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 >> Egbuna v Revenue & Customs [2007] UKVAT(Customs) C00237 (01 March 2007)
URL: http://www.bailii.org/uk/cases/UKVAT/Customs/2007/C00237.html
Cite as: [2007] UKVAT(Customs) C00237, [2007] UKVAT(Customs) C237

---

[New search] [Printable RTF version] [Help]

---

Egbuna v Revenue & Customs [2007] UKVAT(Customs) C00237 (01 March 2007)

C00237

CUSTOMS DUTIES — temporary importation relief — no intention that goods be used whilst temporarily in the United Kingdom - importer's claim for relief rejected — whether rejection correct — no — appeal allowed – Community Customs Code (2913/93), Art 137

LONDON TRIBUNAL CENTRE

EDITH EGBUNA Appellant

- and -

THE COMMISSIONERS FOR HER MAJESTY'S

REVENUE AND CUSTOMS Respondents

Tribunal: Nicholas Aleksander (Chairman)

Alex McLoughlin

Sitting in public in London on 19 February 2007

The Appellant in person

Matthew Barnes of counsel instructed by the Acting Solicitor for HM Revenue and Customs, for the Respondents

© CROWN COPYRIGHT 2007


 


DECISION

1. This is an appeal under section 16 Finance Act 1994 against a review decision dated 24 July 2006 by Ms J Pond, upholding the earlier decision of Mr L Pierce-Pendry dated 4 May 2006, refusing Ms Egbuna's application for authorisation for the earlier temporary importation of a Dell laptop computer. The principal issue is whether the temporary importation of the laptop was to enable its use within the European Union, and whether the importation therefore was within the scope of Article 137 of the Community Customs Code.

The Facts and Evidence

2. A bundle of documents was presented to the Tribunal by each of the Appellant and the Respondents. The Appellant appeared in person, Mr Barnes represented the Respondents. The background facts were not disputed.
3. A laptop computer was purchased in the United States of America. The laptop was purchased for a member of the Appellant's family who lives in Nigeria. Because of the unreliability of the postal service to Nigeria, the laptop was sent to the Appellant in the UK, who was to arrange for the laptop to be forwarded to Nigeria by hand.
4. The laptop was couriered from the USA to the UK with Federal Express. The declared value for VAT purposes was £722.85. The invoice accompanying the laptop stated that the ultimate destination for the laptop was the United Kingdom – although both the Appellant and Customs agree that it was always intended that the laptop was to be re-exported to Nigeria. When the laptop arrived in the UK on 17 February 2006, Federal Express contacted the Appellant and requested payment of £126.49 import VAT. The Appellant explained that the laptop was to be shortly re-exported, and was told by Federal Express that she would be able to reclaim the VAT once the laptop had been exported.
5. The laptop was exported on 12 April 2006 by a friend of the Appellant, who had the export of the laptop verified by HM Revenue and Customs at Heathrow Airport.
6. The Appellant applied in writing for a refund of the VAT paid on the import of the laptop and her letter was received by the National Duty Refund Centre on 27 April 2006. The refund was denied in a letter dated 4 May 2006 by Mr L Pierce-Pendry. The Appellant requested a review of the decision, which was undertaken by Ms J Pond. Ms Pond's decision to uphold the refusal of the refund was dated 14 July 2006.

The Law

7. Article 137 of Council Regulation 2913/92 ("the Customs Code") relates to relief from import duties (which for these purposes includes VAT) on goods temporarily imported into the European Union. It states:

"The temporary importation procedure shall allow the use in the customs territory of the Community, with total or partial relief from import duties of non-Community goods intended for re-export without having undergone any change except normal depreciation due to the use made of them."

The Issues

8. Customs assert that the importation of the laptop by the Appellant does not fall within Article 137. Mr Barnes places emphasis on the phrase "shall allow the use" in Article 137, and submits that relief for temporary importation is only available if the goods are to be "used" before they are re-exported. In this case, as it was not intended that the laptop be used whilst it was temporarily in the United Kingdom, the relief is not available. Claims for relief under the temporary importation provisions were usually required to be made before the goods in question were imported, but, Mr Barnes told us that if the Tribunal found in favour of the Appellant, Article 236 of the Customs Code gave Customs the powers necessary to make a refund.
9. The Appellant's argument is that an import of goods falls within Article 137 if there is an intention that the goods be re-exported (without having undergone any change). The phrase "shall allow the use" is permissive, and not mandatory – and that it matters not whether the goods are in fact "used". The Appellant told us that she had turned on the laptop whilst it was in her possession – and the laptop had in fact undergone some degree of use whilst it was in the United Kingdom - although the Appellant's argument was that the relief should be available irrespective of any use.
10. We would agree with the Appellant's interpretation of Article 137. In order for temporary importation relief to be available, there must be an intention for the goods in question to be re-exported without having undergone any change except normal depreciation due to any use made of them. "Allows" indicates that the Article permits the use of the goods – but does not require it. But, in any event, the laptop was used by the Appellant without having undergone any change except normal depreciation due to its use.
11. For the above reasons, this appeal is allowed. No application was made at the hearing for costs. In case either party should wish to be heard on costs, or in default of agreement, we give liberty to both parties to apply as to costs. Any such application should be made not later than 30 days after the date of release of this decision.

Nicholas Aleksander

CHAIRMAN

RELEASE DATE: 27 February 2007

LON/06/7073