United Kingdom VAT & Duties Tribunals (Excise) Decisions

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Cite as: [2002] UKVAT(Excise) E352, [2002] UKVAT(Excise) E00352

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Mr Donald Clarke, Mrs Rita Clarke and Mr Brent Dunning v The Commissioners of Customs and Excise [2002] UKVAT(Excise) E00352 (08 October 2002)

E00352

ASSESSMENT — community travellers entering the UK with tobacco products in excess of minimum indicative levels purchased for themselves and their families — some of the goods not for "own use " - Customs found to be justified in forfeiting all the goods as being held for a commercial purpose — vehicle transporting the goods also forfeited — circumstances of owner and proportionality not considered by Customs — review decision not to restore vehicle found not to be such as could reasonably be arrived at — appeal dismissed as to goods but allowed as to vehicle

MANCHESTER TRIBUNAL CENTRE

Mr DONALD CLARKE, Mrs RITA CLARKE

and MR BRENT DUNNING

Appellants

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE

Respondents

Tribunal: Mr M S Johnson (Chairman)

The Hon Mrs Angela Widdows

Sitting in public in York on the 9th July 2002

The appellants Mr Clarke and Mr Dunning appeared in person

Mr P Morris, counsel instructed by Heptonstalls, solicitors, appeared for the appellant Mrs Clarke

Mr J Cannan, of counsel instructed by the Solicitor's office of H M Customs and Excise, for the respondents

© CROWN COPYRIGHT

DECISION

Nature of the appeal

This appeal, brought under section 16 of the Finance Act 1994, is against the outcome of a review by an officer of Customs and Excise ("Customs") upholding an earlier decision of Customs neither to restore certain forfeited excise goods ("the goods") nor the forfeited vehicle in which the goods were being transported ("the vehicle").

The goods consisted of the following:

5 kg of hand-rolling tobacco

20,000 cigarettes.

The vehicle was a Mitsubishi Shogun Registration No H458 XUB, the property of the appellant Mrs Clarke, who is the appellant Mr Clarke's mother.

The goods and the vehicle were seized at Eastern Docks, Dover, on 22 January 2001. The goods were being transported in the vehicle by the appellants Mr Clarke and Mr Dunning, who were returning to the UK from France. They were the owners of the goods. Mrs Clarke was not travelling with them.

Under the policy then being operated by Customs, their officers stopped and questioned Mr Clarke and Mr Dunning, and pursuant to the Excise Duties (Personal Reliefs) Order 1992, SI 1992 No 3155 ("the PRO"), article 5(3A), required the travellers to satisfy them that the goods were not being held or used for a commercial purpose. The travellers failed to do this, so Customs treated the goods as not attracting relief from excise duty under the PRO and forfeited the goods. They also forfeited the vehicle, pursuant to the power to do so contained in section 141(1)(a) of the Customs and Excise Management Act 1979 ("CEMA").

The issues

In this appeal the issues to be decided by the tribunal are firstly whether on the evidence it was reasonable for Customs to have forfeited the goods on the basis that they were being held or used by the travellers for a commercial purpose, and secondly whether in all the circumstances of the case Customs acted disproportionately in forfeiting the vehicle.

Legal background to the issues

In so stating the issues we are mindful of the decision of the Divisional Court of the Queen's Bench Division of the High Court of Justice (Brooke LJ and Bell J) in R on the application of Hoverspeed Ltd and Ors v Comrs of Customs and Excise [2002] EWHC 1630 (Admin) ("the Hoverspeed case"), which was handed down on 31 July 2002. Paragraph 130(10B) of the decision in the Hoverspeed case establishes that in this appeal it is for this tribunal to decide de novo whether the goods were being imported for the personal use of the importers, rather than for a commercial purpose, the burden of proof that the goods have been imported for a commercial purpose resting on Customs. As mentioned above, article 5(3A) of the PRO placed the burden of proof on Mr Clarke and Mr Dunning that the goods were not being held or used for commercial purposes, but that has been held in the Hoverspeed case to be a reversal of the correct burden, being inconsistent with Article 28 of the EC Treaty and Council Directive 92/12/EEC ("the Excise Directive").

Articles 6, 8 and 9 of the Excise Directive provide for the operation of the internal market of the European Community in relation to excise goods. Under the Excise Directive, products acquired by private individuals in a member state of the community for their own use and transported by them are charged to excise duty in the state in which they are acquired, but excise duty becomes chargeable in the member state in whose territory the goods are, where products for consumption in a member state are held for a commercial purpose in that other member state. The PRO constitutes the UK's means of embodying this aspect of the Excise Directive in the domestic law of the UK.

Both the Excise Directive and the PRO contain "check-lists" of matters to be taken into account in determining whether goods are intended for commercial purposes. These matters are not to be treated as presumptive as to that intention; rather they are what the Excise Directive calls (in the French version) "éléments d'épreuve" - that is, matters of evidence to be weighed in the balance, without preconception as to the commerciality of the goods held or used. We indicate below the extent to which we think Customs took these matters into account in this case, and how our decision is affected by them.

On the issue of whether the forfeiture of the vehicle was disproportionate, the line we follow is that indicated in paragraph 196 of the Hoverspeed case, that is, that it is for the tribunal to consider the response which is proportionate in any given case, without being constrained by what may be regarded as a disproportionate executive policy founded on very wide statutory discretions but otherwise inaccessible or unpredictable law.

Evidence and findings of fact

The evidence before the tribunal consisted firstly of oral evidence from each of the appellants in turn; secondly the contents of a folder of relevant documents handed in by Mr Cannan (who appeared on behalf of Customs) containing in particular Customs' notes of the interviews with Mr Clarke and Mr Dunning at Dover on 22 January 2001; and thirdly of oral evidence from Mr Paul Arthur Devlin, the reviewing officer of Customs in this case. There was also a written statement from Mr Gerry Dolan of Customs as to Customs' policy as applied in 2001. It is fair to say that that policy was heavily criticised in the Hoverspeed case. In our opinion it would in any event no longer be reasonable to rely upon that policy, whether or not correctly applied.

The facts as we find them to be are as follows.

Mr Clarke and Mr Dunning travelled to the continent together specifically for the purpose of buying low-priced tobacco products. A secondary reason for going was for a change of scene, as a means of temporarily alleviating the pressure that Mr Clarke was under in his domestic affairs. Mr Clarke and Mr Dunning travelled in Mr Clarke's mother's Shogun because it was a diesel-powered vehicle and more economical to use than either of Mr Clarke's own cars (a Ford Fiesta and a classic Reliant Scimitar).

Mr Clarke bought cigarettes and tobacco only for consumption by himself, his wife, his mother, his brothers and sisters-in-law. Mr Clarke personally smokes more than 200 cigarettes a week; he was unable to say how much each other member of his family smoked. In order to buy tobacco products, he took with him, as well as money of his own, about £1,000 received from his mother. He had no particular quantities of tobacco products in mind to be purchased; rather he spent as much as he thought that he should. As mentioned below, he spent just under £2,800, returning to the UK with about £500 of the £3,300 he took with him. As to the identity of the person to receive each carton of cigarettes or box of tobacco, Mr Clarke told the officer of Customs who interviewed him on his return to the UK: "Till we get home, I don't know whose is what".

Although Mr Clarke and Mr Dunning crossed the Channel to France, they then drove in the Shogun across the French border to a so-called "tobacco farm" at Adinkerke, Belgium. It was there that they made their purchases of tobacco products.

Mr Dunning is a good friend of Mr Clarke and his brothers. Of the tobacco products purchased, some were intended for Mr Dunning. There was confusion in the evidence as to who had paid for which products, but we find that, at point of purchase, Mr Clarke paid for all the products acquired, totalling just under £2,800 (including small quantities of Bacardi Breezers and Pernod). Mr Dunning wanted to have a full year's supply of tobacco for himself - he smoked about two pouches of tobacco a week. He also wanted to supply his brother with some tobacco, and acquire about £400 worth of cigarettes for his wife (who was then his girl-friend). Mr Dunning reimbursed Mr Clarke for part of the value of the products purchased by Mr Clarke for Mr Dunning, but at the time of the tribunal hearing, still owed him about half the money due. In cross-examination, Mr Dunning appeared to us to accept that the tobacco acquired for himself would amount to 11 or 12 kgs, more than 2 years' supply for him, although he contended that he was only to have half that amount. We were left unclear in our minds as to how much of the tobacco purchased was on his behalf.

Mr Clarke had been to France on one previous occasion, some 4 or 5 years previously. It was Mr Dunning's first trip to France. Both travellers honestly believed that they could bring back to the UK without payment of further duty excise goods of any amount for their personal use. That is indeed in accordance with what the Excise Directive provides.

Mr Clarke worked as a driving instructor earning between £200 and £500 a week. Mr Dunning was working at the time as a warehouseman, taking home about £250 per week. He has since started his own business of landscape gardening. Mr Dunning accepted that he could not afford the cost of the part of the goods allocated to him, save in the long run.

On their return to Dover, Mr Clarke and Mr Dunning were stopped and questioned by Customs. Contemporaneous interview notes were made, and these were signed by each witness. Mr Clarke's excise goods were forfeited for the following stated reasons: (1) in excess of the minimum indicative levels; (2) received money from third parties; (3) goods being carried for persons who have not travelled; (4) inconsistent declaration of goods (Customs had formed the view that Mr Clarke had not been completely frank initially about the goods that he was carrying). Mr Dunning's excise goods were forfeited for the following stated reasons: (1) in excess of the minimum indicative levels; (2) receiving payment from a third party; (3) expenditure not supported by finance; (4) discrepancy in ownership; (5) no knowledge of cost. As mentioned above, the vehicle (incorrectly described on the seizure form as a "Toyota") was forfeited as well, pursuant to CEMA.

Following the forfeiture of the goods and vehicle, Mr Clarke consulted solicitors, Heptonstalls, of Mr Clarke's home town of Pontefract, West Yorkshire. They wrote a letter dated 26 January 2001 to the Excise Support Team of Customs at Dover. That letter sought the return of both the goods and the vehicle. Correspondence between Customs and the solicitors ensued. It is interesting to note that, in a letter to Customs from Heptonstalls dated 16 February 2001, the appellants modified their request for the return of the goods to 3 boxes of cigarettes intended for Mr Clarke and his wife and one box of cigarettes and one box of tobacco for Mr Dunning, stating:

"As far as the other items are concerned, as already explained, these were purely for our client's family and were not purchased with any commercial intent and our client is prepared to pay the duty on these items if they can be restored".

By letter dated 10 March 2001, Customs declined to restore either the goods or the vehicle. The refusal letter identified the reasons specified at the time of forfeiture by Customs for seizing the goods, and then denied the request for the restoration of the vehicle for the following reasons:

Mrs Clarke had willingly allowed her son to use the vehicle;

The vehicle was used to attempt to smuggle a large quantity of excise goods into the UK without the correct taxes being paid;

It was departmental policy not to restore vehicles to owners unless the vehicle had been stolen and reported to the police - which was not the case;

Any redress that Mrs Clarke might have was between her and her son, who had used the vehicle and subsequently had it seized.

The above reasons suggest that Mrs Clarke should be answerable without further question for the use made of the vehicle in this case. However it appears that no account was taken by Customs of her particular circumstances. These were adverted to by Heptonstalls in their letter dated 26 January 2001, but appear to have been discounted or ignored by Customs in their letter of 10 March 2001.

Mrs Clarke is a non-driver. She is a lady in her early 70s who is in chronic ill health. She requires regular chauffeuring to attend hospital appointments. She financed the purchase of the Shogun as a family vehicle so that she could enjoy family outings with her grandchildren and their parents and be taken to hospital in the vehicle as required. The size of the Shogun, particularly its height, facilitates her getting into and out of it. We are satisfied that the Shogun was better suited to her needs than the Fiesta which Mr Clarke drove as his main car, or the Peugeot driven by another of her sons.

Since losing the vehicle, Mrs Clarke has suffered considerable inconvenience. She is without funds to purchase a replacement vehicle, incurs bus and taxi fares, and can no longer count on her son to take her to the hospital appointments she needs to attend, or to the doctor, or out shopping.

Mrs Clarke knew all about the trip to the continent to purchase tobacco. Indeed she was responsible for providing the family money of £1,000 forming part of the funds carried by her son when he purchased the goods in Belgium. She said that her son had decided to travel on just a day's notice, but that she had that amount of money in the house to "give" him. The idea was that he would spend that money on tobacco and cigarettes for various members of the family, and the money would be recouped from them in due course, depending upon how much tobacco and how many cigarettes they each in due course received.

So we find that Mr Clarke went off to the continent equipped with funds which were not his own in order to buy tobacco and cigarettes on behalf of various members of his family. He also, of course, carried money of his own to buy tobacco products for himself.

Heptonstalls have obtained a written valuation for a Mitsubishi Shogun vehicle, first registered on 1 August 1990, at £4,000 (trade value); £5,695 (retail sale price), as of January 2001. This was challenged by Customs on the basis that this must refer to a mint vehicle, not the Shogun in issue in this case. However Customs were not in a position to produce a valuation of the particular Shogun in issue in this case, despite having been in possession of the vehicle. We have no evidence of the condition of the vehicle, and so will assume in favour of the appellants that its condition was indeed mint. We therefore adopt the valuation put in evidence by the appellants.

The decision of Customs to restore neither the goods nor the vehicle was reviewed by Mr Devlin and was upheld. His review letter dated 22 May 2001 is short and in our view unhelpful. In fairness to him, Mr Devlin accepted that the letter was not ideal, but he maintained that such was the form of letter that he was required to employ at the time. The unhelpfulness of the letter resides in the fact that it does not state why the review has been unsuccessful. It came across clearly to us that Mr Devlin shared the view that the letter was unsatisfactory, but that his hands were tied (as it were) in using it.

Mr Devlin told us that, in reviewing the case, he was struck by the quantity of goods, the size of the vehicle, and the apparent commerciality of the importation. Large parts of the goods, even on the appellants' own case, were not bought for themselves. They were stated to be for members of their families, but they might just as well have been for anybody else. On his calculation (this was not disputed) duty on the goods would amount to about £4,800: that could be said to be the duty evaded, if the appellants were in bad faith. The financial circumstances of Mr Clarke and Mr Dunning did not appear reasonably to allow them to make purchases of such size.

Mr Devlin said that the value of the vehicle played no part in his decision. He had been told by Customs' Central Team that £1,725 was the value of a Shogun of the appropriate age with average mileage, but could not comment on the value of the particular vehicle in this case. He did not consider the principle of proportionality, but applied Customs' policy at the time. That policy did not allow for the importance of proportionality in the way since highlighted in the decision of the Court of Appeal in Lindsay v C & E Comrs [2002] Simon's Tax Cases 588 ("the Lindsay case").

Submissions of the parties

On behalf of Customs, Mr Cannan submitted that Customs had correctly applied the PRO. According to article 5 of the PRO, it appeared that the goods were being imported for a commercial purpose. It was therefore right to forfeit them. The vehicle in which the goods were being transported was properly forfeited in accordance with CEMA. Power to restore the forfeited goods and vehicle existed under section 152 of CEMA, but Customs, applying their policy at the time, saw no reason in this case to permit restoration. The reviewing officer, Mr Devlin, thought likewise. Under section 16(4) of the Finance Act 1994, the tribunal could only interfere if satisfied that the person making the review decision could not reasonably have arrived at it. That could not be said here. As to the vehicle, Mr Cannan took us through the Lindsay case in some detail. The Lindsay case does not specifically deal with the situation where the vehicle is owned by a non-traveller. However, so far as proportionality is concerned, where the non-traveller knowingly facilitates the importation, it is as a matter of policy not unreasonable to withhold restoration. The owner of the vehicle undertakes the risk of deprivation. She still has her remedies, such as they may be, against the travellers.

For Mrs Clarke, Mr Morris submitted that it would be disproportionate to deprive Mrs Clarke of her vehicle, which had been purchased having regard to her special needs, and without which life had become enormously inconvenient. He cited the Lindsay case, in particular paragraph 64 of the judgment of the Master of the Rolls, Lord Phillips, dealing with the circumstances in which proportionality might require restoration of a vehicle. Mr Morris submitted that the facts of the present case were equivalent to those exemplified by Lord Phillips. Mr Morris invited the tribunal to hold that Mr Devlin could not reasonably have decided not to restore the vehicle, to allow the appeal in that regard, and to grant Mrs Clarke relief in accordance with section 16(4) of the Finance Act 1994.

Mr Clarke and Mr Dunning each made speeches, in which they urged the tribunal to find that the goods had been imported for their own use, and to allow the appeal on the ground that it was unreasonable for Customs to have found that the goods were held for a commercial purpose as provided by article 5 of the PRO.

Decision of the tribunal with reasons

In our judgment, this appeal should succeed in respect of the vehicle but not in respect of the goods.

Article 3 of the PRO states that a community traveller entering the UK shall be relieved from payment of any duty of excise on excise goods -

" ... which he has obtained for his own use in the course of cross-border shopping and which he has transported".

The expression "own use" is often misunderstood by bona fide travellers between the continent and the UK. "Own use" is defined in article 2(1) of the PRO as -

"[including] use as a personal gift provided that if the person making the gift receives in consequence any money or money's worth (including any reimbursement of expenses incurred in connection with obtaining the goods in question) his use shall not be regarded as own use for the purpose of [the PRO]".

This is in accordance with the underlying purpose of the Excise Directive. In paragraph 104 of the decision in the Hoverspeed case, it is explained that article 8 of the Excise Directive is designed to provide for "products acquired by private individuals for their own use". That is to be distinguished from and contrasted with the previous law. Under the previous law, as expressed in article 3(2) of Council Directive 69/169/EEC, limited exemption from excise duty on importations was available in respect of items acquired for the "personal or family use" of travellers (see paragraphs 77 and 80 of the Hoverspeed case). The court considered (see paragraph 105) that the Excise Directive had in that respect been correctly transposed into English law. The court adopted the words of Advocate-General Colomer in EMU Tabac [1998] ECR I-01605 at [29], viz

"Article 8 of [the Excise Directive] provides only for action by the private individual on his own behalf".

In the present case we find that neither Mr Clarke nor Mr Dunning had worked out with particularity which amounts of the total quantity of excise goods being transported by the two of them would be for which relatives or for themselves respectively. That had not been decided; rather the decision as to who would get what would be left until the travellers got home. No doubt Mr Clarke would expect to be reimbursed for any tobacco products paid for by himself which might be taken by others (e.g. Mr Dunning). Mrs Clarke would expect to see £1,000 worth of goods representing her contribution. But the matters of division of the goods and reimbursement were unresolved. We think that the uncertainty in the minds of the appellants, demonstrated at the tribunal hearing itself, as to who was to take and pay for which parts of the goods being transported, is an important and revealing feature of this case.

It was apparent to the officers interviewing Mr Clarke and Mr Dunning at the port that some at least of the goods were not being transported for the travellers but rather for their relatives. That was expressed in some of Customs' reasons for forfeiture reiterated in the letter to Heptonstalls from Customs dated 10 March 2001. It was a matter that registered with Mr Devlin, the reviewing officer, according to what he told us in evidence, and was one of his reasons for upholding the forfeiture decision. Customs were justified in law in forfeiting excise goods not being transported by the travellers for their own use, as defined in the PRO.

What, however, of any excise goods that were being imported for the travellers' own use? It was the opinion of the court in the Hoverspeed case, an opinion which we share, that, if no satisfactory explanation is forthcoming, Customs may validly conclude that all the goods are held for "commercial purposes" (see paragraph 115 of the decision in the Hoverspeed case). Because, as we have found, no satisfactory explanation was provided as to which of the goods being transported in this case might be for the travellers' own use and which not, it would have been an invidious task, fraught with uncertainty, for Customs to have attempted any such distinction amongst goods of the same kind transported in bulk. To hold that Customs should be expected to make that distinction, on facts such as those before us, would in our judgment be to impose an unreasonable requirement on them.

Were Customs nevertheless justified in treating the attempted importation as commercial in character? As to this, we think that there is considerable force in Mr Devlin's point that goods not being transported for a traveller's own use might just as well be transported for anyone's use. After all, the traveller has no control over what happens to the goods after they leave his possession. He may intend to hand them over to a relative, but what will the relative do with them? Will he or she smoke them or sell them? One just does not know. The important point is that to attract the relief, the importation must be for one's own, personal use, as both the Excise Directive and the PRO are careful to provide.

The "check-lists" in the Excise Directive and incorporated in article 5 of the PRO constitute a most important set of criteria for determining the applicability of the relief. If we thought that Customs had not had regard to those matters or had given certain of them disproportionate weight, we would have no hesitation in allowing this appeal. But we think that Customs cannot be faulted in how they approached the forfeiture in the light of those matters. Clearly Mr Clarke and Mr Dunning were not revenue traders, but apart from that matter, the rest of the PRO "check-list" to which regard is to be had, when considered in the light of the facts of this case, combine to indicate that the goods could properly be treated as held for a commercial purpose. This is particularly true, as we see it, as regards the quantity of the goods (more than one might reasonably expect to see transported in this way at one time), and the financing of the goods.

For the above reasons, we decide that Mr Devlin, when reviewing this case and upholding the decision to forfeit the goods, arrived at his decision reasonably in that regard.

Turning to the forfeiture of the vehicle, we note first that, in the Lindsay case, the Court of Appeal did not contemplate that vehicles used to transport forfeited excise goods should invariably be forfeited, even in an instance of what the court termed "commercial smuggling" (see paragraph 63 of Lord Phillips's judgment). There might, the court held, be cases of exceptional hardship which should always be given due consideration. Secondly, we note that the distinction drawn by the court between "smuggling" and "the driver importing goods for social distribution to family or friends in circumstances where there is no attempt to make a profit" (paragraph 64 of Lord Phillips's judgment) is adopted as the yardstick for distinguishing cases where proportionality becomes important. We then thirdly note that, in general terms, the court in the Hoverspeed case was concerned that there be no discrimination as to the circumstances in which principles of proportionality are to be applied by Customs in this area (paragraph 189 of the decision in the Hoverspeed case).

Although Customs were justified in treating the goods as being imported for a commercial purpose, we have seen or heard nothing to suggest that this was a case of "smuggling" within the definition of that term in the Lindsay case. The evidence received by the tribunal clearly suggests that the attempted importation in this case was by two travellers who were indeed importing goods for social distribution to their families in circumstances where there was no attempt to make a profit. In these circumstances it would be discriminatory not to apply the principle of proportionality to the forfeiture of the vehicle.

We have indicated above that it does not appear that Customs took into account the personal circumstances of Mrs Clarke in deciding not to restore the vehicle. Mr Devlin admits that he did not have proportionality in mind when he reviewed that decision. Both these matters are, in our view, major shortcomings in Customs' approach in this case to the question whether the vehicle should be restored.

We think that, had this case been properly considered, Customs would have come to the conclusion that it was unreasonable not to restore the vehicle. We say this for the following reasons.

Firstly, Mr Clarke and Mr Dunning went to the continent in Mrs Clarke's vehicle in order to save money on fuel - otherwise it would probably have been Mr Clarke's own Ford Fiesta that would have been used. The Shogun has suffered forfeiture and the Fiesta has not. To that extent the law has been suffered to operate in an arbitrary fashion.

Secondly, the forfeiture of the Shogun for having transported the forfeited goods is out of proportion to its practical value to Mrs Clarke. Without the vehicle, she suffers prejudice which is set to continue indefinitely. That prejudice is growing all the time. It cannot be valued. By contrast the excise duty lost in this case was finite, and, as we say above, we are not satisfied that it was intentionally sought to be evaded.

Thirdly, the reason why the goods were properly forfeited in this case was the failure of the appellants to appreciate that excise goods purchased on the continent and imported for members of the travellers' families were beyond the scope of the PRO and that the goods were therefore likely to be found to be held for commercial purposes. This is apparently a common misconception. Many do not understand that the PRO does not provide relief in respect of excise goods which are imported on behalf of relatives. We are in no doubt that Mrs Clarke would not have made the vehicle available had she appreciated that, by her son purchasing excise goods for her family with the money she had provided, she would be rendering the vehicle liable to seizure. She would have regarded it as untenable to run that risk.

Fourthly, the importation in this case was no different from or worse than many others where the travellers are bona fide and not smugglers. This was not one of those cases where repeated trips across the Channel had been made. There is no evidence that the travellers had concealed the goods to evade discovery. Whilst the quantity of goods was considerable, and out of proportion to the means of the travellers, there was a wish on their part to bring back tobacco and cigarettes for a number of relatives - about ten of them. These travellers were mistaken as to the scope of their rights; they were not setting out to break the law.

Finally, we have accepted evidence that the vehicle in this case had a financial value. The

Shogun was a fairly old vehicle, and compared to many vehicles would not have been worth much on the open market, but its value to Mrs Clarke is to be measured by how long it might be expected to last her and whether she can afford to replace it. Applying those criteria in comparing the vehicle with the forfeited goods, it would be disproportionate not to have restored the vehicle to her.

Relief granted

Having found that Mr Devlin could not reasonably have upheld the decision of Customs not to restore the vehicle, we direct pursuant to section 16(4)(a) of the Finance Act 1994 that his decision should, to that extent only, cease to have effect. Mr Devlin's review letter is dated 22 May 2001. We accordingly direct that his decision should, to the extent mentioned, cease to have effect as from that date.

Apparent consequences of the decision expressing the views of the tribunal but not constituting any part of the relief granted.

It follows, therefore, that the vehicle should have been offered for restoration shortly after the review date. If the vehicle is no longer available for restoration, or is available but has gone down in value since then, monetary compensation will have to be paid. Such compensation should be calculated upon the retail value of the vehicle accepted by us in evidence.

Costs

The appellants Mr Clarke and Mr Dunning have failed in their appeal and there will be no order as to costs so far as the appeal as to the goods is concerned. As to the vehicle, Mrs Clarke has succeeded in her appeal. We understand that she is a LSC funded client, as that term is defined in Part 43.2(1)(i) of the Civil Procedure Rules 1998. We accordingly order that Customs are to pay to her the amount of her reasonable costs of the appeal, to be assessed summarily on the standard basis if not agreed, such assessment not to include Mrs Clarke's costs as a LSC funded client.

If an assessment hearing is required, the appeal is to be listed before the Chairman alone, confined to that matter. Not later than 7 days before the hearing, Customs and Mrs Clarke shall exchange statements of costs, serving copies at the Manchester Tribunal Centre under reference MAN/01/8126. Those statements are to be prepared in accordance with the Civil Procedure Rules 1998 in Form N260.

M S JOHNSON

CHAIRMAN

RELEASE DATE: 22 October 2002

MAN/01/8126