[2010] UKFTT 364 (TC)

TC00646

Appeal number TC/2009/09798

EXCISE DUTY — traveller’s exemption — tobacco and car seized on entry to UK — seizure challenged but challenge withdrawn before condemnation proceedings begun — restoration of tobacco refused but car restored on payment — only reason advanced for restoration and remission of payment that goods for own use — appeal dismissed

FIRST-TIER TRIBUNAL

TAX

                            WILLIAM ASHWORTH and CATHERINE CONNOR

                                                                                                                            Appellants

- and -

                               THE UNITED KINGDOM BORDER AGENCY         Respondents

                            Tribunal:   Judge Colin Bishopp

                                               Rayna Dean FCA

Sitting in Manchester on 5 August 2010

The Appellants appeared in person

Mr David Griffiths, counsel, for the Respondents.

© CROWN COPYRIGHT 2010

DECISION

1.           This is the appeal of Mr William Ashworth and his friend, Mrs Catherine Connor, against the respondents’ refusal to restore to them cigarettes  and hand-rolling tobacco which was seized from them on 6 December 2008 at Hull Ferry Port. Mr Ashworth’s car, which had been used to transport the tobacco and cigarettes was also seized, but restored immediately on payment of £800. The refusal to restore the goods and the terms on which the car was restored were upheld by a review decision set out in a letter to the appellants dated 5 February 2009.

2.           The appellants were returning from a short trip to the continent when they were intercepted at the port. Although there was, and remains, some lack of clarity about the ownership of the goods, the review decision records (and the appellants did not dispute the record) that Mr Ashworth had 10 kg of hand-rolling tobacco and 1000 cigarettes, while Mrs Connor had 1200 cigarettes. They were separately interviewed by different officers and, following the interviews, their goods were seized. The principal reason for the seizure was that there were inconsistencies between the accounts given by the appellants of their smoking habits which led the officer who made the decision to the view that the tobacco products had been imported for a commercial purpose, that is for resale and not, as the appellants insisted, for their own use (that is, consumption by themselves or for gifts). The car was seized because it had been used for the transport of the goods, but offered for restoration on payment of its estimated value of £800 (about half the UK duty on the tobacco goods, of £1,545.59); Mr Ashworth accepted the offer. The officer was not satisfied that various alcoholic drinks which were also in the car had been imported for a commercial purpose, and the appellants were allowed to proceed with them.

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, and for reconsideration of the terms on which the car was offered for restoration. Their requests for restoration of the goods and for reconsideration in respect of the car were refused by letters of 14 January 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 decision which is 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 before the respondents commenced condemnation proceedings in the magistrates’ court, the appellants withdrew their challenges to the lawfulness of the seizures. It is in condemnation proceedings that the lawfulness of a seizure must be determined, in accordance with Sch 3 to the Customs and Excise Management Act 1979. As the appellants withdrew their challenges, the goods are deemed to have been lawfully seized (see para 5 of the same Schedule); and, as the only reason for the seizures 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 wished to put forward was, again, that the goods were for their own use, although they added that, despite appearances, Mrs Connor had been unwell and very distressed at the time of her interview and the apparent inconsistencies between their accounts were attributable to her condition. They also pointed out that they had abandoned their claims that the seizures were unlawful only because they were intimidated by the indication by the respondents that they would seek a substantial award of costs against them should the condemnation proceedings be determined 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 lawfulness 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 actually made by a 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. The position is a little different when the magistrates have not made a finding, either because there has been no challenge to the legality of the seizure or, as here, when the challenge has been withdrawn at an early stage. The authorities show 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. But that is not this case: Mr Ashworth and Mrs Connor made a challenge, but chose to abandon it.

7.           In Gascoyne v Customs and Excise Commissioners [2004] EWCA Civ 1162  Lord Justice Buxton said, at [26], that “in the tribunal you assume the correctness of the findings that the magistrates’ court did make or is deemed to have made”. That is why it is not permissible for the appellants to re-open the issue of “own use” before us. 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 which would excuse the abandonment by the appellants of their challenge, and allow them to raise the issue in this tribunal.

8.           For those reasons, the only argument the appellants have advanced is one we must discard. We have nevertheless considered whether the decision reached on review was one 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. As far as the tobacco and cigarettes are concerned, it is in our judgment impossible to see any basis on which we could conclude that it was 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 us), has applied the law correctly and has come to a decision which is not merely reasonable but inevitable. The respondents’ policy in relation to vehicles used for such importations is long-established and has been considered on many occasions in the tribunals and the courts. It is that on a first “offence” of this kind, the vehicle may be restored on payment of the duty sought to be evaded or, where the vehicle is worth less, its value. That is the course which was adopted in this case, and in our view it is impossible to criticise it.

9.           The appeal must, therefore, be dismissed.

10.        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:  6 August 2010