United Kingdom VAT & Duties Tribunals (Excise) Decisions

You are here: BAILII >> Databases >> United Kingdom VAT & Duties Tribunals Decisions >> United Kingdom VAT & Duties Tribunals (Excise) Decisions >> Bacior & Anor v Customs and Excise [2002] UKVAT(Excise) E00361 (17 October 2002)
URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2002/E00361.html
Cite as: [2002] UKVAT(Excise) E361, [2002] UKVAT(Excise) E00361

[New search] [Printable RTF version] [Help]

Bacior & Anor v Customs and Excise [2002] UKVAT(Excise) E00361 (17 October 2002)

E00361

EXCISE DUTY – appeal from a review decision not to restore goods and car used for the importation of hand rolling tobacco and other excise goods – whether attempt to conceal goods – reasonableness of the decision not to restore – entitlement of Commissioners' officers stop and search Community travellers – appeal allowed

LONDON TRIBUNAL CENTRE

DAVID BACIOR Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

RUTH ESTHER MARTIN Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: MALCOLM GAMMIE QC (Chairman)

MRS ANGELA WEST FCA

Sitting in public in Bristol on 17 July 2002

Mr David Bacior in person and as representative of Ms Ruth Martin

Mr J P Waite, counsel, instructed by the Solicitor of Customs and Excise, for the Respondents

© CROWN COPYRIGHT 2002

DECISION

Introduction

These are two appeals, one by Mr David Bacior (LON/01/8243) and the other by Ruth Martin (LON/01/8244), which the Tribunal directed on 29^th January 2002 should be heard together and which we heard in Bristol on 17^th July 2002.

Mr Bacior appeals against the deemed decision of the Commissioners taken upon review, confirming the decision of 6^th June 2001 not to restore to Mr Bacior his seized excise goods and vehicle, a Volvo 480 motor car registration number E668 OCX. These were seized at the United Kingdom Control Zone at the Channel Tunnel terminal, Coquelles, France, on 15^th April 2001. Ms Martin was a passenger in Mr Bacior's vehicle and she appeals against the same decision (addressed to Mr Bacior) not to restore her excise goods, which were seized with Mr Bacior's goods and vehicle.

At the hearing a bundle of documents was produced to us on behalf of the Commissioners. A separate Statement of Case was produced for each Appellant but in other respects the paperwork for each was the same. In her notice of appeal, Ms Martin listed Mr Bacior as her representative. The bundle included correspondence from the Appellants: a letter of 9^th May 2001 signed by both of them appealing against the seizure, a letter of 17^th July 2001 from Mr Bacior requesting a review of the 6^th June 2001 decision and two undated letters (one referring to a conversation with Customs & Excise on 21^st August 2001) from Mr Bacior.

Both Mr Bacior and Ms Martin gave evidence. In addition, we heard evidence on behalf of the Commissioners from Todd Elliott, the uniformed officer of HM Customs and Excise who made the seizure, and Karen Booth, a senior officer of HM Customs and Excise who conducted the initial review, both of whom are employed at the United Kingdom Control Zone at Coquelles. We record below our findings based on the documents before us and the evidence that we heard.

The evidence

Mr Bacior and Ms Martin are friends and neighbours in Bideford, North Devon. On the day in question they were returning from France and Belgium in Mr Bacior's Volvo 480 vehicle. They travelled first to Belgium where they purchased 35.9 kg of tobacco. They removed the tobacco pouches from the cartons in which they were sold and repacked them in black carrier bags, which they obtained in Belgium. The black carrier bags of tobacco were placed in the rear seat well of the car, the rear seats having been removed by Mr Bacior and left at home. Further pouches of tobacco were placed under the driver's seat and down the sides of the back seat. Mr Bacior had also brought with him from his home a large (empty) box of Persil washing powder, which he had bought on a previous cross-Channel shopping trip. They filled the box with tobacco pouches and resealed it with tape.

They then travelled to France, where they bought a variety of other goods. In addition to the tobacco (and a free gift of 100 cigarillos), the total excise goods finally listed as seized with the vehicle were as follows—

Beer 66 litres
Wine 8.05 litres
Spirits 3 litres

They had other shopping with them, which was seized with the car and which they complained had not been recorded. This included two large boxes of Persil washing powder and two boxes of Coca Cola. They had packed the drink and other shopping on top of the black carrier bags of tobacco.

On their return Officer Elliott stopped them at the Channel Tunnel control zone at Coquelles. At that point the only goods that were visible from outside the car was the beer, wine, spirits and other shopping including the Persil boxes. A small amount of tobacco in its original packaging may have been visible but none of the witnesses could be sure of this. Having identified the Appellants from their passports, the following exchange took place—

Officer Elliott, "Where have you been?"
Mr Bacior, "Calais."
Officer Elliott, "What goods have you obtained and purchased?"
Mr Bacior, "Just shopping and wine."
Officer Elliott, "Any other goods?"
Mr Bacior, "Tobacco."
Officer Elliott, "How much?"
Mr Bacior, "200 pouches of tobacco."

Officer Elliott's written notes (which were signed by Mr Bacior and Ms Martin at the time) also record that after the car had been searched and 35.9 kg (or 718 pouches) of tobacco had been found, Mr Bacior told the Officer that the Officer had misheard him and that he (Mr Bacior) had replied that they had bought "a few hundred", not "200", pouches of tobacco. Officer Elliott did not accept that he had misheard what Mr Bacior had said. The notes indicate that Officer Elliott asked the Appellants to produce the receipts for their purchases, to which Mr Bacior replied that he would find them. If he had produced receipts for only 200 pouches of tobacco that would have been compelling evidence that Mr Bacior was seeking to conceal the extent of their purchases. However, neither the written note nor the evidence we heard reveals whether Mr Bacior ever found and produced them (or was given the opportunity to do so prior to his car being searched).

Officer Elliott's note records that, apart from what he found in the black carrier bags, further tobacco had been packed in two Persil boxes rather than just one. At the hearing Mr Bacior was unable to explain this. He denied that he and Ms Martin had emptied one of their purchases of Persil so as to refill it with tobacco. As the list of seized goods only covers dutiable goods, there is no record of how many boxes of Persil washing powder were seized. Mr Bacior said initially that he had brought only one empty Persil box with him, for which he had an explanation, but on being questioned about this by Mr Waite, he said that it might have been two. In answer to Mr Waite's questions as to why they had removed the tobacco from the cartons in which it had been sold only to repack it in Persil boxes, Mr Bacior explained that he had intended to give a Persil box of tobacco to one of his children as a surprise gift. Ms Martin confirmed that none of her tobacco had been packed in the Persil boxes.

Mr Bacior offered us several reasons as to why the car had been packed as it had. He said that it was packed in accordance with Volvo's specifications for carrying that quantity of goods. He pointed out that if he had attempted to load the car with the tobacco packed in its original cartons on top of the other goods, the cartons would have obstructed the driver's rear view. It could also have been dangerous if they had been involved in an accident and the cartons of tobacco had catapulted forwards against Mr Bacior or his passenger. In his view, unpacking the pouches of tobacco and placing them in carrier bags in the rear seat well with the other shopping packed on top was a safe and efficient way of loading the car with that quantity of goods. Placing the heavier goods on top would not damage the tobacco. He also said that his car leaked when it rained. By packing the tobacco in black carrier bags it ensured that it would not get wet.

Ms Martin gave a similar account of why the car had been packed as it had. She also made the point that the tobacco had been their first purchase. There were signs in the car park warning shoppers to take precautions against thefts from cars. Packing the tobacco in black bags in the seat well and under the seats therefore offered better security against the risk of theft. She added that she lived in a top floor flat and parking was difficult. She had thought that it would be easier to carry the tobacco in carrier bags from the car to her flat when she reached home.

Mr Bacior said that he was purchasing a year's supply of tobacco for himself and to give to his four children. At the time his oldest child was 29 and the youngest 16. They were all heavy smokers. In addition to his own requirements of about 3 pouches per week, he had bought two pouches per week for the three older children (312 in total) and slightly more (150 pouches) for his youngest child, as she was shortly to celebrate her birthday. Mr Bacior said that he had travelled to Belgium to purchase tobacco 4 months previously (when he had bought about 150 pouches) and perhaps six months before that (when he had bought about 200 pouches). He did not consider this excessive when allowing for his family's heavy tobacco consumption. He said that he might also give some tobacco to his ex-wife.

Ms Martin said that this was her first cross-Channel shopping trip. She had received a tax rebate and regarded this as something of an adventure. While Mr Bacior had apparently worked out in advance how much tobacco he planned to buy, Ms Martin had not. It was unclear to us precisely how much of the tobacco that had been bought was claimed to be Mr Bacior's share and how much Ms Martin's. The evidence of Mr Bacior's purchases accounted for the great majority (some 618) of the 718 pouches, leaving rather less for Ms Martin than we would have expected in the light of her evidence. She said that she was buying tobacco for her own consumption and as a gift for her two children and that she expected her share to last about a year.

The seizure and review

We should note that one of the Appellants' complaints was that once they had been stopped and the decision had been taken to search the car, they were given no opportunity to explain anything. In a letter dated 9^th May 2001, the Appellants protested that they had tried to explain matters but that Officer Elliott had refused to listen or to believe them. He did not seek to interview them further or ask for any explanation. Neither Officer Elliott initially, nor Officer Booth on review, heard or knew of the explanations that we have just recorded. Officer Elliott at the time formed the view, based on his experience of these matters, that the tobacco had been packed in a way that was intended to conceal it from his ordinary inspection. It was therefore liable to forfeiture under section 49(1)(f) of the Customs and Excise Management Act 1979 (see below) and it was unnecessary to question the Appellants further.

Ms Booth as the reviewing officer took the same view. She declined to restore the goods or Mr Bacior's vehicle on the basis that there were no exceptional circumstances that would justify a departure from the Commissioners' usual policy. Her letter of 6^th June 2001 was brief, to the point (in refusing to restore) and otherwise entirely uninformative. In particular, the letter contained no mention of the reasons for the seizure, the factors taken into account in reaching her decision on review or, indeed, any of the facts apart from the registration number of the vehicle. The majority of the letter was taken up with a statement of the Commissioners' policy not to restore seized goods or vehicles.

In evidence, Officer Booth said that in reaching her decision she took into account Mr Bacior's alleged under-declaration of the amount of tobacco being carried. She noted that when Officer Elliott first questioned Mr Bacior, Mr Bacior did not include tobacco amongst his purchases. Officer Booth thought this surprising, given that tobacco purchases were the main reason for the shopping trip and tobacco was by far the largest purchase involved. Officer Booth also considered that the tobacco had been removed from the cartons in which it had been purchased in order to pack it in the car in a way that would conceal it from ordinary Customs' inspection. This was particularly so in the case of the tobacco that had been packed in the two empty Persil boxes, which had been resealed with tape. She also regarded it as unusual to pack the car so that the heavier goods were placed on top of the tobacco pouches that had been placed in black carrier bags. Finally, she regarded the quantity being carried (some 35 times the minimum indicative level) as a commercial quantity that was being imported for resale.

On 17^th July 2001, Mr Bacior appealed against Officer Booth's decision and the matter then passed to the Customs and Excise Review Team for further review. None was carried out due to lack of resources and Officer Booth's decision was therefore deemed to be upheld under section 15(2)(b) of the Finance Act 1994.

The Law

The decision not to restore the car and the excise goods was made under section 152(b) of CEMA which provides that the Commissioners "may … as they see fit … restore … anything forfeited or seized" under the customs and excise Acts. Section 49(1)(f) of the Customs and Excise Management Act 1979 ("CEMA") provides (amongst various situations) that where any imported goods are concealed or packed in a manner appearing to be intended to deceive an officer, those goods shall be liable to forfeiture. This was the provision under which the Officer Elliott had acted. Section 49(1)(d) also allows forfeiture in respect of goods imported concealed in a container holding goods of a different description.

Under section 141 of the Act "where any thing has become liable to forfeiture under the customs and excise Acts … any … vehicle … which has been used for the carriage, handling, deposit or concealment of the thing so liable to forfeiture … and … any other thing mixed, packed or found with the thing so liable … shall also be liable to forfeiture." Section 139 provides that "any thing liable to forfeiture under the customs and excise Acts may be seized and detained by any officer …".

The provisions relating to forfeiture are set out in Schedule 3 to that Act. In the present case no condemnation proceedings have taken place. Accordingly the car and the excise goods are deemed to have been duly condemned as forfeited. The sole issue for us is the Commissioners' decision not to restore the car and the excise goods. This is a decision on an "ancillary" matter. Our jurisdiction is defined by section 16 of the Finance Act 1994. Section 16(4) provides as follows—

"In relation to any decision as to an ancillary matter, or any decision on the review of such a decision, the powers of an appeal tribunal on an appeal under this section shall be confined to a power, where the tribunal are satisfied that the Commissioners or other person making that decision could not reasonable have arrived at it, to do one or more of the following, that is to say –

(a) to direct that the decision, so far as it remains in force, is to cease to have effect from such times as the tribunal may direct;

(b) to require the Commissioners to conduct, in accordance with the directions of the tribunal, a further review of the original decision; and

(c) in the case of a decision which has already been acted on or taken effect and cannot be remedied by a further review, to declare the decision to have been unreasonable and to give directions to the Commissioners as to the steps to be taken for securing that repetitions of the unreasonableness do not occur when comparable circumstances arise in the future."

What we have to consider is whether we are satisfied that the Commissioners could not reasonably have arrived at the decision on the review. This requires the Appellants to show that the Commissioners have acted in a way in which no reasonable panel of Commissioners could have acted, that they have taken into account some irrelevant matter or disregarded something to which they should have given weight or made some other error of law. It is also legitimate for us to review the reasonableness of the restoration policy adopted by the Commissioners and to determine whether there are genuine exceptions to that policy such that the policy itself does not fetter the discretion of the officer who has to determine how to exercise the power to review in section 152(b).

Submissions made

Mr Waite submitted that the Commissioners had acted within their powers in forfeiting the goods under section 49(1)(f) of CEMA and that they were also entitled to rely on section 49(1)(d). He said that Mr Bacior's explanations were implausible. The manner of packing pointed to concealment and Mr Bacior's answers to the questions initially put to him by Officer Elliott were blatantly misleading. The quantity of tobacco purchased, coupled with the admission of earlier purchases within the year, pointed to the goods being acquired for a commercial purpose. As such, he said that the seizure was justified and Officer Booth was quite entitled to reach the conclusion that she did. She had considered the evidence of commercial use but in Mr Waite's submission that was unnecessary in this case. All that was necessary was that there had been an intention to conceal the goods from inspection.

In his submissions for both Appellants, Mr Bacior referred back to their explanations. He said that they were merely exercising their right to purchase excise goods in Belgium and France for their own use, there being no limit imposed on the amount they could purchase.

Conclusion

As we explained to the Appellants at the conclusion of the hearing, our jurisdiction in this matter is limited. It is not our role to substitute our view of the matter for that taken on the review by the Commissioners. The question is whether the Commissioners could not reasonably have arrived at the review decisions made by Officer Booth on 6^th June 2001.

Since we heard this case the Divisional Court has given its decision in R v Commissioners of Customs & Excise ex p Hoverspeed Ltd and others [2002] EWHC 1630 (Admin). Mr Waite on behalf of the Commissioners did not address us on any of the issues that were raised in Hoverspeed. This is obviously unsatisfactory in view of the conclusion that we have reached based on that decision but we do not think that the Commissioners can complain at our having regard to Hoverspeed in reaching the decision that we have. The Commissioners would have been aware of the issues that were raised in Hoverspeed, as that case had been fully argued before the Divisional Court by the time of the hearing before us. The Commissioners would not have known what conclusion the Divisional Court would reach. Nevertheless, in cases in which Appellants are unrepresented, it seems to us that the Commissioners and their Counsel have a particular obligation to see that all relevant issues are drawn to the Tribunal's attention. We consider the implications of Hoverspeed below. First, however, we consider the matter as it appeared to us from the evidence we heard.

Conclusions on the evidence

We think that Officer Elliott's action at the time of the seizure was clearly flawed in that he gave the Appellants no opportunity to explain their purchases or why the car was packed as it was. As Hoverspeed makes clear, Mr Bacior and Ms Martin were quite entitled to travel to France and Belgium to purchase any quantity of tobacco, provided they were not doing so for a commercial purpose. Quite apart from whether he had any relevant power in the circumstances to stop and question the Appellants as they entered the UK, and search their car, we consider that Officer Elliott was not entitled, based solely on the quantity of tobacco and the way in which it was packed, to seize the tobacco and Mr Bacior's car without giving the Appellants an opportunity to explain matters.

In conducting her review, Officer Booth also did not have the benefit of the explanations that we heard from Mr Bacior and Ms Martin. Nevertheless, in reviewing the seizure she did consider the aspects of the matter to which those explanations related, namely what answers were given to Officer Elliott's questions, why the Appellants had bought the quantity of tobacco that they had and why the car was packed as it was. In their explanations, neither Mr Bacior nor Ms Martin raised any new aspects of the matter to which Officer Booth should have directed her attention but did not. In particular, while attesting to the inconvenience caused by the seizure of his car, especially as he worked nights, Mr Bacior did not in our view put forward any sufficient reasons why the Commissioners should depart from their normal seizure policy in this case.

Accordingly, were the Appellants' explanations such that Officer Booth could not reasonably have arrived at her decision? We find it impossible to so conclude. We can accept that after a long journey Mr Bacior could well have been tired and that anyone stopped and questioned in these circumstances will be under a certain amount of pressure. That could explain the answers that Mr Bacior first gave to the questions put by Officer Elliott, in failing to mention straightaway either that they had been to Belgium (rather than just Calais) or that the main purpose of the trip was to purchase tobacco. In addition to that, however, we must take into account the recorded (if disputed) under-declaration of tobacco, the quantity of tobacco bought (also taking into account Mr Bacior's previous cross-Channel shopping trips), the unsatisfactory evidence that we heard of how much tobacco was Ms Martin's and the way in which the car was packed.

Finally, however, there is the issue of the two Persil boxes packed with tobacco. Mr Bacior might have persuaded us that it was sensible in the circumstances to unpack the tobacco from its original cartons to facilitate loading the car safely with the quantity involved. Repacking tobacco into two large Persil boxes, however, rather militates against that explanation. Then there is the question of whether Mr Bacior had brought one or two empty Persil boxes from home or whether the Appellants had emptied one of their new purchases to fill it with tobacco. We were not persuaded by Mr Bacior's explanation that this action was no more than to facilitate an innocent surprise gift to one of his children.

Although Officer Booth had not sought or heard these explanations of the Appellants' conduct at the time that she conducted her review, we think it impossible to say (based on what we heard) that no reviewing officer could reasonably arrive at the decision she did. On that basis we would have dismissed the Appellants' appeals. In reaching the contrary conclusion, however, we have had regard to the Hoverspeed decision.

The Hoverspeed decision

The Court in Hoverspeed examined the relevant UK and Community Law in some detail. We do not repeat this here. At paragraph 177 of its decision, the Court pointed out that the requirement for persons entering the UK to declare dutiable goods and the familiar powers for Customs officers to ask questions, to direct travellers to produce their baggage for examination and for Customs officers to search, no longer apply to persons crossing the internal borders of the European Community, any more than they do when people cross county boundaries or the borders of England, Scotland or Wales. The Court accordingly concluded (at paragraph 180) that—

"It follows that the only power available to Customs and Excise officers to stop and search people (or their vehicles) at an internal frontier arises if there are reasonable grounds to suspect one or other of the matters set out in sections 163 and 163A of CEMA. They are not entitled to rely on generalities or trends: there must be reasonable grounds to suspect the person(s) whom they are checking. In the absence of such suspicion on an individualised basis, they have no right to impede Community travellers' movement at the frontier for the purposes connected with the collection of excise duty. The powers they use at a frontier must be the same powers as they would use anywhere else within the state for the purposes of ensuring that duty us paid on excise goods chargeable within that territory."

At paragraph 183, the Court further emphasises that, "individuals and their goods must be free to travel across internal frontiers without being impeded and delayed by checks for excise duty purposes, although such checks may be made on an individualised basis for the purposes set out in sections 163 and 163A of CEMA."

Neither Officer Elliott not Officer Booth offered an explanation as to why the Appellants in this case had been stopped, questioned and searched as they returned to the United Kingdom. As the Divisional Court said in Hoverspeed (at paragraph 192), "We do not know why they stopped the car which Mr Andrews was driving and required its three occupants to explain themselves." As in Hoverspeed, there is nothing that the Commissioners in this case rely upon as reasonable grounds for suspecting the Appellants on an individualised basis. The Divisional Court in Hoverspeed then concluded that (at paragraph 194)—

"We would therefore hold that because the Commissioners have not proved to us that there were reasonable grounds for stopping this car and questioning its occupants, the goods in it should not have been seized. Nor should the car."

In essence, it seems to us that the Commissioners acted beyond their powers in stopping and questioning the Appellants as the entered the United Kingdom from France, in then searching Mr Bacior's car and finally in seizing the Appellant's goods and Mr Bacior's car. While in this instance the Commissioners discovered a substantial quantity of tobacco being carried in the car for which the Appellants have been unable to give us an entirely satisfactory account, we do not think that that legitimises the Commissioners' unauthorised action and what then flowed from it. Accordingly, in failing to take into account that Officer Elliott was acting beyond his powers (having no reasonable grounds to suspect the Appellants on an individualised basis), Officer Booth arrived at a decision that no reasonable reviewing body could have arrived at.

We therefore direct that Officer Booth's decision shall cease to have effect ab initio. The Commissioners should conduct a further review in the light of the decision in Hoverspeed and of the Appellants' explanations as recorded in this decision (together with any further evidence that the Appellants offer to substantiate their explanations).

In the circumstances we have not thought it appropriate to make any order as to whatever costs the Appellants may have incurred in this Appeal. The Appellants, however, are at liberty to apply within 28 day of the release of this decision.

MALCOLM GAMMIE QC

CHAIRMAN

RELEASED: 29 October 2002

LON/01/8243 and LON/01/8244