First-tier Tribunal (Tax)

[2009] UKFTT 255 (TC)

TC00203

Appeal numbers LON/2007/8104-8108

EXCISE GOODS – appeal against non-restoration – appeal dismissed.

FIRST-TIER TRIBUNAL

TAX

                                             ANNA CZARNECKA

EWA KWIECIEN

MAREK ZASADOWSKI

KONRAD ZAPRZALA

WIESLAW KOLUCH

                                                                                                            Appellants

                                                                      - and -

                                 THE COMMISSIONERS FOR HER MAJESTY’S

                                                   REVENUE AND CUSTOMS               Respondents

                                                TRIBUNAL: Judge Richard Barlow

Sitting in public in London on 21 July 2009.

Mr Koluch appeared in person.  None of the other appellants appeared.

Rupert Jones of counsel instructed by the General Counsel and Solicitor to HM Revenue and Customs for the Respondents

© CROWN COPYRIGHT 2009

DECISION

1.     The appellants in this appeal have appealed against the respondents’ refusal to restore to them quantities of alcohol and, in the case of Mr Koluch only, against the respondents decision to restore to him a motor vehicle only on payment of £900 by way of a condition attached to the restoration.

2.     Only Mr Koluch attended the tribunal hearing, and though he claimed to be representing the other four appellants as well as himself, they had not complied with rule 11 of The Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (the Rules).  I decided to hear the appeals of the other four appellants being satisfied, as required by rule 33 of the Rules, that they had been properly notified of the hearing and it being in the interests of justice that the appeals should be considered on their merits rather than being dismissed summarily.  I treated the other appellants as being unrepresented.

3.     Mr Jones did not challenge the appellants’ entitlement to contend that the goods were liable to seizure, even though they had not required the respondents to begin condemnation proceedings.  He made it clear that that was because, in this case, it was accepted that there would be no abuse of process in doing so because of the difficulties the appellants had as non-English speakers (or speakers of limited English) and non-Residents.

4.     All five appellants arrived at Ramsgate on 3 June 2007 travelling in the Transit Van; the conditional restoration of which is under appeal in Mr Koluch’s appeal.   The van was carrying 45 litres of spirits and 490 litres of beer of various brands.

5.     Such interviews of the appellants as the respondents were able to conduct were carried out in part in English, which some of the appellants could speak to some extent, or with the help of an interpreter via a telephone link.  That is not an ideal situation but I find the facts to be as follows.

6.     A customs officer spoke to Mr Zaprzala and he said “there are five of us and it (the alcohol) belongs to all of us”.  The officer asked that the goods be placed in five piles so that the individual owners could be identified.  That was done and Mr Koluch produced eight receipts showing that the alcohol had been purchased in Poland.  Mr Zaprzala said “we all paid” and Mr Zasadowski said that he had paid 2000 zlotys though the other appellants said they had paid 1,000 zlotys each (or thereabouts).  The total amount paid was 5,000 zlotys in round terms so there was a contradiction in Mr Zasadowski’s statement compared with what his fellow travellers were saying about payment.  Each of the appellants was then claiming to have imported equal quantities of alcohol though Mr Koluch said in evidence that he was importing 5 litres and the others were importing 10 litres each.

7.     Mr Zaprzala had with him a letter from the Polish Consulate in London addressed to Mr Koluch, which was translated for me by the interpreter who interpreted for Mr Koluch at the hearing, summarising accurately the legal position about the importation of alcohol from EU Member States into the UK.  In particular it mentions that an unlimited amount of alcohol can be imported if duty has been paid in another Member State and it is for the importer’s personal use.  It also mentions the guideline amounts referred to in the legislation.

8.     Mr Zaprzala said it was the first time he had travelled to the UK, which the respondents alleged was untrue because goods had been sized from him before, but I find that that was a mistake on the respondents’ part because the previous seizure was from a person with a different first name.  Whether or not it was the first time Mr Zaprzala had visited the UK I cannot say but the basis on which the respondents alleged that he lied was clearly incorrect.

9.     I should mention that the respondents also alleged that all the appellants had sent notices of appeal from Mr Koluch’s address which was also incorrect.  The addresses were similar but not the same.

10.  Mr Koluch told the officer he was intending to stay in the UK for about a week and that the alcohol that was his was “for his son”.  He readily admitted that he had had excise goods seized from him on an earlier occasion.  The officer saw a document that suggested the vehicle was due back in Poland on 8 July.  At one point Mr Koluch is recorded, in the officer’s notebook, as having said that he was importing 19 bottles of spirits which would contradict what was said and implied by the appellants when they were interviewed and /or stood by their piles of goods to indicate that each had imported the same quantity.  Mr Koluch insisted, when giving evidence, that he had said that he was importing 5 litres of spirits.  However, he did contradict what he had said when asserting that all the spirits were for his son by saying, in evidence, that only the majority of it was for his son and that he intended to keep one and a half litres.  He described the reference to 19 bottles as a misunderstanding but did not deny that he had said it.  At least some of the spirits were in half litre bottles but there is still a contradiction in Mr Koluch’s reference to 19 bottles on the one hand but 5 litres on the other, even if all 19 bottles were half litres.

11.  The alcohol and the vehicle were seized in the presence of the appellants and the officer making the seizure gave the following reasons. 

12.  The goods were on a single receipt.  As there were in fact eight receipts I take it that what the officer really meant was that the goods were on receipts that did not distinguish between the five owners.  I note that all the receipts show the same client reference number and Mr Koluch admitted when he gave evidence that he had paid for all of the alcohol though he said that was because it was he who had the account with the vendor which was a cash and carry business. 

13.  The second reason for the seizure was that the importers were unable to substantiate which goods belonged to which of the appellants.  This is certainly borne out to a degree by Mr Zasadowski’s mistake about what he paid.  It is also relevant to consider that some at least of the appellants were only coming to the UK for a few days.  The vehicle was due back in Poland within a few days and so the quantities of alcohol far exceeded what the appellants would consume during their intended short stay.  Mr Koluch admitted that only two of the appellants were intending to stay in the UK for more than a few days.   

14.  The third reason was that the vehicle had been used for smuggling before.  In fact that appears to be incorrect.  Mr Koluch had been the driver of a similar vehicle that had been seized in February 2007 because it was pulling a trailer which had cigarettes concealed in false compartments but it was not the same vehicle.  The fact that Mr Koluch had been involved in smuggling concealed goods before is, however, very relevant to whether it was unreasonable for the respondents to refuse to restore the goods seized on this occasion and to their decision to restore the vehicle only on condition that a restoration fee was paid.

15.  The fourth reason stated in support of the seizure was that the vehicle was due back in Poland in a few days, so that the quantity of goods in question could not be for the importers’ own use.

16.   As already mentioned, the goods were seized in the presence of the importers so that no seizure notice was given but a single seizure information notice was given.  Subsequently, when all five importers appealed against the seizure of the alcohol the respondents took no objection to their right to do so and the appeal has proceeded on the basis that they did all own separate quantities of the goods.  It is still the respondents’ case that the goods were not for the own use of the appellants and that they were intended for a commercial purpose.  The appellants all submitted materially identical grounds of appeal in respect of the goods asserting that they were within the “permissible EU quota” which is clearly a reference to the guideline amounts in the legislation.  The grounds do not actually assert that the goods were for the appellants’ own use (or for free gifts) though clearly that is implied and I proceeded on that basis.

17.  The vehicle was not owned by Mr Koluch or any of the other importers.  It had been hired from a third party.  Initially the restoration fee had been set at £980 but that was reduced either because the respondents’ officers had damaged it while searching it (according to Mr Koluch) or because he only had £900 with him and he was allowed to have it restored for that amount as a concession (according to the respondents).  As I will be finding that the goods were liable to seizure and therefore that the vehicle was also liable to seizure and that the restoration fee was reasonable nothing turns on how the £900 fee was arrived at.

18.  I find that the circumstances of the importations fully support the respondents’ contention that the goods were liable to seizure.  The goods were bought in what was effectively a single transaction, about which the appellants made inconsistent assertions in a number of respects, in particular Mr Zasadowski’s assertion about what he had contributed to the cost and Mr Koluch’s inconsistencies about the quantity that was his and about what he was intending to give to his son.  The quantities far exceeded what might be required for the short stays that three of the appellants intended to make.  The burden of proof is upon the appellants so that, for those who did not attend, it is sufficient that the respondents are able to make out a prima facie case as far as the facts are concerned and I hold that they have achieved at least that; so that the appellants were obliged to answer that case but have wholly failed to do so.   

19.  In Mr Koluch’s case I have had the advantage of hearing his evidence.  He gave his evidence in an evasive and untruthful way.  In particular when questioned about the two previous occasions when he has been involved in importations of goods that were seized he claimed to have surprisingly limited recollections.  Goods were seized from him in December 2006 when he was driving a vehicle owned by his wife.  When he was asked if he had admitted he intended to sell those goods he replied “maybe”.  Then he said he did not appeal because he did not know how to appeal and then when he was pressed about having admitted he intended to sell the goods he replied “If there is a document saying that it will be true”.  When he was pressed to say what the goods were for he replied “I cannot recall now but probably for private purposes and let’s say if I said for the Polish community that is what I meant”.

20.   In February 2007 Mr Koluch was driving a vehicle which was pulling a trailer with concealed goods in it and when he was first asked about that he said that he had “assumed the responsibility” for it which appeared to suggest that he was not really to blame but when pressed he admitted that he had attempted to deceive Customs.  I find that his evasiveness in those replies further undermines any credibility his evidence had in this appeal.  That is to say that his evasiveness in giving evidence before me has undermined his evidence before me.  I am not basing my decision on the fact that he had smuggled goods before but rather upon the way he has given his evidence about the earlier incidents.

21.  My finding is that Mr Koluch’s alcoholic goods in this case were imported for a commercial purpose without payment of duty and I hold that that fact fully justifies the respondents’ decision not to restore them and that their decision not to restore them is entirely reasonable.  The imposition of a condition for the restoration of the vehicle is also fully justified on the basis that it is entirely reasonable for the respondents to refuse restoration of vehicles used for smuggling, particularly where the person concerned is fully aware that seizure of the vehicle is a likely consequence of smuggling, having been involved in such enterprises on two previous occasions.  Indeed in my view Mr Koluch was treated favourably by being allowed to have the vehicle restored at all. 

RICHARD BARLOW

TRIBUNAL JUDGE

RELEASE DATE: 8 October 2009