Removal of partially manufactured tobacco or foreign brand tobacco in bond

(7) Partially manufactured tobacco or foreign brand tobacco may, without payment of duty, be removed by its manufacturer from a bonding warehouse only if

    (a) it is entered into another bonding warehouse in bond or exported in bond and not for delivery to a foreign duty free shop or as foreign ships' stores; and

    (b) the removal and entry or export, as the case may be, are in accordance with the regulations and the ministerial regulations.

Diversion

(8) A person who has acquired goods that are manufactured tobacco, foreign brand tobacco or cigars is liable to pay the duty that would have been payable on the goods at the time the goods were completely manufactured, if the goods

    (a) have been relieved, under this Act or otherwise, from the duty because of the purpose for which the person acquired them;

    (b) are removed from a bonded warehouse licensed as such under the Customs Tariff, sold or used by the person for another purpose; and

    (c) would not have been relieved from the duty if the person had acquired them for the other purpose.

Duty payable at time of acquisition

(9) The duty a person is liable to pay under subsection (8) on goods is deemed to have become payable by the person at the time the person acquired the goods.

(2) Subsection (1) is deemed to have come into force on April 6, 2001, except that

    (a) subsections 58(1), (3) and (4) of the Act, as they read immediately before that day, apply to manufactured tobacco (as defined in section 6 of the Act) entered into a bonding warehouse before that day and are subject to subsection 58.1(4) of the Act, as enacted by subsection (1);

    (b) subsections 58.1(3) and (7) of the Act, as enacted by subsection (1), do not apply to tobacco entered into a bonding warehouse before that day; and

    (c) subsection 58.1(4) of the Act, as enacted by subsection (1), does not apply to tobacco exported for delivery to a foreign duty free shop or as foreign ships' stores if it had been entered into a bonding warehouse before that day.

10. (1) The Act is amended by adding the following after section 102:

Penalty for removal from bonding warehouse for certain exports

102.1 Every person who removes from a bonding warehouse and exports in bond manufactured tobacco (as defined in subsection 58.1(1)) otherwise than in accordance with subparagraph 58.1(3)(a)(i) and paragraph 58.1(3)(b) is liable to pay, in addition to any duties or taxes that are payable under this or any other Act in respect of the tobacco, a penalty equal to the total of those duties and taxes, and that penalty becomes payable at the time the tobacco is exported.

(2) Subsection (1) is deemed to have come into force on April 6, 2001.

R.S., c. 12 (4th Supp.), s. 61

11. (1) The portion of subsection 110.1(1) of the Act before paragraph (a) is replaced by the following:

Penalty and interest

110.1 (1) Subject to subsection (2), on default in payment of any duty or penalty payable under this Act within the time prescribed by this Act or the regulations, the person liable to pay that duty or penalty shall pay without delay, in addition to the amount in default,

(2) Subsection (1) is deemed to have come into force on April 6, 2001.

1993, c. 25, s. 40; 1994, c. 37, s. 5(F); 1999, c. 17, par. 144(1)(z. 7)(E)

12. Subsections 201(1) and (2) of the Act are replaced by the following:

Packaging and stamping of manufactured tobacco and cigars manufactured in Canada

201. (1) Before manufactured tobacco, or cigars, that are manufactured in Canada are entered for consumption under this Act,

    (a) they shall be put up and prepared by their manufacturer in packages that have printed on them such information as is prescribed by the ministerial regulations; and

    (b) the manufactured tobacco or cigars and their packages, cartons, boxes, crates and other containers shall be stamped with tobacco stamps or cigar stamps by the manufacturer as required by the ministerial regulations.

Packaging and stamping of imported manufactured tobacco and cigars

(2) Subject to subsection (3), before imported manufactured tobacco or imported cigars are released under Part II of the Customs Act,

    (a) they shall be put up and prepared by the importer in packages that have printed on them such information as is prescribed by the ministerial regulations; and

    (b) the manufactured tobacco or cigars and their packages, cartons, boxes, crates and other containers shall be stamped with tobacco stamps or cigar stamps by the importer as required by the ministerial regulations.

1994, c. 37, s. 6; 1999, c. 17, par. 144(1)(z. 11)(E)

13. Section 211 of the Act is replaced by the following:

Stamp regulations

211. The Minister may make regulations prescribing the form of stamps to be impressed on, printed on, marked on, indented into or affixed to Canadian raw leaf tobacco, cigarettes, cigars and packages, cartons, boxes, crates and other containers containing manufactured tobacco or cigars, the information to be provided on the stamps and the manner in which the stamps are to be affixed.

1994, c. 37, s. 8; 1999, c. 17, par. 144(1)(z. 19)(E)

14. (1) The portion of subsection 239.1(1) of the Act before paragraph (a) is replaced by the following:

Absence of stamps to be notice

239.1 (1) The absence of the proper tobacco stamp or cigar stamp required by this Act and the ministerial regulations to be impressed on, printed on, marked on, indented into or affixed to any cigarette or cigar or any package, carton, box, crate or other container of manufactured tobacco or cigars sold, offered for sale, kept for sale or found in the possession of any person is notice to all persons that

1993, c. 25, s. 52; 1995, c. 41, s. 111(1); 1999, c. 17, par. 144(1)(z. 19)(E)

(2) Subparagraph 239.1(2)(a)(i) of the Act is replaced by the following:

      (i) in the case of manufactured tobacco, by a licensed tobacco manufacturer for export from Canada in accordance with this Act and the ministerial regulations,

      (i.1) in the case of cigars, by a licensed cigar manufacturer

        (A) for export from Canada in accordance with this Act and the ministerial regulations, or

        (B) as ships' stores in accordance with the regulations made under the Customs Tariff and the Excise Tax Act,

1995, c. 41, s. 111(2)

(3) Clauses 239.1(2)(a)(iii)(A) and (B) of the Act are replaced by the following:

        (A) the cigars were manufactured in Canada and are sold or offered for sale as ships' stores in accordance with the regulations made under the Customs Tariff and the Excise Tax Act, or

        (B) the manufactured tobacco or cigars were imported and are, in accordance with this Act, the Customs Tariff and the Customs Act, sold or offered for sale to an accredited representative, to a duty free shop licensed under the Customs Act, as ships' stores in accordance with the regulations made under the Customs Tariff and the Excise Tax Act, to an operator of a bonded warehouse licensed under the Customs Tariff or for export, or

1993, c. 25, s. 52

(4) Subparagraph 239.1(2)(a)(iv) of the Act is replaced by the following:

      (iv) by a person licensed under the Customs Act to operate a duty free shop, if

        (A) the manufactured tobacco was imported and is sold or offered for sale in accordance with that Act to a person about to leave Canada, or

        (B) the cigars are sold or offered for sale in accordance with that Act to a person about to leave Canada,

1995, c. 41, s. 111(3)

(5) Subparagraph 239.1(2)(b)(iv) of the Act is replaced by the following:

      (iv) in the case of cigars or imported manufactured tobacco, in the possession of a person licensed under the Customs Tariff to operate a bonded warehouse or under the Customs Act to operate a sufferance warehouse or duty free shop in that warehouse or duty free shop,

1995, c. 41, s. 111(4)

(6) Subparagraph 239.1(2)(b)(vi) of the Act is replaced by the following:

      (vi) in the case of cigars or imported manufactured tobacco, in the possession of a person as ships' stores, if the acquisition and possession of the cigars or manufactured tobacco by that person are in accordance with the regulations made under the Customs Act, the Customs Tariff and the Excise Tax Act, or

(7) Subsections (2) to (6) are deemed to have come into force on April 6, 2001, but do not apply to manufactured tobacco entered into a bonding warehouse before that day.

1995, c. 41, s. 112(1)

15. (1) Paragraph 240(2)(d) of the Act is replaced by the following:

    (d) in the case of cigars or imported manufactured tobacco, by a person licensed under the Customs Tariff to operate a bonded warehouse or under the Customs Act to operate a sufferance warehouse or duty free shop, in that warehouse or duty free shop;

1995, c. 41, s. 112(2)

(2) Paragraph 240(2)(f) of the Act is replaced by the following:

    (f) in the case of cigars or imported manufactured tobacco, as ships' stores by a person if the acquisition and possession of the cigars or manufactured tobacco by that person are in accordance with the regulations made under the Customs Act, the Customs Tariff and the Excise Tax Act; or

1993, c. 25, s. 52; 1995, c. 41, s. 112(3); 1999, c. 17, par. 144(1)(z. 20)(E)

(3) Paragraph 240(3)(a) of the Act is replaced by the following:

    (a) in the case of manufactured tobacco, by a licensed tobacco manufacturer for export from Canada in accordance with this Act and the ministerial regulations;

    (a.1) in the case of cigars, by a licensed cigar manufacturer

      (i) for export from Canada in accordance with this Act and the ministerial regulations, or

      (ii) as ships' stores in accordance with the regulations made under the Customs Tariff and the Excise Tax Act;

1995, c. 41, s. 112(4)

(4) Subparagraphs 240(3)(c)(i) and (ii) of the Act are replaced by the following:

      (i) the cigars were manufactured in Canada and are sold or offered for sale as ships' stores in accordance with the regulations made under the Customs Tariff and the Excise Tax Act, or

      (ii) the manufactured tobacco or cigars were imported and are, in accordance with this Act, the Customs Act and the Customs Tariff, sold or offered for sale to an accredited representative, to a duty free shop licensed under the Customs Act, as ships' stores in accordance with the regulations made under the Customs Tariff and the Excise Tax Act, to an operator of a bonded warehouse licensed under the Customs Tariff or for export; or

1993, c. 25, s. 52

(5) Paragraph 240(3)(d) of the Act is replaced by the following:

    (d) by a person licensed under the Customs Act to operate a duty free shop, if

      (i) the manufactured tobacco was imported and is sold or offered for sale in accordance with that Act to a person about to leave Canada, or

      (ii) the cigars are sold or offered for sale in accordance with that Act to a person about to leave Canada.

(6) Subsections (1) to (5) are deemed to have come into force on April 6, 2001, but do not apply to manufactured tobacco entered into a bonding warehouse before that day.

R.S., c. E-15

EXCISE TAX ACT

1994, c. 29, s. 1(1)

16. (1) The definitions ``Atlantic manufactured tobacco'', ``black stock manufactured tobacco'' and ``licensed tobacco manufacturer'' in subsection 2(1) of the Excise Tax Act are repealed.

(2) Subsection 2(1) of the Act is amended by adding the following in alphabetical order:

``foreign duty free shop''
« boutique hors taxes à l'étranger »

``foreign duty free shop'' means a retail store that is located in a country other than Canada and that is authorized under the laws of that country to sell goods free of certain duties and taxes to individuals who are about to leave that country;

``foreign ships' stores''
« provisions de bord à l'étranger »

``foreign ships' stores'' means tobacco products taken on board a vessel or aircraft while the vessel or aircraft is outside Canada and that are intended for consumption by or sale to the passengers or crew while the passengers and crew are on board the vessel or aircraft;

1994, c. 29, s. 1(2)

(3) Subsection 2(7) of the Act is repealed.

(4) Subsections (1) to (3) are deemed to have come into force on April 6, 2001.

1993, c. 25, s. 55(1)

17. (1) Subsection 23(1) of the Act is replaced by the following:

Tax on various articles at schedule rates

23. (1) Subject to subsections (6) to (8.3), whenever goods mentioned in Schedules I and II are imported into Canada or manufactured or produced in Canada and delivered to a purchaser of those goods, there shall be imposed, levied and collected, in addition to any other duty or tax that may be payable under this or any other Act or law, an excise tax in respect of the goods at the applicable rate set out in the applicable section in whichever of those Schedules is applicable, computed, if that rate is specified as a percentage, on the duty paid value or the sale price, as the case may be.

1993, c. 25, s. 55(2)

(2) Subsection 23(5) of the Act is replaced by the following:

Tax on release by duty free shop of Schedule II tobacco products

(5) Subject to section 66.1, whenever tobacco products mentioned in Schedule II are sold by the operator of a duty free shop or are retained for the use of the operator, there shall be imposed, levied and collected, in addition to any other duty or tax payable under this Act or any other Act or law, an excise tax in respect of those tobacco products at the applicable rate set out in the applicable section in that Schedule, computed, if that rate is specified as a percentage, on the duty paid value or the price at which the tobacco products were purchased by the operator, as the case may be, and payable by the operator at the time the tobacco products are delivered to the purchaser or so retained for use.

(3) Subsection 23(8) of the Act is amended by striking out the word ``or'' at the end of paragraph (b.1) and by adding the following after that paragraph:

    (b.2) manufactured tobacco imported into Canada by an individual for their personal use if it is stamped in accordance with the Excise Act and duty has been imposed on it under section 200 of that Act; or

1993, c. 25, s. 55(3)

(4) Paragraph 23(8.2)(a) of the Act is replaced by the following:

    (a) in the case of cigars, products in respect of which section 23.3 applies that are not exported for delivery to a foreign duty free shop or as foreign ships' stores, or cut filler or cut rag or products manufactured less fully than cut filler or cut rag, the products have been exported in bond by their manufacturer or producer;

    (a.1) in the case of products other than those to which paragraph (a) applies, the products have been exported by their manufacturer or producer;

(5) Subsections (1) to (3) are deemed to have come into force on April 6, 2001.

(6) Subsection (4) applies to tobacco products exported after April 5, 2001.

1994, c. 29, s. 5(1)

18. (1) Sections 23.1 and 23.2 of the Act are replaced by the following:

Definition of ``tobacco product''

23.1 In sections 23.11 to 23.3, ``tobacco product'' means manufactured tobacco other than cut filler, cut rag or products manufactured less fully than cut filler or cut rag.

Tax on domestic tobacco delivered to a duty free shop or as ships' stores

23.11 (1) There shall be imposed, levied and collected, in addition to any other duty or tax payable under this Act or any other Act or law, an excise tax, at the applicable rate set out in subsection (2), in respect of tobacco products that are manufactured or produced in Canada and are