United Kingdom VAT & Duties Tribunals (Customs) Decisions

Hutchinson v Customs and Excise [2003] UKVAT(Customs) C00175_2 (11 April 2003)

C00175

Classification of garments – Whether pyjamas or T-shirts and trousers – Objective characteristics are those of pyjamas – Unsuitable for general wear – Not obviously for men or for women – Held women's or girls' pyjamas – Appeal allowed

LONDON TRIBUNAL CENTRE

MRS DIANE HUTCHINSON Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: JUDITH POWELL (Chairman)

PRAFUL DAVDA FCA

CAROINE de ALBUQUERQUE

Sitting in public in London on 1 October 2002

Mrs Cambell Rose, employee, for the Appellant

Mr Owain Thomas, counsel, instructed by the Solicitor for the Customs and Excise, for the Respondents

© CROWN COPYRIGHT 2003


 


DECISION

Introduction

1. This appeal concerns the proper classification of garments imported from India.
2. The disputed decision of the Commissioners is contained in their letter, dated 30 August 2001, in which goods were classified for the purposes of Customs duty. An appeal lies to this Tribunal by virtue of section 16 Finance Act 1994.
3. The Appellant imported goods on 11 July 2001. The entry details on the declaration forms stated that the goods were classified under heading 61.08 of the combined nomenclature of the Customs' tariff. The invoice described the goods as pyjamas. The Respondents examined the goods and classified the upper garments as T-shirts under heading 61.09 and the lower garments as trousers under heading 61.04.
4. The combined nomenclature provides the legal basis for the Community's tariff. It is designed to ensure that, with the aid of the General Rules of Interpretation, any product falls into a single classification. There are also explanatory notes to the harmonised system. Although these notes are not legally binding they have consistently been held by the European Court of Justice to be highly persuasive.
5. In order to be classified as pyjamas, garments must meet the criteria of the explanatory notes to the combined nomenclature which, for commodity codes 610831 10 to 610839 00 state:-

"Night Dresses and Pyjamas

These sub-headings include women's or girls pyjamas, knitted or crocheted, which - by their general appearance and nature of the fabric - are identifiable as intended for wear exclusively or mainly as nightwear.

Pyjamas consist of two garments, namely:-

- a garment intended to cover the upper part of the body, generally a jacket type garment or pullover or similar type of garment;

- a garment consisting of trousers or shorts of simple cut, whether or not with an opening.

The components of these pyjamas must be of corresponding or compatible size and of matching cut, constituent fabric, colours, decorations and a degree of finish to show clearly that they are designed to be worn together by one person.

Pyjamas must be identifiable as being comfortable for wear as nightwear by:-

- the nature of the fabric;

- their generally loose fitting cut; and

- the absence of uncomfortable features such as large or bulky buttons and excessive applied decorations.

Sets of garments known as "baby dolls" which consist of a very short nightdress and matching briefs are also considered to be pyjamas.

One piece nightwear of the overall type covering both the upper part and the lower part of the body and enveloping each leg separately are classified in sub-headings 610891 10 to 610899 90."

6. The Respondents say that the upper garments should have been classified as T-shirts under heading 61.09 and meet the requirements of the explanatory notes to the harmonised system for that heading which states "the term "T-shirts" means light weight knitted or crocheted garments of the vest type, of cotton or manmade fibre, not napped, nor of pile or terry fabric in one or more colours, with or without pockets, with long or short close fitting sleeves, without buttons or other fastenings, without collar, without opening in the neckline, having a close fitting or lower neckline (round, square, boat shaped or V shaped). These garments may have decoration other than lace, in the form of advertising, pictures or an inscription in words, obtained by printing, knitting or other process. The bottom of these garments is usually hemmed".

The lower garments, say the Respondents, should have been classified as pairs of knitted unisex trousers under heading 61.04 "Women's or girls suits, ensembles, jackets, blazers, dresses, skirts, divided skirts, trousers, bib and brace overalls, britches and shorts (other than swimwear) knitted or crocheted" and to sub-heading 610462 "trousers, bib and brace overalls, britches and shorts; of cotton".

Submissions

7. The Respondents contend and it was generally accepted that the garments could not be classified as "ensembles".
8. Further, the Respondents say that the upper and lower garments are not of the same colour – the upper garments are each of two colours and the lower garments are each of a single colour; the single colour of the lower garment corresponding to one of the colours of the upper garments.
9. The Appellant submits that it does not intend to import outer wear garments and that in all files and correspondence the goods have always been classed as "pyjama sets". The Respondents say that the question of what the Appellant intended to import is not relevant. The correct classification must be determined upon the objective characteristics of what the Appellant did in fact import.
10. The Appellant maintains that the garments each have a care label attached which states a fire warning and this has to be put into any nightwear for fire regulations on nightwear. The Respondents say that the presence of a fire hazard warning is irrelevant, and that it is indicative only of a requirement for that garment to comply with domestic health and safety regulations in relation to fire warnings in textile garments of various kinds. They also say that those regulations have very different purposes from regulations adopted by the commission for classification of goods imported into the community, and are likely to be of wide ambit whereas a classification is arrived at by selecting one and only one classification for a particular product by reference to strict interpretive rules. The fact that some person considered it was required to insert a warning is not a relevant matter.
11. The Appellant says that the garments are plainly pyjamas; they are not obviously suitable for alternative use. Mr Thomas agreed that the garments were comfortable garments and lacked any features which would have prevented them from being nightwear. However, he submitted this is not good enough to meet other requirements; the garments must also satisfy the strict test of whether the objective characteristics are such as to be intended for wear exclusively or mainly as nightwear. Although each garment was light and made of 100% cotton, the constituent fabric being cotton is not necessarily conclusive that it was nightwear. In Mr Thomas' submission, the garments were not so flimsy as to be unsuitable for outdoor wear, they were not translucent and they were of sound constitution. The upper garment certainly fulfilled the definition of a T-Shirt and the lower garment fulfils the requirement for trousers which is not very closely defined. Mr Thomas pointed out that the garments have to be classified at the port and although the case of Weiner (see below) does support the contention that developments in fashion in the Member State concerned can be taken into account, it would be impossible at the time of import to review the market; in any event the Appellants did not bring forward evidence of current developments in fashion in this Member State that would point to the garments being classified as pyjamas.
12. Finally, Mr Thomas made reference to the recent Tribunal decision in the case of Cotton & Steel Exports Limited -v- The Commissioners of Customs and Excise, which he explained he had not yet had a full opportunity to consider. His preliminary submission about that decision was that, in particular, paragraph 19 of the decision introduced uncertainty and was wrong insofar as it suggests that where something could be used for either of two purposes with equal facility, that necessarily precludes one of those purposes from being the main one. In Mr Thomas' submission, the correct test is the objective test whether, by reason of the objective characteristics of the garments, they are identifiable as intended for wear exclusively or mainly as nightwear, and that if something is equally capable of being worn elsewhere it is not mainly capable of being worn as nightwear. In his view, the correct, objective approach was set out in paragraph 20 of the decision.
13. Mr Thomas drew to our attention several Commission regulations. These were regulations giving effect to commission decisions relating to the classification of garments as pyjamas or other nightwear. For example, a garment described as a straight cut, light weight, loose fitting knitted garment of one colour going down to mid length with short sleeves with a decorative motif and the imprint "Goodnight" printed on the front, was excluded from classification as a nightdress because the garment in question, by reason of its objective characteristics, might be worn equally in bed and elsewhere and therefore, is not intended to be worn exclusively or essentially as nightwear. A garment with a stitched inscription "Sleepwear" and other embroideries on the front was also excluded from classification as a nightwear for the same reasons.
14. Recognising the similarity between the Cotton & Steel case and the case presently under appeal, Mr Thomas felt that he may require time to make further submissions to the Tribunal and the Tribunal agreed that he might have a further 30 days to do so but on the basis that if he did not do so, the Tribunal would proceed to reach a decision on the evidence presented to them at the hearing. There have now been further submissions from Mr Thomas.

Mr Thomas' further submissions are:-

(a) Cotton and Steel Exports Ltd was not correctly decided upon its own facts; it is not, therefore, likely to be of assistance to this Tribunal. Importantly, the basis for determination is not an estimate or opinion of how a garment will be worn according to the intentions of the customer but on the contrary "by reason of its objective characteristics", and this does not support the Tribunal's construction of the explanatory note at paragraph 19 of their decision – when they say "the main or exclusive use to which it is intended a type of garment will in fact be put, is that of nightwear and the fact that that type of garment could just as easily be used for other purposes will be irrelevant as long as it will be used mainly for nightwear". In Mr Thomas' submission the correct classification is not dependent on a determination of the use to which goods will be put. Still less is it dependent, in his view, on the extent to which the goods will be put to one use rather than to another use.

(b) In his submission the correct classification is dependent upon the objective characteristics of the goods which must be looked at to decide whether the goods are "identifiable as intended for wear – mainly as nightwear". In Mr Thomas' submission this does not depend on how a garment will be used at all and instead concentrates on characteristics of the goods which are then to be identified for wear mainly as nightwear. He contends that goods which will probably be put to use mainly as nightwear but which are not identifiable (on the basis of appearance or fabric) as intended for such use will be excluded form categorisation whereas he suggests that, if the Tribunal's reasoning in Cotton and Steel Exports Ltd is adopted, such goods would be included. Finally he submits that what must be pointed to are characteristics which are inconsistent with goods being worn elsewhere.

In fact Mr Thomas' submission did not cause us to alter the views we had already reached; it is not necessary to comment upon what he says in relation to the Cotton and Steel Exports Ltd case at all; the characteristics we concentrated on being in our view quite plainly inconsistent with use other than as nightwear.

Facts

15. The Tribunal was shown examples of the garments. All the goods are garments of a knitted 100% cotton fabric. The upper body garment is round necked and of two colours. It is of a pullover type with long sleeves that have ribbing at the neck and sleeve ends, hemmed at the base, with varying printed motifs on the front. There are no buttons or fastenings and the printed motifs are neither raised nor do they have elaborate decoration. The lower body garment is of a single colour which appears to be intended to reach down to the ankles. It has an elasticated waist and is hemmed at the leg ends. The fabric was thin; held up to the light, it was certainly not opaque. The waist of the lower body garment has no means of adjustment.
16. We heard evidence from Mrs Linda Mary Chandler, the author of the letter dated 30 August 2001 which contains the disputed decision.
17. With the exception of one sentence, that is the last sentence of paragraph 10 found on page 4 of the letter of 30 August 2001, Mrs Chandler confirmed that she did not wish to change anything contained in that letter.
18. Mrs Chandlers explained that she classified the upper garment as a T-shirt on the basis that she felt it met that description as set out within heading 61.09; it had a hemmed rather than cuffed end. It was not obviously suitable only for boys rather than for girls. The lower garment was equally not obviously designed for boys; there was no opening in the trousers and the cut was not different from the garment described as suitable for girls in the same consignment. In her opinion, both of the two garments could equally be worn as leisure wear and might be worn together or separately. They did not satisfy the test of being exclusively or mainly intended as nightwear.
19. Mrs Chandler said (for her) the decisive factor was whether the two garments together were exclusively or mainly intended as nightwear. In deciding this, she took into account the colour, transparent or opaque qualities, and the whole general appearance. She pointed out that any lower garment without an opening is always classified as a unisex or girl's garment. Even, therefore, if the garments taken together had been classified as nightwear they would have been classified as girl's garments.
20. Whilst she agreed that the garments could be worn together as pyjamas, she maintained that they were not identifiable as intended for wear exclusively or mainly as nightwear as set out in the explanatory notes to the combined nomenclature.
21. Mrs Campbell Rose, for the Appellant told us that the company was a nightwear company and imported garments as such. She also explained more about the background to the dispute. She made it clear that the Appellant was not concerned about the rate of duty payable under the various classifications but more about the holding of the correct licence. In any event if they were intended to be sold as T-shirts a different purchase pattern would be required since the goods were imported for distribution to nightwear departments of the retail outlets. Even though the lower garments had no opening she felt they were a more suitable colour and design to be worn by boys although she accepted that girls would wear the garments – particularly if they were "tomboys".

Sources

22. In the case of Bioforce Gmbh Hamlin Electronics (C-338/90) it was decided that goods must be classified according to their objective characteristics.
23. Further, in the case of Bioforce Gmbh (Case C-177/91) it was decided that "to allow presentation of a product in itself to be decisive for its tariff classification might cause a product to be covered by a Customs heading merely on the grounds of a special presentation, even though its objective properties did not correspond to the criteria laid down in the relevant heading. That would conflict with the legal certainty and might lead to arbitrary discrimination."
24. In his submissions for the Respondents, Mr Thomas referred the Tribunal to the case of Wiener S.I. Gmbhv Hauptzollamt Emmerich and in particular to the following words of that judgement as follows:-

"Finally, it remains to point out that it is, in any event, for the national Court, within the context of the dispute before it, to determine, in the light of the cut of the garments, their composition and presentation, and developments in fashion within the member state concerned, whether those garments do have such objective characteristics or whether, on the contrary, they may be worn equally in bed and elsewhere."

This refined the conclusion of the earlier case of Neckermann Versanda -v- Hauptzollamt Frankfurt am Main Ost.

In that case two questions had been raised:-

"1. Is heading 61.08 the combined nomenclature to be interpreted to the effect that only sets of two knitted garments which, according to their outward appearance, are to be worn exclusively in bed must be considered to be pyjamas?

2. If question 1 is answered in the negative:-

Is it sufficient, in order for garments of the type mentioned to be classified as pyjamas, … that according to the generally accepted view in trade in the member state concerned at the times of Customs clearance, the goods in question may in addition to other uses, also be worn in bed?"

In answer to the first question, the following was said:-

"The wording of heading 61.08 of the common Customs tariff… does not provide a definition… In the absence of such of such a definition, the objective characteristics of Pyjamas, which is capable of distinguishing it from other ensembles, can be sought only in the use for which pyjamas are intended, that is to say to be worn in bed as nightwear. If that objective characteristic can be established at the times of customs clearance, the fact that it may be possible to envisage another use for the garments will not preclude them from being classified for legal purposes as pyjamas. It follows that, for a garment to be classified as pyjamas for customs' purposes, it does not have to be solely or exclusively meant to be worn in bed. It suffices if that is the main use for which it is intended. … The answer to the first question submitted must therefore be that heading 61.08 of the combined nomenclature … must be interpreted as meaning that not only sets of two knitted garments which according to their outwards appearance, are to be worn exclusively in bed but also sets used mainly for that purpose must be considered to be pyjamas."

In considering the second question the following was said:-

"The answer to the second question submitted must therefore be that the fact that it is also possible to wear in bed a set of two knitted garments according to the generally accepted practice in the State concerned at the time of customs' clearance is not sufficient for it to be classified as pyjamas."

Conclusions

25. We recognise that the garments must be classified under a heading according to their objective characteristics. We also note that, in considering those characteristics, garments must meet the criteria of the classification found in the explanatory notes to the combined nomenclature. In relation to pyjamas, the opening words are important where they say "these sub-headings include women's or girls' pyjamas, knitted or crocheted, which – by their general appearance and nature of the fabric – are identifiable as intended for wear exclusively or mainly as nightwear."
26. We accept the garments cannot be identified as either men's or boys garments or as women's or girls garments; accordingly they are to be classified in the headings covering women's or girls garments.
27. The main question remains whether the garments in question by their general appearance and nature of the fabric are identifiable as intended for wear exclusively or mainly as nightwear. Applying those considerations we have concluded that the garments in question are pyjamas.
28. Whilst we do not rule out the possibility that they might be worn as "play suits" as contended by Mrs Chandler, we do not believe that their characteristics are consistent with use as such. The fabric is thin; it would not stand up to much "play" by the normal younger child without ripping or wearing into holes very quickly – particularly at the knees and elbows. The fabric, while not transparent, was not completely opaque and underwear would be clearly visible particularly in the case of the lower garment, so that it is not suitable to be worn in public.
29. None of the garments we saw had a sleep related motif; Mr Thomas argued that whilst on the one hand not even a motif of this type was conclusive that a garment was part of a pyjama set, the absence of such a motif pointed strongly to the fact it was not. We do not accept that. We believe that such a motif is irrelevant on its own to determine the correct classification.
30. Having listened to the submissions of Mr Thomas (including his further submissions) and having considered the relevant cases, we come back to our original impression upon seeing the garments; it was our original impression of the garments that their characteristics are only consistent with those of pyjamas. In our opinion, the objective characteristics of these garments identify them clearly as intended for wear mainly as nightwear. We would not go so far as to say they could only be worn as nightwear because we cannot rule out the possibility that they might be purchased as play suits; but our view of the use to which they might be put is irrelevant – as indeed is the view of Mrs Chandler who clearly thought that they might be used as play suits. Indeed they might – but, as Mr Thomas submitted, that is not the correct test; indeed their characteristics are inconsistent with such use.
31. Accordingly we allow the appeal. We believe that the goods are to be classified as women or girls pyjamas under heading 61.08, because we do accept that they cannot be identified as either men's or boys' garments or as women's or girls'.
32. Mrs Campbell Rose did not seek costs and so we make no order as to costs.

JUDITH POWELL

CHAIRMAN

RELEASED DATE: 11 April 2003

LON/01/7090