United Kingdom VAT & Duties Tribunals (Excise) Decisions

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Cite as: [2003] UKVAT(Excise) E391, [2003] UKVAT(Excise) E00391

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Ledbury v Customs and Excise [2003] UKVAT(Excise) E00391 (13 March 2003)

E00391

EXCISE DUTY – Non-restoration of car and tobacco goods – whether reasonable and proportionate.

LONDON TRIBUNAL CENTRE

IAN MARK LEDBURY Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: Peter H Lawson (Chairman)

M M Hossain FCA FCIB

Sitting in public in London on 11 February 2003

The Appellant in person

Christopher Mellor, Counsel, for the Respondents

DECISION

This is an appeal by Mr Ian Mark Ledbury who lives at Faringdon, Oxfordshire, against the Commissioners' decision on rereview (directed by the Tribunal) dated 20 May 2002 not to restore a BMW 316 vehicle, registration number MIA 2531 to the Appellant.

Witness statements were put in by Gerry Dolan dated 3 September 2002, Robert Ian Pennington dated 9 August 2001, Diane Pamela Florence dated 24 May 2001, Brian John Rowland dated 22 June 2001, Kieron Villiers dated 24 July 2002, and Gerald Reilly dated 28 July 2002.

Oral evidence was given before us by Mr Villiers and Mr Reilly, and also by Mr Bernard Martyn Wills who conducted the re-review. Each of them was cross-examined by the Appellant.

We find the following facts:

The Appellant was stopped at Dover Eastern Docks on 9 January 2001 when he was driving the red BMW 316 referred to above, by Mr Villiers. The Appellant was alone in the vehicle.

In response to initial questions the Appellant stated, inter alia, that:

(a) He had been to Belgium that day.

(b) The purpose of the trip was to visit a friend in that country and to get some cigarettes and tobacco.

(c) He had been out of the UK for nine hours.

(d) The vehicle was his and he had owned it for a couple of years.

(e) He had purchased a box of tobacco, which comprised 100 pouches, and some boxes of cigarettes which he said were all for his family.

(f) His family had given him money but he did not sell the goods, they just paid for what he had bought for them.

(g) He had last travelled across before Christmas, for some beer and wine.

The Officer then read a statement to the Appellant formally requiring him to satisfy the Officer that the excise goods qualified for relief from UK excise duty. The Appellant said that he understood.

The Appellant was then interviewed and gave, inter alia, the following additional information:

(a) He had purchased two boxes of Benson & Hedges, one box of Superkings, one box of Golden Virginia tobacco, 10 cartons of Embassy Number 1 and, he thought, five Lambert & Butler and five "cheap French ones" (the name of which he did not know).

(b) He had bought all of the goods from the same shop.

(c) He thought that the cost altogether was just over £2,000 and he had paid in cash as he did not have any credit cards.

(d) The goods were to be gifts for his father, relatives and girlfriend (fiancée.

(e) He would keep a box of Benson & Hedges for himself and the other box would be divided between his father and his grandmother. The Embassy Number 1's were for his aunt, who lived with his grandmother. The tobacco was for his sister-in-law and brother-in-law. The remaining Lambert & Butler and French cigarettes were for his brother and sister-in-law.

(f) His family had offered to give him money for the cost of the goods but he would give the goods away if he was not allowed to take money from them and he would not come again as he was only doing them a favour.

(g) When the Officer asked whether it had been the Appellant's intention to accept money for the goods, he said that he did not know how to answer that really; he would only have taken the cost for the goods, only buying them as a favour. He stated that he had a job and did not need to take money for the goods for financial reasons.

(h) He smoked about 40 or 50 a day.

(i) He thought that the goods would probably last three to four months.

(j) He was a Senior Security Officer earning £17,500 a year and taking home £1,200 or £1,300 a month (without overtime).

(k) His disposable income was about £600 or £700 per month and he received Family Allowance of £60 per week; if he needed extra money he just did overtime.

(l) His fiancée was deaf, did not work and did not contribute financially as she was a housewife.

(m) His monthly outgoings consisted of £60 rent a week, £68 community charge per month, gas and electricity of £15 and £10 per month, and shopping of £250 to £300 per month. He had no other outgoings, loans or credit cards and had £5,000 in his Building Society.

(n) He had been abroad three, maybe four times in the last six months. He came over just before Christmas for beer and wine as they have quite a lot of parties. The first time was to buy cigarettes but in a smaller quantity than on the current trip and the other occasion was for a day trip with his wife and son.

(o) On the trip before Christmas he bought only one box (25 cartons) of Benson & Hedges and 2000 Superkings cigarettes (i.e. 7000 in total). Half of the cigarettes were for his father and he smoked the other half himself; he had two sleeves (400) remaining.

(p) The reason he had not bought goods on the trip before Christmas was that he only had the same car and the purpose of that trip had been to get drink for Christmas. He had not made any trip intentionally to bring back as many cigarettes as he could.

(q) He knew that it was illegal to sell imported excise goods to the public without first paying the duty but did not know that that was also true for family (although he could understand why that was so).

(r) He would certainly not be going again unless it was for himself.

(s) He had not seen a Customs Notice 1 before and was not aware of the guide levels until the Officer told him.

The Officer then issued the Appellant with Notice 1 and explained it to him. The Appellant then signed the Officer's notebook record confirming it to be a true account of what had been said.

The Officer then stated that the Appellant had failed to satisfy him that the goods were not imported for a commercial purpose and seized the excise goods which consisted of 12,180 Benson & Hedges cigarettes, 5000 Superkings cigarettes, 2200 Embassy Number 1 cigarettes, 1000 Lambert & Butler cigarettes, 200 Lambert & Butler Menthol cigarettes, 1000 West King Size cigarettes and 5kgs of Golden Virginia hand rolling tobacco. The Officer noted the following reasons for seizure:

(i) goods in excess of the minimum indicative levels;

(ii) admission of intention to receive money for the goods;

(iii) there was frequent travel, seven trips in six months;

(iv) the goods were for non-entitled persons (i.e. persons who had not travelled); and

(v) the Appellant had misled the Officer in respect of the purpose of a previous trip.

The Officer then issued the Appellant with the appropriate documentation.

On 20 February 2001 the Commissioners wrote to the Appellant informing him that the vehicle would not be restored. In the meantime, the Appellant wrote twice, on 26 February 2001 setting out the details of his domestic situation and protesting against the seizure. The Commissioners treated the letter as a request for a review and, having duly conducted a review, wrote to the Appellant on 11 April 2001, confirming that the decision not to restore the vehicle had been upheld.

The Appellant then appealed against that the decision and the appeal was listed for a hearing on 12 April 2002. However, on 10 April 2002 the Commissioners consented to the appeal being allowed and to a further review being directed. The Tribunal directed, in an Order released on 8 May 2002, that such further review be undertaken by an officer not previously concerned with the matter; the said officer was directed to consider the whole matter afresh on all matters before him including any further matters raised by the Appellant by 15 May 2002. It is that re-review decision which is the subject of the present appeal.

The Appellant's grounds of appeal, as disclosed by the Notice of Appeal dated 24 May 2002, are as follows:

"Ref re review by Mr Bernard Wills not to restore my car. Mr Wills re review is based only on the interview with the Officer who stopped me, no consideration has been given to all the facts i.e. P O travel is incorrect. Proof given that penalty out of all proportion to the amount of tobacco in question £2156. Hardship [?] also most is based on opinion not proof – also disproportionate not to restore".

The re-review was conducted by Mr Bernard M Wills, a Review Officer and his conclusions were set out in an 8 page letter dated 20 May 2002. Mr Wills' conclusions were set out in the Statement of Case as follows:

"(i) In the present case the Appellant had in his possession, 5kgs of hand rolling tobacco and 21,580 cigarettes. He was therefore importing excise goods more than five times and nearly 27 times in excess of the guideline levels respectively, and was required to satisfy the Officer that the goods were not held for a commercial purpose. In the circumstances the Officer was not satisfied and the Commissioners rely, inter alia, on the following in support of that conclusion:

(1) During initial questioning, the Appellant stated that the purpose for his trip was to visit a friend in Belgium and to get cigarettes and tobacco. However, the Appellant's ferry ticket records that the Appellant left Dover at 4am, the receipt from the Belgian tobacco shop records a time of 7.20am and the Appellant's return ferry left Calais at 9.30am. Given the time left after travel to and from Calais, it is not credible that the purpose of the Appellant's trip was to "visit a friend in Belgium". It is contended that the Appellant made this statement with the purpose of misleading the Officer into believing that the main purpose of the trip was social when, in fact, the sole purpose was to buy tobacco goods.

(2) The Appellant told the Officer that he had been out of the UK for nine hours when, in fact, the travel times on his tickets demonstrated that he had been out for only five and a half hours. Once again it is contended that this was intended further to deceive the Officer into believing that the trip was for a social rather than a commercial purpose.

(3) The Appellant stated that he had been abroad "three, maybe four" times in the previous six months. However, commercial records indicate that he had in fact travelled seven times during that period. It is contended that this was not a simple mistake of recall but was intended to deceive the Officer about the frequency of the Appellant's travel for the purpose of concealing the number of opportunities he had had to bring in excise goods.

(4) Commercial records further indicated that the Appellant made three trips in May 2000, which means a total of 11 trips in nine months. Once again, the Appellant made no mention of this frequency of travel.

(5) The Appellant stated that he came over just before Christmas for beer and wine and that the "other time was for a day trip with my wife and son". However, all of the travels recorded in the relevant period show that the Appellant was alone in the car and that none of the trips lasted for longer than five hours. Once again, it is contended that this demonstrates the Appellant's intention to deceive the Officer by setting a scene of innocent travelling.

(6) The Appellant stated that when he travelled in December (on 12^th) he bought 25 cartons (5000) of Benson & Hedges cigarettes and 2000 Superkings cigarettes. He stated that he gave half to his father and the other half he smoked himself, although he had two sleeves (400) left. This would have required the Appellant to have smoked 3100 cigarettes in 28 days, which is clearly nonsensical and, it is contended, that the Appellant's intention was to justify the consumption of the maximum amount of tobacco in order to persuade the Officer that it was for own use.

(7) The Appellant stated that he worked as a Senior Security Officer earning £17,500 per year. Following the Tribunal's direction for a re-review, the Commissioners wrote to the Appellant on 15 May 2002 requesting, inter alia, samples of his pay advices for the last six months of 2000. In the event the Appellant has only provided a P45, dated 15 September 2000, which records that he left his employment on 31 July 2000. Furthermore, his solicitors stated in their letter, dated 18 January 2001, that he was currently off work due to a back problem. On the evidence provided it therefore appears that he was not earning £17,500 at the time he was intercepted. Furthermore, despite the Commissioners' requests, the Appellant has not provided any evidence in support of his statement that he has £5000 in his Building Society.

(8) The Appellant also stated that he had owned the vehicle for "a couple of years" but the vehicle registration document that he provided, following the Commissioners' request in their letter dated 15 May 2002, shows that he registered the vehicle on 27 April 2000, just over eight months before the time of the seizure. It is contended that this calls into question the Appellant's credibility.

(9) Furthermore, in interview the Appellant stated that his relatives had offered to give him money, but that he would give the goods away if he was not allowed to accept money. However, in their letter dated 18 January 2001, the Appellant's solicitors state that money was given to the Appellant by family members in advance. Once again, it is contended that this calls into question the Appellant's credibility.

The Appellant gave evidence also.

He argued that the seizure of a car worth between £9,000 - £10,000 was disproportionate. The cigarettes which he had purchased cost about £2,000 and the duty on them was between £1,400 - £1,500. He had received a legacy of £5,000 from his mother and was not "on the breadline". He had never sold tobacco goods for profit – he had sold them only at cost to his immediate family, i.e. his father, grandmother, aunt, brother, sister-in-law and a "partner". According to a letter dated 18 January 2002 written by the Appellant's solicitors, Bradleys, his family members asked him if he would purchase cigarettes and tobacco on their behalf and the arrangement was that they would pay cost price for them. The money was given to him by his family members in advance.

The Appellant stated that his grandmother died 5 ½ months ago. Some of the family members gave him money in advance but others, for example his father, gave him the money after he had purchased the cigarettes or tobacco.

The Appellant stressed that he was not a smuggler; he did not sell cigarettes outside his family. The important issue to him was the car. After the seizure of the car he had fallen behind with the payment of his debts and had to buy another car. In reply to Mr Mellor the Appellant accepted that the levels of importation as stated by the Customs Officers were correct. He also agreed that the notes made by the Officers were correct, though he was not given the opportunity to read them at the time. He accepted that the items purchased were over the indicative levels and he knew what these were, but he believed that it was acceptable to purchase cigarettes and tobacco for family and friends. He had believed that there was no limit for friends and family.

Asked why he had said that he had crossed the Channel "to visit a friend in Belgium" he said that he was under pressure at the time, suffering from the shock of losing his car. He felt intimidated. He did in fact see a friend who worked at the Eastenders Cash & Carry but that was not the main reason for the trip.

Mr Mellor referred the Appellant to Mr Rowland's Witness Statement. He is the team leader in the Tourist Finance Department of P&O Stena Line, having held this position since 10 March 1998 when P&O European Ferries merged with Stena Line, and previously for four years with P&O European Ferries. Part of his duties include the interrogation and analysis of computerised booking records relating to passenger and tourist vehicle traffic between the UK and the continent. From the computerised booking records Mr Rowland produced a schedule showing 11 ferry trips made between 7 May 2000 and 9 January 2001 in a BMW registration number MIA 2531 travelling under the name of Mr I Ledbury. The schedule shows the booking reference for each trip and the lead passenger time, any other passenger names, the registration number and type of vehicle, the route date and time of each journey leg, the number of passengers actually travelling and the ticket booking office home address. He was able to confirm from the booking records of each of these trips that the vehicle and driver checked in and travelled on the specified sailings. He also produced the 11 booking records from which the schedule was compiled. The small "c" after the route marker on the booking records indicates that the vehicle and passengers checked in and travelled on the specified sailing. All personal details shown on the booking records such as name, vehicle type and registration are supplied by the customer at the time of booking or check-in. Passenger names are normally verified at check-in at which time passports of all passengers are checked, but the registration number would not normally be verified.

In two cases the Appellant's address is stated as 37 Malborough Gardens, Faringdon and in one case as 4 Bromsgrove, Faringdon. In five cases the Appellant's present address is shown and in three cases only the P&O Stena Line ticket office is shown. The Appellant stated that the first trip was with his wife and child on 9 January 2001 and he denied travelling more than 10 times in the previous two years. One trip stated to have been on 27 May 2000 was, he said, made in November 2000.

Evidence was also given by Clare Louise Tyson, the Appellant's fiancée. She told us that she had been on one cross-Channel trip with the Appellant and her son when they went shopping and bought cigarettes. She herself smoked about 20 cigarettes a day. She said that the Appellant had never sold cigarettes to anyone. His father-in-law was a chain smoker. She did not know how many trips the Appellant had made across the Channel but thought they were about every two months and she stated that some of the dates on the schedule were incorrect. She also confirmed that the Appellant smokes between 40 – 60 cigarettes per day. She thought there had been 7 or 8 trips altogether to France or Belgium. She knew that he had no intention of making any further trips, the trip made on 9 January 2001 was to be the last.

Miss Tyson said that she knew that the purchase of tobacco and cigarettes was for relatives because they saw them every Sunday. They would give the Appellant a list of cigarettes and tobacco which they wished him to buy. This was a regular occurrence. The family would give the Appellant a list of their requirements and some money, the balance of the money being paid later. She did not remember precise dates but she did know that the Appellant did take cigarettes and tobacco to them on Sunday mornings. She thought that some of the dates were wrong and the Appellant in fact was at home on those dates. She knew of 7 trips but thought that it was not possible that there were more. The Appellant stated in a letter dated 26 February 2001 that he had travelled to France only 10 times in two years and that not all of these visits were for the purchase of cigarettes.

Mr Mellor, for the Commissioners, made the following submissions (paragraphs 26 – 52 below):

Under section 163 of the Customs and Excise Management Act 1979 ("the 1979 Act"), if a Customs Officer had reasonable grounds to suspect that the vehicle was, or might be, carrying goods which were liable to forfeiture, the Officer could stop and search that vehicle (see also section 163A, relating to the power to search articles) (Commissioners of Customs and Excise v R, ex parte Hoverspeed Ltd and Others [2002] EWCA Civ 1804 (CA), at para 15).

The Officer was permitted to rely on profiles and trends to establish the said reasonable grounds (Hoverspeed (CA), at para 39(iv)).

It is for the Respondents to show that there were the said reasonable grounds justifying the checks carried out on the Appellant and his vehicle (Hoverspeed (CA) at para 23). If they fail to do so, the checks will have been invalid. However, even if the checks carried out were invalid, the seizure of the excise goods and the vehicle was not invalidated by that (Hoverspeed (CA) at para 49).

Pursuant to Article 3 of the Excise Duties (Personal Reliefs) Order 1992 ("the 1992 Order"), the Appellant was only entitled to relief from payment of duty on the excise goods if they were for his own use (as defined in Article 2(1) of the 1992 Order).

The 1992 Order seeks to implement the 1992 Excise Directive; however, the Respondents accept that the Order fails to implement the Directive, which has direct effect, to the extent that:

(a) it makes excise goods imported from another Member State chargeable to UK excise duty without it being established that the goods are imported into the UK for a commercial purpose; and

(b) it places a persuasive burden of proof on the individual to prove that the goods are not held for a commercial purpose where the goods are in excess of the minimum indicative levels ("the MILS").

However, whilst it is apparent that the standard statement read out by the Officer to the Appellant, at the time, reflected in its terms a misapprehension of the legal position and burden of proof, the question is as to what attitude the Respondents actually adopted in coming to their conclusion that the goods were liable to forfeiture (Hoverspeed (CA) at para 54).

In the present case, the Appellant admitted, in answer to initial questions put to him by the seizing Officer (Mr Kieron Villiers), that is was his intention to receive money for the goods (albeit at cost price). The said admission was one of the reasons recorded by the Officer for seizing the goods (the others being that the Appellant had goods in excess of the minimum indicative levels, in fact 5kgs of hand rolling tobacco and 21,580 cigarettes; that he had travelled frequently; that the goods were for non-entitled persons, i.e. persons who had not travelled; and that the Appellant had misled the Officer in respect of the purpose of a previous trip).

The Appellant's admission, that he intended to receive money for the goods, of itself (even before considering the Respondents' conclusion that, in fact, the Appellant intended to sell the goods at a profit) took the goods out of the ambit of the definition of "own use", and of the relief from excise duty, provided for under the 1992 Order. Therefore, in the circumstances, it is submitted that the matter was not decided on the basis of any legal misapprehension or by reference to any burden of proof (see Hoverspeed (CA) at para 55). There can therefore be no suggestion that any misapprehension as to the correct legal position, or as to the burden of proof, caused the seizure to be invalid, as such matters did not play any relevant part at all in the decision to seize (Hoverspeed (CA) para 56).

In the event, the Respondents contend that the Appellant's intention was, in fact, to sell the goods on a commercial basis in the sense of sale for a profit. The Respondents rely on the following matters in support of that conclusion:

(a) The Appellant was importing a large quantity of mixed tobacco and cigarettes (more than 5 times, and nearly 27 times, in excess of the guideline levels applicable at the time, respectively).

(b) During initial questioning, the Appellant stated that the purpose of his trip was to visit a friend in Belgium and to get cigarettes and tobacco. However, given the time of day that he travelled, and the short length of time that he was abroad, it is not credible that the purpose of the Appellant's trip was to visit a friend in Belgium. It is contended that this answer was intended to mislead the Officer as regards the true, sole purpose of the trip, which was to purchase tobacco goods.

(c) The Appellant told the Officer that he had been out of the UK for 9 hours when, in fact, the travel times on his tickets demonstrated that he had been out for only 5 ½ hours. It is submitted that this was another attempt by the Appellant to mislead the Officer as regards the purpose of the trip.

(d) The Appellant stated that he had been abroad, "three, maybe four" times in the previous 6 months. However, commercial records indicate that he had in fact travelled 7 times during that period.

(e) Commercial records further indicate that the Appellant made 3 trips in May 2000, which means a total of 11 trips in the 9 months.

(f) The Appellant stated that, in the previous 6 months, he came over just before Christmas for beer and wine and that the, "other time was for a day trip with my wife and son". However, the travels recorded in the previous 6 months show that the Appellant was alone in the car (the Appellant has since pointed to a trip in April 2000) and that none of the trips lasted for longer than 5 hours. Once again, it is contended that this demonstrates the Appellant's intention to deceive the Officer by setting a scene of innocent travelling.

(g) The Appellant stated that when he travelled in December (on 12^th) he bought 25 cartons (5,000) of Benson & Hedges cigarettes and 2000 Superkings cigarettes. He said that he gave half to his father and the other half he smoked himself, although he had two sleeves (400) left. This would have required the Appellant to have smoked 3,100 cigarettes in 28 days, which is clearly nonsensical.

(h) The Appellant stated that he worked as a Senior Security Officer earning £17,500 per year. However, the Appellant has provided a P45 dated 15 September 2000, which records that he left his employment on 31 July 2000. Furthermore, his solicitors stated in their letter, dated 18 January 2001, that he was currently off work due to a back problem. On the evidence provided it therefore appears that he was not earning £17,500 at the time he was intercepted.

(i) The Appellant also stated that he had owned the vehicle for, "a couple of years" but the vehicle registration document shows that he registered the vehicle on 27 April 2000, just over eight months before the time of the seizure. It is contended that this calls into question the Appellant's credibility.

(j) Furthermore, in interview the Appellant stated that his relatives had offered to give him money, but that he would give the goods away if he was not allowed to accept money. However, in their letter dated 18 January 2001, the Appellant's solicitors state that money was given to the Appellant by family members in advance.

As the tobacco and cigarettes were not held for the Appellant's own use, and were held for a commercial purpose, and the duty had not been paid on them, those goods were liable to forfeiture (Article 5(1) of the 1992 Order).

For the avoidance of doubt, if the Tribunal was to find that some of the goods were for own use, under section 141(1)(b) of the 1979 Act anything mixed, packed or found with the goods liable to forfeiture was also liable to forfeiture. In this respect, it is the Respondents' submission that the decision of the Tribunal in the case of Degerdon, dated 22 August 2002, is incorrect insofar as it deals, at paras 34, 35 and 36, with the phrase "mixed, packed or found". It is submitted that the words should be given their natural, ordinary meaning and the Respondents rely on the rule, expressed by Reid LJ in Pinner v Everett [1969] 1 WLR 1266 (at 1273 C-D).

In addition, the vehicle was liable to forfeiture pursuant to section 141(1)(a) of the 1979 Act.

By section 139(1) of the 1979 Act, anything liable to forfeiture under the Customs and Excise Acts may be seized or detained by any officer. Therefore, the goods and the vehicle were correctly seized in accordance with the applicable law.

In any event, in the present case the Appellant appears to accept that the seizure of the goods and the vehicle was in accordance with the Respondents' powers, as is evident from the letter from his solicitors, to the Respondents, dated 18 January 2001.

The Tribunal's jurisdiction in this matter is confined to a consideration of the reasonableness of the Review Officer's decision (see Finance Act 1994 section 16(4)).

The Tribunal has confirmed, in Dannatt v Commissioners of Customs & Excise LON/00/8030 (and Gora v Commissioners of Customs & Excise, Decision No. E00262) that in making this determination it has the power to make findings of primary fact, including as to the intended use of the goods in question, thereby considering the initial seizure of the goods and vehicle. This does not mean, however, that the Tribunal, having heard the evidence, can substitute its own decision for that of the Review Officer simply because it would have arrived at a different one.

The Tribunal may only interfere with the review decision if it finds that the Respondents could not reasonably have arrived at that decision. "Reasonableness" in this context has the same meaning as "Wednesbury reasonableness". It therefore follows that the Respondents' decision can only be found to be unreasonable if the Appellant can show that they have acted in a way 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.

Furthermore, it is submitted that the decision in question must be judged in the light of the information available to the Respondents at the time the decision was made. Facts and matters raised by the Appellant after the decision was made cannot be taken into account in the Tribunal's consideration of whether the decision has been reasonably arrived at (see also section 14(5) of the Finance Act 1994 in relation to an appellant requesting a further review in light of new information).

In reaching his decision, the Review Officer took into account the Commissioners' policy in relation to the restoration of privately owned vehicles.

The Respondents are entitled to adopt a policy, through which their discretionary power under section 152 of the 1979 Act is to be exercised, and the Review Officer was entitle to take that policy into account. The policy pursues the legitimate aim of deterring the importation of goods for commercial purposes without payment of duty and encourage compliance.

The first issue in relation to the policy is whether the Respondents have fettered their discretion by refusing to listen to an application that the relevant policy should be applied in any given case.

In the present case the Respondents have expressly considered whether there was any reason for disapplying the policy and have only followed that policy after due consideration of all the facts and matters surrounding the seizure of the excise goods, and vehicles, and of the representations made by the Appellant. It cannot therefore be said that they have fettered their discretion. In this regard the Respondents rely on Mr Wills' evidence and the decision letter.

The second issue in relation to the policy is whether its application, in the present circumstances, complies with the requirements of proportionality. Did the policy in question achieve a fair balance between the deterrence of smuggling and the protection of revenue on the one hand, and the right to enjoyment of property, on the other (Article 1 of Protocol 1 of the European Convention on Human Rights and Fundamental Freedoms)?

The question arises as to whether the decision should be condemned in light of the Court of Appeal's judgment in Lindsay v Commissioners of Customs & Excise [2002] 1 WLR 1766. That case concerned whether it was reasonable to refuse to restore a vehicle when goods were imported to be passed on at cost price to friends and family. Their Lordships concluded that it was not, unless certain specific matters were considered.

In relation to Lindsay the Respondents make the following submissions:

(a) The present case is to be distinguished from Lindsay as the Respondents have reasonably concluded that the goods were intended for a commercial purpose in the sense of to be sold at a profit. Consequently, following Lord Phillips' judgment at paragraph 63 in Lindsay (p. 1786 C-E), the matters his Lordship detailed at paragraph 64 need not be considered (see Houlton Meats Limited v Commissioners of Customs & Excise [2002] LON/01/8068 at para 15); and

(b) in any event, Lindsay is no longer good law as support for the propositions that:

(i) a traveller bringing back goods for his friends and family, in anticipation that they will reimburse him for the purchase, can not properly be said to be holding the goods for 'a commercial purpose', as this does violence to the English language; and

(ii) that there must be a third category, including travellers bringing back goods to sell to family and friends at cost price, which falls between 'own use' and 'commercial purpose' Lindsay ( p. 1773 G-H).

The Court of Appeal considered these propositions again in Hoverspeed and concluded that the concepts of 'own use' and 'commercial purpose', as set out in the 1992 Directive, are antithetical. The effect of this is that goods that are not held for 'own use' are held for a 'commercial purpose'. As the Directive has direct effect, it has priority insofar as there are differences between its, and the 1992 Order's, apparent effect (Hoverspeed paras 62 and 64).

It follows that: if the Appellant was not bringing the goods for his 'own use', he was bringing them in for a commercial purpose; and, the Respondents' decision cannot be criticised for failing to take into account a distinction that does not exist.

In the present case, in addition to determining that the Appellant intended to sell the goods on at a profit, the Respondents further concluded that he was aware of the regulations concerning the importation of excise goods (given his previous travel) and that he knew that what he was doing was wrong.

Given such factors, and in the absence of exceptional circumstances to warrant a departure from the Respondents' policy in relation to the restoration of privately owned vehicles, they contended that it was entirely proportionate not to restore the vehicle.

We are grateful to Mr Mellor for his submissions, which we have carefully considered and accept in full.

The decision of the Court of Appeal in Hoverspeed (paras 62 and 64) that the concepts of "own use" and "commercial purpose" are antithetical simplifies our task.

Having considered all the evidence placed before us by the parties we hold that the Commissioners' decision in this case not to restore the Appellant's vehicle and excise goods was both reasonable and proportionate.

The appeal is dismissed and there will be no direction as to costs.

P H LAWSON

CHAIRMAN

RELEASED: 13 March 2003

LON/02/8146