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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 >> Tanner v Customs and Excise [2003] UKVAT(Excise) E00388 (20 February 2003)
URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2003/E00388.html
Cite as: [2003] UKVAT(Excise) E388, [2003] UKVAT(Excise) E00388
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Tanner v Customs and Excise [2003] UKVAT(Excise) E00388 (20 February 2003)

    E00388

    EXCISE DUTY – Appeal heard in the absence of the Appellant under VAT Tribunals Rules, Rule 26(2) – Appeal under s.16 FA 1994 against a review decision not to offer seized excise goods for restoration – imported excise goods allegedly concealed in a manner appearing to be intended to deceive an officer; s.49(1)(f) CEMA – R on the application of Hoverspeed and Others v CCE considered – held that the Appellant had not shown that either the decision not to offer the goods for restoration or the review decision was unreasonable – appeal dismissed

    LONDON TRIBUNAL CENTRE

    JOHN TANNER Appellant

    - and -

    THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

    Tribunal: MR JOHN WALTERS QC (Chairman)

    MR RICHARD CORKE FCA

    MISS ANDELA WEST FCA

    Sitting in public in Cardiff on 10 December 2002

    The Appellant did not appear and was not represented

    Miss Eleni Mitrophanous of Counsel, instructed by the Solicitor for the Customs and Excise, for the Respondents

    © CROWN COPYRIGHT 2003


     

    DECISION

  1. This is an appeal under section 16, Finance Act 1994 ("FA 1994") against the decision by the Commissioners (by their review officer, Mr. L.W. Johnston) on a review under section 15, FA 1994 dated 7th February 2002, which confirmed a decision dated 27th November 2001 (by officer Mr. S. Clapson) not to offer for restoration excise goods seized when a Mercedes van, registration number K247 RLD, driven by the Appellant, was stopped and searched at Eastern Docks, Dover, on 15th September 2001. The excise goods concerned were: 12.5 kilograms of hand-rolling tobacco, 5,400 cigarettes and 550 cigarillos.

  2. The Appellant was represented by Messrs. Probert & Gray, Solicitors, of Neath, in his preliminary dealings with the Commissioners with regard to the review, and those Solicitors lodged the appeal to the Tribunal on 28th February 2002. The Tribunal Centre in London informed those Solicitors of the date fixed for the hearing of the appeal (10th December 2002) by a letter dated 31st October 2002.

  3. Nevertheless, when the appeal was called on for hearing, neither the Appellant, nor any person representing him was present. The Chairman at that time arranged for the Tribunal's Clerk to telephone the Solicitors to ascertain the position regarding the Appellant's representation. Our Clerk was told that the Appellant would be representing himself. In those circumstances, we proceeded to hear Miss Mitrophanous, Counsel for the Commissioners, in the absence of the Appellant.

  4. She submitted to us that it was open to us to dismiss or strike out the appeal under rule 26(1) of the VAT Tribunals Rules 1986 ("the Tribunals Rules") or to proceed to consider the appeal in the absence of the Appellant under rule 26(2) of the Tribunals Rules.

  5. She urged us to dismiss the appeal under Rule 26(1) of the Tribunals Rules.

  6. The Tribunal retired to consider how it would proceed. We considered proceeding under Rule 26(1) or Rule 26(2), or alternatively adjourning the appeal. We decided to proceed under Rule 26(2) and went on to consider the appeal.

  7. The seizure was made under section 49(1)(f) Customs and Excise Management Act 1979 ("CEMA"), which renders liable to forfeiture "any imported goods … concealed or packed in any manner appearing to be intended to deceive an officer" and section 141(1)(b) CEMA, which renders liable to forfeiture "any other thing … found with" a thing otherwise liable to forfeiture.

  8. The seizure was not appealed against, but restoration of the goods seized was applied for (by a letters from the Solicitors acting for the Appellant, dated 10th October 2001 and 24th October 2001). The Commissioners declined to exercise their power to restore the goods (see: section 152(b) CEMA) – Officer Clapson's letter of 27th November 2001 refers. That decision was a decision within paragraph 2(1)(r) of Schedule 5 to the Finance Act 1994, and was therefore a decision in relation to which the Appellant could require the Commissioners to carry out a review (section 14(2) FA 1994)

  9. The Solicitors acting for the Appellant requested a review of Officer Clapson's decision – their letter dated 20th December 2001. This was the review under section 15 FA 1994. As we have already indicated, the decision on review was taken by Officer Johnston and he confirmed Officer Clapson's decision.

  10. The Solicitors appealed to the Tribunal against Officer Johnston's decision under section 16(1) FA 1994. The Tribunal's powers on the appeal are set out in section 16(4) FA 1994. We must consider the reasonableness of the decision appealed against. However it is for the Appellant to show that the decision is unreasonable (section 16(6) FA 1994).

  11. Officer Johnston, Mr. Paul William Rowe, Ms. Roxane Michelle Clare Masters and Mr. Gerry Dolan, who are also officers of H.M. Customs and Excise, provided witness statements (in Officer Johnston's case two witness statements). Notices of Objection to all these witness statements were received at the Tribunal Centre from the Solicitors acting for the Appellant. Pursuant to Rule 21(4) of the Tribunals Rules, this rendered the witness statements inadmissible at the hearing and, in practical terms, necessitated the personal attendance of Officers Johnston, Rowe and Masters, all of whom gave evidence before the Tribunal.

  12. From that evidence we find the following facts:

  13. On 15th September 2001 the Mercedes van, registration number K247 RLD, driven by the Appellant with three passengers, was intercepted at Eastern Docks, Dover by a "selecting officer" (not any of the officers who gave evidence) and Officer Rowe questioned the Appellant.

  14. In response to Officer Rowe's questions, the Appellant said that he had travelled to Belgium to buy garden gnomes for his business, which was a garden centre. Officer Rowe asked him if he had any excise goods with him and he replied "no". When asked if he had any tobacco or cigarettes, he stated that he had 800 cigarettes. He also said that he was aware of the prohibitions and restrictions on the import of certain goods, such as drugs.

  15. Officer Rowe and Officer Masters then searched the vehicle and Officer Masters found 2 boxes of Golden Virginia tobacco under garden gnomes. Each box contained about 6 kilograms of tobacco.

  16. Besides the tobacco, the cigarettes and cigarillos were found under the vehicle seats. These were visible from the footwell at the front of the vehicle.

  17. Officer Rowe asked the Appellant why he had not declared the tobacco. The Appellant replied that he had forgotten it. Officer Rowe put it to the Appellant that he had concealed and not declared the tobacco. The Appellant denied that it had been concealed and asserted that it "was simply packed that way" (to quote from Officer Rowe's notebook). The Appellant's receipts for the purchase of the tobacco (from Euro Baccy of Adinkerke in Belgium) showed that he had bought it at 5.38 a.m. on the same day (15th September 2001).

  18. The goods and the vehicle were seized as liable to forfeiture, but the vehicle was restored to the Appellant without charge. A form C156 (Seizure Information Sheet) was issued, informing the Appellant and his passengers that the seizure had been carried out pursuant to section 139 CEMA and informing them that any application for return of the seized goods should be made in writing to the Queen's Warehousekeeper.

  19. Probert & Gray wrote to the Queen's Warehousekeeper on the Appellant's instructions on 10th October 2001, applying for the return of the seized goods. His case was put in the barest outline: the Appellant asserted that he had not breached any rules and that although there was "a problem" when he was stopped on 15th September 2001, the problem was "not with him".

  20. A further letter from Probert & Gray dated 24th October 2001 indicated that no appeal against seizure was being made, but that a request for restoration was being made.

  21. This led to Officer Clapson's decision not to restore the goods, which was communicated to the Solicitors by his letter dated 27th November 2001.

  22. The letter explained that the Commissioners' policy is not to restore seized excise goods except in exceptional circumstances demonstrated by the applicant for restoration.

  23. The letter went on to state that restoration was not offered (i.e. no exceptional circumstances had been shown to justify a departure from the policy) in the light of the following factors: (a) the Appellant was carrying excise goods in excess of the guidelines set out in Article 5 of the Excise Duties (Personal Reliefs) Order 1992; (b) at the initial interception the Appellant had failed to declare the tobacco which he had purchased, which was construed as a deliberate attempt to deceive the Officer concerned (Officer Rowe); and (c) the tobacco was found concealed in the vehicle underneath garden gnomes. The letter concluded by advising the Solicitors of the Appellant's right to require a review of the decision.

  24. The Solicitors required a review, which was carried out by Officer Johnston, confirming Officer Clapson's decision. Officer Johnston's review concentrated on two issues: first, whether the Appellant's answers to Officer Rowes's questions were "a false declaration in a deliberate attempt to deceive". He decided that they were. Secondly, he considered whether the Appellant had concealed the tobacco beneath the garden gnomes. He concluded that he had. On this basis, Officer Johnston agreed that the goods were liable to forfeiture and concluded that the Appellant had shown no exceptional circumstances to justify a departure from the Commissioners' general policy of non-restoration. He concluded by advising the Solicitors of the Appellant's right of appeal to this Tribunal.

  25. We note that Officer Johnston's decision was not based on a consideration of the guidelines set out in Article 5 of the Excise Duties (Personal Reliefs) Order 1992. In this he can, perhaps, be said to have anticipated the judgment of the Divisional Court in The Queen on the application of Hoverspeed Limited and Others v Commissioners of Customs and Excise (handed down on 31st July 2002) which held that the 1992 Order was incompatible with Council Directive 92/12/EEC and article 28 of the EC Treaty. This aspect of the Divisional Court's decision in the Hoverspeed case was not the subject of the Commissioners' appeal in that case to the Court of Appeal. Accordingly we say no more in this Decision about Officer Clapson's point based on the 1992 Order.

  26. Miss Mitrophanous submitted that by saying to Officer Rowe that he had forgotten about the tobacco, rather than denying that it was his, the Appellant had accepted responsibility for it and had not given any explanation, either in person or by correspondence, which would establish in terms of section 16(6) FA 1994 that the refusal to restore the goods was unreasonable.

  27. At the conclusion of the hearing the Tribunal reserved its decision because the judgment of the Court of Appeal in Commissioners of Customs and Excise v The Queen on the application of Hoverspeed Limited and Others was expected imminently and Miss Mitrophanous submitted that the Tribunal would or might find it relevant to its decision. In fact the Court of Appeal's decision was handed down on the same day as the Tribunal hearing (10th December 2002).

  28. The Tribunal has had an opportunity to consider the Court of Appeal's decision since the hearing.

  29. The Commissioners did not provide any evidence that they had reasonable grounds to suspect the Appellant or any of his passengers of smuggling, so as to justify stopping the vehicle. We must therefore conclude that the check in this case was invalid (see the Court of Appeal's decision in Hoverspeed, paragraphs 22 and 23).

  30. However the seizure in this case cannot be regarded as axiomatically invalid, merely because it occurred as a result of a check which was invalid (paragraph 49 of the Court of Appeal's decision in Hoverspeed).

  31. Nor is the seizure to be regarded as invalid because it may have proceeded in part from Customs' general understanding (based on the terms of the 1992 Order which failed correctly to implement the 1992 Directive) which was contrary to law (paragraph 59(i) of the Court of Appeal's decision in Hoverspeed).

  32. We therefore proceed to consider whether the Appellant has established any grounds for us to hold that Officer Clapson's decision to refuse restoration and/or Officer Johnston's decision confirming Officer Clapson's decision were/was unreasonable in terms of section 16(4) FA 1994.

  33. We note that the papers do not show any allegation on the part of the Appellant that the seizure involved disproportionate interferences with freedom of movement and/or property (compare paragraph 59(ii) of the Court of Appeal's decision in Hoverspeed).

  34. Indeed the only case advanced by or on behalf of the Appellant is the bald assertion in the Notice of Appeal that the Appellant has not deliberately misled anyone, is aware of the applicable regulations and did not breach them on the occasion in question. As recorded above, he nonetheless acknowledged that there was a "problem" when the vehicle was stopped on 15th September 2001, but excused himself from responsibility for it by asserting that the problem was "not with him".

  35. This comes nowhere near establishing grounds for us to hold that Officer Clapson's decision and/or Officer Johnston's decision were/was unreasonable.

  36. On the contrary, we were impressed by the evidence given by the Customs Officers at the Tribunal and formed the clear view that the conclusions reached by them that the tobacco had been concealed, and that the Appellant had attempted to deceive Customs officers were entirely reasonable, as was the decision not to offer the goods for restoration.

  37. We therefore dismiss the appeal.

  38. At the hearing Miss Mitrophanous made an application for costs on behalf of the Commissioners. She explained that, because of the Notices of Objection lodged by Probert & Gray, it had been necessary for Officer Rowe and Officer Masters to attend the Tribunal hearing as well as Officer Johnston. In the normal case only the reviewing officer (Officer Johnston) would have attended. She also drew our attention to the Commissioners' position on costs as set out in paragraph 31 of the Statement of Case settled by her on 14th May 2002. That paragraph states that the Commissioners' policy is normally not to ask for their costs, but they will consider doing so "if circumstances warrant this, in particular if the Appellant fails to attend the hearing without notice".

  39. In these circumstances at the conclusion of the hearing we directed that the Appellant should pay to the Commissioners the sum of £1,358 in respect of their costs pursuant to Rule 29(1)(a) of the Tribunals Rules in any event, that is, whether we allowed or dismissed the appeal. It is appropriate to set a time limit for the payment of these costs and we further direct that they be paid within 28 days of the release date of this Decision.

  40. Because the hearing of the appeal took place pursuant to Rule 26(2) of the Tribunals Rules, it is open to the Appellant to make an application to the Tribunal (to be served at the London Tribunal Centre within 14 days after the release date of this Decision) for this Decision to be set aside on such terms as the Tribunal thinks just – Rule 26(3) of the Tribunals Rules.

  41. It is appropriate to note that the London Tribunal Centre has received a letter from Probert & Gray, the Solicitors acting for the Appellant, dated 7th January 2003. This letter states that the firm dealt with the paperwork leading up to the appeal "but it was always the case that [the Appellant] would represent himself at the final Hearing". The telephone call from the Tribunal's Clerk on 10th December 2002, to which we have referred above, is recorded in the letter, which goes on:

    42. "We explained that Mr. Tanner was representing himself and that we had written to him and no doubt he would be in attendance. We received no further call and presumed that Mr. Tanner had attended albeit somewhat late.

    We then received a telephone call from our client today [7th January 2003] asking for an update of the case. He was flabbergasted to know that the Hearing had been listed for the 10th December and it transpired that we had been writing to him at the wrong address .."

  42. The Solicitors ask if there is any procedure to have the matter reconsidered. The obvious procedure is an application under Rule 26(3) of the Tribunals Rules, as explained in paragraph 40 above. If such an application is made, the Tribunal will no doubt consider any submissions which may be made to it by the Appellant and by the Commissioners, in deciding whether to set aside this Decision, and, if so, on what terms.

    43. JOHN WALTERS QC
    CHAIRMAN
    RELEASED: 20 February 2003

    LON/02/8058

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