Hasbro European Trading BV v Revenue & Customs

For tariff classification under GIR 3(a), rival headings must be compared primarily by their wording. HSENs are an important, non-binding aid to construing headings and deciding whether goods are prima facie classifiable, but they cannot be read into a heading or used as a separate code for resolving a tie. The inquiry may also consider the goods’ objective characteristics and the relative breadth of the descriptions. A description covering a narrower range will ordinarily be more specific, but the name/class distinction is not conclusive. “Articles for … parlour games” was more specific than “toys” because it identified the competitive gaming function and covered a more limited range of goods.

Hasbro appealed from the Upper Tribunal (Tax and Chancery Chamber), which had upheld the First-tier Tribunal’s classification of Beyblades under heading 9503 of the Combined Nomenclature as other toys. Hasbro argued that the tribunals had wrongly treated HSEN 9503 as if it were part of the heading and had applied GIR 3(a) incorrectly. It contended that heading 9504, covering articles for table or parlour games, was more specific. The appeal also raised the significance of the phrase “which equally merit consideration” in GIR 3(c).

The appeal was allowed. Newey LJ gave the principal judgment, with Lewison and Patten LJJ agreeing. Beyblades were appropriately classified under heading 9504 rather than heading 9503.

1. Explanatory notes. HSENs and CNENs are important aids to interpreting tariff headings, but they have no legally binding force and cannot alter the meaning of the Combined Nomenclature. They may assist in determining whether goods are capable of classification under a heading. For GIR 3(a), however, the rival headings cannot be treated as incorporating words appearing only in an HSEN. Nor may HSENs operate as a separate code for resolving an apparent tie. This was consistent with Commissioners for Revenue & Customs v GE Ion Track Ltd [2006] EWHC 2294 (Ch) and the CJEU authorities discussed by the Court, including Kawasaki Motors Europe NV v Inspecteur van de Belastingdienst [2006] ECR I-3659.
2. The GIR 3(a) comparison. Textual analysis is of prime importance, but the objective characteristics and properties of the goods may also be relevant. The name/class distinction in the HSENs is guidance rather than a hard-and-fast rule. In general, a heading covering a more limited range of goods is likely to provide the more specific description.
3. Application. “Toys” described a broad genus or class. “Articles for … parlour games” covered a narrower range and captured the fact that Beyblades were designed for competitive games. That heading therefore more clearly identified the goods, notwithstanding that their objective characteristics also made them toys.
4. Further matters. The Court determined Issue 2 itself. The Upper Tribunal could have made a finding of fact only if it had set aside the First-tier Tribunal’s decision, under section 12 of the Tribunals, Courts and Enforcement Act 2007. Since heading 9504 prevailed under GIR 3(a), the question under GIR 3(c) did not arise.

• Court of Appeal (Civil Division): Allowed the appeal and re-made the decision, classifying Beyblades under heading 9504: [2018] EWCA Civ 1221.
• Upper Tribunal (Tax and Chancery Chamber): Dismissed Hasbro’s appeal and upheld classification under heading 9503: [2016] UKUT 408 (TCC).
• First-tier Tribunal: Held that Beyblades fell within both headings and that heading 9503 was more specific under GIR 3(a).