[2010] UKFTT 362 (TC)

TC00644

Appeal number TC/2009/15163

EXCISE DUTY — traveller’s exemption — tobacco seized on entry to UK — seizure challenged but challenge withdrawn and condemnation proceedings determined against appellants — restoration refused — only reason advanced for restoration that goods for own use — appeal dismissed

FIRST-TIER TRIBUNAL

TAX

                                    GRAHAM LYON and ANTHONY LYON                  Appellants

- and -

                               THE UNITED KINGDOM BORDER AGENCY         Respondents

                            TRIBUNAL:    Judge Colin Bishopp

Sitting in Manchester on 4 August 2010

Mr Graham Lyon represented the Appellants

Ms Ambereen Chaudary, counsel, for the Respondents.

© CROWN COPYRIGHT 2010

DECISION

1.           This is the appeal of Mr Graham Lyon and his son, Mr Anthony Lyon, against the respondents’ refusal to restore to them cigarettes  and hand-rolling tobacco which was seized from them on 3 May 2009 at Liverpool airport. The refusal was upheld by review decisions set out in separate  letters to the appellants, both dated 18 September 2009.

2.           The appellants were returning from a short trip to Barcelona when they were intercepted at the airport. Mr Graham Lyon had in his baggage 3,800 cigarettes, of two different brands, and 3 kg of hand-rolling tobacco, again of two different brands. Mr Anthony Lyon had 3,200 cigarettes and 3 kg of tobacco, in each case of a single brand. They were separately interviewed by different officers and, following the interviews, their goods were seized. The recorded reasons for the seizure were that there were inconsistencies between the accounts given by the appellants of their purchases, that the appellants had put forward implausible consumption rates, that they had given inaccurate accounts of their previous trips abroad and, in Mr Graham Lyon’s case, that he was making frequent trips with others, and that he had brought cigarettes and tobacco of more than one brand. In short, the seizing officer’s conclusion was that the goods had been purchased not, as the appellants insisted, for their own use (that is, consumption by themselves or for gifts) but for the commercial purpose of resale.

3.           The appellants challenged the legality of the seizure and at the same time asked for the restoration of the goods on the ground, in each case, that they were for their own use. Their requests for restoration of the goods were refused by letters of 29 June 2009, and each of the appellants then requested a review of the refusal, in accordance with s 14 of the Finance Act 1994. It was those requests which led to the decisions which are the subject of this appeal. The reason advanced by each appellant for review of the refusal was, again, that the goods were for their own use.

4.           In the meantime, and in response to the appellants’ challenge to the legality of the seizure, the respondents commenced condemnation proceedings in the Liverpool magistrates’ court. These are the proceedings in which the legality of the seizure must be determined, in accordance with Sch 3 to the Customs and Excise Management Act 1979. The proceedings were due to be heard on 21 January 2010, but at the last minute each of the appellants wrote to the respondents to the effect that he no longer wished to contest the case (meaning the condemnation proceedings) even though he maintained that the goods had been bought for his own use. The condemnation proceedings were thereupon determined against the appellants, and the goods were accordingly condemned. That determination means that the goods were lawfully seized: see para 6 of Sch 3. As the only reason for the seizure advanced by the respondents (and the appellants have not suggested any other) was that the goods had been purchased for resale, this tribunal must start from the position that they were correct in that view.

5.           In this appeal, the principal argument the appellants put forward was that the goods were for their own use, although they added that they were of good character, and were in comfortable circumstances with no need to supplement their incomes by selling in the United Kingdom cigarettes and tobacco they had bought more cheaply abroad. They also pointed out that they had abandoned their claims that the seizures were unlawful only because they could not afford the risk that there would a substantial award of costs against them.

6.           The difficulty which they (and, it must be said, many others in a similar position) face is that Parliament has prescribed two distinct courses of action which a person whose goods have been seized may adopt. He may challenge the legality of the seizure, or he may ask for restoration, or he may (as these appellants have done) do both. But they are distinct and separate courses: thus it is not open to this tribunal to re-visit the findings of the magistrates’ court; it must respect that finding, just as the magistrates may not trespass on this tribunal’s jurisdiction to hear appeals against refusals of restoration. I must treat the condemnation by the magistrates of the goods as a determination that they were lawfully seized because they had been imported for resale: as Lord Justice Buxton put it in Gascoyne v Customs and Excise Commissioners [2004] EWCA Civ 1162 at [26], “in the tribunal you assume the correctness of the findings that the magistrates’ court did make or is deemed to have made”. It is not, therefore, permissible for the appellants to re-open the issue before me; they had the opportunity of airing the matter before the magistrates, but failed to take that opportunity to a conclusion.

7.           The authorities do show, however, that the tribunal may consider arguments of “own use” in exceptional circumstances, that is when the person concerned has been prevented by circumstances beyond his own control from challenging the seizure in the magistrates’ court and would otherwise be deprived of any opportunity of a challenge. That is not this case.

8.           In  Gascoyne Lord Justice Buxton went on to consider the nature of the  exceptional circumstances which might make it possible for this tribunal to consider the question of own use, but at [46] he said “I do not think it can have been intended that the [appellant] before the tribunal would have a second bite at the cherry of lawfulness, having failed in the condemnation proceedings, or let them go by default.”  In Revenue and Customs Commissioners v Dawkin [2008] EWHC 1972 (Ch) Mr Justice David Richards made it clear that fear of an adverse costs order, an ordinary hazard of litigation, could not be considered an exceptional circumstance.

9.           For those reasons, the only argument the appellants have advanced is one I must discard. I should record that, once the position had been explained to him, Mr Lyon agreed that this appeal could not succeed. I have nevertheless considered whether the decisions reached on review were ones at which the respondents could reasonably arrive, that being the test prescribed by s 16 of the Finance Act 1994, the statutory provision which confers jurisdiction on this tribunal. It is in my judgment impossible to see any basis on which I could conclude that they were not. The officer who undertook the reviews has clearly considered all the available information carefully, has asked herself whether mitigating factors were present and found none (and there are none before me), has applied the law correctly and has come to a decision which is not merely reasonable but inevitable.

10.        The appeal must, therefore, be dismissed.

11.        These are full reasons for the decision. Any party dissatisfied by this decision may apply for permission to appeal to the Upper Tribunal. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party.

COLIN BISHOPP

Tribunal Judge

Release Date: 4 August 2010