Amoena (UK) Ltd v The Commissioners for HM Revenue and Customs
| Jurisdiction | England & Wales |
| Judge | Lady Justice Arden,Lord Justice McCombe,Lady Justice King |
| Judgment Date | 29 January 2015 |
| Neutral Citation | [2015] EWCA Civ 25 |
| Docket Number | Case No: A3/2013/2870 |
| Date | 29 January 2015 |
| Court | Court of Appeal (Civil Division) |
[2015] EWCA Civ 25
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM
The Upper Tribunal (Tax and Chancery Chamber)
Judge Sinfield and Judge Alexander
FTC/23/2012
Royal Courts of Justice
Strand, London, WC2A 2LL
Lady Justice Arden
Lord Justice McCombe
and
Lady Justice King
Case No: A3/2013/2870
Mr Sarabjit Singh (instructed by HMRC Solicitors Office) for the Appellants
Mr Tim Eicke QC (instructed by Clarkson Wright & Jakes Ltd Solicitors) for the Respondent
Hearing date: 17 October 2014
This appeal concerns the appropriate classification, and hence level of customs duty, for a mastectomy bra ("MB"). This is designed principally to be worn with an artificial breast form by women who have undergone surgical removal of one or more breasts. The MB in this case is known as the "Carmen" MB. It is imported by the respondent ("Amoena").
There are two issues: (1) Is the MB a part of or accessory to a breast form? (2) Is it an orthopaedic appliance? In each case the question is to be answered by the instruments relevant to the classification of MBs, as explained below. If the answer to either issue is yes, then, as the Upper Tribunal ("UT") (Judge Greg Sinfield and Judge Nicolas Alexander) held, the Carmen MB carries no duty. If, as the appellants ("HMRC") declared in the Binding Tariff Information (an official written notice of classification) ("BTI") on 16 October 2009, and the First-tier Tribunal ("FTT") held, it is an article of clothing, it carries duty of 6.5%.
WHAT ARE THE FEATURES OF THE CARMEN MB?
In its application for a BTI, Amoena explained:
A mastectomy bra 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".
The FTT found that all the features of a Carmen MB were found in an ordinary bra with the exception of:
i) the positioning of the pockets to hold the breast form. The FTT considered that such pockets might be present in an ordinary bra but that the wearer would use such pockets to insert padding to create an appearance of a larger bust;
ii) the high cup to cover the breast form;
iii) the positioning of the straps to the centre of the cups.
The FTT found that the primary purpose of the MB was to hold the breast form(s) in place, not to compensate for a defect or disability. Another purpose was the lessening of the psychological impact of having a mastectomy. It would be worn by women who had had a mastectomy but also by women who had had a lumpectomy or who had had breast reconstruction. The appearance of the MB was so close to that of a normal brassiere that it could not be determined from its objective characteristics that it was worn to compensate for a breast which had been removed.
The FTT declined to find that the MB had a subsidiary function of preventing shoulder pain or problems arising from the absence of lymph nodes.
HOW ARE GOODS CLASSIFIED FOR CUSTOMS PURPOSES?
In the EU, customs classification is carried out under a system known as the Combined Nomenclature ("CN"). It 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.
There are certain rules for interpreting the HS and the CN set out in those instruments which the court must apply. These are called the "GIR".
The CN, including the GIR, is contained in Annex 1 to Regulation 2658/87. Annex 1 is updated annually. The update with which we are concerned is that contained in Regulation 927/2012.
Relevant parts of the Customs classification system for the purposes of this appeal
The CN is divided into three parts of which only the first two are relevant. The first part, headed Preliminary Provisions, includes the GIR. The second part, headed Schedule of Customs Duties, is divided into sections which are then sub-divided into Chapters with notes, headings and subheadings. I have added underlining below for ease of explanation later.
The two contending Chapters in the CN in this case are:
i) Chapter 62 for "Articles of apparel and clothing accessories, not knitted or crocheted" in Section XI, headed Textiles and textile articles.
ii) Chapter 90. This covers a large number of miscellaneous items: "optical, photographic, cinematographic, measuring, checking precision, medical or surgical instruments and apparatus; parts and accessories thereof". Chapter 90 appears in Section XVIII, which covers all these items and in addition clocks, watches and musical instruments.
Chapter 62 starts with a number of explanatory notes which include the following:
"1. This chapter applies only to made-up articles of any textile fabric other than wadding, excluding knitted or crocheted articles (other than those of heading 6212).
2. This chapter does not cover:
…
(b) orthopaedic appliances, surgical belts, trusses or the like (heading 9021)."
There is then a table setting out the CN 8–digit code in the first column and then a description of the item under what are called headings and sub-headings. The final columns in the table show the rate of customs duty.
So far as relevant the table shows as follows: CN code 6212 has a heading "Brassieres, girdles, corsets, braces, suspenders, garters and similar articles and parts thereof, whether or not knitted or crocheted." The subheadings then are for bras made up into a set with briefs and other bras (6212 10 90).
Chapter 90 is headed "Optical, photographic, cinematographic, measuring, checking precision, medical or surgical instruments and apparatus; parts and accessories thereof."
Chapter 90 also starts with explanatory notes of which the following are relevant:
"1. This chapter does not cover:
(a) articles of a kind used in machines, appliances or for other technical uses, of vulcanised rubber other than hard rubber (heading 4016), of leather or of composition leather (heading 4205) or of textile material (heading 5911);
(b) supporting belts or other support articles of textile material, whose intended effect on the organ to be supported or held derives solely from their elasticity (for example, maternity belts, thoracic support bandages, abdominal support bandages, supports for joints or muscles) (Section XI);…
2. Subject to note 1 above, parts and accessories for machines, apparatus, instruments or articles of this chapter are to be classified according to the following rules:
(a) Parts and accessories which are goods included in any of the headings of this chapter or of Chapter 84, 85 or 91 (other than heading 8487, 8548 or 9033) are in all cases to be classified in their respective headings.
(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 (including a machine, instrument or apparatus of heading 9010, 9013 or 9031) 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.
Orthopaedic appliances include footwear and special insoles designed to correct orthopaedic conditions, provided that they are either (1) made to measure or (2) mass-produced, presented singly and not in pairs and designed to fit either foot equally…."
The same format of table follows. The relevant headings (shown in bold) and subheadings are as shown below:
| 9021 | 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: | Conventional rate of duty (%) | Supplementary unit |
| 9021 10 | – Orthopaedic or fracture appliances | ||
| 9021 10 10 | –– Orthopaedic appliances | Free | — |
| 9021 10 90 | –– Splints and other fracture appliances | Free | — |
| – Artificial teeth and dental fittings | |||
| 9021 21 | –– Artificial teeth | ||
| 9021 21 10 | ––– Of plastics | Free | 100 p/st |
| 9021 21 90 | ––– Of other materials | Free | 100 p/st |
| 9021 29 00 | –– Other | Free | — |
| – Other artificial parts of the body | |||
| 9021 31 00 | –– Artificial joints | Free | — |
| 9021 39 | –– Other | ||
| 9021 39 10 | ––– Ocular prostheses | Free | — |
| 9021 39 90 | ... |
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