TC09592 - [2025] UKFTT 00891 (TC)

HMRC’s original application for the appeal to be struck out, made on 27 December 2024, referred to paragraphs 1 and 2 of Regulation 14 of the 2001 Regulations. These are set out above.

The Appellant objected to the strike-out application on 11 February 2025 on the grounds that the appeal had a reasonable prospect of success. The Appellant stated that it relied on its grounds of appeal. The Appellant’s notice of objection set out some information on the uses and properties of gutka, reproduced relevant legislation, and stated as follows:

“9.

Heading 2403 is the customs tariff code heading entitled "Other manufactured tobacco and manufactured tobacco substitutes; 'homogenised' or 'reconstituted' tobacco; tobacco extracts and essences" and contains the customs tariff code under which the tobacco product component of the Goods was declared, namely, 2403 9910 00 "Chewing tobacco and snuff (nasal tobacco)".

10.

Tobacco products include chewing tobacco section 2(1) of TPDA. Chewing Tobacco is defined as a product which consists of or includes tobacco and has been prepared so that it can be chewed. The tobacco that is added to Gutkas is chewing tobacco that has already reached its Production Account Point (PAP) and removed from the factory as it can be chewed on its own or added to Gutkas. It follows that the duty payable at the exercise duty point is the weight of tobacco products (other than cigarettes) is their weight at the time of time of their entry into the productions account which is only the net weight of tobacco that is added to the Gutkas and not the net weight of the Gutka.

11.

Applying a purposive interpretation to the excise duty regime, it is plainly inappropriate to extend the excise duty regime to the entire weight of a product of which a minority component is tobacco; to do so would result (as here) in a perverse situation where there is an unintended windfall arising based on the quantity, density and weight of substances other than tobacco which would not otherwise be subject to excise duty. It would make it commercially unviable to import Gutka into the UK.”

On 24 March 2025, HMRC applied to amend their strike-out application on the grounds that the original application had incorrectly referenced Regulation 14 of the 2001 Regulations, which applies only to tobacco which is manufactured in registered factories, as opposed to imported tobacco. HMRC applied to amend their application to refer instead to the correct legal provisions regarding the imposition of excise duty on imported tobacco, which is Regulation 6 of the 2010 Regulations.

On 16 April 2025, the Appellant’s representative emailed the Tribunal as follows:

“As directed by the Tribunal, we, on behalf of the Appellant, write to object to the application of the Respondent dated 24 March 2025 to amend their application of 27 December 2024 for this appeal to be struck out.  Such application comes after the Appellant's response to their application of 27 December 2024 and the Respondent should have anticipated such response when filing their original application and should not be allowed to adjust their application after the Response of the Appellant. This will put the Appellant at further costs of providing another response.”

On 9 May 2025, the Tribunal wrote to the parties, referring to the hearing on 7 July 2025 and stating that the application for permission to amend the application would be considered at that hearing, along with the strike-out application itself.