“(5) In relation to other decisions, the powers of an appeal under this section shall also include power to quash or vary any decision and power to substitute their own decision for any decision quashed on appeal. i. On an appeal under this section the burden of proof as to- (a) [Various matters not relevant to this appeal] …. shall lie upon the Commissioners: but it shall otherwise be for the appellant to show that the grounds on which any such appeal is brought have been established.” 10. The tribunal must, in the first instance, decide whether a liability to customs duty arises. Article 80 requires submission of a Certificate of Origin Form A if the products are to benefit from tariff preference. Article 78 of the Implementing Regulation provides as follows, so far as relevant: 1. The following shall be considered as transported direct from the beneficiary country to the Community-- (b) products constituting one single consignment transported through the territory of countries other than the beneficiary country or the Community, with, should the occasion arise, trans-shipment or temporary warehousing in those countries, provided that the products remain under the surveillance of the customs authorities in the country of transit or of the warehousing and do not undergo operations other than unloading, reloading or any operation designed to preserve them in good condition--- 2. Evidence that the conditions specified in paragraph 1(b) and (c) have been fulfilled shall be supplied to the competent customs authorities by the production of (a) a single transport document covering the passage from the exporting country through the country of transit; (b) a certificate issued by the customs authorities of the country of transit giving an exact description of the products; stating the dates of the unloading and reloading of the product and, where applicable, the names of the ships, or the other means of transport used, and certifying the conditions under which the products remained in the country of transit; (c) or failing these, any substantiating documents. 11. In order to be entitled to tariff preference the importer must therefore satisfy two conditions: If the importer is unable to establish that it had a valid Form A and that it had complied with the direct transport rule it may, however, obtain relief under Article 239 which provides as follows:- “ 1. Import duties… may be repaid or remitted in situations other than those referred to in articles 236,237 and 238- · to be determined in accordance with the procedure of the committee; · resulting from circumstances in which no deception or obvious negligence may be attributed to the person concerned. The situations in which this provision may be applied and the procedures to be followed to that end shall be defined in accordance with the committee procedure. Repayment or remission may be made subject to special conditions. Article 904 (c) provides that the duties shall not be remitted or repaid where the only (our emphasis) grounds relied upon are the presentation, for the purpose of obtaining preferential tariff treatment of goods declared for free circulation, of documents subsequently found to be forged, falsified or not valid for that purpose, even where such documents were presented in good faith.”
“ In that respect, it is clear that the importer is responsible both for the payment of the import duties and for the regularity of the documents presented by him to the customs authorities, and that the adverse consequences of the wrongful acts of his contracting parties cannot be borne by the Community. The possibility that the price undertaking documents are subsequently discovered to be invalid is a trade risk inherent in the importation business (see, by analogy, Mehibas Dordtselaan, paragraph 83 see below) . Moreover, the importer may seek damages against the trader involved in the fraudulent use of the documents in question. Finally, a prudent trader aware of the rules must assess the risks inherent in the market which he is considering and accept them as normal risks. (Case C-97/95 Pascoal & Filhos [1997] ECR 1-4209, paragraphs 57 to 61) On the evidence in this present case it is plain that Kam was not entitled to the preferential rate of duty. The liability to duty is clearly established by reference to the evidence contained in the Entry/ Shipping bundle considered alongside the evidence of OLAF. 27. Although neither Mr Hussain nor Mr Price, on behalf of Kam, have sought remission of the duty Mr Thomas wished to consider the position under Article 239. He submitted that any claim now made would be out of time. In summary, Kam says that it entered into the transactions in good faith. Article 239 provides for remission of the duty if Kam can show a ‘special situation’ when trading with Bangladesh, and that there has been no ‘obvious negligence’ on its part. Article 904 (c) provides that the duties shall not be remitted or repaid where the only grounds relied upon are the presentation of documents, which are subsequently found to be forged, falsified or not valid for that purpose, even where such documents are presented in ‘good faith’. In the case of Spedition Wilhelm Rotermund GmbH v Commissioners of the European Community [2001] ECR 11-1619 the Court of First Instance held that article 905 contained an equitable provision intended to deal with exceptional situations faced by an operator and was intended to apply, inter alia, where the circumstances of the trader and the administrator were such that it would be inequitable to require the trader to bear the loss which, in normal circumstances, would not have been incurred. In deciding whether a ‘special situation’ existed, the Commission must balance the Community interest against the interests of the trader who had acted in good faith. In order to assess whether a trader is in a ‘special situation’ it is necessary to consider whether he is in an exceptional situation as compared with other operators engaged in the same business. 28. Remission or repayment will be refused if either of the two cumulative conditions are not met. In Mehibas Dorstselaan v Commissioners [2000] ECR 11-15 at paragraph 83, the CFI noted in that case: “ It is settled case law that submitting documents found to be falsified or inaccurate does not of itself constitute a special circumstance justifying the remission or repayment of import duties, even where such documents were presented in good faith ( Eyckeler & Malt, paragraph162 ). A customs agent, by the very nature of his work, assumes liability for the payment of import duties and for the validity of the documents which he presents to the customs authorities. ( Van Gend & Loos paragraph 16), and any loss caused by the wrongful conduct on the part of his clients cannot be borne by the Community. For that reason, it has been held that the fact that certificates of origin which were subsequently found not to be valid were delivered by the customs authorities of the countries mentioned on them does not amount to a special situation. It is one of the trade risks assumed by custom agents.”
“58. Therefore, as the Commission rightly submits, the presentation of documents subsequently found to be invalid cannot of itself constitute a special situation justifying repayment of import duties even where such documents were presented in good faith… 59. “A different conclusion , namely that there was a special situation, would only be possible in the event of serious failures by the Commissioners or the customs authorities, facilitating the fraudulent use of the price undertaking documents (see to that effect Eyckeler & Malt, paragraph 163 et seq, and Primex Produckte Import- Export, paragraph 141 et seq). It is therefore necessary to consider whether the applicant has demonstrated the existence of such failures”. 29. It is plain from the circumstances of this case that there was no ‘special situation’ and that there has been ‘obvious negligence’ on the part of Mr Hussian and Mr Ali. As a result Kam would not be entitled to remission of the import duties even if they had requested it Submission on behalf of Kam 30. In an attempt to hear coherent argument from Mr Price Judge Porter had asked him to prepare appropriate headings for the points he wished to raise by way of submissions. Unfortunately Mr Price had not prepared such headings and the Tribunal has had considerable difficulty in understanding what he wished to submit. His principal concern appears to have been that neither HMRC nor OLAF had provided him with sufficient information to enable him to prepare for this hearing. By way of example he submitted that HMRC could have provided the evidence from the Landlords of the premises at 36, Purana Paltan Lane much sooner than September 2008 to enable Mr Hussain to have time to visit the site. Mr Price said that he had had no opportunity to query the email presented to the Tribunal at the hearing, as to the truth about the location of Dewan Textile Mills Ltd. He submitted to the Tribunal that he and his clients were unable to understand the basis of the post-clearance demands as HMRC had not, even by the time of the hearing , produced the papers he had asked for. He had written a substantial letter to HMRC on31 December 2007 , which he understood had been passed on to OLAF, but to which he had had no meaningful reply. He objected to the evidence produced by Mr Dettrich and Mr Fuhrmann on behalf of OLAF because it was incorrectly numbered and paginated. He further submitted that KAM had been prejudiced because the transactions took place in 2004 to 2006 and it could no longer obtain the necessary information. 31. Mr Price produced to the Tribunal a list of valid EPB Form AS , which he had extrapolated from the electronic list provided in Annex 9 of the OLAF Mission in March 2007. This list had not been put to Mr Hussain, Mr Ali nor to HMRC’s witnesses so we have no means of knowing if the list, as compiled by him, is accurate.. The final report of the March 2007 mission at paragraph 4 states: “ The EPB has also provided OLAF with a similar list (of valid Form As) for all the Member States of the European Community covering all Form As issued for the period January 2005 to the end of February 2007. Any Form As that are not on these lists or do not correspond with the information provided in these lists should be suspect and false…(see Annex 9).”