Upper Tribunal Tax and Chancery Chamber

[2025] UKUT 00142 (TCC)

Fecha: 12-Mar-2025

We refer to these collectively as the “charges”

We refer to these collectively as the “charges”.

The Appellants (“HMRC”) decided that these charges were due, and Canadian Solar appealed that decision to the FTT. By its Decision, the FTT decided that:

(1)

The solar cells were consigned from Taiwan and that therefore the charges were in principle payable. This involved deciding:

(a)

Whether Canadian Solar had used the correct commodity codes for the products they were importing into the EU. The FTT concluded that the wrong code had been used.

(b)

Furthermore, the FTT concluded that Canadian Solar’s error – which, as we will come to describe, and as the FTT itself fully recognised, was entirely understandable – could not be corrected after the event.

(2)

This was, however, a case where “special circumstances” existed within Article 120 of Regulation (EU) No 952/2013 (the “Union Customs Code” or “UCC”), such that, in the circumstances of this case, the charges should be remitted. Article 120 is referred to as the “general equity provision”.

The combined effect of the FTT’s decision was to leave Canadian Solar the winner in terms of outcome. However, considering matters issue-by-issue, HMRC had “won” on the issues described at [2(1)(a)] and [2(1)(b)] (which we shall describe, respectively, as the “interpretation issue” and the “correction issue”), whereas Canadian Solar had “won” on the “general equity issue” described at [2(2)].

With the permission of the FTT, HMRC appeal the conclusion reached by the FTT in regard to the general equity issue and Canadian Solar cross-appeals on the basis that the FTT should have decided both the interpretation issue and the correction issue in its favour.

Before outlining the relevant facts, some general points can be made in regard to the three issues that are before us:

(1)

This was HMRC’s appeal, so we would normally have heard from HMRC first on the general equity issue. However, the logical order for considering the three issues was in the order we have set them out above, as follows:

(a)

Interpretation issue.

(b)

Correction issue.

(c)

General equity issue.

We are very grateful to the advocates for accommodating our request to deal with these issues in this order, and for the careful and helpful way in which they addressed us.

(2)

This decision unsurprisingly addresses these three issues in this order. Not only does this track the order of consideration of the issues by the FTT, but (as we anticipated) the consideration of the earlier issues affects the consideration of the later issues.

(3)

In order for Canadian Solar to succeed in recovering the charges, it only needs to succeed in relation to one of these three issues. By contrast, in order to defeat Canadian Solar’s claim for remission of the charges, HMRC must succeed on all three: “two out of three ain’t bad”, but it is not enough for HMRC’s purposes.

We turn to consider the relevant background facts.

THE RELEVANT FACTS