Upper Tribunal Tax and Chancery Chamber

UT/2023/000023 - [2024] UKUT 00096 (TCC)

Fecha: 23-Ene-2024

Pet Playpen panels and Heavy duty panels

Pet Playpen panels and Heavy duty panels

56.

As described by the FTT (at FTT [23]), the function of these products was to construct a barrier or make an enclosure in the form of a playpen for pets. They came in two types: Heavy Duty Playpens/Panels and Metal Playpens/Panels the difference being that in the latter the panels were less sturdy as they were not framed with heavy duty metal tubing material.

57.

As regards the Heavy Duty product the FTT’s findings, from the photographic evidence (which was annotated with dimensions), described the height as 80.5cm with the width being either 110cm or 35cm. The panels comprised frames cast in heavy duty metal. The inserts within the frames were metal wires which were welded to intersect vertically and horizontally at intervals to form a grill. The panel could, through use of tubular extensions from the frame, be used to form a barrier to a staircase. Or, the panels could be linked up by insertion of a metal wire to form a defined enclosed shape such as a square, rectangle, hexagon or octagon. The entrance/exit panel had metal latches to open and close it. The metal playpens/panels were similar but were not framed with heavy duty metal tubing material. The standard dimension was smaller (76.5cm height by 60cm width).

58.

The parties agree the goods are within Chapter 73: Articles of iron or steel (which sits within Section XV: Base metals and articles of base metals).

59.

Before the FTT, Cozy Pet argued for the following three classifications each of which sat under 7314 and each of which carry 0% duty: Cloth (including endless bands) grill, netting and fencing, of iron or steel wire expanded metal of iron or steel. These were:

(1)

7314 49: Other cloth, grill, netting and fencing

7314 49 00: Other

(2)

7314 31: Other grill, netting and fencing, welded at the intersection

7314 31 00: Plated or coated with zinc

(3)

7314 39: Other grill, netting and fencing, welded at the intersection

7314 39 00: Other

60.

HMRC submit the classification which applies is 7326 20 00 90 which sits under 7326 (“Other articles of iron or steel”) where the applicable duty rate is of 2.7%:

7326: Other articles of iron or steel

7326 20: Articles of iron or steel wire

7326 20 00 90: Other

61.

In relation to Cozy Pet’s heading 7314: Other cloth, grill, netting and fencing Note 2 of the CNENs states:

‘In this chapter, the word ‘wire’ means hot-or-cold-formed products of any cross-sectional shape of which no cross-sectional dimension exceeds 16mm.’

62.

The HSENs to Heading 7314 explain:

‘(A) Cloth (including Endless Bands), Grill, Netting and Fencing

The products of this group are, in the main, produced by interlacing, interweaving, netting, etc., iron or steel wire by hand or machine. The methods of manufacture broadly resemble those used in the textile industry (for simple warp and weft fabrics, knitted or crocheted fabrics, etc.). The group includes wire grill in which the wires are welded at the points of contact or bound at those points by means of an additional wire, whether or not the wires are also interlaced. The term "wire" means hot- or cold-formed products of any cross-sectional shape, of which no cross-sectional dimension exceeds 16 mm, such as rolled wire, wire rod and flat strip cut from sheet (see Note 2 to this Chapter). The material of the heading may be used for many purposes e.g., for the washing, drying or filtering of many materials; to make fencing, food protecting covers and insect screening, safety guards for machinery, conveyor belting, shelving, mattresses, upholstery, sieves and riddles, etc.; and for reinforcing concrete, etc. The material may be in rolls, in endless bands (e.g. for belting) or in sheets, whether or not cut to shape; it may be of two or more ply.’

63.

The HSEN to HMRC’s preferred heading 7326 states:

‘This heading covers all iron or steel articles obtained by forging or punching, by cutting or stamping or by other processes such as folding, assembling, welding, turning, milling or perforating other than articles included in the preceding headings of this Chapter or covered by Note 1 to Section XV or included in Chapter 82 or 83 or more specifically covered elsewhere in the Nomenclature.

[…]

Articles of wire, such as snares, traps, mouse-traps, eelpots and the like; wire ties for fodder, etc.; tyre tringles; duplex or twin wire for making textile loom heads and formed by soldering together two single wires; nose-rings for animals; mattress hooks, butchers’ hooks, tile hangers, etc.; waste paper baskets.’