Manchester Candle Company Ltd v Revenue & Customs [2012] UKFTT 94 (TC) (31 January 2012)
[2012] UKFTT 94 (TC)
TC01790
Appeal number: TC/2010/06308
Anti-Dumping
Duty – candles imported from China by Appellant – goods dispatched prior to
imposition of ADD but imported into UK following its imposition – goods liable
to ADD - Appeal dismissed.
FIRST-TIER TRIBUNAL
TAX
MANCHESTER
CANDLE COMPANY LTD Appellant
-
and -
THE
COMMISSIONERS FOR HER MAJESTY’S
REVENUE
AND CUSTOMS Respondents
TRIBUNAL:
DAVID DEMACK (TRIBUNAL JUDGE) ALBAN
HOLDEN (MEMBER)
Sitting in Manchester on 20
January 2012
The Appellant was not
represented
Mr Joshua Shields, instructed
by the General Counsel and Solicitor to HM Revenue and Customs, for the
Respondents
© CROWN COPYRIGHT
2012
DECISION
1. The
issue in this appeal by Manchester Candle Co Ltd (MCC) is whether the company
is liable to pay anti-dumping duty (ADD) on an importation of candles from China.
2. The
disputed decision of the Commissioners is that to issue a Post Clearance Demand
Note, commonly referred to as a form C18 (C18), in respect of a quantity of
candles imported into the United Kingdom under entry number 290/010777C in
December 2008. The C18 was issued on 7 July 2010 for under-payment of ADD of
£5,532.08, import VAT for the ADD of £829.81, and the overseas freight omitted
of £243.21, making a total assessed of £6605.10.
3. MCC
appealed the Commissioners’ decision on 15 July 2010 claiming that ADD should
not apply to the candles included in its order 2095 and imported under entry
number 290/010777C. That was the fifth of six orders it placed in January 2008
with Tianjin Century Shengfa Group Co Ltd (TCS) of Tianjin, China, for candles to be delivered throughout that year. In its reasons for appealing, with which we
shall deal in detail shortly, MCC explained that there was no ADD on
importations of candles from China until after the candles in question were
shipped on or about 19 October 2008, and that the Commissioners had imposed the
duty in what it considered to be a “retrospective way”.
4. Before
us the Commissioners were represented by Mr Joshua Shields of counsel. MCC was
not represented but, since we knew of no good reason why no one appeared to
represent it and the notice of hearing appeared to have been regularly served,
we determined to proceed in its absence.
5. It
is perhaps appropriate for us to provide a background to the imposition of ADD
on importations of candles. The framework for ADD was put in place by Council
Regulation 384/96 (the 1996 Regulation) to protect against dumped imports.
Article 7 of that regulation provides for provisional imposition of ADD during
investigation and consultation prior to completion of that process.
6. Pursuant
to the powers contained in the 1996 Regulation, by Commission Regulation
1130/2008 (the 2008 Regulation) provisional ADD was imposed on certain candles,
tapers and similar items imported from the People’s Republic of China. By para 3 of art 1 thereof, liability for the provisional ADD arose on the release
for free circulation of such products. In practical terms that required payment
of the amount of duty specified, which was to be held pending completion of the
investigative and consultative process. The rate of provisional ADD was
contained in a table contained in para 2 of art 1 of the 2008 Regulation, and
that applicable in the instant case was 671.41 euros per tonne of fuel. The
2008 Regulation came into force on 16 November 2008, and was stated to apply
for 6 months.
7. By
Commission Regulation 393/2009 (the 2009 Regulation) of 11 May 2009 a
definitive ADD was imposed effectively replacing the provisional ADD. The
general rate of ADD imposed by the 2009 Regulation was 549.33 euros per tonne
of fuel, but the products of certain specified manufacturers were liable to a
lower, or nil, rate of duty.
8. The
one thing we have not so far mentioned is that in terms of the quantum of
assessment ADD is payable on the weight of the fuel imported, net of packaging.
MCC informed the Commissioners that the net weight of the fuel concerned was
11,909.5 kg. The Commissioners accepted the correctness of that figure, and
assessed accordingly.
9. There
is no dispute as to the facts, and we take the majority of them from MCC’s
reasons for appealing, as signed by its director, Mr Bryan Clementson, in its
notice of appeal:
“Our
order 2095 (5 of 6) [for certain candles] was placed as part of a 6 part order
in January 2008. The idea being that the producer [TCS] wished for forward
planning and [MCC] wanted security going forward. Through 2007 and at the time
this order was placed there was zero duty on imports of candles from China.
The first, second, third and fourth parts of this block
order were completed during the period January to August 2008. The law during
this period was that zero duty applied. The fifth part of the block of orders
2095 (5 of 6) was partly paid for (20%) before production started sometime in
August 2008. Upon completion of the production the remaining 80% was paid prior
to packing into a container. Shipment of the container was made on or about the
19th October 2008. The law continued to be that no duty applied.
Thus when the goods left China the duty rates were clearly zero. The time of
arrival of the container in question here in the UK was 17th
November 2008. On the 15th/16th November the law had
changed. I understand it was the European courts who pushed through this law
under what the authorities were calling an Anti Dumping Duty (ADD). Although we
and our suppliers TCS strongly deny being involved in anything remotely
connected with “dumping” we needed to take action. Although the new rules and
duty rates were almost impossible to decipher we decided to stop this trade
because we did not want to be involved with politics and the phrase anti
dumping was something we immediately wished to separate ourselves from. Having
already paid a US$5000 deposit for the 6th and final part of the
order we had to have emergency discussions with TCS regarding what to do about
the 6th part of the block order. The total amount for that 6th
order was about US$31000 and TCS were trying to get another US$26000 from MCC.
The result was MCC allowed TCS to keep the deposit of US$5000 (MCC wrote off
the item as a loss) and we would not continue with the final part of the order.
During this difficult period our supplier TCS held onto the documents for several
days until matters were resolved. This resulted in several days where the
container was held up at the doc(sic) side and further charges of £780 were
incurred by MCC for that. Thus the final and official clearance date of the
goods into the UK for the order we claim should not have duty applied to it was
10th December 2010 (sic).
In summary. On 17th October 2008 (sic) when our
goods left China by ocean shipment there was no duty applicable. MCC feels this
new duty should not be applied in what we feel is in a retrospective way to
these goods.”
10. The remaining
facts can be shortly stated. On 10 December 2008 MCC’s clearing agent,
Panalpina World Transport Ltd (PWT), declared its importation. PWT acted as
MCC’s direct representative, which meant that it acted in the name and on
behalf of MCC, but the latter was solely liable for the duty liability which
arose. MCC was selected for an audit by the Commissioners, and they visited it
on 29 June 2010. The visiting officers found the documentation produced to be satisfactory
(subject to a small amount of omitted overseas freight on the 5th
entry, which was resolved), with the exception of the 8th entry,
that of the candles in entry 290/10777C. The officers observed that, whereas
the code A999 should have been used in the import declaration SAD since TCS was
not a supplier qualifying for a reduced or nil rate of ADD, PWT had used code
A916, indicating the supplier to be Quingdao KingKing Applied Chemistry Co Ltd,
to whose products a nil rate of ADD applied. No explanation for PWT’s incorrect
use of code A916 was provided, but we find it unnecessary to consider whether
such use was deliberate. During the visit a representative of MCC explained to
the officers that it had tried to cancel the relevant consignment, and that it
was ultimately left with goods it was unable to sell; had there not been delay
in TCS dispatching the order, it would not have attracted ADD.
11. Following the
imposition of ADD at the definitive rate, the assessment to the duty in the
form of the C18 Post Clearance Demand Note, which had been originally made at
the higher provisional rate, was reduced; and it is the assessment at the
reduced rate that is under appeal.
12. Mr Shields
submitted that, on the facts, we must dismiss the appeal. By its declaration of
10 December 2008, MCC sought the release of the candles imported under entry
number 290/010777C for free circulation and, by the Commissioners’ acceptance
and processing of the same, the goods were released. By then, the provisions of
the 2008 regulation had come into force, and duty was due.
13. We have
considerable sympathy with the position of MCC but, unfortunately, that is of
no help to it. As we have said. The liability to duty, i.e. the duty point,
occurred on the candles being imported into the UK. And, at the date they were
imported, the ADD had been imposed.
14. It follows that
we must dismiss the appeal.
15. 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: 31 January 2012
