Section 52 — Excise Tax Act: Appropriation by manufacturer or producer

Where goods that were manufactured or produced in Canada are appropriated by the manufacturer or producer thereof for his own use, the sale price of the goods shall be deemed to be equal to the sale price that would have been reasonable in the circumstances if the goods had been sold, at the time of the appropriation, to a person with whom the manufacturer or producer was dealing at arm’s length. Subsection (1) does not apply in respect of goods, other than printed matter, manufactured by Her Majesty in right of Canada or a province (except goods manufactured by a company to which the Government Corporations Operation Act applies) for any purpose, other than sale; use by any board, commission, railway, public utility, university, manufactory, company or agency that is owned, controlled or operated by the Government of Canada or the government of a province or under the authority of Parliament or of the legislature of a province; or use by Her Majesty in right of Canada or a province or Her agents or servants for commercial or mercantile purposes. Where goods that were manufactured or produced in Canada are leased, or the right to use any such goods, but not the property therein, is sold or given, by the manufacturer or producer thereof to a person the goods shall be deemed to have been sold at the time the goods were so leased or the right to use them was so sold or given; and the sale price of the goods shall be deemed to be equal to the sale price that would have been reasonable in the circumstances if the goods had been sold at that time to that person. Where the sale price of goods consists in whole or in part of a royalty, or any other consideration, that is unascertained at the earlier of the time the goods are delivered or the property in the goods passes to the purchaser thereof, the sale price of the goods shall be deemed to be equal to the sale price that would have been reasonable in the circumstances if the whole of the consideration had been ascertained at that time. Where cosmetics were manufactured or produced in Canada by a licensed manufacturer for a non-resident person who is a person described in paragraph (d) of the definition manufacturer or producer in subsection 2(1) and who has failed to apply for a licence as required by section 54, the licensed manufacturer shall be deemed to have sold the cosmetics for a sale price equal to the sale price that would have been reasonable in the circumstances if the cosmetics had been sold in Canada, at the earlier of the time the cosmetics were delivered or the property in the cosmetics passed to that non-resident person, by that non-resident person to a third person with whom he was dealing at arm’s length. Where prerecorded video cassettes that are new or have not been used in Canada were manufactured or produced in Canada by a licensed manufacturer for a non-resident person who is a person described in paragraph (j) of the definition manufacturer or producer in subsection 2(1) and who has failed to apply for a licence as required by section 54, the licensed manufacturer shall be deemed to have sold the cassettes for a sale price equal to the sale price that would have been reasonable in the circumstances if the cassettes had been sold in Canada, at the earlier of the time the cassettes were delivered or property in the cassettes passed to that non-resident person, by that non-resident person to a third person with whom he was dealing at arm’s length.