Bradgate Containers Ltd v Revenue & Customs [2011] UKFTT 308 (TC)
[1]The official model for written declarations to customs by the normal procedure, for the purposes of placing goods under a customs procedure or re-exporting them in accordance with Article 182 (3) of the Code, shall be the Single Administrative Document.[2]Other forms may be used for this purpose where the provisions of the customs procedure in question permit.[3]The provisions of paragraphs 1 and 2 shall not preclude: - waiver of the written declaration prescribed in Articles 225 to 236 for release for free circulation, export or temporary importation, - waiver by the Member States of the form referred to in paragraph 1 where the special provisions laid down in Articles 237 and 238 with regard to consignments by letter or parcel-post apply, - use of special forms to facilitate the declaration in specific cases, where the customs authorites so permit, - waiver by the Member States of the form referred to in paragraph 1 in the case of existing or future agreements or arrangements concluded between the administrations of two or more Member States with a view to greater simplification of formalities in all or part of the trade between those Member States, - use by the persons concerned of loading lists for the completion of Community transit formalities in the case of consignments composed of more than one kind of goods, - printing of export, transit or import declarations and documents certifying the Community status of goods not being moved under internal Community transit procedure by means of official or private-sector data-processing systems, if necessary on plain paper, on conditions laid down by the Member States, - provision by the Member States to the effect that where a computerized declaration-processing system is used, the declaration, within the meaning of paragraph 1, may take the form of the Single Administrative Document printed out by that system.[4]When formalities are completed using public or private computers which also print out the declarations, the customs authorities may provide that: - the handwritten signature may be replaced by another identification technique which may be based on the use of codes and having the same legal consequences as a handwritten signature. This facility shall only be granted if the technical and administrative conditions laid down by the competent authorities are complied with, - the declarations thus produced may be directly authenticated by those systems, in place of the manual or mechanical application of the customs office stamp and the signature of the comptetent official.[5]Where in Community legislation, reference is made to an export, re-export or import declaration or a declaration placing goods under another customs procedure, Member States may not require any administrative documents other than those which are: - expressly created by Community acts or provided for by such acts, - required under the terms of international conventions compatible with the Treaty, - required from operators to enable them to qualify, at their request, for an advantage or specific facility, - required, with due regard for the provisions of the Treaty, for the implementation of specific regulations which cannot be implemented solely by the use of the document referred to in paragraph 1. Computerized customs declarations Article 222[1]The customs authorities may authorize the declarant to replace all or part of the particulars of the written declaration referred to in Annex 37 by sending to the customs office designated for that purpose, with a view to their processing by computer, codified data, or data made out in any other form specified by those authorities, corresponding to the particulars required for written declarations.[2]The customs authorities shall determine the conditions under which the data referred to in paragraph 1 are to be sent. Article 223 The customs authorities may authorize the use of computers, inter alia, as follows: - they may stipulate that the data necessary for completing the formalities in question shall be entered in their computerized declaration-processing systems, without a written declaration being required, - they may provide that the declaration within the meaning of Article 205 (1) shall be constituted by entry of the data in the computer if a document corresponding to a declaration is not produced. Article 224[1]When formalities are completed using public or private computer systems, the customs authorities shall authorize persons who so request to replace the handwritten signature with a comparable identification device, which may be based on the use of codes, and which has the same legal consequences as a handwritten signature.[2]The customs authorities may authorize the persons concerned to make out and transmit by computer in whole or in part the supporting documents referred to in Articles 218 to 221.[3]The facilities referred to in paragraphs 1 and 2 shall be granted only if the technical and administrative conditions laid down by the customs authorities are met. Article 859 The following failures shall be considered to have no significant effect on the correct operation of the temporary storage or customs procedure in question within the meaning of Article 204(1) of the Code, provided: - they do not constitute an attempt to remove the goods unlawfully from customs supervision, - they do not imply obvious negligence on the part of the person concerned, and - all the formalities necessary to regularize the situation of the goods are subsequently carried out: 1. exceeding the time limit allowed for assignment of the goods to one of the customs-approved treatments or uses provided for under the temporary storage or customs procedure in question, where the time limit would have been extended had an extension been applied for in time; Article 860 The customs authorities shall consider a customs debt to have been incurred under Article 204(1) of the Code unless the person who would be the debtor establishes that the conditions set out in Article 859 are fulfilled. Article 899 Without prejudice to other situations to be considered case by case in accordance with the procedure laid down in Articles 905 to 909, where the decision-making customs authority establishes that an application for repayment or remission submitted to it under Article 239(2) of the Code: - is based on grounds corresponding to one of the circumstances referred to in Articles 900 to 903, and that these do not result from deception or obvious negligence on the part of the person concerned, it shall repay or remit the amount of import duties concerned. 'The person concerned` shall mean the person or persons referred to in Article 878 (1), or their representatives, and any other person who was involved with the completion of the customs formalities relating to the goods concerned or gave the instructions necessary for the completion of these formalities, - is based on grounds corresponding to one of the circumstances referred to in Article 904, it shall not repay or remit the amount of import duties concerned. Article 905[1]Where the decision-making customs authority to which an application for repayment or remission under Article 239 (2) of the Code has been submitted cannot take a decision on the basis of Article 899, but the application is supported by evidence which might constitute a special situation resulting from circumstances in which no deception or obvious negligence may be attributed to the person concerned, the Member State to which this authority belongs shall transmit the case to the Commission to be settled under the procedure laid down in Articles 906 to 909. The term 'the person concerned` shall be interpreted in the same way as in Article 899. In all other cases, the decision-making customs authority shall refuse the application.[2]The case sent to the Commission shall include all the facts necessary for a full examination of the case presented. As soon as it receives the case the Commission shall inform the Member State concerned accordingly. Should it be found that the information supplied by the Member State is not sufficient to enable a decision to be taken on the case concerned in full knowledge of the facts, the Commission may ask for additional information to be supplied.[3]Without awaiting completion of the procedure laid down in Articles 906 to 909, the decision-making customs authority may, if requested, permit the customs formalities relating to the re-export or destruction of the goods to be carried out before the Commission has given a ruling on the application in question. Such permission shall be entirely without prejudice to the final decision on the application. Conclusions 23 The case falls, in principle, within the scope of Article 204(1)(a) as one where there is “non-fulfilment of one of the obligations arising, in respect of goods liable to import duties ... from the use of the customs procedure under which they are placed”, namely the failure to re-export within the time limits appropriate. It was common ground that the relevant limits were exceeded, and a customs debt is therefore prima facie due in respect of the goods. We consider below the question of who is the debtor for the purposes of this article but first we consider whether either of the grounds on which the debt may be cancelled is applicable, assuming for this purpose that Bradgate is correctly identified as the debtor. 24 Article 204(1)(a) does not apply to establish a customs debt where “it is established that the failure in question has no significant effect on the correct operation of the temporary storage or customs procedure in question”. Article 859 of the Implementing Regulation applies this where “all the formalities necessary to regularise the situation of the goods are subsequently carried out” – which is the case here – and the fault has been “exceeding the time limit allowed ... where the time limit would have been extended had an extension been applied for in time”. Although it was submitted that one extension only could be allowed, and had already been given, it is not clear to us what in the legislation so provided. The main question however remains: was there ‘obvious negligence’ on the part of the presumed debtor? 25 On this, the principal authority to which we were referred was the decision of the Court of Justice in Case-48/98 Firma Söhl & Söhlke v Hauptzollamt Bremmen [1999] ECR I-7877. In that case, the Court interpreted the same expression used in Article 239 as requiring account to be taken(i) of the complexity of the provisions non-compliance with which has resulted in the customs debt being incurred,(ii) the professional experience of the trader concerned, and(iii) the care taken by the latter. Holding that the term ‘obvious negligence’ should be interpreted in the same way wherever it occurred in the legislation, the Court observed (at paragraph 52) that: Since a lack of ‘obvious negligence’ is an essential condition of being able to claim repayment or remission of import or export duties, it follows that the term must be interpreted in such a way that the number of cases of repayment or remission remains limited. 26 Bearing this in mind, we reach the conclusion that the condition requiring the absence of ‘obvious negligence’ was not satisfied. The workings of the IPR scheme in itself have not been claimed as particularly complex, especially in regard to the time limits for re-export which are quite straightforward. Bradgate’s professional experience of the IPR scheme back in 2007 was not great, but as regards compliance with the time limits the evidence has shown that the previous remission of duties and the warning accompanying it in October 2008 provided all the experience needed in the matter. Lastly, it cannot be said that Bradgate took enough care to deal with matters within the time limits, or to refer to the Commissioners when it was apparent that they would be unlikely to be met. The missed possibility of using the customs warehousing procedure to extend the time for re-export, by reporting Bradgate’s difficulty to the Commissioners and seeking their advice, only reinforces that conclusion. 27 Under Article 239, which deals generally with cases where duty may be repaid or remitted, the available ground is that there has been no ‘obvious negligence’ on the part of the debtor. Article 899 of the Implementing Regulation gives effect to this in relation to the various types of situation enumerated in Articles 900 to 904, none of which in fact apply to this case. 28 Article 905 then, as a longstop, provides that where the customs authority in question cannot take a decision on the basis of Article 899 “ but the application is supported by evidence which might constitute a special situation resulting from circumstances in which no deception or obvious negligence may be attributed to the person concerned, the Member State to which this authority belongs shall transmit the case to the Commission”. Counsel for the Commissioners informed us that if we were to conclude that there had been no ‘obvious negligence’ on Bradgate’s part, the case would be referred to the Commission for a ruling under the procedure laid down in Articles 906 to 909 of the Implementing Regulation. Since we have found that there was ‘obvious negligence’ on the part of Bradgate, there is no occasion for examining whether a ‘special situation’ existed or for referring the case to the Commission. 29 We turn therefore to the second question, whether Bradgate is correctly assessed as the ‘debtor’ within the meaning of Article 204(3). We remind ourselves that this provision envisages that: The debtor shall be the person who is required, according to the circumstances, either to fulfil the obligations arising, in respect of goods liable to import duties, from their temporary storage or from the use of the customs procedure under which they have been placed, or to comply with the conditions governing the placing of the goods under that procedure. (emphasis supplied) 30 We are also mindful of the provision in Article 199 of the Implementing Regulation that “the lodging with a customs office of a declaration signed by the declarant or his representative shall render him responsible under the provisions in force for ... compliance with all the obligations relating to the entry of the goods in question under the procedure concerned.” This provision applies, mutatis mutandis, whether the entry is made in hard copy or electronically, and we have found as a fact that Bradgate did not authorise Concordia to act as their agents in this case, and that Concordia was shown on the customs entry as both the declarant and the paying agent. We therefore conclude that in the particular circumstances of this case Bradgate does not fall within the definition of ‘debtor’ in Article 204(3) in relation to the debt established under Article 204(1). The appeal therefore succeeds. 31 This document contains the full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be received by this Tribunal no later than 56 days after this decision is sent to that party. The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice. Malachy Cornwell-Kelly Tribunal Judge RELEASE DATE: 10 May 2011