2014
COURT OF APPEAL (CRIMINAL DIVISION)
United Kingdom
CORAM
AI Generated Summary
Asda Stores Limited sought a broader interpretation of customs duty provisions for imported goods, disputing the Upper Tribunal's decision to uphold a full transaction value for customs purposes without deducting a supplier rebate. The case revolved around whether the agreed-upon rebates on imported hangers should reduce the customs value. The First-tier Tribunal initially sided with Asda based on the Repenning case, but the Upper Tribunal reversed this finding, upholding the full transaction value. The appellate court confirmed the Upper Tribunal's decision, stating the customs value should be the full price paid to the clothing supplier without reducing it by the rebate and that the choice of the valuation method impacts the customs duty incidence.
Judgment
Lord Justice Vos:
Introduction
In this appeal, the appellant, Asda Stores Limited (“Asda”), argues for a broad purposive construction of certain central provisions of the regime concerning customs duties applicable to goods imported into the European Union (“EU”). In doing so, Asda seeks to overturn the decision of the Upper Tribunal (Newey J) dated 8 th May 2013.
The case concerns the importation by Asda of clothing together with clothes hangers and ancillary items (together “hangers”). Asda buys the clothing and hangers from the clothing supplier on terms that the supplier will source the hangers from sub-suppliers (which I will call the “hanger suppliers”) specified by Asda at specified prices. Asda pays the clothing supplier the price agreed for the clothing together with the price it (the clothing supplier) has paid for the hangers to the nominated hanger suppliers. Unknown to the clothing supplier, however, Asda has agreed with the hanger suppliers that the true value of the hangers is less than the price actually charged by the hanger suppliers to the clothing supplier, and that the hanger suppliers will rebate the difference to Asda (the “rebate”). In these circumstances, Asda contends that the customs value of the imported clothes and hangers should be the price paid to the clothing supplier less the rebate, whilst HMRC contends that the customs value should be the full sale price paid by Asda to the clothing supplier for the clothes and the hangers without regard to the rebate returned by the hanger suppliers to Asda.
The First-tier Tribunal (Judge Kevin Poole, Judge Timothy Herrington, and Mr Richard Law FCA CTA) (the “FTT”) agreed with one particular contention put forward on behalf of Asda, but the Upper Tribunal over-ruled the FTT on that ground and held that the customs value was the full transaction value paid by Asda to the clothing supplier.
Article 29 of Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code (the “Code”) defines the customs value of imported goods, upon which customs duties are charged. It provides by article 29(1) that the customs value of imported goods “shall be the transaction value, that is, the price actually paid or payable for the goods when sold for export to the customs territory of the Community, adjusted, where necessary, in accordance with Articles 32 and 33 …”. Article 29(3)(a) then defines what is meant by the “price actually paid or payable” as “the t