Vital Nut Co Limited v The Commissioners for HM Revenue and Customs
| Jurisdiction | UK Non-devolved |
| Judge | Mr Justice Marcus Smith,Judge Bishopp |
| Neutral Citation | [2017] UKUT 0192 (TCC) |
| Court | Upper Tribunal (Tax and Chancery Chamber) |
| Subject Matter | Tax,16 May 2017 |
| Date | 16 May 2017 |
| Published date | 16 May 2017 |
[2017] UKUT 0192 (TCC)
Appeal number: UT/2016/0010
CUSTOMS DUTY – Harmonised Commodity Description and Coding System
– Combined Nomenclature – Correct Classification of Commodities – Review
of its Decision by the FTT - s 9 Tribunals, Courts and Enforcement Act 2007
UPPER TRIBUNAL
TAX AND CHANCERY CHAMBER
VITAL NUT CO. LIMITED
Appellant
- and -
THE COMMISSIONERS FOR HER MAJESTY’S
REVENUE AND CUSTOMS
Respondents
TRIBUNAL:
The Honourable Mr. Justice Marcus Smith
Judge Colin Bishopp
Sitting in public at The Rolls Building, Fetter Lane, London EC4A 1NL on 13 and
14 March 2017
Frank Mitchell, instructed by John Weston & Co. Solicitors, for the Appellant
Brendan McGurk, instructed by the General Counsel and Solicitor to HM
Revenue and Customs, for the Respondent
© CROWN COPYRIGHT 2017
DECISION
A. INTRODUCTION
1. The European Community is a contracting party to the International Convention
on the Harmonised Commodity Description and Coding System (the “Harmonised 5 System”). The Convention requires that the tariffs and nomenclatures of contracting
states conform to the Harmonised System. All contracting states therefore use the
headings and sub-headings of the Harmonised System.
2. The Harmonised System is administered by the World Customs Organisation in
Brussels. It publishes explanatory notes to the Harmonised System, known as 10 “Harmonised System Explanatory Notes” or “HSENs”.
3. At Community level, the amount of customs duties on goods imported from
outside the Community is determined by reference to the “Combined Nomenclature”
or “CN” established by Article 1 of Council Regulation 2658/87 and Article 20.3 of
Regulation 2913/92. The CN is re-issued annually. It comprises three elements: 15
(1) The nomenclature of the Harmonised System.
(2) Community sub-divisions to that nomenclature.
(3) The preliminary provisions, additional section or chapter notes and
footnotes relating to CN sub-headings.
4. The CN uses an eight-digit numerical system to identify a product, the first six 20 digits of which are those of the Harmonised System, while the two following digits
identify the CN sub-headings, of which there are about ten thousand. Where there is
no Community sub-heading, these two digits are “00”. There may also be ninth and
tenth digits, which identify further Community sub-headings, of which there are about
eighteen thousand. For present purposes, it will only be necessary to refer to the first 25 four digits of this numerical system.
5. In addition to the Harmonised System Explanatory Notes or HSENs, the
European Commission issues “Combined Nomenclature Explanatory Notes” or
“CNENs”.
6. The Appellant, Vital Nut Co. Ltd (“Vital Nut”), is an importer of preserved, 30 diced, papaya from Thailand into the United Kingdom, manufactured by a company
called Vanda. Vital Nut imported the papaya under commodity code heading 20.08 of
the Combined Nomenclature. This classification was challenged by the Respondents,
the Commissioners for Her Majesty’s Revenue and Customers (the “Commissioners”)
who, after examination, determined that the proper commodity code for the papaya 35 was under heading 20.06 of the Combined Nomenclature. This resulted in a higher
rate of customs duty being payable.
7. Vital Nut appealed this decision to the First-tier Tribunal (Tax Chamber) (the
“FTT”). By a decision dated 7 July 2015 (the “Original Decision”) and revised
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