United Kingdom VAT & Duties Tribunals (Excise) Decisions

Ludgate & Anor v Customs and Excise [2003] UKVAT(Excise) E00403 (11 April 2003

RESTORATION – Refusal – Review decision – Import of tobacco by non-smoker as gift to father-in-law, who looks after Appellant's children and helped building patio – Whether gift in consideration of money or money's worth – No – Whether review decision reasonable – Appeal allowed – Further review ordered

RESTORATION – Import of excise goods in excess of schedule to Personal Reliefs Order – Burden of proof on Commissioners to shew import for commercial purpose – Whether burden of proof played part in decision on review

LONDON TRIBUNAL CENTRE

RICHARD JOHN LUDGATE & MARTIN JOHN GREATOREX Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: ANGUS NICOL (Chairman)

ALEX MCLOUGHLIN

Sitting in public in London on 15 January 2003

Mr Greatorex in person

Mr Matthew Barnes, counsel, instructed by the Solicitor for the Customs and Excise, for the Respondents

© CROWN COPYRIGHT 2003


 


DECISION

1. This is an appeal against a decision on review refusing to restore a vehicle, the property of Mr Greatorex, and certain excise goods belonging to both Appellants, seized by Customs and Excise at Coquelles, in France, on 4 October 2001. At the hearing it was pointed out by Mr Barnes, for the Commissioners, that Mr Ludgate had at no time made any application for the restoration of his excise goods. There had, therefore, been no decision not to restore them and, of course, no review. There had therefore been no appealable decision against which Mr Ludgate could appeal. The Appellants were asked if they wished to proceed with the appeal in those circumstances, or whether they wished an adjournment so that Mr Ludgate could make an application for restoration. The Appellants elected to carry on. Mr Barnes observed that in the event of Mr Greatorex succeeding in his appeal, an application by Mr Ludgate for restoration would be dealt with speedily. For convenience, we shall continue to refer to Mr Ludgate and Mr Greatorex together as "the Appellants".

The Commissioners' evidence

2. The Appellants were stopped at Coquelles at about 4.10 p.m. on 4 October 2001. The goods found in the car consisted of 10kg of hand rolling tobacco, 800 cigarettes, 20 cigarillos, 109.8 litres of beer, 57 litres of wine, and 7.5 litres of spirits.
3. An officer of Customs and Excise interviewed Mr Greatorex. From the notes of the interview the following emerge: Mr Greatorex said that he had last travelled across the Channel three months before. He said that he had never seen Notice 1 before, and that he did not know what the guidance levels were. He said that he had 200 pouches of tobacco and 800 cigarettes. He identified the goods that belonged to him, and said that he had paid for them. Mr Greatorex said that the tobacco goods would last him three months, and that he did not smoke. The goods were for his family, specifically his father-in-law, and no-one else. Then Mr Greatorex was asked why he was giving his father-in-law the tobacco for no payment, and he replied "Gift. He helps me with building work." He was then asked again when he had last travelled across the Channel, and he said, "Three weeks ago." On that occasion he said that he had imported some alcohol and 600 cigarettes for his wife. He said that he was a welder, earning £20,000 a year. Mr Greatorex signed the notes as being a true and accurate account of the interview. Thereafter, the car and goods were seized.
4. Correspondence ensued. In an undated letter, received by Customs on 9 October 2001, Mr Greatorex said that he had been across the Channel six or seven times that year, mainly for beer and wine, and also for cigarettes for his wife. He continued,

"This time I brought tobacco for my family as a present. This took me over the limit which I did not know until I was informed by Customs....

I had no intention of any gain on any of the goods I had brought. I was truthful from the start with the customs officers, on the amount of goods in my car. I am a law abiding citizen and I had no intention of breaking the law."

He added that he could not afford to lose his car. In reply, an officer of the Post Seizure Unit asked whether he wished to appeal or to request restoration. Mr Greatorex replied, in a letter of 18 October 2001 that he was requesting the restoration of the goods and the vehicle.

5. The decision letter was dated 20 November 2001. In it the reasons for seizure were given as follows:

"1. You were found to be carrying excise goods that were in excess of the guidelines as per article 5 of the Excise Duties (Personal Reliefs) Order 1992.

2. You were a frequent traveller therefore giving you the opportunity to purchase similar quantities on those occasions.

3. You did not advise the officer about the previous trips made.

4. Neither yourself of your fellow traveller smoked, therefore it is unrealistic to believe that such a large quantity of tobacco products would be given away as gifts.

5. During the interview, it was established that tobacco products were to be given in return for favours. No relief will be afforded on goods that are not solely for personal use.

. . .

I have considered the facts in this case and in conclusion I am unable to offer the goods for restoration as the seizure was made in accordance with Departmental policy as stated above. There are no exceptional circumstances in this case, which would justify a departure from this policy."

We observe, at this point, that that letter does not in fact set out the policy as to restoration at all.

6. Solicitors for Mr Greatorex wrote, on 12 December 2001, to the Post Seizure Unit, asking for a review of the decision not to restore. The review letter, dated 31 January 2002, was in fact out of time, though no point was taken on that either in the letter itself nor at the hearing. We therefore treated the letter as being a review letter containing the decision against which this appeal lies.

The review

7. The review letter set out the amount of goods concerned, and stated,

"The Officer advised Mr Greatorex and Mr Ludgate that as they had excise goods in excess of the guide levels, they were required to satisfy Customs that the goods qualified for relief from excise duty by being for own use. They both said they understood."

The letter then summarised the interviews with both Mr Greatorex and Mr Ludgate, and concluded that "Mr Greatorex and Mr Ludgate failed to satisfy Customs that the excise goods were for own use and they were subsequently seized as forfeit to the Crown. The reasons for seizure of the car were given as

"1. Excise goods in excess of the guide levels.

2. Regular traveller.

3. Mr Greatorex lied about previous travel.

4. Giving goods for favours.

8. Having set out the relevant legislation and the Commissioners' policy regarding the restoration of vehicles and goods, the review letter continued by setting out the Commissioners' policy on restoration, in the following terms:

"Vehicles

With effect from 14 July 2000 the Commissioners' policy regarding privately owned vehicles used for the improper importation of excise goods is that they will not be restored, even on the first occasion they are so used. That policy applied at the time of the seizure of the vehicle. A car may however, be restored in exceptional circumstances.

Goods

It is this Department's general policy that seized goods are not restored. However, each case is examined on its merits to determine whether or not restoration may be exceptionally offered. In conducting this examination the presence of any one of the following factors will militate against restoration:

any evidence of previous smuggling or failure to comply with legal requirements;

any evidence that the person involved knew what they were doing was wrong;

any evidence that the person was paid to make the journey;

large quantities of goods which might damage legitimate trade;

any evidence that the goods were for a commercial purpose."

9. That stated, the letter continued with a section headed "Consideration". The first sentence of that stated:

"It is for me to determine whether or not the decision you are contesting is one that a reasonable body of Commissioners could not have reached."

The letter then went on to consider whether or not the goods and vehicle had been properly seized, and took into consideration the following matters:

"1. When the Officer asked Mr Greatorex when he had last travelled across the Channel, he said, "3 months ago". When asked again later, he said, "3 weeks ago". I can only deduce from this that it was an attempt to mislead the Officer.

2. Both travellers had 5 times the guide levels of tobacco, yet they were non smokers. Mr Greatorex said his 100 pouches of tobacco were for his father-in-law and that he expected it to last 3 months. In fact, 5kg of tobacco would normally last one person 9 months to 1 year, which means [Mr Greatorex's] explanation is not credible.

3. Further, Mr Greatorex said the tobacco had cost £200. That would be a very generous gift. However, he also said his father-in-law helped him with building work. That would constitute goods for favours and precludes it from relief from excise duty under the Channel Tunnel Order 2000 and the Personal Reliefs Order 1992.

4. Since Mr Greatorex appears to be a regular traveller, "six or seven times this year" according to his letter received on 9 October 2001, I wonder why he felt the need to purchase a large quantity of tobacco on this particular trip if it was for a legitimate purchase.

5. [Refers to Mr Ludgate's goods.]

6. [Refers to the frequency of Mr Ludgate's trips across the Channel.]

7. The legality of the seizure has not been challenged.

It seems clear from the above that Mr Greatorex tried to mislead the Officer and even if he intended to give £200 worth of tobacco to his father-in-law, it would have been in exchange for favours....

Mr Greatorex and Mr Ludgate failed to satisfy the Officers that the tobacco was for own use and thereby rebut the statutory presumption of commerciality. In view of the above I cannot come to any other conclusion and am satisfied that the goods were properly seized under the appropriate legislation."

The review officer then expressed satisfaction that the vehicle had also been properly seized.

10. The letter then continued:

"Turning now to the matter of restoration of the goods, in instances where commerciality has been demonstrated, it is the Commissioners' policy not to restore them.

With regard to the vehicle, I would like to draw your attention to the Commissioner's [sic] policy, shown above. As you will see, there is a robust policy in force, designed to protect the revenue and legitimate businesses in the UK.

Restoration of goods and vehicles is only considered in exceptional circumstances and I regret that I have not been presented with circumstances that would lead me to depart from that policy.

In reaching that decision, I am satisfied that Mr Greatorex is being treated no more leniently nor harshly than anyone else in a similar position."

In her witness statement, Mrs Marshall, the review officer, said, "I was satisfied that the decision not to offer restoration was correct and reasonable based on the information I had. I am satisfied that I considered every matter that was relevant and disregarded everything that was irrelevant."

11. Giving evidence at the hearing, Mrs Marshall added a number of things which she had not mentioned in her review letter. She said that Mr Greatorex had said that he had last travelled three months before: it was unusual for someone with nothing to hide to give false information from the start. The Appellants were both non-smokers, and it was unusual for non-smokers to buy tobacco; They had made regular trips across the Channel, and had travelled to Belgium; it would not be cost-effective to travel there, it was most likely that they were purchasing tobacco to make a profit on it on their return. There was, she said, no evidence of large quantities of tobacco having been bought by them before. The fact that Mr Greatorex had brought in 4.5kg of one brand and 0.5kg of another looked as if an order had been placed, otherwise he would have bought just one kind. The answers that Mr Greatorex had given about when he travelled were misleading; giving different answers at different times shewed that they were not true. She said also that she believed it necessary to consider all the facts relating to Mr Ludgate, since that might have a bearing on the position regarding the car.

The Appellants' evidence

12. Mr Greatorex told the Tribunal that he and Mr Ludgate had gone over to France and Belgium on the afternoon of 4 October 2001 to get some drink, some tobacco for his father-in-law, and some cigarettes for his wife. When stopped by Customs, they were asked if they had any tobacco, and told the officers what was in the car. Mr Greatorex was asked when he had last travelled across, and he said it had been "three weeks before, I thought it was six weeks, but I made a mistake." There had, he said, been no discrepancies between the amount of tobacco goods that they told the officers they had bought and that which was found in the car. Mr Greatorex said that he asked why they had been stopped, and one of the officers said "We think you are smuggling," or words to that effect. He said that his 200 cigarettes were for his wife. He said that his father-in-law smokes 40 to 60 cigarettes a day. He and his family helped Mr Greatorex and his wife a lot with their children and lots of other things. They looked after the children every day, because Mr Greatorex and his wife both worked. His father-in-law had helped him with the building of a patio at his house. He came round at week-ends, and they would both do a bit of work on it. Mr Greatorex had paid for all the materials. His father-in-law had done about a week's work on it all told. That had been finished a couple of weeks or so before the trip to Adinkerke. He said that his father-in-law would never take money, and would feel insulted if it was offered. Mr Greatorex said that he had not told his father-in-law that he would bring him the tobacco, nor was there any agreement that he would do so. He said that he had given it to his father-in-law purely as a gift, because he had looked after the children and helped with the patio. That amount of tobacco was not a lot for someone who smokes up to 60 a day. Mr Greatorex said that when he told the officer that his father-in-law helped with the children and had helped with the patio, the officer had just written down "building work", and said that that was not a gift.
13. Mr Greatorex said that when he was told that the Customs were taking the car, if was all very rushed, because he had to get onto the minibus that would take them through the tunnel, and the next would not be for four hours. He had left a lot of personal gear in the car, and that had now been sold. The car was worth £4,000, and he did not think that the punishment fitted the crime.
14. As to his previous cross-Channel journeys, Mr Greatorex said that he had in fact travelled three weeks earlier. In the interview notes it had said "6 months", and the "6" had been crossed out. He had not in fact said "six months", he might have said "six weeks", but he could not now remember. He had travelled six or seven times in that year, about every six weeks. He had been stopped twice, and on each occasion had had small amounts of tobacco and liquor. He said that there were no signs up in Eastenders saying what the guide levels were, and he had never seen any such notices. He was not bringing large quantities of goods into the country in order to sell it for a profit. He had 5kg and Mr Ludgate had 5kg. The new guide level he knew was 3kg.
15. Mr Greatorex said that he had not stopped working after his car was seized, but he had some difficulty in getting to work. He borrowed a car, or took the train, or got a lift. Eventually he bought another car.
16. Mr Ludgate's evidence was strictly relevant in this appeal only in so far as it bore upon that of Mr Greatorex. Mr Ludgate said that he had bought what he wanted, and had paid for it himself using a credit card, except the tobacco which he had paid for in cash. He could only draw £250 a day from a hole-in-the-wall. He did not smoke, and was going to give the tobacco away as presents, at or before Christmas, to members of his family.

The law

17. The law has undergone dramatic changes since October 2001, some of which have a direct effect upon this appeal. In the first place, in R (on the application of Hoverspeed Ltd) v Customs and Excise Commissioners [2002] 3 WLR 1219; [2002] 3 CMLR 395, the Divisional Court held that the burden placed upon an appellant under the Excise Duties (Personal Reliefs) Order 1992 of proving that excise goods over the indicative limits laid down in the Schedule to that Order imported by that appellant were not held for commercial purposes was incompatible with the Excise Directive 92/12/EEC. The Divisional Court also held that the burden of proving that goods imported were held for a commercial purpose rested upon the Commissioners. Neither decision was challenged in the Court of Appeal. Thereafter the 1992 Order was revoked and amending regulations passed with effect from 1 December 2002. The fact that the 1992 Order was incompatible with the Excise Directive means that the burden of proof was upon the Commissioners at all times, and applies in this appeal. That Order has been replaced by the Tobacco Products Regulations 2001, as amended by the Excise Goods, Beer and Tobacco Products (Amendment) Regulations 2002. So far as is relevant to this appeal, the Regulations provide as follows:

"12. Excise duty point

. . .

(1A) In the case of tobacco products acquired by a person in another Member State for his own use and transported by him to the United Kingdom, the excise duty point is the time when those products are held or used for a commercial purpose by any person.

(1B) For the purposes of paragraph (1A) above—

. . .

(b) 'own use' includes use as a personal gift;

(c) if the tobacco products in question are—

(i) transferred to another person for money or money's worth (including any reimbursement of expenses incurred in connection with obtaining them), or

(ii) the person holding them intends to make such a transfer,

those products are to be regarded as being held for a commercial purpose.

. . .

(e) without prejudice to subparagraphs (c) and (d) above, in determining whether tobacco products are held or used for a commercial purpose by any person, regard shall be taken of—

(i) that person's reasons for having possession or control of those products;

(ii) whether or not that person is a revenue trader....

(iii) that person's conduct, including his intended use of those products or any refusal to disclose his intended use of those products;

(iv) the location of those products;

(v) the mode of transport used to convey those products;

(vi) any document or other information whatsoever relating to those products;

(vii) the nature of those products including the nature and condition of any package or container;

(viii) the quantity of those products, and in particular whether the quantity exceeds any of the following quantities—

3,200 cigarettes

400 cigarillos

200 cigars

3 kilogrammes of any other tobacco products

(ix) whether that person personally financed the purchase of those products;

(x) any other circumstance that appears to be relevant."

In Customs and Excise Commissioners v The Queen (Hoverspeed Ltd and Others) (10 December 2002), at paragraph 65, the Court of Appeal held,

"... that, if an individual acquires (or having acquired for his own use subsequently decides to hold) products for a purpose other than his own use, such products are to be regarded as held for commercial purposes."

It follows that goods are held either for the importer's own use or for commercial purposes. Where there is an intention that the goods in question shall be passed on to friends or the family of the importer, who are going to reimburse the importer the cost price (i.e. with no profit element) that is still a commercial purpose and duty is payable: Lindsay v Customs and Excise Commissioners [2002] 1 WLR 1766; [2002] STC 588, CA. However, the question of proportionality as to restoration or non-restoration is a different matter.

18. As to the reasonableness and proportionality of non-restoration, that, being the deprivation of a person's property falls within Article 1, Protocol 1 of the European Convention on Human Rights. Such deprivation can be justified, as being reasonable, if it is in the public interest, and that includes the securing of the payment of taxes. That a Member State considers that the deprivation of the property is necessary is not enough to satisfy Article 1 of Protocol 1. It was held in Air Canada v United Kingdom (1995) 20 EHRR 150, at paragraph 36,

"There must be a reasonable relationship of proportionality between the means employed and the aim pursued."

In Paraskevas Louloudakis v Greece (Case C-262/99) [2001] ECR I-5547, the Court said, as to proportionality:

"The administrative measures or penalties must not go beyond what is strictly necessary for the objectives pursued and a penalty must not be so disproportionate to the gravity of the infringement that it becomes an obstacle to the freedoms enshrined in the Treaty."

19. Both Air Canada and Louloudakis were cited by the Court of Appeal in Customs and Excise Commissioners v Lindsay [2002] STC 000. In that case, Lord Phillips said, at paragraph 63,

"Those who deliberately use their cars to further fraudulent commercial ventures in the knowledge that if they are caught their cars will be rendered liable to forfeiture cannot reasonably be heard to complain if they lose those vehicles. Nor does it seem to me that, in such circumstances, the value of the car used need be taken into consideration. Those circumstances will normally take the case beyond the threshold where that factor can carry significant weight in the balance. Cases of exceptional hardship must always, of course, be given due consideration.

64. The Commissioners' policy does not, however, draw a distinction between the commercial smuggler and the driver importing foods for social distribution to family or friends in circumstances where there is no attempt to make a profit. Of course, even in such a case the scale of importation, or other circumstances, may be such as to justify forfeiture of the car. But where the importation is not for the purpose of making a profit, I consider that the principle of proportionality requires that each case should be considered on its particular facts, which will include the scale of importation, whether it is a 'first offence', whether there was an attempt at concealment or dissimulation, the value of the vehicle and the degree of hardship that will be caused by forfeiture. There is open to the Commissioners a wide range of lesser sanctions that will enable them to impose a sanction that is proportionate where forfeiture of the vehicle is not justified."

20. At the time of the importation in October 2001, the amount of hand-rolling tobacco referred to in the Schedule to the 1992 Order (the guide level) was 1 kg, and the number of cigarettes was 800. It is not in dispute that apart from the hand-rolling tobacco the other excise goods imported by the Appellants were within the guide levels. It was and remains also the law that relief from excise duty was afforded only where a traveller imported excise goods which were for his own use, and that own use did include holding such goods with the intention of making a gift of them.

The Commissioners' contentions

21. Mr Barnes, for the Commissioners, contended, first, that the seizure of the goods and car were not invalidated by the fact that the officers had not understood the position in law regarding the burden of proving that the goods were held for a commercial purpose, that fact having played no part in the decision to seize: Hoverspeed, at paragraph 59 in the judgment of the Court of Appeal. The decision not to restore was reasonable and proportionate, having been made on the basis that Mr Greatorex had attempted to mislead the officers, and was therefore not credible; that Mr Ludgate's suggestion that he would have received the cost price of the tobacco was more likely than that he would give it to his family as gifts; that the Appellants had imported the tobacco for a commercial purpose and had tried to evade paying duty, thereby damaging legitimate trade.
22. Mr Barnes contended that Lindsay was no longer good law as support for the propositions, first, that importing goods for family and friends in the expectation that they will reimburse the importer for the purchase cannot be said to be holding the goods for a commercial purpose; nor that there must be a third category falling between own use and commercial purpose which accommodates travellers importing goods to sell at cost price to family and friends: Lindsay at page 1773G and H). In Hoverspeed (paragraphs 62 and 64) the Court of Appeal had held that the effect of the 1992 Directive was that goods that were not held for own use were held for a commercial purpose. Therefore, if the Appellants were not bringing the goods in for their own use, they were bringing them in for a commercial purpose. That they were not bringing them in for their own use was established by the fact that Mr Ludgate was expecting to receive the cost price for the goods, and Mr Greatorex was giving the tobacco to his father-in-law in exchange for favours or services.

Conclusions

23. It is to be noticed, first, that the review officer began her review by stating that it was her function to determine whether or not the decision under review was one that a reasonable body of Commissioners could not have reached. That is not the function of the review officer. Her function was to review all the facts and circumstances and come to her own decision as to whether it was proper to refuse restoration. The review was therefore defective to that extent. However, we look further, to see whether she did in fact carry out the proper function of the review officer. In her witness statement, Mrs Marshall said that she had considered every matter that was relevant and disregarded everything that was irrelevant, and that her decision was based upon the information that she had. It therefore appears that she did not confine herself to considering whether the original decision was reasonable, though that was clearly in her mind, as she said in her statement. In particular, she took into consideration the matters set out in paragraph 9 above, as to whether the goods and vehicle had been lawfully seized. We go on to look at those matters in detail.
24. In many of this kind of case, including the present, it is noticeable that whatever an appellant says which is not accurate, or is mistaken in some way, is assumed to be a deliberate lie intended to deceive or mislead the Customs officers. It is quite clear that the possibility of a mere mistake, or even ignorance, is not considered at all. The first of the main reasons for upholding the refusal in this case is that Mr Greatorex intended to mislead the officer, in that first, he lied about previous travel, and that his estimate of the length of time the tobacco would last was not credible. There seems to be a tendency to forget that travellers are human individuals, and do not all act in identical ways like clones. Mr Greatorex was reported to have said, first, that he had last travelled three months earlier, and then, later, that it was three weeks earlier. It is difficult to see what, if any, deception was being practised here. If the truth was that it was three months, the change to "three weeks" can scarcely have misled the officer in any significant matter. If three weeks was correct, the earlier mention of three months was being corrected. Generally the review officers seem to take the view that a very recent previous trip is an indication of a commercial purpose; by changing "three months" to "three weeks" Mr Greatorex may have increased suspicion rather than deceiving the officer. It was also the case that in his evidence Mr Greatorex said that the correct answer had been three weeks, and pointed out that in the interview notes it had at first recorded "6 months", and the "6" had been crossed out. But, he said, he had not said "six months", though he might have said six weeks"; he could not now remember. He had travelled about six or seven times in that year, which amounted to a little more than six-week intervals. His oral evidence on these matters was not significantly challenged.
25. The second point which was said by Mrs Marshall to have amounted to an intention to mislead the officer was that Mr Greatorex said that he thought that the tobacco would last his father-in-law about three months. She pointed out that 5 kg of tobacco would last one person between nine months and a year "which means [Mr Greatorex's] explanation is not credible". In the first place, no evidence was called by the Commissioners (upon whom the burden of proof lies) as to how long hand rolling tobacco may last any given person. Secondly, Mrs Marshall seems to have ignored the fact that Mr Greatorex is a non-smoker, and could not be expected in the normal course of things to know how long tobacco might last.
26. Thirdly, Mrs Marshall commented that an amount of tobacco which cost £200 would be a very generous gift. Clearly that is a matter to be taken into consideration, if one is to be realistic, but evidently no thought was given to the possibility that it was exactly that. Mrs Marshall went on to say that, because Mr Greatorex's father-in-law had given him some help with some building, the gift was in return for favours and that precluded it from relief under the 1992 Order, which was then in force. Both Mrs Marshall and the officer who made the original decision seem to have ignored the fact that the gift was to Mr Greatorex's father-in-law, as opposed to someone who was not any relation or family connexion of his. No further inquiry was made by the officer who interviewed Mr Greatorex, to find out whether this was some kind of bargain, or whether there was an agreement that the tobacco was to be a payment for services rendered. The unchallenged evidence of Mr Greatorex was that there was no agreement that his father-in-law would undertake building work in consideration of an amount of tobacco. The evidence was that Mr Greatorex wanted to give him something, not only for having helped with building a patio at Mr Greatorex's own house on one or two week-ends, but also because his parents-in-law gave constant help in minding the children since both Mr Greatorex and his wife work. One might suppose that a man who brought back a quantity of tobacco for his wife, who kept house for him and cooked for him and also looked after the children, would also be said to be importing tobacco to be given in return for favours. It is necessary to look at the matter realistically. It appears to us that it is a matter of fact and degree, which will vary in individual cases. In our view, the giving of a gift, not pre-arranged, not part of a bargain, to a member of one's family who has, as families will, done one repeated kindnesses, does not indicate a commercial purpose, even in the qualified sense of a sale at cost to family and friends referred to in Lindsay.
27. Fourthly, Mrs Marshall "wondered why" Mr Greatorex felt the need to purchase a large quantity on this particular trip. The asking of that unanswered question is, we feel, hardly a reason for refusing restoration. But the conundrum is answered in the evidence. It was so that he could give some tobacco to his father-in-law. Some weight is added to that evidence by the other evidence, that Mr Greatorex had been stopped twice before by Customs officers (so that this was a matter within the knowledge of the Commissioners) and had had only small amounts of excise goods, including tobacco, in his possession. It was also one of the reasons for the original decision that Mr Greatorex was a regular traveller. That was not disputed by him. But there was no evidence that he had ever brought in any excessive, or any significant, amount of excise goods before. We point out again, that the burden of proof lies upon the Commissioners.
28. Finally, Mrs Marshall added, as a reason for her decision, that Mr Greatorex and Mr Ludgate failed to satisfy the officers that the tobacco was for their own use and to rebut the statutory presumption of commerciality. The Court of Appeal, in Hoverspeed, held that the requirement that the burden of proof that goods were imported for a traveller's own use lay upon the traveller was not compatible with either European or domestic law. The 1992 Order and the Channel Tunnel Order 2000 were therefore revoked, and that rule is as though it had never been. It is not for the traveller to prove that his goods are for his own use, but for the Commissioners to prove that they are not. In our view, this is one of the cases in which the burden of proof does play a part in the determination of the issue before us: see Gascoyne v Customs and Excise Commissioners [2003] EWHC 257 (Ch) at paragraphs 83 and 84.
29. Those were the reasons given for the review decision. In our judgment, as indicated above, the review officer did take into consideration matters which were irrelevant and did ignore matters that were relevant. In our view, therefore, the review decision was not reasonable in the sense laid down in Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 QB 223 (often referred to as "Wednesbury reasonableness", and in Customs and Excise Commissioners v J H Corbitt (Numismatists) Ltd [1980] STC 231, 239, where Lord Lane CJ said that in order for a decision to be unreasonable it has to be shewn that

"the Commissioners had acted in a way which no reasonable panel of Commissioners could have acted; if they had taken into account some irrelevant matter or had disregarded something to which they should have given weight...."

30. We do not accept Mr Barnes's contention (see paragraph 23 above) as to the effect of Hoverspeed on the decision in Lindsay. We had not understood the decision in Lindsay to be that there were three categories of import: own use, commercial, and a third, family and friends, which was somewhere between the two. We understand the Court of Appeal to have said that although an import for the purpose of transferring the goods, or some part of them, to family or friends for the cost price was an import for a commercial purpose, as opposed to importing in order to sell for a commercial profit, in the former case, consequences less severe than the total loss of goods and vehicle would be appropriate. In view of our decision in paragraph 27 above, the point does not arise. But if that were wrong, we would hold that this particular import, by Mr Greatorex, fell into that category of commercial imports for which the total loss of goods and vehicle was a disproportionately high penalty : see also Lindsay at paragraph 64, cited in paragraph 20 above.

32. For the above reasons, in our view this appeal should be allowed. Our jurisdiction in this type of case is set out in section 16 of the Finance Act 1994, under which:

"...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 the decision could not reasonably 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 time 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;

(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 future."

33. In our view, the only practicable course that we can take is under paragraph (b). Accordingly, we direct that a further review of the original decision be carried out, by an officer who has had no previous connexion with this case. In carrying out the review, the review officer should have particular regard to the decision of the Court of Appeal in Hoverspeed, and to the matters to which we refer in paragraphs 24 to 30 above. This review is to be carried out within 45 days after the date of release of this decision, and, if unfavourable to Mr Greatorex, will be a decision from which an appeal will lie to this Tribunal.

31. We give no direction as to the costs of this appeal.

ANGUS NICOL

CHAIRMAN

RELEASED:

LON/02/8061