Matalan Retail Ltd v Revenue and Customs

A binding tariff information is prospective and may be relied on only by its holder for goods corresponding in every respect to those described in it. A BTI concerning one type of goods does not automatically determine the classification of other goods or create a general tariff ruling. Withdrawal of an appeal, without a judicial determination or concluded compromise, does not ordinarily create an issue estoppel. Customs-duty decisions concerning particular importations do not generally determine liability for different importations. Abuse of process remains a broad, merits-based jurisdiction, but the public interest in recovery of the correct duty outweighed the importer’s expectations on these facts.

Matalan appealed against a decision of the VAT and Duties Tribunal concerning repayment claims for customs duty on imported swimwear. The Tribunal had found that the garments fell within the higher tariff classification and rejected Matalan’s contention that HM Revenue and Customs was precluded from relying on that classification after withdrawing an earlier BTI decision and withdrawing from the related appeal.

The dispute before the High Court concerned the legal effect of the BTIs, the withdrawal of the earlier appeal, alleged agreements, estoppel and abuse of process. Regulation 651/2007 had also subsequently classified comparable swimwear within the higher tariff heading.

1. Appeal dismissed. The Tribunal had not erred in rejecting the alleged agreements. The correspondence did not establish that the first appeal would determine the classification of all Matalan’s swimwear, nor that withdrawal of the Commissioners’ decision was conditional on withdrawal of the appeal. There was no meeting of minds and no compromise under section 85 of the Value Added Tax Act 1994 producing a substantive determination (paras [91]-[96]).
2. A BTI operates prospectively and only for its holder. Under Article 12 of the Community Customs Code and Article 10 of the Implementation Regulation, the goods must correspond in every respect to those described in the information. The statutory language does not permit application merely because other goods are indistinguishable for tariff purposes. The second BTI therefore applied according to its terms, including the stated commercial denomination and the relevant dates (paras [75], [83]-[88], [127]).
3. Regulation 651/2007 was legislative and of general application. It indicated the proper interpretation of the Combined Nomenclature and was capable of applying by analogy to sufficiently similar goods, unlike a BTI, whose effect was confined by the Code (para [88]). The Tribunal’s classification of the swimwear under the higher classification was not challenged on the appeal (paras [68]-[70]).
4. The withdrawal of the first appeal was not an express or implied determination of the essential classification issue. The principles concerning tax and rating assessments meant that a decision concerning one importation would not ordinarily create an estoppel concerning different importations. The distinction between issue estoppel and abuse of process remained important (paras [100]-[117]).
5. Applying the broad, merits-based approach to abuse of process, it was not abusive for HMRC to resist repayment. No court had determined the essential proposition; there was no agreement that the first appeal would govern later claims; the public interest required payment of the correct duty; and Matalan had not been treated so unfairly that this interest was displaced. The Tribunal had also made no error of law in refusing HMRC its costs, since the costs decision fell within its discretion (paras [121]-[127]).

• High Court (Chancery Division): appeal from the VAT and Duties Tribunal dismissed. The High Court upheld the Tribunal’s refusal to require repayment of the excess duty, subject to the second BTI taking effect according to its terms.