Nexans Norway AS v The Commissioners for HMRC

Nexans Norway AS v The Commissioners for HMRC

The cable performs two independent and equally important functions—power transmission and data transmission—neither of which is ancillary to the other. Its essential character is the combination of both functions, and neither dominates. Therefore, classification under principal function (Note 3) or essential character (GIR 3(b)) is not possible. Applying GIR 3(c), the cable is classified under 85 44 70 00 90 (optical fibre cables, other).

Parties
Appellant: Nexans Norway A. S.; Respondents: The Commissioners for His Majesty’s Revenue and Customs
Jurisdiction
England and Wales
Judgment Date
09 March 2024
Procedural Posture
Customs Duty Appeal / First Tier Tribunal (tax Chamber) Judgment
Outcome
Appeal allowed
Legal Topics
Customs Classification, Composite Goods, Tariff Codes, Interpretation of General Interpretive Rules (girs), Principal Function and Essential Character Tests
Tax Law Customs Law Customs Classification Composite Goods Tariff Codes Interpretation of General Interpretive Rules (girs) Principal Function and Essential Character Tests

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Parties

Nexans Norway A. S.

Appellant

The Commissioners for His Majesty’s Revenue and Customs

Respondents

Procedural Posture

Customs Duty Appeal / First Tier Tribunal (tax Chamber) Judgment

Legal Issues

  1. 1 What is the correct customs tariff classification for an underwater composite cable containing both power conductors and fibre optic elements?
  2. 2 Does the cable have a principal function or essential character for classification under the UK Tariff and GIRs?

Ratio Decidendi

The cable performs two independent and equally important functions—power transmission and data transmission—neither of which is ancillary to the other. Its essential character is the combination of both functions, and neither dominates. Therefore, classification under principal function (Note 3) or essential character (GIR 3(b)) is not possible. Applying GIR 3(c), the cable is classified under 85 44 70 00 90 (optical fibre cables, other).

Court Disposition

Appeal allowed

Orders

  • HMRC’s classification decision is set aside.
  • The correct classification of the cable is Community Code 85 44 70 00 90.