E01066

EXCISE DUTY – restoration of goods – cigarettes – own use? – no – appeal dismissed.

MANCHESTER TRIBUNAL CENTRE

	DAVID JOPLING	Appellant

-	and –

	HER MAJESTY’S REVENUE AND CUSTOMS 	Respondents

				Tribunal: Richard Barlow	 (Chairman)
					      Warren Snowdon							

Sitting in public in North Shields on 18 July 2007.

The Appellant in person.

Miss McGlory of counsel for the Respondents.

© CROWN COPYRIGHT 2007

DECISION

1.	This appeal concerns a decision made by the Commissioners on 13 February 2007 by which they reviewed and upheld their earlier decision of 30 November 2006 not to restore to the appellant 13,980 JPS Black cigarettes which had been seized from him on 3 August 2006 at Durham Tees Valley Airport on his arrival from Palma, Spain.

2.	That decision concerns an “ancillary matter” as defined in section 16(8) of the Finance Act 1994 and is a decision falling within paragraph 2(1)(r) of Schedule 5 to that Act.  The decision under review relates to the Commissioners’ discretionary power provided by section 152 of the Customs and Excise Management Act 1979 to restore goods after seizure.

3.	The effect of section 16(4) of the Finance Act 1994 is that the Tribunal can only allow an appeal in a case like this if it is satisfied that the Commissioners’ decision was one that they could not reasonably have arrived at.

4.	It is established by authority that the Tribunal can make findings of fact and determine the issue of reasonableness in light of those facts as well as examining the basis on which the Commissioners acted.

5.	Where, as here, goods have been seized and have been condemned as forfeit because there have been no condemnation proceedings the Tribunal cannot re-examine the question of forfeiture as such but where the question whether the goods were for the importer’s own use is an issue in the case the Tribunal can examine that issue and make findings about it as long as to do so would not be an abuse of process or something akin to that.  

6.	In this case the issue of own use was raised but in light of our findings about it we need not decide whether there would be an abuse of process if we had allowed the issue of forfeiture to be re-opened.

7.	Council Directive 92/12/EC, amongst other things dealing with the general arrangements for products subject to excise duties, provides that where such products are imported for their own use by private individuals into a Member State the duty should be charged in the Member State where the goods were acquired.  In other words Mr Jopling was entitled, as he pointed out, to import as many cigarettes as he liked from Spain if they were imported by him as a private individual and were for his own use.  However, the Directive lays down that Member States must take into account, amongst other things, the number of cigarettes imported when deciding if they are for the importer’s own use and allows Member States to set a limit as a guide only and solely as a form of evidence above which the number will be relevant to the question of own use.  Member States are allowed to set that limit no lower than 800 in the case of cigarettes and the United Kingdom has set the limit at 3,200 by regulation 12 of The Tobacco Products Regulations 2001 (as amended).

8.	We must therefore decide the issue of own use on the basis that Mr Jopling was entitled to import any number of cigarettes for his own use but that we must regard it as relevant, though not a determining factor, that the number exceeded 3,200.  No ground for challenging the Commissioners’ decision or the review has been advanced other than that the goods were for own use.

9.	We heard evidence from Mr Jopling and examined a bundle of documents consisting of 44 pages and 6 additional pages submitted at the hearing by him.  We find the facts to be as follows.

10.	Mr Jopling found out about a cheap flight to Spain and went with a friend of his on a flight that left about 7am on 2 August 2006 and returned on a flight that arrived before 2.10 pm the next day (by which time he had been stopped by a Customs Officer for questioning).  He had made six or so short trips in the six or seven months before he was stopped and questioned and the last trip had been about one month before.  Not all of those trips were as short as this one and some were 2 or 3 day breaks taken with a group of friends.  Mrs Jopling had accompanied him on some of the trips.  He also admitted he had trips already booked at that time for October, November, December and January.

11.	Mr Jopling admitted he knew about the 3,200 guideline limit.

12.	He had been involved in previous Tribunal proceedings which it appears were adjourned and then HMRC agreed to pay money in lieu of restoration of cigarettes.  He denied that he had been told either then or on this occasion that he could challenge the seizure by requiring condemnation proceedings to be commenced in the Magistrates Court though he did admit being given a Notice that he did not read.  His solicitor had only told him after it was too late on this occasion.   

13.	Mr Jopling told us that he is unemployed and receives £170 per fortnight in state benefits and £50 a week compensation for a white finger condition.  He told us that his wife runs a seamstress business but denied knowing what her income from it is.  He also had an inheritance about four years earlier from his father consisting of £10,000 and a house that was sold for £17,000.  He produced a bank statement for the period from 29 January 2007 to 18 April 2007 with an opening balance of £7,364 and a closing balance of £6,402.

14.	He claimed that he smokes 60-80 cigarettes a day and that his consumption had been more at the time in question.  He claimed his wife smokes 20 cigarettes a day.  Even allowing for a joint consumption of 100 a day that would mean the cigarettes seized would have lasted nearly five months and given the frequency of trips before the seizure and the trips booked for dates after the seizure the question obviously arose as to why Mr Jopling had bought so many on this occasion.

15.	His explanation was that he had heard that the price would be going up in Spain though he did not say whether he had heard this before he set off.  In fact he found when he got there that the price was actually lower than it had been on the previous trip so he “bought extra”.  We find this to be implausible because Mr Jopling also said in interview that he had taken £1500 in sterling with him from cash he kept at his house.  He had converted currency into euros and spent the equivalent of £1125.  On that basis he could have bought even more cigarettes and they would have been consumed before they dried out if his level of consumption is to be believed. 

16.	Mr Jopling declined to sign the officer’s notebook at the airport though he did not dispute the accuracy of the record.

17.	We find as a fact that the cigarettes were not for Mr Jopling’s own use.  

18.	That is partly a matter of impression based on our observation of Mr Jopling as a witness but we also take account of the following.  The number of cigarettes purchased was large and given the frequency of the trips he made before this one and the number that were booked for dates after this one we regard his explanation of why he bought so many to be untrue.  Had it really been a case of buying while the price was low or before an expected increase we would have expected him to spend the money he had taken with him.  He took that amount with the intention of spending it on cigarettes as such a short trip would not have allowed for any great expenditure on other things and indeed Mr Jopling was at pains to explain how cheap the trips were.  The very short length of the trip and the contrast between the time in Spain and the time spent travelling and checking in and dealing with the other frustrations of air travel are inconsistent with Mr Jopling’s assertion that the trip was for pleasure as well as to buy cigarettes.  Mr Jopling said in interview that this trip cost him £160 which was more than the cost of some of the longer trips he described to us and given that it was in the high season that is not surprising but again we are not satisfied that he would have taken this trip for pleasure at that particular time of year when he had other trips booked at more relaxing times of year.  We find Mr Jopling’s description of his pattern of buying to be untruthful.  He claims to have bought relatively modest quantities on other earlier trips and yet at the same time to have said that on some occasions he has bought large quantities and again we find this to be untrue as there is no satisfactory explanation of why he would not buy at a steady rate given that he was travelling monthly and given that he had ample funds available to make purchases throughout the relevant period.

19.	It follows that the Commissioners’ initial decision and the review of it are not unreasonable and indeed are correct.  

20.	Miss McGlory addressed us about that question whether we should allow the question of own use to be considered at all and urged us to decide that question first but we preferred to hear the evidence and having reached a positive finding that the cigarettes were not for Mr Jopling’s own use we see no point in considering or reaching any conclusions about the reasons why he did not challenge the seizure in the Magistrates Court.  Miss McGlory is right to contend that that issue, if it arises, is logically prior to the issue we have decided but our decision on the substantive issue makes that prior issue irrelevant.

21.	The appeal is dismissed.  Miss McGlory did not seek an award of costs and we make no order.

CHAIRMAN

RELEASED: 20 September 2007

MAN/07/8015