Sony Computer Entertainment Europe Ltd v Revenue and Customs

This is an appeal from an order made on 27 July 2005 by Mr Justice Lawrence Collins on an appeal under section 11 of the Tribunals and Inquiries Act 1992 from a decision of the VAT and Duties Tribunal (Dr John Avery Jones CBE, chairman, and Mr Alex McCloughlin) released on 15 October 2004.

The tribunal had dismissed the appeal of Sony Computer Entertainment Europe Limited (“Sony”) under section 16 of the Finance Act 1994 from the decision of a reviewing officer of H M Customs and Excise contained in a letter dated 18 October 2001. That review decision had upheld an earlier decision, in a letter dated 25 July 2001, to revoke binding tariff information which had been issued by Customs and Excise on 12 June 2001 in respect of a Sony product known as “PlayStation2”.

The judge dismissed Sony’s appeal from the tribunal’s decision of 15 October 2004. Sony appeals to this Court with permission granted by Lord Justice Carnwath on 24 October 2005. The appeal has been heard with a linked application, made by notice dated 7 September 2005, for an order that issues of Community law, said to arise on the appeal, be referred to the Court of Justice for a preliminary ruling pursuant to article 234 of the EC Treaty and CPR Pt 68. After hearing full argument on the application and on the appeal we have taken the view that a reference is not necessary in order to enable us to reach a decision in this case.

Customs duties are levied on goods imported into the European Community in accordance with the rules and provisions of the Common Customs Tariff established by Council Regulation (EEC) 2658/87 of 23 July 1987. In particular, the level of customs duties is determined at Community level on the basis of the combined nomenclature, or in abbreviated form ‘CN’, established by article 1 of Regulation 2658/87.

The CN is reissued annually. It provides – by reference to an eight digit numerical system – for the classification of goods under one of some 10,000 sub-headings. In a case where goods are potentially classifiable under two or more sub-headings, rule 3 of the General Rules for the Interpretation of the combined nomenclature (“GIRs”) set out in section 1 of part 1 of annex 1 to Regulation 2658/87, provides how the choice is to be made. It is sufficient to note, for the purposes of this appeal, that rule 3 requires that the heading which provides the most specific description is to be preferred to headings providing for a more general description and that goods made up of different components are to be classified as if they consisted of the component which gives them their essential character.

In the present context the relevant CN sub-headings in relation to the Sony PlayStation2 are 8471 10 00 (automatic data processing machines) and 9504 10 00 (video games of a kind used with a television receiver). Since 1 January 2004 the tariff classification as between those two sub-headings has been of little or no practical importance because the duty levied on goods classified under each has been zero. But, before that date the classification was of importance: duty on goods imported into the Community under sub-heading 8471 was zero, but duty on goods under sub-heading 9504 was 1.7% in 2001, 1.1% in 2002 and 0.6% in 2003.

Put shortly, Sony’s concern in these proceedings is to establish that duty should not have been levied on imports of PlayStation2 into the Community between 19 October 2000 and 31 December 2003 on the basis that that product was to be classified under sub-heading 9504. It is said that the customs authorities were required to treat the goods as classified under sub-heading 8471. The amount of duty that Sony has overpaid is said to be some €50 million. But, for reasons which I shall explain, the point does not turn on whether, on a proper interpretation of the CN – or on the true effect of rule 3 of the GIRs - the goods ought to be classified under sub-heading 8471 rather than under sub-heading 9504. The point turns on whether, in the events which have happened, Sony was entitled to continue to rely on binding tariff information issued on 12 June 2001 – which did classify the goods under sub-heading 8471 - notwithstanding the subsequent decision of Customs and Excise that that information be revoked. In order to decide that point it is necessary to have in mind the provisions of the Community Customs Code.

The Community Customs Code was established by Council Regulation (EEC) 2913/92 of 12 October 1992. Chapter 2 in Title I (General provisions) of the Code contains “Sundry general provisions relating in particular to the rights and obligations of persons with regard to customs rules”. Section 2, chapter 2, provides for an importer to request and obtain from (interalia) the national customs authorities a decision relating to the application of customs rules. The following provisions are material in the present context:

Section 3, chapter 2 in Title I of the Community Customs Code provides for an importer to request and obtain information from the national customs authorities. Articles 11 and 12 are in these terms (so far as material):

Article 11

1.

Any person may request information concerning the application of customs legislation from the customs authorities.

. . .

Article 12

1.

The customs authorities shall issue binding tariff information or binding origin information on written request, acting in accordance with the committee procedure.

2.

Binding tariff information or binding origin information shall be binding on the customs authorities as against the holder of the information only in respect of the tariff classification of goods.

3.

. . .

4.

Binding information shall be valid for a period of six years in the case of tariffs and three years in the case of origin from the date of issue. By way of derogation from Article 8, it shall be annulled where it is based on inaccurate or incomplete information from the applicant.

5.

Binding information shall cease to be valid:

(a)

in the case of tariff information

(i)

where a regulation is adopted and the information no longer conforms to the law laid down thereby;

(ii)

where it is no longer compatible with the interpretation of one of the nomenclatures referred to in Article 20 (6):

- at Community level, by reason of amendments to the explanatory notes to the combined nomenclature or by a judgment of the Court of Justice of the European Communities

- at international level, by reason of a classification opinion or an amendment of the explanatory notes to the Nomenclature of the Harmonized Commodity Description and Coding System adopted by the World Customs Organization established in 1952 under the name 'the Customs Cooperation Council',

(iii)

where it is revoked or amended in accordance with Article 9, provided that the revocation or amendment is notified to the holder.

The date on which binding tariff information ceases to be valid for the cases cited in (i) and (ii) shall be the date of publication of the said measures or, in the case of international measures, the date of the Commission communication, in the 'C' series of the Official Journal of the European Communities;

(b)

in the case of origin information

. . . [(i) – (iii)]

6.

The holder of binding information which ceases to be valid pursuant to paragraph 5(a)(ii) or (iii) or (b)(ii) or (iii) may still use that information for a period of six months from the date of publication or notification, provided that he concluded binding contracts for the purchase or sale of the goods in question, on the basis of the binding information, before that measure was adopted. However, in the case of products for which an import, export or advance-fixing certificate is submitted when customs formalities are carried out, the period of six months is replaced by the period of validity of the certificate.

In the case of paragraph 5(a)(i) and (b)(i), the Regulation or agreement may lay down a period within which the first subparagraph shall apply.

7.

The classification or determination of origin in binding tariff information may [be] applied, on the conditions laid down in paragraph 6, solely for the purpose of:

- determining import or export duties,

- calculating export refunds and any other amounts granted for imports or exports as part of the common agricultural policy,

- using import, export or advance-fixing certificates which are submitted when formalities are carried out for acceptance of the customs declaration concerning the goods in question, provided that such certificates were issued on the basis of the information concerned.

. . .

The Community Customs Code must be read subject to Council Regulation (EEC) 2454/93 of 2 July 1993, which lays down provisions for the implementation of the Code. In particular chapter 4 in Title II of Regulation 2454/93 contains provisions directed to the “legal effect of binding tariff information”. Article 11 provides that:

Article 11

Binding tariff information supplied by the customs authorities of a Member State since 1 January 2001 shall become binding on the competent authorities of all the Member States under the same conditions.

In that context, “the same conditions” means, I think, the conditions laid down in articles 6 and 7 of the Regulation – see article 5.1 – and, perhaps, those in article 10.2 and 10.3; but nothing turns on that. The effect of the article is to make a binding tariff information issued by the customs authorities in one Member State binding throughout the Community.

Article 12.1 of Regulation 2454/93 is in these terms (so far as material):

Article12

1.

Upon adoption of one of the acts or measures referred to in Article 12(5) of the Code, the customs authorities shall take the necessary steps to ensure that binding tariff information shall thenceforth be issued only in conformity with the act or measure in question.

Article 243 – to which reference is made in article 6.3 of the Code – provides for a right of appeal from decisions taken by the national customs authorities. The article is in these terms:

Article 243

1.

Any person shall have the right to appeal against decisions taken by the customs authorities which relate to the application of customs legislation, and which concern him directly and individually.

. . .

The appeal must be lodged in the Member State where the decision has been taken or applied for.

2.

The right of appeal may be exercised:

(a)

initially, before the customs authorities designated for that purpose by the Member States;

(b)

subsequently, before an independent body, which may be a judicial authority or an equivalent specialized body, according to the provisions in force in the Member States.

In that context “decision” means “any official act by the customs authorities pertaining to customs rules giving a ruling on a particular case, such act having legal effects on one or more specific or identifiable persons” and the term “official act” includes “binding information within the meaning of article 12” – article 4(5) of the Code.

Effect is given to article 243 of the Code, in domestic law, by sections 14 to 16 of the Finance Act 1994. Sections 14 and 15 of that Act – read with Customs Reviews and Appeals (Tariff and Origin) Regulations 1997 (SI 534/1997), regulation 3(1)(c) - provide for Customs and Excise to review any decision as to whether or not any binding tariff information is to be revoked. Section 16(1) provides that an appeal shall lie to an appeal tribunal with respect to any decision on a review under section 15.

The powers of the tribunal, in relation to a decision on what are termed “ancillary matters” and a decision on the review of such a decision, are confined to a power “where the tribunal are satisfied that the Commissioners or other person making that decision could not reasonably have arrived at it” to do one or more of the acts set out in section 16(4) – which include directing that the decision is to cease to have effect. In relation to other decisions the powers of an appeal tribunal include a power “to quash or vary any decision” and a power “to substitute their own decision for any decision quashed on appeal” – section 16(5). In that context, a decision is “a decision on an ancillary matter” if it is a decision of a description specified in schedule 5 to the Act which is not comprised in a decision falling within section 14(1)(a) to (c). Decisions falling within paragraph (c) of regulation 3(1) of the 1997 Regulations – that is to say, “any decision as to whether or not any binding tariff information . . . is to be . . . revoked” – are brought within section 16(4) of the 1994 Act by regulation 4 of those regulations.

The circumstances in which Customs and Excise issued BTI GB 105614503 (“the BTI”) – by which PlayStation2, model numbers SCPH-30003 and SCHP-30004, were classified under sub-heading 8471 of the CN – are fully set out in an agreed statement of facts which was before the tribunal (and recorded at paragraph 3 of the tribunal’s decision, [2004] UKVAT (Customs) C00190, 15 October 2004) and in the judgment which Mr Justice Lawrence Collins handed down on 27 July 2005, [2005] EWHC 1644 (Ch), at paragraphs [34] to [51]. The following summary will be sufficient for the purposes of this judgment:

As I have said, Sony’s appeal from the review decision of 5 January 2001 was allowed by consent on 30 May 2001. The reason why Customs and Excise gave consent was that, on that day, they had learnt that the Customs Code Committee, Tariff and Nomenclature Section, Mechanical/Miscellaneous Sector (the “Nomenclature Committee”) – established under article 7 of Regulation 2658/87 - had taken the view that the PlayStation2 models were capable of being freely programmed; and that that view would be reflected in the regulation which the European Commission were proposing to make. Although the regulation was expected to classify the goods under sub-heading 9504 (rather than under 8471), the basis for that classification - which (as Customs and Excise had learnt) was set out in the proposed regulation - was inconsistent with the reasoning in the decision of 19 October 2000 and the review decision of 5 January 2001. So those decisions could not stand. The position was explained by the judge in the following paragraphs of his judgment:

“[42] The 243^rd meeting of the [Nomenclature Committee] was held on February 26 and 27, 2001 and unanimously concluded that the PS2 should be classified under Heading 9504 after witnessing a demonstration of the product by Sony, and resolved that a draft regulation be drawn up by the European Commission to codify this decision.

[43] In a letter dated March 29, 2001 [Customs and Excise] informed Sony that the Nomenclature Committee had unanimously agreed to place the PS2 under Heading 9504 and that a draft regulation was being prepared. . . .

[44] At the 247^th meeting of the Nomenclature Committee from April 9 to 11, 2001 a draft text of the regulation classifying the PS2 under Heading 9504 was discussed. It was noted that most Member States would classify the product on the basis of GIR 3(c) ‘as this apparatus had several functions, none of which could be considered more important than the others.’

[45] The Nomenclature Committee further considered the draft regulation for the PS2 in its 252^nd meeting on May 30, 2001. The Nomenclature Committee approved the Regulation by a qualified majority. Germany voted against and Sweden abstained because they could not agree with the use of GIR 3(b) as to function. They thought that it was important to make reference to GIR 3(c) as the legal basis for the classification, though they agreed with the classification itself. All the members agreed that HSEN exclusion (b) in Heading 9504 could not limit the scope of applicability of Heading 9504.

[46] The justification for classifying the PS2 under Heading 9504 in the draft regulation was given as:

‘Classification is determined by the provisions of General Rules 1, 3(b) and 6 for the interpretation of the Combined Nomenclature, Note 6 to Chapter 85 and the wording of CN Codes 8524, 8524 39, 8524 39 90 as well as 9504 and 9504 10 00. Of the various functions (including playing video games, playback of CD audio, DVD video, automatic data processing etc.) playing video games gives the apparatus its essential character and determines classification under heading 9504 as a games console’"

[47] The agreed text of the draft regulation also referred to the fact that the PS2 could be programmed in YABASIC.”

Customs and Excise made reference to the proposed regulation – and to the need to revoke the BTI to which (when made) the regulation would give rise - in the covering letter of 12 June 2001. The letter included the following paragraph:

“As you are aware, the European Commission will shortly be publishing a Regulation which classifies the Playstation 2 to a different commodity code from that on the BTI. Once this Regulation has been published, BTI GB 105614503 will have to be revoked (Council Regulation (EEC) No 2913/92, Article 12.5(a)(i)). You will receive notification of revocation in due course”.

The regulation, as approved by the Nomenclature Committee, was made by the Commission on 10 July 2001 and published in the Official Journal on the following day. The regulation - Regulation 1400/2001 (EC) - was in these terms, so far as material:

As I have said, article 12.5(a)(i) of the Community Customs Code (Regulation 2913/92) requires that binding tariff information shall cease to be valid “where a regulation is adopted and the information no longer conforms to the law laid down thereby”. In reliance on that article, Customs and Excise – as they had said that they would do – revoked the BTI of 12 June 2001 on the ground that it could not stand with Regulation 1400/2001. On 25 July 2001 they wrote to Sony:

"Revocation of BTI GB 105614503

As you know, Commission Regulation (EC) No. 1400/2001 was published on 11 July. Article 3 states that the 'Regulation shall enter into force on the 20th day following its publication in the Official Journal of the European Communities.' Accordingly, the Regulation enters into force on 31 July, and consequently BTI 105614503 will be revoked on that date.

“If you do not agree with the decision to revoke the BTI, you can ask for a formal Departmental review.”

Sony’s response to the events which I have just described was (i) to seek a formal departmental review of the decision to revoke the BTI and (ii) to apply to the European Court for annulment of Regulation 1400/2001. The review decision, in a letter dated 18 October 2001, upheld the decision to revoke the BTI. It is, of course, that review decision which was the subject of the appeal to the tribunal and which has given rise to the present appeal. But it is necessary to have in mind that, by the time the appeal from the review decision came before the tribunal in September 2004, Regulation 1400/2001 – in so far as it related to goods of the description relevant to the PlayStation2 models – had been annulled by the Court of First Instance.

In a letter from its lawyers in Brussels (Van Bael & Bellis) Sony sought a formal departmental review of the decision to revoke the BTI; as it was entitled to do under section 14 of the Finance At 1994. The basis of the request was that Sony regarded the revocation decision as invalid “considering that it was made in support of an illegal Community act, i.e. Commission Regulation 1400/2001.”

The reviewing officer, correctly in my view, identified two distinct issues.

“Firstly, the legality of the revocation decision and that of the Commission Regulation (EC) No. 1400/2001. Secondly whether a UK Tribunal or I have jurisdiction to annul either decision or Regulation should we consider the legality of these to be flawed.”

In relation to the first, she wrote:

“14.

Commission Regulation (EC) No 1400/2001 dated 10 July 2001 classifies the Playstation 2 system under CN code 95041000. There is no doubt that the regulation refers directly to your client's product. The measure has been adopted and duly published by the EC Commission and at this time is legally extant and valid. This means that BTI reference GB105614503 which classified the Playstation 2 under commodity code 8471499000, no longer conforms to the published EC view. The BTI was revoked in accordance with Articles 9(1) and 12(5)(i) (sic) to Council Regulation (EEC) 2913/92. The holder was notified in accordance with Article 9(3). The date of revocation was effected in accordance with Article 9(4) and Article 12(5).

15.

In my opinion, the conditions set out in Council Regulation (EEC) No 2913/92 have been complied with. The revocation of BTI reference GB105614503 is legal and was correctly notified to the holder concerned. Therefore, I must uphold the decision to revoke your clients BTI as it clearly no longer conforms to the law laid down thereby. In my opinion, UK Customs have no margin of discretion in revoking of BTI reference GB105614503 and were acting in accordance with directly applicable Community rules.”

She went on to consider whether, in any event, it would have been open to her to set aside or reverse the decision if she had been persuaded that the Regulation was legally flawed; and held that there was no basis upon which a national decision maker or tribunal could treat a Community instrument as invalid.

By a notice of appeal dated 15 November 2001 Sony appealed to the tribunal from the review decision of 18 October 2001. The grounds of appeal were summarised in two concluding submissions: (i) that the tribunal was not bound by Regulation 1400/2001 and (ii) that the review decision should be set aside or reversed on the basis that it was founded on an invalid Community act. Sony requested the tribunal to refer the question whether Regulation 1400/2001 was valid to the Court of Justice for a ruling. Faced with those submissions the tribunal stayed the appeal to await the determination of Sony's application to the Court of First Instance for annulment of the Regulation.

The Court of First Instance gave its judgment on Sony’s application in Case T-243/01, Sony Computer Entertainment Europe Ltd v Commission [2003] ECR II-418, on 30 September 2003. The Court annulled Regulation 1400/2001 in so far as it classified the PlayStation2 models described in column 1 of the table annexed to the regulation under tariff subheading 9504 10 00.

It is not, I think, necessary for the purposes of this appeal to analyse the judgment of the Court of First Instance in detail. It is sufficient to note: (i) that the Court rejected Sony’s submission that – by reason of the exclusion noted at (b) to heading 95.04 in section XX of the HSENs – the goods could not be classified under sub-heading 9504; but (ii) that the Commission had been in error in relying on GIR 3(b) as its reason for classifying the goods under that sub-heading. In particular, the Court pointed out, at paragraph 124 of its judgment, that GIR 3(b):

“ . . . does not provide for the possibility of classifying mixtures or composite goods according to the function which gives them their essential character.”

The Regulation was annulled because the classification of the goods was based on flawed reasoning. There is nothing in the judgment to suggest that the correct classification was under sub-heading 8471 rather than under sub-heading 9504. The Court accepted (at paragraph 119 of its judgment) that the PlayStation2 models could be classified under sub-heading 9504.

As I have said, the issue before this Court does not turn on whether, on a proper interpretation of the CN and the GIRs, the PlayStation2 models ought to be classified under sub-heading 8471 rather than under sub-heading 9504. It was made clear to us by Mr Clough QC that Sony did not wish to have that point decided on this appeal. The point which we have to decide is whether, in the event which happened – that is to say, the annulment of Regulation 1400/2001 - Sony was entitled to rely on the BTI of 12 June 2001 notwithstanding the decision of Customs and Excise on 25 July 2001 that that BTI be revoked. Nevertheless, it is pertinent to note that, when Customs and Excise reviewed the position again, following the decision of the Court of First Instance in Case T-243/01, they remained satisfied that the correct classification was under sub-heading 9504.

Their reasons are set out in paragraph 14 of a letter to Sony of 25 February 2004:

“14.1

In Case T-243/01 Sony v Commission, at paragraph 83 of its judgment, the CFI set out Sony’s contention that PS2 was a data-processing machine which fell under heading 8471 and not 9504. The CFI went on to consider (at paragraph 105) whether the Commission had committed an error of law by classifying the PS2 to heading 9504 in the contested regulation. This plea was rejected by the CFI. The contested Regulation was not annulled on this basis. Instead it clearly held at paragraphs 110 to 114 of its judgment that the PS2 was properly to be classified under heading 9504;

14.2

Customs cannot ignore the findings of the CFI in this case. In any event Customs respectfully agree with the CFI’s conclusions that the essential, objective characteristic of the PS2 is a video games console and as such it falls to be classified under heading 9504. This has been Customs view throughout;

14.3

Although it did not form part of the reasoning for the contested regulation, the classification to 9504 is also supported by Note 1(p) to Section XVI. Paragraph 132 of the CFI’s judgment indicates strongly that Note 1(p) could have been relied upon to support a classification to heading 9504;

14.4

In a letter dated 8 January 2004 (copy enclosed), the Commission has expressed its view that the CFI agreed that the PS2 was and is still classifiable under heading 9504;

14.5

The classification has been judged to be correct by the Harmonised System Committee of the Customs Co-operation Council (‘HSC’). On 28 November 2003, the HSC reported on the 32^nd session of the Committee. One of the items discussed at the meeting was the correct classification under the harmonised tariff of the PS2. The Japanese delegate advanced the same (or very similar) arguments to those raised by Sony to the effect that the PS2 should be classified under heading CN 8471. The EC Delegate advanced the reasoning adopted by the CFI in its judgment in Sony v Commission, including the contention that Note 1(p) to Section XVI precluded the classification to heading 8471. The EC Delegate contended that the proper classification was to heading 9504 on the basis that ‘the PS2 was intended essentially for playing video games’. The HSC decided by 28 votes to 9 that the proper classification was under heading 9504 by virtue of headings 1 and 6 of the GIRs and note 1(p) to Section XVI of the tariff. The Secretariat was instructed to prepare a classification opinion accordingly;

14.6

The Commission in Regulation (EC) No 1508/2000 of 11 July 2000 concerning the classification of certain goods in the Combined Nomenclature classified one of PS2’s competitors, the SEGA Dreamcast video game console, under heading 9504. Customs acknowledge that the said Regulation notes that the SEGA Dreamcast does not permit the games programs to be modified by the user. Customs do not accept that for this reason alone their selected classification is incorrect.”

The letter of 25 February 2004 concluded:

“15

I of course acknowledge that the contested Regulation has been annulled because it was vitiated by a defect in its reasoning. Nonetheless, as a matter of Community law (and in order to protect the Community's own resources) UK Customs as a national customs authority are obliged to ensure that the PS2 is entered to the correct commodity code.

16

It follows that I must continue to maintain that the revocation decision was correctly issued. It was correctly issued because the amended BTI dated 12 June 2001 wrongly classified the PS2 under Heading 8471. The amended BTI was incorrectly issued. Indeed, Customs were correct to issue the BTI under Heading 95.04 which was issued in October 2000. Nonetheless, due to the passage of time, UK Customs do not seek to recover the sums they have paid out on repayment claims to Sony following the amendment of the BTI.

17

Customs do, however, intend to continue to defend the present appeal brought by you. . . . ”

Customs find support for their view in the decision of the World Customs Organisation, in May 2004, to adopt a Classification Opinion which classified the PlayStation2 models under sub-heading 9504.

The appeal from the review decision contained in the letter of 18 October 2001 came before the tribunal for hearing in September 2004. Matters had moved on, of course, since the notice of appeal had been filed in November 2001. The grounds of appeal, as set out in that notice, had been overtaken by events. But the tribunal identified, at least in general terms, the issue which it thought it had to decide at paragraph 2 of its decision ([2004] UKVAT(Customs) C00190, 15 October 2004):

“2.

The issue in the appeal is essentially to determine the effect of the following steps: (a) the issue of binding tariff information 105614503 classifying the Product under heading 8471; (b) Commission Regulation 1400/2001 classifying it under heading 9504; (c) the Commissioners revoking the BTI; and (d) the Court of First Instance (CFI) annulling the Regulation. Does the BTI revive, as the Appellant contends, or does it remain revoked, as the Commissioners contend? ”

At paragraph 8 of the decision the tribunal noted that the parties were not in agreement as to the need for it to make any determination as to the correct classification of the goods:

“8.

. . . The Appellant asks the Tribunal to quash the revocation decision so that BTI revived on the Court annulling the Regulation, without making any decision on classification, which it says does not arise in the appeal; the Commissioners ask the Tribunal to start by classifying the Product. . . .”

The tribunal decided to address, first, the question whether the letter of 25 July 2001 – which purported, on its face, to revoke the BTI of 12 June 2001 - was properly to be regarded as a decision to revoke which was independent of Regulation 1400/2001 (“the Regulation”); or was to be seen as no more than a statement of the effect of the Regulation. It did so for the reason which it gave at paragraph 8 of its decision:

“8.

. . . If the revocation of the BTI was an automatic consequence of the Regulation, the BTI would remain in force now that the Regulation has been annulled retrospectively and the BTI would conclusively determine the classification. . . .”

The tribunal set out the rival contentions at paragraph 10 of its decision. If, as Sony submitted, the letter reflected no independent decision to revoke the BTI, then (on the Regulation coming into force on 31 July 2001) the BTI ceased to be valid by virtue of article 12.5(a)(i) of the Community Customs Code: on the annulment of the Regulation by the Court of First Instance in September 2003 the BTI was automatically reinstated with retrospective effect. If, on the other hand and as Customs and Excise submitted, the letter of 25 July 2001 was properly to be regarded as a decision to revoke the BTI under article 9(1) of the Community Customs Code, in anticipation of (but independent of) the Regulation coming into force on 31 July 2001, then the subsequent annulment of the Regulation by the Court of First Instance had no relevant effect: the BTI remained revoked. The tribunal encapsulated the point in the following passage (at paragraph 11 of its decision):

“11.

If step (3) [the letter of 25 July 2001] had not been taken or if the Regulation had revoked the BTI, the Appellant would clearly be right. When the Regulation was issued the BTI automatically ceased to be valid. When the Regulation was annulled, the effect was as if there had been no Regulation and so the BTI remained in force. This is so whether or not the classification by the BTI was wrong and the Regulation was annulled because of a defect in the legal basis for the conclusion, rather than the conclusion itself being wrong (which the CFI did not address). The issue is whether the position is different because of the Commissioners’ letter revoking the BTI. ”

The tribunal came to the conclusion (at paragraph 16 of its decision) that the letter of 25 July 2001 was properly to be regarded as a decision to revoke the BTI under article 9(1) of the Code; and that “the revocation of the BTI under article 9(1) was a separate act from its automatically ceasing to be valid under article 12(5)(a)(i) by virtue of the Regulation”. By postponing the date of revocation to 31 July 2001 (as they were entitled to do under article 9(4) of the Code) Customs and Excise “made a decision that both [the revocation under article 9(1) and the automatic invalidity under article 12.5(a)(i)] took effect on the same day”.

In reaching that conclusion the tribunal had noted (at paragraph 12) that the letter of 25 July 2001 had included notification of the right to a formal departmental review. That suggested that the letter was intended to give effect to an independent decision to revoke: “Why should there be a right to ask [the Customs and Excise] to review the BTI automatically ceasing to be valid in consequence of the Regulation entering into force?” It had noted that the review decision of 18 October 2001 (in the passage at paragraph 14 of that letter which I have set out earlier in this judgment) “clearly separates the revocation decision from the Regulation”. It had gone on to observe (at paragraph 15 of its decision):

“15.

The letter [of 25 July 2001] is odd in invoking both Articles 9(1) and 12(5)(a)(i). The former requires notification; the latter does not. The holder was in fact notified in accordance with Article 9(3). The dates on which they take effect are potentially different: the date of notification (with the possibility of postponement) in the former; the date of publication in the latter (we assume that this must mean the date it enters into force). The date of revocation was stated to be effected in accordance with both Article 9(4) (which implies that a decision to apply a postponement was made under article 9(4)) and Article 12(5). The reason for upholding the revocation decision, that the BTI "no longer conforms to the law laid down thereby" [i.e. by the Regulation] is a quotation from the latter. These suggest that at least at the time of the review decision, which is what is the subject of the appeal, the Commissioners saw the automatic effect of the Regulation and the revocation of the BTI as two separate things.”

On the basis of its conclusion that the letter of 25 July 2001 was properly to be regarded as reflecting a decision by Customs and Excise to revoke the BTI under article 9(1) of the Code the tribunal held that: “Now that the Regulation has been annulled retrospectively there is no reason why the revocation should not stand, unless this is prevented by [Customs and Excise] not giving the correct reason for the revocation at the time.”

The tribunal then addressed the submission, advanced on behalf of Sony, that the only reason given at the time (25 July 2001) was the making of the Regulation and that Customs and Excise were not entitled to introduce reasons (in the review decision of 18 October 2001 or subsequently) with retrospective effect. It was said that: “the Appellant has a right of appeal which requires them to know the reasons for the contested decision before lodging an appeal.” The tribunal rejected that submission for the reasons set out at paragraph 19 of its decision:

“19

It seems to us that one must consider the context in which this dispute arises. One is required to treat the Regulation as valid until it was annulled. Although the Appellant stated from the beginning that it considered that the Regulation was invalid for the same reason as the CFI, until the CFI decided this the Regulation was valid. The Commissioners were consistent in their reason for revoking the BTI: that its classification was wrong in law. Clearly any detailed reasons which the Commissioners had at the time had to take into account the validity of the Regulation. Now that they know that the Regulation has been annulled it must be open to them to put forward new reasons supporting their conclusion in the light of the new circumstances. The only limit is that the Appellant must be in a position to challenge the reasons in an appeal. That is completely satisfied in this case. New reasons were given by the Commissioners in a letter of 25 February 2004 and at the same time in their statement of case. The Tribunal has jurisdiction to decide the issue of law of whether the classification was correct; this is not a review jurisdiction where the stated reason for the decision is important to the determination of its reasonableness . . .

. . . Unlike a Community body which, as demonstrated in the Sony case, must state the correct reasons for regulations, directives and decisions, here the issue is whether the Commissioners were right or wrong in law in revoking the BTI. It is not unusual for the Commissioners to adopt new legal arguments in the course of an appeal in this Tribunal. Accordingly, we do not consider that the revocation decision is invalid because the Commissioners put forward different reasons, in the light of the annulment of the Regulation for the classification being wrong, as they had always contended.”

The tribunal’s conclusion in relation to the first question led it to consider whether revocation of the BTI under article 9(1) of the Code – “where . . . one or more of the conditions laid down for its issue were not or are no longer fulfilled” – was erroneous in law: or, to put the point another way, to consider whether classification of the PlayStation2 models under sub-heading 8471 was wrong. In that context the tribunal reminded itself of the observations of the Court of Justice in Timmermans Transport & Logistics BVv Inspecteur der Belastingdienst and Hoogenboom Production Limited v Inspecteur der Belastingdienst (Joined cases C-133/02 and 134/02) [2004] ECR I – 1125, [24] and [25].

Before addressing that question the tribunal observed (at paragraph 21 of its decision) that:

“21.

Because of the way in which Mr Clough argued the case, he did not address us on this issue. We assume that for tactical reasons he did not do so in reply either. Our decision is therefore made without the benefit of the Appellant's arguments but on the other hand, we now have a wealth of views from various bodies on the matter.”

The tribunal set out their analysis of the position under the relevant provisions of the CN and the GIRs in some detail (at paragraphs 22 to 24 of its decision) and in the light of observations in the judgment of the Court of First Instance in Case T-243/01, Sony Computer Entertainment Europe Ltd v Commission, (at paragraphs 25 to 27 of the decision). It is unnecessary to rehearse that analysis in this judgment. As I have said, the question what is the correct classification of the goods is not before this Court.

At paragraph 28 the tribunal held that the correct classification was under sub-heading 9504. It observed, at paragraph 30, that:

“30.

It follows that the BTI classification under 8471 is wrong in law and the Commissioners can use that ground as justification for having revoked the BTI. As we have already concluded the fact that the Commissioners did not rely on this reason at the time does not prevent them from relying on it now. It is not a case of the Appellant being deprived of the judgment in the Sony case; the CFI merely upset the Regulation's legal reasoning and left open that the result was unaltered. ”

Accordingly, the tribunal dismissed Sony’s appeal from the review decision of 18 October 2001.

At paragraphs 31 to 33 of its decision the tribunal addressed the question: what, in the events which had happened, was the current classification and from what date had that classification had effect? Its answer is at paragraph 33:

“33.

In summary, as a result of the Tribunal's Direction by consent on 5 June 2001 the classification of the Product was under 8471, until the revocation of the BTI on 31 July 2001 when it became 9504.”

Sony appealed to the High Court under section 11 of the 1992 Act. The grounds of appeal were set out under three main heads: (A) that the tribunal was wrong to find that the letter of 25 July 2001 was an independent revocation of the BTI; (B) that the tribunal was wrong to allow Customs and Excise to rely on new reasons to replace the reasons stated in the letter; and (C) that the tribunal should not have addressed the question whether - the Regulation having been annulled – the BTI was wrong in law. Further, it was said that those issues raised questions of Community law which made it necessary for the High Court to refer questions to the Court of Justice for a preliminary ruling.

The judge noted (at paragraph [116] of his judgment) that Sony had been unwilling “for tactical reasons . . . to confront before the Tribunal the essential commercial question, whether the PS2 is correctly classified to Heading 9504 as a video game of a kind used with a television receiver”. In the previous paragraph he had explained why Sony was unwilling to confront that question:

“[115]. . . . what Sony seeks to do is to revive a BTI classifying the PS2 to Heading 8471 from October 2000, when (a) that BTI was intended, and understood to be intended, to be a short term measure pending the adoption of a Regulation which Sony was aware would ‘shortly’ be published (letter of June 12, 2001); (b) the Commissioners had informed Sony that the BTI would be revoked when the Regulation was published; (c) at all material times from the issue of the BTI on June 12, 2001 all relevant national, European and international bodies considered that the PS2 could or should be classified to Heading 9504; and (d) the CFI annulled the Regulation not on the ground that it had wrongly classified the PS2, but that it should not have based the classification on GIR 3(b).”

It is important to keep in mind that there was no direct challenge, in the grounds on which Sony appealed to the High Court, to the tribunal’s conclusion that a correct application of the relevant provisions of the CN and the GIRs must lead to classification of the PlayStation2 models under sub-heading 9504. The most that can be said is that, under ground (C), there was a submission (at paragraph (iii)) that the tribunal had erred in law “in considering that PlayStation®2 is wrongly classified under heading 8471”. After referring to that submission, the judge observed, at paragraph [141] of his judgment, that:

“[141]. . . . In its original skeleton on the appeal, Sony merely said that the Tribunal had wrongly relied on the judgment of the CFI, the World Customs Organisation opinion, and the European Commission letter. Its only positive argument was that the classification of the PS2 according to its objective characteristics (which would lead to classification under Heading 8471) should be preferred over a classification according to its intended use. The submission was supplemented in reply.”

The judge acknowledged that the issue whether a correct application of the relevant provisions of the CN and the GIRs must lead to classification under sub-heading 9504 was raised before him (if at all) only indirectly. And he expressed doubt whether (having regard to Sony’s position before the tribunal) it was open to Sony to raise that issue on the appeal. But, in any event, he was not persuaded that there were grounds for interfering with the tribunal’s decision on that issue. At paragraph [142] of his judgment he said this:

“[142]. The issue was indirectly raised in the Notice of Appeal to this court, and I am satisfied that even if it were open for Sony to appeal from this aspect of the decision, there are no grounds for interfering with it. In my judgment, Sony should not be allowed to reopen what is essentially a question of fact, and appreciation of fact, on this appeal when it did not argue the question in the Tribunal. I am satisfied that whether I were to approach this question on the Edwards v Bairstow approach or whether I were to look at the material afresh, the decision of the Tribunal on this question must be affirmed. ”

In my view the judge was plainly correct to take the view that Sony should not be allowed, on an appeal under section 11 of the 1992 Act, to re-open a fact-based issue which it had declined to argue before the tribunal.

Ground (A) in the appellant’s notice raised two discrete issues, as the judge recognised at paragraphs [117] and [121] of his judgment. Those issues were (i) whether, given the fact that Regulation 1400/2001 had been published on 11 July 2001, it was open to Customs and Excise (under article 9(1) of the Code) to revoke the BTI on 25 July 2001; and (ii) whether, on the facts, that is what Customs and Excise did by the letter of 25 July 2001.

The judge was satisfied that publication of the Regulation on 11 July 2001 did not preclude a separate revocation decision on 25 July 2001. In examining the reasoning which led him to that conclusion it is necessary to keep in mind that article 3 of the Regulation provided, in terms, that it did not come into force until the 20^th day after publication in the Official Journal.

The judge’s reasoning on this point is set out at paragraphs [119] and [124] to [125] of his judgment. After reminding himself (at paragraph [117]) of the terms of articles 9(1) and 12.5(a)(iii) of the Code and (at paragraph [118]) of the ruling of the Court of Justice in the Timmermans case (supra), he said this:

“[119]. I do not consider that revocation of a BTI is a mutually exclusive alternative to its ceasing to be valid by reason of the adoption of a Regulation with which it is not in conformity, or that anything in the opinion of Advocate General Jacobs in C-463/98 Cabletron Systems Ltd v Revenue Commissioners [2001] ECR I-3495 paras 34 to 36, says so. All he is doing is paraphrasing Article 12(1), (2), (4), (5), and (6). In my judgment, there is no reason in principle why a Regulation could not determine the classification of a product and a separate revocation notification be made on the basis that the previous BTI applied an incorrect classification. The notification would then take effect under Article 9(1) and Article 12(5)(a)(iii) on the basis that the conditions which led to the BTI being issued had not been, or were no longer, fulfilled.”

And he went on:

“[124]. A separate revocation decision taken by a national customs authority is a measure taken in implementation of Article 9, and not one taken in implementation of the Regulation. It is true that the Regulation was directly applicable under Article 249 EC Treaty and left no discretion to Member States. There is also a general principle of European Community law that national measures may not interfere with the scope or effectiveness of Regulations: e.g. Case 34/73 Variola SpA v Amministrazione Italiana delle Finanze [1973] ECR 981;Case 94/77 Zerbone Snc v Amministrazione delle Finanze dello Stato [1978] ECR 99; Case C-223/98 Adidas AG [1999] ECR I-7081; Collins, European Community Law in the United Kingdom, 4^th ed 1990, pp 74-76.

[125]. But I do not consider that it is arguable that treatment of the decision as a separate revocation interferes with the direct applicability of the Regulation.”

The judge was satisfied, also, that the tribunal was entitled to reach the conclusion that there had been a separate revocation decision under article 9(1) of the Code. His reasoning is set out at paragraphs [121] and [122] of his judgment:

“[121]. The Commissioners informed Sony on June 12, 2001 that the BTI would have to be revoked when the impending Regulation was published.

[122]. The only measure which can be taken in relation to a BTI by a national customs authority is amendment or revocation under Article 9. The revocation decision was taken on July 25, 2001. Under Article 9(4) CCC revocation takes effect from the date of notification, although the customs authorities may defer the date when revocation takes place. By Article 6(3) decisions which are detrimental to persons addressed must refer to the right of appeal under Article 243, which gives a right of appeal initially to the customs authorities and then to the courts. By Article 12(5)(a)(iii) revocation under Article 9 must be notified. The July 25, 2001 decision letter is consistent with these provisions. The revocation decision was notified in accordance with Article 12(5)(a)(iii), and gave details of a right of appeal as required by Article 6(3) CCC, which is consistent with its legal basis under Article 9. The decision was expressed to take effect on July 31, 2001, when the Regulation was to enter into force. At the time that the decision was taken and notified, there was no automatic invalidity. The Regulation itself provided (Article 2) that BTIs which did not conform with the Regulation could be invoked under Article 12(6) CCC for a period of 3 months. ”

At paragraph [123] the judge noted that the review decision of October 18, 2001 referred to revocation in accordance with both Article 9 and Article 12.5(a)(i). He pointed out, correctly, that the reference to the latter article was plainly inapposite. Article 12(5)(a)(i) is not concerned with revocation, but with cessation of validity: compare article 12.5(a)(iii). But, as he said, the review decision had recognised the distinction between revocation, under the decision of 25 July 2001, and invalidity, arising from the Regulation. He set out paragraphs 14 and 15 of the letter of 18 October 2001, to which I have already referred earlier in this judgment.

The judge rejected the submission – made under ground (B) - that the tribunal was wrong to allow Customs and Excise to rely on new reasons to replace the reasons stated in the letter of 18 October 2001. He said this, at paragraphs [127] and [128] of his judgment:

“[127]. I am satisfied that the reasoning was adequate. Article 6(3) CCC requires decisions which are detrimental to importers to set out the grounds on which they are based. The obligation under Article 6(3) is to set out the grounds for the decision, and not to set out a detailed statement. Sony was well aware of the grounds. The application for a formal departmental review of the decision of July 25, 2001 relied on the invalidity of the Regulation, but among the reasons for invalidity relied upon was the point that the Regulation had wrongly classified the PS2 to Heading 9504.

[128]. The combined effect of the June 12, 2001, July 25, 2001, and October 18, 2001 letters is that the BTI was revoked on the ground that the Regulation had classified the PS2 under Heading 9504. But this reasoning is not dependent on the validity of the Regulation. The underlying reason, which was obvious to Sony, was that under the Common Customs Tariff system the PS2 was being classified as a video game of a kind used with a television receiver. I consider that the Tribunal was right to say that the Commissioners were at all times consistent in their reasoning, namely that classification to Heading 8471 was wrong, and that this is not a case of retrospective reasoning or a case where later reasons contradict earlier ones. ”

He rejected, also, the submission made under ground (C): that the tribunal should not have addressed the question whether (the Regulation having been annulled) the BTI was wrong in law. His reasons are found at paragraphs [129] to [133] of his judgment:

“[129]. What I have described as Sony's technical argument is this. The effect of the annulment of the Regulation under Articles 230 and 231 EC Treaty is to render it void ab initio, with the result that Sony must be placed in the situation it would have been in, had it not been adopted. Since the Regulation has meanwhile been implemented, the United Kingdom is obliged to take the necessary measures to restore Sony to its original situation. In the present case, the Tribunal rather than giving full effect to the CFI judgment, has adopted a decision limiting the retroactive effects of the CFI judgment, which is manifestly beyond its powers. On an orthodox approach to Community law, all Sony is permitted to do by Community law is to ask the court to reinstate the BTI which was not lawfully invalidated by the Regulation, because the Regulation must be treated as having never taken effect as a matter of Community law. ”

[130]. Sony relies on what Advocate General Jacobs said in C-463/98 Cabletron Systems Ltd v Revenue Commissioners [2001] ECR I-3495 para 112 (in the context of preliminary rulings):

‘Where … the Court finds that a Community measure is invalid, that ruling in principle takes effect erga omnes and ex tunc, so that any person may in any proceedings rely upon the invalidity of the measure.’

[131]. I consider that this argument fails for a number of separate reasons. First, the Regulation produced legal effects when it was made and published. Regulations "produce legal effects, even if they are tainted by irregularities, until such time as they are annulled… ", unless they are tainted by an irregularity whose gravity is so obvious that it cannot be tolerated by the Community legal order and must be treated as non-existent : Case C-235/92P Montecatini SpA v Commission [1999] ECR I-4539, paras 96-97. Where (as here) the trader has challenged the imposition of duty prior to the annulment, amounts due as a result of a Regulation declared to be invalid may be recovered: Case C-228/92 Roquette Frères v Hauptzollamt Geldern [1994] ECR I-1445. Whether that is so also where the trader had not initiated proceedings or raised an equivalent claim prior to the annulment was raised, but not decided, in Case C-463/98 Cabletron Systems Ltd v Revenue Commissioners [2001] ECR I-3495, where Advocate General Jacobs said he could not see any reason for limiting the retroactive effect of the finding of invalidity: paras 111-115. ”

[132]. If the revocation decision was a separate decision, not dependent on the Regulation for its validity, then an annulled Regulation which produces no effects in Community law cannot be used to strike it down. The revocation decision was made before the Regulation came into force. The Regulation was not a legal basis for the separate revocation decision, as such. It was a reason why the classification decision was considered to be wrong and why the revocation decision was taken. The Tribunal was right to consider that although the revocation decision was issued because of the Regulation, it was legally independent from it. It would only be in the event that the Regulation alone had automatically invalidated the BTI that the BTI would be revived by the annulment of the Regulation. ”

[133]. Because the revocation decision is a separate measure taken by the Commissioners as a national customs authority, the fact that it was based on the classification confirmed by the Regulation does not mean it is pro tanto annulled by the annulment of the Regulation. The revocation decision remains valid provided that the BTI was not legally correct when issued for the purposes of Article 9. There is no basis in the judgment of the CFI for a contention that the annulment meant that the classification adopted by the BTI was correct. ”

The judge refused a reference to the European Court. At paragraph [148] of his judgment he identified “the principal question which Sony seeks to have referred” as:

“[148]. . . . whether or not a revocation decision under Article 9(1) which was precluded by a classification Regulation from having any legal effects on the validity of the BTI when adopted may be transformed retroactively into a revocation decision under Article 9(1) which invalidates the BTI when the obstacle to its invalidation of the BTI is removed by the annulment of the Regulation for error of law by the CFI.”

He reminded himself that, sitting in the High Court, he was under no obligation to make a reference under article 234 EC if he felt able to decide the question without a preliminary ruling; and that recent observations in the Court of Justice had cautioned against too great a readiness to refer. And he said this, at paragraph [152]:

“[152]. In my judgment the main issue raised by Sony is essentially one of fact, or appreciation of facts, namely whether there was a separate decision under Article 9(1). That question is not one susceptible of a reference. The main subsidiary issues are (a) whether that decision was based on the impending Regulation as such, [or] on the view that the Regulation represented a correct classification; and (b) whether that distinction makes a difference. I am satisfied that none of these questions raises a question of interpretation of Community law on which I ought to make a reference.”

The judge dismissed the appeal.

Sony appeals to this Court. In section 7 of the appellant’s notice, filed on 10 August 2005, the grounds of appeal are set out under seven paragraphs. But, in the expanded grounds annexed to the notice, those are reduced to three main heads. It is said, first, that the judge was wrong in finding that the letter of 25 July 2001 was a notification under article 9(3) of the Code of a decision to revoke the BTI under article 9(1). Second, that the judge misinterpreted article 6(3) of the Code and the requirement to state the grounds of any decision. And, third, that the judge misinterpreted article 12, article 9(1) and article 6(3) by concluding that the decision to revoke remained valid provided that the classification in an otherwise valid BTI was not legally correct for the purposes of article 9. It can be seen that those main heads, under which the arguments on this appeal were advanced are, in substance, the three heads relied upon before the judge.

Further it is said that the judge erred in interpreting and applying Community law in the appeal before him without seeking a preliminary ruling from the Court of Justice under article 234 EC. That last point, as it seems to me, adds nothing in the circumstances that (as I have said) there is an application before this Court for a reference under article 234.

The arguments advanced in the expanded grounds of appeal annexed to the appellant’s notice are developed and elaborated in a skeleton argument (extending over 35 pages) which was filed on behalf of Sony. The flavour of that document can be found in paragraph 2:

“The main issue in the present appeal is whether the High Court (and the VAT and Duties Tribunal before it) is permitted by Community law to sidestep, albeit on shifting grounds, the elementary interpretation and application of Community law put forward by Sony, when to do so will require the Court of Appeal to overturn fundamental principles of the Community legal order.”

In my view that is an extravagant mis-characterisation of what this Court would be doing if it were to uphold the decisions below.

I should add that Sony does not seek to challenge, in this Court, the tribunal’s conclusion that a correct application of the relevant provisions of the CN and the GIRs must lead to classification of the PlayStation2 models under sub-heading 9504. This is made clear in paragraph 6.24(a) of Sony’s skeleton argument:

“Sony resists making comments on the classification issues discussed by [the] High Court since as it submitted before the Tribunal, and repeated before the High Court, the question of classification of the PlayStation®2 is precluded by Community law in the present appeal.”

It is emphasised that “Sony’s appeal concerns the legality of the measure which invalidated the BTI of 12 June 2001”. Sony relies on its contention that there was no decision by the national customs authority to revoke the BTI of 12 June 2001 under article 9(1) of the Code.

If that contention is upheld then, it is said, the BTI revived automatically when Regulation 1400/2001 was annulled by the Court of First Instance in September 2003. The BTI cannot, now, be revoked with retro-active effect: “Any attempt by the Tribunal or the High Court to classify the PlayStation®2 retroactively is a serious infringement of the general principle of legal certainty in Community law (and the legitimate expectations of the BTI holders)”. It follows that the classification of PlayStation2 “was and remains Heading 8471”.

If the contention that there was no decision by the national customs authority to revoke the BTI of 12 June 2001 under article 9(1) of the Code were upheld it may well be that the result would be, as Sony submits, that the current classification of PlayStation2 is under sub-heading 8471, as stated in the BTI; and that that classification cannot be altered with retro-active effect. But the converse must also follow. If the BTI was revoked under article 9(1) of the Code, then, since 31 July 2001, the classification of PlayStation 2 has been under sub-heading 9504. That is what the Tribunal decided on 15 October 2004. There has been no appeal from that part of its decision.

As I have said, the judge identified two discrete issues under this head: (i) whether, given the fact that Regulation 1400/2001 had been published on 11 July 2001, it was open to Customs and Excise (under article 9(1) of the Code) to revoke the BTI on 25 July 2001; and (ii) whether, on the facts, that is what Customs and Excise did by the letter of 25 July 2001. In my view the judge was correct to approach the matter in that way.

Sony’s primary contention – as I understand the elaborate arguments that have been advanced on its behalf – is that, having regard to the publication of Regulation 1400/2001 on 11 July 2001, it was not open to the national customs authorities, on 25 July 2001, to revoke the BTI of 12 June 2001. It is necessary to address that contention with the relevant provisions of the Code in mind.

Article 12.1 of the Code provides for binding tariff information to be issued by the national customs authorities on request from an applicant. That must be read subject to the restriction in article 12.1 of Regulation (EEC) 2454/93 which requires national customs authorities to ensure that binding tariff information shall be issued only in conformity with any act or measure – that is to say, any regulation or amendment to explanatory notes - referred to in article 12.5 of the Code. When issued, binding tariff information shall be valid for a period of six years unless either (i) it is annulled (because based on inaccurate or incomplete information) or (ii) it ceases to be valid under article 12.5(a). Binding tariff information may only be invoked by the holder – article 10 of Regulation 2454/93: but, when so invoked, will be binding on all customs authorities throughout the Community – article 11 of Regulation 2454/93.

It is clear – and not, I think, in dispute – that binding tariff information ceases to be valid on the occurrence of one or other of the three events for which article 12.5(a) of the Code provides: (i) where a regulation is adopted and the information no longer conforms to the law laid down thereby; (ii) where the information is no longer compatible with the interpretation of a relevant nomenclature (at Community level, the CN) by reason of amendment to the explanatory notes; and (iii) where the information is revoked or amended in accordance with article 9 of the Code and the revocation or amendment has been notified to the holder.

The date upon which binding tariff information ceases to be valid turns - prima facie, at least -on which of paragraphs (i), (ii) and (iii) of article 12.5(a) of the Code is in point. In cases which fall within paragraphs (i) and (ii) the date on which the binding tariff information ceases to be valid is the date of publication in the Official Journal of the relevant “measures”: that is to say, the regulation or the amendment to explanatory notes (as the case may be). That is what the final paragraph of article 12.5(a) requires. In cases which fall within paragraph (iii), the date on which the binding tariff information ceases to be valid is the date when the revocation or amendment under article 9 is notified in accordance with the requirement in article 9(3), unless the national customs authorities decide to defer that date – article 9(4). The power to defer the date in a paragraph (iii) case is exercisable by the customs authorities “in exceptional cases where the legitimate interests of the person to whom the decision is addressed so require” – again, article 9(4).

Notwithstanding that binding tariff information has ceased to be valid on the occurrence of one or other of the three events for which article 12.5(a) of the Code provides, it may still be used by the holder for a limited period thereafter in the circumstances for which article 12.6 makes provision. In cases which fall within paragraphs (ii) or (iii) of article 12.5(a), the holder may continue to use the binding information for a period of six months from the date of publication or notification “provided that he concluded binding contracts for the purchase or sale of the goods in question, on the basis of the binding information, before that measure was adopted”. The period of six months may be replaced by the period of the validity of an import, export or advance-fixing certificate in case where such a certificate is submitted when customs formalities are carried out. In cases which fall within paragraph (i) of article 12.5(a), the regulation itself may lay down the period during which the binding tariff information may continue to be used. Regulation 1400/2001 does lay down a period during which binding tariff information which does not conform to the provisions of the regulation may continue to be invoked under the provisions of article 12.6 of the Code. That period is three months – article 2 of the regulation.

It is submitted on behalf of Sony that the events described in the three paragraphs of article 12.5(a) of the Code are mutually exclusive: “The Court’s finding that there could be an invalidation under Article 12(5)(a)(iii) in addition to an invalidation under Article 12(5)(a)(i) is contrary to the following fundamental principles of Community law . . . (i) legal certainty and legitimate expectations, (ii) proportionality (because it cannot be necessary to have two instruments invalidating a BTI), (iii) the principle of effectiveness of Article 12(5)(a)(i) and/or Article 12(5)(a)(iii), and the principle of direct applicability of regulations under Article 249 EC . . .” If, by that submission, Sony intends only to assert that binding information which has become invalid under one of the three paragraphs of article 12.5(a) is not (while it remains invalid) capable of becoming invalid under another of those paragraphs, I would accept the proposition. Binding information which has already ceased to be valid is not thereafter (while it remains invalid) capable of “ceasing to be valid”.

But, if it is intended to suggest that once an event within one of the three paragraphs has occurred it is impossible thereafter for an event within another of those paragraphs to occur, I would reject the submission. It is, as it seems to me, impossible to say that – where binding information has been revoked - a regulation may not be adopted in terms which (had the information not already been revoked) would have led to the information no longer conforming to the law laid down by the regulation; or to say that explanatory notes may not be amended so as to require an interpretation of the CN which (had the information not already been revoked) would have led to the information being no longer compatible with that interpretation. All that can be said is that the information which has been revoked does not cease to be valid when the regulation is adopted or the amendment to the explanatory notes is made. But that (as I have said) is because binding information which has already ceased to be valid is not thereafter (while it remains invalid) capable of “ceasing to be valid”.

The point can be illustrated by an example. Suppose that the BTI of 12 June 2001 had been revoked under article 9(1) of the Code, before Regulation 1400/2001 had been published, on the grounds that “one or more of the conditions laid down for its issue were not or are no longer fulfilled”; as, on the basis of the principle established by the judgment of the Court of Justice in joined cases C-133-02 and C-134/02 (the Timmermans and Hoogenboom Production cases), it could have been. There is a challenge to the revocation decision under section 16 of the Finance Act 1994. The regulation is then published. Before any challenge to the regulation has been made or determined, the challenge to the revocation decision is upheld and the decision set aside. It could not be said, as it seems to me, that the binding information was then valid. Although, following the successful challenge to the revocation decision, the BTI of 12 June 2001 could not be treated as having been revoked – or as having ceased to be valid under article 12.5(a)(iii) – it would no longer conform to the law laid down by the regulation and would have ceased to be valid under article 12.5(a)(i).

On a proper analysis, the relevant question is not whether it is legally impossible for the subsequent event to occur. The relevant question is what is the legal effect of the subsequent event if it does occur. The answer, in my view, is that, if the binding information is then invalid by reason of the first event, the second event can have no effect on its validity. But if, thereafter, it is held that at the time when the second event occurred the information was not already invalid – because, for example, the legal effect of the first event is annulled ab initio – I can see no reason why the second event should not have the legal effect that it would have had if the first event had not occurred. So, in such a case, the binding information will have become invalid on the occurrence of the second event.

On the facts in the present case, there is no doubt that the BTI became invalid on 31 July 2001. And there is no doubt that the BTI did not become invalid before 31 July 2001. In particular, the BTI did not become invalid under article 12.5(a)(i) on the publication of regulation 1400/2001 on 11 July 2001. The regulation itself provided, at article 3, that it would not enter into force until the 20th day following publication. That, as it seems to me, overrides the general rule in the final paragraph of article 12.5(a) of the Code. And the BTI did not become invalid under article 12.5(a)(iii) before 31 July 2001. The letter of 25 July 2001 provides, in terms, that the BTI will be revoked on 31 July 2001.

For the reasons which I have already explained, if the BTI had become invalid on 11 July 2001 under article 12.5(a)(i) of the Code, it could not (for so long as it remained invalid for that reason) have become invalid under article 12.5(a)(iii). It would not become invalid under article 12.5(a)(iii) until the regulation was set aside; but, on the regulation being set aside ab initio, the BTI would have been invalid under article 12.5(a)(iii) from the date that revocation was notified to the holder. Further, if the BTI had become invalid on 25 July 2001 (the date of the revocation decision) under article 12.5(a)(iii) of the Code, it could not (for so long as it remained invalid for that reason) have become invalid under article 12.5(a)(i). In such a case the publication and subsequent setting aside of the regulation would, I think, have been irrelevant – at least in relation to the question of invalidity.

But, as I have said, the BTI did not become invalid on 11 July 2001 under article 12.5(a)(i); and it did not become invalid on 25 July 2001 under article 12.5(a)(iii). The BTI became invalid on 31 July 2001. On the facts in the present case it is a nice question whether the BTI became invalid on that date under article 12.5(a)(i) or under article 12.5(a)(iii) or (possibly) under both article 12.5(a)(i) and article 12.5(a)(iii).

I would find that question difficult to answer. It is with some relief, therefore, that I have reached the conclusion that it is unnecessary to answer it on the present appeal. The position, as it seems to me, is this. If the BTI became invalid on 31 July 2001 under article 12.5(a)(i), then (as I have said) it could not (for so long as it remained invalid for that reason) have become invalid under article 12.5(a)(iii); but, on regulation 1400/2001 being set aside ab initio, the BTI would have been invalid under article 12.5(a)(iii) from 31 July 2001. If, on the other hand and notwithstanding the publication of the regulation, the BTI became invalid on 31 July 2001 under article 12.5(a)(iii), then (as I have said) the fact that the regulation was published and subsequently set aside by the Court of First Instance would be irrelevant to its continuing invalidity.

Sony has argued that it is necessary to know whether the BTI became invalid under article 12.5(a)(i) or article 12.5(a)(iii) because (unless that is known) it is impossible to ascertain the period for which it could have been invoked thereafter by the holder under the provisions of article 12.6. In the one case (it is said) the period would be three months: in the other case it would be six months. At first it seemed to me that there might be force in that argument: but, on further consideration, I am satisfied that it is without substance. First, in the context of this appeal, it is unnecessary to decide whether the relevant period, for the purposes of clause 12.6, was three months or six months. Second, if on a true analysis the BTI became invalid under article 12.5(a)(i), then the period was plainly three months at that time – although it might be arguable that, on the regulation being set aside, the holder of the BTI would (retrospectively) be entitled to the benefit of a six month period. Third, if on a true analysis, the BTI became invalid under article 12.5(a)(iii) then, as it seems to me, the period was also three months at that time. Article 2 of regulation 1400/2001, which lays down that period, does not depend for its effect on which paragraph of article 12.5(a) of the Code gives rise to the invalidity of binding tariff information. And article 2 of Regulation 1400/2001 overrides the first paragraph of article 12.6 of the Code. But, again, it might be arguable in that case also that, on the regulation being set aside, the holder of the BTI would (retrospectively) be entitled to the benefit of a six month period.

For those reasons I would answer issue (i) in the affirmative. It was open to the national customs authorities to revoke the BTI on 25 July 2001.

I turn, therefore, to the second issue under this head: did Customs and Excise intend to revoke the BTI by the letter of 25 July 2001. That issue, as it seems to me, turns on the meaning to be given to that letter, applying the ordinary principles of interpretation. Those principles require that the meaning of the letter of 25 July 2001 must be determined by reference to the factual and legal context in which it was written.

The factual and legal context in which the letter of 25 July 2001 was written may, I think, fairly be summarised as follows:

With those matters in mind, the judge reached the conclusion that, on the true interpretation of the letter of 25 July 2001, Customs and Excise had made a separate revocation decision under article 9(1) of the Code. In my view he was correct to reach that conclusion.

It follows that I would reject the grounds of appeal advanced under the first head. I would hold that the letter of 25 July 2001 was a notification under article 9(3) of the Code of a decision to revoke the BTI of 12 June 2001under article 9(1).

Article 6.3 of the Code requires that a decision of the national customs authorities which is detrimental to the person to whom it is addressed shall set out the grounds on which it is based. The purpose of that requirement – as can be seen from the next sentence in article 6.3 – is to enable the person affected to decide whether to exercise the right of appeal for which article 243 of the Code provides.

The letter of 25 July 2001 – either alone or, a fortiori, read with the earlier letter of 12 June 2001- satisfies that requirement. The decision to revoke the BTI is based on the ground that when Regulation 1400/2001 has been published – or has “entered into force” – the BTI will be inconsistent with the classification adopted by the regulation. The criticism that can be made of the letter of 25 July 2001 is not that it failed to comply with the requirement imposed by article 6.3. The proper basis on which to criticise the letter is that – when read with the letter of 12 June 2001 - the writer seems to have to have failed to appreciate that, on the entry into force of the regulation, the BTI would cease to be valid under article 12.5(a)(i) of the Code without the need for a separate revocation of the BTI.

The letter of 25 July 2001 led Sony to invoke the appeal procedure for which article 243 – read with sections 14 and 15 of the Finance Act 1994 – provides. But Sony did not take the point that the decision to revoke was flawed because it was based on a misunderstanding of the effect of article 12.5(a)(i). The letter requesting a review – dated 6 September 2001 – makes this clear in the following passages:

“. . . The Revocation Decision was taken in application of Article 3 of Commission Regulation 1400/2001 whereby the Commission classified the PlayStation2 under CN Code 9504.10.00.

. . .

[Sony] regards the revocation decision as invalid considering that it was made in application of an illegal Community act, i.e. Commission Regulation 1400/2001. . . . ”

The reference to article 3 of the regulation is curious. It is article 1 of the regulation which classifies the goods under CN sub-heading 9504: article 3 does no more than postpone the date on which the regulation enters into force. But nothing turns on that. The letter requesting review then set out the facts and advanced the arguments why the correct classification – on the basis of the CN and the explanatory notes – was to sub-heading 8471. The letter concluded:

“On the basis of the foregoing [Sony] submits that the decision revoking the BTI GB 105614503 is invalid due to the invalidity of the Commission Regulation 1400/2001 which constitutes its legal basis. . . ”

The request for review having been made by the letter of 6 September 2001, Customs and Excise were required, by section 15 of the Finance Act 1994, to review the decision of 25 July 2001. The decision on review is set out in their letter of 18 September 2001. At paragraph 12 of that letter the decision-maker referred to the point made in the request: “It is your contention that the revocation decision is invalid because it was made in application of an illegal Community act”. She went on to set out the arguments advanced in the letter of 6 September 2001. But she did not think it necessary to address those arguments because she took the view – correctly, as it seems to me – that it was enough that the regulation was in force and that the BTI did not conform to the law as laid down by the regulation.

Sony appealed from the review decision of 18 October 2001 by notice dated 15 November 2001. The appeal lay to the VAT and Duties Tribunal under section 16 of the Finance Act 1994. The grounds of appeal – set out over 33 pages – did not take the point that the decision of 25 July 2001 was flawed because it was based on a misunderstanding of the effect of article 12.5(a)(i). Nor was it submitted that, if the reviewing officer was correct to take the view that she was bound by the regulation, she was nevertheless wrong to uphold the decision to revoke. The challenge was based on the proposition that the reviewing officer was wrong to hold herself bound by the regulation – alternatively, that the tribunal should not do so: “Appellant respectfully submits that the VAT and Duties Tribunal can not rule in the present case on the assumption that the Commission Regulation is valid”. And the grounds of appeal contain a full analysis of the reasons why it was said that the classification adopted by the regulation was wrong.

The basis of the review decision of 18 October 2001 was undermined when Regulation 1400/2001 was set aside by the Court of First Instance on 30 September 2003. Customs and Excise responded to that change in circumstances by their letter of 25 February 2004. As I have already explained, that letter addressed, in some detail, the question raised by the letter of 6 September 2001 - whether the correct classification, on the basis of the CN, the GIRs and the explanatory notes, was to sub-heading 8471 and concluded that it was not. The revocation decision of 25 July 2001 was upheld on the basis that: “It was correctly issued because the amended BTI dated 12 June 2001 wrongly classified the PS2 under heading 8471. The amended BTI was incorrectly issued.”

The appeal from the review decision of 18 October 2001 came before the tribunal in September 2004. As the tribunal observed (at paragraph 19 of its decision), the issue for the tribunal was whether Customs and Excise were right or wrong in law in revoking the BTI. For my part, I would add to that observation the further observation that the tribunal might have taken the view (but did not) that the review decision fell within section 16(4) rather than section 16(5) of the Finance Act 1994; so that the tribunal was required to consider whether it was satisfied that Customs and Excise “could not reasonably have arrived at it.” In treating the appeal as an appeal within section 16(5) of the Act the tribunal adopted an approach which was, perhaps, more favourable to the appellant than the legislation required.

The context in which the appeal came before the tribunal included the following elements: (i) the decision of 25 July 2001 had not been challenged (as it might have been) on the ground that it was based on a misunderstanding of the effect of article 12.5(a)(i); (ii) the challenge based on the submission that Customs and Excise were not bound by Regulation 1400/2001 had been overtaken by events – the regulation had been annulled; and (iii) the remaining (and only live) issue was whether the correct classification – on the basis of the CN and the explanatory notes – was to sub-heading 8471 and not to sub-heading 9504. That issue had been raised by Sony in its letter of 6 September 2001. The issue remained live because it had not been determined by the Court of First Instance in Case T-243/01. That issue had been addressed by Customs and Excise in their letter of 25 February 2004. But, as the tribunal pointed out at paragraph 21 of its decision, the appellant decided “for tactical reasons” not to address that issue at the hearing.

The appellant’s complaint – articulated in paragraph 6.16(a) of its skeleton argument – is that: “The High Court has made a fundamental error in interpretation of Article 6(3) of the Customs Code. . . . It is clear that the grounds set out in the decision in order to comply with Article 6(3) must be sufficient to enable the addressee of the decision to know whether or not to bring an appeal on the basis that the grounds reveal an error of law, and to enable the court hearing an appeal to adjudicate”.

There is no substance in that complaint. The decision of 25 July 2001 did make it clear why the BTI had been revoked. I have explained why it might have been said that the reason given in the letter of 25 July 2001 revealed that Customs and Excise had misunderstood the effect of article 12.5(a)(i); but that point has never been taken by Sony. Sony requested a review on other grounds. The review decision of 18 October 2001 made it clear why the decision to revoke the BTI was upheld: the decision was upheld because Customs and Excise took the view that they were bound by the regulation. Sony appealed to the tribunal. The grounds of that appeal included the argument that the PlayStation2 models were correctly classified under sub-heading 8471, not sub-heading 9504. Customs and Excise met that argument in the letter of 25 February 2004; and the tribunal ruled upon it. It is impossible to say, on a proper analysis of the events which have happened, that Sony has not known whether to bring, and pursue, an appeal from the decision of 25 July 2001; or that Sony has not been able to identify and advance the grounds on which it wished to rely; or that the tribunal was not able to adjudicate on the issues that were raised before it.

It follows that I would reject the grounds of appeal advanced under the second head. I would hold that the judge was right to hold, as he did, that the underlying reason for the revocation of the BTI was that classification under sub-heading 8471 was incorrect.

The arguments advanced on behalf of Sony in its grounds of appeal under this, third, head may be summarised as follows: (i) the judge was wrong to take the view that there was no basis in the judgment of the Court of First Instance in Case T-243/01 “for the contention that the annulment meant that the classification adopted by the BTI was correct”; (ii) that that error led the judge “to go in search of an interpretation of Article 6(3) which effectively allows a revocation decision to be adopted under Article 9(1) of the Code without stating any grounds at the time it was adopted”; (iii) that the judge was wrong to conclude that the BTI could not be valid notwithstanding that it provided for the wrong classification “since the validity of the BTI may only cease in accordance with Article 12.5(a)”; (iv) that, if the judge was “to rely on the classification of the product in order to determine the validity of the BTI, [he] was under a obligation when interpreting the legal rules applicable to the classification of the product to ensure that the classification is correct”; (v) that “the only valid ruling at the European Community level on the classification of the PlayStation®2 is that of the CFI on 30 September 2003 which annulled the Commission Regulation insofar as it classified the PlayStation®2 under heading 9504”; and (vi) that Sony had already “submitted adequate arguments to demonstrate that the correct classification of the Sony PlayStation®2 should be under Heading 8471 . . .”

It is important to keep in mind that, as I have pointed out earlier in this judgment (at paragraph 57), Sony has not sought to challenge, in this Court, the tribunal’s conclusion that a correct application of the relevant provisions of the CN and the GIRs must lead to the classification of the PlayStation2 models under sub-heading 9504. Sony is correct to point out that there is no Community instrument or ruling – at least prior to 1 January 2004 – which does classify those goods under sub-heading 9504. But nor is there any Community instrument or ruling which classifies the goods under sub-heading 8471. It is because there is – or was at the relevant time - no Community instrument or ruling which classifies the goods under either sub-heading that Sony seeks to rely on the BTI of 12 June 2001. The only question on this appeal is whether the tribunal and the judge were right to hold that the BTI is no longer valid because it has been revoked. What the effect of the tribunal’s decision that a correct application of the relevant provisions of the CN and the GIRs must lead to the classification of the PlayStation2 models under sub-heading 9504 may be in other Member States is not a matter for this Court on this appeal.

I have already explained (at paragraph 23 of this judgment) that Regulation 1400/2001 was annulled by the Court of First Instance because the reasoning (which appeared on the face of the regulation) on which the classification of the goods was based was held to be flawed. There was nothing in the judgment of that court to suggest that the correct classification was under sub-heading 8471 rather than under sub-heading 9504.

I have rejected the contention that that the judge was led to search for “an interpretation of Article 6(3) which effectively allows a revocation decision to be adopted under Article 9(1) of the Code without stating any grounds at the time it was adopted”. The revocation decision did state the grounds on which it was based.

I accept that it would have been wrong to conclude that the BTI could not be valid notwithstanding that it provided for the wrong classification. Plainly – on the facts in the present case - the BTI would have remained valid, notwithstanding that it provided for the wrong classification, if it were not for the fact that it was revoked by Customs and Excise in their letter of 25 July 2001. But the judge did not fall into the error which Sony attributes to him. He held that – on the basis of the principle established in the Timmermans case (supra) - the BTI could have been revoked on 25 July 2001 on the grounds that, on reconsideration, Customs and Excise appreciated that it should not have been issued; and that that was what had occurred.

I accept, also, that if the tribunal and the judge were to rely on the classification of the product in order to determine whether the BTI could be revoked under article 9(1) of the Code, they needed to satisfy themselves that, applying the legal rules applicable to the classification of the product - the CN and the GIRs - the classification under sub-heading 9504 was correct. But that is what they did.

It follows that there is no fresh point raised under this third head that needs to be addressed. I reject the grounds of appeal advanced under the third head. The judge was entitled to conclude that the decision to revoke under article 9(1) of the Code could be upheld because the classification in the BTI of 12 June 2001 was not legally correct.

As I have said, this Court has taken the view, after hearing full argument, that a reference is not necessary to enable us to reach a decision in this case. For my part, I have been led to that conclusion after taking account of the following matters.

First, I do not think it necessary to obtain a ruling as to the interpretation of the judgment of the Court of First Instance in Case T- 243/01. I think it clear that there is nothing in that judgment to suggest that the correct classification of the PlayStation2 models is under sub-heading 8471 rather than under sub-heading 9504. Second, it is common ground that there is no other Community instrument or ruling which classifies the goods under either heading. Third, there is no appeal to this Court from the tribunal’s decision that the correct classification is under sub-heading 9504. Fourth, the Court of Justice has already given a ruling – in the Timmermans case - to the effect that binding tariff information may be revoked under article 9 of the Code following a re-appraisal by the national customs authorities as the correct classification of goods under the Common Customs Tariff. Fifth, the question whether, on a proper interpretation of the letter of 25 July 2001, Customs and Excise intended to revoke the BTI of 12 June 2001 is a matter of domestic law on which it would not be appropriate to seek a ruling from the Court of Justice. Sixth, on the facts in the present case, it seems to me plain that the BTI could be revoked on 25 July 2001, because it had not (at that date) ceased to be valid. And seventh, again on the facts in the present case, the BTI ceased to be valid on 31 July 2001 either under paragraph (i) or under paragraph (iii) of article 12.5(a) of the Code and it is unnecessary to decide which of those two paragraphs had that effect on that day.

I would dismiss this appeal.

I think it necessary to add some observations as to the manner in which Sony’s case has been presented to this Court. In my view the skeleton argument filed in this Court on behalf of Sony goes beyond what can be regarded as acceptable written advocacy: it exceeds the bounds of propriety. The document is signed by both Mr Mark Clough QC and by M. Philippe de Baere of the Brussels bar: but it is right to say that Mr Clough accepts sole responsibility for its contents. I am not here protesting about its inordinate length, nor about its discursive quality, nor about its frequent and unnecessary resort to hyperbole; although all those unappealing features are present. My concern is with the repeated aspersions that are cast in that document on the intellectual honesty of the High Court Judge from whose decision this appeal is brought.

In paragraph 5.9 of the skeleton argument, it is submitted that the judge has “decided that it would be more helpful to the court’s analysis to find as a fact that the review decision referred to Article 12(5)(a)(iii) rather than Article 12(5)(a)(i)”. In paragraph 6.1(f) it is asserted that the judge “has often completely misrepresented the text of documents”. In paragraph 6.11(g) it is said that he “deliberately misinterprets” part of the review decision. In paragraph 6.13(a) one of his findings is described as “a semantic game played by the High Court” (a remark repeated at the end of the supplementary skeleton argument). And in paragraph 6.23(c), another of his findings is described as “a classic example of the trampling over the evidence in which the High Court has allowed itself to indulge”.

Fearless advocacy is one thing; intemperate advocacy is another. Advocates, once sure of their ground, must not retreat for fear of, or in the face of, judicial displeasure; and judges for their part will respect such fearlessness. None of this diminishes the courtesy which characterises the relationship between bench and bar. An advocate who means to call in question not only the reasoning but the intellectual integrity of a judge, or a judgment, must be particularly sure of his or her ground; but if it is advanced with good reason and with proper courtesy, such a critique is fully within the responsible advocate’s remit. What is not acceptable is making such allegations without good grounds.

It seems to me that the examples I have given go beyond either strong advocacy or simple hyperbole. They are damaging assertions about the intellectual integrity of the judge which no advocate should make unless he is prepared to substantiate them. In oral argument Mr Clough disavowed any intention to suggest that the judge had collateral motives for his decision. But the passages I have quoted are susceptible of no other meaning, and Mr Clough finally accepted this and apologised for them. This puts the matter to rest; but it would have been much better, as I think he would agree, if the remarks had not found their way into the appellant’s skeleton argument in the first place.

There are at least two broad grounds of public law, whether domestic or European, on which a subordinate instrument classifying goods as taxable may be struck down. One is that the goods are not taxable. The other is that, whether or not the goods are taxable, the instrument is bad for other reasons. A decision on the first ground precludes any further attempt to classify the goods as taxable. A decision on the second ground has no such effect: it simply requires any such instrument to be properly made.

The present case is in the second class. The striking down by the CFI of the 2001 Regulation for want of adequate reasoning had no logical impact on the taxability of the PS2 Playstation. Sony’s case is that the annulment of the 2001 Regulation revived by operation of law the antecedent Commissioners’ classification of the PS2 to the non-taxable Heading 8471. For the reason I have given, however, this follows only if no other instrument supplants Heading 8471. Both the Tribunal and Lawrence Collins J held that it was supplanted by measures which lay within the competence of the authorities adopting them, and I agree with the other members of this court that they were right in so holding.

I should add that I agree with the observations of Lord Justice Chadwick as to the manner in which this appeal has been presented to this Court.

I agree that this appeal should be dismissed for the reasons set out in the judgment of Lord Justice Chadwick.