United Kingdom VAT & Duties Tribunals (Customs) Decisions

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URL: http://www.bailii.org/uk/cases/UKVAT/Customs/2006/C00221.html
Cite as: [2006] UKVAT(Customs) C00221, [2006] UKVAT(Customs) C221

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Primafruit Ltd v Revenue & Customs [2006] UKVAT(Customs) C00221 (22 August 2006)

Primafruit Ltd v Revenue & Customs [2006] UKVAT(Customs) C00221 (22 August 2006)

C0221

Customs Duty – Importation of grapes from Chile – Whether relevant documents received before quota exhausted – Article 889 of Commission Regulation 2454/93 applied – No evidence from Appellant beyond a certificate of posting – Appeal dismissed

LONDON TRIBUNAL CENTRE

PRIMAFRUIT LTD Appellant

and –

THE COMMISSIONERS FOR HER MAJESTY'S REVENUE & CUSTOMS Respondents

Tribunal: MISS J C GORT (Chairman)

MR P DAVDA

Sitting in public in London on 17 July 2006

Mr M Parr, agent of Perishable Movements Ltd, for the Appellant

Dr I Hutton, counsel, for the Respondents

© CROWN COPYRIGHT 2006


 


DECISION

1. The decision under appeal is a formal departmental review dated 29 November 2005. The Commissioners upheld on review a decision of the National Duty Repayment Centre ("NDRC") dated 22 September 2005 by which an application dated 1 March 2005 for a refund or remission of import duties totalling £32,964.89 was rejected.
2. The Appellant is an importer of, inter alia, grapes from Chile into the UK. Between 5 January and 3 February 2005 the Appellant imported eleven consignments of grapes from Chile. When an importer wishes to take advantage of a reduced zero-rated import duty that is available because of the availability of a tariff quota he must complete Box 39 of Form C88. The Appellant had not completed Box 39 on this occasion. However, he had completed Box 44 which indicated that a special valuation method was being used to calculate the amount of duty to be paid.
3. In the event of a failure to complete Box 39 on entry at the time of importation, an importer is not prevented from making a belated claim to tariff quota. The rules for such a claim are set out in article 889 of Commission Regulation 2454/93 (the Customs Code Implementing Provisions) which provides:

"1. Where the request for repayment or remission is based on the existence, at the time when the declaration of release for free circulation was accepted, of a reduced or zero-rate of import duty on the goods under a tariff quota, a tariff ceiling or other preferential tariff arrangements, repayment or remission shall be granted only on condition that, at the time of lodging the application for repayment or remission accompanied by the necessary documents:

in the case of a tariff quota, its volume has not been exhausted,

in other cases, a rate of duty normally due has not been re-established.

If the conditions laid down in the preceding paragraph are not fulfilled, repayment or remission shall nevertheless be granted where the failure to apply the reduced or zero-rate of duty to the goods was a result of an error on the part of the Customs authorities themselves and the declaration for free circulation contained all the particulars and was accompanied by all the documents necessary for application of the reduced or zero-rate.

4. The Appellant's case is that, subsequent to the importation, it lodged its application for repayment at a time when the tariff quota had not been exhausted. It contends that it lodged the relevant documents on 10 March, and they were received by the Commissioners on 11 March, whereas the quota was not exhausted until 21 March 2005. It is the Commissioners' case that documents were sent on 10 March, but they were not the relevant documents. These were not received until 25 April 2005, after the quota was exhausted.
5. Mr Michael Parr, of Perishable Movements Ltd who act as the Appellant's agent for the importation, gave evidence to the Tribunal. He himself had not sent off the Form C88 nor was he the person who had signed it. It was dated 1 March 2005 and was signed by a Mr R Khullal of Perishable Movements Ltd. The Form has two stamps on it both dated 25 April 2005, one stamped by staff at the National Duty Repayment Centre ("NDRC"), and a further stamp from NIDAC. (These will be explained later.)
6. Mr Parr produced a recorded delivery slip dated 10 March 2005, and stated his belief that the eleven relevant Forms C88 and C285, all dated 1 March 2005 had been sent under cover of that recorded delivery slip. He had not himself been responsible for the posting, and had no records to say that there were any forms in the package sent on 10 March.
7. The Commissioners had received a recorded delivery package from the Appellant on 11 March 2005 at the NDRC which is recorded in the relevant post-book. This contains ten entries noted as "various". These items were sent on to NIDAC on 17 March 2005.
8. In the present case Box 44 of the C88s had been completed on behalf of the Appellant with the words "on deposit pending account sales" which informed NIDAC that certain documentation must be lodged with them within four months of the entries being submitted, and is relevant to determining the correct Customs valuation of the imported goods at the time of sale. If the documentation is not provided within the four month period, that means that duty which is held on deposit from the Appellant is brought into account. Box 47 of a C88 identifies methods of payment of Customs duty and import VAT. In this case the importer had indicated in Box 47 a payment outright through a deferment account, and it had also been indicated that security had been paid through a deferment account.
9. In the above circumstances, once NDRC receive the relevant C285s, they pass them on to NIDAC as the duty in question was being held on deposit, and therefore no repayment could be made by NDRC at that time.
10. The ten entries received at NDRC on 11 March have the following serial numbers:

033-000548A 06/01/2005

033-001463A 17/01/2005

033-000027X 03/01/2005

065-003509K 10/02/2005

065-000888F 05/01/2005

150-001496B 05/01/2005

150-003446E 07/01/2005

150-004776H 09/02/2005

150-001130D 02/02/2005

150-001491C 05/01/2005

11. Mr Parr was unable to say what the documents were that were sent by Perishable Movements Ltd on behalf of the Appellant which were received on 25 April 2005. He had not investigated this because he had considered that the recorded delivery stamp of 10 March was sufficient. The Commissioners produced evidence to show the eleven original entries that accompanied the C285s which were all said to have been received at NDRC on 25 April 2005. The numbers for these entries are all different from the ten received on 11 March.
12. Mr Stephen Partridge from NDRC gave evidence to the Tribunal of the procedure there. The NDRC is responsible for processing claims for repayment of duty and VAT, and Mr Partridge had been manager there since April 2005. He gave evidence of a very secure postal system at NDRC, the post-room being kept locked. The post is all date-stamped as it is sorted and the officer sorting the post on a particular day records his/her name in a stamp record book against the number of the stamp which will be used on that day. Once the post is opened, stamped and sorted, all post proper to the NDRC is brought to the NDRC office. There it is again stamped, and recorded, and thereafter that which is proper to NIDAC is sent on to NIDAC. In fact the claims in question which had arrived together did not get recorded on the spreadsheet as should have happened. Because in this case the duty was partly held on deposit, it was considered that the documents should be forwarded to NIDAC, whose job it is to adjust deposits, and therefore they were not entered onto the NDRC database. Having gone to NIDAC, the documents were later returned to NDRC once the deposit had been dealt with, and it then was considered to be an NDRC repayment case and was entered onto the database at that time. Mr Partridge gave the original entries that accompanied the C285s as follows:

150-001965M 03/02/2005

150-001964T 03/02/2005

071-025918V 17/01/2005

071-025124X 17/01/2005

071-005317K 05/01/2005

071-025112N 17/01/2005

071-025116T 17/01/2005

071-035790A 24/01/2005

071-045685K 31/01/2005

071-026649E 18/01/2005

071-035225H 24/01/2005

It will be seen that these are all different from those received on 11 March.

13. The Tribunal also heard evidence from Mr Michael Lawrence of NIDAC. He gave evidence of a secure postal system and also that the C285s in this case had been received and stamped by NIDAC on 27 April 2005.
14. In the documents produced there is a letter from Perishable Movements Ltd dated 17 January 2006 in which Mr Parr states inter alia that the total of eleven entries for which claims had been submitted had been declined as the quota was exhausted. He states that at the time those were lodged the quota was still open and continues: "… and taking into account that we had spoken to Mr Michael Lawrence of HMC (stet) who had confirmed that these had been sent for payment". Mr Lawrence did not recall any such conversation, and Mr Parr eventually agreed that the letter should have been dated 17 October 2005. He believed he had had a conversation with Mr Lawrence prior to October 2005 but, as several claims were sent in each year, he could not be specific. Mr Lawrence was unable to confirm whether the ones that might have been spoken about were the ones in question.
15. The Commissioners' case was that they had clear evidence that the documents were received on 25 March, after the quota had been exhausted on 21 March.

Reasons for decision

16. In this case the Appellant, upon whom there is burden to satisfy us on the balance of probabilities that he was entitled to benefit from the tariff quota in that at the time of lodging the application for repayment the tariff quota volume had not been exhausted, has failed to provide any evidence other than the recorded delivery slip of 10 March 2005. We do not consider that this is sufficient to displace the very clear evidence given on behalf of the Commissioners that documents were indeed sent to them by recorded delivery on 10 March which were received on 11 March 2005, but those documents were not the C285s which are the subject of this appeal.
17. In all the circumstances the Appellant has failed to discharge the burden upon him and this appeal is dismissed.
18. No order for costs.

MISS J C GORT

CHAIRMAN

RELEASED: 22 August 2006

LON/05/7093