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You are here: BAILII >> Databases >> United Kingdom Supreme Court >> Bloomsbury International Ltd v Sea Fish Industry Authority and Department for Environment, Food and Rural Affairs [2011] UKSC 25 (15 June 2011) URL: https://www.bailii.org/uk/cases/UKSC/2011/25.html Cite as: [2011] WLR 1546, [2011] UKSC 25, [2011] 1 WLR 1546 |
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Trinity Term
[2011] UKSC 25
On appeal from: [2010] EWCA Civ 263
JUDGMENT
Bloomsbury International Limited and others (Respondents) v Sea Fish Industry Authority and Department for Environment, Food and Rural Affairs (Appellant)
before
Lord Phillips, President
Lord Walker
Lady Hale
Lord Mance
Lord Collins
JUDGMENT GIVEN ON
15 June 2011
Heard on 23 and 24 March 2011
Appellant Hugh Mercer QC Tim Eicke QC Iain Quirk (Instructed by DEFRA Law & Corporate Services) |
Respondents (for the 1st, 7th and 8th) Fergus Randolph QC Margaret Gray Karwan Eskerie (Instructed by The Wilkes Partnership) |
|
Intervener (Sea Fish Industry Authority) Mark Hoskins QC Robert Weekes (Instructed by Treasury Solicitor) |
LORD MANCE (with whom Lord Walker, Lady Hale and Lord Collins agree)
Introduction
"… 'the sea fish industry' means the sea fish industry in the United Kingdom and a person shall be regarded as engaged in the sea fish industry if –
(a) he carries on the business of operating vessels for catching or processing sea fish or for transporting sea fish or sea fish products, being vessels registered in the United Kingdom; or(b) he carries on in the United Kingdom the business of breeding, rearing or cultivating sea fish for human consumption, of selling sea fish or sea fish products by wholesale or retail, of buying sea fish or sea fish products by wholesale, of importing sea fish or sea fish products or of processing sea fish (including the business of a fish fryer)."
"(3) Regulations under this section may impose a levy either -
(a) in respect of the weight of sea fish or sea fish products landed in the United Kingdom or trans-shipped within British fishery limits at a prescribed rate which, in the case of sea fish, shall not exceed 2p per kilogram; or(b) in respect of the value, ascertained in the prescribed manner, of sea fish or sea fish products landed or trans-shipped as aforesaid at a prescribed rate not exceeding 1 per cent of that value.
(4) If regulations under this section impose a levy as provided in subsection (3)(a) above the prescribed rate in relation to any sea fish product shall be such that its yield will not in the opinion of the Authority exceed the yield from a levy at the rate of 2p per kilogram on the sea fish required on average (whether alone or together with any other substance or article) to produce a kilogram of that product.
(5) Different rates may be prescribed for sea fish or sea fish products of different descriptions; ....
…..
(8) For the purposes of this section -
(a) parts of a sea fish shall be treated as sea fish products and not as sea fish;(b) references to the landing of fish include references to the collection for consumption of sea fish which have been bred, reared or cultivated in the course of fish farming whether in the sea or otherwise and references to the landing of fish or fish products include references to bringing them through the tunnel system as defined in the Channel Tunnel Act 1987."
The second part of section 4(8), referring to the landing of fish or fish products through the Channel Tunnel, was inserted by the Channel Tunnel (Amendment of the Fisheries Act 1981) Order 1994 (SI 1994/1390).
"(2A) If any levy imposed under section 4 below has effect in relation to sea fish or sea fish products from the sea fish industries of member States other than the United Kingdom, the Authority shall so exercise its powers under this Part of this Act as to secure that benefits are conferred on those industries commensurate with any burden directly or indirectly borne by them in consequence of the levy."
"2. Interpretation
In these Regulations, unless the context otherwise requires, the following expressions have the meanings hereby respectively assigned to them –
….
'firsthand sale' means -
(a) in relation to any sea fish or sea fish product which has been first landed in the United Kingdom the first sale thereof (other than a sale by retail) whether prior to or after landing in the United Kingdom;(b) in relation to any sea fish or sea fish product which has been first landed outside the United Kingdom and any sea fish product manufactured outside the United Kingdom from such sea fish or sea fish product which in either case is purchased by a person carrying on business in the sea fish industry and is imported or brought into the United Kingdom for the purposes of any such business, the first sale thereof (whether in the United Kingdom or elsewhere) to such a person as aforesaid;(c) in relation to any sea fish or sea fish product which is trans-shipped within British fishery limits, the first sale thereof;...
'sale by retail' means a sale to a person buying otherwise than for the purpose of resale or processing or use as bait, and includes a sale to a person for the purposes of a catering business (other than a fish frying business); and 'sell by retail' has a corresponding meaning; …
4. Imposition of levy
(1) There shall be paid to the Authority subject to and in accordance with the provisions of these Regulations by every person engaged in the sea fish industry who -
(a) purchases any sea fish or any sea fish product on a firsthand sale; or(b) trans-ships within British fishery limits any sea fish or any sea fish product by way of firsthand sale; or(c) lands any sea fish or sea fish product in the United Kingdom for subsequent sale other than in the United Kingdom;
a levy (hereinafter referred to as 'the levy') at the rate per kilogram set out in the second column of the Schedule hereto in respect of any sea fish or sea fish product specified opposite thereto in the first column of the said Schedule so purchased or trans-shipped or landed by him.
…..
(6) Where the levy becomes payable in respect of any sea fish it shall not be payable in respect of the products of such sea fish.
5. Time Limits for Payment
(1) Levy payable by a person who purchases any sea fish or sea fish product on a firsthand sale shall be paid to the Authority within seven days after the end of -
(a) the week during which there took place the firsthand sale of the fish or fish product in respect of which the levy is payable; or(b) the week during which such fish or fish product was imported or brought into the country;
whichever is the later."
The meaning of "landed"
A charge having equivalent effect to customs duty ("CEE")?
(a) The law
"PART 3 UNION POLICIES AND INTERNAL ACTIONS
TITLE II - FREE MOVEMENT OF GOODS
Article 28
The Union shall comprise a customs union which shall cover all trade in goods and which shall involve the prohibition between Member States of customs duties on imports and exports and of all charges having equivalent effect, and the adoption of a common customs tariff in their relations with third countries.
…….
CHAPTER 1
THE CUSTOMS UNION
Article 30
Customs duties on imports and exports and charges having equivalent effect shall be prohibited between Member States. This prohibition shall also apply to customs duties of a fiscal nature.
……
TITLE VII – COMMON RULES ON COMPETITION. TAXATION AND APPROXIMATION OF LAWS
Article 110
No Member State shall impose, directly or indirectly, on the products of other Member States any internal taxation of any kind in excess of that imposed directly or indirectly on similar domestic products.
Furthermore, no Member State shall impose on the products of other Member States any internal taxation of such a nature as to afford indirect protection to other products."
"28….. the prohibition [of a CEE] is aimed at any tax demanded at the time of or by reason of importation and which, being imposed specifically on an imported product to the exclusion of a similar domestic product, results in the same restrictive consequences on the free movement of goods as a customs duty by altering the cost price of that product. The essential characteristic of a charge having an effect equivalent to a customs duty, which distinguishes it from internal taxation, is that the first is imposed exclusively on the imported product whilst the second is imposed on both imported and domestic products. A charge affecting both imported products and similar products could however constitute a charge having an effect equivalent to a customs duty if such a duty, which is limited to particular products, had the sole purpose of financing activities for the specific advantage of the taxed domestic products, so as to make good, wholly or in part, the fiscal charge imposed upon them".
"26 Where a charge is imposed on domestic and imported products according to the same criteria, the Court has nevertheless stated that it may be necessary to take into account the purpose to which the revenue from the charge is put. Thus, if the revenue from such a charge is intended to finance activities for the special advantage of the taxed domestic product, it may follow that the charge imposed on the basis of the same criteria nevertheless constitutes discriminatory taxation in so far as the fiscal burden on the domestic products is neutralized by the advantages which the charge is used to finance whilst the charge on the imported product constitutes a net burden (judgment in Case 73/79 Commission v Italy [1980] ECR 1533, para 15).
27 It follows from the foregoing considerations that if the advantages stemming from the use of the proceeds of the charge in question fully offset the burden borne by the domestic product when it is placed on the market, that charge constitutes a charge having an effect equivalent to customs duties, contrary to article 12 [now 30] et seq of the Treaty. If, on the other hand, those advantages only partly offset the burden borne by domestic products, the charge in question is subject to article 95 [now 110] of the Treaty. In the latter case, the charge would be incompatible with article 95 [110] of the Treaty and is therefore prohibited to the extent to which it discriminates against imported products, that is to say to the extent to which it partially offsets the burden borne by the taxed domestic product."
"The objective of article 95 [now 110] is to abolish direct or indirect discrimination against imported products but not to place them in a privileged tax position in relation to domestic products. There is generally no discrimination such as is prohibited by article 95 [110] where internal taxation applies to domestic products and to previously imported products on their being processed into more elaborate products without any distinctions of rate, basis of assessment or detailed rules for the levying thereof being made between them by reason of their origin."
"the fact that the import surcharge is payable ex hypothesi solely on imported goods and that the origin of the goods determines the amount of the duty to be levied cannot remove the tax in general or the surcharge in particular from the scope of article 95 [now 110] of the Treaty; accordingly, their compatibility with Community law must be assessed in the light of that provision and not articles 9 to 13 [now 28 to 31] of the Treaty"
The Court went on (in para 27) to refer to the issue of discrimination that can arise under article 110, saying:
"It is ….. beyond question that application of a higher charge to imported products than to domestic products or application to imported products alone of a surcharge in addition to the duty payable on domestic and imported products is contrary to the prohibition of discrimination laid down in article 95 [now 110]."
"It is however appropriate to emphasise that in order to relate to a general system of internal dues, the charge to which an imported product is subject must impose the same duty on national products and identical imported products at the same marketing stage and that the chargeable event giving rise to the duty must also be identical in the case of both products. It is therefore not sufficient that the objective of the charge imposed on imported products is to compensate for a charge imposed on similar domestic products - or which has been imposed on those products or a product from which they are derived - at a production or marketing stage prior to that at which the imported products are taxed. To exempt a charge levied at the frontier from the classification of a charge having equivalent effect when it is not imposed on similar national products or is imposed on them at different marketing stages or, again, on the basis of a different chargeable event giving rise to duty, because that charge aims to compensate for a domestic fiscal charge applying to the same products - apart from the fact that this would not take into account fiscal charges which had been imposed on imported products in the originating Member State - would make the prohibition on charges having an effect equivalent to customs duties empty and meaningless."
The requirements set out in the first sentence of para 8 in Denkavit have themselves been echoed in a number of cases, including Joined Cases C-149/91 and C-150/91 Sanders Adour Snc v Directeur des Services Fiscaux des Pyrénées-Atlantiques [1992] ECR I-3899 at para 17, Outokumpu at para 24, Joined Cases C-441/98 and C-442/98 Kapniki Mikhailidis AE v Idryma Kinonikon Asphaliseon [2000] ECR I-7145 and Nygård at para 20.
"As to the requirement that the chargeable events be identical, no difference may be discerned in the present case in the fact that the charge is levied on an imported product at the time of importation and on the domestic product when it is sold or used, for in actual economic terms the marketing stage is the same since both operations are carried out with a view to utilisation of the product."
"…. in circumstances such as those of this case, no difference may be discerned in the fact that imported electricity is taxed at the time of importation and electricity of domestic origin at the time of production, since in view of the characteristics of electricity the marketing stage is the same for both operations, namely the stage when the electricity enters the national distribution network ….".
"29. …. the event giving rise to the levy here in issue in the main proceedings must be considered to be the withdrawal of the pigs from the national herd, regardless of whether that levy is charged on pigs intended for slaughter in Denmark or for live export. In both cases, therefore, the fiscal obligation arises when the animals leave the primary national production.
30 In those circumstances, no difference may be discerned in the fact that pigs exported live are taxed at the time of exportation, whereas pigs intended for slaughter on the national market are taxed at the time of supply for purposes of slaughter, as in real economic terms those two moments correspond to the same marketing stage, both operations being carried out with a view to releasing the pigs from national primary production ….."
"…. even a charge which is borne by a product imported from another Member State, when there is no identical or similar domestic product, does not constitute a charge having equivalent effect but internal taxation within the meaning of article 95 of the Treaty if it relates to a general system of internal dues applied systematically to categories of products in accordance with objective criteria irrespective of the origin of the products."
It went on to treat the levy as internal taxation because its purpose was to redress the inequity resulting from the copying of published material, which would, if sold and bought in published form, have attracted a levy, and because it could be regarded as part of the same internal system of taxation as that levy:
"16 The Court is of the opinion that the particular features of the levy in issue lead to its being accepted as forming part of such a general system of internal dues. That follows first from its inclusion in taxation arrangements which have their origin in the breach made in legal systems for the protection of copyright by the increase in the use of reprography and which are designed to subject, if only indirectly, the users of those processes to a charge which compensates for that which they would normally have to bear.
17 That conclusion follows in the second place from the fact that the levy in issue forms a single entity with the levy imposed on book publishers by the same internal legislation and from the fact, too, that it is borne by a range of very different machines which are moreover classified under various customs headings but which have in common the fact that they are all intended to be used for reprographic purposes in addition to more specific uses."
(b) Application of the law to this case
"55. In purely formal terms the 1995 Regulations appear to meet those requirements. They lay down a uniform system that draws no distinction between domestic and imported products as regards rates of levy, production or marketing stage or chargeable event. The authorities make clear, however, that one must look beyond form and examine contents and effects. It is here that, in my judgment, the scheme runs into difficulties in relation to sea fish products that have been processed on land. By virtue of regulation 4(1)(a), a levy is payable by a person who purchases a sea fish product on a firsthand sale. That takes one to the definition of firsthand sale in regulation 2. Imported products are covered by paragraph (b) of that definition, the application of which will in practice generally produce a liability to levy, since there will be both an importation and a first sale of the products to a relevant person. Domestic products are covered by paragraph (a) of the definition, but the application of that paragraph will in practice produce no liability to levy. That is because liability arises only in relation to sea fish products which have been "first landed" in the United Kingdom; but products resulting from processing on land are in no sense "landed", let alone "first landed", in the United Kingdom. The sea fish or sea fish product ingredients from which they are produced may have been first landed in the United Kingdom, but the resulting products are not.
56. In practice, therefore, the 1995 Regulations involve a material difference of treatment between domestic and imported products. ….."
Additional points
Conclusion
LORD PHILLIPS
"Where an Act has been interpreted in a particular way without dissent over a long period, those interested should be able to continue to order their affairs on that basis without the risk of being upset by a novel approach."