The Commissioners for HMRC v International Plywood (Importers) Limited

For customs classification, explanatory notes are important aids to construing the Combined Nomenclature and should be followed unless inconsistent with it. Shuttering for concrete constructional work in heading 4418 means a complete shuttering assembly, though it may be imported unassembled if all its components are presented together.

Uniform wooden panels imported without the parts needed to create and support the shuttering structure lack the objective characteristics of shuttering. Where laminated timber panels fall within heading 4412, that heading is more specific than heading 4418. The exclusion from heading 4418 extends to unassembled, surface-treated multi-ply laminated wood, including laminboard.

International Plywood (Importers) Ltd imported three-layer wooden panels with a medium-density overlay and Noxcrete coating. It declared them under commodity code 4418 40 00 as shuttering for concrete constructional work, attracting no customs duty.

HMRC reclassified the panels under 4412 94 10 as laminboard with at least one outer ply of non-coniferous wood. It issued a post-clearance demand and penalty. The First-tier Tribunal allowed the importer’s appeal, holding that the panels were properly classified as shuttering: [2022] UKFTT 223 (TC).

HMRC appealed on six grounds. The central questions were whether the panels were capable of classification as shuttering under heading 4418 and whether their proper classification was instead under heading 4412.

1. Appeal allowed. The First-tier Tribunal made material errors of law on grounds 4 and 5. Its decision was set aside and remade. The panels were classified under commodity code 4412 94 10.

2. The Harmonised System and Combined Nomenclature explanatory notes are not legally binding, but they are important interpretative aids. In the absence of conflict with the Combined Nomenclature or another compelling reason, they should be followed. The First-tier Tribunal was nevertheless entitled to find on the evidence that the panels were laminboard rather than plywood.

3. The explanatory notes to heading 4418 describe shuttering as assembled shuttering or an assembly. A complete article may be imported unassembled, but all identifiable components for the finished article must be presented together. The imported panels were uniform sheets with no supporting or joining parts. They could not form shuttering without further products and therefore did not have the objective characteristics of shuttering.

4. Classification proceeds hierarchically. Heading 4412, covering plywood, veneered panels and similar laminated wood, was more specific to these panels than heading 4418, covering builders’ joinery and carpentry. Laminboard is distinct from plywood, but the explanatory-note exclusion from heading 4418 extends to unassembled, surface-treated multi-ply laminated wood within heading 4412. The classification regulation concerning a closely similar three-layer panel supported that construction.

5. The First-tier Tribunal also misstated the burden of proof as resting on HMRC. That was an error, but it was not material. The tribunal was entitled to treat the panels’ size and coating as relevant objective characteristics when considering their intended use; that finding did not justify classification under heading 4418.

6. The tribunal upheld HMRC’s revised demand of £277,930.83 and the £1,250 penalty. If the panels had been another form of laminated wood rather than laminboard, the residual code 4412 99 50 would have produced the same 10% duty rate.

• Upper Tribunal (Tax and Chancery Chamber): allowed HMRC’s appeal, set aside the First-tier Tribunal’s decision, and remade it in favour of classification under 4412 94 10: [2023] UKUT 278 (TCC).
• First-tier Tribunal (Tax Chamber): allowed the importer’s appeal and classified the panels under 4418 40 00 as shuttering for concrete constructional work: [2022] UKFTT 223 (TC).