Build-A-Bear UK Holdings limited v Revenue & Customs (CUSTOMS DUTY - classification 'accessories') [2019] UKFTT 707 (TC)

FTT-Tax
Build-A-Bear UK Holdings limited v Revenue & Customs (CUSTOMS DUTY - classification 'accessories')
[2019] UKFTT 707 (TC) · 2018-02-23
[124]Binding Tariff Information notices are issued by the customs authorities of the Member States pursuant to Article 12 of the Common Customs Code (Council Regulation 2913/92/EEC) on request from a trader. They are called “BTIs”, and such information is binding on the relevant authorities in respect of the tariff classification of goods. The tribunal must exercise care before departing from a settled approach set out in BTIs (see Case C-495/03 Intermodal Transports BVv Staatssecretaris van Financien at [34]). The parties produced a number of BTIs issued by the authorities in other Member States. I found these of limited assistance given there is often no explanation of the reason for the classification, in some instances the precise nature of the goods is not clear and overall they do not demonstrate a clearly consistent approach. Approach to classification set out in the case law 125. As set out in the decision of the CJEU in Case C-486/06 Van Landeghem (Common Customs Tariff) [2007], to which BAB referred, it is settled case-law, as set out at [23] to [25] of that case that:(1) “in the interests of legal certainty and ease of verification, the decisive criterion for the classification of goods for customs purposes is in general to be sought in their objective characteristics and properties as defined in the wording of the relevant heading of the CN and in the section or chapter notes….”(2) “ the intended use of a product may constitute an objective criterion for classification if it is inherent to the product, and that inherent character must be capable of being assessed on the basis of the product’s objective characteristics and properties….”(3) “..the Explanatory Notes drawn up, as regards the CN, by the Commission and, as regards the HS, by the WCO are an important aid to the interpretation of the scope of the various headings but do not have legally binding force ( BAS Trucks , paragraph 28). Moreover, although the WCO opinions classifying goods in the HS do not have legally binding force, they amount, as regards the classification of those goods in the CN, to indications which are an important aid to the interpretation of the scope of the various tariff headings of the CN (see Kawasaki Motors Europe , paragraph 36)”. 126. The parties referred to cases where the CJEU has classified products for customs duty purposes according to their main intended use. In Case C-480/13 Sysmex Europe GmbH v Hauptzollamt Hamburg-Hafenfor , for example, the question was whether a product intended for the analysis of white blood cells was to be classified either as a diagnostic or laboratory reagent (under heading 3822) or as a dye or other colouring matter for retail sale (under heading 3212). An expert’s report concluded that the product could dye a textile with a blue colour, but that that colouring was nevertheless very light and could not be classified as “permanent”. 127. In considering the “intended use” principle the court noted, at [32], that there is authority that where a product has two possible uses but one of those uses was “no more than a purely theoretical possibility”, that product was, “on the basis of its objective characteristics and properties, naturally intended for the other use and therefore came under the tariff heading relating to that use” (referring to Case C-459/93 Thyssen Haniel Logistic (at [17] and [18]). They continued that likewise, according to the case-law :
“in order to be classified under the tariff heading relating to a use, the product to be classified need not be solely or exclusively intended for that use. It suffices that that use is the main use for which the product is intended (see, to that effect, Neckermann Versand, C-395/93, EU:C:1994:318 , paragraphs 8 and 9, and Anagram International, C-14/05, EU:C:2006:465, paragraph 26).” 128. The court said, at [42], that it followed that the use of the product as a laboratory reagent “constitutes, in the light of its objective characteristics and properties, its exclusive use” and, at [45], that it came under heading 3822 noting that it “may have a weak and non-permanent dyeing effect on textiles, is not in practice used for its dyeing properties and is intended for the analysis of white blood cells..”. 129. BAB referred to HMRC v Huxley (UK) Ltd [2017] UKUT 393 (TCC) where the Upper Tribunal (“ UT ”) noted, at [60], that the CJEU made reference in its reasoning to Case C-14/05 Anagram International Inc v Inspecteur van de Belastingdienst Douanedistrict Rotterdam . That case involved the classification of gas-filled balloons described as “plastic festive balloon” on which different motifs could be printed depending on the occasion for which they were to be used. The question was whether they could be correctly classified as festive articles or as toys. The court held, at [26]: “It is irrelevant that those balloons can also be used as festive articles. If the objective characteristic of a product can be established at the time of customs clearance, the fact that it may also be possible to envisage another use for that product will not preclude its classification for legal purposes. For its classification for customs purposes, that product does not have to be solely or exclusively intended for use corresponding to that objective characteristic. It suffices if that is the main use for which it is intended...” 130. The UT concluded, at [61], that it is therefore clear that (a) “use in practice” as that term is used in Sysmex “is a synonym for “main use” and (b) the main use of a product is, therefore, capable of constituting an objective characteristic if it can be established at the time of customs clearance. They noted that both Thyssen Haniel and Sysmex establish that “the main use of a product can be ascertained by adducing evidence, notwithstanding that such evidence is not available to the customs officer at the point of entry”. 131. The parties also referred to decisions where the courts have emphasised that the classification test is a purely objective one such that subjective matters should not be taken into account. In Case C-228/89 Farfalla Fleming v Hauptzollamt München-West [1990] ECR I-3387 the CJEU rejected the argument that glass paperweights could qualify for an exemption from customs duty as original works of art as they were executed by famous glassware artists and served no functional purpose as paperweights. The CJEU stated, at [20], that since the customs authorities can rely only on objective criteria relating to the external characteristics of goods, even where such goods are hand-made by artists, they must be regarded as goods of commercial character because they appear similar to comparable articles manufactured industrially or as works of craftsmanship: “That conclusion is not invalidated by the fact that the paperweights in question are produced by hand in limited editions by well-known artists and are collected by collectors and displayed in museums without ever being used as paperweights. Just as an artistic value which an article may have is not a matter for assessment by the customs authorities, the method employed for producing the article and the actual use for which that article is intended cannot be adopted by those authorities as criteria for tariff classification, since they are factors which are not apparent from the external characteristics of the goods and cannot therefore be easily appraised by the customs authorities. For the same reasons, the price of the article in question is not an appropriate criterion for customs classification.” 132. In Case C-376/07 Kamino International Logistics BV v Staatssecretaris van Financiën the CJEU considered the correct classification of a colour LCD monitor which, although marketed for use with automatic data processing machines, also had other uses, such as for playing games. In his opinion, which appears not to have been disapproved by the CJEU, the Advocate General rejected the idea that a product’s “intended commercial use, in other words its “target use” should be taken into account in order to determine its normal use”
. The concern was (at [74]) that if significance is attached to elements such as the product’s declared use, as indicated on its packaging or in advertising material, there is an increased risk of abuse. The relevant parts of the opinion are as follows :
“72. In my view, there is no doubt that the technical characteristics of the product constitute the fundamental criterion to be taken into account in that connection. In the case of the monitors at issue, it will plainly be characteristics like the resolution, the 40 screen aspect ratio (the width of the screen in relation to its height), the available connectors, the possibility of adjusting the height and screen tilt angle, the presence of certain specific ergonomic features designed to facilitate close ‘desktop’ use and so forth, which the national court will have to analyse in order to determine whether or not the product is normally used in connection with an automatic data-processing system. 73. The possibility of taking account of the product’s intended commercial use, in other words its ‘target’ use, in order to determine its normal use, seems to me to be more problematical. In my view, that option should be excluded. 74. It is in fact clear that if significance is attached to elements such as the product’s declared use, as indicated on its packaging or in advertising material, there is an increased risk of abuse. In a variety of fields, instances of products which are surreptitiously presented as being intended for uses other than their real use, in order, for example, to circumvent sales bans or rule out producer liability, are in fact anything but infrequent, even though the relevant public is actually perfectly well aware of the real intended use of the products in question. 75. The position set out above seems to me, moreover, to be consistent with the case-law of the Court which, while in principle accepting the possibility of taking a product’s intended use into account in order to determine its customs classification, has, nevertheless, stressed that that intended use must be based on specific and objective criteria.” 133. This approach was followed in the UT in E.P. Barrus Ltd and another v Revenue and Customs Commissioners [2013] UKUT 449 . In that case the UT held that the tribunal had erred in assessing the correct classification of the vehicles in question by reference to the actual use that the vehicles were put by particular importers and the possible use to which they could be put on the basis of witness evidence as to such use and the marketing material that suggested possible uses. Essentially, the UT viewed this as evidence as to “targeted use” within the meaning of Kamino . 134. In the Huxley case referred to above, the UT accepted, at [64], that there is a distinction between the main use of a product, ascertained by reference to its objective characteristics, and other possible uses of the product, which can be ascertained, for example, from marketing material: “Where the marketing material includes the subjective views of those who are promoting the product in question it is not relevant to classification. There is the risk, identified in Kamino , that purported uses set out in the marketing material are in fact shams in order to obtain a reduced rate of duty or circumvent some restriction applicable to the import of the goods in question.” 135. At [66], the UT rejected the submission that the tribunal erred in taking into account certain external evidence as to the main use to which the relevant products were put. They said that there is nothing in the relevant authorities that “rules out the importer seeking to adduce evidence to the customs officer as to the main use or use in practice to which the goods in question will be put which may not otherwise be readily apparent from a physical inspection”
. They accepted, therefore, at [70], that “evidence can properly be presented with the goods to demonstrate the significance of their particular objective features”. 136. It seems that the Advocate General in Kamino and the UT in Barrus and Huxley were making the point that, in classifying articles for CN purposes, courts should not take account of the subjective views of those promoting the product in question as to the possible uses for the product, whether set out in marketing materials or otherwise. That does not rule out, however, that such material may contain statements of relevance where, for example, it contains an explanation of how a particular product is intended to operate by reference to its objective characteristics and properties. 137. The extent to which “targeted use” can be taken into account and the role of the main intended use test has been considered more recently by the Court of Appeal in HMRC v Honeywell Analytics Ltd [2018] EWCA Civ 579 . The issue in that case was the correct classification of an item described as “a gas monitoring device which is carried on the person (portable) and used by people who work in confined spaces and may have reason to come into contact with potentially dangerous toxic gases” and which contained “both an audible, visible and a vibration alert mechanism” (the “ Device ”). The issue was whether the UT was correct to hold that the Device falls within a heading of the CN relating to measuring devices (9026) thereby overturning the tribunal’s decision that it falls within a heading relating to alarms (8531). 138. The majority upheld the tribunal’s decision. Sir Terence Etherton MR dissented but the majority agreed to some extent with his analysis of the relevant case law. 139. As Sir Etherton recorded, at [26], the tribunal held that heading 8531 (relating to alarms) described accurately and clearly the essential characteristics and properties and the use (the only intended use) of the Device. The tribunal stated the following (at [80]) as regards the meaning of the wording in heading 9206 “Instruments and apparatus for measuring the … level of … gases”:
“In our view while the device is an instrument that does measure “the… level … of gases”, it is not a instrument for doing that….[N]o employer would send an operator into a confined space with this device to measure the level of dangerous gases without the alerting functions being operative. We consider that the items listed in Heading 9026 are ones whose only function and use is to measure the level etc of gas etc.”
[140]As noted at [20], in forming this conclusion the tribunal had regard to the technical literature available online in relation to the Device, which stated under the heading “Protect yourself” that the Device could simultaneously monitor and display up to five atmospheric hazards. 141. As recorded by Sir Terence Etherton MR, at [39] to [42], amongst other findings, the UT found that:(1) The tribunal may have been unduly influenced by this heading due to the technical literature.(2) Nothing in the wording of heading 9026 suggests it is to be restricted to measuring apparatus whose principal purpose is to measure for the sake of measurement alone. T he tribunal was wrong to conclude that the Device did not have measurement as one of its uses and that heading 9026 was restricted to those devices whose only function was to measure the level of gas (see [63] and [64] of the UT decision).(3) The Device “prima facie falls within the scope of” both headings, and inevitably, by virtue of note 1(m), the Device must be classified under heading 9026 (as that note excludes from heading 8531 items which fall within chapter 90 of which heading 9026 forms part) (see [68]). 142. Sir Terence Etherton MR said, at [65] and [66], that he could see no basis for the tribunal’s restrictive interpretation of heading 9026 as regards the word “for” . He rejected the argument “that there is a general principle that, where an item is capable of falling within the wording of more than one heading, the heading which is most consistent with the principal purpose of the item in question should be applied”. However: (1) At [67], he accepted that a main or principal function test has a role where:
“a heading specifies a product’s function according to a descriptive term which is undefined, an item will fall within that heading if that specified function is its principal or main function even though the item might also be used for some other purpose”
. He said that was the situation in cases concerning the “undefined functions” of “pyjamas”, “nightdresses” and “video games” respectively (C-395/93 Neckermann Versand AG v Hauptzollamt Frankfurt am Main-Os , C-338/95 Wiener S.I. GmbH v Hauptzollamt Emmerich [1997] ECR I -6495 and T–243/01 Sony Computer Entertainment Europe Ltd v Commission of the European Communities [2003] ECR II-4089). (2) At [68], he acknowledged that there is also a principle that, where the objective characteristics and properties of an article are capable of falling within more than one heading, a use which is “theoretically conceivable but highly improbable” is to be ignored (as in Thyssen Haniel and Sysmex). 143. He continued, at [69], that there are many cases which are plainly incompatible with the proposition that a principal or main function test applies as a general rule. Whilst the CJEU has held that an item may fall within more than one heading the court “ never suggested that the conflict might be resolved by applying any such principle”; rather it was resolved by reference to tie-break provisions in the notes or the GIRs. He gave some examples including, at [70], the decision in the Sony Computer case where it was held (a) that Sony’s PlayStation®2 falls within both heading 8471 (in section XVI) as an automatic data-processing machine and heading 9504 (in chapter 95) which includes video games of a kind used with a television receiver, on the basis that it was intended mainly to be used to run video games, and (b) that note 1(p) in section XVI sufficed to classify it under that video games heading. That note states that section XVI does not cover articles within chapter 95. He concluded, at [71], that on that approach:
“ There was no hint of any general principle that where an item falls, on the face of it, within more than one heading, it is allocated only to that heading which is consistent with the item’s principal purpose, function or intended use.” 144. He noted, at [73], that HMRC referred to and relied on a number of cases where the CJEU used a “principal function” test as a tie-breaker between different applicable headings and took into account what consumers would consider to be the ancillary or principal functions ( C-119/99 Hewlett BV v Directeur Général des Douanes et Droits Indirects [2001] ECR I-3981 , C-288/09 and C-289/09 British Sky Broadcasting Group plc v Revenue and Customs Commissioners [2011] STC 1519 and C-58/14 Hauptzollamt Hanover v Amazon EU Sarl ) . He observed that the court did so, however, pursuant to the express provisions of the principal function test in note 3 in Section XVI which, in his view, “undermines, rather than supports, HMRC’s argument…”; if a general principal use test existed, there would be no need for note 3. He noted, at [75] that: “ It might equally be said that GIR 3(b) would also be unnecessary if there was a generally applicable tie-break test of "principal function".” 145. He did not express a firm view on whether the word “for” in the measurement heading means that it applies only to items whose main or principal purpose is to measure (at [77] and [78]). He commented, however, at [78], that “the Sony case illustrates why caution must be exercised on this point” given that the word “for” appeared in both applicable headings but the CJEU held that the only legitimate tie break was note 1(p) in section XVI. He said that, therefore, if that word “imports a principal function test, it would not have been possible for Sony’s product to fall under both headings”. 146. He concluded at [83], that having regard to the principles he had set out, the UT were wrong to classify the Device under heading 9026 only if the UT were bound by findings of fact of the tribunal to conclude that the Device’s measuring function was “theoretically conceivable but highly improbable”
. He said that it was obvious that was not the case. 147. At [89] he agreed with HMRC that the UT were wrong to say that, for the purposes of classification, marketing materials and a product’s “targeted” use are always irrelevant. He also said that the UT were not entitled to interfere with the tribunal’s decision insofar as it found as a fact that a person would only acquire the Device because it had an alarm function, and in that sense the measuring was subordinate to the alarm function. However, at [90], for the reasons he had given, he considered that these errors were “irrelevant to the analysis” since the only question of fact was as set out above. 148. Lord Justice Sales took the contrary view, at [115], that the UT had made a material error in its reasoning and that the tribunal’s classification was lawful and should be upheld. He said at [116], that he agreed with the observations of the Master of the Rolls at [67] to [69] albeit that he reached a different conclusion on the facts.[149]Lord Justice Sales set out further details of the marketing and other materials the tribunal had regard to in making its decision. At [121] he noted that HMRC relied on the published manuals for use of the Device and the appellant’s product description, available on its website:
“The Quick Reference Guide stated that the device was "designed to warn of hazardous gas levels above user-defined alarm setpoints". The Manual included a Safety Information notice, which stated "Use the detector only as specified in this user manual, otherwise the protection provided by the detector may be impaired." It also included a recommendation that the sensors should be bump tested before each day's use, "to confirm their ability to respond to gas by exposing the detector to a gas concentration that exceeds the alarm setpoints. Manually verify that the audible and visual alarms are activated."” 150. He noted, at [122], that, as emphasised by the tribunal at [28], there was a prominent warning that extreme caution should be used when disabling a sensor, as then it “cannot detect and alarm against the applicable gas”
. He thought that on “a fair reading of the Manual as a whole, it is directed to ensuring that the device is maintained so that the alarm function is effective. Although it appears the alarm function can be switched off and the device also has a visual display, there is no section of the Manual addressed to use of the device other than as an alarm. The product description appeared under the heading, “Protect yourself”. 151. He said, at [127], that the tribunal had not erred in taking account of the above information and the Device’s “targeted use”. He considered that it is clear from relevant EU case-law that the marketing literature and manuals issued by a producer of an item are themselves part of the objective materials to which it is legitimate and appropriate to have regard in classifying goods for customs duty purposes. He said that this point emerges clearly in the Sony case. He noted, at [129], that it was held that there was no definition of “video games” and following Neckermann Verstand and Wiener SI GmbH , that :
“it was appropriate to look for the objective characteristic of those goods which tended to distinguish them from others in the use for which those goods were intended” and to assess in that regard whether the goods were used mainly for the purpose given by a tariff heading, even though it might also be possible to envisage another use for them: see [110]. It was appropriate to consider as video games "any products which are intended to be used, exclusively or mainly, for playing video games, even though they might be used for other purposes": [111]. In making that assessment, the CFI had regard to "the manner in which the PlayStation®2 is imported, sold and presented to the public" and to promotional material which indicated how it was marketed and sold to consumers, namely as a video game console: [112]-[113]. These materials and the way in which the device was configured showed that it was intended for use mainly for playing video games, even though it might be used for other purposes: [112]-[113].” 152. I note that in Sony , in forming the conclusions referred to above, the CJEU had regard to (a) “the brochures and other promotional information relating to the PlayStationR2” which showed that it was marketed and sold to consumers mainly as a video game console, even though it may also be put to other uses, (b) evidence that consumers perceive the PlayStationR2 mainly as a game console and (c) the fact that it was packaged for retail sale as a video game console, since it is presented with a `controller module [with] several control buttons, which are mainly used for playing video games, as well as connector cables whereas other units, such as standard keyboard, mouse and ADP monitor to which it can be connected are sold separately (see [112]). 153. In the Honeywell case, Sales LJ concluded on this point, at [130], as follows: “Such material forms part of the objective characteristics and properties of the goods in question for the purposes of applying the classification headings in the tariff Regulation. The relevance to tariff clarification of the objective manner in which an item is presented to consumers or users is also confirmed by the judgment of the CJEU in Joined Cases C-288/09 and C-289/09 British Sky Broadcasting Group [2011] STC 1519 , at [77]-[79]. Indeed, given the importance for tariff classification under various headings of the use to which an item is intended to be put, it seems to me that it would be most odd and contrary to principle to leave out of account the way in which consumers are encouraged to use the item in question by materials placed into the public domain and objectively verifiable for the purposes of tariff classification .”
(emphasis added) 154. He continued, at [132], that as the Master of the Rolls explained at [68], there is a principle of EU law in assessing the application of tariff headings that one should ignore uses of an item which are conceivable but are in reality “no more than a theoretical possibility” (referring to Sysmex at [32] and [42]). He said that to “use a domestic law analogy, this is a de minimis type principle”. He concluded, at [133] and [134], that on the findings properly made by the tribunal, at the most use of the Device for measuring the level of gas could only be regarded as a theoretical possibility. 155. Further, at [136], he considered that in the context of the circumstances where the tribunal had to make a binary choice between the two headings in question, the tribunal was entitled to apply a main or principal purpose test to heading 9026 on the basis that that is the force of the use of the word “for” as supported by the general approach to application of the tariff headings set out in the Sony case. He thought, however, at [138], that the tribunal went too far in interpreting heading 9026 to mean that the items covered by it were ones “whose only function and use is to measure the level etc of gas etc”:
“it would have been sufficient if that was the main function of the [Device]. Just as in the Neckermann case items of clothing were properly to be classified as pyjamas because that was their main intended use, even though they could also be used in other ways, I consider that a device could be said to be an instrument for measuring the level of gases if that was its main use, even if it might be used for other things. But plainly, on the findings made by the FTT, that was not the main use or function of the [Device]. Faced with the arguments before it about how to characterise the use or function of the Device, the FTT was entitled to have regard to the main or principal object for which it was to be used, namely as an alarm rather than for measuring the level of gas.” 156. Lord Justice Davis essentially agreed with Sales LJ. He said, at [102], that the correct question was what the Device was “for” and that overall the tribunal found that the measurement or checking of gases was not what the Device was “for”
. The tribunal found that the measuring function was entirely subordinate to the alarm function; the measuring function was simply a means to an end: the end being the alerting function. He said, at [104], the tribunal’s conclusion amply accords with the caselaw that uses of a particular device which are found to be but a theoretical possibility are on any view to be disregarded; that is what the tribunal had in terms found to be the case. 157. He said, at [109], that, on any view, HMRC’s argument that checking or measuring the level of gases was the principal function of the device had failed conclusively on the facts before the tribunal. Nor (even on its mistaken legal approach) did the UT make such a finding. It simply “proceeded on the footing that measuring was at least one purpose and one of the intended uses”. 158. In view of that he thought, at [110], there still are real doubts as to whether the device could fall within heading 9026. He said that he “entirely understands the point that, where there are competing functions or uses, the Notes and GIRs are potentially available and the need to resort to a "principal function" approach becomes less obvious; and I agree also that a number of the authorities in the European jurisprudence, as cited to us, are decisions where the Explanatory Notes feature”. However, at [111], as he read them:
“a number of the authorities do also invoke a principal function or main intended use principle in order to help assess what particular classification heading is appropriate to the particular product in question: such principle operating independently of, albeit concurrently with, Explanatory Notes or GIRs”. 159. At [112] he gave as an example the case of Hauptzollamt Hannover v Amazon case where the CJEU accepted that: “while Amazon’s Kindle device had a dictionary function, that did not make the device an electronic dictionary for classification purposes: since that was not the "principal function" of a Kindle. It is true that Note 3 to Section XVI featured in that case; but the statements of principle there set out seem to go wider than that. The cases of Neckerman , Sysmex and Sony Corporation (cited above), among others, also all contain statements of principle to like effect: again, statements of principle not based on Notes or GIRs. For example, in Sysmex (at paragraph 32) this was said, in unqualified terms [citing [32] of Sysmex]….. Accordingly, even on this alternative basis I would query if the respondent could have succeeded here, unless it could have established that it was the (or, possibly, a) main intended use of the Device to measure or check the level of gases. And that it had not established.”
Decision on clothing and footwear Submissions on clothing items 160. It was common ground that the clothing items are accessories within the meaning of chapter 95. There was also no dispute that under GIRs 1 and 6, as applied in combination with note 3, they fall, at any rate on a “prima facie” basis within the toys heading and the sub-heading “stuffed” (9503 00 41) on the basis that they are accessories which are principally suitable for use with those articles. The dispute is: (1) Whether, as BAB argued, the clothing items also fall within the dolls heading and the sub-heading for “accessories and parts” (9503 00 29) on a prima facie basis such that the correct classification is to be determined under the “tie breaker” provisions in GIR 3. (2) Whether as HMRC argued, classification under the toys heading and the sub-heading “stuffed” is definitive without the need to have recourse to GIR 3. That is on the basis that under note 3 items cannot be principally (in the sense of first or foremost for use) suitable for use with articles falling within more than one heading or sub-heading of chapter 95. (3) If, contrary to HMRC’s view, the tie-breaker in GIR 3 applies, whether classification is to be made (a) as BAB argued, under GIR 3(a) by reference to the dolls heading (and the sub-heading for “parts and accessories”) on the basis that this provides the more specific description of the clothing items or (b) as HMRC argued, under GIR 3(c) by reference to the toys heading (and the sub-heading “stuffed”) as the last in numerical order on the basis that neither heading is more specific than the other. 161. HMRC submitted that the application of GIR 1 and 6 is key in this case noting, in particular, the following: (1) In the reference in the chapter heading to “dolls, other toys”, the words “other toys” plainly mean all toys other than those already mentioned, such as dolls. This heading is, therefore, the appropriate heading for all toys. (2) Note 3 must be applied to the construction of headings and sub-headings in chapter 95 so that it is read as including parts or accessories to the items listed in the headings/sub-headings. (3) Articles which do not represent human beings do not fall within the dolls heading given it refers to “dolls representing only human beings” . It follows that the subsequent reference to “and parts and accessories thereof” means parts and accessories of dolls representing only human beings. (4) The sub-heading for toys complements the dolls heading by classifying separately other articles, which represent animals or non-human creatures. “Parts and accessories” which are, within the meaning of note 3, “suitable for use solely or principally with” such toys are classified with those articles. 162. In HMRC’s view, in assessing whether the clothing items are suitable for use principally with any articles in heading 9503, the tribunal must follow the approach set out in the cases as regards “intended use”. In their view, it is readily apparent from the clothing items’ objective characteristics, that the items are inherently suitable for use principally as “accessories” with animal toys of a stuffed kind. The slits in the clothing or loops on the wigs clearly demonstrate that they are specifically designed to fit BAB’s stuffed bears. The slits are positioned for the tail or ears of a stuffed bear and are of the size to accommodate those features. As with an armhole in a garment, it is evident from their positioning and sizing what they are designed to do. 163. Clothing items suitable for use solely or principally with human dolls would not have such features; they are included in the items, as is clearly apparent from the design, to accommodate the ears and tail of a stuffed bear as features which have no human equivalent. Moreover, they are not equally suitable for use with both human dolls and animal toys given the features simply cannot be explained as being of any use for a human doll. The fact that, for example, hair can be pulled through the loops on wigs or the slits in hats where a doll has pig tails is an example of theoretical use which is to be disregarded. 164. HMRC consider that it is inherent in the words “solely” or “principally”, that if accessories are found to be suitable for use solely or principally with a category of articles in a particular heading of chapter 95, they cannot also be held to be suitable for such use with articles in another category . The natural meaning of the term “principally” is first or foremost; an item cannot be suitable first or foremost for use with more than one set of articles. It is simply irrelevant, therefore, whether the clothing items can be used with human dolls. Moreover, under the hierarchical approach to classification the test in note 3 is specifically intended to allocate an item to a particular category at the first level of the classification test. 165. BAB’s stance is that, on the contrary, the clothing items fall on a prima facie basis in each of the dolls and toys headings on the basis that (a) they are suitable for use in practice as accessories for human dolls or that use can reasonably be envisaged and is more than entirely theoretical and (b) note 3 brings them also within the toys heading as their principal function is to serve as accessories for human shaped toys, whether or not having tails or ears and, therefore, as accessories to dolls or toys falling within both headings. In support of this BAB made the following main points: (1) It is not permissible, as is the effect of HMRC’s argument, to apply a principal purpose test as regards whether the clothing items fall within the dolls heading. (a) Whilst it is arguable that there is a main intended use test inherent within the wording of the dolls heading, there is no “principal” use test as such. (b) It may be that certain items carry within them an implied principal use. A nightdress or pyjamas for example may be intended for use principally at night rather than at other times (as in the Neckerman and Weiner cases referred to in Honeywell Analytics ). However, the clothing items can plainly be used as accessories for more than one set of articles especially given that the articles in question (human dolls and animal toys) are very similar. This slim line is demonstrated by the fact that the HSENs state that the toys heading applies even where the toy possesses “predominantly human physical characteristics”; the inclusion of alien ears would suffice for an item to fall under that heading. On that basis, the clothing items are essentially an accessory for a wider class comprising articles falling within both headings. (c) Note 3 cannot be intended to introduce a principal use test into the dolls heading given the express inclusion in that heading of the words “and accessories and part thereof”. It would not be necessary to include these words if note 3 were intended to apply. Note 3 cannot simply rub out or qualify that express wording. If note 3 were intended to do so, it could have been differently worded as in note 3 to section XVII which states:
“References in Chapters 86 to 88 to “parts” or “accessories”, do not apply to parts and accessories which are not suitable for use solely or principally with the articles of those chapters”
. Moreover, note 3 does not operate as a form of tie-breaker provision, to determine which of two headings apply, as that would render GIR 3 redundant. (d) The fact that note 3 refers to classifying accessories with “article s ” falling within chapter 95 further supports this analysis. The purpose of note 3 is in part to make it clear that, subject to certain exceptions, items which may otherwise fall within other chapters fall within chapter 95 where they are suitable for use solely or principally with “articles” meaning any one or more of the categories of articles falling within the headings in chapter 95. (2) In the first instance, therefore, the tribunal must assess whether the clothing items fall within the dolls heading separately from considering whether they fall within any other heading. Under the general principles set out by the CJEU, such classification may be made according to “use in practice” or “main intended use” as distinct from a wholly theoretical use as held in the Sysmex case (as interpreted in Huxley ) or on the basis that the use can be reasonably envisaged looking at all the characteristics of the items as a whole ( see Van Landeghem (Common Customs Tariff) [2007] C-486/06 at [27], [29], [34] and [42]). (3) If, contrary to BAB’s view, note 3 is held to import a principal use test into the dolls heading or there is a principal or main intended use test inherent in the heading itself, it is entirely conceptually possible for an accessory to have more than one principal or main intended use (see Kip Europe SA and Others (C-362/07), Hewlett Packard International SARL (C-363/07) v Administration des douanes – Direction générale des douanes et droits indirects and Xerox Ltd v Revenue & Customs [2010] UKFTT 527 ). (4) The inclusion of the slits does not somehow change the nature of the clothing items as suitable for use with human dolls. The circumstances of this case are not akin to those in HMRC v Invamed Group Limited and Others (Tax) [2018] UKUT 305 or Paderborner Brauerei Haus Cramer (Customs Union) [2011] EUECJ C-196. The inclusion of the slits in the relevant items (a) is not so invasive as to render use as an accessory to a human doll as theoretical and (b) does not result in the items of clothing ceasing to have the objective characteristics which make them suitable for use with human dolls. BAB also referred to Xerox Ltd v Revenue and Customs [2015] UKUT 631 (TCC) in this context. 166. BAB concluded that on the evidence, including, in particular, the witnesses’ evidence on the interchangeability of the clothing items for use with dolls and toys, (see [8] to [43]) the use of the clothing items as “accessories” for dolls is not theoretical and can reasonably be envisaged and indeed is a main or principal use. BAB emphasised the following main points as regards the evidence: (1) There is a standard size for dolls and toys of this kind such that the items fit both human dolls, including those sold by BAB, and stuffed bears and other stuffed animal toys. (2) The slits in the clothes and the loops for wigs are not “intrusive”; they are not noticeable when the item is on a doll. The loops are there simply to compensate for the fact that animal ears get in the way. Whilst the slits in the hats, hoodies and specific items, such as knitted dresses, are slightly more visible than those in other items, in the overall context of the item they are not intrusive. In all cases the presence of the slits or loops does not detract from the item’s suitability for use with a human doll. The slits in hats and hoodies have a function in the context of human dolls in that hair can be pulled through them as set out above. (3) The sales data evidence demonstrates that, in practice, the items are sold and used with both BAB stuffed animals and BAB stuffed dolls as Mr Parry and Ms Stout stressed. 21% of the accessories sold with Honey and Daisy are items of clothing with slits. Under the principles set out in the caselaw, the tribunal can take this evidence into account in classifying these items; it relates to an objective characteristic in demonstrating the lack of significance of the slits such that use of the clothing items with human dolls is a principal use. (4) On the other hand, under the principles in these cases, the fact that BAB sells more stuffed bears than human dolls is not relevant. That is not a function of the objective characteristics of the clothing items; it is merely a function of BAB’s business model. (5) Similarly, the use of the bear logo on certain of the items does not affect the position. This merely reflects BAB’s branding and does not limit the items to being suitable for use only with stuffed bears. 167. BAB concluded that a customs officer inspecting the items would naturally view them as being suitable for use principally with human shaped dolls whether or not having tails or ears. Only on closer inspection would the customs officer note that the slits permit use with human like dolls or toys with tails or protruding ears. The conclusion, as based on objective characteristics, that the principal use of the clothing items is as accessories for human and quasi human dolls can be corroborated by the sales data evidence. 168. HMRC responded that: (1) The cases which BAB referred to provide no support for its case but rather in many instances support HMRC’s position. In particular, there is no suggestion in any of the cases that where a main intended use or principal purpose test is relevant, an item can have more than one such main use or principal purpose. (2) The lack of intrusiveness of the slits is not relevant. This is not an objective concept and its use as a test is nowhere supported in the terms of the headings or subheadings. (3) Much of the evidence on “interchangeability” of the clothing items for use with human dolls and animal toys is not relevant to classification as it does not relate to objective criteria: (a) On the basis of the decision in Honeywell Analytics , information in marketing materials or manuals or on packaging which is in the public domain and objectively verifiable can be taken into account. That does not include material such as the sales data produced by BAB or information on the commercial history of BAB or the subjective experience of the witnesses as to the behaviour of children. Whilst some of this may indicate consumer behaviour, it is not objectively verifiable and does not otherwise shed light on the objective characteristics of the items. (b) In any event the data produced by BAB is not wholly reliable and relates to a large extent to sales of BAB dolls which were only sold towards the end of the period in question or to sales taking place wholly outside the relevant period. (c) The Guidelines and the fact that the relevant items may fit some other dolls or toys is irrelevant to the objective assessment required. Clearly the items would fit any figure of comparable size with appropriate limbs and shape. For all the reasons set out above, the items are clearly designed for use with BAB’s own stuffed bears. Moreover the fact that there is no evidence that other manufacturers make clothing with slits underlines the significance of the design of these items. (4) The fact that parts and/or accessories are mentioned in some sub-headings, such as the dolls heading, is irrelevant. The point is that recourse must be had to note 3 for parts and accessories to be included in the main heading in the first place. 169. If it is found that, contrary to HMRC’s view, the relevant items fall within both relevant headings: (1) BAB’s view is that, applying the test in GIR 3(a) as set out in the case law (see below), GIR 3(a) allocates the clothing items to the dolls heading (and the sub-heading for “parts and accessories”, 9503 00 29) as that is the more specific heading. (2) BAB noted that the dolls heading specifically refers to “accessories and parts thereof” whereas the toys heading has no such reference absent note 3; that note is to be disregarded for this purpose. (3) In any event, the toys heading must encompass a much broader range of items on the basis of the following main points: (a) It is not a question of surveying the market to see how many individual goods are sold in a year within each category but of applying common sense. (b) According to the dictionary definition a “doll” is a model of a human form which is small in size. This implies that the term “dolls” in the dolls heading covers a specific range of sizes smaller than that of “toys” under the toys heading. The related “parts and accessories” for a “doll” can be assumed to be correspondingly limited. (c) There is a vast variety of animal and other non-human forms compared with a single human form. That means that correspondingly there must be a much wider range of “parts and accessories” for animal toys. (d) The specification of size and human characteristics to which an “accessory” for a “doll” must conform makes the definition in the dolls heading a more complete description of the clothing items. (4) HMRC’s stance is that neither heading is more specific than the other. They each merely capture one of the principal uses of “accessories” with human dolls and with animal toys. The proposition that the toys heading covers a greater range of items is based on nothing more than assertion. In any event the question of which heading is more specific is not determined by reference to how many goods fall within that heading but on the specificity or generality of the heading. The decision of the UT in Xerox entirely supports this view.[117]Conclusion on clothing items 170. In my view, for the reasons set out in full below:(1) the clothing items are, according to their objective characteristics and properties, “accessories” which are, within the meaning of note 3, “suitable for use…principally” with animal toys of a stuffed kind (under sub-heading 9503 00 41);(2) under GIR 1 and 6 and on the plain meaning of note 3, as read in the context of the overall hierarchical approach under the GIRs, the clothing items are to be classified definitively with those articles under the sub-heading for animal toys of a stuffed kind; and(3) if, contrary to my view, the clothing items fall within each of the dolls and toys headings on a prima facie basis (and thereby the relevant sub-headings), under GIR 3, in any event, the items are to be classified under the sub-heading for animal toys of a stuffed kind as the last applicable heading in numerical order. Application of GIR 1 and 6 and note 3 171. On the basis of the caselaw, in deciding which heading in chapter 95 applies to the clothing items, the correct starting point under GIR 1 and 6 must be to assess whether the items, which are accepted to be “accessories”, are suitable for use solely or principally with articles falling within chapter 95 within the meaning of article 3 according to the items’ objective characteristics. On their natural meaning I interpret the term “suitable” to mean right or appropriate and the term “principally” to mean for the most part or chiefly. On that basis, in my view, the clothing items are “accessories” which are suitable, in the sense of right or appropriate, for use for the most part or chiefly with animal toys of a stuffed kind: (1) The critical factor is that the items are specifically designed, according to BAB’s specifications, to fit stuffed bears of the size and proportions of the BAB stuffed bears with slits in the clothing or loops on the wigs which are evidently positioned and sized to enable the tail or ears of the stuffed bear to be pulled through. (2) Whilst the clothing items may fit some human dolls, these design features have no function as regards such dolls (except in the limited circumstance that a child could choose to use the slits in the hats to pull through the hair of dolls which have appropriate hair styles to enable the child to do so). (3) Much of the evidence presented by BAB on the lack of visibility of the slits, the “interchangeability” of the products for use with human dolls and animal toys, the commercial history of the group and the sales data, is aimed at demonstrating that (a) absent the loops or slits, the clothing items are similar to clothes for dolls, (b) the clothing items fit some human dolls and other toys and (c) consumers purchase and use the clothing items with human dolls notwithstanding the presence of the slits. However, much of this evidence is not objectively verifiable evidence of the type which can be taken into account in the classification analysis and/or does not establish the proposition asserted and/or in any event does not detract in any way from the significance of the objective characteristics of the clothing items, including the slits or loops, as features which make the clothing items suitable for use chiefly with stuffed bears (see [172], [173] and [181] to [187]). 172. As set out in full above, in Honeywell Analytics it was held that materials such as marketing information and manuals which demonstrate an item’s “targeted use” or intended use may form part of and may be taken into account in assessing its objective characteristics for classification purposes. The court noted that it is apparent from the BskyB case that the objective manner in which an item is presented to consumers or users is relevant. In that case, in applying the intended use test the CJEU considered it relevant to consider which functions of a multi-functioning device a consumer would regard as principal and ancillary, which they discerned from the features of the device itself (see [76] to [81] of the decision). In Honeywell Analytics the court also noted that, given the importance to classification of the use to which an item is intended to be put, it would be wrong to leave out of account the way in which consumers are encouraged to use the item in question by “materials placed into the public domain and objectively verifiable”. 173. On that basis, objectively verifiable materials and evidence showing how the clothing items are marketed to customers and how customers view the items according to their objective characteristics may be of relevance to the analysis. In that context BAB point, in particular, to the following evidence, as demonstrating that, in its view, the presence of the slits in the clothing items does not affect a consumer’s view of the items as suitable for use with human dolls: (1) Evidence on the commercial history of the BAB group as regards the production, import and sale of the clothing items, the marketing strategies of other dolls and dolls “accessories” retailers and the size of dolls they sell and the witnesses’ subjective views based on their observations of children’s behaviour (see [8] to [43]). However, this is not objectively verifiable material of a type which evidences how consumers are encouraged to use these particular clothing items or how they view the clothing items’ objective characteristics as regards their suitability for use chiefly with human dolls or animal toys. At most this evidence demonstrates that, aside from the presence of the slits, the clothing items are similar to clothing produced for human dolls, that there are human dolls on sale in the market place of an appropriate size for the clothing items to be used on them and that, in practice, the clothing items are sometimes used for that purpose. This does not suffice to detract from the analysis set out above. (2) The sales data, in particular, that relating to Daisy and Honey. However, even if it is permissible to take account of such sales data as evidencing consumer behaviour (and that seems doubtful on the basis of the caselaw), the materials produced in this case are not sufficient to evidence how consumers view the clothing items, in terms of their suitability for use with human dolls or animal toys, with any degree of reliability or certainty: (a) As regards the data in respect of sales of Honey and Daisy and related evidence (see [36] to [40]): (i) Honey and Daisy were only sold in the UK from near the end of the relevant period, from 2012 onwards, (ii) it is not possible with accuracy to establish how many of the sales referred to were made in the UK, (iii) whilst the data shows that around 21% of sales of accessories made with a Honey or Daisy doll when sold alone were of clothing items, it is not necessarily the case that all of these items were purchased for use with these dolls (see [40]), (iv) BAB produced no comparable statistics for sales of clothing items with its stuffed bears or other toys during the whole of the relevant period and (v) the evidence was that during the relevant period around 45% of sales were of accessories alone (with no toy); there is no way of knowing what doll or toy those items were purchased for use with. (b) The data regarding sales of Lalaloopsy relates to periods after that in question and there is no breakdown of sales of clothing items with these dolls between those with slits and those without them (see [41]). (3) BAB also noted that there were occasions when the clothing items were marketed for sale with toys with no ears or tails but only limited specific occasions were identified (see [35] and [56]). In the example given by Mr Parry of “bundle promotions”, the toys with which the relevant clothing items were marketed for sale included stuffed bears. 174. Equally I do not consider that the fact that the items may have the BAB pawprint logo on them or on the packaging is a matter to be taken into account in the analysis. In my view the fact that items are branded with an image associated with a bear is not a feature which of itself indicates that the items are suitable for use principally with stuffed bears. The logo simply indicates that this is a BAB product. It is reasonable to assume that a bear related logo is used as the sales of stuffed bears are a central part of BAB’s business model. However, it does not follow and there is no objectively verifiable evidence that this branding affects or influences the view which a consumer can be expected otherwise to have of the relevant items, according to their objective characteristics. 175. In my view, as applied under GIR 1 and 6, note 3, in effect, provides a definitive classification for an accessory where it can be identified as being suitable solely or principally use with articles within a particular heading: (1) Under GIR 1 and 6 items are to be allocated (where possible) to a particular heading, according to their objective characteristics and properties, as specifically defined in the relevant heading (and in the section or chapter notes). In that context I note that the wording of the headings in point here plainly suggests a clear dividing line and demarcation between (a) all dolls in human form (under the dolls heading) and (b) all toys in an animal form or other non-human form (under the toys heading). (2) It would be out of kilter with that approach to interpret note 3 as meaning that items are to be classified under heading 9503 where they can be viewed as suitable solely or principally for use with articles falling under one or more headings taken together in a holistic way (on the basis that GIR 3 then determines which particular heading applies). Rather: (a) On the plain meaning of the wording used, as interpreted in light of the overall approach under GIR 1 and 6, the relevant enquiry is whether, according to their objective characteristics and properties, the clothing items are accessories suitable for use solely or principally with particular articles as specifically defined in a particular heading or sub-heading. (b) On the natural meaning of the terms “principally” and “suitable”, an “accessory” which is held to be right and appropriate for use, for the most part or chiefly , with articles of a particular heading or sub-heading cannot also be suitable for use in that sense with a different set of articles of a different heading or sub-heading. (c) The reference at the end of note 3 that relevant accessories “ are to be classified with those articles” plainly indicates, as is in line with GIR 1 and 6, that accessories are to be classified definitively with such particular articles as they are found to be suitable for use solely or principally with. 176. BAB said that, in effect, this interpretation involves reading the dolls heading as though it is subject to note 3 thereby importing a principal use test into that heading. BAB argued that if note 3 is to be read in that way different wording could have been used (as in section XVII) (see [165]). Moreover, in its view, there is no suggestion in the wording of the dolls heading itself that a principal purpose test is to be applied; if anything, a main intended use test may be implied. 177. It seems to me that, given that note 3 applies to chapter 95 generally with no exclusions, it is likely that it is intended to apply to the reference to “parts and accessories thereof” in the human dolls heading. If that was not the intention the wording of note 3 could have been modified accordingly. Moreover, it would be very odd if “parts and accessories” are to be classified with articles in headings in chapter 95 (a) which do not specifically mention “parts and accessories” only if they are suitable for use solely or principally with those articles but (b) which specifically mention “parts and accessories” by reference to some lesser test. I also think it likely that, in any event, the term “parts and accessories thereof ” in the dolls heading is to be interpreted as meaning that an item must be mainly or principally intended for or suitable for use with human dolls for it to be an accessory of such a doll. 178. On that basis, it follows that if an item cannot be identified as an “accessory” suitable for use solely or principally, in the sense of chiefly or for the most part, with articles within a particular heading or sub-heading of chapter 95, it is to be classified as an item in its own right under the heading or sub-heading within which it otherwise falls under the usual approach to classification. That would be the case, therefore, if, for example, the item is equally suitable for use with human dolls and animal toys such that, under note 3, it cannot be specifically identified as an “accessory” or “part “of either set of articles. The overall effect of note 3, therefore, as applied in conjunction with the GIRs, is that an item is classified as an “accessory” or “part” of another article only where it can be identified as suitable for use solely or principally with that article. 179. In my view, the case law to which BAB referred does not support a different approach to that set out above in a case where, as here, the CN specifically requires a sole or principal suitability for use test to be applied in determining which heading or sub-heading applies: (1) The decisions in Sysmex, Huxley and Honeywell Analytics address when and how a principal or main intended use is to be applied when such a test is not expressly provided for in the CN or related GIRs. I note that in Honeywell Analytics there was a difference of opinion as to when such a test may be used when not specifically provided for in the headings/notes. However, there is nothing in that case or the other cases referred to which casts doubt on the application of such a test when specifically provided for in the CN or GIRs or to suggest that “principally” should be interpreted otherwise than in accordance with its natural meaning. (2) In Kip , Hewlett Packard and Xerox the courts considered the effect of note 3 to section XVI which sets out a principal function test as follows:
“Unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines designed for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function ”. (3) An issue in these cases was whether machines carrying out a number of different functions (such as printer, copier, fax and scanner) could be classified under the above note by reference to an identifiable principal function. BAB emphasised that in Xerox it was found, at [101], that the machines were, by reference to their objective characteristics, “genuinely multifunctional and that it is not possible to conclude that the copying function is subsidiary to the data processing function or vice versa ”. (4) BAB submitted that, similarly the relevant items are genuinely multifunctional in that they are for use both with human dolls and stuffed bears; no one function is subsidiary to the other. I note, however, that the assumption in those cases was that if it was possible to identify a principal use or function, classification would be determined accordingly at the GIR 1 stage. It was only if the different functions were of equal importance, that it was necessary to have recourse to GIR 3(a). The general approach was, therefore, consistent with the approach taken here and, for the reasons set out, I do not consider that the clothing items are equally suitable for use with human dolls and animal toys. 180.

(b) “vehicles for the transport of goods”

. BAB noted the following: (1) The CJEU said that under the wording of the heading in (a), “the principal intended use of those vehicles is decisive for their classification. It follows from the use of the term 'designed', as supported by the settled case-law….that the principal intended use of the vehicle is decisive, provided that it is inherent to the product” (see [27]). The CJEU emphasised that “intended use is determined by the general appearance of the vehicles…. and on the basis of the entirety of the characteristics of those vehicles which give them their essential character” (see [27], [29] and [34]). It is uncontroversial that, as BAB said, this demonstrates the importance of looking at all the characteristics of the relevant items in assessing which heading they fall within. (2) At [42] the CJEU concluded that, on that test, the principal intended use of the vehicles was for the transport of persons. They added that “[c]ontrary to the Commission's argument, the classification of the vehicles [under the heading for vehicles for the transport of goods] cannot reasonably be envisaged and therefore the application of General Rule 3(c)….is excluded on the basis of its very wording.” BAB said that this demonstrates that the CJEU considered that, notwithstanding the “principal use” test applicable under the heading for vehicles designed principally for the transport of persons, the vehicles could also have fallen within the heading for vehicles for the transport of goods on a prima face basis if that use could “reasonably be envisaged”. However, I note that earlier in the decision, at [27], the CJEU said in terms that under the first heading “the principal intended use of those vehicles is decisive for their classification”. It seems that in the comment at [42] the CJEU was simply noting that the Commission’s argument that the tie-breaker in GIR 3 was in point had no basis at all (given the view that use for the transport of goods could not reasonably be envisaged). 181. BAB pointed to Invamed , Paderborner and Xerox as supporting its view that the analysis is to be approached by assessing whether the presence of the slits or loops in the clothing items detracts from the suitability of the items for use as accessories with human dolls. In that context, BAB noted that in the majority of the items the slits and loops are not very visible, apparent or “intrusive” which, in its view, together with the evidence set out at [8] to [43] (as to which see [171] to [174]), demonstrates that the items are intended for and are suitable for use with human dolls notwithstanding these features. 182. In Invamed , the tribunal held that mobility scooters should be classified as “carriages for disabled persons..” (8713) rather than “other motor vehicles, principally designed for the transport of persons…” (8703) on the basis that the addition of certain features compromised their use by persons other than disabled persons. Following the hearing of this appeal, however, the UT has overturned that decision in HMRC v Invamed Group Ltd & Ors [2018] UKUT 305 (TCC) but the reasoning in the UT decision is of relevance. In outline, the UT held the following: (1) The UT said that the vehicles would fall within “carriages for disabled persons” only if they were designed solely for persons with a non-marginal limitation on their ability to walk (“ disabled persons ”) (based on the decision of the CJEU on a referral the tribunal made to it ( see Invamed Group and Others [2016] EUECJ C-198/15 )). They said, at [66], that where such vehicles are equally capable of being used by persons other than disabled persons “the real question is whether the vehicles are also, by reference to their objective characteristics, designed for the use of such persons” as well as for those who are disabled. (2) The UT said, at [68] and [69], that the approach of looking for additional objective features of the vehicle which tend towards a design for use by disabled persons is not applicable given the objective characteristics are simply those of a motorised vehicle providing transport, at walking pace, which is capable of being used for that purpose by an able-bodied person, and there is evidence of actual (and not merely theoretical) use by such persons. In that case the court must analyse whether the vehicle is designed for transport generally or solely for use by persons with a relevant disability. (3) In their view, at [70], the correct approach is to determine whether there are characteristics of the vehicle which, although they do not detract from use by disabled persons (because they do not outweigh the objectively identifiable benefits to such persons), do detract from use by able-bodied persons because, viewed objectively, they outweigh the benefits to those persons of using a scooter as an alternative to walking (even if some people might still choose to use the scooters notwithstanding the perceived disadvantages). (4) The UT held, at [72], that the tribunal was wrong (a) to conclude that, because the design of the vehicle and those features which benefitted disabled persons did not benefit able-bodied persons when compared to walking, the scooters could not be said to have been designed for such able-bodied persons and (b) to seek to identify whether particular features of the scooter afforded an extra ability or facility to able-bodied persons:
“…where the core structure of the vehicle affords to an able-bodied person the same facility for mechanised travel as a disabled person, that fact without more would result in classification under heading 8703, because there could be no design distinction ascertainable from those objective characteristics between intended use by disabled persons as against able-bodied persons who may choose to use a scooter in preference to walking. It is not necessary to find something in addition to the ability to use the scooter instead of walking which aids or is an advantage to an able-bodied person in order to conclude that the scooter is designed for able-bodied persons as well as for disabled persons and so is not designed solely for disabled persons. In seeking to identify such additional advantages, we consider that the FTT adopted the wrong approach.” (5) They held, at [74] to [76] that analysing “the true question” (as set out at (3) above that: “there are no material countervailing disadvantages in the use by an able-bodied person of a mobility scooter, and that since the basic objective characteristics of such a scooter provide the same facility of mechanised movement to disabled and able-bodied persons alike, it must follow that viewed by reference to their objective characteristics the scooters are not designed solely for use by disabled persons and are not classifiable under heading 8713. They are motor vehicles principally designed for the transport of persons and fall as such to be classified under heading 8703.” 183. The UT took the view, therefore, essentially that the vehicles were to be classified for customs duty purposes as vehicles principally designed for the transport of persons on the basis that the vehicles were designed to provide both able-bodied and disabled persons with the same mechanised transport function; the design did not give rise to any material disadvantage for an able-bodied person in using the vehicle for that function. On that basis, the UT considered that the scooters could not be said to be designed solely for use by disabled persons. 184. In this case, I accept that, on the approach taken in Invamed , according to their objective characteristics, the clothing items are suitable for use to provide the same basic clothing function as “accessories” for human dolls and animal toys of an appropriate size. The presence of the slits or loops does not prevent the clothing items being used on a human doll of an appropriate size albeit that the slits or loops do not have any function as regards such dolls (except to the limited extent set out above as regards hats). If the only test in this case was, similarly to the test in Invamed , whether the clothing items are suitable for use “solely” with an article, then, on the Invamed approach, the fact that the clothing items are suitable for use to perform the same basic function as regards both human dolls and animal toys would prevent them being classified with animal toys. 185. However, unlike in Invamed , the test set out in note 3 is also satisfied where “accessories” such as the clothing items are suitable for use “principally” with particular articles. For the reasons already given, the fact that the clothing items can be used with human dolls (or other toys) of an appropriate size does not detract from the fact that their design with slits and loops of a specific size and position to accommodate ears and tails of a stuffed bear renders them suitable, in the sense of right or appropriate, for use principally, in the sense of for the most part or chiefly, with such toys. As set out at [171] to [174], there is insufficient objectively verifiable evidence of relevance to assessing, according to their objective characteristics, with what articles the items are suitable for use chiefly or for the main part, to justify a conclusion to the contrary. 186. In Paderborner , the CJEU held that a “malt beer base” produced from brewed beer could not be classified as such as it lost the objective properties and characteristics particular to beer when it was clarified and subjected to ultrafiltration; the resulting malt beer base did not look like beer and did not have the bitter taste specific to beer (see [37]). In Xerox , the UT upheld the tribunal’s decision that items known as “ink sticks”, which were imported for use exclusively with Xerox solid ink printers, should be classified as “printing ink” or “other inks” rather than as “parts” of printers. The UT rejected the criticism that it followed from the tribunal’s statement, at [91] of its decision, that the goods retained “at least some of the objective properties and characteristics of “ink”…”, that the goods had not retained all the characteristics of ink and so were not prima facie classifiable under the heading for inks. The UT noted that in the relevant passage the tribunal were dealing with a submission based on Paderborner that the goods had lost the objective characteristics and properties of ink. The tribunal made this comment in that context, “that is in order to show that it had not lost them” and evidently regarded Paderborner : “as a case where the processes that the product had undergone so denatured it that it was no longer capable of answering the description of ‘beer’, whereas in the present case the processes the Goods had undergone did not mean that they were no longer capable of answering the description ‘ink’….” 187. In this case, however, it is not a question of assessing whether, due to the presence of the slits or loops, the clothing items have lost or retained their character as items which provide a clothing function for toys or dolls. As set out above, whilst the clothing items can plainly be used on any toy or doll of an appropriate size, the fact is that they are, according to their objective design characteristics, suitable principally for use with stuffed animal toys. Application of GIR 3 188. To recap, for the reasons set out above, my view is that: (1) It is inherent in the wording of note 3, as interpreted in the light of the GIRs, that an “accessory” cannot be regarded as suitable for use solely or principally with articles falling in more than one heading or sub-heading in chapter 95. It follows that if an item does not meet the test in note 3 as regards any of the articles in the relevant headings, it is to be classified as an item in its own right according to the usual classification principles. (2) On that basis, if, contrary to my view, the clothing items are equally suitable for use with human dolls and animal toys, they would not fall to be classified as “accessories” under either the dolls heading or the toys heading. Rather they would fall to be classified under the other toys heading and the relevant sub-heading for “other” (9503 00 99). (3) If I am wrong on how the test in note 3 applies and the clothing items can be classified within both the dolls and the toys heading on a prima facie basis, for the reasons set out below, my view is that, under GIR 3, they are to be classified under the toys heading and the sub-heading “stuffed” (9503 00 41). 189. As regards applying GIR 3(a) in this context, the parties referred to a number of cases, including in particular the UT decision in Xerox . At [50], the UT took the view that when deciding between competing headings on the basis of which is more specific, the comparison should be made “between the relevant part of each heading rather than the heading as a whole” on the basis that : “The language of GIR 3(a) refers to the heading which “provides the most specific description”, and a heading which is itself a broad category of goods but contains within it a specific description which fits the goods in question does, it seems to me, “provide” that description. It also I think accords more with the apparent intent of GIR 3(a) that if goods are specifically described in a heading they should be classified under that heading. I will therefore proceed on the basis that the question is whether the relevant part of heading 3215 which describes the Goods (‘printing ink’ or ‘other inks’) is a more specific description than the relevant part of heading 8443 (‘parts’ of ‘other 15 printers’).” 190. The UT went on, at [61], to accept the argument that the tribunal had made an error in their approach to GIR 3(a) on the basis that, as set out at [54], the exercise does not require any further comparison of the objective characteristics and properties of the goods. Once an article has been prima facie classified under particular headings by reference to its objective characteristics and properties “the result is a binary determination: either a tariff heading describes the article or it does not”
. Whilst GIR 3(a) “requires an examination of the competing tariff provisions” that exercise “does not call for any further comparison of the objective characteristics and properties of the goods” rather it is “a textual exercise requiring a comparison of the language of the competing headings, to see which, if any, more specifically describes the goods.” The UT continued at [55] that to put it another way:
“ the GIR 3(a) exercise is not concerned with examining the goods again to see how closely or obviously they fit under a particular heading, or with which of two or more competing headings the goods have more affinity. It does not matter for this purpose whether the conclusion that the goods are prima facie classifiable under a particular heading was an obvious and straightforward one, or was a narrow decision under which the goods only just scraped in. Either they are in the heading or they are not. What is of relevance at this stage is how specific the description in the heading is.” 191. The UT noted, at [65], that there is guidance on how to apply this rule at para (IV) of the Explanatory Note to GIR 3 as follows: “ It is not practicable to lay down hard and fast rules by which to determine whether one heading more specifically describes the goods than another, but in general it may be said that: (a) A description by name is more specific than a description by class (e.g. shavers and hair clippers, with self-contained electric motor, are classified in heading 85.10 and not in heading 84.67 as tools for working in the hand with self-contained electric motor or in heading 85.09 as electro-mechanical domestic appliances with self-contained electric motor). (b) If the goods answer to a description which more clearly identifies them, that description is more specific than one where identification is less complete.” 192. The UT went on to refer to a number of examples falling in (b) as follows : “Tufted textile carpets, identifiable for use in motor cars, which are to be classified not as accessories of motor cars in heading 87.08 but in heading 57.03, where they are more specifically described as carpets. Unframed safety glass consisting of toughened or laminated glass, shaped and identifiable for use in aeroplanes, which is to be classified not in heading 88.03 as parts of goods of heading 88.01 or 88.02 but in heading 70.07, where it is more specifically described as safety glass.” 193. The UT accepted that the examples given above were relevant and helpful particularly the second which the UT considered was “closely similar to the present case” and concluded that: “Here too the Goods have been specially manufactured to fit into a more complex object, and are “shaped and identifiable for use in” printers. I will assume that they are prima facie classifiable as parts of printers. But they are also prima facie classifiable as inks, which as explained above is in my judgment both a description of the material of which they are made, and also a reference to their intended function. The example tends to support the view that I have already expressed that the Goods are to be classified not as parts of printers but as inks, the latter being a more specific description than parts of printers, which covers a wide range of different items. Similar considerations apply to the other example where a carpet designed for use in a car is more specifically described as a carpet than as an accessory for a car.” 194. In Hasbro European Trading BV v Revenue & Customs [2018] EWCA Civ 1221 , the Court of Appeal agreed that, as was said in Xerox , that textual analysis must be “of prime importance” in a GIR 3(a) case (see [41]). Newey LJ added, however, that the fact that the HSENs in respect of the GIRs direct attention to which description “more completely identifies” the goods indicates that the “objective characteristics and properties of the goods” can also be significant: “GIR 3(a) seems to me to call for an evaluation of which heading provides the most specific description of the relevant goods . Often, it may not in practice be necessary to look beyond the wording of the rival headings to determine this. The particular characteristics of the goods can potentially be material, however.” 195. Lord Justice Newey also thought that a certain amount of guidance as to how GIR 3(a) should be applied can be gleaned from Case C-183/06 RUMA GmbH v Oberfinanzdirektion Nürnberg [2007] ECR I-1561. In that case the issue was whether keypad membranes for insertion on the keypad of a mobile phone was to be classified (a) under heading 8529 of the CN as “[p]arts suitable for use solely or principally with the apparatus of headings 8525 to 8528”, which includes mobile telephones or (b) under heading 8538, as “[p]arts suitable for use solely or principally with” certain apparatus which include “[b] oards, panels, consoles, desks, cabinets and other bases, equipped with two or more apparatus of heading 8535 or 8536, for electric control or the distribution of electricity ”. 196. Lord Justice Newey cited, at [42], the following passage at [35] of the CJEU’s decision in Ruma where they comment on the application of GIR 3(a): “ According to the wording of [GIR 3(a)…..which specifically covers the situation where goods are prima facie classifiable under two or more headings, 'the heading which provides the most specific description shall be preferred to headings providing a more general description'. In the present case, it must be pointed out that, as regards the objective characteristics and properties of the keypad membrane at issue in the main proceedings, and in particular given the fact that it refers expressly to '[p]arts of apparatus of subheadings … 8525 20 91', namely to parts of mobile telephones, subheading 8529 90 40 provides a more specific description than subheading 8538 90 99 which covers a much wider and more varied range of goods , as shown by its title read in conjunction with that of heading 8537" (emphasis added).” 197. He continued to note, also at [42], that in that case, the heading covering “a much wider and more varied range of goods” was thus rejected. He said, at [43], that: “This makes obvious sense. The ultimate question is which heading provides the most specific description. In general, the heading encompassing the most limited range of goods can be expected to be the most specific. A heading covering a broader range is likely to be seen as more generic and less specific.” 198. BAB also referred to the UT decision in HMRC v TomTom International BV [2013] UKUT 498 where the UT took a similar approach to applying GIR 3 as set out in Ruma . 199. Having regard to the approach set out in the caselaw, I have concluded that, for the purposes of GIR 3(a) neither of the dolls and toys headings provides a more specific description of the clothing items than the other: (1) I can see no reason why, in comparing the two relevant headings, the toys heading should not be read as including reference to “parts and accessories” suitable for use solely or principally with toys falling within that heading. Plainly the toys heading is only in point if read subject to note 3. It makes no sense, therefore, to read it, as BAB argued, without reference to note 3; BAB provided no convincing reason why that should be the case. (2) On that basis, the comparison is between, to paraphrase, descriptions of the clothing items (a) as accessories of human dolls and (b) as accessories of animal toys (of a stuffed kind). On a textual analysis these descriptions are simply of accessories for two different ranges of items, namely, human dolls and animal toys. I cannot see how one of these descriptions can be said to more specifically describe or more completely identify the clothing items than the other. Each description identifies the clothing items as accessories but for use with different articles, namely (a) human dolls or (b) animal toys. (3) On the authority of Ruma (as cited with approval in Hasbro ), BAB asserted that the dolls heading is more specific primarily because the toys heading covers a wider and more varied range of “accessories” than the dolls heading. That assertion was made on the basis that (a) there is a wide variety of animal and other non-human forms compared with a single human form and that the term “dolls” implies articles of more limited sizes than “toys” and (b) it follows that there must be a wider and more varied range of animal toys than human dolls and, correspondingly, of “accessories” for those animal toys. However: (a) As set out in Hasbro , whilst in general terms the fact that a heading covers a less broad and varied range of goods may indicate greater specificity, the essential question is which heading provides the most specific description of the relevant goods or which heading most completely identifies those goods . (b) In Ruma , it is readily apparent that a description of a keyboard membrane as, to paraphrase, a part of a mobile phone is clearly more specific and more completely identifies the membrane than a description as a part of “boards, panels, consoles, desks, cabinets and other bases….for electric control or the distribution of electricity”. (c) However, in my view the assumption that there is a more limited range of items which may fall to be classified as accessories of a human doll compared with the range that may be classified as accessories of an animal toy, does not mean that the dolls heading provides a more specific description of or, more completely identifies, the clothing items. The fact remains that the clothing items are captured by each heading essentially on the same basis, namely, that they are “accessories” but suitable for use with, in one case, human dolls and, in the other, animal toys. Each heading simply captures one of the potential uses of these items as “accessories”. (4) In any event, it seems doubtful that it can simply be assumed that more items may be classified as “accessories” of human dolls than of animal toys on the basis that animal toys may take a number of different forms and be of a greater variety of sizes than human dolls. It is a matter of common experience that human dolls come in all different shapes and sizes, with different appearances and may be made of different materials; a vast array of accessories for use with such dolls can be envisaged. 200. On that basis the clothing items fall to be classified under GIR 3(c) by reference to the heading which is the last in numerical order, namely, the animal toys heading (and the sub-heading stuffed) (9503 00 41). Submissions on footwear 201. The parties essentially took the same stance as set out above as regards all items of footwear. They made the following main points on the evidence: (1) HMRC said that the shoes are specifically designed in terms of their distinctive round shape and size to fit BAB’s bears. They are not of the size and shape which indicates that they are for use with human dolls as they do not correspond to a human shaped foot. The fact that these shoes fit onto some specific types of doll is irrelevant. (2) BAB said that the shoes are plainly equally suitable for use as accessories for human dolls and animal toys. The evidence demonstrates that the fact that they are round is not to do with the bears; bears do not have round feet. The evidence is that they are designed with that shape due to the difficulty of inserting feet attached to non-moving joints into a shoe with a foot shape. In BAB’s view the paw print logo appearing on some of the shoes is irrelevant for the reasons set out above. (3) HMRC responded that there is no real evidence that a rounded shoe of this kind fits more easily on a doll with fixed joints (which many dolls have). The examples in the bundles do not show human dolls with rounded feet of the type for which these shoes are suitable. The fact that BAB’s shoes fit some dolls with more rounded feet is irrelevant to classification; that does not of itself make them identifiable as shoes suitable for use for human dolls. Conclusion on footwear 202. Applying the same analysis as set out in relation to the clothing items, I have concluded that (a) the footwear is also to be classified under the toys heading and the sub-heading “stuffed” (9503 00 41) and (b) if, contrary to my view, the footwear can be classified on a prima facie basis under both the dolls and the toys headings, for the same reasons as set out in relation to the clothing items, it is to be classified under GIR 3(c) under heading 9503 00 41 as the last applicable heading in numerical order. 203. I note the following as regards the evidence: (1) The size and rounded shape of the footwear, as designed specifically to fit BAB’s stuffed bears, clearly indicates that the footwear is suitable for use principally, in the sense of for the most part or chiefly, with stuffed bears. (2) I note that Ms Stout sought to demonstrate that the shoes are suitable for use with dolls and that the rounded shape facilitates use with dolls with fixed joints. From the demonstration and evidence given, however, I cannot see that such a round shape (corresponding to the paws of a BAB stuffed bear) is a necessary feature for a shoe to be fitted on dolls with fixed joints. (3) The footwear is suitable for use with certain dolls, such as BAB’s Honey and Daisy and Cabbage Patch dolls, which have more rounded feet than those corresponding to a human foot. However, for the reasons set out above in relation to the clothing items, the fact that the shoes can be used on such dolls (or may well fit on other dolls with feet corresponding to human feet) does not detract from the fact that their design specification renders them suitable for use principally with stuffed bears. (4) The comments set out at [173] and [174] in relation to the clothing items apply equally here as regards the corresponding evidence relating to footwear. Sets comprising clothing items 204. In my view, for the reasons set out below, (a) two or more clothing items put up for retail sale in a set, each of which contain slits (such as a trouser and hoodie set) or one of which includes a slit or slits and (b) the sets of items set out at [3], one of which is an item of clothing with a slit, are to be classified under the toys heading and the sub-heading “stuffed” (9503 00 41). 205. Where each item in the set includes a slit or slits, note 4 is not in point as that applies only where one of the items in a set put up for retail sale falls in a different heading to 9503. The sets heading (9503 00 70) is also not in point as according to the HSENs, it does not apply where the items in a set both fall within the same heading/sub-heading as is the case here. 206. Where only one item of clothing of a set of two items contains a slit, the items fall within different headings (namely (a) the dolls heading (and the sub-heading for “parts and accessories”) as regards the item without a slit and (b) the toys heading (and the sub-heading “stuffed”) as regards the item with a slit or slits). (1) HMRC appeared to consider that, in this scenario, the sets heading takes priority over the application of GIR 3(b) which determines the classification of items put up for retail sale in sets according to “the material or component which gives them their essential character in so far as this criterion is applicable”. (2) I note that the GIR 1 states that classification is to be determined according to “the terms of the headings and any relative section or chapter notes and, provided such headings or notes do not otherwise require , according to the following provisions”
(emphasis added) including GIR 3(b). In my view, the fact that chapter 95 includes a specific heading for other toys put up for retail sale in sets or outfits, does not of itself require GIR 3(b) to be disregarded in the absence of any express provision to that effect. It is reasonable to suppose that the sets heading applies to goods of the relevant description only where they are not otherwise to be classified under a different heading, according to the “material or component which gives them their essential character” under GIR 3(b). I note also that some of the BTIs produced indicate that the relevant customs authorities considered that GIR 3(b) was potentially in point in such circumstances although classification was not in fact made on that basis. (3) On that basis, in my view GIR 3(b) applies to classify the relevant clothing items under the animal toys heading on the basis that the presence of the slits in one of the clothing items in the set gives the overall set the essential character of accessories suitable for use principally with animal toys of a stuffed kind. 207. The sets described in [3] above also contain items which viewed individually may be classified in different headings (on my analysis, as regards the items with slits under the heading for animal toys of a stuffed kind and, as regards the other items as “accessories” for human dolls (as set out below)). In my view the same analysis applies as set out at [206]. Under GIR 3(b) the slits in one of the clothing items in the set gives the overall set the essential character of accessories suitable for use principally with toys of a stuffed kind. It is clear from the slits in the main clothing item that the overall outfit is suitable for use principally with a stuffed toy and the remaining items are designed to complement that outfit. 208. Finally, I note that in any event the same rate of duty would apply if the items are instead viewed as falling within the sets heading on the basis that GIR 3(b) does not apply or that the essential character of the items cannot be determined under that provision. BAB’s fall back argument 209. BAB argued that if, contrary to its view, it is found that the clothing items and footwear fall within the animal toys heading, they should be classified under the sub-heading for “other” (meaning other than “stuffed”) (9503 00 49). In its view, (a) the items are equally suitable for use with hard-bodied toys as for with stuffed toys (b) neither of these sub-headings provides a more specific description of the goods than the other and (c) therefore, they are to be classified under the last sub-heading in numerical order for “other”, 9503 00 49. 210. HMRC argued that (a) the items do not have characteristics which render them suitable for use chiefly with hard-bodied animals and (b) in any event, under GIR 3(a) the sub-heading “stuffed” is to be preferred on the basis that it provides a more specific description of the relevant items than that for “other” which covers a broader range of toys. 211. As set out in full above, it is plain that the clothing items and footwear are specifically designed to fit stuffed bears of a particular size and shape. Whilst theoretically the items could fit a hard-bodied animal of similar dimensions, no evidence was presented justifying a conclusion that the items are suitable for use chiefly or for the most part with such animals. If contrary to my view, the items can be classified on a prima facie basis under each sub-heading, I would accept BAB’s argument that neither of the applicable sub-headings provides a more specific description than the other such that the items are to be classified, under GIR 3(c) by reference to the sub-heading for “other” as the last in numerical order. Decision on all other items Submissions on plastic and textile items 212. HMRC submitted that the plastic and textile items are not correctly viewed as parts or accessories at all and either have an independent “play value” or a “utilitarian” function of their own. In their view, on that basis the classification of these items depends on what they are made of and whether they are imported in sets or individually. For example, toys of plastic should be classified in heading 9503 00 95 and toys put up in sets in heading 9503 00 70. 213. HMRC made the following main points in support of their position that these items are not accessories: (1) The case law establishes that an item is to be classified as an “accessory” to another item only if it performs a particular service relative to the main function of that other item. That test is not satisfied as regards these items merely because a child can use them in conjunction with a doll or toy. In fact, many of the items, such as sunglasses, mobile phones and i-pad, have “independent play value” and/or are clearly suitable for playing with in association with a stuffed bear or a doll or on their own. Some of the items, such as backpacks, purses, handbags, suitcases and furniture, have a “utilitarian” function in that they can be used, for example, to carry or hold things. (2) The HSENs contain several provisions indicating what constitute accessories in this context: (a) In the notes, the reference to parts and accessories of a doll is exemplified by “heads, bodies, limbs, eyes….moving mechanisms for eyes, voice-producing or other mechanisms, wigs, dolls’ clothing, shoes or hats. It is probable that items listed up to voice producing and other mechanisms are included as parts and the remaining items as accessories. The fact that the parts referred to are all parts of the body of the doll gives a clear indication of the scope of the “parts” which are intended to be included within this heading. The fact that the accessories refer only to clothing (namely, to items to be attached directly to the body of the doll) is an equally clear indication of the scope of the “accessories” which are intended to be included. (b) The HSENs emphasise that “other toys” includes all toys not included in (A) to (C) and includes a wide variety of toy items some of which are specifically intended to be used with dolls such as dolls houses and furniture, including bedding, dolls’ tea sets, toy shops and farmyard sets. (c) It is plain from the above that not everything which can be played with in association with dolls can or should be classified as an accessory for a doll. The HSENs clearly contemplate classification as “other toys” for items which are specifically designed to be used with dolls. 214. BAB submitted that all of these items are accessories of dolls and/or toys and, applying the same analysis as set out in relation to the clothing items, they are to be classified under the dolls heading and the sub-heading for parts and accessories (9503 00 29). BAB made the following main points: (1) These items are plainly accessories for human dolls and animal toys both as a matter of ordinary English and common sense and under the principles in the caselaw. The function of dolls and toys is as an object of amusement for a child to play with. According to their objective characteristics and properties, such as the size of the items as specifically scaled for use with dolls and toys, these items are clearly designed to enhance this “play function” as an experience for the child. The addition to certain items of the elastic bands, of a size to fit a doll’s arm or foot as appropriate, reinforces this assessment. (2) The guidance published by HMRC supports the view that these items are accessories; they state that such accessories include “any other articles of limited functionality and sized to be used in play scenarios alongside dolls” (see [116(1)]). There is nothing in the HSENs to indicate these items are not to be viewed as accessories of dolls. In the French language version of the HSENs the reference is merely to tea sets and not to dolls’ tea sets. There is no indication that the toy shops and farmyard and similar items referred to specifically for use with dolls or toys. (3) The HSENs specifically refer to wigs, dolls clothing, shoes and hats as accessories to dolls. BAB does not accept that this suggests that in this context accessories are confined to items which can be placed on a doll. However, this does make it entirely clear that there can be no material distinction between such items and other items which are to be worn by or directly attached to a doll or toy such as headbands, crowns, tiaras, wands and sunglasses. (4) The items do not have “independent play value” or a utilitarian function. That they are not designed for use by a child as toys in their own right is apparent simply from the size and scale of the items (as demonstrated by comparison with items designed for children in some cases) and, in some cases, as reinforced by the presence of the elastic bands as set out above. A child would have no use for these items other than in conjunction with a doll or toy. The elastic bands are too small for a child to use and a child would not need to use them; the child could simply hold the relevant item. 215. HMRC responded that there is insufficient objectively verifiable evidence for the tribunal to conclude that the size of the items themselves and of the elasticated loops renders them suitable only for use as accessories with toys and dolls. In particular, HMRC noted that only very limited comparator items were produced and that the evidence on sizing of a child’s wrist was taken only from a jeweller’s website, no evidence was produced on the size of a child’s head and that dolls may plainly vary considerably in size. Accordingly drawing a distinction based on these factors is fraught with difficulty. Caselaw on meaning of parts and accessories 216. The parties referred to the following cases as regards what constitutes a part or accessory for the purposes of the CN.[217]In Turbon International GMBH v Oberfinanzdirektion Koblenz (Case C-276/00) [2002] ECR I-1389 (“ Turbon 1 ”) the question was the correct classification of ink cartridges specifically designed for use in a particular type of ink jet printer. Three potential headings or sub-headings were in play: 3215 90 80 (printing ink - other), 8471 60 40 (printers), and 8473 30 90 (under “parts and accessories ... suitable for use solely or principally with (printers)”). The court said , at [29], that it was apparent that the cartridge was specifically designed for, and could only be used by, a particular type of printer and as “the cartridge includes a technically sophisticated mechanism ensuring a controlled flow of ink during the printing process, the national court wonders whether such a cartridge should not be regarded rather as part or accessory of a printer”. 218. The court rejected the argument that the cartridge was a part of the printer as follows, at [30] and [31]:[30]“…. it should be observed that the word part, within the meaning of CN heading 8473, implies a whole for the operation of which the part is essential…. and this is not so in the case of the cartridge…..While it is true that, without an ink-cartridge, a printer is not able to carry out its intended functions, the fact remains that the mechanical and electronic functioning of the printer in itself is not in any way dependent on such a cartridge. The inability of the printer, in the absence of an ink-cartridge, to transcribe on to paper the work produced with the aid of a computer is caused by lack of ink rather than a malfunctioning of the printer.[31]For those reasons an ink-cartridge such as that at issue in the main proceedings, which, in view of its characteristics …plays no particular role in the actual mechanical functioning of the printer, cannot be regarded as part of a printer….”[219]The court continued, at [32], that e qually, such a cartridge cannot be classified under heading 8473 as an accessory of the printers in question. At [12] the court had noted that “according to the [HSEN] relating to heading 8473, '[t]he accessories covered by this heading are interchangeable parts or devices designed to adapt a machine for a particular operation, or to perform a particular service relative to the main function of the machine, or to increase its range of operations'”. At [32] they concluded that applying that guidance:[33]“While the cartridges are interchangeable, they are not designed to adapt the printers for a particular operation, or to perform a particular service relative to their main function, or to increase their range of operations, within the meaning of the [HSEN] relating to heading 8473. Such cartridges merely enable ESC printers to fulfil their usual function, namely, the transcription on to paper of work produced with the aid of a computer.” 220. The court said that such classification is, moreover, corroborated by the HSEN relating to heading 3215 which includes mere ink-filled cartridges for ordinary fountain pens. As they considered the Advocate General rightly pointed out at [59] of his opinion:[15]“such cartridges are to fountain pens what the cartridges at issue….are to ESC printers, since their function is both to hold the ink and to release a regular flow of ink necessary for the use of an instrument designed to print on paper and they have a format, which varies according to brand, such as to allow them to fit inside the pen for which they are designed”. 221. In Turbon International GMBH v Oberfinanzdirektion Koblenz (Case C-250/05) [2006] ECR I-10531 (“ Turbon 2 ”) the CJEU referred to further evidence in the national court which had shown that the cartridge itself played an essential role in the printer’s mechanism. They reached the same result as in Turbon 1 , but by a different route. They now accepted that the cartridge itself was a part of the printer, but the ink was not. In consequence, the CJEU said, at [19], that the cartridge was to be treated as:
“made up of two elements which, when considered separately, may each be classified under one heading, namely subheadings 3215 90 80 or 8473 30 90 of the CN, but neither of those headings covers the goods as a whole.” 222. It was, therefore, necessary, under the general rules, to determine which element provided the “essential character”
. On this point the court held, at [23], that the ink was determinant, with the result that the correct classification was 3215 90 80:[16]“Even if an ink cartridge ... is constructed in such a way that the Printer does not function in the absence of that cartridge, the fact remains that the ink contained in the Cartridge is the most important factor for the purpose of using the goods at issue. In fact, the ink cartridge is not inserted in the printer in order to make the printer itself function but specifically to supply it with ink. Therefore, the ink must be regarded as determining the essential character of an ink cartridge, such as that at issue in the main proceedings. ” 223. The CJEU did not find it necessary to revisit its finding as to the meaning of “accessory” in its first judgment. However, in her opinion Advocate General Kokott made the following observations, at [56]:[17]“... as the court correctly held in its first judgment (para 32) it is not possible to classify the ink-cartridges under CN heading 8473 as an 'accessory'. As the explanatory note to HS heading 8473 makes clear, only something which enables the principal item to perform a function over and above its standard functions counts as an accessory. This is not the case with the ink-cartridges, which, though necessary to enable the printer's standard functions, do not enable anything beyond that.” 224. In the light of the new evidence, however, she held that the cartridge could be treated as a “part” of the printer because it had been shown to be essential to its mechanical operation. She compared it to the paper-tray, by which paper was delivered to the printer and which “no-one would doubt” was part of the printer (at [69]). By contrast “the ink in the cartridges”, though “suitable solely for use” with this type of printer, was not essential for its “mechanical and electronic functioning”, and was not therefore “part of” the printer (at [72]). She would have held (unlike the court) that neither element could be regarded as giving the cartridge its essential character (at [99]), so that under the general rules the relevant classification would be the last in numerical order (that is 8473 30 90).[225]The same approach was taken to whether something was a “part” or “accessory” in Case C-152/10 Unomedical A/S v Skatteministeriet which concerned the classification of plastic drainage bags for catheters and dialysers. The relevant headings were 3926 (“other articles of plastic”) and 9018 (medical appliances including “catheters” and “dialysers”), taken with chapter 90 note 2(b) (“parts and accessories”). The court described the function of the catheter bags as follows, at [15]:
“The bags are manufactured from PVC foil and injection-moulded plastic components. The bags are designed to function together with a standard balloon catheter, but are imported and sold without the catheter. The function of the bags is to collect urine, at the same time ensuring a sterile environment around the catheter and facilitating observation, measurement and sampling of the drained urine.” 226. The court said that the dialyser bags performed a similar function (at [17]). The court observed, at [27], that catheters and dialysers were provided for by specific subheadings under 9018, and that the drainage bags could only be included in that classification on the basis that they were parts or accessories under note 2(b). The court also noted, at [28], that note 2(b) to Chapter 90 of the CN states that “[o]ther parts and accessories, if suitable for use solely or principally with a particular kind of machine, instrument or apparatus, or with a number of machines, instruments or apparatus of the same heading … are to be classified with the machines, instruments or apparatus of that kind”. 227. The court referred, at [29], to the comments in Turbon 1 at [30] and [32] as set out above. They said, at [30], that there is “nothing which permits the conclusion that those notions cannot be defined identically” in respect of the relevant headings and that would ensure “a coherent and uniform application of” the CN. At [35] they held that neither set of goods could be classified either as a “part” or as an “accessory” in respect of catheters or dialysers on the basis that, at [36]: “Neither the urine drainage bag for catheters nor the drainage bag for dialysers is indispensable for the functioning of those instruments or apparatus. It is apparent that catheters do not depend on the presence of a urine drainage bag in order to function and, similarly, that dialysers do not depend on the presence of a drainage bag in order to carry out dialysis, since the process of cleansing blood is complete at the time when the bag is used, that bag serving only to collect the liquid drained (see, by analogy, Case C-339/98 Peacock [2000] ECR I-8947 , paragraph 21, and Turbon International , paragraph 30).” 228. They considered, at [37], that this finding was not affected by the “fact that dialysers work only when a bag is attached”
. In that regard:
“suffice it to state, as the European Commission points out, that, were it not for the security mechanism with which that apparatus is fitted, the dialysis process could be carried out without a bag, that security mechanism being the sole link between the apparatus and the bag (see, by analogy, Case C-250/05 Turbon International [2006] ECR I-10531 , paragraph 23).” 229. They said, likewise, at [38]: “ those bags do not enable the instruments and apparatus to be adapted for a particular operation, nor do they increase their range of operations, or enable them to perform a particular service connected with their main function. A drainage bag attached to a catheter has the sole purpose of collecting liquid drained after the catheter itself has fulfilled its own function, which is to drain the urine present in the bladder. For its part, a drainage bag for a dialyser does not enable that apparatus to perform operations other than that for which it is designed, namely that of cleansing blood.”
[230]In Amoena (UK) Ltd v Revenue and Customs Commissioners [2016] STC 1884 the Supreme Court considered these cases in the context of deciding on the appropriate customs classification of a Carmen mastectomy bra designed to be worn with an artificial breast form, by women who have undergone surgical removal of one or both breasts. The Supreme Court held that the item should be classified under chapter 90, as a part or accessory for an artificial part of the bod y.[231]At [38] Lord Carnwath, who gave judgement with which the other panel members agreed, commented that the two Turbon cases are of little direct help because the facts were so different. He said that as Arden LJ recognised in the Court of Appeal’s decision in Amoena , the main significance of the Turbon cases was as regards the guidance given on the meaning of “parts and accessories”, as then applied in Unomedical. In Lord Carnwath’s view “that aspect of the court’s reasoning, relating to the interpretation of the CN, must be treated as authoritative, regardless of its application to the particular facts”. 232. However, he continued, at [39], that like McCombe LJ in the Court of Appeal he had “difficulty” with some of the reasoning in Turbon 1 :[40]“ If, as the court said, one test under the relevant explanatory note was whether the cartridge performed “a particular service relative to (the) main function”, the natural answer would be yes. The only reason given by the court for reaching the opposite view was that the service merely supports the printer's "usual function" of transcribing work onto paper. That seems to make little sense. The "usual" function of a printer is also its "main" function, and the ink cartridge performs the "particular service" of providing ink for that function. ”[233]At [40] he said that in Turbon 2 Advocate General Kokott tried to get round the problem in a different way. She interpreted the CJEU as holding in Turbon 1 that what was required was something enabling the principal item to perform a function “over and above its standard functions”, which the ink-cartridges did not do. He thought that in the Court of Appeal decision, Arden LJ in effect interpreted that case in the same way. However, he noted that “that is not what the guidance says, nor what the court itself said in Turbon 1. Nor is it a natural meaning of the word “accessory”.” Referring to an example given by the UT, he said that “a bicycle bell can fairly be described as an "accessory" to the bicycle, even if does not add to its range of functions”. 234. In his view, at [41]:[42]“a better answer is one which distinguishes more clearly between the printer itself, and the materials used by it. Ink and paper are both necessary for the printer to do its work. But one would not naturally describe either as a "part or accessory" of the printer, any more than petrol would be regarded as a "part or accessory" of a car. The words "particular service relative to" its function need to be more narrowly construed as referring to services directly connected with the mechanisms or processes by which it performs that function. As Advocate-General Kokott said in Turbon 2 (para 72), the ink though "suitable solely for use" with this type of printer, was not essential for its "mechanical and electronic functioning". This approach is also consistent with the ultimate conclusion of the court in Turbon 2 . Although the cartridge (unlike the ink) played a part in the mechanical functioning of the printer, its dominant or "essential" function was to supply it with ink. This is not a distinction which arises in the present appeal. ” 235. He said, at [42], that Unomedical is of more direct relevance. He thought that on one view, “it was a surprisingly narrow application of the guidance. The bags were designed specifically for use with the catheters or dialysers, and might be said to perform a particular service relative to them. In ordinary language, there would be nothing unnatural in describing them as "accessories"”. However:[43]“what seems to have mattered to the court was that the bags played no direct part in the actual processes of either appliance. As they said of the dialyser bag, "the process of cleansing blood is complete at the time when the bag is used, that bag serving only to collect the liquid drained ..." (para 36). Similarly, the catheter bag had the sole purpose of collecting liquid drained "after the catheter itself has fulfilled its own function, which is to drain the urine present in the bladder" (para 38). ”[236]He continued that it is difficult to translate the reasoning of the Turbon cases or Unomedical to an artificial breast form, whose function does not depend on any mechanical or other active process (at [43]). In any event, he did not see them as showing any error in the approach of the UT, at least as regards their conclusion that the bra is an accessory. He noted that Arden LJ held that the bra was not a “part”, applying the statement in Turbon 1 that the notion of parts implies “a whole for the operation of which the part is essential” and, at [44], that she held it was not an “accessory” because it did not “improve the performance of the breast form” or give it “any additional functionality”. He did not agree with this conclusion but rather agreed with McCombe LJ that the bra is an accessory:
“If it were necessary to identify some "additional functionality" in that sense, the requirement would in my view at least arguably be met by the contribution of the bra to (as the FTT found) lessening the psychological impact of having had the mastectomy. However, for the reasons I have given I do not see that as an essential requirement under the second part of the relevant test. I agree with McCombe LJ that on a natural reading the bra is an "accessory". By holding the breast form in place, the bra enables it to perform its function. The bra thus "performs a particular service relative to the main function" of the breast form. Contrary to his view I do not find that conclusion inconsistent with the principles established by the CJEU in the cases cited. ” 237. HMRC submitted that Lord Carnwarth was here effectively upholding the approach of the UT which had held (at [57]) that: “In our view, an accessory is not merely something which is used in conjunction with an item: an accessory must also contribute something to the item. We consider that an accessory must provide some additional functionality or enhance the performance of the item. An accessory is an optional improvement to the product whereas a part is something that is essential or integral to the functioning of the item”
. Conclusion on plastic and textile items 238. I have concluded that the plastic and textile items are to be classified for customs duty purposes as accessories of a human doll. I am assuming for this purpose that an item can be classified as an accessory of a human doll only if it is identifiable as suitable for use principally with such a doll. 239. Under the caselaw set out above an item is an accessory of or for another item for the purposes of the CN if it plays a particular service relative to the main function of that other item. It seems to me that the main function of a doll of the type with which these items are suitable to be used is to serve as an object of amusement and play. According to their objective characteristics and properties, the plastic and textile items perform a particular service in relation to that main function in adding to or enhancing the way in which such dolls can be used for amusement or play. Items corresponding to those in the HSENs 240. I note that the HSENs list clothes, shoes, wigs and hats as examples of accessories of a human doll. The listed items all have in common that they can be used to dress or adorn the doll itself. In the terms used in the caselaw, they can be regarded as performing a particular service relative to a doll’s main function by adding to its amusement or “play value”, specifically by reference to adding to its character or appearance. These items enhance the scope for a child to imagine a particular role or character for a doll in playing with the doll. 241. I cannot see any basis in principle for drawing a distinction between the listed items and the items in this case, which can be used similarly to adorn or dress a doll, namely, sunglasses, headbands, medals, crowns and tiaras: (1) These items are designed to be placed on or worn by a doll or toy by way of adornment in the same way as the items listed in the HSENs. Under the test set out in the caselaw, these items perform precisely the same service relative to the main function of a doll as those listed in the HSENs, namely, in enhancing the doll as an object of amusement by adding to its character and appearance. (2) These items are specifically identifiable as accessories of a doll or toy due to the sizing and scaling of the items. (3) Due to their size and nature these items have no function as an object of amusement otherwise than when used on a doll or toy. Whilst the items are sized for relatively large dolls (compared with, for example, Barbie), I consider it is plain from their size together with their composition and appearance that they are not suitable for children to use on themselves for “play value”, for example, in dressing up games. (4) Whilst these items could be used on either a doll or a toy they are by design suitable, in the sense of right or appropriate, principally, in the sense of chiefly or for the most part, for use with human dolls given they are scaled down versions of corresponding items used by people. Other items 242. In my view, the remaining plastic and textile items are also accessories of a doll or toy notwithstanding that they extend beyond the types of items of clothing and adornment listed in the HSENs (and I note that list is plainly not exhaustive). 243. Under the caselaw, I can see no basis for distinguishing between items according to whether they can be directly placed on a doll or by reference to the level of active involvement required from a child. In my view, the critical factor is that all the remaining plastic and textile items can be used to enhance the amusement or play value which can be derived from a doll, essentially in the same way as those listed in the HSENs, by adding to the character of the doll and/or the role-play scenarios in which a child can use the doll. I cannot see that it makes a material difference to the analysis that, in order to derive amusement from some of these items, the child would have to be involved actively in manipulating the doll and the relevant item to make them interact in a more extensive way than by simply placing the item on the doll. In each case these items enable a child to use the doll for role play in situations or, according to the character, suggested by the item in question. For example, a child may wish to enact a scenario where the doll dresses and undresses and stores its clothes using the furniture items or where the doll styles and dries its hair using the hairdryer set. 244. The fact that the HSENs cite items such as dolls’ tea sets, dolls’ houses, toy shops and farmyards as examples of “other toys” does not, in my view, suffice to indicate that items of this type are not accessories of dolls. I note that, as BAB pointed out, in the French language version of the CN, the reference is merely to tea sets with no reference to dolls; that indicates that in fact the intention is to refer to tea sets scaled for use as a toy by a child himself/herself. There is no indication that toy shops and farmyards are items which are suitable for use with dolls or toys; they may well be items suitable for the child to use in enacting his/her own role play in interacting with the item. The fact that it has been decided that dolls’ carriages and dolls’ houses should be classified as items in their own right does not necessarily indicate that items such as furniture cannot be regarded as an accessory of a doll or toy; if that were the intention, those items also could also have been dealt with specifically in the CN. 245. In my view, essentially for the same reasons as set out above, with the exception of the baby carriers, these items are accessories which are suitable principally for use with a human doll: (1) These items are specifically identifiable as accessories of a doll or toy due to the sizing and scaling of the items and, as regards some items, given that they can be attached to a doll or toy with elastic loops. The evidence on the size of the elastic loops compared with the size of a child’s wrist was insufficient to form a conclusion on whether the loops could be used on a child. However, in any event, a child would have no use for the loops. It is fanciful to suggest that a child would want or need to attach a toy surfboard, skateboard or suitcase to himself/herself with an elastic loop. (2) Due to their size and nature these items have no function as objects of amusement otherwise than when used on or with a doll or toy. Again I consider it is plain from their size together with their composition and appearance that these items are not suitable for children to use as toys in their own right without a doll or toy or for use as functional items. (3) Whilst these items could be used on either a doll or a toy they are by design suitable, in the sense of right or appropriate, principally, in the sense of chiefly or for the most part, for use with human dolls given they are scaled down versions of corresponding items used by people. There is nothing in their design or appearance to suggest they are chiefly for use with animal toys (whether of a stuffed kind or otherwise). For the same reasons as set out at [173] above, my view is that the presence of BAB’s logos on some of the items (such as the furniture) is not a material factor. The presence of that branding does not render the items inherently suitable for use chiefly with stuffed animal toys. 246. In my view, the baby carriers are equally suitable for use with human dolls and stuffed bears. In the overall context of the design and composition of these items, presence of the slit on the baby carrier (and the description on the packaging as “bear stuff”) indicates that these items are suitable for use with stuffed bears as well as with human dolls, but is not of itself sufficient to indicate that they are suitable for use chiefly or for the most part with stuffed bears or other animal toys. On that basis the baby carriers should be classified as set out at [249]. 247. Some of the items dealt with in this section are put up for sale in retail sets (such as the crown and wand sets and the hair “accessories” set). As when viewed individually the items all fall within the same heading, as “accessories” for dolls, neither the sets heading nor note 4 is in point. 248. I note that at the hearing BAB accepted that wheelchairs and strollers may alternatively fall within the heading relating to dolls’ carriages (9503 00 10) which also applies to give a duty rate of 0%. Application of GIR 3 249. For the same reasons as set out above in relation to the clothing items, my view is that (a) due to the nature of the “principal purpose” test in note 3 as applied under GIR 1 and 6, the plastic and textile items cannot be regarded for classification purposes as falling on a prima facie basis within both the dolls heading and the toys heading and (b) if, contrary to my view (except as regards the baby carriers), the items are accessories which are equally suitable for use with animal toys and human dolls, they would fall to be categorised under the final “other toys” category and the relevant sub-heading according to what they are made of. 250. If, contrary to my view, the items can be classified as “accessories” within both the dolls and the toys headings on a prima facie basis, for the same reasons as set out above in relation to the clothing items, for the purposes of GIR 3(a) neither heading describes the plastic and textile items more specifically than the other and the items would fall to be classified under GIR 3(c) by reference to the last heading in numerical order (namely, that for animal toys of a stuffed kind (9503 00 41)). Conclusion on “accessories” for animal toys 251. HMRC argued that the animal accessories are not in fact “accessories” for animal toys within the meaning of note 3 for the same reasons as set out above in relation to the plastic and textile items. HMRC consider they should be classified under the heading for other toys and the appropriate sub-heading according to what they are made of. 252. BAB submitted that, essentially applying the same analysis as set out in relation to the plastic and textile items, the various items are “accessories” which are suitable for use solely or principally with animal toys and, therefore, are to be classified under the toys heading. In its view, however, they are classifiable on a prima facie basis within each of the sub-headings for “stuffed” and “other”, as they are equally suitable for use with stuffed animal toys and hard-bodied animal toys. On that basis, as neither of those sub-headings provides a more specific description of the items than the other, they are to be classified under rule 3(c) by reference to the last sub-heading in numerical order being that for “other” (9503 00 49). 253. I have concluded that these items are to be classified as items in their own right (and not as “accessories” of animal toys) under the other toys heading and in the relevant sub-heading according to what they are made of. In my view, for the same reasons as set out in relation to the plastic and textile items, these items constitute accessories suitable for use with animal toys. However, there is nothing in their objective characteristics which render them principally suitable for use with stuffed animals or with other non-stuffed or hard bodied animal toys. They are equally suitable for use with either of these categories of toy animals. On that basis, for the same reasons as set out in relation to the textile and plastic items at [249], they are to be classified as items in their own right under the other toys heading (given they are designed for amusement) and the relevant sub-heading according to what they are made of. 254. If I am wrong in the analysis set out at [253] and these items can be classified under both of the relevant sub-headings on a prima facie basis, in my view, for the same reasons as set out in relation to the clothing items at [199], under GIR 3(a) neither of those sub-headings provides a more specific description of the items than the other and the items should be classified under GIR 3(c) by reference to the heading which is the last in numerical order (9503 00 49). Decision on hearts and sounds 255. BAB’s stance is that, according to their objective characteristics, (a) the textile and beating hearts and plastic sounds which make human noises are to be classified as “accessories or parts” of human dolls under the sub-heading 9503 00 29 on the same basis as set out above and (b) the plastic sounds, which make animal noises, are to be classified as accessories or parts of animal toys under the sub-heading “stuffed” (9503 00 41). 256. HMRC submitted that: (1) The textile hearts have no characteristics which enable them to be identified as for use inside dolls or toys as opposed to for use for other craft purposes and should be classified as “Other made up articles of textile” under heading 6307. (2) There is nothing to identify the plastic beating hearts specifically as for use with animal toys or human dolls. They should be classified under the heading for other toys and the sub-leading for plastic (9503 00 95). (3) Whilst the unfinished appearance of the plastic sounds indicate they are to be put inside something, there is nothing to indicate whether they are to be put inside a doll or toy or another item such as a pillow. These should be classified under heading 8543 as “Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter”. HMRC noted that the HSENs for this heading provide “For incorporation in a wide variety of utilitarian or other goods, e.g., wrist watches, cups and greeting cards. These modules usually consist of an electronic integrated circuit, a resistor, a loudspeaker and a mercury cell. They contain fixed musical programmes”. 257. In my view, the textile hearts and plastic beating hearts are identifiable from their objective characteristics, notably their heart shape, sizing and, in the case of the beating hearts, their pulsation feature, as parts or accessories for use with stuffed dolls or toys (albeit that explanatory materials, such as marketing materials, may need to be provided to the customs authorities to explain the significance of these features). However, there is nothing to identify them as suitable for use principally with stuffed human dolls or animal toys. They are equally suitable for use with both of these items. On that basis: (1) For the same reasons as set out in relation to the other items, they cannot be classified as accessories under either the dolls heading or the toys heading. Given they are not objects of amusement when viewed as items in their own right, they should be classified under the appropriate heading according to their utilitarian function as textile and plastic items respectively. (2) If I am wrong and these items can be classified on a prima facie basis as accessories under both the dolls heading and the toys heading (and appropriate sub-headings), for the same reasons as set out in relation to the other items, they are to be classified under GIR 3(c) under the last applicable heading in numerical order (9503 00 41). 258. As regards the plastic sounds, my view is that (a) those which make a pre-recorded human sound or on which a sound can be recorded are to be classified as “accessories or parts” under the sub-heading to the dolls heading (9503 00 29) and (b) those which make an animal sound, are to be classified under the sub-heading for animal toys of a stuffed kind (9503 00 41). The fact that these items make a sound when pressed and the nature of the sounds made plainly indicate that these items are to be placed into a human doll or animal toy (according to the nature of the sound made). Decision in principle 259. Finally, I note that I have made this decision on the correct classification of the items as a matter of principle. BAB asked the tribunal also to determine the quantum of its liability according to the figures it presented on the evidence of Mr Cook. However, my view is that it is premature for the tribunal to make any such determination at this stage. If necessary the parties can apply to the tribunal for further consideration of this issue should there be any outstanding dispute between them once they have considered the impact of this decision and once it is clear whether either party will apply for and be granted permission to appeal and, if so, pending the outcome of any further proceedings. Conclusion 260. For all the reasons set out above, the appeal is allowed in part to the extent set out above. 261. This document contains 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 not 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. HARRIET MORGAN TRIBUNAL JUDGE RELEASE DATE: 27 NOVEMBER 2019

Cited in 2 later judgments