HM Revenue & Customs v FLIR Systems AB

Customs tariff headings must be interpreted by reference to the wording of the Combined Nomenclature, its notes and the objective characteristics of the goods. Explanatory notes are an important aid but cannot alter the legal text.

The relevant terminology is not necessarily to be read with strict scientific precision. Where ordinary commercial usage supports it, thermal-imaging equipment may be treated as instruments for measuring or checking quantities of heat, even though it measures temperature rather than heat in the scientific sense. If goods fall under two headings of equal specificity and the difference is functional rather than physical, GIR 3(b) does not resolve the conflict and GIR 3(c) applies.

HM Revenue and Customs classified four thermal imagers manufactured by FLIR under heading 9025 19 20 90 as electronic thermometers. The VAT and Duties Tribunal accepted FLIR’s alternative case that they fell under heading 9027 50 00 00 as instruments using optical radiations for measuring or checking quantities of heat, and allowed the appeal.

HMRC appealed to the High Court on points of law under section 11(1) of the Tribunals and Inquiries Act 1992. The central issues were whether the products could fall within heading 9027, how the competing headings should be reconciled under the General Interpretative Rules, and whether infrared heat radiation constituted optical radiation for the relevant subheading.

1. Appeal dismissed. The Tribunal had reached the correct conclusion.

2. Tariff terminology is to be interpreted by reference to the wording of the relevant Combined Nomenclature heading and notes, together with the objective characteristics and properties of the goods. The Harmonised System and Combined Nomenclature explanatory notes assist interpretation but have no independent legal force and cannot alter the meaning of the legal provisions.

3. The phrase in heading 9027 referring to instruments for measuring or checking quantities of heat does not require strict scientific precision. The appropriate linguistic register is that of the intelligent businessman. In ordinary usage heat and temperature may be used interchangeably. The products detected infrared heat emissions and converted them into thermal images, while also measuring temperature. They therefore fell within heading 9027 as instruments measuring and checking quantities of heat in a relatively non-technical sense.

4. The products also fell within heading 9025, but were not mere thermometers. Their imaging and temperature-measuring functions were of equal importance. Neither heading therefore provided the more specific description for the purposes of GIR 3(a). GIR 3(b) could not resolve a conflict arising from different functions rather than separate physical components, following Sony Computer Entertainment Europe Ltd v Commission of the European Communities. GIR 3(c) consequently required classification under the later numerical heading, 9027.

5. Subheading 9027 50 00 provided its own meaning of optical radiations by expressly referring to ultraviolet, visible and infrared radiation. Infrared heat radiation was therefore included. The appeal was dismissed.

• High Court (Chancery Division): HM Revenue & Customs v FLIR Systems AB [2009] EWHC 82 (Ch). Appeal from the VAT and Duties Tribunal dismissed.