C00227
CUSTOMS DUTIES — returned goods relief — goods apparently manufactured in Germany exported to Israel and then re-imported into the United Kingdom — inadequate supporting documentation — importer’s claim for relief rejected — whether rejection correct — yes — appeal dismissed 
	
MANCHESTER TRIBUNAL CENTRE

POLYRAM UK LIMITED
Appellant

- and -

THE COMMISSIONERS FOR
HER MAJESTY’S REVENUE AND CUSTOMS
Respondents

		Tribunal:		Colin Bishopp (Chairman)
					Marjorie Kostick BA FCA CTA

Sitting in public in Birmingham on 19 October 2006 

Mark Timmins, general manager, for the Appellant 

 Sarabjit Singh, counsel, instructed by the Acting Solicitor for HM Revenue and Customs, for the Respondents 

© CROWN COPYRIGHT 2006

DECISION

1.	In this appeal Polyram UK Limited challenges the Respondents’ decision, upheld on review, to issue a post-clearance demand for customs duty of £1,511.25 and VAT of £264.46. On 7 October 2004, Polyram imported from Israel a quantity of synthetic resin. Polyram’s agents declared the goods to be exempt from customs duty and the goods entered the United Kingdom for free circulation on payment only of the appropriate VAT. An assurance officer later examined the declaration, and concluded that it was incorrect and that duty at 6.5 per cent was due. On 7 November 2004 he issued the disputed post-clearance demand. 
2.	Polyram appeared, at first, to be putting forward two inconsistent contentions: that the goods were of Israeli origin and entitled to exemption from duty by reason of the Euro-Mediterranean Agreement (see the Official Journal L147/3 of 21 June 2000); and that the goods were of German origin, had been triangulated via Israel and were eligible for returned goods relief (“RGR”). Mark Timmins, Polyram’s general manager, who represented it at the hearing, told us, however, that only the latter ground of appeal was pursued. The apparent reliance on the former ground was due to a misunderstanding on his part. 
3.	Mr Timmins told us that the material had been manufactured by Bayer International SA, the world’s largest manufacturer of such material, which produced it only in Germany. It was then shipped to Bayer’s Israeli agent, Lidorr Chemicals Limited, and was released for free circulation in Israel. Lidorr sold the goods to Polyram’s Israeli holding company which arranged its export direct to Polyram’s customer in the United Kingdom—Mr Timmins is Polyram’s only employee in this country and he arranges that all the goods in which he deals are physically handled by agents. Polyram had, in fact, only just begun to trade and this was its first importation of this kind.
4.	He produced copies of various documents evidencing the sale by Bayer to Lidorr and the movement of the goods from Israel to the United Kingdom. Among the latter was a movement certificate, EURI, endorsed by the Israeli customs authorities, which recorded that the country of origin of the goods was Germany. That document had been obtained retrospectively, in March 2006, in order to support Polyram’s claim that the goods should be relieved of import duty. This consignment was, Mr Timmins said, typical of Polyram’s many later importations of goods of German origin which had first been transported to Israel; none of the subsequent importations had been subjected to import duty and there was no reason why this importation should be treated differently. He pointed out, too, that by the time the post-clearance demand was issued it was too late for Polyram to recover the duty from its customer, and that the burden its payment would place on a small company was considerable. 
5.	The Respondents’ case, as it was advanced by Sarabjit Singh of counsel, was that articles 844 to 856 of Commission Regulation 2454/93/EEC, which set out the conditions on which RGR may be allowed, had not been observed and the relief was consequently not available. The articles require the production of correctly completed documents, which had not been provided in this case. The Respondents can, and in appropriate cases do, accept alternative evidence that the goods in question originated in a Member State of the European Union, were exported to a third country and then returned to the territory of the European Union, and that various other conditions are satisfied. Those conditions are, in summary, designed to ensure that the goods did originate in the European Union and are being returned in essentially the same condition as that in which they were exported. The documentation produced by Polyram, although it went some way towards establishing that the conditions for relief were satisfied, nevertheless failed in one fundamental respect, since it did not clearly show that the goods imported by Polyram were the same goods as those exported by Bayer to Lindoor; and there was no documentary evidence of the sale by Lidorr to Polyram’s Israeli holding company. In addition, there was no clear evidence, but merely supposition, that the goods exported by Bayer to Lindorr satisfied all the other conditions imposed by articles 844 to 856. 
6.	Although, Mr Timmins told us, he was confident that the goods were indeed the same, and that the other conditions were satisfied, he was forced to accept that the documentation was inadequate in the respects identified by Mr Singh. We agree with Mr Singh that the system could not function properly if the Respondents were required to be satisfied by the word of importers rather than by properly authenticated documentation, and that, sympathetic to the Appellant though we are, the Respondents were right to reject the claim for returned goods relief. 
7.	The appeal must, therefore, be dismissed 

COLIN BISHOPP 
CHAIRMAN
Release Date: 25 October 2006
MAN/06/7016