Euro Packaging UK Limited – classification of long-life shopping bags

25 April 2017. Published by Michelle Sloane, Partner

In HMRC v Euro Packaging UK Limited [2017] UKFTT 0160, the First-tier Tribunal (FTT) allowed the Appellant's appeal against decisions of HMRC relating to the customs duty to be paid on the importation from countries outside the EU of shopping bags and its refusal to remit the customs duty.


Euro Packing UK Limited (the Appellant) is a UK manufacturer and supplier of packaging products.  It imported into the UK woven and non-woven shopping bags.  The bags at issue in this appeal were long life woven polypropylene shopping bags (the bags).  

The Appellant classified the bags under Combined Nomenclature (CN) heading 4202 929890, which carries a rate of duty of 2.7%.  In determining the classification of the bags, the Appellant relied upon  advice received from HMRC and its conduct.

In HMRC's view, the correct CN heading was 4202 921900 and therefore the rate of duty was 9.7%. Also, whatever guidance and actions HMRC had given or taken, did not entitle the Appellant to rely upon such guidance and actions to obtain remission of the correct amount of duty.  

HMRC issued a C18 post clearance demand note in the sum of £989,689.19, which the Appellant appealed.    

There were two main questions for determination by the FTT. First what is the correct classification of the bags and secondly, if the higher rate of 9.7% duty is payable, is the Appellant entitled to remission of the duty pursuant to Articles 220, 236 and 239 of the Community Customs Code (CCC).   

The FTT's decision 

In relation to the first question, in order for the bags to fall within the CN code contended for by HMRC, they must be covered with "plastic sheeting" visible to the naked eye.  The FTT was of the view, from a visual examination of the bags, that their outer surface was covered in a form of plastic.  However, the FTT accepted the Appellant's evidence that the industry usage and understanding of "plastic sheeting", referred to in the CN, was thicker than that applied to the bags in issue. The FTT therefore concluded that the bags were not covered in "plastic sheeting", but rather were covered in a very thin layer of plastic which allowed the underlying texture of the woven material to show through, something which would not be evident if the bags had been covered in plastic sheeting.  

The FTT allowed the Appellant's appeal.  Although not necessary given its decision on the first issue, the FTT went on to consider the issue of remission and concluded that remission would have been due under Article 239 of the CCC.  


This decision provides helpful general guidance on the rules relating to the  classification of products and will be useful to businesses which import similar bags.   The decision also provides a useful summary of the FTT's jurisdiction in relation to remission claims, confirming  that the FTT does have jurisdiction to determine remission claims.  

A copy of the decision can be found here.

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