DECISION
1. This
is a preliminary hearing pursuant to rule 5(3)(e) of the First Tier Tribunal
Rules of Procedure to decide two issues of law:
(a)
Whether or not it is open to the Tribunal to make a finding inconsistent
with that reached by the EC Commission on 4 July 2008 concerning the waiver and/or repayment of the customs duty incurred in this case;
(b)
Which provisions govern the determination of origin for the products in
question.
Background
2. The
Appellant carries on business as an importer and distributor of household
goods, including lighting products, in the United Kingdom. It trades from
premises at 5b Lombard Road, London, SW19 3TZ.
3. In
the course of its business, it has imported and sold compact fluorescent lamps
(“CFLs”) for the domestic consumer market. At all material times, relevant
supplies of CFLs were sourced by the Appellant from a company called Ecopak, or
one of its subsidiaries, in Pakistan.
4. On
4 April 2000, the European Lighting Companies Federation lodged a complaint
with the EU Commission on behalf of EU producers of CFLs. The complaint
contained evidence of dumping of CFLs from exporters based in the People’s
Republic of China. The Commission decided to initiate an anti-dumping
investigation. In the course of that investigation, the Commission received
information and/or submissions from a Chinese exporting producer called Firefly
Lighting Corporation Limited, based in Xiamen, China (‘Firefly’). Firefly was
found by the Commission to have production facilities in China.
5. By
Commission Regulation (EC) No. 255/2001, the Commission imposed provisional
anti-dumping duties on exports of CFLs of Chinese origin on a number of Chinese
exporters.
6. The
Commission concluded that there had been injurious dumping in relation to
exports of CFLs and imposed provisional anti-dumping duties (“ADDs”).
Individual margins were calculated for a number of exporters but not for
Firefly. A residual ADD rate of 74.4% was set for all other companies.
7. The
Regulation entered into force on 9 February 2001 and was stated to apply for a
period of six months.
8. Between
4 February 2003 and 1 September 2004, the Appellant imported into the United Kingdom a series of consignments of CFLs from Ecopak in Pakistan.
9. On
16 August 2004, Lighting Industry and Trade in Europe (‘LITE’) on behalf of
producers and importers of CFLs in the EU lodged a request with the European
Commission that it investigate the possible circumvention of anti-dumping
measures imposed by Regulation 1470/2001. The request contained prima facie
evidence that the ADD measures imposed were being circumvented, inter alia,
through trans-shipment through and/or assembly operations in Pakistan of CFLs
which were in fact of Chinese origin.
10. By Commission
Regulation (EC) No. 1582/2004 the Commission initiated an investigation into
the complaint. Regulation 1582/2004 entered into force on 11 September 2004. The investigation was carried out by DG Trade, a directorate of the Commission.
11. Between 18 April
and 27 April 2005, representatives of the Commission’s European Anti-fraud Office
(“OLAF”) conducted a verification mission in Pakistan as part of cooperation
between customs authorities. The OLAF Mission inspected Ecopak’s premises for
the purposes of determining the true origin of the CFLs exported by that
company. The investigation showed that those CFLs did not meet the conditions
for recognising the preferential origin as Pakistan. It found that in most
cases the alleged components imported from China were in fact complete lamps
imported from that country in a semi-knocked down condition.
12. The Mission found that all the components used by Ecopak to assemble the CFLs had been
imported from China and originated from China. Only an insignificant quantity
of ballasts had been purchased in Pakistan. There were insufficient workers to
conduct manufacturing operations in Pakistan. The GSP Form A Certificates had
therefore been incorrectly issued by the Pakistan authorities.
13. It therefore
concluded in its report of 10 November 2005 (“the Mission Report”) that these
goods could not be granted the preferential tariff regime provided for in
Regulation 2501/2001, that they retained their Chinese non-preferential origin
and that they were subject to the ADDs imposed by Regulation 1470/2001.
14. In addition the
Mission Report noted that Ecopak was owned by the President and Vice-President
respectively of Firefly Lighting, Xiamen, China and that Ecopak had only
employed 25 workers. It concluded from this that only minimal assembly
operations could have been carried out.
15. The value of the
non-originating components used in the production of the CFLs represented in
excess of 60% of the ex-factory value of the finished goods and the goods did
not qualify for GSP preferential origin nor did they qualify for Pakistani
non-preferential origin.
16. Incorrect information
had been provided by Ecopak to the Pakistan authorities in order to obtain
incorrect GSP Form A Certificates of preferential origin. In particular, Ecopak
had presented false descriptions of imported products and used false invoices
at both importation and exportation of the products. Ecopak had in some cases
presented “double” export invoices.
17. The Appellant
made 11 imports of CFLs from Pakistan between 26 April 2004 and 26 October 2004. The exporter in each case was Ecopak.
18. HMRC raised a
number of post-clearance demand Notices (C18s) against the Appellant, in
respect of various imports of CFLs by the Appellant from the Islamic Republic
of Pakistan into the United Kingdom. The C18s demanded payment of £587,351.80
by way of anti-dumping duty and £23,111.06 as import VAT on the Appellant’s
consignments, giving a total figure of £610,462.86.
19. The Appellant
sought a formal departmental review. The first review decision upheld the C18s.
A second review decision dated 14 March 2006 declined to apply the provisions
of Article 220(2)(b) of the Community Customs Code (“the Code”).
20. A notice of appeal
was filed on 12 April 2006 in respect of the two review decisions. The grounds
of appeal were that the ADDs were not due under Regulations 1582/2004 and/or
866/05 and that the customs debt was covered under good faith provisions. A
claim for hardship was lodged with the notice of appeal.
21. By letter dated 20 December 2006, HMRC agreed to refer the claims for remission to the Commission. HMRC
sought comments from the Appellant on a draft submission. They required
confirmation that the Appellant had nothing further to add to the final
submission and confirmation that Mike Hodge Associates had authority to act on
behalf of the Appellant.
22. Mr Hodge is a
customs specialist with considerable experience of customs matters including
repayment and remission procedures who has been assisting Mr Eden, managing
director of the Appellant, throughout this matter.
23. The dossier was
transmitted to DG Taxud on 28 February 2007. The submission prepared by HMRC stated
that:
(a)The total amount of
customs duty in issue was £610,462.86.
(b)The importations had taken place between 4 February 2003 and 1 September 2004.
(c)The OLAF investigation had concluded that these CFLs
were of Chinese origin.
(d)The error alleged was that of the Pakistani
authorities in issuing GSP Form A certificates for the exports in question.
(e)Although the non-preferential rules of origin applied
for ADD purposes, the Appellant had reasonably relied upon the GSP Form A
certificates as a statement of origin.
24. The Appellant
was subsequently requested by the Commission to provide further information. It
did so. The Commission then published a draft summary of its proposed decision
and invited the Appellant to make comments on it. The Appellant through its
representative submitted a detailed response to it.
25. The Commission’s
final decision (“the Decision”) was issued following a meeting on 23 May 2008. The Commission at that meeting noted that:
(a)The question of whether or not the customs debt
existed could not be examined by the Commission in the context of the REM/REC
procedure;
(b)The Commission did not consider that there had been a
relevant error by the Pakistani authorities for ADD purposes. While there had
been an active error by the Pakistani authorities for GSP purposes (issuing the
GSP certificates), the Appellant had not met the good faith criteria;
(c)There had been ‘deception or obvious negligence’ for
the purposes of Article 239 of the Code.
26. The Decision was
published on 4 July 2008. The Commission decided that:
(a)There had been an error on the part of the Pakistani
authorities in respect of normal customs duties. There had been no error in
respect of ADDs, since the GSP Form A certificate was not a certificate of
origin for anti-dumping purposes.
(b)There had been no error on the part of the Commission.
(c)The goods had never been declared under their correct
CN heading. The Appellant had thereby failed to comply with all the rules in
force as regards its customs declaration, with no error having been found in
this respect. The terms of Article 220(2)(b) were not met.
(d)The Appellant was not in a special situation vis-à-vis
other traders.
Legislation
27. Council
Regulation (EEC) No. 2913/92 of 12 October 1992 establishing the Code at the material time provided for a community wide system of rules governing inter
alia goods imported from third countries. Article 20 of the Code provides
for the establishment of a Customs Tariff which in turn provides for certain
customs duties to be applied to the importation of goods falling within a given
nomenclature. By virtue of Article 4(10) and 20(2) of the Code duties for these
purposes include ADDs.
28. Article 20(3)
sets out the facts and matters which comprise the Customs Tariff. Article 20(6)
states that:
“The tariff classification of goods shall be the
determination, according to the rules in force, of –
(a)
the subheading of the combined
nomenclature or the subheading of any other nomenclature referred to in paragraph
3(b);
(b)
the subheading of any other
nomenclature which is wholly or partly based on the combined nomenclature or
which adds any subdivisions to it, and which is established by Community
provisions governing specific fields with a view to the application of measures
other than tariff measures relating to trade in goods,
under
which the aforesaid goods are to be classified.”
29. The primary
rules governing the origin of goods for non-preferential purposes are contained
in Chapter 2, section 1 of the Code, at Articles 22 to 26. By virtue of Article
22(2)(b), these rules apply for the purposes of determining the origin of goods
in the course of “applying measures other than tariff measures established by
Community provisions governing specific fields relating to trade in goods.” By
virtue of Article 22(a) read in conjunction with Articles 20(3)(d) and
20(3)(e), these rules do not govern determination of origin for the purposes of
the application of “preferential tariff measures.”
30. Article 24
states:
“Goods
whose production involved more than one country shall be deemed to originate in
the country where they underwent their last, substantial, economically
justified processing or working in an undertaking equipped for that purpose and
resulting in the manufacture of a new product or representing an important
stage of manufacture.”
31. This general
statement of principle is subject to the terms of Article 25, where it is shown
that the sole object of any particular processing or working is to circumvent
the rules on origin.
32. Article 26(2)
establishes that notwithstanding the production of any document that is
required to be produced as proof of origin of the goods, customs authorities
may, in the event of serious doubts, require any additional proof to ensure
that the indication of origin does comply with the rules laid down by the
relevant Community legislation.
33. Chapter 2,
section 2, through a single article, Article 27, lays down primary rules for
determining preferential origin. Article 27 states that the rules on
preferential origin shall lay down the conditions governing acquisition of
origin which goods must fulfil in order to benefit from the measures referred
to in Article 20(3)(d) or (e). Those rules are either determined by agreements
conferring preferential tariffs, or are determined by the Committee procedure.
34. Article 40 of
the Code imposes an obligation on a person bringing goods into the Community to
present the goods to the national customs authority of the Member State.
35. Whether or not
the goods are examined, an obligation to make a summary declaration in respect
of the imports arises under Article 43 (subject to the exceptions set down in
Article 45).
36. Article 44
stipulates the manner in which the summary declaration must be made.
37. Article 59 and following
deals with placement of goods under a Customs procedure which, in accordance
with Article 4(16), includes entry of the goods for free-circulation.
38. Articles 73 and
74 provide that the goods shall be released once the customs declaration has
been accepted and any customs debt paid.
39. Once the goods
have been released for free circulation, they are accorded the status of
Community goods in accordance with Article 79 of the Code, which shall entail
the charging of any duties legally due.
40. Article 78(3)
requires national customs authorities to take steps to regularise an incorrect
situation if it is discovered post-clearance of the goods.
41. Article 201 of
the Code provides that a customs debt on importation shall be incurred through
the release for free circulation of goods liable to import duties.
42. Import duties
are defined in Article 4(10) as being “customs duties and charges having an
effect equivalent to customs duties payable on the importation of goods.” It is
incurred at the time of acceptance of the customs declaration. Article 201(3)
provides as follows:
“The debtor shall be the declarant. In the event of
indirect representation, the person on whose behalf the customs declaration is
made shall also be a debtor.”
43. Articles 217 to
221 impose obligations on Member States to ensure that customs debts are
accounted for and paid within certain time periods and that the amount of the
customs debt is communicated to the debtor.
44. Article 220
provides, with limited exceptions, that where a customs debt has been entered
in the accounts at a lower level than the amount legally owed, the amount of
the duty which remains to be recovered must also be entered in the accounts.
45. Article 221(3) lays
down a three-year time limit for communication to a debtor of a customs debt.
46. Article 236 of
the Code requires duties to be repaid if they were not legally due or where the
amount has been entered in the accounts contrary to Article 220(2).
47. Article 220(2)
provides as follows:
Except in the cases referred to in the
second and third subparagraphs of Article 217(1), subsequent entry in the
accounts shall not occur where:
(b) the amount of duty legally owed was
not entered in the accounts as a result of an error on the part of the customs
authorities which could not reasonably have been detected by the person liable
for payment, the latter for his part having acted in good faith and complied
with all the provisions laid down by the legislation in force as regards the
customs declaration.
Where the preferential status of the goods
is established on the basis of a system of administrative cooperation involving
the authorities of a third country, the issue of a certificate by those
authorities, should it prove to be incorrect, shall constitute an error which
could not reasonably have been detected within the meaning of the first
subparagraph.
The issue of an incorrect certificate
shall not, however, constitute an error where the certificate is based on an
incorrect account of the facts provided by the exporter, except where, in
particular, it is evident that the issuing authorities were aware or should
have been aware that the goods did not satisfy the conditions laid down for
entitlement to the preferential treatment.
The person liable may plead good faith
when he can demonstrate that, during the period of the trading operations
concerned, he has taken due care to ensure that all the conditions for the
preferential treatment have been fulfilled.
The person liable may not, however, plead
good faith if the European Commission has published a notice in the Official
Journal of the European Communities, stating that there are grounds for doubt
concerning the proper application of the preferential arrangements by the
beneficiary country.”
48. Article 230
states that
The Court of Justice shall review the legality of acts adopted jointly
by the European Parliament and the Council, of acts of the Council, of the
Commission and of the ECB, other than recommendations and opinions, and of acts
of the European Parliament intended to produce legal effects vis-à-vis third
parties.
It shall for this purpose have jurisdiction in
actions brought by a Member State, the European Parliament, the Council or the
Commission on grounds of lack of competence, infringement of an essential
procedural requirement, infringement of this Treaty or of any rule of law
relating to its application, or misuse of powers.
The Court of Justice shall have jurisdiction
under the same conditions in actions brought by the Court of
Auditors and by the ECB for the purpose of protecting their prerogatives.
Any natural or legal person may, under the
same conditions, institute proceedings against a decision addressed to that
person or against a decision which, although in the form of a regulation or a
decision addressed to another person, is of direct and individual concern to
the former.
The proceedings provided for in this Article shall be instituted within
two months of the publication of the measure, or of its notification to the
plaintiff, or, in the absence thereof, of the day on which it came to the
knowledge of the latter, as the case may be.
49. Article 239
provides as follows:
“1. Import
duties . . . may be repaid or remitted in situations other than those referred
to in Articles 236, 237, and 238 –
-
to be determined in accordance
with the procedure of the committee;
-
resulting from circumstances in
which no deception or obvious negligence may be attributed to the person
concerned. The situations in which this provision may be applied and the
procedures to be followed to that end shall be defined in accordance with the
committee procedure. Repayment or remission may be made subject to special
conditions.
2.
Duties
shall be repaid or remitted for the reasons set out in paragraph 1 upon
submission of an application to the appropriate customs office within 12 months
from the date on which the amount of the duties was communicated to the debtor.
However,
the customs authorities may permit this period to be exceeded in duly justified
exceptional cases.”
50. Decisions
adopted by national customs authorities, including decisions requiring
post-clearance payment of customs duties not previously levied, may be
challenged before the national courts under Article 243 of the Code.
51. Commission
Regulation (EEC) No. 2454/93 of 2 July 1993 laying down provisions for the
implementation of Council Regulation (EEC) No. 2913/92 establishing the
Community Customs Code provides for the concrete implementation of the Code
(‘the Implementing Regulation’).
52. Title IV of the
Implementing Regulation is headed ‘Origin of Goods’. Chapter 1 of that Title
deals with non-preferential origin. Section 1 of that Chapter addresses
“Working or Processing Conferring Origin.” This lays down, in conjunction with
Annexes 9 to 11 of the Implementing Regulation, the specific rules which govern
the application of Article 24 in the specified cases. Products ex
heading 8539 are not within the specified list.
53. Chapter 2
governs preferential origin. Articles 66 to 79 set out detailed provisions
governing the determination of origin for the purposes of the application of
generalised tariff preferences granted by the EU to products originating in
certain beneficiary countries.
54. Articles 198 and
following of the Implementing Regulation deal with customs declarations in
general.
55. Article 199 specifically
provides that the lodging of a declaration signed by the declarant renders him
responsible for the accuracy of the information provided in the declaration.
56. Articles 254 and
following cover declarations made for release for free circulation.
57. Articles 868 and
following govern entry in the accounts and post-clearance recovery.
58. Article 869
provides that the customs authorities shall themselves decide not to enter
uncollected duties in the accounts in cases where they consider the provisions
of Article 220(2)(b) of the Community Customs Code are fulfilled. However, this
is subject to the exception that they shall not do so where the dossier must be
transmitted to the Commission under Article 871 (as amended) of the
Implementing Regulation.
59. The terms of the
Implementing Regulation governing repayment or remission of customs duties
lawfully due were amended by Commission Regulation (EC) No 1335/2003 of 25 July 2003 amending Regulation (EEC) No 2454/93 laying down provisions for the
implementation of Council Regulation (EEC) No 2913/92 establishing the
Community Customs Code. Recital (2) to that Regulation provided as follows:
“Given that under Article 8 of Council Decision 2000/597/EC, Euratom of
29 September 2000 on the system of the European Communities' own resources the
Member States are primarily responsible for collecting traditional own
resources, it should therefore primarily be up to the authorities of the Member
States to decide whether or not import duties or export duties should be
entered subsequently in the accounts under Article 220(2)(b) of Regulation
(EEC) No 2913/92 or repaid or remitted under Article 239 of that Regulation.”
60. Recital (3) also
identified circumstances in which the matter should continue to be transmitted
to the Commission:
“However, in order to
ensure uniform treatment of traders and protect the financial interests of the
Communities, the obligation to transmit dossiers to the Commission for a
decision should remain where Member States consider that the decision should be
favourable and either (a) an active error or failing on the part of the
Commission is cited, or (b) the circumstances of the case are connected to
Community investigations carried out under Council Regulation (EC) No 515/97 of
13 March 1997 on mutual assistance between the administrative authorities of
the Member States and cooperation between the latter and the Commission to
ensure the correct application of the law on customs and agricultural matters
(4), or (c) the amount of duties involved is EUR 500 000 or more.”
61. Article 871 states
that:
“1. The customs authority shall transmit
the case to the Commission to be settled under the procedure laid down in
Articles 872 to 876 where it considers that the conditions laid down in Article
220(2)(b) of the Code are fulfilled and:
— it considers that the Commission has committed an
error within the meaning of Article 220(2)(b) of the Code, or
— the circumstances of the case are related to the
findings of a Community investigation carried out under Council Regulation (EC)
No 515/97 of 13 March 1997 on mutual assistance between the administrative
authorities of the Member States and
cooperation between the latter and the Commission to ensure the correct application of the law on customs and agricultural matters or under any other
Community legislation or any agreement concluded by the Community with a
country or group of countries in which provision is made for carrying out such
Community investigations, or
— the amount not collected from the operator concerned
in respect of one or more import or export operations but in consequence of a
single error is EUR 500 000 or more.
2. However, the cases referred to in
paragraph 1 shall not be transmitted where:
the Commission has already adopted a
decision under the procedure provided for in Articles 872 to 876 on a case
involving comparable issues of fact and of law,
the Commission is already considering a
case involving comparable issues of fact and of law.
3. The dossier submitted
to the Commission shall contain all the information required for full
consideration. It shall include detailed information on the behaviour of the
operator concerned, and in particular on his professional experience, good
faith and diligence. This assessment shall be accompanied by all information that
may demonstrate that the operator acted in good faith. The dossier shall also
include a statement, signed by the applicant for repayment or remission,
certifying that he has read the dossier and either stating that he has nothing
to add or listing all the
additional information that he considers should be included.”
62. Further relevant
provisions are found at Articles 883 and following of the implementing
Regulation. Article 899 (as amended) governs the specific case of applications
under Article 239 of the Code.
63. Article 899 now
provides
“1. Where the decision-making customs
authority establishes that an application for repayment or remission submitted
to it under Article 239(2) of the Code:
is based on grounds corresponding to one
of the circumstances referred to in Articles 900 to 903, and that these do not
result from deception or obvious negligence on the part of the person
concerned, it shall repay or remit the amount of import or export duties
concerned,
is based on grounds corresponding to one of
the circumstances referred to in Article 904, it shall not repay or remit the
amount of import or export duties concerned.
2. In other cases, except those in which
the dossier must be submitted to the Commission pursuant to Article 905, the
decision-making customs authority shall itself decide to grant repayment or
remission of the import or export duties where there is a special situation
resulting from circumstances in which no deception or obvious negligence may be
attributed to the person concerned.
Where Article 905(2), second indent, is
applicable, the customs authorities may not decide to authorise repayment or
remission of the duties in question until the end of a procedure initiated in
accordance with Articles 906 to 909.”
64. Article 899(3)
defines the “person concerned” by reference to the persons entitled to make the
application (by cross-reference to Article 878) and their representatives, as
well as any other person involved in the completion of customs formalities
relating to the goods.
65. Article 904(c)
of the implementing Regulation provides that the duties shall not be remitted
or repaid where the only grounds relied upon are the presentation, for the purpose
of obtaining preferential tariff treatment of goods declared for free
circulation, of documents subsequently found to be forged, falsified, or not
valid for that purpose, even where such documents were presented in good faith.
The strict rules in this area must be observed if Member States are to comply
with their obligation to use the utmost care to prevent any fraud or
irregularity liable to affect adversely the General Budget of the European
Communities. See the Eighth Recital to the Community Customs Code in the
Preamble to the Code.
66. Article 905
provides for a reference procedure to the Commission of the European
Communities, in certain defined circumstances. Article 905 states:
“1. Where the application for repayment or remission submitted under
Article 239(2) of the Code is supported by evidence which might constitute a
special situation resulting from circumstances in which no deception or obvious
negligence may be attributed to the person concerned, the Member State to which
the decision-making customs authority belongs shall transmit the case to the
Commission to be settled under the procedure laid down in Articles 906 to 909
where:
the authority considers that a special
situation is the result of the Commission failing in its obligations,
the circumstances of the case are related
to the findings of a Community investigation carried out under Regulation (EC)
No 515/97, or under any other Community legislation or any agreement concluded
by the Community with countries or groups of countries in which provision is
made for carrying out such Community investigations, or
the amount for which the person concerned
may be liable in respect of one or more import or export operations but in
consequence of a single special situation is EUR 500 000 or more.
The term “the person concerned” shall be
interpreted in the same way as in Article 899.
2. However, the cases referred to in
paragraph 1 shall not be transmitted where:
the Commission has already adopted a
decision under the procedure provided for in Articles 906 to 909 on a case
involving comparable issues of fact and of law,
the Commission is already considering a
case involving comparable issues of fact and of law.
3. The dossier submitted to the Commission
shall contain all the information required for full consideration. It shall
include detailed information on the behaviour of the operator concerned, and in
particular on his professional experience, good faith and diligence. This
assessment shall be accompanied by all information that may demonstrate that
the operator acted in good faith. The dossier shall also include a statement,
signed by the applicant for repayment or remission, certifying that he has read
the dossier and either stating that he has nothing to add or listing all the
additional information that he considers should be included.”
67. The relevant
terms of the Community Customs Tariff as at 1 January 2004 were to be found in Commission
Regulation (EC) No 1789/2003 of 11 September 2003 amending Annex I to
Council Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature
and on the Common Customs Tariff. Chapter 85 fell within Section XVI. It
covered “electrical machinery and equipment and parts thereof; sound recorders
and reproducers, television image and sound recorders and reproducers, and
parts and accessories of such articles.”
68. Article 288 of
the Consolidated Version of the Treaty on the European Union and the Treaty on
the Functioning of the European Union (OJ C 115 9 May 2008) with reference to Decisions states:
“A decision shall be binding in its entirety. A
decision which specifies those to whom it is addressed shall be binding only on
them”.
69. Provisions of
article 26.2.c of Council Regulation (EC) No 2501/2001 of 10 December 2001 (OJ L 346 31 December 2001) as extended by Commission Regulation (EC) No 2331/2003
are:
Article 1
1. The Community scheme of generalised preferences
shall apply during the years 2002, 2003 and 2004 in accordance with this
Regulation.
2.This Regulation provides for:
(a)
general arrangements,
(b)
special incentive arrangements for
the protection of labour rights,
(c)
special incentive arrangements for
the protection of the environment,
(d)
special arrangements for least
developed countries, and
(e)
special arrangements to combat
drug production and trafficking.
Article 26.
1. The preferential arrangements provided for in this
Regulation may be temporarily withdrawn, in respect of all or of certain
products, originating in a beneficiary country, for any of the following
reasons:
…
(e) fraud, irregularities or systematic failure to
comply or to ensure compliance with the rules of origin of products and the
proof thereof, and to provide the administrative cooperation as required for
the implementation and the control of the respect of (sic) the arrangements
referred to in article 1(2);
2.
The administrative cooperation
referred to in paragraph 1(e) requires, inter alia that a beneficiary country:
(c) assist the Community by allowing the Commission,
in coordination and close cooperation with the competent authorities of the
Member States, to conduct Community administrative and investigative cooperation
missions in that country, in order to verify the authenticity of documents or
the accuracy of information relevant to granting the benefit of the
arrangements referred to in Article 1(2)”.
HMRC’s Submissions
70. Mr Beal
submitted that under Articles 871 and 905 of the Implementing Regulation, HMRC
was obliged to transfer the dossier to the Commission. This obligation arose
because of the involvement of OLAF in providing the Mission Report in this
case; and because of the value of the sums at stake which were more than EUR500,000.
71. He contended
that the Appellant sanctioned the referral of the dossier to the Commission and
expressly consented to the terms of the submission that was made. The Appellant
signed a letter confirming that he had read the dossier and had nothing to add.
The Appellant was subsequently requested by the Commission to provide further
information. It did so. The Commission then published a draft summary of its
proposed decision and invited the Appellant to make comments on it. The
Appellant through its representative submitted a detailed response to it. Mr
Beal contended that it was simply too late now for the Appellant to suggest (in
so far as it does) that HMRC should not have submitted the application to the
Commission after all.
72. Furthermore he
contended that Articles 871 and 905 of the Implementing Regulation, which are
directly applicable in the United Kingdom, precluded the Commissioners from
adopting any other course. He referred to Case C-375/07 Staatssecretaris van
Financien v Heuschen Oriental Foods Trading BV [2008] ECR I-8691, ECJ at
[60].
73. He submitted
that by virtue of Article 288 TFEU (ex Article 249 EC) and sections 1 to 4 of
the European Communities Act 1972, the Tribunal could have been in no better
position than HMRC with regard to its ability to depart from directly
applicable provisions of EU law. This Tribunal could not have taken its own
decision on the application for remission and/or repayment in circumstances
where the national customs authority was precluded from doing so.
74. Having been
unsuccessful in its application to the Commission, the proper course for
challenge for the Appellant would have been to bring an action for annulment
against the Decision before the Court of First Instance, pursuant to what was
Article 230 EC (and is now Article 267 TFEU). Mr Beal referred to Case C-38/07 Staatssecretaris
van Financiën v Schrouff Oriental Foods Trading BV [2008] ECR I-8599 ECJ at
[1]and [17] to [19[ and Case C-375/07 Schrouff at [68]. The application
for annulment would have had to be brought before the Court of First Instance
within two months and 21 days of the date of the Decision. The Appellant did
not take that course of action, presumably on the basis of legal advice.
75. He submitted
that it was not open to the Appellant now to seek to challenge the Decision
through the back door of raising the same issues of law and fact before this
Tribunal. The fact that the time period had expired meant that the Decision was
binding vis-à-vis the Appellant as someone who could have brought a
challenge to it, but did not. Mr Beal cited Case C-188/92 TWD Textilwerke
v. Germany [1994] ECR I-833, ECJ; and Case C-239/99 Nachi Europe
GmbH v. Hauptzollamt Krefeld [2001] ECR I-1197, ECJ at [36] to [38].
76. Mr Beal
submitted that this conclusion was reinforced by the terms of the judgment of
the ECJ in Case C-375/07 Staatssecretaris van Financiën v. Heuschen &
Schrouff Oriëntal Foods Trading BV , where at [64] the Court held as
follows:
“However, where an application for remission of import
duties has been submitted to the Commission by a Member State for the purposes
of Article 239 of the Customs Code and the Commission has already adopted a
decision containing assessments of fact and law in a particular case concerning
import operations, such assessments bind all the authorities of the
Member State to which it was addressed, in accordance with Article 249 EC, including
the courts which have to assess the same case under Article 220 of the
Customs Code (see, to that effect, Case C‑413/96 Sportgoods [1998] ECR I-5285, paragraph 41).”
77. Mr Beal
contended that the suggestion by the Appellant that it was an abuse of process
for HMRC to follow the binding conclusions of the Commission which had been
unchallenged by the Appellant was patently misconceived.
78. Furthermore, even
if the Tribunal were to consider that the criteria for Article 220(2)(b) and/or
Article 239(2) were met (contrary to the Commission’s express findings), then
that would not be an end of the matter. The wording of Articles 871 and 905
respectively of the Implementing Regulation required that where the sum in
dispute exceeds EUR500,000 or where the circumstances of the case are related
to findings of a mutual assistance mission as here, then the national customs
authority cannot simply waive or remit the customs debt itself. Instead, it
must submit a dossier to the EC Commission for it to consider the matter. Mr
Beal again cited Case C-375/07 Staatssecretaris van Financiën v. Heuschen
& Schrouff Oriëntal Foods Trading BV at [60].
79. He contended
that the only remedy which the Tribunal could direct would be the submission of
a dossier to the Commission but that was exactly what had already taken place.
Further, transmission of the dossier was not permitted under Articles 871(2) or
905(2) of the Implementing Regulation where the Commission had already adopted
a decision under the procedure provided for in the Implementing Regulation on a
case involving comparable issues of fact and of law.
80. Mr Beal
contended that the Appellant’s submissions in its statement of case had not
addressed the judgment of the ECJ in Heuschen, which was a surprising
omission. Nor was it addressed in writing in the Appellant’s note for the directions
hearing prepared in November 2009. Rather, the Appellant had cited the judgment
of the ECJ in Case C-121/91 and 122/91 CT Control (Rotterdam) BV and another
v The Commission [1993] ECR I-3873, ECJ.
81. Far from aiding
the Appellant’s case, that judgment made clear that the proper way of
challenging a decision of the Commission upon the transfer of the dossier to it
under the Code was through the initiation of an action for annulment at
paragraphs [9]-[10]. He submitted that it was a striking feature of the
Appellant’s case that nowhere had it explained why it did not take the obvious
step of seeking annulment of the Commission’s decision if it disagreed with it.
82. The Decision
addressed the question of whether an established customs debt should be
remitted or repaid, not with the underlying liability to pay the customs debt
itself. It followed, as HMRC have acknowledged, that any arguable, underlying
challenge to the legality of the customs debt would be entertained by the
Tribunal at a substantive hearing.
83. Mr Beal
submitted that the rights of defence of an importer were adequately protected
by the concurrent jurisdiction exercised by the Commission and the Community
courts the one hand, and the national customs authorities and national courts
on the other. The bifurcated procedures do not, contrary to the Appellant’s
assertion, restrict their right of access to a judicial remedy.
84. He said that the
outcome of the case law which he had cited was accordingly binding on the
Appellant vis-à-vis its application for remission and/or repayment of
the customs duties under Article 220(2)(b) and/or Article 239 of the Code. He
contended that the fact that the Decision should be determinative before a
national court was not surprising given the shared and concurrent competence
deployed by the Commission and national customs authorities in this area.
85. He submitted
that it was still open to the Appellant to advance different arguments not
determined by the Commission to challenge the imposition of the customs debt,
pursuant to Article 236 of the Code, if it considered that any are reasonably open
to it. He requested however that the Tribunal directed that evidence aimed at
establishing that the tests set out in Articles 220(2)(b) or 239 of the Code were
met should not be admitted at any substantive hearing because such a direction
would shorten matters considerably.
86. In so far as the
provisions governing the origin of the goods were concerned Mr Beal submitted
that the Appellant had made some misconceived submissions in its statement of
case about which set of origin rules applied to determine the origin of the
goods. He stated that for the avoidance of doubt, the non-preferential rules on
origin found in the Code are those applied to anti-dumping issues. This followed
from the clear terms of Article 22(b) of the Code. The preferential rules of origin
are confined to determining whether preferential tariff measures are applied,
under Articles 20(3)(d) and (e), as is made clear by the terms of Article 22(a)
of the Code. The preferential rules relate to tariff preferences granted by the
EU (either through international agreement or unilaterally) to products
originating in certain developing countries and that had nothing to do with the
imposition of ADDs.
87. Mr Beal
contended that this position was reinforced by a consideration of the terms of
Council Regulation (EC) 384/96 which was the Anti-Dumping Basic Regulation.
Article 1(3) of the Basic Regulation states:
“The
exporting country shall normally be the country of origin. However, it may be
an intermediate country, except where, for example, the products are merely
transhipped through that country, or the products concerned are not produced in
that country, or there is no comparable price for them in that country.”
88. He submitted
that Article 14(3) stated that
“Special
provisions, in particular with regard to the common definition of the concept
of origin, as contained in Council Regulation (EEC) No 2913/92, may be adopted
pursuant to this Regulation.”
89. Mr Beal
contended that these provisions made it clear that the terms of the Code
governed the question of origin absent specific measures adopted pursuant to
this power.
Appellant’s Submissions
90. Mr Barlow
submitted that the Appellant’s case was that despite the Heuschen
judgment the Appellant was entitled to rely on the provisions of Articles 220
and 239 of Council Regulation 2913/92 establishing the Code.
91. He said that
HMRC appeared to suggest that the burden of proof on the Appellant included a
burden as to questions of law but that was not the case. Burden of proof was a
concept that only applied to questions of fact and evidence and had no
application so far as issues of law are concerned.
92. He submitted
that HMRC had acknowledged in correspondence as well as in their skeleton
argument that whatever the Tribunal’s decision was on the preliminary issue it
would be open to the Appellant to challenge the factual basis relevant to
whatever origin rule or rules apply. Indeed HMRC had acknowledged in their
skeleton argument that they would need to be put on notice if the Appellant
contested the correctness of the Commission’s report so that they could call
witnesses from the officials who made the enquiries leading to that report. He
said that the Appellant hereby put them on notice that it would contest the
factual basis of that report though it was unclear why HMRC appeared to think
that they might need to call evidence from other Member States as well as from
those officials.
93. He submitted
that Articles 243 to 246 of the Code required Member States to have a procedure
for appeals against decisions taken by the customs authorities which obviously
included decisions under articles 220 and 239. That requirement had been
provided for by Section 16 of the Finance Act 1994 and the appeal was what
might be termed a full appeal, as it was not an appeal relating to an ancillary
matter as defined in section 16(4). It was presumably not in doubt that the
nature of such an appeal in UK law was that the Tribunal had full fact finding
powers and could decide the facts on the evidence presented.
94. The Appellant relied on CT Control (Rotterdam) v The Commission
C-122/91 [1993] ECJ I-03873. In that case the ECJ held that article 13 of
Regulation 1430/79 (a precursor of the current general equity provision dealing
with special situations) could not be used to challenge a decision of the national
court that duty was payable. In other words the ECJ cannot be used as an appeal
court against substantive decisions of the national court, which confirmed, Mr
Barlow contended, that the national courts do have jurisdiction in such cases.
95. In
addition, the ECJ recognized that the audi alterem partem principle
applied and that compliance with it was partly secured by the role of the national
court. The Court also added that the audi alterem partem principle was
especially important in ADD cases and was only respected at community level if
the principles established in the Control Data, van Gend en Loos and Bosman
cases were applied, which recognized that the national courts do have
jurisdiction. Mr Barlow submitted that CT Control demonstrated that if
the matter was one which should not have been referred to the Commission in the
firstplace, then the national courts were not debarred.
96. Mr Barlow
submitted that only the clearest provisions should be allowed to curtail those
rights as they are provided for both in Community law and UK law. A Community provision curtailing them ought therefore to be clearly intended to curtail that
right and should comply with the general rights given under Community law such
as the right of non-retrospection and the principle of legal certainty.
97. HMRC had
contended that the Appellant had a right of appeal under article 230 of the EU
Treaty, now said to be article 267 of the TFEU though Mr Barlow submitted that
that appeared to be a misprint as article 263 was the equivalent of 230. As the
wording was materially different the Appellant referred to the wording of
article 230.
98. Mr Barlow
submitted that as could be seen, the Appellant had no right of appeal against
the Commission’s decision under that provision. The right of appeal of an
individual was in respect of a decision addressed to it and Mr Barlow contended
that the Decision was only addressed to the Member States; in the form of a
regulation which Mr Barlow contended was not the form it took or; a decision
addressed to another person which Mr Barlow submitted it was not as it was
addressed only to the Member States who are not persons.
99. Further, even
if a right of appeal had been bestowed upon the Appellant, the form of the
appeal in the second paragraph of the article, “lack of competence” etc, would
not have allowed the appellant an appeal against the Commission’s findings of
fact. Those findings were made by unnamed officials and were not open to
scrutiny and the actual finding was made by a vote taken amongst the delegates
representing the Member States who had not had any opportunity to scrutinise
the evidence of the officials.
100. Mr Barlow submitted
that it followed that what HMRC contended for was a situation where officers of
the Commission had reached a conclusion on evidence which the Appellant had had
no opportunity to challenge and the accuracy of which was not tested by the
Commission before it reached a decision. HMRC now asserted that the Decision could
not be appealed despite the fact that both UK and EU law otherwise provided a
right of appeal.
101. He submitted
that the Appellant repeated that very close scrutiny of HMRC’s case on that
contention was essential and only if the Tribunal was obliged by the clearest
authority to reach such an apparently unjust conclusion should it do so. The
Appellant would contend that only the most scrupulous adherence to the relevant
procedures would justify that conclusion even if it was justifiable in
principle.
102. Mr Barlow
referred to Article 288 of the Consolidated Version of the Treaty on the
European Union and the Treaty on the Functioning of the European Union (OJ C
115 9 May 2008) (paragraph 66 above).
103. He said that
the Decision was addressed as follows:
This Decision is addressed to the United Kingdom of
Great Britain and Northern Ireland.
This Decision is addressed to the Member States”.
104. He submitted
that therefore the decision was not binding on the Appellant although he
contended that no doubt HMRC would argue that as it was addressed to the UK both specifically and as a Member State that bound the institutions of the UK including the First Tier Tribunal.
105. He referred
to the provisions of the Code and those of Commission Regulation 2454/93
‘laying down provisions for the implementation of Council Regulation (EEC) No
2913/92 establishing the Code’ (“the Implementing Regulation”). He said that
the relevant provisions of the Implementing Regulation were article 871 so far
as article 220 of the Code is concerned and article 905 so far as article 239
of the Code was concerned.
106. He confirmed
that a case for applying article 220 must be submitted to the Commission in
three circumstances under article 871 of the Implementing Regulation as stated
at paragraph 59 above.
107. He submitted
that the Appellant’s case was that each importation was subject to a separate
error so that the third circumstance does not apply. The Pakistan authorities issued a separate certificate of origin for each importation and if, which is
not admitted, they were incorrect then each one is a separate error. Each
individual importation was for goods valued at less than EUR 500,000. For
example if the quota was exceeded by an error caused by another country’s
error, this could only be looked at as one error. It was not accepted that the Pakistan authorities issued the GSP certificates in error.
108. He contended
that this issue raised issues of fact which it was not open to the Tribunal to
rule upon at this stage in the proceedings and so the Appellant submitted that
the Tribunal must proceed on the assumed fact that, even if the Pakistan
authorities did issue incorrect certificates of origin, each one related to
goods worth less than EUR 500,000.
109. He said that
the argument that each certificate of origin was a separate error seemed to be
in issue. The Appellant relied upon the contention that each importation was a
distinct act from the legal and practical point of view and that that was
inherent in the procedures for import declarations. Questions such as the
amount of duty payable and whether or not an importation exceeded a limit
placed under quotas obviously depended entirely on separate importations being
distinct operations.
110. The
Appellant therefore submitted that the third circumstance did not apply and did
not justify HMRC submitting the case to the Commission
111. Further he
contended that there was no investigation based on mutual assistance between
the Member States and the Commission under Council Regulation 515/97 and there
was no investigation by those parties based on any other Community legislation.
112. He accepted
that the Appellant might be affected by the provision which applies where an
investigation is under an agreement concluded between the Community and another
country, or group of countries in which “provision is made for carrying out
such Community investigations”.
113. The Mission
Report on which the decision in this case was made stated that it was made
following a request to the Pakistan authorities for a mission of administrative
co-operation under article 26.2.c of Council Regulation (EC) No 2501/2001 of 10
December 2001 (OJ L 346 31 December 2001) as extended by Commission Regulation
(EC) No 2331/2003.
114. Mr Barlow
said that the Appellant therefore contended that the Mission Report and
therefore the Decision was not based on an agreement between the Community and
another state under which makes “provision … for carrying out such Community
investigations” that is that it does not fall within the second circumstance of
Articles 871(1) or 905(1) in the Implementing Regulation. He submitted that it was
true that a one-off agreement may have been given by Pakistan over which a
fairly big stick in the form of a threat to withdraw the preferences had been
wielded but that was not an agreement “for carrying out such investigations”
which was clearly meant to refer to agreements in advance that such
investigations will always be permitted.
115. Mr Barlow
contended that the question of whether the Decision was binding could not be
decided on the basis that the Appellant made submissions to the Commission as HMRC
appeared to suggest in their skeleton argument. HMRC either were or were not
right to submit the dossier as a matter of law and the Appellant could not, by
its actions, confer upon them a right or duty contrary to the applicable laws.
116. Mr Barlow
also contended that HMRC were wrong to assert that the Appellant had lost the
right to challenge the Commission report by reason of the expiry of the time
limits they say apply to the making of such a challenge. Firstly, he submitted,
the time limits only applied to decisions that have to be referred to the Commission
for the reasons already explained. If the matter should not have been referred
then the time limits were irrelevant. The Nachi Europe case cited by HMRC
in their skeleton argument was irrelevant because it dealt with a question
about the challenge to a Regulation under an entirely different procedure.
117. HMRC had
also referred to the TWD Textiles case in their skeleton argument.
Unlike TWD Textiles the Appellant in this case did not have a right to
challenge the Decision so far as the conclusions of fact were concerned, as
already explained, and so the period within which an action for annulment could
be brought are irrelevant.
118. None of the
provisions of these articles therefore applied because HMRC were not entitled
to refer the matter to the Commission and it should never have been referred.
The Appellant was encouraged by HMRC to support the referral to the Commission
but if there was no jurisdiction then the Appellant’s involvement in the
referral could not give the referral jurisdiction where there was none.
119. In
paragraphs [60] and [61] of the Heuschen decision the Court referred to
the Implementing Regulation and the Code and stated that in the relevant
situations the Member States must submit the case to the Commission. The Court
did not expressly say that in other cases where those conditions did not apply
the Member State should not submit the case to the Commission but that was
inherently implied and was strongly supported by the amendment to Article 871
which reduced the circumstances in which a decision should be requested by
excluding the previously included general provision in cases of doubt.
120. Mr Barlow
contended that the principle of legal certainty precluded the Member States
from conferring on themselves powers they were not specifically given by the
legislation. He therefore contended that as the matter should not have been
submitted and the Decision should be treated as ineffective and as having no
standing.
121. Additionally
the appeal in this case was submitted before HMRC submitted the matter to the
Commission. According to paragraphs [62] and [63] of the judgement in Heuschen
that meant that the national court should have dealt with the issue anyway.
122. With respect
to the second issue to be decided Mr Barlow contended that the Pakistan authorities had never withdrawn the GSP certificates they issued and so he contended
that the GSP rules still applied. The rules relating to customs procedures
generally apply to ADDs and in the absence of any specific provision specifying
that the non-preferential rules applied he contended that it was at least
unclear which rules applied.
123. However, he
contended that the goods in question did have Pakistan origin under the
non-preferential rules and in view of the fact that HMRC now accepted that it was
still open to the Appellant to contend that the goods did in fact have that
origin under those rules he submitted that the issue of origin would have to be
decided at a subsequent hearing in any event.
124. Finally Mr
Barlow produced a letter together with a technical note (“the Technical Note”) from
Mr Norgrove, a director of HMRC, which had been sent to Mr Hammond MP and
forwarded to Mr Eden.
125. Mr Barlow
directed the Tribunal’s attention to the Technical Note which stated under
Points 2 & 4:
The
Tribunal proceedings provide the independent legal route to resolve customs
disputes and will provide Mr Eden with the possibility to present all the
evidence that he considers will support his case including on the matter of
“Good Faith”.
126. Mr Barlow
submitted that this showed that at the highest level HMRC believed that the
matter of good faith could be decided by the Tribunal.
HMRC’s Reply Submissions
127. Mr Beal
submitted that the Appellant had sought to rely upon correspondence passing
between Mr. Eden and his MP, Stephen Hammond MP. The Appellant did not seek to
rely upon the full contents of the relevant letter until 2.10 pm on 14 March 2011. HMRC had now produced the full extent of the correspondence, so that it
could be seen in context. Mr Beal said that it was regrettable that the context
was not given to the relevant letter by the Appellant.
128.Mr Beal,
having taken instructions from his client, HMRC, stated that the Technical Note
relied upon by the Appellant referred under the heading “points 2 and 4” referred
to the fact that this preliminary hearing provided Mr Eden with the opportunity
to present his arguments in relation to jurisdiction, including jurisdiction
regarding “good faith.” His arguments had been so presented. He contended that
the Appellant was mistaken to consider that the Technical Note departed from
the contentions advanced in the Commissioners’ skeleton argument dated 18 May 2010.
129. Further the
paragraph immediately above points 2 and 4 stated that it was for Mr Hodge to
advise Mr Eden of his “right to appeal” to the European Court of First Instance.
130. The
paragraph above point 9 stated that:
“It will be for the Tribunal to decide (if it agrees
under the preliminary hearing procedure, that it can potentially reach a
decision which is at variance with that already reached by the Commission)
whether HMRC, or the Commission has failed to correctly apply/interpret the
law.”
Findings
131. There
appeared to be some disagreement between the parties as to why the dossier was
submitted to the Commission. The Appellant stated that it had agreed with HMRC
that they should do so because HMRC had encouraged them. The Technical Note at
point 1 stated that it was Mr Hodge who asked HMRC to submit a request to the
Commission for remission of the duties concerned.
132. In any event
we find however that HMRC were bound to submit the matter to the Commission. Articles
871 and 905 of the Implementing Regulation which are directly applicable in the
United Kingdom precluded HMRC from adopting any other course. This is
supported by the case of Heuschen.
133. We find that
the time limits for applying for an annulment do therefore apply because HMRC
were bound to submit the dossier to the Commission.
134. Articles
871 and 905 state that there are three circumstances in which the matter should
be referred to the Commission
135. We find that
the circumstances of the case are related to the findings of a Community
investigation carried out on mutual assistance and an agreement concluded by
the Community with a country in which provision is made for carrying out such
Community investigations (second circumstance). The verification mission by
OLAF was conducted as part of cooperation between customs authorities.
136. We find that
in this matter there was a single error being the incorrect issue of the GSP
certificates by the Pakistani authorities in respect of goods which exceeded
EUR 500,000 (third circumstance).
137. We examined
the CT Control case with respect to Mr Barlow’s submission that the
Appellant relied on the ECJ’s judgement in the CT Control case to show
that the national courts did have jurisdiction in this matter. In the summary
of that judgement it was stated:
Within
the framework of Article 13 of Regulation No.1430/79, the procedure for adoption by the Commission of
decisions on repayment or remission of import duties, which comprise several
stages, some of which take place at a national level (submission of the
application by the undertaking concerned, preliminary examination of the
application by the customs authorities) and some at Community level (submission
of the application to the Commission, examination of it by the Committee on
Duty-Free Arrangements, consultation of a group of experts, decision by the
Commission, notification to the Member State concerned), affords the persons
concerned all the necessary legal safeguards, in particular that of audi
alteram partem, which represents the defence’s most essential right, provided
that it is conducted in accordance with the requirements of the Community
rules.
138. At
paragraphs 47 to 49 of this case it was stated:
47.
The Applicants maintain that the procedure followed in the adoption of the
disputed decisions does not meet the safeguards laid down in this regard by
Community law. They say that they did not have an opportunity to express their
point of view directly to the Commission and that they did not have all the
information that led to the adoption of the disputed decisions.
48.
It should be recalled that in its judgement in Case 294/81 Control Data v
Commission [1983] ECR paragraph 17 and in its judgment in Van Gend & Loos
and Bosman, cited above, the Court has already rejected this plea, put forward
in the same legal context. In these judgments the Court held that the procedure
for adopting the disputed decisions, which comprised several stages, some of
which took place at national level (submission of the application by the
undertaking concerned, preliminary examination of the application by the
customs authorities) and some at Community level(submission of the application
to the Commission, examination of it by the Committee on Duty-Free
Arrangements, consultation of a group of experts, decision by the Commission,
notification to the Member State concerned), afforded the persons concerned all
the necessary legal safeguards.
49.
Given that this procedure was followed in the present cases, a fact which the
applicants do not contest, the plea of infringement of the defence is
unfounded. The procedure followed enabled the applicants to submit all their
arguments to the Netherlands authorities; their files were at the disposal of
both the Committee on Duty-Free Arrangements and the Commission. Moreover the
applicants acknowledge that all the arguments which they could have put forward
in favour of remission had been mentioned in their applications and there was
no new factor that they could have introduced into their arguments. At all
events they knew that their applications were being forwarded to the Commission
and could have supplemented the arguments contained in them if they had so
wished.
139. We did not
find that this case was helpful to the Appellant as the national level to which
it referred was the submission of the application to HMRC by the Appellant and
the preliminary examination by HMRC at which time the Appellant was afforded
ample opportunity to express its opinions both initially and by way of seeking two
reviews by HMRC of their decision.
140. Although Mr
Barlow contended on behalf of the Appellant that the Commission had reached a
conclusion on evidence which the Appellant had no opportunity to challenge and
the accuracy of which was not tested by the Commission before it reached a
decision we find that the Appellant was given an opportunity to both comment on
HMRC’s submission, supply further information to the Commission and comment on
the Commissions draft decision.
141.We find in
any event that the CT Control case could not be helpful to the Appellant
once the matter had been submitted to the Commission as was necessary by virtue
of Articles 871 and 905 (1).
142. We find that
once the matter had been submitted to the Commission the Appellant’s only
course of action was to apply within two months to have the decision annulled.
143. We find that
the judgement of the ECJ in the case of CT Control made it clear that
the proper way of challenging a decision of the Commission upon the transfer of
a dossier to it was through the initiation of an action for annulment.
144. Mr Barlow
submitted that HMRC now asserted that the Decision could not be appealed however
we found that EU law had provided an appeal route by way of an application for
annulment.
145. Although Mr
Barlow submitted that the Appellant was entitled to rely on the provisions of
Articles 220 and 239 we find that the Commission decision specifically stated that
the terms of Article 220 were not met. The Commission decided that the
Appellant did not meet the good faith criteria of Article 220(b).
146. Additionally
the Commission decided that there was deception or obvious negligence for the
purposes of Article 239.
147. We find that
as stated in the Heuschen case the decision binds all the authorities of
the relevant Member State which include this Tribunal.
148. We examined Case T-191/09 Hit Trading BV Berkman Forwarding BV which was provided to us
shortly after this hearing. In that case the Appellants sought annulment of a
Commission decision which stated that the remission of certain import duties
imposed as a result of CFLs imported from Ecopak was not justified and found
that there were similar facts to this matter. The Appellants failed in their
application for annulment.
149. We find that
the rules governing the origin of the goods are the non preferential rules.
Decision
150. It is not
open to the Tribunal to make a finding which is inconsistent with the Decision.
151. The rules
governing the origin of the goods are the non- preferential rules.
152. The Decision
dealt specifically with Articles 239 and 220 deciding that there was deception
or obvious negligence for the purpose of Article 239 and that the Appellant did
not meet the good faith criteria for the purposes of Article 220.
153. This
document contains full findings of fact and reasons for the decision. Any party
dissatisfied with this decision has a right to apply for permission to appeal
against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal)
(Tax Chamber) Rules 2009. The application must be received by this Tribunal
not later than 56 days after this decision is sent to that party. The parties
are referred to “Guidance to accompany a Decision from the First-tier Tribunal
(Tax Chamber)” which accompanies and forms part of this decision notice.
TRIBUNAL JUDGE
RELEASE DATE: 3 June 2011
