Restoration of Goods; traveller from non EU Country; taken from Passport Control to Customs Office; whether any opportunity to declare excess goods; seizure; whether refusal to restore unreasonable in the circumstances.

EDINBURGH TRIBUNAL CENTRE

                                      SAHIN LIM                                       Appellant

                                         - and –

THE COMMISSIONERS OF CUSTOMS AND EXCISE  Respondents

               Tribunal (Chairman)  J Gordon Reid, QC., FCI.Arb.,
                               (Member)     Mrs Heidi Poon, CA., CTA.,

	Sitting in Edinburgh on Wednesday 18 June and Monday 29 					September 2003.

For the Appellant         Mr S Lim appeared on his own behalf

For the Respondents   Miss P Odell, Solicitor, Shepherd &
                                        Wedderburn, WS

CROWN COPYRIGHT 2003.

DECISION

Introduction
This is a restoration appeal relating to 2,200 cigarettes and 25 Cuban cigars brought into the UK from a non EU country by the Appellant.  The  Hearing took place on 18/6/03 and 29/9/03, the proceedings being adjourned in June to enable the Respondents (“Customs”) to lead the evidence of witnesses not then present.  This adjournment should not have been necessary and an award of expenses was made in the Appellant’s favour to reflect the need for an extra day to complete the Hearing.  At the Hearing, the Appellant represented himself and gave evidence.  Customs were represented by Pamela Odell, solicitor, Messrs Shepherd & Wedderburn, Edinburgh.  She led the evidence of Craig Smout, (an anti-smuggling officer) and David Dryden (an anti-smuggling team leader), who are both Customs Officers, and DC Farnan a police officer with Special Branch, then based at Manchester Airport.  Customs lodged a bundle of productions.  There was no dispute as to their authenticity.

Facts
The Appellant is a Turkish national who has lived in Glasgow, for about fifteen years.  As at the first diet of the Hearing, he was unemployed.  He has a degree in economics from a Turkish University, a Masters Degree in Economic Development from Glasgow University, and a BA in History from the Open University.  He previously worked as a bank inspector in Turkey.  

On 30/11/02, he flew into Manchester Airport from Jamaica along with about 200 other passengers.  On reaching Passport Control, he was intercepted by DC Farnan and a colleague.  DC Farnan worked at the Airport for what may be colloquially referred to as Special Branch and had been informed by Customs that they, Customs, had an interest in the Appellant.  Having checked police records, DC Farnan established that Special Branch also had an interest in the Appellant.  The nature of and reason for that interest was not explored in evidence in any detail.  Customs and Special Branch arranged that Special Branch would interview the Appellant first.  DC Farnan and at least one other colleague interviewed the Appellant in the vicinity of Passport Control.  At this stage, the Appellant had already collected his luggage from Baggage Reclaim but had not passed through any Customs Declaration Areas such as the Red, Green or Blue Channels.  In the course of his interview, the Appellant was searched and his baggage was examined.  This revealed, inter alia, cigarettes and cigars.  On conclusion of the interview, which lasted about one hour, DC Farnan informed the Appellant that he was being taken to Customs’ Office.  The Appellant had no practical alternative but to accompany DC Farnan to the Customs Office.  He did so.  The Customs Office was beside the Green Channel.  To reach that Office from Passport Control it was necessary to pass by or near the Red Channel.  When the Appellant and DC Farnan passed by the Red Channel, it was unmanned.  By that stage, most of the passengers from the Jamaican flight had dispersed.  It was not Customs’ practice to man the Red Channel when there were no incoming passengers.

On arrival at the Customs Office, DC Farnan knocked on the door.  The door was opened by Mr Dryden.  Mr Smout was also present within the Office as were several other Customs Officers.  Dryden, Smout and others stepped out of the Customs Office into an area which formed part of the Green Channel.  Smout was asked to search the Appellant’s luggage.  Smout asked the Appellant a series of standard questions including whether he had packed his bags, was aware of their contents, and whether he had any illegal drugs.  Curiously, the evidence does not disclose the Appellant’s answers.  Smout then asked whether he, the Appellant, was aware of the duty free allowances from non EU countries.  The Appellant replied that he had more than the allowance, saying that he had about ten packs i.e. cartons of cigarettes.  Mr Smout, at this stage, had not discovered the cigarettes.  He subsequently did so and also found twenty five cigars.  He then informed the Appellant that he was seizing these items.  Throughout the search by Mr Smout, which lasted about twenty minutes, the Appellant was calm and acting normally.  He was not upset or agitated and answered all questions put to him, although as we have said the detail of all the answers was not disclosed in the evidence.  Mr Smout processed a seizure form, and gave a copy to the Appellant.  The Appellant was then escorted out of the Airport Building by Special Branch Officers, of whom one was DC Farnan.  

In the course of the interview and search, Smout did not ask the Appellant whether he had had the opportunity of declaring the seized goods or the opportunity of passing through the Red or Green Channels.  At the time, Mr Smout did not know whether the Appellant had been given any such opportunity.  In fact, the Appellant had no such opportunity.

Mr Smout seized the goods because they, or at least the cigarettes, exceeded the prescribed limit, and because the Appellant was within the Green Channel at the time of his examination and search.  However, at no stage did the Appellant attempt to bypass Customs Controls.  He had no opportunity to declare the excess goods at the Red Channel.  He did not therefore fail to declare such goods at the Red Channel.  He was effectively prevented from declaring such goods at the Red Channel by DC Farnan.  He effectively declared the goods in question before the search was undertaken by Customs.

By email letter dated 3/12/02, the Appellant complained to Customs about his treatment on 30/11/02.  By email letter in reply dated 6/12/02, Customs informed the Appellant of his rights of appeal in relation to seizure and restoration.  No comment was made in relation to his complaints.  By email dated 6/12/02, the Appellant stated that he was requesting restoration only.  By letter dated 17/12/02, Mr Dryden informed the Appellant that his request for restoration was refused.  In that letter he noted that 
You imported 2200 cigarettes and 25 cigars but your Statutory allowance of these goods is 200 cigarettes or 50 cigars.  You did not attend the red point to declare the excess goods and pay the UK duty and VAT.  You did in fact commit an absolute offence under Section 78 of the Customs and Excise Management Act 1979 and could have been prosecuted for that offence.  In this case the Officer limited his action to seizure of the goods only.

Mr Dryden then proceeded to note the Department’s policy as follows:-
It is this Department’s policy that seized goods should not be restored.  However, each case is examined on its merits to determine whether or not restoration may be exceptionally offered.  In this case I find that there are no exceptional circumstances to warrant a deviation from this policy.  Your request for restoration is therefore refused.

By letter dated 23/12/02, the Appellant requested a reconsideration of the refusal to restore the goods.  By letter dated 2/1/03 the decision to refuse restoration was confirmed by Julie Logan, a Customs Review Officer.  Under the heading Background, the letter notes that the Review Officer had received a copy of the seizure officer’s notebook and a copy of his report and that of his Senior Officer.  Neither Report was produced or referred to in evidence.  One sheet of an officer’s Notebook was produced at the Hearing  [C/1].  It merely recorded the Appellant’s name and address and the goods seized.  It was not referred to at all at the Hearing.  The letter then continues as follows:-
From the available  paperwork my understanding of the case is as follows:

On the 30th November 2002 you arrived at Manchester airport from Montego Bay, Jamaica.  You were first questioned by Special Branch Officers.  You had made it clear to Special Branch that you were concerned about the extra cigarettes you were carrying but at no point did you mention that you wished to declare the goods at the red point, nor were you prevented from doing so.  In fact it is reported that you suggested to Special Branch that since you had co-operated with them you may be allowed to bypass Customs controls. The Officer advised that he is able to give a written statement regarding this.

The Special Branch Officers escorted you to the Customs controls.  It is noted that you did not state that you wished to attend the red point.  At no point did you suggest to the Customs Officer that Special Branch had prevented you from declaring the goods at the red point.  The Customs Officer proceeded to examine your baggage and you then advised him that you had in excess of your allowances.

The Officer seized the goods because you had made no attempt either verbally or physically to declare these goods at the red point and pay the duties on them.  You were over your allowances and had committed an Offence under section 78 of the Customs and Excise Management Act 1979 for which you could have been prosecuted.  In this case the Officer limited his action to seizure of all the goods only.  They were seized under section 139 of the Customs and Excise Management Act 1979.”

The letter then refers to sections 78, 141(1), 139(1) and 152 of the 1979 Act.  Under the heading Restoration Policies, the letter substantially mirrors what Mr Dryden said in his letter.  Under the heading Consideration the letter states as follows:-
It is for me to determine whether or not the contested decision is one that should be upheld, varied or withdrawn.   In doing so, I consider the decision afresh;  including all the material that was before the Commissioners at the time the decision was made.  I examine and consider any representations made at the time the decision was made, and I also examine and consider any representations that have subsequently been received.

I have examined the circumstances of the seizure and related evidence, to identify if any exceptional circumstances exist that should be considered in my review.

You have not appealed the legality of the seizure and therefore the goods are condemned as forfeit to the Crown by the passage of time.

Based on the evidence before me I am satisfied that the goods were correctly and lawfully seized.  This then leaves the issue of [non] restoration of the goods.

The evidence I have suggests that you first of all attempted to bypass Customs Controls altogether and secondly that you failed to declare the excess goods at the red point.  At no point did you tell any Officer that you wanted to go and declare the goods at the red point and no Officer prevented you from doing so.

The policy in such cases is clear.  Having taken all relevant material into consideration I conclude that you have offered no reason for departing from the policy of non-restoration of the goods.  The goods will not be restored.”

Law
There is no dispute about the applicable law.  The quantities for tobacco or cigars under the Travellers Allowance Order (SI 1994/955), namely 200 cigarettes or 50 cigars were exceeded.  Section 78 of the 1979 Act provides that any person entering the UK must declare any thing he has obtained outside the UK in respect of which he is not entitled to exemption from duty or  tax and must answer appropriate questions by a proper officer.  Where dutiable goods have not been declared they are liable to forfeiture and may be seized by Customs (section 78(4) and 139(1)).  Seizure may be challenged by the Statutory Notice of Claim procedure (1979 Act Schedule 3).  Where restoration only is sought or where the procedure under Schedule 3 results in condemnation of the goods, section 152 applies which gives Customs a discretion to restore such seized goods subject to such conditions as they think proper. Customs’ decision not to restore must be reconsidered if such a request is made and if still refused an appeal may be made to this Tribunal (Finance Act 1994 sections 14-16).

Submissions
Having set forth the law, broadly as narrated above, Miss Odell submitted that Customs based their case on the following arguments:- (i) the Appellant attempted to bypass Customs; (ii) he failed to declare excess goods at the Red Channel; (iii) at no point did the Appellant inform any officer that he wanted to declare the goods; and (iv) no officer prevented the Appellant from declaring the goods.  In inviting the Tribunal to reject aspects of the Appellant’s evidence, she submitted that he had adopted three different positions, namely (i) that he did not know how many cigarettes he was allowed to bring in, (ii) that he saw a TV advert indicating that he was allowed 16 boxes, and (iii) that he knew he had too many cigarettes and had to declare them.  She further submitted that the Review Officer’s decision was a reasonable one and referred to Lett v CC&E 19/6/0,1 Chairman, Paul Heim.

The Appellant reminded us of the facts as he saw them and emphasised that (i) he had no choice but to go with DC Farnan from Passport Control to the Customs Office; (ii) as he knew he was to be searched by Customs it was unlikely that he would attempt to bypass Customs; (iii) he informed officer Smout that he had more than the permitted quantity of cigarettes or cigars; and (iv) Dryden and Smout said in evidence that his behaviour was calm whereas DC Farnan said he was agitated.

Discussion
The Appellant appeared to us to be an intelligent man who gave his evidence in a clear and calm manner.  His narrative of the facts was credible, consistent and compelling.  We reject the attack on his credibility and reliability.    We do not agree that he adopted several inconsistent positions.  Although he may have been in some doubt as to what the allowances were, he was clear in his evidence that he wished to declare what he had.  

There were several areas of the evidence in which the parties’ evidence was in conflict.  In a number of significant areas the Appellant’s evidence was in conflict with the evidence led on behalf of Customs; in other significant areas, the evidence led on behalf of Customs was in itself inconsistent.

The first was whether the Appellant attempted to bypass Customs by asking DC Farnan not to let his bags be searched by Customs.  This piece of evidence came from DC Farnan.  It was not put to the Appellant.  The Appellant had to pass through Customs at some stage, so it seems surprising that he would remonstrate with Farnan as suggested.  In the circumstances, we are not prepared to make such a finding against the Appellant.

The second area of conflicting evidence was whether DC Farnan effectively escorted the Appellant directly from Immigration or Passport Control to the Customs Office.  In other words, could the Appellant have declined, and if he had declined, would he have been free to proceed through the Red or Green Channel at his discretion?  It was initially suggested in evidence by DC Farnan that the Appellant was not under his custody or control.  However, it became clear, as DC Farnan’s evidence proceeded, that the Appellant had no practical choice but to be taken from Passport Control to the Customs Office which was by or adjacent to the Green Channel.  There was no opportunity to declare goods at the Red Channel.  Even if there had been such an opportunity, it would have been pointless as the Red Channel was unmanned by that stage.  

The third area of apparent conflict in the evidence was whether the Appellant actually declared his cigarettes and cigars.  Our conclusion is that he effectively declared the excess goods at the first available opportunity.  There was, however, in substance no significant conflict between the evidence of Mr Smout and the Appellant.  At the end of his series of standard questions, Smout asked the Appellant whether he was aware of the duty free allowances from countries outside the EC.  The Appellant’s reply was that he had more than the specified allowances.  This reply was made before Mr Smout began his examination of the Appellant’s baggage.  This was, in effect, a clear statement by the Appellant that he had something to declare.  Furthermore, in evidence, Smout said that he, Smout, did not know whether the Appellant had had the opportunity of going through the Red or Green Channels and did not ask him.  Nor did he offer him the opportunity of retaining the goods on payment of the appropriate duty and tax thereon.  So far as we could understand Smout’s evidence, the only possible basis for seizing the goods must have been because the Appellant was physically present in the area of the Green Channel.  This seems to us to be an example of a decision maker taking leave of his senses.  On the evidence presented to us, it must have been patently obvious to all concerned that the Appellant was declaring excess goods at the first available opportunity.  Both Dryden and Smout must have known that the Red Channel would have been unmanned as the Appellant and Farnan were proceeding from Passport Control to the Customs Office because passengers from the Jamaican flight would have dispersed by the time the Appellant’s interview with DC Farnan had been concluded.  

There was a fourth but minor conflict in the evidence of Dryden and Farnan.  Dryden said that the arrangement between him and Farnan was that when Farnan was finished with the Appellant he would telephone Dryden, who would come to Passport Control to collect the Appellant.  Dryden said he gave Farnan a note of his telephone extension number.  Dryden said that when Farnan arrived at the Customs Office with the Appellant, Farnan claimed to have lost the number.  Surprisingly, Farnan did not mention this arrangement or explanation at all in his evidence.  It is unnecessary to make any finding about the matter.  There is a further conflict of evidence involving DC Farnan.  When he and the Appellant arrived at the Customs Office, DC Farnan said to Dryden (according to the Appellant) He’s got cigarettes, f*** him.  Both Farnan and Dryden denied that this was said.  Neither was clear about whether cigarettes were mentioned.  However, it would be surprising if DC Farnan, as a Special Branch Officer, in the course of an hour long interview, had not discovered the cigarettes and cigars.  It would also be surprising if he did not mention such a discovery when handing over the Appellant to Customs.  Although our inclination would be to accept the Appellant’s account, it is unnecessary to resolve this further conflict, as what, if anything, was said at this particular point is not material to our overall conclusions.  

The final area of conflict in the evidence related to the demeanour of the Appellant during his interrogation or interviews.  The Appellant himself said he was calm as did Dryden and Smout.  Only Farnan said that the Appellant was agitated.  He said this we think to lend support for his account that the Appellant pestered him en route to the Customs Office to let him bypass Customs and to justify him escorting him out of the Airport Terminal Building.  We reject DC Farnan’s evidence on these matters and prefer the evidence of Dryden, Smout and the Appellant.  They are consistent and are consistent for what it is worth with the Appellant’s demeanour throughout the Hearing before us.  Dryden said the Appellant’s behaviour was the same as any other traveller; the Appellant did not raise his voice in Dryden’s presence.  Smout said the Appellant was calm and not aggressive in any way. 

On the material provided to us, the seizure appears to have been fundamentally flawed and had seizure been challenged as it ought to have been, condemnation proceedings at the instance of Customs might well have been dismissed.  We note that Mr Dryden said in evidence that it was fundamental that a passenger has the opportunity to declare excess goods and that if he does not have that opportunity, to proceed with seizure would be incorrect.  In broad terms, we agree.  This is essentially what happened to the Appellant.

Where do our findings, on the material presented to us, leave the appeal given the nature of our jurisdiction and the nature of the decision appealed against?  In our view, Smout ignored the fact that the Appellant had no earlier opportunity to declare excess goods and ignored the fact that the Appellant was declaring excess goods.  Likewise, Mr Dryden’s statement of fact in his letter dated 17/12/03 that the Appellant did not attend the red point to declare the excess goods, while, strictly speaking correct, is utterly misleading.  He has ignored completely the fact that the Appellant had no earlier opportunity to declare excess goods and, as must have been obvious, the Appellant was taking the first available opportunity to declare excess goods.  Mr Dryden thus misunderstood the facts and failed to take account of these important circumstances when exercising his discretion.  His decision is therefore vitiated and cannot stand.  

The exercise carried out by the Review Officer can only be described as a pointless whitewash.  The facts and circumstances do not appear to have been reconsidered.  The penultimate paragraph on the first page even makes reference to a vehicle.  There is no vehicle involved in this case.  The paragraph may be part of a template which is unthinkingly included in all such letters.  If the reports by Smout and Dryden were along the same lines as their evidence then either she ought to have investigated matters further or reached the conclusion that the Appellant was declaring excess goods at the first available opportunity.  It seems to us that in the unusual circumstances of this case these facts would be material to the exercise of discretion on the question of restoration.  The Reviewing Officer in her letter dated 2/1/03 expressly states that she has examined the circumstances of the seizure and related evidence.  She plainly considered these to be material to the exercise of her discretion.  Further support for this is to be found in Mr Dryden’s explanation of Customs’ policy to which we allude briefly below.  

While the Review Officer notes that the Special Branch Officer escorted the Appellant to Customs Controls she failed to appreciate that the Appellant had no choice but to proceed directly to the Customs Office and that, in any event, a request to stop at the red point or Red Channel would have been futile as the red point by that stage would have been unmanned.  She also incorrectly narrates the sequence of events in an important respect.  The statement by the Appellant that he had excess dutiable goods was made before Smout examined his baggage not during or after.  In the absence of the production of Smout’s report, we can only assume that its contents were substantially in accordance with his evidence to this Tribunal.  The erroneous facts upon which the Review Officer placed reliance were plainly material to her decision.  She therefore took into account matters which she should not have taken into account.  Had she made any reasonable enquiries these would have revealed the true state of affairs if they were not already apparent from the material in her possession.  In these circumstances, the exercise of her discretion is flawed and cannot stand.

In these circumstances little need be said about Customs’ policy in relation to restoration.  Plainly, Customs are entitled to have such a policy.  According to Mr Dryden, restoration was rarely granted; he had never known goods being restored.  He said exceptionally goods might be offered for restoration subject to payment of the relevant duty and tax where they were of high value or where a traveller had through genuine error proceeded to the Green Channel instead of the Red Channel.  This was not explored in evidence or submissions.  Given our findings and conclusions we make no further comment on this aspect of the case, save to observe that in the unusual circumstances of this case, the latter category of exceptions might well have been applied.

Decision
It seems to us that all aspects of the decision-making process in this case have been flawed, namely the decision to seize, the refusal to restore and the confirmation of that refusal.  We accept of course that the legality of the seizure is not directly before us, but in this case it is very much part of the background.  We  are mindful of what this Tribunal said in Connolly v CC&E 6/6/03.  The evidence led by Customs covered the issue of seizure and the Review Officer expressed the view in her letter dated 2/1/03 that the goods were properly seized.  Our conclusion is that Customs have acted in a way in which no reasonable panel of Commissioners could have acted in the exercise of their discretion vested in them by section 152(b) of the 1979 Act (see Lett para 76 and the authorities there cited).  We are satisfied that Customs could not reasonably have arrived at the decision (to refuse to restore the goods) on review.  No reasonable panel of Commissioners would have misunderstood the facts or failed properly to investigate them as noted above.  The Tribunal therefore allows the appeal and requires Customs, in terms of Section 16(4)(b) of the Finance Act  1994, to conduct a further review of the original decision in accordance with the following Directions:-
•	The review is to be conducted by an officer not previously involved in the case;
•	The review is to proceed on the basis of the facts found by this Tribunal and any further information requested by Customs and/or supplied by the Appellant ;
•	The review is to be carried out and intimated within eight weeks of the date of release of this decision.

The Appellant has been successful.  In her written submissions Miss Odell conceded that if Customs were unsuccessful then the Appellant should be awarded expenses as taxed.  We are doubtful whether taxation, by the Auditor of Court, of the Appellant’s expenses would be a useful exercise.  This may be a suitable case for awarding a lump sum in name of expenses to the Appellant.  In these circumstances, we allow parties, if they cannot reach agreement, twenty eight days from the date of the release of this Decision, to make any representations they think fit on the question of expenses.

J. GORDON REID Q.C. F.C.I.Arb.
CHAIRMAN
Release Date:  13 November 2003.

EDN/03/8000