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

The FTT ultimately agreed with HMRC’s case that the classification regulation 350/2014 provided the answer, rejecting Cozy Pet’s argument that the regulation was not relevant for the following reasons.

In relation to cat trees, it considered them to be the same as the products under Regulation 350/2014 (FTT [57]). While the FTT accordingly held that Regulation applied directly to Cozy Pet’s cat tree and cat scratcher products, it went on to find that because the plush covering was knitted rather than woven the correct CN code was not the exact eight digit code as that specified in the Regulation (6307 90 98) but 6307 90 10, a code which referred to knitted textile.

The FTT also rejected Cozy Pet’s case that, because of the presence of the sisal cord, the relevant duty code was that for “rope”; it considered the sisal code was “woven” textile. It considered the material ratio between sisal and plush was such that (apart from for the single column cat scratcher) the plush predominated. The codes for both the cat tree and the double column cat scratcher were accordingly 6307 90 10.

The single column cat scratcher, where the FTT thought the sisal, which it considered was a woven textile, predominated over knitted plush, was based on the code for woven textile. Although the FTT did not state it in terms, the code it envisaged for the single column cat scratcher was therefore 6307 90 98. That had the result of reducing the duty on the product to 6.3% (FTT [76]) as compared with HMRC’s preferred code which had a duty rate of 12%.

Because the FTT considered the products were the same not just similar the FTT explained that it did not consider it had to apply the principle (which it described as a caveat) “to take great care” (see [13] above). It went on however to consider Cozy Pet’s contentions (regarding the application of the GIR, and pursuant to those the essential character of the products) if it were wrong in that view and for the sake of completeness. However, having done so, it reached the same classifications as before as described above. The FTT rejected the submission the wooden component of the product, which performed the function of providing stability, shape and structure, gave the product its essential character explaining (at FTT [73]):