Loudwater Trade and Finance Ltd v Revenue & Customs [2012] UKFTT 37 (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 authorities 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 competent 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 17 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 report 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 first we consider whether the grounds on which the debt may be cancelled are present. 18 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” – an issue which has not been argued in this case. The question therefore remains: was there ‘obvious negligence’ on the part of the debtor? 19 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. 20 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. 21 The appellant’s case is essentially that the goods had been re-exported within the time limits, that there had been no loss of duty and that the re-export, which was in time, could have been picked up by customs’ computers and indeed that Belgrave had assumed that that had been done. But there was no explanation of why the warning letter of 28 February 2008 was ignored, merely a plea that the effect of requiring the full duty to be paid was draconian in the circumstances, and effectively a massive ‘fine’ for an administrative oversight. 22 There is, as a matter of common sense, some force in these arguments but we have no jurisdiction to do other than apply the law as interpreted by the Court of Justice. Bearing this in mind, and considering Belgrave’s record of past failures to respect the time limits for bills of discharge, we reach the conclusion in the circumstances of this case 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 - this was a case using the simplified procedure - and the time limits for re-export are quite straightforward; Belgrave is a shipping agent whose profession is to deal with the procedures relative to customs legislation, and who must therefore be expected to be familiar with them. We add that the negligence of Belgrave in the matter is of course deemed to be that of the appellant, on whose behalf Belgrave acted. 23 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”. 24 If we had concluded that there had been no ‘obvious negligence’, 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 Belgrave, there is no occasion for examining whether a ‘special situation’ existed for referring the case to the Commission. 25 We remain concerned, however, that the form of the import entry in this case – the standard format used in the vast majority of cases – did not indicate clearly whether the declarant acted as a direct or indirect representative. As will be seen from the legislation, and from Articles 5 and 64(2) of the Code in particular, the distinction can be significant in deciding who the correct customs debtor is. But as the respondents have correctly submitted, the burden of proof in the appeal lies on the appellant not on the Crown, and in this instance neither the appellant nor its representative was present to assist the tribunal at the hearing. 26 In the circumstances the matter can be taken no further, but it is to be hoped that the respondents will take the opportunity to review the mechanisms for electronic import entries to clarify on the record the capacity in which the declaration is made. As it is, this appeal must be dismissed. 27 This document contains the full findings of fact and reasons for the decision. The appellant, not having been present or represented at the hearing of this appeal, may under Rule 38 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 apply in writing to the tribunal for the decision to be set aside; the application must be received by the tribunal no later than 28 days after the decision is sent to the appellant. 28 In addition, any party dissatisfied with this decision has a right to apply in writing 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 the 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 January 2012
Cited in 2 later judgments