E01169

EXCISE DUTY – NON RESTORATION OF MOTOR VEHICLE – Customs Officers discovered 23,580 duty free cigarettes in the boot  of a vehicle parked on a  property owned by a Mr Ibrahim – cigarettes and vehicle seized – no Appeal against seizure – Appellant claimed that he was the owner of the vehicle and knew nothing about the cigarettes – Review Officer not satisfied that the Appellant was the owner – Appellant’s evidence on ownership contradictory and unsatisfactory  – review decision reasonable – Appeal dismissed

MANCHESTER TRIBUNAL CENTRE

	MOHAMMED SAJID SADDIQUE  	Appellant

	- and -

	HER MAJESTY’S REVENUE and CUSTOMS	Respondents

			Tribunal: MICHAEL TILDESLEY OBE	 (Chairman)
				      ROLAND PRESHO FCMA        (Member)	  

Sitting in public in Leeds on 8 January 2009

Kimberley Evans counsel instructed by Gateway Advisers appeared for the Appellant

Josh Shields counsel instructed by the Solicitor’s office of HM Revenue & Customs, for the Respondents

© CROWN COPYRIGHT 2009

DECISION
The Appeal
1.	The Appellant was appealing against the Respondents’ decision on review dated 18 August 2008 refusing restoration of a motor vehicle, Mercedes C180 SE registration number R4 WAF (hereinafter referred to as the vehicle).
The Dispute
2.	On 2 April 2008 the Respondents seized the vehicle along with 23,580 duty free  and foreign cigarettes discovered in its boot. At the time of the seizure the vehicle was parked on the driveway at 21 Briar Garth, Driffield, the home address of Mr Haydir Ibrahim and his partner. Mr Ibrahim did not appeal against the seizure of the cigarettes.
3.	The Appellant contended that he was the owner of the vehicle which he purchased from a Mr S Mohammed on 8 March 2008. The Appellant was in the business of selling and repairing motor vehicles. He stated that he bought the vehicle for onward sale. The Appellant claimed he had no room on his garage premises to store the vehicle which required repairing before sale, and, therefore, took up Mr Ibrahim’s offer to the park the vehicle on his driveway. The Appellant asserted that he did not give Mr Ibrahim permission to use the vehicle, and knew nothing about the illegal importation of cigarettes. The Appellant argued that the vehicle should be returned to him because he was an innocent third party.
4.	The Respondents were satisfied that the vehicle had been used in the unlawful importation of cigarettes. There had been no appeal to the magistrates’ court against  the seizure of the vehicle and the cigarettes. The Respondents were not satisfied that the Appellant was the owner of the vehicle, and, therefore refused restoration of the vehicle to him.
5.	The issue in dispute was whether Mrs Wiggs’ refusal to restore the vehicle was a decision which no reasonable body of Commissioners could have arrived at. In order for the decision to have been reasonable Mrs Wiggs (the review officer) must have considered all relevant matters and must not have taken into consideration irrelevant matters.   
The Evidence
6.	We heard evidence from the Appellant, Mr Mohammed who purportedly sold the vehicle to the Appellant, and Mr Ibrahim. We also heard evidence from the review officer, Mrs Wiggs. We received a bundle of documents in evidence.
The Review Decision 
7.	Mrs Wiggs placed no weight on the documents relied upon by the Appellant to prove ownership of the vehicle. The Appellant supplied a copy receipt from Mr S Mohammed which stated that  he sold the vehicle to the Appellant on the 8 March for £7,000, and a copy of one page of a V5 log book (DVLA registration certificate) for the vehicle which  was signed as being sold or transferred to the Appellant’s business, MS Auto’s Limited. Mrs Wiggs questioned the legitimacy of the receipt which appeared to have been drawn up by Mr Ibrahim. The V5 log book did not name the Appellant as the registered keeper. Mrs Wiggs was not satisfied that the Appellant was the owner of the vehicle, and in those circumstances the non-restoration of the vehicle was fair reasonable and proportionate.
8.	Mrs Wiggs indicated in her review letter that she would consider fresh information about the ownership of the vehicle which  included:
(1)	Details of where the vehicle was advertised for sale and how the Appellant discovered it.
(2)	Full details of the seller, Mr Mohammed.
(3)	Evidence of the tax status of the vehicle at the time of the seizure.
(4)	Full log book for the vehicle.
(5)	Evidence of the money used for the purchase of the vehicle by the Appellant, for example a bank statement, and business records.
(6)	Insurance cover for the vehicle at the time.
(7)	Details of the agreement the Appellant had with Mr Ibrahim about the vehicle and its use.
(8)	Any other documents the Appellant believed relevant.
The Evidence
9.	According to the Appellant Mr Ibrahim informed him that the vehicle was for sale on the AutoTrader website. The Appellant who was a motor trader and repairer bought the vehicle to sell on, which was why he registered the vehicle in the name of his business.  The Appellant purchased the vehicle for £7,000 cash, £3,000 of which he borrowed from a friend named John, and £1,000 from another friend by the name of Al. The Appellant did not know the surnames and addresses of the friends from whom he borrowed the money. The Appellant did not carry out any checks on the ownership of the vehicle before he bought it.
10.	As it was a cash sale the Appellant could produce no bank statement to evidence the sale. The Appellant first denied that he held any business records of the purchase, but when it was pointed out by the Respondents’ counsel that these records were necessary for income tax purposes the Appellant changed his account, asserting that the purchase of the vehicle was recorded in his business records.
11.	The principal document relied upon by the Appellant to evidence the sale was a receipt from a Mr S Mohammed  which stated that he sold the vehicle to the Appellant for the sum of £7,000. The receipt was signed by Mr Mohammed and dated 8 March 2008. Mr Ibrahim accepted that he wrote out the receipt which was in his handwriting. According to the Appellant, he did not have time to collect a receipt for the purchase monies when he bought the vehicle, so he asked Mr Ibrahim to collect the receipt for him. Mr Mohammed, on the other hand, said that he signed and gave the receipt when the monies were handed over.
12.	Mr Ibrahim accepted that he had written out a second receipt dealing with a purported sale of another car seized at the same time as the vehicle. This other car was a Fiat Punto which was used by Mr Ibrahim’s partner. According to Mr Ibrahim he was in a state of panic when the vehicles were seized, particularly as he was left with no car to drive. His partner needed the Fiat Punto to attend work, so he came up with the idea that if he drafted a receipt evidencing a sale of the Fiat Punto to his partner, he might be able to get this car back. Mr Ibrahim admitted that he owned the Fiat Punto and that no sale took place to his partner. 
13.	The Appellant stated that he did not buy the vehicle on the first occasion when he saw it because he did not have the money. According to Mr Mohammed, the person who sold the vehicle, the Appellant purchased the vehicle on the first occasion. 
14.	The Appellant stated that he did not advertise the vehicle for sale after purchasing it because it required repairs. The Appellant, apparently did not have the parts to repair the vehicle and could not afford to buy them despite the fact that he was a motor repairer by trade. The Appellant stated that he could not keep the vehicle at his business premises because of the lack of space, and as the tax was about to run out on the vehicle he arranged for it to be parked on the driveway belonging to Mr Ibrahim in Driffield which was some 20 miles from the Appellant’s garage premises in Hull. The Appellant gave Mr Ibrahim the keys for the vehicle but did not permit him to drive it or store cigarettes in the vehicle. The Appellant was unable to produce any documents evidencing the restrictions placed upon Mr Ibrahim’s use of the vehicle. 
15.	The Appellant and Mr Ibrahim gave conflicting accounts about whether Mr Ibrahim would attempt to find a buyer for the vehicle whilst it was parked on his driveway. Mr Ibrahim explained that his business was buying and selling things for others for which he charged a commission. Mr Ibrahim apparently acted for Mr Mohammed in the purported sale of the vehicle to the Appellant. Mr Ibrahim stated that one of the reasons for taking the vehicle to Driffield was that there was a greater prospect of a sale because Driffield was a wealthier area than Hull. The Appellant in his evidence denied that the vehicle was to be sold in Driffield. 
16.	The Appellant produced a document entitled Industry Standard Service in relation to the vehicle which was completed by a Paul Allen, a mechanic employed by the Appellant on the 1 March 2008. The Appellant asserted that this document showed that he had examined the vehicle before purchasing it. However, closer inspection of the document and its title demonstrated that it was a record of a service carried out on the vehicle by the Appellant’s mechanic. The Appellant denied that this was the case stating that his mechanic was unreliable and had been subsequently dismissed from his employment. Also Mr Mohammed, the purported seller of the vehicle said in evidence that he had not seen or met the Appellant before the date of the alleged transaction on the 8 March 2008.
17.	At the hearing the Appellant supplied a certificate of motor insurance which apparently covered the use of the vehicle. The certificate, however, did not advance the Appellant’s case as it was a motor trader’s certificate of insurance which covered the use of any vehicle by the Appellant for his business and domestic purposes. The certificate did not specify the vehicle in dispute.
18.	The Appellant also provided the DVLA registration certificate for the vehicle which recited M S Auto’s Limited, the Appellant’s trading name, as the registered keeper of the vehicle. The Appellant accepted that he had obtained the certificate  on 16 September 2008 after the vehicle was seized and in response to Mrs Wigg’s request for further documentary evidence for ownership. The extract of the registration certificate supplied by the Appellant at the time of Mrs Wigg’s review which recorded the transfer of ownership of the vehicle to M S Auto’s Limited did not assist the Appellant. According to the directions on the registration certificate the extract should have been sent by Mr Mohammed to DVLA. The Appellant offered no valid explanation for why he retained the extract.
Our Findings
19.	We find the Appellant’s explanation of the purchase of the vehicle wholly implausible. The Appellant did not know the surnames and addresses of the persons from whom he borrowed the monies to purchase the vehicle. He carried out no checks on the ownership of the vehicle prior to the purchase which we find surprising as he was in the motor trade. There were no documents evidencing the purchase except the receipt written by Mr Ibrahim, the authenticity of which was highly dubious in light of Mr Ibrahim’s admission that he presented a false receipt in respect of another car seized at the same time as the vehicle.  Finally the Appellant did not advertise the vehicle for sale despite it being bought purportedly for resale. The Appellant’s excuse for not advertising the vehicle was equally far-fetched in that he could not afford to repair it even though he was in the motor trade.
20.	 Significant parts of the Appellant’s testimony were contradicted by the evidence of his witnesses. Mr Mohammed gave a different account from the Appellant of the events surrounding the purchase. Mr Ibrahim asserted that he was asked to sell the vehicle in Driffield which was flatly denied by the Appellant.
21.	The documents produced by the Appellant to substantiate his claim of ownership did not advance his claim, and if anything undermined it. We placed no weight on the registration and insurance certificates. The Appellant accepted that the registration certificate was obtained after the Respondents refused restoration of the vehicle. The Appellant gave no credible explanation for having in his possession the transfer of ownership section of the original registration certificate. The insurance certificate did not specify the vehicle and was a general motor traders’ insurance. The Industry Standard Service document indicated that the Appellant had serviced the vehicle, not examined it as asserted by him, which carried the implication that the vehicle belonged to someone-else.
22.	We agree with Respondents’ counsel’s assessment of the Appellant’s evidence, namely, that it was a complete fabrication designed to mislead the Tribunal. 
Decision
23.	Our findings of fact supported Mrs Wiggs’s principal conclusion that the Appellant was not the owner of the vehicle. Further we find that the non-restoration of the vehicle was proportionate having regard to the facts that no challenge was made in the magistrates’ courts against the seizure of the vehicle and that a commercial quantity of duty free cigarettes was found in its boot.
24.	We are satisfied from our findings that the Respondents’ decision on review dated 18 August 2008 refusing restoration of a motor vehicle, Mercedes C180 SE registration number R4 WAF was reasonably arrived at within the meaning of section 16(4) of the Finance Act 1994. We, therefore, dismiss the Appeal.
25.	We give leave to the Respondents to apply for their costs against the Appellant, which must be made within 28 days from release of the decision.

                                

                                 MICHAEL TILDESLEY OBE
CHAIRMAN
RELEASE DATE: 23 February 2009

MAN/