Uflex Europe Limited v The Commissioners for HMRC
[2023] UKFTT 409 (TC)
Natco Foods Limited v The Commissioners for HMRC
8 March 2023
[2023] UKFTT 274 (TC)
First-tier Tribunal
A company imported pappadums and argued with the tax authority about the correct tax rate. The tax authority said the pappadums should have a higher tax because of how they were made. The court decided the tax authority was wrong and the company should pay less tax because the main ingredient was still shelled beans, even though they were ground into flour.
Key Facts
- •Natco Foods Limited imported pappadums between February 15, 2016, and January 24, 2019.
- •HMRC issued a post-clearance demand notice (C18) for £280,047.41, later reduced to £265,891.47.
- •The dispute concerned the correct customs classification code for the pappadums.
- •The pappadums are made from shelled urid bean flour, rice flour, salt, calcium bicarbonate, and coconut oil.
- •Natco Foods initially used code 2005 9980 99, which ceased to exist.
- •HMRC classified the pappadums under code 2005 5900 00 ('beans – other').
- •Natco Foods argued for code 2005 5100 00 ('beans – shelled').
Legal Principles
Customs classification is determined according to the Combined Nomenclature (CN) and General Interpretive Rules (GIRs).
Combined Nomenclature Regulation (Reg EEC) No 2658/87, UK Tariff, GIRs
GIR 3(a) prioritizes the most specific description when a product could fall under multiple headings.
General Interpretive Rules (GIRs)
Binding Tariff Information (BTI) is binding between the applicant and tax authorities but not otherwise.
Combined Nomenclature Regulation (Reg EEC) No 2658/87
Outcomes
The appeal is allowed.
The Tribunal found that the pappadums are preparations of shelled beans and should be classified under 2005 5100 00.
The C18 is overstated and should be recalculated at a lower duty rate (14.10% instead of 15.7%).
The incorrect classification code resulted in a higher duty rate.
The argument of legitimate expectation was not considered due to the decision on classification.
The correct classification resolved the main issue.
Similar Cases
Innovation Rehab Limited v The Commissioners for HMRC
[2023] UKFTT 472 (TC)
M & S Property Services (NW) Ltd v The Commissioners for HMRC
[2023] UKFTT 969 (TC)
Laurence Supply Co (Leather Goods) Limited v The Commissioners for HMRC
[2024] UKFTT 124 (TC)
KRF UK Limited v The Commissioners for HMRC
[2023] UKFTT 717 (TC)