First-tier Tribunal (Tax)

[2014] UKFTT 1067 (TC)

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TC04160

Appeal number: TC/2013/02371

Excise duties – import of cigarettes – whether for personal use – seizure not challenged – jurisdiction of Tribunal – Customs & Excise Management Act 1979, Schedule 3, para 5 – Rule 8 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 – strike-out granted

FIRST-TIER TRIBUNAL

TAX CHAMBER

Sitting in public at Manchester on 11 November 2014

Appellant – appeared in person

Respondents – Miss Eleanor Caine, with Mr Riley, Solicitors Office, HMRC

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DECISION

1.             The issue in this appeal is an assessment on Mr Fedoruk to excise duties of £4,626 and a 20% penalty of £925.20 arising out of the import of 20,000 cigarettes.  The appeal is in respect of both the assessment and penalty.  HMRC seek to strike-out the appeal on the basis that this Tribunal does not have jurisdiction to hear it, and further that there is no reasonable prospect of success.

2.             Helpfully Miss Caine agreed to introduce the Appeal and set out her argument before Mr Fedoruk was invited to reply.  This was a helpful means of highlighting the issues arising for his consideration.

3.             On 2 September 2012 Mr Fedoruk had returned to the UK from Lithuania, Miss Caine explained.  At Robin Hood Airport, Doncaster, he was challenged by officers of the UK Border Force about the import of 20,000 cigarettes.  These were all Marlboro KSF brand.  Mr Fedoruk had explained to the officers that they were for his personal use, but notwithstanding they were seized.  The seizure was not challenged by Mr Fedoruk, and they were condemned as forfeit.  On 19 October 2012 he was assessed for excise duties of £4,626.  He sought a review of HMRC’s decision but this was not successful.  The 20% penalty reflected that this had been a non-deliberate but prompted disclosure.

4.             Miss Caine submitted that an excise duty point and consequent liability had occurred on the import of the cigarettes into the UK, and that duty had been properly levied.  She founded on the decisions in Jones & Jones [2011] EWCA Civ 824 and Nicholas Race [2014] UKUT 331 (TCC).  In particular she referred to the opinion of Mummery LJ in Jones where it is indicated that if seizure is not challenged, the goods are deemed to be held for a commercial purpose.  By reason of CEMA 1979, Schedule 3, para 5, this Tribunal’s jurisdiction does not extend to considering whether the seized goods were held for personal use, she argued.

5.             The hearing was adjourned briefly to enable Mr Fedoruk to revise his submissions.  In reply he did not challenge the factual aspects of Miss Caine’s account.  He was insistent that he had imported the cigarettes for personal use.  He maintained that there was no restriction for excise duty purposes on the amount of cigarettes which could be imported for personal consumption.  He had consulted HMRC’s website.  He explained too that he had not challenged seizure because of having to pay expenses of perhaps £1,500.

6.             While I do not doubt Mr Fedoruk’s personal credibility, I consider that on the basis of the authorities cited I have no alternative but to grant the strike-out application at the instance of the Respondents.  I consider the submissions of Miss Caine to be well-founded.  I agree with her that the powers of this Tribunal are circumscribed by the decision of the Court of Appeal in Jones.  Where seizure is not challenged, as in the present case, the goods are deemed to have been condemned, and consideration of possible private use by the importer is not a matter on which I can make fresh findings-in-fact.  For these reasons I consider that I cannot consider the appeal against the assessment of excise duties and the penalty.

7.             Accordingly I strike-out the appeal in terms of Rules 8(2)(a), ie “no jurisdiction”, and (3)(c), ie “no reasonable prospect of success”.

8.             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.

KENNETH MURE, QC

TRIBUNAL JUDGE

RELEASE DATE: 1 December 2014