Donnelly v Revenue & Customs  UKVAT(Excise) E00981 (16 August 2006)
EXCISE DUTY – restoration of vehicle and excise goods – minibus driver making frequent trips with same or similar passengers – whether his goods were for own use – no – appeal dismissed
LONDON TRIBUNAL CENTRE
PHILIP JOHN DONNELLY Appellant
- and -
THE COMMISSIONERS FOR HER MAJESTY'S
REVENUE AND CUSTOMS (No.2) Respondents
Tribunal: DR JOHN F AVERY JONES CBE (Chairman)
PRAFUL DAVDA FCA
Sitting in public in London on 7 August 2006
The Appellant in person
Sarajbit Singh, counsel, instructed by the Acting Solicitor for HM Revenue and Customs, for the Respondents
© CROWN COPYRIGHT 2006
(1) The Appellant was stopped at Dover on 5 February 2005 as the driver of the minibus carrying eight passengers. In total the vehicle contained 19,400 cigarettes, 86.8 kilograms of hand-rolling tobacco, 1,000 cigars and 20.25 litres of wine. The Appellant had purchased 1,400 cigarettes (1,000 Superkings Menthol and 400 Marlboro Red), 5 kg of Old Holborn tobacco, 2 cases of wine and 4 cases of beer. The guide levels at the time were 3,200 cigarettes and 3 kilos of tobacco. Customs seized the vehicle and the excise goods.
(2) Customs made a decision not to restore the Appellant's goods or the vehicle on 7 March 2005 which was confirmed on a review on 25 April 2005, against which this appeal was brought on 24 May 2005. None of the passengers applied for restoration of their goods.
(3) The Appellant had recently started to operate a minibus service. He was previously a gas fitter but his registration ran out in August 2005 and he knew that he was not fit enough to renew it. He charged the passengers £25 each for the journey that day, a total of £200. He said that he considered that this was an economic price and that he had enquired what a coach company would charge and was told £20 per passenger. He could charge more because he picked up the passengers individually. The minibus ran on diesel which was economical and he would make a profit before overheads of £100 per trip which he considered realistic. He also received tips. Although Mr Singh suggested that the price was uneconomic in the absence of other evidence we accept the Appellant's evidence.
(4) The officer's note of what the Appellant said when stopped was that he had:
"been to Calais and Be[lgium] for shopping, cigs, tobacco, beer, wine, [illegible] etc he owns vehicle for 1 year. People are all friends from Southend British Legion. He has 12x cigarettes + some tobacco—total of approx 90x cigarettes + 4-5 boxes tobacco. Last trip was before Christmas."
(5) The Appellant said that his answer about the passengers being friends from the Southend British Legion was that they were friends of each other, not of him, and that he only knew Mr Gaitens. When answering that the last trip was before Christmas he said that he thought the officer was asking what was the last time he had travelled in the last year . We consider that both these explanations are improbable and we do not accept them. We find that the Appellant intended to mislead the officer about these points.
(6) The quantities of goods recorded by the officer are difficult to understand and so we do not place any weight on them. The Appellant correctly declared a total of 7 cartons of cigarettes at interview, which does not agree with the 12 recorded; we consider that it is most unlikely that he would have declared more than he had. The totals may relate to the whole party but given the 86.8 Kg of tobacco in total which must have been visible we doubt if the Appellant was declaring that the total was 4 or 5 boxes (we believe of 5 Kg).
(7) At his subsequent interview the Appellant said that the tobacco was for himself and would last 6 months as he smoked 3 to 4 pouches a week; that the cigarettes were for himself; that he last travelled to Belgium or France a couple of weeks previously with the majority of the same people; that he had travelled six times in December 2004, January 2005 and on that trip on 5 February 2005; and that on three of these trips tobacco was purchased.
(8) The Appellant said he did not know what the passengers had bought but Mr Butler said that he gave the driver [the Appellant] money to purchase goods on his behalf while he was in the pub. The Appellant denies that he did this and wrote to Customs after speaking to Mr Butler on the telephone that "He [Mr Butler] said that he gave the money to Mr Stevens to buy them but thought it sounded better to say the driver." We find that, in view of the fact that Mr Butler has not verified this himself even in a letter, this is improbable and Mr Butler's initial statement was true. However, we find that the Appellant did not know the quantities that each passenger had bought and so his answer was essentially true and he did not intend to mislead the officer. The approximate quantity of excise goods must have been apparent to the Appellant. 86.8 Kg was a considerable quantity. A box of 5 Kg was produced at the hearing which must have measured about 18 by 12 by 12 inches and the total quantity is more than 17 of these. The Appellant said that the goods were in black bags holding 100 pouches (total 5 Kg), not in such boxes. We find that the Appellant was aware in general terms of the quantity of tobacco in the minibus.
(9) Of the other passengers, Ms Liggins stated that she had last travelled in the minibus was in summer 2004 but at interview she accepted that she had travelled seven times since November 2004, on 16 and 25 November, 2, 10, 18 December and 5 and 22 January 2005. Mr Dixon initially said that he had purchased 30 pouches of tobacco whereas at interview he said that it was 200 pouches. Ms Allen admitted in interview that she had lied about the amount of goods at the initial questioning.
(10) Customs stated in the review letter that the Appellant was registered as keeper of three other vehicles, a Bedford van, a Seat Ibiza and a Ford Fiesta. We accept the Appellant's evidence that the Seat had been scrapped by the local authority two years earlier and that the Fiesta belonged to his son (Philip James Donnelly).
(11) The excise goods had a shop value in the UK of over £20,000, and the duty is over £12,000. The Appellant told us, and we accept, that the minibus cost £7,600 a year before.
(12) Customs' policy for a coach company is not to seize the coach on the first occasion it has been used to bring in excessive quantities of excise goods, but to interview the company and request passenger lists. If on a subsequent occasion more than half of the passengers were involved the coach would be seized and restored on payment of the duty evaded, but if the driver or an employee of the coach company were involved the coach would not be restored.
(1) His excise goods were for his own use.
(2) Refusal to restore the vehicle is disproportionate and he has suffered undue hardship in not being able to replace it and accordingly not being able to continue his minibus business.
(1) That the shared purpose of the trip was to import excise goods for resale. Three of the passengers admitted to lying about when they had travelled or what they were bringing in. The Appellant made false statements that he did not ask the passengers what they had purchased whereas, as we have found, he purchased goods on behalf of Mr Butler; and in relation to the passengers being his friends and the time of the last trip. The price charged by the Appellant was uneconomic and must have been made up by selling the goods (we have not found this). Since the Appellant had travelled six times in a little over the previous two months it is unlikely that he would purchase six months' worth of tobacco for his own use. The Appellant must have been aware that the vehicle was being used to smuggle excise goods.
(2) Refusal to restore the excise goods was proportionate. Customs' policy of non-restoration of goods for commercial purposes was accepted as lawful in Lindsay v Customs and Excise Commissioners  1 WLR 1766. While accepting that the Appellant would suffer hardship there were no exceptional circumstances as the Appellant was registered as the keeper of three other vehicles (we have found it is one vehicle).
"In relation to any decision as to an ancillary matter, or any decision on the review of such a decision, the powers of an appeal tribunal on an appeal under this section shall be confined to a power, where the tribunal are satisfied that the Commissioners or other person making the decision could not reasonably have arrived at it, to do one or more of the following, that is to say—
(a) to direct that the decision, so far as it remains in force, is to cease to have effect from such time as the tribunal may direct;
(b) to require the Commissioners to conduct, in accordance with the directions of the tribunal, a further review of the original decision;…."
JOHN F AVERY JONES
RELEASE DATE: 16 August 2006