King v Customs & Excise [2003] UKVAT(Excise) E00512 (29 October 2003)

EXCISE DUTY – Restoration of vehicle – Vehicle and goods seized – 17.5kg of hand-rolling tobacco belonging to Appellant – Restoration of vehicle offered in return for sum equal to excise duty on goods – Whether offer reasonable – Yes – CEMA 1979 S152(b)

LONDON TRIBUNAL CENTRE

	CHRISTOPHER J KING	Appellant

	- and -

	THE COMMISSIONERS OF CUSTOMS AND EXCISE	Respondents

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				Tribunal:	STEPHEN OLIVER QC   (Chairman)
						ALEX MCLOUGHLIN

Sitting in public in London on 8 October 2003

The Appellant in person and Richard Smith, counsel, instructed by the Solicitor for the Customs and Excise, for the Respondents

© CROWN COPYRIGHT 2003

DECISION

1.	Christopher King appeals against a decision of the Commissioners on review, dated 14 February 2003, to refuse restoration of excise goods seized as liable to forfeiture and of a Rover 200 motor vehicle (R352 DKK) seized as liable to forfeiture concerned to section 141 of the Customs and Excise Management Act 1979.  In the course of the hearing Mr King stated that he did not wish to pursue the appeal against the refusal to restore the goods.  The appeal, accordingly, is only against the decision so far as it refuses to restore the motor vehicle.

2.	Evidence was given by Mr King who presented his case in person and by the review officer, Mr David Harris.

3.	Mr King was stopped by officers of Customs and Excise at Dover Eastern Docks.  He was travelling in the seized motor vehicle with two passengers, a Mr Howden and a Mr Bird.  He was questioned by a Customs officer and it was established that he and his passengers had been to Belgium for the day.  All three occupants of the car stated that they were aware of the guideline levels for the importation of the excise goods into the UK.  When asked what he had purchased that day Mr King answered that he had 150 pouches of hand-rolling tobacco in total.  He stated that he had last travelled to the continent at about the same time the previous year.  Mr Howden said that he had 40 pouches of hand-rolling tobacco and some cigarettes and Mr Bird stated that he had 20 pouches of tobacco and some cigarettes.

4.	At this point the officer asked to look in the boot of Mr King’s motor vehicle and on doing so found 340 pouches of tobacco and some cigarettes.  The officer invited all three gentleman to stay for interviews.  The relevant points of the interviews are dealt with later in this decision.

5.	Following the interviews the officer formed the view that Mr King and Mr Howden were not holding the excise goods that they were seeking to import for their own use.  The goods were accordingly seized as being liable to forfeiture.  Mr Bird was allowed to continue with his excise goods.  The quantity of the excise goods seized was 20kg of hand-rolling tobacco and some cigarettes and some wine.  The officer’s reasons for coming to this view were recorded as –

•	Mr King and Mr Howden were carrying excise goods in excess of the guide levels in place at the time and they had knowledge of those guide levels:

•	there had been an initial misdeclaration as to the quantity of excise goods held by both Mr King and Mr Howden:

•	Mr King had declared a consumption rate which appeared excessive to the officer and 

•	Mr Howden had made a recent trip and the vehicle which he had been travelling had been found to contain 17.5kg of hand-rolling tobacco.  As well as the goods, Mr King’s motor vehicle was seized.

6.	By letter of 6 December 2002 Mr King wrote to the Commissioners requesting that they restore his goods and the motor vehicle.  The seizure took place on 5 December 2001, being the same day as the three gentleman had travelled to Belgium.

7.	Mr King wrote to the Commissioners on 6 December 2003 requesting restoration of his goods and the motor vehicle.  The Commissioners wrote to him on 8 February 2002 refusing the request.  By letter of 11 February 2002 Mr King wrote to the Commissioners requesting a review of the decision not to restore the goods and the vehicle.  The formal review of that decision was not completed within the 45 day time limit.  Consequently the decision to refuse was deemed to be upheld by operation of Section 15(2) of Finance Act 1994.  Mr King appealed and the Tribunal directed that the Commissioners should conduct a further review of the decision to refuse restoration of the goods and the vehicle.

8.	A review was performed and resulted in the decision which is appealed against.  The review set out the facts of the case, the applicable legislation, the Commissioners’ policy of restoration of improperly imported excise goods and vehicles used in such an importation and the reasoning for refusing to restore the goods and the vehicle.  That reasoning was, in brief, that the inconsistencies in Mr King’s account given to the officer at the time of seizure, together with the amount of tobacco that he was seeking to import, made it likely that the goods were not held for Mr King’s own use; in the circumstances the review officer did not consider that the goods should be offered for restoration, but did offer restoration of Mr King’s vehicle on condition that he pay an amount equal to the amount of excise duty that he had sought to evade.

9.	Mr King’s case, is set out in the notice of appeal in his earlier appeal, which has not been added to or amended for this purpose of this appeal, is this.  “At no time was the tobacco purchased intended for resale.  The amount purchased was the amount needed for my partner and myself to negate the need for further trips to the continent.  Customs at Dover should not have questioned my rights and allowances under EEC Regulations.”

10.	The only issue in this appeal arises from the application of Customs and Excise Management Act 1979 Section 152(b).  By this provision the Commissioners may “as they see fit … (b) restore, subject to such conditions (if any) as they think proper, anything forfeited or seized under those [Customs and Excise] Acts …”

11.	In summary, the review officer’s (Mr Harris’s) evidence drawn from his witness statement and from the review letter was that, on examination of the facts and circumstances, he agreed with the seizing officer’s decision that the goods and the car had been liable to forfeiture on the grounds that the goods had not been for Mr King’s own use.  That, reinforced by (i) Mr King’s failure to tell the seizing officer the true quantity of goods he was importing and (ii) Mr King’s explanation of his own consumption which was not credible, justified Mr Harris in applying the then current restoration policy.  That restoration policy stated that when there was smuggling for profit and the amounts were less than or equal to three times the October 2002 guidance levels (3kg of hand-rolling tobacco), then consideration should be given to offering the vehicle for restoration upon payment of 100% of the revenue evaded.  In Mr King’s case the goods seized from him had overtopped that level.  However the review officer “exceptionally” offered restoration of the vehicle for an amount equal to the duty on his goods alone, which the Commissioners took to have been 15kg of hand-rolling tobacco.  This worked out as a payment required of £1452 in return for restoration of a car whose then retail value was £5200.

12.	We have already set out the grounds of appeal put forward by Mr King.  We should add that Mr King also argued that the Customs had been wrong to reject his contention that the hand-rolling tobacco was liable to forfeiture having regard to the fact that only a few weeks earlier, when Mr Howden (one of his passengers)  had been stopped, he had been found to be carrying 17.5kg of hand-rolling tobacco.  Mr Howden’s tobacco had not, Mr King said, been seized from him on that earlier occasion.  Mr Howden’s case established a precedent which the Commissioners should follow in the interests of fairness in his (Mr King’s case).  We do not find this argument persuasive.  We do not know the circumstances of Mr Howden’s earlier importation.  There is no reason why the Commissioners should be bound, in Mr King’s case, to what happened on an earlier occasion.  Each situation has to be determined on its own merits.

13.	The feature that most struck us as a relevant consideration was the quantity of hand-rolling tobacco carried by Mr King.  Whether it was 15kg (as the Commissioners say) or, as Mr King claimed, 17.5kg, the claim that it was for his own use calls for an explanation.  17.5kg of hand-rolling tobacco comprises 350 50g pouches.  It was not disputed that 50g can produce 80-100 roll up cigarettes.  At the rate of consumption of 100 roll up cigarettes a day, Mr King will (assuming 100 cigarettes per pouch) have been carrying a year’s supply.  At a consumption rate of 40 roll up cigarettes a day, he will have been carrying two and a half years’ supply.

14.	We think that Mr Harris was correct to regard Mr King’s claim that the hand-rolling tobacco imported by him was for his own use as implausible.  We accept that Mr King was a heavy smoker.  His doctor was not in a position (when asked at the invitation of Mr King) to confirm Mr King’s consumption rate.  Mr King told us that he had completely stopped smoking after the events of 5 December 2001, so there is no continuing pattern of consumption for us to go on.

15.	The position taken by Mr King tends to undermine his credibility.  When interviewed at Dover on 5 December Mr King had accepted that all the hand-rolling tobacco had been imported for himself and none had been for his “missus”.  On 11 February 2002 Mr King wrote to the Commissioners stating that the goods were “for my own use”.  On 25 February 2002 he wrote claiming that they were “for my own consumption”.  But when Mr King later appealed to the Tribunal his grounds of appeal which are set out above stated that the amount purchased was the amount needed “for my partner and myself”.

16.	Mr King was challenged as to whether he really consumed 100 hand-rolling tobacco cigarettes each day.  The review officer said that this was implausible because it meant starting a new cigarette every 5.6 minutes of a 16 hour waking period; and if you were working full-time as a builder he would, suggested the review officer, have had little time to prepare the cigarettes.  Mr King’s earlier explanation given in correspondence had not addressed this issue.  In oral evidence, however, Mr King stated that his practice had been to prepare “tailor-made” hand-rolling tobacco cigarettes in advance.  Moreover, Mr King had said, wastage was high when he was working.  Many cigarettes were part-smoked and then thrown away; some got wet and had to be jettisoned.

17.	We do not accept Mr King’s explanation that part of the consignment of 17.5kg was for his partner.  Nor do we accept Mr King’s explanation as to how he sustained a consumption (allowing for wastage) at the rate of 80-100 cigarettes each day.  Making up a stock of tailor-made hand-rolling cigarettes would in any event take a considerable amount of a person’s working time.  His explanation seems to us to have been created in order to counter the review officer’s conclusion.

18.    Another fact taken into account by the review officer, and emphasized in his oral evidence, was that Mr King had spent £600 on hand-rolling tobacco on 5 December 2001 and yet his account of what he had bought was, according to the intercepting officer’s notes, inconsistent.  The intercepting officer did not give evidence but her notes of the initial questioning at 1900 on 5 December were signed at 2050 the same day.  The notes say that Mr King was asked what he had purchased.  His answer had been “3 packs of tobacco”.  Asked how many in a pack, Mr King (according to the note) said “50”.  The next question was asking Mr King to confirm that that made 150 pouches and Mr King is recorded as saying “yes”.  When the boot of the motor vehicle was opened, at least 340 pouches were found (i.e. about 17kg).  In the circumstances of the formal interview that followed, Mr King said that 15kg were his.  The reasons given for the seizure included the fact that, at the initial interception, Mr King had failed to declare all the excise goods that he had been carrying.

19.	The review officer, in the review letter of 14 February 2003, observed that Mr King had had three opportunities to disclose the precise amount of goods that he had been bringing in.  Had he been unsure of the quantity he could have said so but he had chosen not to do so.  The review officer inferred that had Mr King been a legitimate traveller and been unsure as to what hand-rolling tobacco he had bought, then he would have surely mentioned this to the intercepting officer.  On this basis the review officer inferred that Mr King knew precisely how much he had bought, having spent in excess of £600 on the goods.  He therefore concluded that Mr King had been attempting to deceive the intercepting officer as to the true quantity of goods so that the officer would allow him to proceed without further examination.  Moreover the review officer had noted that in correspondence Mr King claimed ownership of 17½kg of hand-rolling tobacco and these could not have been equally divided into three boxes.  In his view the true quantity of goods that Mr King had been bringing in that day had been three 5 kilogram boxes of hand-rolling tobacco.

20.	Mr King’s response in relation to those discrepancies was that the intercepting officer had been mistaken and that the record of the initial interview had been inaccurate.  What, Mr King said, would have been the point of concealing the amounts of tobacco carried in the car when a search was likely to follow?

21.	While we do not rely on this as the only basis for our decision, we think that there was an inconsistency between what Mr King had said, at the initial interview, about the quantity of hand-rolling tobacco that he was bringing and the amount that he eventually claimed.  An outlay of £600 is a serious amount and a purchaser, especially one who claims to be a heavy smoker and to know the quantities that he consumes, is we think more than likely to know precisely how much he has bought and how it has been packed; even if he is not a smoker he is likely to know the quantity of his purchase.

22.	Overall, there were, we think, too many inconsistencies for Mr King’s eventual account that he had bought 17.5kg (in his letter of 11 February 2002) all for his own consumption to ring true.  We consider that the review officer was right to have taken these inconsistencies into account and the reasonableness of his conclusion that the tobacco was not destined for Mr King’s own consumption cannot be faulted.

23.	The review officer has departed from the strict guidelines and has offered restoration in return for a payment that equates to the excise duty on Mr King’s hand-rolling tobacco alone.  The amount (£1452) is between a quarter and a third of the value of the car (£5200).  We think that the review officer’s decision produces a proportionate result in all of the circumstances.

24.	For all those reasons we consider that the decision of the review officer to restore the car on payment of £1452 was a reasonable one.  We therefore dismiss the appeal.

STEPHEN OLIVER QC
CHAIRMAN

RELEASED:

LON/03/8058