Trinidad and Tobago
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Judge quashes customs order on potato wedges

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Jada Loutoo Sweet potato fries.
Sweet potato fries.

A Customs and Excise order which did not classify frozen potato wedges as french fries, which attract a higher tariff, has been quashed by a High Court judge.

On Monday, Justice Carol Gobin said the policy, made in 2020, was inconsistent, as it included products of different cuts and sizes in the description of french fries, while excluding wedges.

She also said classification for exemption should not rely on the manufacturer’s marketing choices –as had been done in this case – suggesting that using the certification from health officials at the port of export could carry more weight.

Gobin was asked to review the policy of the Comptroller of Customs implemented in 2020, when it was revealed wedges were wrongly classified and were not french fries, so did not qualify for a reduced tariff of five per cent, but 20 per cent.

The judicial review claim was brought by Westco Food Unlimited after it was told the wrong code had been used in its paperwork. Demands were made for the payment of the duty from 2011-2018.

From 2010-2017, duties on frozen french fries were either suspended entirely or varied from 20 per cent to five per cent and since 2011, Westco applied the code used for french fried potatoes to include wedges.

The forms submitted were scrutinised by customs and approved and the importer paid the relevant duties.

The judgment said the division then did a post-clearance audit and determined that importers, not only Westco, were incorrectly classifying wedges as french fries.

However, in her ruling, Gobin rejected the justification the division gave for doing post-clearance audits.

“Post-clearance audits are not incorporated into the published policy guidelines of the division. The actions of the defendant in conducting a post-clearance audit in the manner it did and years after goods were cleared, verified and delivered, only served to defeat the salutary objectives above of facilitating trade, reducing time, and its claim to be entitled to do this at all injects a level of uncertainty for importers which is highly prejudicial, unfair, and which offends against commercial sense.”

She said the role of the division was to facilitate trade for the benefit of citizens who relied on imported commodities and to encourage legitimate business and investment.

“Customs best fulfils this role by ensuring that imports move as quickly as possible to achieve the efficient release of goods, while at the same time it adopts and maintains procedures, simple though stringent enough, to ensure and certify the proper collection of revenue according to applicable classifications and tariffs.”

For importers, she said,” the certainty of supply, fixed classifications for tariff purposes, and the application of appropriate rates of duty are key to fixing prices of goods, and stability in the local market supply chain and business.”

Gobin held the division could not demand the recovery of short-levied duty from Westco, since no offence had been identified, nor was there notice of any investigation or charge.

She said while the Customs Act did not stipulate a time frame for paying duty erroneously short-levied, “In my opinion, the comptroller cannot claim up to seven years for recovery where there has been no offence.

“The defendant has no roving jurisdiction to simply embark on a reclassification exercise and to demand further duty where an importer has complied with all the guidelines and duty has been assessed and paid and delivery of goods has been allowed."

She said it would be "a recipe for confusion in the marketplace" if customs could arbitrarily do classification exercises years after goods had been processed and delivered.

“To allow the defendant to do this in the absence of express statutory power would defeat the statutory objectives of efficiency and ease of business.”

She suggested six months to make demands for payment or revisit clearances.

In quashing the 2020 order, she also held the decision was illegal, irrational, procedurally improper and of no effect.

The comptroller was further directed to reconsider its decision in the order.

Westco was represented by attorneys Jagdeo Singh, Leon Kalicharan, Savitri Samaroo and Karina Singh. Representing the comptroller were Karlene Seenath, Maria Belmar, Nicol Yee Fung, Amrita Ramsook, and Kezia Redhead.