Cozy Pet Limited v The Commissioners for HMRC

A classification regulation may be applied by analogy to sufficiently similar goods. The tribunal must identify which features in the regulation’s reasoning are decisive and assess whether they are present in the imported goods. A difference at a lower tariff level does not necessarily prevent analogy where the higher-level reasoning remains applicable. For composite goods, essential character may be identified by reference to the material covering them to the greatest degree. Non-exhaustive tariff explanatory notes do not exclude finished articles merely because examples include material intended for incorporation into other products.

Cozy Pet appealed against the First-tier Tribunal’s dismissal of appeals concerning customs classifications for cat trees, cat scratchers, pet playpen panels and heavy-duty panels. The FTT had applied Commission Implementing Regulation 350/2014 directly or by analogy to the cat products and classified the relevant goods under textile headings. It had classified the playpen products under heading 7326 rather than heading 7314.

The Upper Tribunal considered whether the FTT had erred in treating the cat products as the same as those described in the classification regulation, whether the regulation could be applied by analogy to produce a different eight-digit code, and whether the FTT had wrongly restricted heading 7314 to components rather than finished fencing articles.

1. Cat trees and double-column cat scratchers. The FTT erred in law by treating the imported products as the same as, rather than sufficiently similar to, the products described in Commission Implementing Regulation 350/2014. That error was immaterial because the FTT’s alternative reasoning correctly applied the regulation by analogy.
2. Reasoning in a classification regulation should be analysed to identify which characteristics are decisive in the context of the competing classifications. Here, the decisive reasoning was that the surface covering, rather than the underlying wood, gave the products their essential character, and that the relevant covering material was the material present to the greatest degree. The knitted nature of the plush affected the precise eight-digit code but did not prevent analogy with the regulation’s woven-fabric product.
3. The products were sufficiently similar to those in the regulation. The furniture heading was unavailable because the goods were not intended for human use. The FTT was entitled to find that plush predominated over sisal. The appeal concerning the cat trees and double-column cat scratchers was dismissed. The unappealed single-column scratcher classification was undisturbed.
4. Pet playpen and heavy-duty panels. The FTT materially erred in interpreting the HSEN to heading 7314. The note was plainly non-exhaustive. Its references to products being made into or incorporated in other articles did not establish that heading 7314 excluded finished products, or that assembly could not constitute the relevant process. A fencing panel may fall within the heading even when supplied in finished form.
5. On the FTT’s findings and the photographic evidence, both types of panel comprised iron or steel wire grids welded at their intersections and fell within heading 7314. The precise subheading, depending on whether the products were zinc-coated, was left for the parties to agree. The appeal concerning those products was allowed.
6. The proposed new classification under heading 7304 was not permitted on appeal. The post-hearing note was disregarded because it repeated matters previously raised, introduced matters that should have been advanced before the FTT, or relied on evidence not before that tribunal.

• Upper Tribunal (Tax and Chancery Chamber): allowed the appeal in relation to the pet playpen and heavy-duty panel products and dismissed it in relation to the cat tree and cat scratcher products.
• First-tier Tribunal (Tax Chamber), [2022] UKFTT 359 (TC): dismissed Cozy Pet’s customs-duty appeals, subject to the classification of the unappealed single-column cat scratcher.