Freely Available British and Irish Public Legal Information
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]
United Kingdom VAT & Duties Tribunals (Customs) Decisions
You are here: BAILII >> Databases >> United Kingdom VAT & Duties Tribunals Decisions >> United Kingdom VAT & Duties Tribunals (Customs) Decisions >> Ransomes Jacobsen Ltd v Customs And Excise [2002] UKVAT(Customs) C00161 (23 May 2002)
URL: http://www.bailii.org/uk/cases/UKVAT/Customs/2002/C00161.html
Cite as: [2002] UKVAT(Customs) C161, [2002] UKVAT(Customs) C00161
[New search] [Help]
- The duty rate under the classifications contended for by the Commissioners is 10%; the duty rate under the classification primarily contended for by the Appellant is nil, the duty rate payable in accordance with the Appellant’s secondary and alternative submission is 4%.
- Against this background, the main debate before us at the hearing was whether the Turf-Trucksters are more accurately described as vehicles for the transport of goods (as the Commissioners contend) or as tractors (the Appellant’s primary submission).
- Illustration B(˙) shows a vehicle similar to but not identical with the Turf Trucksters with which this appeal is concerned. In particular, it has a box or open load area fitted. It is relevant to note that the illustration is expressly stated to be “purely for information", and does not form part of the description of goods in column (1) of the table annexed to the Regulation. Therefore it does not form part of the operative part of the Regulation.
- The vehicles are not for use on public highways, but are designed for off-road use in open fields and turfed areas such as golf courses and sports fields. The use for which they are designed is "turf maintenance".
- "Turf maintenance" in this context excludes grass-cutting but includes soil aeration, spiking, chemical and fertilizer spraying, fertilizer and seed spreading and sweeping.
- The vehicles in the market in direct competition with the Appellant’s Turf Trucksters are imported under classification 8701 as tractors.
- Mr. Ferguson told us with the benefit of his experience – and we accept – that the most important aspect of turf care is not grass cutting but creating and maintaining the optimum soil structure and condition for strong and healthy growth of the particular grass mix required for any particular playing surface. This involves a number of different processes and treatments including aeration through slitting, spiking and hollow coring, improvement and maintenance of soil fertility through top dressing and applications of fertiliser through spreading or spraying, as well as the control of weeds and disease, primarily through spraying.
- All of these operations, when required to be carried out on a large scale involve the use of power driven machinery and it is essential to balance the size and weight of the machinery involved to avoid (or minimise) the damage to the grass surface and soil structure through compaction that machinery can cause. The Turf Truckster is designed to meet all these specialist turf maintenance requirements and at Ipswich Town Football Club two Turf Trucksters are used as well as the full range of accessories.
- Miss Haynes, for the Appellant, submits that the Turf Truckster differs from an agricultural tractor only in its design adaptation for use on turf. She argues that many of the Turf Truckster attachments are towed behind or coupled alongside the Turf Truckster in an identical manner to that of a conventional tractor. She points out that some of the attachments, essentially the heavier ones, are operated by haulage from the centre of the Turf Truckster (the "fifth wheel coupling") as opposed to the rear end, for reasons of weight distribution. As to the attachments which are not ground-engaging, her primary submission was that we should interpret "hauling" as including carrying such attachments. It was not her primary submission (she said) that such attachments were "other goods" for the transport of which the Turf Trucksters contained "subsidiary provision".
- She submitted that the classification for which the Commissioners contend is artificial. The Turf Truckster is not designed mainly for carrying loads or for carrying the optional specialised attachments in the sense that it merely transports pieces of equipment from one place to another. The attachments are never "carried" in the sense that they are passively transported but, rather, they are physically attached to the Turf Truckster by various means for the purposes of operation and in order to carry out the various turf maintenance functions. The optional box attachment, which may be used with the Turf Truckster is intended merely, she submits, as a means of transporting items such as seed and fertiliser in connection with the various turf maintenance functions, and cannot be attached and used when the majority of the other attachments are in operation.
- She submitted that the natural meaning of "motor vehicles for the transport of goods" in classification 8704 was vehicles designed to carry goods from one place to another. She contrasted this with the carriage of attachments to enable them to function.
- She submitted that the main use of the Turf Truckster was in the haulage of such of the attachments as are ground-engaging. She said that the Turf Truckster is designed to be as versatile as possible: it is constructed essentially for dragging, etc. because the market requires that a turf maintenance vehicle should have that function (as well as being suitable to carry those attachments that require to be carried).
- She submits that the Commissioners’ case ignores commercial reality. By this she means that vehicles within classification 8704 (motor vehicles for the transport of goods) are, in context, vehicles of the type of the Workhorse or Haulster, which are much cheaper than the Turf Truckster, and a purchaser who wishes to acquire a vehicle for the transport of goods would not choose a Turf Truckster, which confirms that a Turf Truckster is not, in commercial terms, a vehicle for the transport of goods.
- As to Commission Regulation EC No. 799/99, Miss Haynes submits that the description of the vehicle at item 2 of the Regulation does not provide a complete and accurate description of the Turf Truckster models in issue. She contends that the particular emphasis in item 2 to the open load area, the load capacity and load area tilting hydraulics show that the Commission was considering a vehicle which did not have the range of functions found in Turf Trucksters, but rather a vehicle which was indeed primarily designed as a load bearing vehicle. She says that the photograph annexed to the Regulation confirms this.
- She led evidence that in 1995 the Commissioners had classified the Appellant’s Turf Trucksters under tariff heading 8701 (tractors) on the basis that "whilst transport of goods [was] a feature of the vehicle[s their] main function is to act as an off road vehicle with power take-off onto which a variety of mainly horticultural machines are mounted … providing the tractive element". She says that the Commissioners have no rational basis for revising their 1995 classification.
- She made the alternative submission, recorded above, that if we found that the Turf Truckster was correctly classified as a load-bearing vehicle rather than a tractor, classification 8709 was more appropriate than classification 8704.
- Mr. Ben Collins, for the Commissioners, submitted that the essential question for us is whether the Turf Trucksters "haul or push another vehicle, appliance or load" (and therefore are tractors within classification 8701), or whether they are "for the transport of goods" and therefore within classification 8704. "Haul" in this context means drag, draw or pull (with effort).
- Responding to the Appellant’s contention that the Turf Truckster is (like a tractor) constructed essentially for hauling another vehicle, appliance or load, he submitted that only a minority of the attachments (3 or 4) appear to be pulled or dragged. For the majority of uses, the attachments are carried (or "transported") on the load-bearing part of the vehicle. He referred to the Appellant’s product catalogues and observed that the Turf Truckster is described as a "heavy-duty work truck", not a tractor, and that tractors, so described, are different vehicles described elsewhere in the catalogues.
- He placed great reliance on Commission Regulation EC No. 799/99. He showed us documents discussed by the European Commission Customs Code Committee (Tariff and Statistical Nomenclature Section (Mechanical)) in 1998 on the subject of the classification of "4-wheel turf trucksters". Although he accepted that as a matter of principle the documents were not an aid to the construction of the Regulation, he submitted that the Tribunal would be unrealistic if it ignored the fact that the vehicle considered by the Committee was a form of turf truckster. He submitted that the vehicle considered by the Commission and described in the resulting Regulation 799/99 was factually indistinguishable from the Turf Trucksters which are the subject of this appeal (the factual variants of some Turf Trucksters having 3 wheels not 4, or being petrol-powered not diesel-powered being irrelevant in context). He submitted that the Commissioners are effectively bound by the Regulation and that the Tribunal should endorse the conclusion reached by the Commission and uphold the classification of the Turf Trucksters as 8704.
- He submitted that in the comparison of the function of hauling with that of transporting goods, there was nothing to support Miss Haynes’s distinction between the transport of passive goods (which she characterised as hauling) and the transport of active goods. He submitted that ground-engaging attachments were not being hauled because their weight was being borne by the Turf Truckster, not the attachments themselves. Indeed the Turf Truckster was constructed to avoid a situation where it hauled anything: that was the logic of mounting attachments on the vehicle wherever possible and, where an attachment was ground-engaging, arranging by the "fifth wheel coupling" that its weight was taken (in part at any rate) by the axles of the Turf Truckster. He submitted that the core harvester wasn’t pushed or dragged because it was attached to the side of the Turf Truckster rather than its front (for pushing) or its rear (for dragging).
- He relied on the evidence that the majority of the attachments of the Turf Truckster were carried. In the construction of Note (2) of Chapter 87 he submitted that "vehicles constructed essentially for hauling .." meant vehicles constructed primarily for hauling. The relevant question for the Tribunal to ask was: "what is the essence of the vehicle – what is it really constructed for?" He made the point that neither the classification nor the Chapter Note described a tractor as a vehicle essentially for powering or for supporting the functions of other vehicles or attachments.
- He submitted that the box was not an incidental or subsidiary provision in the terms of Note (2) of Chapter 87.
- He resisted the Appellant’s secondary and alternative submission in favour of classification under code 8709 because a Turf Truckster was not a truck of the type used in factories, etc., nor was it a tractor of the type used on railway station platforms.
- We consider that, as the case was presented to us – on the evidence and applying GRI 1 – the choice before us is between classifying the Turf Trucksters under heading 8701 as tractors (other than tractors of heading 8709) or under heading 8704 as motor vehicles for the transport of goods.
- Also, it appeared to us that if we were to conclude that the Turf Trucksters did not fall within heading 8701 (as tractors) or heading 8704 (as vehicles for the transport of goods), they would fall within heading 8705 90 90 – Special purpose motor vehicles, other than those principally designed for the transport of persons or goods; Other; Other.
- We proceed therefore to consider headings 8701 and 8704.
- "Agricultural tractors" and "forestry tractors" within heading 8701 must be interpreted as meaning agricultural and forestry vehicles constructed essentially for hauling or pushing another vehicle, appliance or load, whether or not they contain subsidiary provision for the transport, in connection with the main use of the tractor, of tools, seeds, fertilizers or other goods (Note (2) to Chapter 87, CN).
- We have considered whether this Note requires that a tractor must essentially be a vehicle for hauling, etc., or whether, on the other hand, it must be a vehicle having – as an essential attribute – the capability of hauling, etc. We have concluded that the requirement that it must be "constructed essentially for hauling" etc., indicates that the latter and not the former alternative is correct. The reference in the Note to construction essentially for hauling (rather than, for example, use essentially for hauling) indicates to us that a tractor must have the capability of hauling as an essential attribute of its construction, rather than that the vehicle itself must be essentially a vehicle for hauling.
- We thus notice a distinction drawn in the CN between vehicles constructed essentially for hauling on the one hand and vehicles designed essentially (or principally) for transport purposes on the other.
- In our judgment, the carriage of non-ground-engaging accessories whether or not they contain fertilizer, seed, etc.) is a function which is neither "hauling" nor "the transport of goods". It is not "hauling", because the accessories are not dragged. It is not "transport of goods" because although the accessories are physically moved, the purpose of the function of carrying them is not to convey them from one place to another. It is instead to enable them to perform the functions for which they themselves are designed. There is, in our judgment, a distinction between carriage and transport in this context. Transport etymologically connotes carriage from one place to another. We conclude that a vehicle designed for the transport of goods in this context is one which is designed to carry goods for the purpose of conveying them from one place to another.
- This analysis is confirmed by the reference to interchangeable agricultural equipment in the Chapter Note (2) to Chapter 87 of the CN and the CNENs to heading 8701. Note (2) contains the passage (set out above): "Machines and working tools designed for fitting to tractors of heading 8701 as interchangeable equipment remain classified in their respective headings even if presented with the tractor, and whether or not mounted on it." The reference to machines and working tools as interchangeable equipment does not include any qualification that they must be ground-engaging, or "hauled". We accept that it is pre-supposed that the "tractors of heading 8701" referred to are vehicles constructed essentially for hauling, etc., but there is no recognition in the Note even of the possibility that interchangeable equipment could be goods for the transport of which the tractor was essentially designed.
- Thus, in order to decide whether the Turf Trucksters are classifiable as tractors, we must examine two conditions, not one. A tractor must be both a vehicle constructed essentially for hauling – in the sense of having, as an essential attribute, the capability of hauling – and also a vehicle whose main use is not for the transport of goods.
- As we have found (see: paragraph 22 above), the Turf Trucksters are designed for use with accessories. An accessory of one sort or another is required for every use for which the vehicle is designed. The vehicle itself is thus the source of motion and power for the performance of the various functions envisaged.
- Of the accessories described to us, the following seem to us to be hauled: the core-harvester, the coring machine, the large top-dresser (top dresser ‘B’), the "slitter" and the "Ryan Quick Aerator".
- The following accessories described to us are not hauled: the rear box, the sprayer, top dresser ‘A’, the spinner, the "vicon wagtail spreader", top dresser ‘C’.
- We were not able to determine on the evidence whether the "enviro-jet" is hauled or not.
- In our judgment, a "vehicle, appliance or load" is hauled, rather than carried, by a[nother] vehicle if it to any extent carries its own weight. If it does, it is in a real sense being dragged or hauled by the tractive vehicle. All the accessories which are ground engaging seem to us to carry their own weight to some extent. If they did not, they would glide over the ground. However, it is possible that the "enviro-jet" glides over the ground and is not hauled.
- Thus, five accessories are hauled, six (including the rear box) are carried, and one (the "enviro-jet") may be either hauled or carried.
- The fact that the core-harvester is side mounted does not detract from the proposition that it is hauled by the Turf Truckster. "Hauling" does not require that the thing hauled should be attached to the rear of the hauling vehicle rather than its side. The motive power for the core-harvester is provided by the Turf Truckster in the same way as if it had been mounted at the rear.
- In considering whether the Turf Trucksters are constructed essentially for hauling, we think it would be wrong to decide the issue on the basis that, arithmetically, most of the accessories described to us were, or were not, hauled. We must have regard to the significance of the capability of hauling those accessories which were hauled, in the context of ascertaining whether the Turf Trucksters are constructed essentially for hauling.
- It is, in our judgment, clear that Turf Trucksters are "obviously intended, given their construction and equipment" (CNEN to heading 8701) for use (and are used) at least to a significant extent in hauling accessories. That use may not be the main or principal use of Turf Trucksters, but we accept Miss Haynes’s submission that the market requires that a turf maintenance vehicle must be constructed and equipped for that use. A vehicle which could not haul would not be essentially the same as a Turf Truckster.
- As respects the second question, which is whether or not the main use of the Turf Trucksters is for the transport of goods, we have already stated our conclusion (in paragraph 80) that the carriage of non-ground-engaging accessories is not "the transport of goods".
- To the extent that Turf Trucksters are used for hauling (ground-engaging accessories), they are not used for the transport of goods, because the concept of the transport of goods is used in Chapter 87 of the CN in contradistinction to hauling.
- We proceed to consider what effect the rear box has on this analysis. We have found that Turf Trucksters are not imported or sold with a rear box as a standard component (paragraph 18). The rear box is one of the accessories which may be specially purchased. It is a "working tool" (see: the functions described at paragraph 35), which, if we conclude that Turf Trucksters are tractors within heading 8701, remains classified under its respective heading (as an accessory within heading 8708) in accordance with Note (2) to Chapter 87. It is, in this regard, like any of the other accessories we have dealt with. It is designed to be used to carry from time to time fertilizer, seeds, extracted cores, etc. and, obviously, other goods – and also for dumping. In this connection we note that it can (and is designed to) carry heavy loads. It cannot be used during the operation of the sprayer, the "enviro-jet", the coring machine, any of the top dressers, the "vicon wagtail spreader", the "slitter" or the Ryan Quick Aerator. It is used in conjunction with the core harvester and the spinner.
CUSTOMS DUTY – Tariff Classification – Combined Nomenclature – vehicles constructed and designed for "turf management" – whether tractors within heading 8701 or vehicles for the transport of goods within heading 8704 or works trucks or tractors of the type used on railway platforms within heading 8709 – whether constructed essentially for hauling – held they were – whether main use for the transport of goods – held it was not – whether Commission Regulation 799/99 engaged – held it was not – held vehicles were tractors within heading 8701 – Appeal allowed
LONDON TRIBUNAL CENTRE
RANSOMES JACOBSEN LIMITED Appellant
- and -
THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents
Tribunal: MR JOHN WALTERS, Q.C. (Chairman)
MR KEITH DUGDALE F.C.A.
Sitting in public in Lowestoft on 23 rd May 2002
Miss Rebecca Haynes, Counsel, instructed by Eversheds, Norwich, for the Appellant
Mr Ben Collins, of Counsel, instructed by the Solicitor for the Customs and Excise, for the Respondents
© CROWN COPYRIGHT 2002
DECISION
Introduction
1. This is an appeal against decisions of the Commissioners contained in two letters, both dated 9 th March 2001, to uphold on review decisions to classify vehicles marketed as Cushman® Turf-Truckster®s ("Turf Trucksters") under commodity codes 8704 31 91 00 (Motor vehicles for the transport of goods: – Other, with spark-ignition internal combustion piston engine: - Of a gross weight not exceeding 5 tonnes: Other, with engines of a cylinder capacity not exceeding 2,800 cc. – New) and 8704 21 91 00 (Motor vehicles for the transport of goods: – Other, with compression-ignition internal combustion piston engine (diesel or semi-diesel): – Of a gross weight not exceeding 5 tonnes: Other, with engines of a cylinder capacity not exceeding 2,500 cc. – New). The classification contended for by the Commissioners, therefore, is, put shortly, as motor vehicles for the transport of goods, with different sub-classifications for petrol and diesel powered vehicles. The classifications are classifications of the Combined Nomenclature of the European Community ("CN").
2. The Appellant’s primary submission is that the vehicles were and remain properly classified under commodity code 8701 90 11 00 (Tractors (other than tractors of heading No 8709 [see: next paragraph]) – Other: Agricultural tractors (excluding pedestrian-controlled tractors) and forestry tractors, wheeled: New, of an engine power: – Not exceeding 18 kW). The Appellant’s primary submission, therefore, is that the vehicles should be classified as agricultural or forestry tractors.
3. The Appellant’s secondary and alternative submission is that if the vehicles are not correctly classified as tractors, they should be classified under community code 8709 – Works trucks, self-propelled, not fitted with lifting or handling equipment, of the type used in factories, warehouse, dock areas or airports for short distance transport of goods; tractors of the type used on railway station platforms.
6. The legal framework within which we must approach this decision is not in dispute. We must have regard to the terms of the CN as amended for the year(s) in which the products were imported (1999 and 2000); the general rules for the interpretation of the CN for the relevant year(s) ("GIRs"); any relevant explanatory notes to the CN ("CNENs") and the explanatory notes to the Harmonized System ("HSENs") – although the HSENs are persuasive but not binding on us.
7. A particular feature of this appeal is the existence of Commission Regulation 799/99 of 16 th April 1999. This Regulation classified, as the second item in column 1 of the table annexed to it, goods described as follows:
"New four-wheeled vehicles with a 928 cm³ diesel engine, a gross vehicle weight of approximately 1,800 kg and approximate dimensions of 2.7 m (length) x 1.4 m (width). The vehicles have an open cabin and a bench seat for 2 persons (including the driver) and an open load area with the approximate dimensions of 1.2 m (length) x 1.4 m (width).The load capacity is approximately 900 kg. The load area has tilting hydraulics. The vehicle has a device for towing trailers and a power-take-off. The area for persons is smaller than the load area." The description adds a reference to "illustration B(˙).
8. Goods so described must be classified under CN Code 8704 21 91, see: column 2 of the annexed table in the Regulation.
9. The reasons given in the Regulation for this classification are :
"Classification is determined by the provisions of General Rules 1 and 6 for the interpretation of the Combined Nomenclature and the wording of CN Codes 8704, 8704 21 and 8704 21 91.
The vehicles are not essentially designed for hauling or pushing another vehicle, appliance or load and therefore do not fulfil the requirements of Note 2 to Chapter 87. They are not principally designed for the transport of persons. They are not dumper trucks (see the Explanatory Notes to the Harmonised System to subheading 8704 10)."
11. The Regulation is binding in its entirety and directly applicable in all Member States. Although submitting that "very strictly, such a regulation is binding only in respect of the particular article it concerns", the Commissioners contend that (in the interests of certainty) they are effectively bound by the Regulation in respect of the vehicles which are the subject of this appeal. They accept that some of the vehicles with which we are concerned have 3 wheels, not 4, and that some are petrol-powered and not diesel-powered. But they say that the vehicles are essentially the same as the vehicle described (and classified) as the second item in column 1 of the annexed table of the Regulation.
The facts
12. We received a written statement and oral evidence from Mr. Richard Edward Comely, the product manager for Textron Golf Turf & Speciality Products, a trading name of the Appellant. We also received a written statement and oral evidence from Mr. Alan David Ferguson, Head Groundsman at Ipswich Town Football Club, called on behalf of the Appellant. Two Turf Trucksters are used at Ipswich Town Football Club.
13. For the Commissioners, we heard oral evidence from Mrs. Shelley Chamberlain, the Customs Officer at the Commissioners’ Information Management Division Reviews and Appeals Team, who was the author of the review decisions appeal against. However, her evidence did not touch on the nature or attributes of the Turf Trucksters. Instead she described the processes involved in the making of Commission Regulations concerning the classification of goods in the CN and, although we found her evidence interesting and informative, it was not relevant to any of the issues we have to decide.
14. From the written and oral evidence let by the Appellant, and the documentary evidence before us, we find the following facts.
15. The vehicles in issue are:
(a) the petrol powered 3 wheeled JR truckster model number 898543B;
(b) the petrol powered 4 wheeled 31 hp Turf-Truck model number 898652;
(c) the diesel powered 3 wheeled Turf-Truckster model number 898684;
(d) the diesel powered 4-wheeled Turf-Truckster model number 898685.
16. There are no material differences between the vehicles in these categories apart from the fuel with which they are powered and the number of wheels. The 4-wheeled vehicles have bigger payloads than the 3-wheeled vehicles. We were told that the large majority (10 to 1) of the vehicles imported were diesel powered.
17. The vehicles have two seats – for a driver and a passenger. They have a 3 point tow hitch for the attachment and control of items of equipment; a power take-off providing either mechanical or hydraulic power to operate spreaders, spinners, sprayers and deep-tine aerators; 2 or 3 auxiliary hydraulic pumps to provide separate hydraulic power to machinery such as spreaders and core harvesters; a 21 horse power engine with the facility to be governor-controlled to maintain an even ground speed essential for the proper operation of the equipment and a 2 range, 4 speed gearbox to provide a combination of slow speed and high power output, also essential for the operation of equipment.
18 The vehicles are not imported or sold with a rear box as a standard component. The rear box is one of the accessories which may be separately purchased. The box cannot be used during the operation of the majority of the other accessories and is designed to be used from time to time to carry, for example, fertiliser, seeds and cores extracted during aeration. The accessories are imported separately to the vehicles.
21. The special feature of a Turf Truckster is that it is designed in such a way that it does the least damage possible to the turf over which it travels while it carries out the functions for which it is designed. This requires sophisticated engineering, in particular in the achievement of a spreading of the weight of the vehicle over as large an area as possible, so that it does not rut or otherwise damage the ground, in the way that a normal agricultural tractor might be expected to do.
22. The vehicles are designed for use with accessories. An accessory of one sort or another is required for every use for which the vehicle is designed. The vehicle itself is thus the source of motion and power for the performance of the various functions envisaged.
23. We accept Mr. Comely’s detailed explanation of the various accessories with which the vehicles are designed to be used. We describe them in the order in which they were explained to us.
24. The first is a core-harvester. This accessory is used to gather cores of turf after they have been extracted in the process of coring. It is side-mounted to the vehicle and has a single wheel of its own. It is hydraulically powered from the vehicle. It is a piece of machinery which gathers the cores, scattered as they are on the surface of the turf, and deposits them in the box, which is carried for the purpose on the back of the vehicle. The accessory touches the ground (is "ground-engaging") at the wheel and also, it appears, at the base of the chute through which the cores are gathered to be deposited in the box.
25. The second accessory is a sprayer. It is not ground-engaging, but is carried on the back of the vehicle, being attached to the back of it by a hitch assembly and powered from the vehicle. It extends out beyond the width of the vehicle on both sides. It is used for weed control, pest control and the spraying of chemical fertiliser. It incorporates a tank holding the liquid to be sprayed.
26. The third accessory is an "enviro-jet". This is a high-pressure liquid aerator powered from the vehicle. It is used with a tank attached to the vehicle by a simple fastening. The tank usually contains water, with or without additives. The water passes through high pressure pipes and is applied to the ground by means of rotating brushes, somewhat similar to those often found in car-washing machines. The part of the attachment holding the brushes appears to be ground-engaging.
27. The fourth accessory is a coring machine. This has two wheels of its own (and is therefore ground-engaging) and is a substantial machine designed to pierce the ground and extract cores out of the turf (the cores can subsequently be gathered using the core-harvester). It is coupled to the vehicle by means of a coupling (described as a "fifth-wheel coupling") which transfers the weight of the coring machine forward so that it is spread between all three axles (the two axles of the vehicle and the axle of the coring machine).
28. The fifth accessory is a top dresser ("top dresser ‘A’"). This is a hopper designed to carry powdered material (for example fertiliser) which is applied to the ground through a spinning mechanism attached beneath the hopper. This accessory is not ground-engaging, and is attached to the vehicle in the same way as the sprayer (see above). It is powered hydraulically, using the hydraulic power take-off from the vehicle.
29. The sixth accessory is a spinner, for sewing grass seed in small areas. It incorporates a hopper (a different hopper from those so far considered) and is carried behind the box, which can be used in this function for carrying spare seed. It is also powered from the vehicle. It is not ground-engaging.
30. The seventh accessory is a "vicon wagtail spreader". This is used to apply fertilizer and top dressing. The box cannot be carried on the vehicle when this accessory is used. It incorporates a hopper (again of a different design to the hoppers so far considered) and has a scattering mechanism, which is powered from the vehicle. It is adapted from equipment used in agriculture. It is not ground-engaging.
31. The eighth accessory is a large top-dresser ("top dresser ‘B’"). It has an axle with two wheels and incorporates a large hopper (again of a different design to those so far considered) and is specially designed for the spreading of powdered material within a precise area as wide as the vehicle. On a golf course it would be used on greens rather than fairways. It is powered from the vehicle and is coupled to it by the "fifth wheel coupling" for weight distribution over the three axles. It is, obviously, ground-engaging.
32. The ninth accessory is a smaller top-dresser ("top dresser ‘C’"). This accessory is carried on the vehicle (in place of the box). It is not ground-engaging.
33. The tenth accessory is a "slitter" mounted on the 3-point hitch assembly. Its function is to make slits in the turf – a similar function to coring. It is, obviously, ground engaging
34. The eleventh accessory is a "Ryan Quick Aerator". This machine can function as a slitter or a corer. It is hydraulically powered from the vehicle and is ground-engaging.
35. The rear box, described in the catalogue before us as "flatbed and dump boxes" is available in three varieties, two in steel and one in polyethelene. The boxes feature an automatic tailgate release and latch. When the hydraulically operated box is raised, the tailgate releases. The hydraulic power comes from the Turf Truckster. The box can thus be used for dumping.
36. As Mr. Comely explained – and we accept – a Turf Truckster is different from an agricultural tractor in that it does not have larger wheels at the back or a four wheel-drive. A tractor can operate with front as well as back accessories, whereas a Turf Truckster does not operate with front accessories. A tractor cannot use a "fifth wheel coupling" for spreading the load of the accessory over the axles of the tractor.
37. On the other hand the Turf Truckster has these similarities with an agricultural tractor: It has a ground-speed governor and a multiple-range gearbox which enables the vehicle to crawl (for some functions, for example, coring) or to go much faster for others (for other functions, for example, spraying) – in both cases at constant speeds.
38. In support of the Appellant’s contention that the Turf Truckster was a tractor rather than a truck for the transport of goods, Mr. Comely showed us details of the Appellant’s products which are – the parties agree – trucks for the transport of goods, branded as "Workhorse" and "Haulster". These vehicles are not adapted to power and operate with ground-engaging equipment. They have no ground-speed governor or multiple-range gearbox. This is because their function is load-carrying rather than the operation of accessories such as we have described.
39 The Turf Truckster is a much more expensive vehicle than either the Workhorse or the Haulster. We accept that a customer requiring a vehicle to transport goods would not be expected to buy a Turf Truckster rather than a Workhorse or Haulster because the Turf Truckster is twice to three times the price of the other vehicles and would not be as suitable for the transport of goods.
The legislation and prescribed aids for interpretation
43. We have cited above, in paragraphs 1 and 2, the competing headings (8704 31 91 00, 8704 21 91 00, 8701 90 11 00 and 8704) as they appear in the CN.
44. We turn now to the relevant Section Notes, Chapter Notes, GIRs, CENs and HSENs. We give here what we consider are the provisions relevant to our Decision.
45. The relevant Section Notes (Section XVII) applicable for the year 1999:
"3. References in Chapters 86 to 88 to ‘parts’ or ‘accessories’ do not apply to parts or accessories which are not suitable for use solely or principally with the articles of those chapters. A part or accessory which answers to a description in two or more of the headings of those chapters is to be classified under that heading which corresponds to the principal use of that part or accessory."
"Additional note 1. … tools and articles necessary for the maintenance or repair of vehicles, aircraft or vessels are to be classified with those vehicles, aircraft or vessels if presented with them. Other accessories presented with vehicles, aircraft or vessels are also to be classified therewith if they form part of the normal equipment of the vehicles, aircraft or vessels and are normally sold with them."
46. The relevant Chapter Notes applicable for the year 1999:
"Chapter 87: Vehicles other than railway or tramway rolling-stock, and parts and accessories thereof.
Note (2): For the purposes of this chapter, ‘tractors’ means vehicles constructed essentially for hauling or pushing another vehicle, appliance or load, whether or not they contain subsidiary provision for the transport, in connection with the main use of the tractor, of tools, seeds, fertilizers or other goods.
Machines and working tools designed for fitting to tractors of heading 8701 as interchangeable equipment remain classified in their respective headings even if presented with the tractor, and whether or not mounted on it."
47. The relevant GIRs applicable for the year 1999:
1. "…for legal purposes, classification shall be determined according to the headings and any relevant section or chapter notes …"
3. "When … goods are prima facie classifiable under two or more headings, classification shall be effected as follows :
(a) the heading which provides the most specific description shall be preferred to headings providing a more general description.
(b) …
(c) when goods cannot be classified by reference to 3 (a) … they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration."
6. "For legal purposes, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes and mutatis mutandis to the above rules, on the understanding that only subheadings at the same level are comparable. For the purposes of this rule the relative section and chapter notes also apply, unless the context otherwise requires."
(Thus GIR 6 extends the scope of the other GIRs to sub-heading (6-digit) level.)
48. The relevant CNENs applicable for 1999 in respect of Chapter 87 of the CN:
Heading notes:
" 8701 90 11 to 8701 90 50 Agricultural tractors (excluding pedestrian-controlled tractors) and forestry tractors, wheeledThese subheadings cover agricultural or forestry tractors having at least three wheels and obviously intended, given their construction and equipment, to be used for agricultural, horticultural or forestry purposes. Vehicles of this type only have a limited maximum speed (generally not more than 25 km per hour on the highway).
Agricultural tractors are generally equipped with a hydraulic device enabling agricultural machinery (harrows, ploughs, etc.) to be raised or lowered, a power take-off enabling the power to the engine to be used to operate other machines or implements, and a coupling device for trailers. They may also be fitted with a hydraulic device intended to operate handling equipment (hay loaders, manure loaders, etc.) when there may be considered to be accessories.
These subheading [ sic] also cover specially built agricultural tractors such as raised-chassis tractors (straddle tractors) used in vineyards and nurseries, and hill tractors and tool-carrying tractors.
Even if mounted on the tractor at the time of presentation, interchangeable agricultural equipment remains classified in its respective heading (heading No 8432, 8433, etc.).
A further feature of forestry tractors is the presence of a permanently attached winch enabling timber to be hauled.
In accordance with Note 2 to this chapter, tractors falling within these subheadings may also incorporate certain modifications enabling them, in line with their main purpose, to carry agricultural or forestry machinery, tools, fertilizers, seeds, etc.
These subheadings do not include lawnmowers (referred to as ride-on lawnmowers or garden tractors), fitted with a permanent cutting device and no more than one power take-off solely for the purpose of driving the cutting equipment (see the [CNENs] to heading No 8433)."
8704 Motor vehicles for transport of goods
This heading includes four-wheel drive, articulated chassis, all-terrain vehicles in which the front section houses a diesel engine and a cab fitted with controls. The rear section consists of a two-wheeled chassis, without equipment, but designed to be fitted with a variety of equipment.
This heading does not however include such vehicles when fitted with agricultural or other special purpose equipment (heading No 8705)."
49. The HSENs which we were shown come from a "Second edition (1996) reprinted with Amending Supplements Nos. 1 to 3". The relevant Notes are as follows:
" 87.01 – Tractors (other than tractors of heading No. 87.09)For the purposes of this heading, tractors means wheeled or track-laying vehicles constructed essentially for hauling or pushing another vehicle, appliance or load. They may contain subsidiary provision for the transport, in connection with the main use of the tractor, of tools, seeds, fertilisers or other goods, or provision for fitting with working tools as a subsidiary function.
The heading does not cover propelling bases specially designed, constructed or reinforced to form an integral part of a machine performing a function such as lifting, excavating, levelling, etc., even if the propelling base uses traction or propulsion for the execution of this function.
This heading covers tractors (other than tractors of the type used on railway station platforms, falling in heading 87.09) of various types (tractors for agricultural or forestry work, road tractors, heavy duty tractors for constructional work, winch tractors, etc.), whatever their mode of propulsion (internal combustion piston engine, electric motor, etc.). It also includes tractors which can be used both on rails and on road, but not those which are designed exclusively for use on rails.
The tractors of this heading are not fitted with coachwork although they may have seats for the crew or a driving cab. They may be equipped with a tool box, with provision for raising and lowering agricultural implements, with a coupling device for trailers or semi-trailers (e.g., on mechanical horses and similar tractive units), or with a power take-off for driving machines such as threshers and circular saws.
The chassis of a tractor may be mounted on wheels, on tracks or on a combination of wheels and tracks. In the last case, only the front steering axle is fitted with wheels.
…
This heading includes tractors fitted with winches (e.g., as used for hauling out bogged-down vehicles; for up-rooting and hauling trees; or for the remote haulage of agricultural implements).
The heading further includes straddle-type tractors (stilt tractors) used, for example, in vineyards and forestry plantations.
The heading also excludes motor breakdown lorries equipped with cranes, lifting tackle, winches, etc. (heading 87.05).
…
87.04 – Motor vehicles for the transport of goods
…
This heading covers in particular:
Ordinary lorries and vans (flat, tarpaulin-covered, closed, etc.); delivery trucks and vans of all kinds, removal vans; lorries with automatic discharging devices (Tipping lorries, etc.); tankers (whether or not fitted with pumps); refrigerated or insulated lorries; multi-floored lorries for the transport of acid in carboys, cylinders of butane, etc.; dropframe heavy-duty lorries with loading ramps for the transport of tanks, lifting or excavating machinery, electrical transformers, etc.; lorries specially constructed for the transport of fresh concrete, other than concrete-mixer lorries of heading 87.05; refuse collectors whether or not fitted with loading, compressing, damping, etc., devices.
This heading also covers:
i. Dumpers …
ii. Shuttle cars …
iii. Self-loading vehicles equipped with winches, elevating devices, etc., but designed essentially for transport purposes.
iv. Road-rail lorries …
…
87.09 – Works trucks, self-propelled, not fitted with lifting or handling equipment, of the type used in factories, warehouses, dock areas or airports for short distance transport of goods; tractors of the type used on railway station platforms; parts of the foregoing vehicles.
…
The main features common to the vehicles of this heading which generally distinguish them from the vehicles of heading 87.01, 87.03 or 87.04 may be summarised as follows:
(1) Their construction and, as a rule, their special design features, make them unsuitable for the transport of passengers or for the transport of goods by road or other public ways.
(2) Their top speed when laden is generally not more than 30 to 35 km/h.
(3) Their turning radius is approximately equal to the length of the vehicle itself.
Vehicles of this heading do not usually have a closed driving cab, the accommodation for the driver often being no more than a platform on which he stands to steer the vehicle. Certain types may be fitted with a protective frame, metal screen, etc., over the driver’s seat.
The vehicles of this heading may be pedestrian controlled.
Works trucks are self-propelled trucks for the transport of goods which are fitted with, for example, a platform container on which the goods are loaded.
Small tank trucks of a kind generally used in railway stations, whether or not fitted with subsidiary pumps, are also classified here.
Tractors of the type used on railway station platforms are designed primarily to or push other vehicles, e.g., small trailers. They do not themselves carry goods, and are generally lighter and less powerful than the tractors of heading 87.01. Tractors of this type may also be used on wharfs, in warehouses, etc."
The parties’ submissions
Our conclusions
65. We approach the issue which we have to decide, in relation to the Turf Trucksters, which are the actual vehicles in issue before us, in the first instance without regard to Regulation 799/1999. We then consider how our prima facie conclusion stands with that Regulation, and whether any consequential issues arise.
67. We reject the Appellant’s secondary and alternative submission (that heading 8709 applies) because in our judgment the Turf Trucksters cannot (on the evidence) fairly be described as works trucks of the type used in factories, warehouses, dock areas or airports for short distances for the transport of goods or tractors of the type used on railway station platforms. It is apparent from their nature, construction, design and purpose, that they are intended for turf maintenance – which is wholly different from any function performed in factories, warehouses, dock areas or airports, or on railway station platforms. They have a relatively large payload and are quite unlike tractors of the type used on railway station platforms, which, as the HSEN to heading 8709 points out, "do not themselves carry goods and are generally lighter and less powerful than the tractors of heading 8701".
68. We have considered whether the Turf Trucksters are prima facie classifiable under heading 8705 (Special purpose vehicles, other than those principally designed for the transport of persons or goods (for example … spraying lorries …)). This was not a classification which either party had submitted was appropriate. We notice that it expressly includes "spraying lorries" – amplified by the applicable HSEN as "spraying lorries of all kinds … for agricultural use, etc." – but we rejected the classification as a special purpose vehicle (spraying lorry) because it requires that the apparatus enabling the vehicle to perform its special purpose must be built-in. Whereas the Turf Trucksters can, in a number of their functions, operate as spraying lorries, the spraying apparatus is, as we have explained, not built in, and it would be incorrect to say that the Turf Trucksters are equipped or fitted with it or with any other apparatus that would render them vehicles specially constructed or adapted to enable them to perform non-transport functions (to quote the HSEN).
69. Nonetheless we found the implication in the CN heading for classification 8705 informative and helpful in this respect: a spraying lorry is clearly regarded for the purposes of the CN as a vehicle which is not "principally designed for the transport of persons or goods".
73. The CNEN to heading 8701 tells us that agricultural or forestry tractors cover vehicles "obviously intended, given their construction and equipment, to be used for agricultural, horticultural or forestry purposes". It also says that the subheading covers "specially built agricultural tractors such as raised-chassis tractors (straddle tractors) used in vineyards and nurseries, and hill tractors and tool-carrying tractors". It includes a specific exclusion for "lawnmowers (referred to as ride-on lawnmowers or garden tractors), fitted with a permanent cutting device" etc. The HSEN to heading 8701 is to similar effect. From this we conclude that the use of the Turf Trucksters in this case for turf maintenance on golf courses and sports grounds does not disqualify them from being agricultural tractors within heading 8701.
74. We derive from Note (2) to Chapter 87 that a tractor within heading 8701 must be constructed essentially for hauling etc. Also, any provision contained by the tractor for the transport of goods must be subsidiary to its main use.
76. As to heading 8704, we note from the HSEN to that heading that motor vehicles for the transport of goods covers self-loading vehicles equipped with winches, elevating devices, etc. ( i.e. special purpose equipment) "but designed essentially for transport purposes". This dovetails with the content of heading 8705 (special purpose vehicles, other than those principally designed for the transport of persons or goods) – although we notice the contrast between the word "essentially" and the word "principally". We conclude that vehicles for the transport of goods within heading 8704 are vehicles designed "essentially" or "principally" for the transport of goods.
78. Also (as we have noted above) a spraying lorry is clearly regarded for the purposes of the CN as a vehicle which is not "principally designed for the transport of persons or goods". It would therefore be illogical to conclude that the Turf Trucksters were vehicles for the transport of goods by reference to the contents (fertilizer, seed, etc.) of the accessories which are not ground-engaging and are therefore carried by the Turf Trucksters.
79. It follows that the Turf Trucksters can only be vehicles for the transport of goods, within heading 8704, if they are designed essentially or principally for the transport of the accessories which are not ground-engaging – including the rear box – or if they are designed essentially or principally for the transport of other goods which may be transported in the rear box. Mr. Collins’s submissions emphasised that the Turf Trucksters were designed essentially for the transport of non-ground-engaging attachments, while we read the decision letters appealed against (written by Mrs. Chamberlain) as emphasising that the Turf Trucksters "are designed to carry heavy loads on a rear boxed section" – see ibid. at paragraph 5.
82. We have noted that CN heading 8704 specifically excludes vehicles when fitted with agricultural or other special purpose equipment – such vehicles are classified under heading 8705 – and that vehicles within heading 8705 include spraying lorries. It follows that if the carried accessories (or any of them) had been fitted to the Turf Trucksters, instead of being attachable to them as and when required (to increase the versatility of the Turf Trucksters), they would be expressly not classifiable as vehicles for the transport of goods, but instead would be classifiable as special purpose motor vehicles. The import of Mr. Collins’s submission (that the main use of the Turf Trucksters is for the transport of the carried accessories) is that the mere fact that the carried accessories are not permanently fitted renders the Turf Trucksters not special purpose vehicles, but vehicles for the transport of goods, and the goods in question are those very accessories. In this regard, Mr. Collins’s submission is inconsistent with the everyday reality that accessories of this kind become effectively part of the vehicle as and when they are fitted to it, a reality which, it seems to us, we are not required to ignore by the scheme of the CN.
83. In our judgment it follows from our conclusion that the carriage of non-ground-engaging accessories is neither hauling nor the transport of goods that construction essentially for hauling and main use for the transport of goods are not direct alternatives. There is a third possibility (leading to classification under heading 8705 90 90 as per paragraph 70 above) – if we were to find that the Turf Trucksters are designed and constructed essentially for the carriage of non-ground-engaging accessories and not essentially for hauling – that they are special purpose vehicles neither constructed essentially for hauling nor to be used mainly for the transport of goods.
91. We reject Mr. Collins’s submission that the ground-engaging accessories are not hauled because their weight is born by the Turf Truckster and not by the accessories themselves (particularly where the "fifth wheel coupling" mechanism is used). The ground-engaging accessories (except, possibly, the "enviro-jet") bear some of their own weight. The fact that some of it is transferred to the Turf Truckster does not negate the proposition that the accessories are being hauled by the Turf Truckster.
95. In our judgment, the significant extent to which the Turf Trucksters are intended (given their construction and equipment) for hauling demonstrates that they are constructed essentially for hauling. We answer Mr. Collins’s rhetorical question (see paragraph 62) that Turf Trucksters are "really constructed" for both hauling accessories and carrying accessories. We conclude that it is of the essence of their construction that they should both haul and carry accessories – i.e. they are constructed "essentially" both for hauling and for carrying accessories. Both capabilities are essential attributes of their construction. The Turf Trucksters therefore satisfy the first condition in Note (2) to Chapter 87 – that a tractor within heading 8701 must be constructed essentially for hauling etc.
98. Turf Trucksters are constructed and used for turf management: i.e. so that with the various interchangeable accessories fitted to them as required from time to time, fertilizers, chemicals, seeds and so forth, can be applied to the turf as part of the turf management process (or goods carried in the rear box). It is incidental to that use (and not a purpose of it) that the accessories are carried, and we imagine that often they are not in any real sense carried from one place to another because they are brought back after use to be dismantled from the Turf Truckster at the same place where they were installed on it.
100. In terms of Note (2) to Chapter 87 and headings 8701 and 8704, we have to decide whether the availability of the rear box has the result that the Turf Trucksters either are vehicles for the transport of goods or, if they are otherwise prima facie tractors, they nevertheless contain provision for the transport of goods which is not "subsidiary provision … in connection with [their] main use" otherwise than for the transport of goods.
101. On the evidence, we have concluded that the availability of the rear box (with the facility of using it for the transport of goods) is not sufficiently significant to render the main use of the Turf Trucksters a use for the transport of goods. It does not detract from our conclusion that the Turf Trucksters are vehicles constructed essentially both for hauling some accessories and carrying others in the performance of turf management functions.
102. Use of the rear box for the transport of goods otherwise than as a subsidiary use in connection with their main use in turf management (although possible) is not a use for which Turf Trucksters are intended, having regard to their objective characteristics and properties. In reaching this conclusion we find persuasive the evidence that the Appellants’ Haulster and Workhorse vehicles are available at far lower prices (because they are less specialised vehicles) and – in their more powerful specifications at least – provide for similar load capacity to the Turf Trucksters.
103. Also, the fact that the rear box is not fitted to a Turf Truckster has the result that the vehicle itself does not contain any provision for the transport of goods. Only a fitted box could constitute subsidiary (or other) provision of this kind.
104. For these reasons we conclude that Turf Trucksters are correctly classified as tractors under heading 8701 and not as vehicles for the transport of goods under heading 8704.
105. We now consider how our conclusion stands with regard to Regulation 799/1999.
106. The description of the relevant item in the Regulation is of a vehicle which has "an open load area with the approximate dimensions of 1.2 m (length) x 1.4 m (width)", which "has tilting hydraulics".
107. It seems to us therefore that the goods referred to in the Regulation were fitted with a load area, similar to the rear box in this case. But the box in this case is not fitted to the Turf Truckster. That is a significant difference.
108. The reasons given in the Regulation for the classification (8704) accorded to the item, stated that the Commission has determined that the vehicle was "not essentially designed for hauling or pushing another vehicle, appliance or load" (despite the fact that it had a device for towing trailers and a power take-off). We comment below (at paragraph 112) on the language used in the reasons.
109. In our judgment the presence of the rear box as a fitting to the vehicle in the case considered by the Commission has the consequence that that vehicle and the Turf Trucksters in this case are so materially different that the Regulation is not engaged in this case. It does not affect the conclusion which we have come to above, that the Turf Trucksters are properly classified as tractors under heading 8701.
110. We can well see that a vehicle with a device for towing trailers and a power take-off but also with a fitted load area could be a vehicle obviously intended, given its construction and equipment (including the load area), to be a vehicle for the transport of goods and not a vehicle essentially designed for hauling or pushing another vehicle, appliance or load.
111. Therefore we have concluded that the Regulation does not affect our conclusion that the Turf Trucksters are properly classified under heading 8701.
112. If we had concluded otherwise, we would have had to consider further the question of whether or not the Regulation was valid. In this regard we have noted that the language used in the Commission’s reasons [ "vehicles … essentially designed for hauling" etc. – see paragraph 108 above], evidently to state why the Commission did not classify the vehicle under heading 8701, does not follow the language of the definition of ‘tractors’ in Note (2) to Chapter 87, viz: "vehicles constructed essentially for hauling" etc. At the conclusion of the oral hearing, we invited Miss Haynes and Mr. Collins to refer us to the authorities as to the course we should take if we had concluded that the Regulation was engaged in this case and we had any doubts as to its validity. They referred us to the decisions of the European Court of Justice in Foto-Frost v Hauptzollamt Lübeck-Ost (Case 314/85 [1987] ECR 4199) and Cabletron Systems Ltd. v Revenue Commissioners (Case 1638/94) (Judgment delivered on 10 th May 2001) from which it appears (as both Counsel submitted) that, in such hypothetical circumstances, we would have been obliged to refer this case to the Court of Justice. However, as we have explained, we have reached the conclusion that the Regulation is not engaged in this case.
113. The appeal is therefore allowed.
114. Miss Haynes applied for an order for costs, in the event that the appeal was successful. We direct the Commissioners to pay to the Appellant its costs of and incidental to and consequent upon the Appeal, such costs to be taxed if not agreed.
JOHN WALTERS QC
CHAIRMAN
RELEASED:
LON/01/7040-JAC.WAL