United Kingdom VAT & Duties Tribunals (Customs) Decisions

Fusion foods Int Ltd v Customs & Excise [2003] UKVAT(Customs) C00181 (18 August 2003)

CUSTOMS DUTIES — tariff classification — chicken breasts with added salt — whether added salt in excess of 1.2% by weight — reliability of analyses — one appeal allowed, in other direction for further analysis

CUSTOMS DUTIES — BTI — whether frozen chicken breasts with added salt to be regarded as frozen chicken within heading 0207 or meat, salted or in brine within heading 0210 — Council Regulations 2658/87 EEC, 2913/92 EEC — Commission Regulation 1223/2002 — whether latter overrides former — no — appeal allowed

MANCHESTER TRIBUNAL CENTRE

FUSION FOODS INTERNATIONAL LIMITED

Appellant

- and -THE COMMISSIONERS OF CUSTOMS AND EXCISE

Respondents

Tribunal: Colin Bishopp (Chairman)

Peter Whitehead

Sitting in public in Manchester on 2 and 3 July 2003

Robert Jenkins, customs consultant, for the Appellant

Jonathan Cannan of counsel instructed by the Solicitor for the Customs and Excise for the Respondents

© CROWN COPYRIGHT 2003


 


DECISION

1. Fusion Foods International Limited ("Fusion Foods") is an importer of food products. The products with which we are concerned in these appeals are chicken breasts imported from Thailand. A consignment of such breasts which arrived in the United Kingdom on 21 August 2001 was declared by the appellant under tariff heading 0210. a second consignment arrived on 8 October 2001 and that too was declared under heading 0210. Samples of each consignment were taken by the respondents for analysis. In the light of the results of those analyses, the respondents concluded that the goods should have been declared under heading 0207, which attracts a higher rate of duty than heading 0210. Post-clearance demands for the difference the duty paid by Fusion Foods, on the strength of its declarations, and the amount which the respondents consider to be due were raised. The first two of the appeals are against those post-clearance demands, for £5,836.70 and £11,561.31 respectively.
2. The third appeal is against the Commissioners' decision, given in the form of a Binding Tariff Information ("BTI") of 21 August 2002, that chicken breast fillets similar, though not identical, to those included in the two consignments are proper to commodity code 02071410 00; Fusion Foods maintains that the correct code is 02100929 90. Since all three appeals relate to essentially the same product, and raise similar issues, it was directed that they be consolidated. We add for completeness that the parties have complied with all the relevant requirements in respect of reviews of the disputed decisions.
3. The chicken products are produced in Thailand by a company, C P Group, which is an international trading organisation based in the Far East from which Fusion Foods has bought all its supplies for some years. The breasts, after removal from the chicken carcase, have salt added to them by means of a "tumbling" process, in which they are exposed to dry salt which they absorb in a way which distributes the salt uniformly within them. Robert Miller, the appellant's managing director, produced the product specification which stipulates that the salt content of the finished breasts within the two consignments was to be 1.2% by weight; in his evidence he told us that the purpose was in part to enhance the flavour of an otherwise bland product, and in part to improve the breasts' ability to retain moisture. After the salt has been added, he said, the breasts are frozen, sometimes individually and sometimes in 6 kg or 10 kg blocks, then bagged and placed in large cardboard boxes for shipment to the United Kingdom, where they are used in the manufacture of ready meals.

The post-clearance demand appeals

4. We will return to the detail of the tariff classification when we deal with the third of the appeals; it is sufficient at this point to state that in 2001, when the two consignments arrived, the Commissioners accepted that chicken breasts with a salt content of not less than 1.2% by weight could properly be declared under tariff heading 0210 attracting, in the case of poultry meat, duty of 15.4%, rather than under heading 0207, which imposed duty of €60.20 per 100 kg — Mr Miller told us that this amounted to nearly 100%. The Commissioners' analyses, to which we have referred, revealed that the chicken in the two consignments contained only 0.6% and 0.7% of salt respectively.
5. Extensive evidence was given by Chanchai Waimaleongora-ek, the Assistant Vice-President of C P Group responsible for its analytical laboratory; by Carol Baldock, a tariff classification consultant at the laboratory of the Government Chemist, which carried out the analysis of the first consignment; by Rachael Pither, who performs a similar function at Campden & Chorleywood Food Research Association, where the second analysis was performed; and from John Cowles, a chartered chemist, who gave evidence about the accuracy, reliability and other features of the different methods of analysis used by the three laboratories. Interesting though it was, much of this evidence lost its value when it emerged, as the documentation in the bundle produced by the respondents for the hearing was examined, that the first analysis had, by some mishap, been carried out not on Fusion Foods' goods, but on a consignment intended for a well-known fast food chain.
6. After the overnight adjournment Jonathan Cannan, counsel for the respondents, told us that he could not seek to uphold the first of the post-clearance demands, and he invited us to allow the appeal against it, which we do. We proceeded at that stage to hear Mrs Pither's evidence about the second analysis; although the analysis may have yielded the right result, there were some concerns about the quality of the sample, which arrived at the laboratory in a partly defrosted condition. Having heard Mrs Pither, we think it probable that the result of the analysis was not affected, but the concerns cannot be completely dispelled. There were, however, also some concerns about the rigour of the analyses carried out by Dr Waimaleongora-ek's laboratory, though those concerns may have been induced by poor translation rather than any true failing. Nevertheless, we had a conflict: for the appellant, the evidence was that the "tumbling" was effective, that proper quality control checks were carried out on a regular basis, that product specifications were respected and that there was nothing to be gained by adding too little salt since it is a very cheap commodity; for the respondents, that the analysis revealed a considerable, rather than merely marginal, shortage of salt from the claimed 1.2%.
7. We do not, however, need to resolve that conflict. Mr Cannan did not call the officer who carried out the review of the post-clearance demands and decided to uphold them, David Ketley, but told us that Mr Ketley had been influenced, in reaching his conclusion, by the fact that the two analyses had yielded very similar results. Since the first analysis must now be discarded, and there was a challenge to the validity of the second, it must follow that his decision should be reconsidered. Fortunately a second sample from the first consignment is still held by the Commissioners, in cold storage, and the parties agreed that the most appropriate course was that they should agree together upon a laboratory which would analyse that sample and that they should be bound by the outcome, providing only that the laboratory certified that the sample remained in a condition which allowed of accurate analysis. If the salt content is shown to be at least 1.2% by weight, the second appeal is to be allowed; if less, it is to be dismissed. That seemed to us to be a sensible, pragmatic course. We set out our directions for implementing it at the end of this decision.

The BTI appeal

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