First-tier Tribunal (Tax)

[2011] UKFTT  271 (TC)

TC01133

Appeal number TC/2010/01251

EXCISE GOODS – seizure of smuggled goods – seizure of motor car used - goods concealed and for commercial purpose – refusal of restoration upheld.

FIRST-TIER TRIBUNAL

TAX

RICHARD CARTER Appellant

- and -

THE DIRECTOR OF THE BORDER AGENCY Respondent

TRIBUNAL: RICHARD BARLOW

NICHOLAS DEE

Sitting in public at 45 Bedford Square, London WC1 on 11 March 2011

The Appellant did not appear.

Caroline Stone of counsel, instructed by the General Counsel and Solicitor to HM Revenue and Customs, for the Respondents

© CROWN COPYRIGHT 2011

DECISION

1.       The appellant appeals against a decision dated 15 December 2009 by which, on review, the respondent confirmed a decision to refuse to restore to the appellant a Volvo motor car (Y797 HUD) and 18.05 kilograms of tobacco, 850 cigars and 12 litres of spirits.  Those goods were seized at the Control Zone in Coquelles on 19 August 2009 under section 139 of the Customs and Excise Management Act 1979 (the Management Act).

2.       The appellant failed to attend the hearing but we were satisfied he had been properly informed of the hearing date and venue and decided to proceed in his absence.  We should add that when contacted by a member of the Tribunal staff on the day of the hearing the appellant said that he had thought the hearing was fixed for a week later than the date on which it was fixed.  We did not regard that as sufficient reason to postpone the hearing and proceeded in the appellant’s absence.

3.       After the hearing the appellant wrote to the Tribunal a letter that might be considered to have made further points relating to the appeal but having heard the case in his absence and having reached our decision before receipt of that letter (albeit that the Decision had not been rendered into written form) we have ignored that letter (indeed the member of the Tribunal has not seen it) and this decision is based on the proceedings on 11 March only and the evidence presented at that time.

4.       In fairness to the appellant we should mention that he has a right to apply to the Tribunal to set aside this decision.  The Tribunal Rules require that to be done within 28 days of the receipt of the notice of the Decision (ie this document) and such an application will only be allowed if the Tribunal is satisfied that it would be in the interests of justice to do so.  The fact that we have referred to that right here should not be taken to suggest that such an application either would or would not succeed and should not be taken to suggest, that if the appeal is re-opened, the result would necessarily be any different.

5.       The tobacco and cigars were seized under regulation 16 of the Excise Goods (Holding, Movement, Warehousing and REDS) Regulations 1992 (the REDS Regulation) on the grounds that there had been a breach of regulation 6 because the goods had been imported (bringing the goods to the Control Zone amounts to importation for this purpose) without payment of duty.  Duty was payable under regulation 12 of the Tobacco Products Regulations 2001 because the goods were held for a commercial purpose at importation.  The tobacco goods were also seized as liable to forfeiture under section 49 of the Management Act because they had been concealed at importation in a manner intended to deceive an officer.

6.       The spirits were seized under regulation 16 of the REDS Regulation and duty was payable under regulation 4 because the goods were held for a commercial purpose.

7.       The goods were also seized under section 141(1)(b) of the Management Act because they were “mixed packed or found with” other goods which were liable to forfeiture.  That provision was mainly relevant to the cigars and spirits which were found with the hand rolling tobacco because Mr Carter claimed the spirits and cigars were for his own use which, if true, might have meant they were not liable to be seized as commercial goods but were liable to be seized as goods found with those that were uncommercial.

8.       The motor car was seized under section 141 of the Management Act on the grounds that it had been used for the carriage of the goods that were liable to seizure.

9.       The appellant had the right to challenge the legality of the seizure of the goods by requiring the respondent to bring proceedings in the Magistrates Court in which that question could be decided but he did not do so and therefore the goods and the vehicle were duly condemned as forfeit. 

10.    In addition to the right to challenge the legality of the seizure a person from whom goods are seized can request the respondent to exercise the power contained in section 152 of the Management Act to restore the goods and the appellant made a request of that type in respect of the vehicle.  That request was refused by the respondent on 29 September 2009 and was upheld on review as already mentioned.

11.    In such a case the appellant has a right of appeal to the Tribunal but on a refusal to restore goods our powers are limited to considering whether the respondent’s decision was one it could reasonably have reached and, even if we do find it was unreasonable, our powers are limited to requiring the respondent to conduct a further review and that the decision already given shall cease to have effect but we cannot substitute our own decision.  Certain other powers relating to cases where the decision under appeal has taken effect and cannot be reversed are not relevant in this case. 

12.    The facts of this appeal were presented to us in written form consisting of the notebook entries of officers, the correspondence and the appellant’s grounds of appeal.  In addition photographs of parts of the interior of the motor car were produced.

13.    The basic facts were not really disputed as is clear from the grounds of appeal though the appellant does not agree with the respondent’s conclusions about earlier trips he made to the Continent or about the concealment of the goods.

14.    The undisputed facts are as follows.

15.    When Mr Carter was stopped at Coquelles he was asked if he had obtained any goods and his reply was “just some shopping”.  He was then asked “Any wine, spirits, tobacco?” and replied “Just two boxes of whisky”.  The officer asked “Any tobacco goods at all?” to which he replied “No”. 

16.    Mr Carter had travelled to France via the Eurotunnel on the morning of 19 August 2009 and thence to Adinkerke de Panne in Belgium where he bought the tobacco products which feature in this appeal.  There were four separate receipts for the tobacco purchases and they were timed between 12.20 and 13.05.  Mr Carter was stopped by detection officers at Coquelles at 14.15. 

17.    We take judicial notice of the fact that the journey between Adinkerke and Coquelles would have taken most of the hour and ten minutes between the last purchase and the interception of the vehicle. 

18.    The disputed facts concern the questions of own use and whether the concealment was pre-planned.

19.    The time between the purchases and the arrival back at Coquelles is important because Mr Carter claimed later, in a letter requesting restoration, that he panicked when he realised how much tobacco he had bought and said to himself “… I’ll have to hide it as you wouldn’t allow me so much”.  

20.    The tobacco, including the cigars, was hidden in spaces above the wheel arches and behind the rear seats. The space behind the rear seats had been created in part by the installation of a metal plate behind the seats.  The spirits and some other shopping were on view when the car boot was opened but the tobacco was not.

21.    We find it incredible that Mr Carter could have concealed the tobacco in the way it was concealed in a panic and on the spur of the moment in the short time available.  We find that he must have planned the concealment even if, as he claimed was the case, the installation of the metal plate had an innocent explanation connected with the need for a straight edge to attach a new carpet he had fitted.  We find that he had pre-planned the concealment of the tobacco behind the metal plate whether or not the plate had been installed specifically for that purpose.

22.    It is also significant that the cigars were concealed, as Mr Carter claimed they were for his own use, and so it seems inconsistent with his account of the tobacco for him to have concealed the cigars at all.

23.    As far as the tobacco is concerned Mr Carter claimed that it was for resale at cost to friends and he said the fact that he had kept the receipts for the tobacco was so that he could work out how much the friends owed him for whatever they had ordered.  It seems he had not kept the receipts of the whisky and other shopping so that may be some corroboration of his story but on the other hand he has produced no evidence from any such friends to prove his story.  On the balance of probabilities we find that none of the tobacco was for Mr Carter’s friends and was intended for a commercial purpose including the making of a profit.

24.    In view of the lies he admits telling the officers and our finding about the concealment we also find on the balance of probabilities that the cigars were not for Mr Carter’s own use.

25.    Whether or not the motor car had been modified deliberately for the purpose of smuggling or whether it had initially been modified for an innocent reason there is no doubt that the goods were concealed and that is an aggravating factor in the context of this case.

26.    No grounds of exceptional hardship have been advanced.  Mr Carter has said that he particularly liked his car but there is no suggestion that he has more need for it than the average motorist or that he will be unable to replace it.

27.    We hold that the respondent was fully justified in deciding to refuse to return the motor car as it had been used for smuggling and because the goods were deliberately concealed which is clearly an aggravating factor in a case like this because it reduced the likelihood of detection and showed pre-planning.  Also at least the majority of the goods were smuggled with a view to making a profit and the loss of the other excise goods, even if they were not smuggled for that reason, is not disproportionate.

28.    The appeal is dismissed and the review decision is confirmed. 

29.    This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party.  The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice.