.R. 61 (TD)

MNR v. Gen-Lite Ind. Ltd. (1986), 7 F.T.R. 61 (TD)

MLB headnote and full text

Canada (Deputy Minister of National Revenue for Customs and Excise) v. Gen-Lite Industries Ltd.

(No. T-818-83)

Indexed As: Minister of National Revenue (Customs and Excise) v. Gen-Lite Industries Ltd.

Federal Court of Canada

Trial Division

Denault, J.

April 17, 1986.

Summary:

The Deputy Minister determined that Gen-Lite imported $166,214.38 worth of goods for which it owed excise taxes of $14,944.60. The Minister determined that Gen-Lite attempted to defraud the federal government and imposed a $166,214.38 penalty. The penalty was later reduced to $29,989.20. Gen-Lite immediately paid the excise tax. The Deputy Minister sued for the penalty, which after being reduced because of prescription, was now $10,863.44. Gen-Lite counterclaimed for the amount of the excise tax it paid, claiming it was illegal and paid under protest.

The Federal Court of Canada, Trial Division, dismissed both the Deputy Minister's claim and Gen-Lite's counter-claim. The court held that it had no jurisdiction over the counter-claim where Gen-Lite did not appeal to the Tariff Board. The court held that no penalty was payable where Gen-Lite acted in good faith without fraudulent intent.

Customs - Topic 8201

Offences and penalties - Penalties - Whether justified - An importer was penalized for allegedly attempting to defraud the federal government of $14,944.60 in excise taxes - The evidence disclosed that the importer sought explanations or clarifications as to the amount of tax payable, but received no answers - The Federal Court of Canada, Trial Division, held that the penalty was not justified, where the evidence disclosed the importer acted in good faith with no intent to defraud.

Customs - Topic 9065

Appeals - To Tariff Board - Failure to appeal bars alternate action - The Deputy Minister determined that an importer owed $14,944.60 in excise taxes and penalized the importer for attempting to defraud the federal government - The importer paid the taxes - The Deputy Minister sued for the penalty - The importer counterclaimed for reimbursement for the taxes paid under protest - The Federal Court of Canada, Trial Division, held it had no jurisdiction to deal with the counterclaim, because the importer's remedy was an appeal to the Tariff Board and the failure to appeal precluded an alternate action.

Practice - Topic 7022

Costs - Party and party costs - Entitlement to - Successful party - Exceptions - Defective procedure - An importer successfully defended an action to recover a penalty imposed under the Customs Act - The action would have been unnecessary had the importer appealed to the Tariff Board, the appropriate procedure - The Federal Court of Canada, Trial Division, therefore denied the successful importer costs.

Cases Noticed:

Proprietary Association of Canada et al. v. The Queen, 83 D.T.C. 5323, dist. [para. 5].

R. v. Sun Parlor Advertising Company et al., [1973] F.C. 1055, refd to. [para. 9].

R. v. Bureau, [1949] S.C.R. 367, refd to. [para. 9].

The Queen v. Mondev Corp. Ltd., 33 C.P.R.(2d) 193, refd to. [para. 10].

Marun and Minogue v. The Queen, [1964] C.T.C. 444, refd to. [para. 11].

R. v. Silver, 2 C.E.R. 307, refd to. [para. 11].

R. v. Canabec Trailers Incorporé, 6 C.E.R. 331, refd to. [para. 11].

R. v. Clouston Foods Canada Ltd., 4 C.E.R. 167, refd to. [para. 11].

Statutes Noticed:

Customs Act, R.S.C. 1970, c. C-40, sect. 2(3) [para. 8]; sect. 46, sect. 47, sect. 48 [para. 5]; sect. 163, sect. 192 [para. 1].

Excise Tax Act, R.S.C. 1970, c. E-13, sect. 8(b), schedule 1 [para. 6]; sect. 59 [para. 5].

Counsel:

David Lucas, for the plaintiff;

Michel Carle, for the defendant.

Solicitors of Record:

Frank Iacobucci, Q.C., Deputy Attorney General of Canada, Ottawa, Ontario, for the plaintiff;

Phillips & Vineberg, Montreal, Quebec, for the defendant.

This action was heard on December 3, 1985, at Montreal, Quebec, before Denault, J., of the Federal Court of Canada, Trial Division, who delivered the following judgment on April 17, 1986.