United Kingdom VAT & Duties Tribunals (Excise) Decisions

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URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2003/E00376.html
Cite as: [2003] UKVAT(Excise) E376, [2003] UKVAT(Excise) E00376

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Pitcher v Customs and Excise [2003] UKVAT(Excise) E00376 (11 December 2003)

E00376

EXCISE DUTIES — Customs officer inspecting baggage apparently abandoned at point of entry — appellant claiming baggage late — whether Customs' questioning of appellant amounts to random stopping — no — burden of proof — whether respondents have shown that importation commercial — 11,800 cigarettes imported 11 months after 26.5 kg of tobacco — importation commercial — appeal dismissed

MANCHESTER TRIBUNAL CENTRE

ANTHONY PITCHER

Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE

Respondents

Tribunal: Mr Colin Bishopp (Chairman)

Sitting in public in Manchester on 31 October 2002

The Appellant did not appear and was not represented

Nigel Poole of counsel instructed by the Solicitor's office of HM Customs and Excise for the Respondents

© CROWN COPYRIGHT 2002


 


DECISION

1. In this appeal Anthony Pitcher challenges the refusal of the respondent Commissioners to restore to him 11,800 cigarettes which were seized from him at Dover on 23 September 2001. He applied for a review of that refusal; the review was carried out by David Harris, who upheld the decision that the goods should not be restored and conveyed his decision by letter to Mr Pitcher of 19 April 2002. It is against the decision conveyed by that letter that Mr Pitcher now appeals to this tribunal.
2. Mr Pitcher did not attend the hearing. It appeared that notice of the hearing had been sent to him at his correct address and had not been returned by the postal authorities to the tribunal. Nigel Poole of counsel, who appeared for the Commissioners, was ready to proceed and invited me to hear the case in the appellant's absence in accordance with rule 26 of the Value Added Tax Tribunals Rules 1986 (SI 1986/590). I concluded that it was an appropriate case in which I should do so, although I have deferred reaching a final conclusion and releasing this decision until I had the opportunity of reading the judgment of the Court of Appeal in R (on the application of Hoverspeed Ltd and others) v Customs and Excise Commissioners, which was handed down on 10 December 2002.
3. Mr Poole did not call any oral evidence, but I had before me a bundle of documents including the correspondence between Mr Pitcher and the respondents, particularly Mr Harris's letter upholding the decision not to restore the goods, and a copy of the notebook of the officer who had interviewed Mr Pitcher at Dover. Mr Poole also produced a short statement from Mr Harris, which had been served upon Mr Pitcher and to which he had taken no objection, but the statement really adds nothing to Mr Harris's letter. Mr Poole produced the statement of Gerry Dolan, which outlines the Commissioners' policy with regard to the seizure of vehicles used for the illicit importation of goods and has no bearing on the matters which I must consider, since the vehicle in which Mr Pitcher was travelling was not seized.
4. It was apparent from the documents before me that Mr Pitcher had travelled across the Channel as a passenger in a coach. He had been on a coach tour of ten days' duration. During the course of the trip he had visited Spain, where he had purchased the cigarettes in question.
5. In accordance with what I understand is the practice, the luggage of the coach passengers was removed from the coach when it arrived at Dover, and placed on a carousel in order that the passengers could individually reclaim their luggage. Mr Pitcher however did not immediately claim his suitcase, and it was observed by a Customs officer, Mr Rodgers, still on the carousel and apparently abandoned. Mr Rodgers looked at the suitcase to see if its owner could be identified from labels, but found that there were no such identifying marks. As he was doing so, Mr Pitcher re-entered the room in which the carousel was situated, evidently having previously left it, to claim what turned out to be his suitcase. He told Mr Rodgers that it was his only item of luggage and that it contained 40 sleeves of cigarettes. The suitcase was opened and Mr Rodgers searched it, finding 59 sleeves of Lambert & Butler cigarettes, making a total of 11,800 cigarettes. Mr Pitcher is then recorded to have conceded that there were 54 rather than 40 sleeves; it was not apparent to me from the notebook entries how the discrepancy between the 59 found and the 54 sleeves to which Mr Pitcher then admitted arose, nor indeed is there any recorded explanation at this point in the notes of the discrepancy between the number initially conceded and the number found.
6. In accordance with what was then the Commissioners' practice, Mr Rodgers proceeded to ask Mr Pitcher to satisfy him that the cigarettes were being brought into the country for his personal consumption. The notebook shows that Mr Pitcher had begun to relate where he had bought the cigarettes and for what price, when a Mr Graeme Webster entered the room in which the interview was being conducted, and stated, so the notebook records, that half of the cigarettes found in Mr Pitcher's suitcase belonged to him. Mr Rodgers asked Mr Webster if he wished to stay and answer some questions; Mr Webster asked if he might first speak to Mr Pitcher, and this was permitted. After he had done so, Mr Webster and Mr Pitcher together told Mr Rodgers that three or four of the sleeves belonged to Mr Webster, and that Mr Pitcher had brought them into the country in his suitcase. I deduce, though it is by no means clear from the available documents, that Mr Webster had also been a passenger on the coach trip. At this point Mr Webster elected to leave, and the interview continued with Mr Pitcher alone. Mr Rodgers asked a number of questions about Mr Pitcher's tobacco consumption, his income and his savings. Even allowing for what appears to me to be an obvious mistake in the notes, in that the amount Mr Pitcher is recorded to have earned per week must be the amount he earned per month, it is clear that he had the wherewithal to buy such a quantity of cigarettes. Mr Pitcher claimed a heavy daily consumption of cigarettes; Mr Rodgers observed that while he had an open packet of cigars on his person, he had no open packet of cigarettes.
7. It was then put to Mr Pitcher that on 21 October 2000, that is some eleven months previously, he had been stopped at Dover when importing 26.5 kilos of hand-rolling tobacco and 1000 cigarettes. At that time, Mr Pitcher had claimed that he would smoke all of the tobacco himself, and that he expected it would last him two years. He was allowed to proceed with it. In his interview with Mr Rodgers, Mr Pitcher said (according to the notes), that he had smoked it all. He was asked at this stage why he had declared only 40 sleeves of cigarettes and said "I didn't realise how many I'd got." Shortly after that exchange the interview ended. Mr Pitcher wrote at the end of the notes that he had read and agreed with them, and signed his name.
8. Mr Rodgers seized the cigarettes, exercising the powers conferred on him, by s 139 of the Customs and Excise Management Act 1979, to seize goods imported without payment of the requisite excise duty and recorded in the notebook that his reasons for doing so were that the amount involved exceeded the minimum indicative limits, that Mr Pitcher had initially misrepresented the amount imported, that he was aware of the law because of his previous encounter with Customs, that he claimed to have smoked 26.5 kilograms of tobacco in less than a year, which Mr Rodgers regarded as an unreasonable consumption rate, that he had no cigarettes, but only cigars, on his person and that he might have been carrying goods through Customs' controls for other people.
9. In his review letter, Mr Harris concentrates first on the misdeclaration and, second, on the quantity of cigarettes imported. At that time the guideline figure for manufactured cigarettes, set out in the Schedule to the Excise Duties (Personal Reliefs) Order 1992 (SI 1992/3155), was 800 and, as the law was then understood, a traveller seeking to import more than that quantity could be required to satisfy Customs they were being imported for his personal consumption. In July 2002, about three months after Mr Harris wrote his letter following his review, the Divisional Court determined in the Hoverspeed case that this was an incorrect approach and that the burden of establishing that goods were imported for commercial purposes lay on Customs; it was not for the traveller to satisfy Customs to the contrary. This finding was not challenged by Customs in the Court of Appeal and it is appropriate to proceed upon the basis that the burden at all times lay upon the Commissioners.
10. It does not seem to me that the other point of significance which arises from the Hoverspeed decision is of relevance here. That point of significance is the Divisional Court's conclusion that it was not within the Commissioners' power to stop travellers at random but that they could do so only when they had reasonable grounds for suspicion. That view was modified though not overturned by the Court of Appeal. Here, Customs' attention was drawn to Mr Pitcher's suitcase by its apparently having been abandoned. It does not seem to me to be unreasonable for a Customs officer to look into the circumstances of that abandonment and to ask questions of the person belatedly claiming ownership of the suitcase. I do not regard this as an example of stopping a traveller at random, on the contrary, para 30 of the judgment of the Court of Appeal seems to me to be very much in point.
11. Mr Pitcher is recorded to have told Mr Rodgers that the suitcase was his only item of luggage, which seems to me rather surprising – first, because it is difficult to understand why Mr Pitcher would have forgotten to claim his only piece of luggage and, second, because 59 sleeves of cigarettes would have left very little space inside a suitcase for the clothing and other items which Mr Pitcher would have needed on his ten day trip. Those factors could, I think, have led only to an increase in Mr Rodgers's suspicions.
12. The only remaining question therefore is whether the Commissioners can reasonably be said to have established that Mr Pitcher was importing the cigarettes for commercial purposes, that is for re-sale, whether or not at a profit. In my view they have. Mr Harris undertook a calculation, which is set out in his letter, showing that if Mr Pitcher had indeed consumed all of the hand-rolling tobacco and the 1,000 cigarettes he imported in October 2000 by the time he was stopped in September 2001, it would have been necessary for him to smoke between 128 and 159 cigarettes per day. Even if one were to take the lower figure and round it down to allow a margin for error (and I should add that Mr Harris's calculation already errs somewhat in the appellant's favour, assuming as it does that he had finished consuming the earlier importation of tobacco on the very day on which he was stopped in September 2001) it requires an impossibly high consumption of cigarettes if his story of having consumed the entirety of the 26.5 kilos is true. This factor alone must point to the conclusion that Mr Pitcher was importing the tobacco and the cigarettes otherwise than for his own consumption. The only reasonable inference is that he was importing them with the intention of re-selling them.
13. I am accordingly satisfied that the decision to seize the goods, the refusal to restore them and the upholding of that decision were all reasonable.
14. The appeal is dismissed. In accordance with the Commissioners' policy of seeking a direction for costs where appellants fail without good reason to attend the hearing of their appeals, Mr Poole asked for such a direction in this case. I considered that was a reasonable request and I direct that the appellant pay the Commissioners' costs, assessed at £250, by 31 January 2003.

COLIN BISHOPP

CHAIRMAN

RELEASE DATE: 11 December 2003

MAN/02/8111