clr/1988/1988_3_2215.pdf

(1988)ApplyingmeExptenabvv Noticeissnedby theDirectorofCustomsand ExciseinSeptember1984,whichpurportedtoclarify andexplaintheafore­ said Order 151/81 for theguidance of thoseinterested,therespondents turneddownmeapplication. Hence thisrecourse.Respondentsoriginally based their case on the 5 groundthatsincetheapplicants'caipertsmostasof their very nature be gluedonthefloorofthebuildingoftheapplicants'office andthusbecome an inseparable partof thebuilding,theirusei s outsidetheletterand the spiritoftheexemption.Notwithstandingmatdierespondentsattheendad­ mitted.thatthecaipetswerenottobegluedand.therefore,theywouldbe 10 easilyremovable,therespondentsinsistedonthecorrectnessofthesubjudiceact,becauseinaccordancewiththesaidexplanatorynotecarpetsare household equipment Held,annulling thesubjudkedecision

(1)Theprinciple thatinmatters relatingtoclassification of goodstheDepartmentof CustomsandExcise hasvery widediscretionandthatthecourtwill notdistrurbadecision»if it was reasonably opentotheDirector,hasnobearingonthiscase. Herethe questionisif thewords "office equipment" in thecontextoforder No. 151/ 81,properly construed,includecarpets.Ifyes.itwasnotreasonablyopen totheDirectortodefeattheobjectoftheorder.

(2)Order 151/81 shouldbeinterpreted asawhole.Theordermakesno distinction whatsoeverbetweentheoffice equipmentontheonehandand the household equipment on theother hand. Furniture, however, isex­ pressly excluded in both cases. This indicates thattheexpression "πας γραφειακόςκαιοικιακόςεξοπλισμός(alltheofficeandhouseholdequipment)in thecontextof orderNo. 151/81isusedin asensewideenoughto include furniturebut for theirexpressexemptionfrom theambitoftheor­ der.Thewordfurnituredoesnotincludecarperts. 15 20 25

(3)Therefore, the Explanatory Note correctly classifies carperts as householdequipment Whether ornotcarpetsshouldalsobeconsideredas 30 partoftheoffice equipment dependsonwhether theyareordinarily usedin offices aswell.Theanswerisinthe affirmative.

(4)Inthelightof theabove thesubjudicedecisionhastobe annulled for misconceptionof law.

(5)The question whether carperts. which, oncefitted, cannotbe removed,arewithin theexemption,isleftopen. Subjudicedecisionannulled. Noorderastocosts. 2216 35 3CX.SL Hanseafic «hippingw.IRepubfic Casesreferretiiui; nemetfautDaiiy/Ifooiiucts.v:$heiRepuWfc($ Dm0/rrouand'ionjv:/T'/ie7?ep^7ic.:

(1968).BCl.'R.-444; Kasapisv./TAe«epiai/iiri(196TB):3(CiLiR.546; , ί ©ΑτΜΐθίίοώ£ϊ«\ν.Τ^/Λ<ρΐίΰ/β:/

(1967)3^^1Κ.50. Recourse. fRecourse against ;the(decision.ofuheirespondents conveyed c^dllytto'thei^ppUcants to^theeffecttthat'theumportation of'fitted icaipatsffontheiridffices was.not free dficustoms;duty. 10 (GhrJDemetriaties,l£ar;uitApp\icants. OJRgpad0poUllou{QMrsl),iortherespondents. Cwr.adv.vu.lt. TJOYADJIS J..readimefollowingjudgment'By thepresentre;course:the applicants seeka;declaration.cifitheiGourtithat "theide-^ •15 ccisioncof.theircspondentsiortbf(any ofimem,orally>conveyedito ;the;applicantSOn>or.about 29th'November, 1984,to;theteffect Jhat ttheiimportationiof fitted carpetsfor theirofficeswas notfreefrom ^customs dutyiunder order No. 151/81, published in the official igazette oftheiRepublic dated 10/7/81.is null and voidandof no 20 xffectNwhatsoever.lbeing contrary to thell;aw and/ontotheirelevant order and/or as'havinglbeen taken inexcessorTn abuse of ithe'pOwers vested toitnemior^fanyoneofiUiem". As itappears from the'Application andtheiChpposition thefac. ttualbackground.tOLtheipresent recourse-isbriefly as follows: 25 The applicants are;aibig offshore:ship management company. . "They operatemeiribusinessifromitheirLimassol offices^vhich oc2217 Boyadjis J. Hanseatic Shipping v. Republic

(1988)cupy the extent of more than two floors in an office block. Sometime in November 1984, applicants imported a quantity of fitted carpets valued £11,219 for use in their aforesaid offices. The carpets were imported in small pieces 50 cm X 50 cm each. A small sample of the carpets was attached to the written address 5 of counsel for the applicants and is in thefile of the proceedings. Relying on order 151/81 published in the official gazette of the Republic of 10/7/1981, issued by the Council of Ministers under section 11

(2)of Law 18 of 1978 as amended, the applicants sub­ mitted on the prescribed form on 26 November 1984 a formal claim for relief from customs duty in respect of their aforesaid carpets on the ground that they formed part of their office equip­ ment within the ambit of the aforesaid order 151/

1. The respondents dismissed applicants' claim for relief and col­ lected from the applicants the full import duty amounting to £1,958.55 cents which the latter paid under protest as it appears from their letter dated 30 November 1984, attachedto the Appli­ cation as Exh.
2. 10 15 In reaching their sub-judice decision therespondents hadcom­ plied with an Explanatory Notice,issued by the Directorof Cus- 20 toms and Excise in September 1984,. which purported to clarify and explain the aforesaid Order 151/81 for the guidance of those interested. Feeling aggrieved'with the aforementioned decision of the re­ spondents to charge and collect from them importduty on their 25 aforesaid carpets imported for use in their office; the applicants seek to have it annulled through the present recourse filed on 7 February 1985 on the sole ground that the interpretation,given by the respondents to the words "γραφειακός εξοπλισμός!' ("office equipment")'in the aforesaid order15>1'/81is wrong. 3Q In their Opposition the respondents alleged thatthe sub judice decision was lawfully and'correctly taken in accordance-with the 2218 3 C.L.R. 5 10 *" 25 30 35 Hanseatic flipping w.Htepdblic lioyatljisU. Customs and''Excise DutiesILaw,U978^KOWth^'Schedule*,&ub~ heading Ifrof item'01as amiendedi^ycoraerrNo.IlSl/Sl.TFheireasoriing for merespondentsViiecision^setioutlint'the statemcntcdf factsuponwhich theC^pasitio^isIbaWte .ten.addressof theircounBdl,iisfthat,?since'the applicants^carpets imust,asrrftfheirvcryjiatnre.ibeigluedon thefloorbf me&aiilding of theapplicants'aj^ficeraTicitthu's.becorne^n inseparablerpartdf ;thebuMng.'meiriMeiiwoutsiiletmeltetteroand thespirit/dftrheiexemptiofLUtifoUowBtihatt^ were throughout labouringontoimelbe'lirfUhat.oonaetthey^are'fixedonithe floor,tthe?ap'pliraritt'iaarpets.^tthemver^^ aianolheT^lace.linwiew.ofttheca^OTesaib! reasons putforwardtby jtfbeitraponderits,tthejparticiilarinature oftrue'applicants'ccarpets, Te^iidhtthellatcer<oiiginally describeckasfitted'oarpets,'rbecame of Titalirmportanee:onliv-5uch naturebeinga matter-.ofifaet that must tejprovetiri^«^^nj^,t'me\applicantsrfiled an;affidavifcsworn:on .'28Uifarch11986rtwyAtidreasiDroushiotis.rtheiJGhier Accountant aniflcoriedf·theiEJirectors ofithe_aprjlioants^ in an^frbrtto.idispriive flttaUle^tBmfpmnlDTwardlriy;the.respondents. /Attadredtto'.thisiaTfidavit thereis^aMeafletillustrating;inten'alia, 'teimannerim-.wtiich'tHe carpettiles;areplaced ori:me:^ooT.iIn:tnis affidavitiitiisatatedithat;Mr. Droushiotis.was resjonsiblefforctheorder'ofithese.particular carpets^.and had personally1:supervised ^irrfittii^cOTtthetfloor'ofme'ar^hca^ edwithoutttheiuseof anykindofgluewiththeTesult'that theyjare easily,removable. 'ir?ar'fh>m;attempting todisprovetheaforesaid allegation of Mr. jDroushiotis,itheifespondehts filed an;affidavfeworneori l9-'Jiiry i98&by/Antoriios Antonia&es,'aCollectorofGustomsiattached to the GustomsHHeadquarters, Nicosia, nvpara.(

(3)fof which:referenceiis madeitotthe applicants'affidavitand itis 1stated that: vOn the basisofthetechnical information containediinrthesaid'leaflets and me?sta'ternentscontained nvthe r afc^said^fidavitVthe r Respondent wilhnot insist on·considering;the''carpettiles'-inquesition asifittedccarpets'". 2219 Boyadjis J. HanseaticShipping v. Republic

(1988)The matter,however,didnotend there.Intheconcluding para­ graphof hisaffidavit Mr. Antoniades insists on thecorrectnessof the sub-judice decision which he seeks tojustify on somewhat different grounds.Paragraph4of the affidavit readsas follows: "4. Nevertheless thedispute astotheireligibility for relief 5 stillremainsbecause theDepartmentof Customsdoesnotcon­ siderandithasbeenitspolicy nottoconsidercarpets(individ­ ual units) as falling within the scope of Office equipment' (γραφειακός εξοπλισμός),but simply considered carpets only as 'householdequipment'.Intherelevant Notice41 (Ap- JQ pendix 1of the Opposition)itis statedthat relieffromduty is notallowed on householdequipmentcleared byoffshore com­ paniesfor furnishing their offices." At the subsequent stage oforal argumentsand/or clarifications made by counsel on both sides, counsel for the respondents 15 adoptedtheaforesaid contentsofparagraph

(4)of theaffidavit of Mr. Antoniades andsought tojustify thesub-judice decisionon the lastaforementionedreasoning. Thepolicy of theDepartmentof Customsbelatedly reliedupon by therespondentsis itself theresult of the Noticeissued by the 20 Directorof theDepartmentofCustomstowhichreference hasal­ ready been made.Therelevant partof this Noticereads as fol­ lows: "The companiesmayobtainreliefonoffice equipment, i.e. supplies of adurable nature,suchasphoto-copiers»typewrit- 25 ers,calculatingmachinesand computers. Theymaynotobtain relief on householdeffects for furnishing theiroffices butthey may importor acquire locally such goods underitem01. 18 for theexclusiveuseof theirapprovedexpatriateemployeesin their dwelling houses. Moreover,relief is notafforded inre- ^a spect of replacement parts, air-conditioners and goods of a consumablenature, suchasstationery. The personnel may obtainrelief on household effects, a? 2220 3 C.L.R. Hanseatic Shipping v. Republic Boyadjis J. termwhich means alldurable goods used in a household and extends·toitems such ascarpets andcurtains, TV sets,video recorders, washing machines, refrigerators, kitchen utensils, mattresses,,linen, cutlery andtableware,household decorative articles aridpractically everything normally used tofurnish a house.Relief is not afforded inrespect of consumable goods, air-conditioners andpersonal effects, such asphotoghaphic or videocameras." ' ' 10 -15 20 25 30 35 Counsel for theapplicants submitted: (i)thatthe very fact that therespondentsconsidercarpets asforming part of thehousehold equipment strengthens theirargument thatcarpets should likewise beconsideredasforming partoftheoffice equipment: (ii)thatthe object of the legislature in exempting offshore companies and theirexpatriatepersonnelfrompaymentofcustomsdutyon their office andhousehold equipment respectively wastoattract thereby offshore companies to incorporate themselves and operate from within theRepublic:and (in)that inconstruing therelevant provision theCourt should givefull effect totheaforesaid object by giving the words of theexemption the wider possible meaning. ' .vl . • . . Counsel for therespondents,on theotherhand, submitted that in matters relating,toclassification of goods the Department of Customs and Excise hasvery wide discretion and that the court. willnotdistrub adecision ifitwasreasonably open totheDirecr tor. In support of this proposition counsel cited the decision in DemetriouDairyProducts v.TheRepublic

(1985)3C.L.R.758. I fail to see the relevancy of thedecision in the abovecase to the matters now under consideration. The aforesaid case concerned the classification of certain vans for thepurpose of paymentofcustomsduty andtheCourtheld thatinmattersofclassificationof goods an administrative Court has no competence to substitute its own discretion in theplaceof thediscretion of the .Customs Authorities once it is found that it was in the circumstancesreasonably open tothe Authorities toclassify the goods undertariff heading 87.02,sub-heading99,instead of undersubheading 91astheapplicantsin thatcasehadalleged.The dispute in thiscase does notconcern theexercise by theDirector of any discretion onewayortheother.Itconcernsthealleged wrongap2221 / Boyadjis.'J. Hanseatic Shipping v. Republic

(1988)plicationvoftthe'law.'If the-words "office equipment" in the con­ text of orderfNo. 151/81, properly construed, includecarpets,it "ismotreasonably,opentrytheDirectortoexercise hisdiscretionin *a\waytharswould defeat the.object of theorder.Itfollows thatthe *>^oieissuehereis thecorrectinterpretationoforderNo. 151/81 is- 5 isued by thevCounciloffMiriisters undersection 11

(2)of the Cus­ toms andoExcise Duties.Laws 1978-1981, whereby sub-heading iV8\wasadded toitem01 of theFourth Schedule totheLaw,the >relevant.partof whichreads.as follows: Κλάσις , 'ΈΛώφιον 01 18 ΠεριγραφήΑπαλλαγής Έχτασις Απαλλαγής ΜηχαναχΙνίΓίαοχήματατα^κλάσεων 87.02.11και _87.02ι19'εισαγόμενα, χαι «ας γραφειακός και ίΟΜίακός [εξοπλισμός, πλην των επίπλων, εισαγόμενος, υπό αλλοδαπών εταιρειών ή αλλοδαπού προσωηκσύσντών. Translated in Engli$h;sUb-headingiT8 of item01 reads as folUows: SubItem 01 · nMfling 18 'Descriptionof, relief Extentof relief Motor vehicles of categories 87.02.11 a n d ^ . O ^ l 0 (imported,and all theoffice, andhousehold equipemnt, .other than furniture, imported.iby.offihore companies loritheir.expatruuejemployees. Theprovision must be construed asa whole. Itis'material to 95 notein this respect thatrelief from customs duty isafforded to thoseeligibleinrespect of allifceir office andhousehold.equipemenL It makes no distinction whatsoever between die .office equipmentontheonehandandthehousehold equipmentonthe .other hand. Furniture,however, is expressly excluded in both 30 cases. This indicates thattheexpression "παςγραφειακόςχαι 2222 3 <C.L.R. ^ 10 15 20 25 -^ " Hanseatic Shipping v. Republic Boyadjis J. οικιακός εξοπλισμός" (alUheoffice and household equipment) in thecontext of order No. 151/81 is used in a sense wide enough toinclude furniture but for*their express exemption from theam­ bit of the order. The word furniture does not include carpets. Therefore, the Director was right when he.advisedinhis aforesaid Explanatoiy Noticeall persons concerned thatcarpets form part of the household equipment and as^uch areexempted from payment of customs duty.' Whether or hotcarpets should also be considered as part of the office equipment depends on whether they are ordinarily used in offices as well. Ithas notbeen argued in this case that it is nowadays unusual for offices to be fitted with carpets, especially offices of companies of the size and fi­ nancial standing of theapplicants. . r ' *.-v*:·;.: \ Itfollows from theabovethat, uponthecorrect'construction of sub-heading 18 of item01 of the Fourth Schedule totheCustoms andExcise DutiesLaw 1978 as amended,by giving tothe words used therein their ordinary literal meaning, without the necessity of applying theso-called "purposive construction",Iamled tothe conclusion that theparticular carpets imported by the applicants areexempted from thepayment of customs duty as forming part of applicants' office equipment.Ileave thequestion open whether carpets which,oncetheyarefitted indieoffice cannotpossibly be removed therefrom, fall under trie aforesaid sub-heading 18>of item 01 ornot The respondents have in this case misinterpreted and misap­ plied thelaw andtheirdecision is liable tobe.annulled onthis sole ground. Misconception of law vitiates the1administrative act: be· metriou & Sons v. TheRepublic

(1968)3..C.LR. 444. Misdirec­ tion by theadministrative'authority as tothemeaning andeffect of a statutory provision is a ground for annulment of its decision: Kasapis v. Republic

(1968)3 C.L.R. 546.tA decision taken un­ der a basic misconception of law is.a decision·taken in excess of powers: Christodoulou v.Republic

(1967).3 G.L.R.50. · . > In theresult, thesutvjudice decision.is annulled,but inthecircumstanceslmakenoorderas tocosts." , ^ . v t . Sub-judice decisionannulled. Noorderas to costs: 2223