On 29 August 2012, the Full Federal Court dismissed an appeal by Robert Bosch (Australia) Pty Ltd (RBA) against a clawback of duty credits that it previously received under the Automotive Competitiveness and Innovation Scheme (ACIS).
List G Barristers' members Peter Hanks QC and Tom Clarke appeared for the Department of Industry, Innovation, Science and Research and Tertiary Education, as they did before Murphy J in the Federal Court and before the Administrative Appeals Tribunal. The Department has successfully resisted RBA’s appeal at each stage.
RBA claimed and received duty credits under the ACIS scheme for research and development (R&D) activities that were carried out on its behalf, and under its direction and management, in Europe by employees of its German parent company, Robert Bosch GmbH (RBG). The central question was whether the R&D activities were “conducted by” RBA, in which case the activities qualified for Commonwealth assistance under the ACIS scheme, or whether the activities were “conducted by” RBG in which case the activities did not qualify. Although the ACIS scheme has now lapsed, the same question arises under the current Automotive Transformation Scheme. The decision confirms that Commonwealth assistance is not payable for R&D work that Australian automotive companies contract out offshore.
The Full Federal Court also confirmed that, following a compliance audit of RBA, the Department was entitled to recover the duty credits that RBA had claimed and received for the ineligible offshore R&D, thereby upholding the fiscal integrity of the ACIS scheme. (RBA had argued that, even if it was not entitled to the duty credits, the Department could not recover the credits.)
Peter Hanks QC also appeared for the Department in an earlier Federal Court judicial review application decided in 2009, which arose from an interlocutory decision in the course of the AAT review, and in which the Department was also successful.