Kinley & Anor v Customs & Excise [2003] UKVAT(Excise) E00426 (09 June 2003)
	
	EXCISE DUTY — non-restoration of excise goods and car said to belong to first appellant — finding that when seized car did not belong to first appellant — first appellant thus had no right to appeal against non-restoration — Customs not satisfied that excise goods not being imported for commercial purpose — Customs’ decision held to be reasonable— appeal dismissed

MANCHESTER TRIBUNAL CENTRE

 
ROBERT ALFRED KINLEY (1)
And
MS EDNA JENKS (2)
		Appellants

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE	
Respondents

				Tribunal:      Mr J D Demack (Chairman)
			                               Mr A E Brown FCA

Sitting in public in Manchester on 14 May 2002 and 19 May  2003

The Appellants appeared in person

Mr Jonathan Cannan instructed by the Solicitor for the Customs and Excise for the Respondents

© CROWN COPYRIGHT 2002

DECISION

1.	This is an appeal by Mr Robert Alfred Kinley against a deemed decision on review of the Commissioners of Customs and Excise by letter of 19 June refusing to restore to him excise goods and a Ford Sierra motor car, reg no B119 LRY (‘the car’), seized on 12 May 2001.  And at our request, because all correspondence between the Commissioners had also been signed by Ms Edna Jenks, Mr Kinley’s travelling companion (but Ms Jenks had not given notice of appeal to the tribunal), Mr Cannan, counsel for the Commissioners, agreed that the proceedings might also be treated as an appeal by her against the Commissioners refusal to restore excise goods to her.
2.	The excise goods and car were seized in the following circumstances.  On 12 May 2001, Customs’ officers on duty in the UK Customs zone at Coquelles, France, stopped the car as it was returning to the UK from the continent.  Mr Kinley was driving it, and Ms Jenks was his passenger.
3.	In initial questioning, Mr Kinley said that the two had travelled out that morning on a trip to Calais and Adinkerke, Belgium.  He said that he had been stopped by Customs’ ‘a few months before’, when excise goods had been taken from him.  He added that he travelled abroad ‘quite a bit’, and had travelled the previous Tuesday.  He also said that the car belonged to a friend.
4.	He told the officers that he was aware of the guidelines for importing alcohol and tobacco products into the UK, as was Ms Jenks.  On being asked, ‘What alcohol and tobacco have you bought today?’, Mr Kinley replied, “Only the guidelines: we’ve got nothing over what we are allowed.”  He produced two receipts to the officers, one for 60 pouches of Golden Virginia hand-rolling tobacco, and 1600 cigarettes, and two receipts for 24 cases of beer.  Both travellers signed the officer’s notebook recording the questions and answers as being an accurate account.
5.	At that stage the officer indicated that since the quantity of excise goods did exceed the guidelines for two people he required the travellers to satisfy Customs that the excise goods being imported were for personal use, and were not held or used for a commercial purpose.  We shall deal with the two interviews which officers then carried out a little later in our decision.  For the moment we propose to deal with the car.
6.	In the ante penultimate paragraph, we mentioned that, in initial questioning, Mr Kinley said that the car belonged to a friend.  In his oral evidence Mr Kinley confirmed that to be the case, and identified the friend as one David McCulloch.  After the car had been seized by Customs (as to which see below), during the correspondence with the Commissioners about restoration of the goods and car, Mr Kinley sent a Vehicle Registration Document V5 for the car to them. With the Form V5 was a short note saying, “As you see I have not sent it off for my name to be put on.  I only had it a very short time before it was taken off me at Dover” and that Mr Kinley had completed that section of it relating to the notification of change or sale, but had not in fact given notice of any change to the DVLC.  Mr Kinley admitted to us that, on 12 May 2001, the car did belong to Mr McCulloch but that after it was seized by Customs he came to an arrangement with Mr McCulloch whereby he paid him an agreed sum, not for true ownership of the car but rather by way of compensation for its loss, and in return Mr McCulloch handed him the Form V5.  We are quite satisfied, and find, that in those circumstances Mr Kinley did not own the car when it was seized by Customs on 12 May 2000, nor was he entitled to be registered as keeper of it on that date.  Consequently, we do not consider Mr Kinley to have any entitlement to appeal to these tribunals against a decision of the Commissioners not to restore it.  The car was a third party vehicle: only Mr McCulloch was entitled to request restoration of it and to appeal against a decision not to restore it.  We therefore proceed to deal with Mr Kinley’s appeal on the basis that it is only against non-restoration of excise goods.
7.	In the notes of interview of Mr Kinley, the interviewing officer, Ms Jayne Harvey, recorded his claiming that half the seized goods belonged to him and the other half to Ms Jenks; that he had paid £122 for beer and £135 for tobacco and cigarettes, all in cash; that he was not a revenue trader, no-one had assisted him financially with the purchase, and he did not expect to receive any goods or favours for the goods; that he smoked 60 cigarettes a day and 2 pouches of tobacco a week; that he did not know how much alcohol he drank as he was a registered alcoholic; that all the beer was for him and the tobacco for his three sons who each smoked about 2 pouches a week; that he was a self-employed bricklayer earning £500 a week; that he had travelled the previous Tuesday with his son whose 18th birthday was 3 weeks later, when he had bought some beer and one carton of 200 cigarettes; that he had made about 20 trips in the last 12 months to buy alcohol; and that his present purchases would last about 2 weeks.  Mr Kinley also explained that he sometimes went to the continent with friends ‘to show them the way’; and he had travelled in about six different cars.  He said that he had not used his own car for the present trip as it was only a two-seater and had no boot.  He confirmed that he had seen Public Notice 1 previously, and was aware of the guidelines; and that he knew that it was an offence to sell imported excise goods without first paying the duty on them.  Mr Kinley signed the officer’s notebook as being a true account of his interview.
8.	Officer S Holder interviewed Ms Jenks.  Her notes of interview show that she claimed ownership of 10 cases of Stella beer, 4 sleeves of Lambert & Butler cigarettes, 3 500g pouches of tobacco, and 2 boxes of red wine, for which she had paid cash - £96 for the beer and £135 for the tobacco.  Ms Jenks said that she was in receipt of income support of £144 per week and received £60 per week from her partner who did not live with her; that she had savings of £3,000 which represented a successful compensation claim; that she was not a revenue trader, and no-one had assisted her with her purchases; that she smoked 100 cigarettes a day due to depression; that she supplied her mother – a registered alcoholic – with cigarettes and drink; that she expected her goods to last her a few weeks, 3 weeks.  Ms Jenks claimed not to have seen Public Notice 1 previously, but said that she knew the guidelines were 10 cases of beer and 4 sleeves of tobacco.  Officer Holder then issued Public Notice 1 to Ms Jenks, and explained it to her.  Ms Jenks admitted knowing that it was an offence to sell imported excise goods without first paying the duty on them.  She said that she had made 3 trips to the continent in all, the first just after her passport was issued on 13 April 2001 when she had travelled with Mr Kinley and had imported 10 cases of beer, 800 cigarettes, and 2 or 3 pouches or packets of tobacco.  Ms Jenks then signed the officer’s notebook as a true record of her interview.
9.	The officers were not satisfied that the goods which Mr Kinley and Ms Jenks were importing were not for a commercial purpose and proceeded to seize them as liable to forfeiture.  They consisted of 1200 Kingsize filter Lambert & Butler cigarettes, 400 Superking size filter cigarettes; 3 kilograms of Golden Virginia hand-rolling tobacco, 120 litres of 9% strength beer, 120 litres of 5.2% strength beer and 36 litres of table wine.  The reasons noted for seizure were that Mr Kinley’s stated consumption was unrealistic; that he travelled to the continent frequently; knew the guidelines, but chose to ignore them; and that he had had goods seized from him before.  The reason noted for seizure of Ms Jenks’ goods was that they were packed with goods liable to forfeiture.
10.	On 6 June 2001 the Commissioners received a letter from Ms Jenks asking for the return of her excise goods, to which they replied on 19 June refusing to restore.
11.	On 6 June 2001 the Commissioners also received a letter from Mr Kinley which was treated as a request for restoration of his excise goods and car.  They wrote to Mr Kinley on 23 June refusing to restore the goods (and on 28 June refusing to restore the car), saying that they saw no reason for departing from their policy of refusing to restore seized goods, Mr Kinley having failed to satisfy the officer that the goods he was importing were not for a commercial purpose.
12.	Notwithstanding that Mr Kinley failed to require the Commissioners to carry out a review of their decision not to restore the excise goods timeously, the Commissioners did act on a letter from him which they received on 21 July 2001 and in which he said he wished to take the matter to court as he was being victimised.  In the event, the Commissioners failed to carry out a review of their decision not to restore the goods to him within the 45 day period for which s 15 of the Finance Act 1994 provides, so that their letter of 19 June 2001 became the deemed decision on review.
13.	In evidence to us, Mr Kinley confirmed that he had travelled to the continent 20 times in the previous 12 months in at least 5 different vehicles; and that he had bought only one carton of cigarettes on his visit the previous Tuesday as he had some cigarettes left.  He complained that ‘Every time I go these days, I get stopped.’  He claimed to have savings of £3000, but produced no documentary evidence to confirm his claim.  Otherwise his evidence confirmed what he had earlier told the Customs’ officers, as did that of Ms Jenks.  We do not accept that Mr Kinley purchased only one carton of cigarettes on his visit to the continent the previous Tuesday, but otherwise accept the evidence of both travellers as fact.
14.	The jurisdiction of the tribunal is restricted to considering whether the decision of the Commissioners not to restore seized excise goods is one which no reasonable body of Commissioners could have reached, s 16(4) Finance Act 1994
15.	In R (Hoverspeed Ltd and others)  v CEC [2002] 3 WLR 1219, the Divisional Court held that the Excise Duties (Personal Reliefs) Order 1992 was incompatible with Council Directive 92/12 and art 26 of the EC Treaty in so far as arts 3 and 5 thereof created a presumption that excise goods held in excess of the minimum indicative levels were held for a commercial purpose and therefore chargeable to additional excise duty in the UK, and placed the burden of proof that such goods were not held for a commercial purpose  upon the individual in question. The Commissioners did not appeal those parts of the court’s decision .  Subsequently the 1992 Order was revoked, and amending regulations made.
16.	As the seizing officer, without realising it at the time violated the appellants’ community rights under the Directive, the seizure and subsequent proceedings would appear to be flawed.
17.	Does that assist the appellants? In John Dee Ltd v CEC  [1995] STC 941, Neill LJ said this at p. 953:
“ … where it is shown that, had the additional material been taken into account, the decision would  inevitably have been the same, a tribunal can dismiss the appeal”.
18.	In the instant case, the Commissioners have satisfied us that, notwithstanding  the defects in the review, the importations by the appellants were for profit.  Thus we hold that the excise goods were held or to be used for commercial purposes. (We accept that the two appellants were smugglers on a small scale, but nevertheless we hold that they were smugglers).
19.	We hold that the Commissioners’ decision not to restore the excise goods imported by the two appellants was not unreasonable, and we dismiss their appeals.	

J D DEMACK
CHAIRMAN
RELEASE DATE:

MAN/01/8293