Upton v Customs & Excise [2003] UKVAT(Excise) E00597 (19 December 2003)

EXCISE DUTY  —  excise goods and truck transporting goods seized at Dover on return to UK  —  truck restored on payment of fee in the amount of duty sought to be evaded  —  goods condemned as forfeit by the court  — appellant contending before tribunal that goods purchased in Belgium for his own use —  attempted deception found to have been practised by appellant with a view to evasion of duty  —  held on facts to be reasonable for Customs review officer to conclude that vehicle should not be restored save on payment of fee in the amount of the duty sought to be evaded — appeal dismissed     

MANCHESTER TRIBUNAL CENTRE

 
 	
	 ROGER ALAN UPTON 	Appellant

	- and -

	THE COMMISSIONERS OF CUSTOMS AND EXCISE	Respondents

							
						
Tribunal:	Mr M S Johnson (Chairman)
					Mr R Grice

Sitting in public in Birmingham on the 30th October 2003

The Appellant appeared in person

Mr J Puzey, counsel instructed by the Solicitor for the Customs and Excise, for the Respondents

	© CROWN COPYRIGHT 2003

DECISION
1.	This is an appeal under section 16 of the Finance Act 1994 (“the 1994 Act”) against a decision of the Commissioners of Customs and Excise (“Customs”) not to offer restoration of a seized vehicle other than on payment of a fee of £2,170.00.  The vehicle, a Renault Magnum Tractor Unit, Registration No L975 WGO (“the truck”) was seized at Dover Eastern Docks on 5 September 2001.

2.	The appellant gave evidence before the tribunal and was cross-examined by Mr Puzey, counsel appearing for Customs.  The tribunal did not hear from any other witness; however we also had the benefit of a folder of copy documents relevant to the appeal handed in by Mr Puzey.  This folder contained inter alia an unchallenged witness statement from Mr Andrew Simon Trollope, an employee of P & O Stena Line Limited, and formerly an employee of P & O European Ferries (Dover) Limited, giving evidence of cross-channel vehicle freight movements for the truck.  The folder also contained unchallenged witness statements from the Customs officer who conducted the review in this case, Mr Raymond Alfred Payne, and from Mr Gerry Dolan of Customs, as to the then policy of Customs in these cases.

3.	The following are the facts as we have found them to be. 

4.	The appellant was on 5 September 2001 driving the truck back from the continent on behalf of his employers.  He was transporting a load of chipped potatoes in the trailer attached to the truck.  He had with him in the cab of the truck a quantity of excise goods (“the goods”) consisting of the following:

14 Kg hand-rolling tobacco;
6,000 cigarettes. 

He had bought these at a tobacco outlet in Adinkerke, Belgium.

5.	On the appellant’s arrival in Dover from France, Customs had regard to the Excise Duties (Personal Reliefs) Order 1992 SI 1992/3155 (“the PRO”), which was then in force.  Under article 3 of the PRO, a community traveller entering the UK was relieved from payment of any duty of excise on excise goods obtained for his own use in the course of cross-border shopping and which he had transported.  The intention of the PRO was to give proper effect in UK domestic law to EC Council Directive 92/12 (“the Excise Directive”).  

6.	An officer of Customs interviewed the appellant.  The appellant relied upon his right in European Law freely to transport excise goods for his own use between member states of the European Community without payment of excise duty in addition to that paid when he bought the goods in Belgium.  He maintained that the goods were for the personal use of himself and his wife, with occasional gifts for members of his family.  He told Customs that he smoked 80 to 100 cigarettes per day, that his wife smoked 60, and that he had had £2,000 to spend.  He said that he had bought the amount of tobacco goods that he could afford.  

7.	Customs were not satisfied with what the appellant had told them, so they seized the goods for the following stated reasons:

•	the goods exceeded in quantity the indicative levels specified in the Schedule to the PRO;

•	the appellant was aware of those levels;

•	the stated consumption rates for the goods appeared to be excessive;

•	the appellant had admitted that he had attempted to deceive Customs in not informing Customs that the goods were in excess of the indicative levels; and

•	the appellant had concealed the goods in the truck.

8.	Customs also seized the truck itself, in reliance upon section 141 of the Customs and Excise Management Act 1979 (“the 1979 Act”).  Restoration of the truck was however immediately offered by Customs on payment of a fee of £2,170.00.  That fee was paid and the truck was restored to the appellant’s employers.

9.	On 21 September 2001, the appellant wrote to Customs applying for the return of the goods and for the repayment of the restoration fee.  In his letter, the appellant stated that the goods had been brought into the UK for his and his wife’s personal use.  Customs replied by letter dated 3 October 2001, stating that condemnation proceedings would be instituted under Schedule 3 of the 1979 Act in respect of the goods.  We were informed that in due course, by order dated 1 May 2002, the goods were condemned as forfeited by the court.  We were not shown a copy of that order.

10.	It is not open to this tribunal to investigate the legitimacy of the matters considered and ruled upon by the court:  see  Gora v C & E Comrs [2002] V & DR 49;  [2003] EWCA Civ 525 (Court of Appeal, 11 April 2003).  We emphasize this point because it was suggested before us by the appellant that the correct procedures had not been followed by the court.  If that is correct – and we express no view – the appellant’s remedy would have been to mount an appeal against the ruling of the court.  For our part, we cannot properly reopen the matter of forfeiture of the goods.  

11.	The appellant is however entitled to raise before the tribunal the issue of private use for the purposes of seeking to invoke the discretionary procedure of restoration:  see  C & E Comrs v Dickinson [2003] EWHC 2358 (Ch) (15 October 2003), per Peter Smith J at paragraph 49.  That is what the appellant seeks to do before us.  In effect the appellant submits:

“I agree that the goods were condemned as forfeit; however when the circumstances of my case are looked at in the context of whether there should have been restoration, this is a proper case for restoration, and I invite the tribunal to allow the appeal on that basis”.

12.	Customs seemingly proceeded to the review stage, that is, the stage contemplated by section 15 of the 1994 Act, without express invitation from the appellant to do so.  One can see this from Customs’ letter to the appellant dated 9 October 2001, which treats his letter of 21 September 2001 as a request for a review of a previous decision.  Mr Payne’s witness statement indicates that Customs regarded the appellant’s letter as an implied request for a review of the decision to restore the truck on payment of a fee of £2,170.00.   We agree that the appellant’s letter could be so construed.  In any event, it is clear that, by implication, Customs had not been prepared to offer restoration of the truck without fee, otherwise they would not have sent the decision for review.  

13.	A further complication is that the review, when it was forthcoming, was not notified to the appellant within 45 days, the period contemplated by section 15(2) of the 1994 Act.  The review letter itself was dated 27 November 2001, which was more than 45 days after 9 October 2001, let alone 21 September .  That means that Customs are to be assumed to have confirmed the decision required to be reviewed.  Again, we think it right to presume that that would be the decision to offer restoration of the truck only on payment of a fee of £2,170.00.

14.	A still further complication is in the form of a letter from Customs to the appellant dated 15 October 2001.  That letter stated that Customs could not consider restoration (presumably of the goods) until the appeal (which we take to mean the condemnation proceedings) had been concluded or withdrawn.  For that reason, the review letter, when it was forthcoming, was expressed to deal only with the matter of the fee for the restoration of the truck, and not with the restoration of the goods. 

15.	The Notice of Appeal was dated 21 December 2001, and was expressly against the decision dated 27 November 2001.  It seems to us that the appellant was not debarred from appealing that decision at that moment in time by any of the matters mentioned.  The review letter, irrespective of its date, evidenced that the decision of Customs had been not to offer restoration without payment of the restoration fee.  Customs treated themselves as having been required to conduct a review, whereby section 14 of the 1994 Act (the need for a requirement for a review) was treated as having been satisfied.  Those matters suffice in our opinion for the appellant to have come within section 16(1) of the 1994 Act (the right to appeal to this tribunal).  

16.	In particular, if a review decision has been forthcoming, even if not within the 45 days, it is our reading of the 1994 Act that an appellant can appeal against that decision.  He is not obliged to appeal against the assumed decision provided for by section 15(2).  If there was an original decision not to restore in respect of which a review was required, and the review was not notified within the 45 days period, an appellant can appeal against the deemed confirmation of the original decision.  But he does not have to do that.  He can instead appeal against the review decision belatedly made, as has happened in this case.  

17.	The review letter, written by Mr Payne, reviewed Customs’ notes of the interviews conducted at the port with the appellant; the contents of the PRO, the 1979 Act and the 1994 Act, so far as relevant; Customs’ restoration policies with regard to seized freight vehicles and excise goods (the latter for information only); and what were considered to be the salient circumstances of the case.  The letter concluded as follows:

“For the reasons given, I exercise my opinion to uphold the Officer’s decision [sic].  The vehicle was restored to you/ your company for a fee of £2,170.00.  If you are dissatisfied with the outcome of this review you may now lodge an appeal with a VAT & Duties Tribunal … ”.

18.	The “reasons given” for the review decision were expressed on the final and penultimate pages of the letter.  They can be stated succinctly as follows:

•	When stopped and questioned, the appellant failed to declare the full amount of the goods.  The appellant only told the Customs officer about the additional goods when it became apparent that the cab of the truck would be searched and the goods found.

•	The appellant made it clear at the time that he knew about the “guidelines” for excise goods specified in the PRO.  He knew that he was transporting greater quantities than those specified in the “guidelines”.  Yet the appellant did not inform the officer of this at the outset.

•	The appellant admitted to the officer that he had lied to the officer, due to the appellant’s “naïveté or stupidity”, and that he would not have mentioned the full extent of the goods unless the Customs officer had made to search the cab.

•	When it was put to the appellant that it was his intention to deceive Customs, the appellant replied, “I suppose so”.            

19.	The review letter stated that, in Mr Payne’s opinion, it was reasonable for the Customs officer to have believed that the appellant had misled him as to the true quantity of goods being imported, and for the officer to have been dissatisfied with the appellant’s account.  

20.	Mr Payne wrote that, given the appellant’s actions and the answers he gave to the officer, he was satisfied that Customs’ policy in relation to the seizure of freight vehicles had been correctly applied in the case of the truck.   That policy was, on the first occasion of seizure, to have restored the truck on payment of the revenue evaded, which had been done.  £2,170.00 was the amount of that duty and the correct fee for restoration.

21.	We have listened to the appellant’s account of what happened on the day of the seizure, and to his comments about the interviews he had.  We have studied the copies of the notes of the interviews contained in the folder produced for the tribunal hearing.  It does appear to us that the appellant made the statements attributed to him by Mr Payne, and acted in the manner described by him in his review letter.  Indeed, the appellant admitted to us that he had lied to Customs as alleged.  

22.	The appellant denied in tribunal that he had hidden the goods – he said that they had just been placed where they were so as not to slide about on the flat floor of the cab. However the fact remains, as we find, that he would not have admitted to the totality of the goods had the Customs officer not wished to search the cab.

23.	It appears that the appellant was a regular traveller to the continent, by virtue of his work as a goods vehicle driver.  We find that the frequency of his trips fluctuated from the norm of about once a week to three or more times a week.  He therefore had considerable opportunity to bring back quantities of excise goods with him from the continent, should he so choose.

24.	The appellant informed us that he had brought back a lot of tobacco and cigarettes on this occasion because he thought that he would be changing his job and not going abroad again.  He said that he therefore took with him more than his usual amount of money to spend, seeing that his proposed purchase of a blue & gold macaw from JJ’s Baby Birds, of Ilkeston, Derbyshire @ £1,000.00 had fallen through .  

25.	This explanation seems to us to be somewhat disingenuous, given that, as the appellant informed us, and as Mr Trollope’s evidence made very clear, the appellant in practice continued to travel abroad in much the same way as before.  The fact that the appellant might have changed jobs, so as no longer to be travelling abroad, seems to us to be insufficient to justify a genuine belief that one should “stock up” on tobacco goods against that eventuality.  Moreover it does not seem to us to be clear why the non-acquisition of the macaw should lead to the expenditure of the money earmarked for that purpose on tobacco goods instead. 

26.	On behalf of Customs, Mr Puzey reminded us that, as provided in section 16(4) of the 1994 Act, the tribunal only has power to intervene where it is satisfied that the decision of Customs could not reasonably have been arrived at.  He submitted that the appellant was neither naïve nor stupid, but was well aware of the procedure at the port, and that he had deliberately set out not to declare the goods.  Customs were justified in regarding the present case as an instance of attempted evasion.  That being so, it was reasonable to offer restoration of the truck only on payment of the restoration fee.

27.	The appellant, for his part, said that the court ordering condemnation had got it all wrong.  Had he enjoyed an opportunity to put his case fully, the court would have been satisfied that the goods were for his own use.  That was what he was telling the tribunal today.  That being so, the truck should not have been seized, and it was not in order for Customs to have demanded a fee as the price of its restoration.  

28.	Having seen and listened to the appellant, we agree with Mr Puzey that the appellant is and was in reality neither naïve nor stupid.  We think that he was caught out by Customs and, to his credit, admitted that he had misinformed the officer initially as to the volume of the goods.  We think that he was right to admit, as in effect he did, that he had attempted to deceive Customs.  That is indeed our assessment of the position.

29.	Nevertheless it might have been possible for us to be satisfied, in the absence of the deception, that the volume of goods was such that they would have been consumed solely by the appellant and his wife, with occasional gifts for members of his family.  That is, however, not the question in this appeal.  The question is, was the seizure of the truck, and its restoration only on payment of the fee demanded, justified in the light of the appreciation by Customs, as expressed by Mr Payne in his review letter, that attempted deception had been practised?

30.	A person who has nothing to hide does not set out to deceive.  Deception is practised for a purpose, namely to obtain for the deceiver an outcome better than otherwise he would have any right to expect.  There were only two possibilities in law as regards the goods: either they were dutiable as goods held or used for a commercial purpose, or else they were for the appellant’s own use and so not dutiable .   The latter result would not require deception; the former might, if one wanted to evade payment of the duty due.

31.	It seems to us that the appellant well understood this distinction.  In a nutshell, was it reasonable for Customs to conclude, on the facts of this case, that the appellant was deliberately engaged in attempting to evade duty?   We think that it was.

32.	Against that background, we cannot think that there was anything unreasonable in Customs seizing the truck and only restoring it on payment of the duty evaded.  After all, the appellant’s employer has ended up with the truck, and Customs have received no more than the amount of duty evaded, which was theirs by right in the first place.  

33.	The goods themselves are not the subject of this appeal, but if they were, we would have needed some persuading that they should be restored to the appellant, given that, in our appreciation, they were justly condemned as forfeit.  A case such as the present, where deception has been practised, would not normally come anywhere close to justifying restoration.

34.	This appeal is therefore dismissed.  No application for costs was made, and none are awarded.              

M S JOHNSON 
CHAIRMAN
RELEASE DATE:

MAN/2002/8008