United Kingdom VAT & Duties Tribunals (Excise) Decisions

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Cite as: [2003] UKVAT(Excise) E416, [2003] UKVAT(Excise) E00416

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Patricia Ann Wood v Customs and Excise [2003] UKVAT(Excise) E00416 (12 May 2003)

E00416

EXCISE DUTY — importation of tobacco products in excess of MILS – whether for appellant's use and held for commercial purposes – appellant's failure to stay for interview – held Customs decision not to restore goods unreasonable – appeal allowed

MANCHESTER TRIBUNAL CENTRE

PATRICIA ANN WOOD Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: Mr J D Demack (Chairman)

Hon Mrs A Widdows

Sitting in public in York on the 1st April 2003

The Appellant appeared in person

Miss K Huyton of counsel instructed by the Solicitor for the Customs and Excise for the Respondents

DECISION

This is an appeal by Mrs Patricia Ann Wood against a decision on review of the Commissioners of Customs and Excise by letter of 13 November 2002 not to restore to her certain tobacco products which they seized from her on 31 August 2002.

On 26 November 2002, Mrs Wood appealed against the Commissioners' decision claiming that the goods were for her own use, and 'disagreeing' with the seizing officer's decision not to restore because she had failed to stay for interview when stopped.

The underlying facts (which we take from the oral evidence of Mrs Wood herself, Miss K M Philpott, the Commissioners' reviewing officer, and the contents of Commissioners' bundle of copy documents) are not in dispute, and may be stated in the following way.

On 31 August 2002, Mrs Wood and her friend Mrs Bacon went on a day trip from their home town of Castleford, West Yorkshire, to France and Belgium with the specific purpose of buying excise goods at continental prices, i.e. duty paid at continental rates. As they left Dover, the coach was stopped by Customs' officers and they were given a leaflet which told them that there was no limit on the quantities of excise goods that could be brought into the UK by community travellers for own use. Whilst abroad, Mrs Wood bought 1000 Benson & Hedges cigarettes and 12 packs of Samson hand rolling tobacco (ie. 6 kilos) for £336. On the coach returning to Dover it was again stopped by Customs' officers. The passengers were told to get off and go through customs, the coach driver telling them that he would be leaving in 10 minutes. An officer took Mrs Wood to one side, and asked what excise goods she had. She told him. He then said that she would have to be interviewed. She replied that that would cause a problem as her coach was leaving in 10 minutes time. He shrugged his shoulders and responded saying the interview would take about an hour.

Mrs Wood told us, and we accept (not least because she was told by letter of March 24 2003 that it was 'anticipated' that the seizing officer would be attending the hearing, but failed to attend), that the officer then asked her if she worked and, on her replying "Yes, I'm a hairdresser", said "Self-employed; you might be selling this to your customers." As Mrs Wood recognised that an interview would take longer than the 10 minutes she had available, she chose to ask for a receipt for her tobacco products which the officer then seized. She then left.

On 5 September 2002, Mrs Wood wrote to Customs seeking recovery of her goods. She pointed out that they had "no proof that I bought this tobacco for resale", and said that it was for her personal use. She also said that it was her first shopping trip to Belgium, and that the brand of tobacco she had bought was that she smoked regularly.

Customs replied to her letter on 12 September saying it was not clear to them whether she wished to appeal against the legality of the seizure, or merely wished to request restoration of the goods. On 15 September, Mrs Wood indicated by letter that she sought restoration of the goods and 'emphasised' that they were for her own use. She added,

"This is the first time my friend and I have ever been on this type of trip, and being women on our own, we were very un-nerved and frightened of being left at Dover."

(We accept her statement in that behalf). She enclosed a leaflet produced by P&O Stenna Line on which she highlighted two passages:

" For passenger travelling anywhere within the EU there is no such thing as a 'personal allowance'. Neither is there any limit on the amount of items like alcohol, tobacco products, wine and beer which you can bring back to the UK, providing that they are for your own personal use"

and

"Remember, the MILS are not limits and you are entitled to exceed these levels by any amount, providing they are for your own personal use."

By letter of 21 October 2002, Mrs Wood was told that her goods would not be restored to her, the officer in the Post-Seizure Unit indicating that "the presence of any one of the following will militate against restoration:

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

any evidence that the person involved knew that they were doing 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".

Mrs Wood was told that in her case "the following circumstances have been taken into account when considering the request for restoration:

you were carrying excessive quantities of excise goods. Large quantities such as these are likely to damage legitimate trade.

You declined to stay for an interview regarding the goods, therefore the officer was not satisfied that the goods were not for a commercial purpose"

Mrs Wood asked for a review of that decision by letter of 24 October 2002. Yet again she claimed that the goods were for her own personal use. And in yet a further letter to Customs, undated, she repeated once more that her trip was the first she had ever made to bring back tobacco and alcohol for personal use. She explained that she had taken over £500 to spend but had only spent £336 saying pointedly that had the expedition been a commercial one, she would have spent the whole £500.

The review was conducted by Miss Philpott. In her letter of 13 November 2002 she stated that she was carrying out a "statutory review" of the decision not to restore the goods to Mrs Wood, pursuant to s. 14 of and Schedule 5 to the Finance Act 1994. The review began by setting out in detail, under the heading "Background", the circumstances in which the seizure took place. Amongst other things Miss Philpott said,

"The officer read you a formal statement, which notified you of a requirement to satisfy him that the excise goods, which were in your possession, were not for a commercial purpose and were therefore for own use."

We pause there to note that, following the unappealed part of the decision of the Administrative Court in Regina (Hoverspeed Ltd) v CEC [2002] 3WLR 1219, the Excise Duties (Personal Reliefs) Order 1992 (S1 1992/3155) is incompatible with EC Directive 92/12/EC and art. 26 of the EC Treaty in so far as articles 3 and 5 of the Order create a presumption that excise goods held in excess of the minimum indicative levels are held for a commercial purpose and are therefore chargeable to additional excise duty in the UK, and places the burden of proof that such goods were not held for a commercial purpose upon the individual in question. As the officer in question violated Mrs Wood's community law rights under the 1992 Directive, the seizure and subsequent proceedings would appear to be flawed.

Reverting to Miss Philpott's review letter, she went on to indicate that it was Customs' policy not to restore seized goods, but that in exceptional circumstances they might do so. Dealing with Mrs Wood's failure to stay for interview, Miss Philpott said:

"It is recorded that the officer asked you whether you wished to stay and answer questions and you replied "I'll take a receipt and go".

The officer then informed you that if you left prior to answering his questions then the goods would be seized and you confirmed that you understood that to be the case. It is therefore apparent that you knew the consequences of leaving without an interview and you chose to do so.

I note that you stated in your correspondence that you felt victimised into leaving without having an interview and only did so because you thought that by remaining to be interviewed the coach could go without you. The decision to stay or leave was one which only you could make and a matter which you can raise with the coach company. Any coach company which operates regularly on the continent is aware of the need for customs checks and interviews where necessary."

A little later in the letter, Miss Philpott observed that the quantity of tobacco which Mrs Wood had was in excess of the then MILS (and could still be so), and pointed out that the P&O Stenna leaflet produced explained that such quantities of goods might cause her to be interviewed. She then added,

"yet you still purchased them…"

"Armed with the information in the letter which you enclosed you went ahead and purchased a large quantity of tobacco and then in essence refused to be interviewed regarding the goods. Customs interview people when they suspect may have improperly imported goods as soon as is practically possible and individually so that they may properly form a view at the material time. It was for that reason that the officer wished to interview you: he needed the information then so that he could make a decision regarding your goods and you did not stay to give him that information. The officer inevitably had doubts concerning the use of the excise goods. I have examined the matter and consequently have the same doubts, due to your unwillingness to provide information when required".

Miss Philpott then confirmed that the tobacco products would not be restored to Mrs Wood.

On the basis of Mrs Wood's various claims in correspondence and her oral evidence, we find that she purchased the tobacco products which Customs seized for her own use. We also find that she did not hold the goods for a commercial purpose

What emerges plainly from the review letter is that Miss Philpott simply ignored Mrs Wood's claim that she had bought the tobacco goods for her own personal use. In her view it was clearly sufficient to assume that, because Mrs Wood had failed to stay for interview when stopped, she held her goods for a commercial purpose. That was to ignore the fact that Mrs Wood corresponded with Customs and provided them with information about her purchases. Had Mrs Wood not had good reason for leaving perhaps Miss Philpott's assumption might have had some foundation. But she did have good reason; and that reason was known, but perhaps not acceptable, to Customs from the outset.

Futher, to establish that excise goods acquired by private individuals for their own use and transported by them are intended for commercial purposes member states must, by art 9.2 of the Excise Directive, take account of , inter alia the following:

the commercial status of the holder of the products and her reasons for holding them

the place where the products are located

any document relating to the products

the nature of the products

the quantity of the products

Miss Philpott failed to take account of all but the last of those requirements and, in relation to that one, seems to have assumed that since the quantity of the products exceeded the MILS she had no further need to consider the matter. We conclude that her decision not to restore the excise goods to Mrs Wood was one which could not reasonably have been arrived at.

We allow the appeal. We direct that a new review be carried out by the Commissioners. At that review, the reviewing officer (who shall not be Miss Philpott) shall take into account the findings we have made and our conclusion that the tobacco products were not held for a commercial purpose. The review shall be conducted within 6 weeks of the release date of our decision, and a copy shall be served on the Manchester Tribunal Centre.

DAVID DEMACK

CHAIRMAN

RELEASE DATE: 12 May 2003

MAN/02/8290