Amoena (UK) Ltd v Commissioners for HM Revenue and Customs
| Jurisdiction | England & Wales |
| Judge | Lord Carnwath,Lord Hodge,Lord Sumption,Lady Hale |
| Judgment Date | 13 July 2016 |
| Neutral Citation | [2016] UKSC 41 |
| Date | 13 July 2016 |
| Court | Supreme Court |
[2016] UKSC 41
Lady Hale, Deputy President
Lord Sumption
Lord Reed
Lord Carnwath
Lord Hodge
Appellant
Tim Eicke QC Edward Brown
(Instructed by Clarkson Wright and Jakes LLP)
Respondent
Sarabjit Singh
(Instructed by HMRC Solicitor's Office)
Heard on 7 June 2016
( with whom Lady Hale, Lord Sumption, Lord Reed and Lord Hodge agree)
This appeal concerns the appropriate customs classification of a Carmen "mastectomy bra". It is designed to be worn with an artificial breast form, by women who have undergone surgical removal of one or both breasts. Classification is governed by the system known as the "Combined nomenclature of the European Union" ("CN"). The issue is whether the bra should be classified under chapter 90, as an "orthopaedic appliance", "artificial part of the body", or "other appliance … worn … to compensate for a defect or disability" (heading 9021) taken with note 2(b) ("parts and accessories"). If not, there is no dispute that it should be classified under chapter 62 subheading 6212 (brassières). In the latter case it would attract duty at 6.5%; in the former none. The Court of Appeal, upholding the decision of the First-tier Tribunal (FTT), but reversing the decision of the Upper Tribunal (UT), held that it should be classified under chapter 62.
The commendably careful and detailed findings of the FTT are not in dispute.
The bra was described in the original application in terms which were accepted by the FTT (para 21):
"A mastectomy bra which is worn by post-operated women, following amputation of a breast or breasts. The bra is especially designed to hold silicone breast forms and has left and right pockets to hold the breast forms firmly in place. The other design features which differentiate the mastectomy bra from an ordinary bra are the wide padded straps which help support the weight of the breast form and help to avoid undue stress associated with neck/shoulder problems for the post operated women. The bra is also designed to ensure the breast form itself does not show and therefore has a specific cut and shape dissimilar to a conventional bra."
As the FTT found, it was designed not solely for post-mastectomy use, but also for patients who had had a lumpectomy (removal of a tumour), or following breast reconstruction.
The FTT examined the Carmen bra together with a normal bra, and also saw it modelled by a woman who had had a mastectomy. They commented:
"The most noticeable differences between the two garments (were) that the mastectomy bra had two side supports on the outside of each breast, which were absent in the normal brassière which we saw, and the straps in the mastectomy bra were positioned centrally over the breasts whereas in the normal bra the straps were marginally over to the sides. It was Mrs Seehaus's evidence that the area under the bust was not elasticated, however, we do not accept this evidence, it appearing to us that there was some give in that area. She also referred to the fact that there was more fabric used to cover what might be called the cleavage, ie the middle part of the bra, than would be found in a normal brassière." (para 17)
(Mrs Seehaus was product manager for the German parent company of the appellant.)
They referred also to Mrs Seehaus' evidence describing 13 features of the Carmen bra, but said:
"We find that there is not one of the above features which may not be found in an ordinary brassière, although the positioning of the pockets to hold the breast form in conjunction with the higher cup to cover it is not such as would usually be found in an ordinary brassière where the opening is more normally used in conjunction with a low cut bra, and where it is found, it is in order to insert padding to create an appearance of a larger bust; the central positioning of the straps is a feature which we accept it would be unusual to find in a normal brassiere." (para 19)
They referred to evidence that, as an alternative to a mastectomy bra, the same (or in some respects a better) result might be achieved by "a new system in which breast forms are attached by adhesive strips to the thorax wall" (para 24). They accepted also that one purpose of the breast form and the bra taken together was "the lessening of the psychological impact of having had the mastectomy" (para 25). Later in their judgment, they rejected arguments that it had some other medical purpose than containment of the breast form:
"On examination of the mastectomy bra we could find no evidence that its function was not just the containment of the breast form, but was also the prevention of shoulder pain and problems arising from the absence of lymph nodes." (para 33)
It is unnecessary to repeat the detailed exposition of the relevant provisions, helpfully set out by Arden LJ in the Court of Appeal (paras 7–22). As she explained (para 7):
"[The CN] is based on the customs classification scheme agreed and used internationally by a large number of countries, called the Convention on the Harmonised Commodity Description and Coding System ('HS'). The EU is a party to this Convention. The HS consists of some 5,000 groups of goods with 6-digit codes. The CN integrates the HS but in addition contains further subdivisions with 8-digit codes, specifically adapted for the EU. Both the HS and the CN have explanatory notes ('HSEN' and 'CNEN' respectively), which are prepared by experts. Courts generally give weight to these notes even though they are not legally binding."
The current version of the CN takes effect under EEC Regulation 2658/87, as updated by EU Regulation 927/2012.
The relevant chapters are 62 ("articles of apparel and clothing accessories"), and 90, which covers a disparate range of items including for present purposes "… medical or surgical instruments and apparatus; parts and accessories thereof". Heading 9021 embraces —
"Orthopaedic appliances, including crutches, surgical belts and trusses; splints and other fracture appliances; artificial parts of the body; hearing aids and other appliances which are worn or carried, or implanted in the body, to compensate for a defect or disability."
The notes to chapter 90 deal respectively with "parts and accessories" (note 2) and "orthopaedic appliances" (note 6):
"2. …
(b) Other parts and accessories, if suitable for use solely or principally with a particular kind of machine, instrument or apparatus, or with a number of machines, instruments or apparatus of the same heading … are to be classified with the machines, instruments or apparatus of that kind.
6. For the purposes of heading 9021, the expression 'orthopaedic appliances' means appliances for:
— preventing or correcting bodily deformities; or
— supporting or holding parts of the body following an illness, operation or injury …"
We have been referred to a number of CJEU decisions under the classification system, in particular:
i) Lohmann GmbH & Co KG and Others v Oberfinanzdirektion Koblenz (Joined Cases C-260/00 to C-263/00) [2002] ECR I-10045 ( Lohmann)
ii) Turbon International GMBH v Oberfinanzdirektion Koblenz ( Case C-276/00) [2002] ECR I-1389 ( Turbon 1)
iii) Turbon International GMBH v Oberfinanzdirektion Koblenz ( Case C-250/05) [2006] ECR I-10531 ( Turbon 2)
iv) Uroplasty BV v Inspecteur van de Belastingdienst—Douanedistrict Rotterdam ( Case C-514/04) [2006] ECR 1-6721 ( Uroplasty)
v) Unomedical A/S v Skatteministeriet ( Case C-152/10) [2011] ECR I-5433 ( Unomedical)
The general approach to the classification of products was explained by the court in Uroplasty paras 40–42. The decisive criterion is in general to be found "in their objective characteristics and properties as defined in the wording of the relevant heading of the CN and of the notes to the sections or chapters". The Explanatory Notes are an important aid to interpretation but do not have legally binding force. Finally:
"[T]he intended use of a product may constitute an objective criterion in relation to tariff classification if it is inherent in the product, and such inherent character must be capable of being assessed on the basis of the product's objective characteristics and properties."
As noted by Arden LJ in the Court of Appeal (para 54), Advocate General Kokott in her opinion in Uroplasty gave more detailed guidance as to the structured or "hierarchical" approach which may be required by the various headings and subheadings of the CN. However, the area of dispute in this appeal is narrowly defined by reference to the scope of a single subheading (9021), so that issues of hierarchy do not appear to arise.
It is also important to bear in mind the general comment made in Lohmann:
"It must be made clear at the outset that, when the court is requested to give a preliminary ruling on a matter of tariff classification, its task is to provide the national court with guidance on the criteria which will enable the latter to classify the products at issue correctly in the CN, rather than to effect that classification itself, a fortiori since the court does not necessarily have available to it all the information which is essential in that regard. In any event the national court is in a better position to do so." (para 26)
In Revenue and Customs Comrs v Aimia Coalition Loyalty UK Ltd [2013] UKSC 15; [2013] 2 All ER 719, Lord Reed made a similar observation in respect of the VAT directives, by reference to earlier European authorities:
"54. Article 267 TFEU confers on the Court of Justice jurisdiction to give preliminary rulings concerning (a) the interpretation of the Treaties and (b) the validity and...
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