# Customs and Excise Management Act 1979/Schedule 2

Layout 2
SCHEDULE 2 Composite Goods: Supplementary Provisions as to Excise Duties and Drawbacks
Duties
1.—(1) Where under subsection (1) of the principal section imported goods of any class or description are chargeable with a ​duty of excise in respect of any article contained in the goods as a part or ingredient of them and it appears to the Treasury on the recommendation of the Commissioners that to charge the duty according to the quantity of the article used in the manufacture or preparation of the goods (as provided by the principal section) is inconvenient and of no material advantage to the revenue or to importers of goods of that class or description, then the Treasury may by order give a direction in relation to goods of that class or description under and in accordance with this paragraph.
(2) An order under this paragraph may direct that in the case of goods of the class or description to which it applies the duty chargeable shall be calculated in such of the following ways as may be provided by the order, that is to say—
    (a) at a rate specified in the order by reference to the weight, quantity or value of the goods; or
    (b) by reference to a quantity so specified of the article, and (where material) on the basis that the article is of such value, type or quality as may be so specified.
(3) If it appears, to the Treasury on the recommendation of the Commissioners that, in the case of goods of any class or description, the net amounts payable in the absence of any direction under this paragraph are insignificant, the order may direct that any such goods shall be treated for the purpose of the duty as not containing the article in respect of which the duty is chargeable.
(4) If it appears to the Treasury on the recommendation of the Commissioners that goods of any class or description are substantially of the same nature and use as if they consisted wholly of the article in respect of which the duty is chargeable, the order may direct that any such goods shall be treated for the purpose of the duty as consisting wholly of that article.
(5) In making an order under this paragraph the Treasury shall have regard to the quantity and (where material) the type or quality of the article in question appearing to them, on the advice of the Commissioners, to be ordinarily used in the manufacture or preparation of goods of the class or description to which the order applies which are imported into the United Kingdom.
2. Where a direction given by virtue of paragraph 1 above is in force as regards goods of any class or description and any article contained in them, and goods of that class or description are imported into the United Kingdom containing a quantity of that article such as, in the opinion of the Commissioners, to suggest that advantage is being taken of the direction for the purpose of evading duty on the article, the Commissioners may, notwithstanding the direction, require that on those goods the duty in question shall be calculated as if they consisted wholly of that article or (if the Commissioners see fit) shall be calculated according to the quantity of the article actually contained in the goods.
3. Nothing in paragraphs 1 and 2 above shall affect the powers of the Treasury under subsection (2) of the principal section; and ​any goods as regards which a direction under that subsection is for the time being in force shall be deemed to be excepted from any order under paragraph I above.
Drawbacks
4. Where a direction is given by virtue of paragraph 1 above as regards imported goods of any class or description, the Treasury may by order provide that for the purpose of allowing any drawback of excise duties there shall, in such cases and subject to such conditions (if any) as may be specified in the order, be treated as paid on imported goods of that class or description the same duties as would be chargeable apart from the direction.
5.—(1) Where, in the case of imported goods of any class or description which contain as a part or ingredient any article chargeable with a duty of excise, drawback of the duty may be allowed in respect of the article according to the quantity contained in the goods or the quantity used in their preparation or manufacture, and it appears to the Treasury on the recommendation of the Commissioners that to allow the drawback according to that quantity is inconvenient and of no material advantage to the revenue or to the persons entitled to the drawback, then the Treasury may by order give the like directions as to the manner in which the drawback is to be calculated, or in which the goods are to be treated for the purposes of the drawback, as by virtue of paragraph 1 above they may give in relation to charging duty.
(2) For the purposes of this paragraph, the reference in paragraph 1(5) above to goods imported into the United Kingdom shall be taken as a reference to goods in the case of which the drawback may be allowed.
Supplementary
6. Where any order under paragraph 1 or 5 above directs that, for the purpose of any duty or of any drawback, goods are to be treated as not containing or as consisting wholly of a particular article, the goods shall be so treated also for the purpose of determining whether any other duty is chargeable or any other drawback may be allowed, as the case may be ; but any duty or drawback which is charged or allowed shall, notwithstanding the direction, be calculated by reference to the actual quantity and value of the goods and, except for the duty or drawback to which the direction relates, by reference to their actual composition.
7. Where a resolution passed by the House of Commons has statutory effect under the 1968 c. 2.Provisional Collection of Taxes Act 1968 in relation to any duty of excise charged on imported goods, and any provision about that duty contained in an order under paragraph 1 above is expressed to be made in view of the resolution, then that provision may be varied or revoked retrospectively by an order made not later than one month after the resolution ceases to have statutory effect, and that order may include provision for repayment of any ​duty overpaid or for other matters arising from its having retrospective effect; but no such order shall have retrospective effect for the purpose of increasing the duty chargeable on any goods.
8. The power to make orders under this Schedule shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.
Interpretation
9. In this Schedule “the principal section” means section 126 of this Act.