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PlayStation 2 is not a PC, says Court of Appeal

Ruling denies import duty rebate

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Sony's PlayStation 2 is officially a games console and not a computer, according to an English court judgment that denies the electronics firm a €50m (£34.2m) rebate for import duties.

Sony has been pursuing legal action for five years in attempts to have the machine classified as a "digital processing unit" and not a games console. Games machines attracted an EU import duty of 1.7 per cent in 2001, falling year by year to zero by 2004; but computers attracted no duty in that time.

The most recent judgment comes from the Court of Appeal and not only upholds the High Court's decision, but denies Sony a referral to the European Court of Justice.

Sony was granted permission at one point to import the PS2 as a games console, but was subsequently told by Customs and Excise that that permission was revoked. It was Sony's continuing reliance on the earlier permission to import the machine as a games console on which Lord Justice Chadwick adjudicated.

"The point does not turn on whether … the goods ought to be classified under sub-heading 8471 (ie, as a games console). The point turns on whether, in the events which have happened, Sony was entitled to continue to rely on binding tariff information...which did classify the goods under 8471 notwithstanding the subsequent decision of Customs and Excise that that information be revoked," wrote Chadwick. He dismissed the appeal.

In a stinging rebuke to Sony's legal team, Chadwick also took issue with the manner in which the case was conducted.

"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," he wrote. "I am not 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," he wrote.

Sony was the sole importer of the PS2 into Europe and told the court that most imports came via Holland. Because sales were not as high as expected, the company had to absorb the £6.60 cost of the import duty itself rather than pass it on to consumers.

Since 2004 the issue has been irrelevant since neither classification of machine has attracted import duty since then.

See: The Sony ruling

Copyright © 2006, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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