United Kingdom VAT & Duties Tribunals (Excise) Decisions

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URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2003/E00433.html
Cite as: [2003] UKVAT(Excise) E00433, [2003] UKVAT(Excise) E433

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Robert William Batchelar v Customs and Excise [2003] UKVAT(Excise) E00433 (11 July 2003)

E00433

EXCISE – Restoration Refusal – Concealment of cigarettes in a vehicle on importation –Cigarettes and vehicle seized – condemned as forfeit by the Justices –whether concealment was conclusive evidence of a commercial purpose on the part of the Appellant – held it was not – held the cigarettes were imported for the use of the Appellant and his wife – Appeal allowed and further review ordered under section 16(4)(b) Finance Act 1994

LONDON TRIBUNAL CENTRE

ROBERT WILLIAM BATCHELAR Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: MR JOHN WALTERS, QC (Chairman)

MRS RUTH WATTS DAVIES

MR LEON WILKINSON

Sitting in public in London on 1 April 2003

Nigel Woodhouse, Counsel, instructed by Saulet & Co, Solicitors, for the Appellant

Ms Katrine Sawyer, of Counsel, instructed by the Solicitor for the Customs and Excise, for the Respondents

© CROWN COPYRIGHT 2003


 


DECISION
1. Mr. Batchelar ("the Appellant") appeals against the Commissioners' decision on a review under section 15, Finance Act 1994 ("FA 1994") not to offer to him the restoration of a seized Volvo motor vehicle, registration number L921 HFC. The decision appealed against is contained in a letter dated 2^nd July 2002 sent by the review officer, Mr. Colin William George Weston (who gave evidence before us), to Saulet & Co., Solicitors, acting for the Appellant. We refer to this letter as "the Review Letter".
2. In the Review Letter, Officer Weston gives his reasons for confirming the decision of another Customs Officer, Miss T.J. Wheeler, not to offer restoration of the vehicle. Officer Wheeler's decision is contained in a letter dated 19^th April 2002, also addressed to Saulet & Co.
3. Our jurisdiction is provided by section 16, FA 1994. We must decide whether Officer Weston reasonably arrived at the decision contained in the Review Letter – the burden being on the Appellant to show that he did not.
4. We were provided by Ms. Sawyer, for the Commissioners, with a bundle of documents, which included Witness Statements made by Officer Weston, Karan Anne Johnson and Alistair Hardon (also Customs Officers). We were also provided by Mr. Woodhouse, for the Appellant, with a bundle which included a Witness Statement made by the Appellant. We heard oral evidence from the Appellant, Officer Johnson and Officer Weston.
The facts
5. On the basis of the evidence, we find the following facts.
6. The Appellant is the licensee of the Red White and Blue public house at Portsmouth, where he lives with his wife.
7. The Appellant and his wife were invited to a wedding being held at Madrid in Spain on 8^th September 2001. They took time to drive to Madrid and back, using their vehicle, a Volvo Estate (Registration Number L921 HFC).
8. On their return to Portsmouth Continental Ferry Port on 15^th September 2001, they were stopped and questioned by Officer Johnson. During the course of the questioning the Appellant's wife said that she and the Appellant had bought some cigarettes, that they had been using them and still had some left. During Officer Johnson's search of the vehicle the Appellant showed her a bag and a suitcase in which there were a total of 2,800 cigarettes. Officer Johnson then asked the Appellant "Is this all you have, sir?", to which he replied "yes". Officer Johnson subsequently looked in the boot of the vehicle, and while she was doing so she lifted the tool tray cover and found inside a further 2,200 cigarettes. There were additionally 100 cigarettes in the car in loose packets. In total, 5,100 cigarettes were found.
9. At an interview which took place shortly thereafter, Officer Johnson read to the Appellant a standard "Commerciality Statement" informing him that he was in possession of tobacco goods exceeding the "minimum indicative levels" and therefore he was required to satisfy the Commissioners that the goods were not imported for a commercial purpose. The Appellant was offered the opportunity to obtain legal advice, to which he replied "I don't think I need it, I just want to let you know that they are for me so that I can go". He denied that he was intending to sell any of the cigarettes and said in evidence before us that he had forgotten about the cigarettes stored under the tool tray cover, because they had been stored there some days previously so that they would not be visible to passers-by when the car was parked.
10. When Officer Johnson asked the Appellant "How many do you smoke a day?", he replied "A carton will last me 5-6 days". Officer Johnson then asked: "What about your wife?". The Appellant replied: "About the same, might be a bit less than me, as she will not smoke at home". A carton contains 10 packets of 20 cigarettes. Two persons smoking at the rate indicated would be expected to consume 5,100 cigarettes in about 85 days (or slightly less than 3 months).
11. When Officer Johnson asked the Appellant why he had forgotten to declare the cigarettes under the tool tray cover, he said that he "got nervous" and "I know it was foolish and you thought that you'd be waved through". When Officer Johnson asked if the Appellant had travelled recently, he replied that "around May time" he had been with a friend to Cherbourg for the day and had bought 800 cigarettes on that occasion. He had said to Officer Johnson earlier that he did not travel regularly and had not "got away" for 4 years.
12. On the facts being reported to him by Officer Johnson, Officer Hardon authorised seizure of the cigarettes and the vehicle. Officer Hardon says in his witness statement that he did so because he "was not satisfied that the goods were for Mr. Batchelar's personal use".
13. While the Appellant was being questioned, the Commissioners arranged for a search of the Red White and Blue public house to take place. That search revealed that no tobacco products were on the premises except four packets of hand-rolling tobacco which belonged to the Appellant's step-son, which were confiscated.
14. Condemnation proceedings were instigated and the Portsmouth Justices adjudged (on 22^nd March 2002) that the goods were concealed or packed in a manner appearing to be intended to deceive an officer. The cigarettes and the vehicle were condemned, and the Appellant before us does not challenge the condemnation. However, the Appellant before us does make the point that the Justices made no finding (or adjudication) that the Appellant had any intention to sell the cigarettes, and, as we state below, this factual question is the central issue in the appeal.
The central issue in the appeal
15. Following the decision of the Court of Appeal in Lindsay v Commissioners of Customs and Excise [2002] EWCA Civ 267, the Commissioners' policy (as appears from the Review Letter) is to consider vehicles for restoration where the traveller can demonstrate that the goods were to be supplied (by him) at purchase price and not for profit. Officer Weston's decision to confirm on review the original decision not to offer the vehicle for restoration to the Appellant was based on his conclusion that the Appellant was engaged in commercial smuggling, so that applying the Master of the Rolls' comments at paragraph 63 of the decision in Lindsay, non-restoration is reasonable in the absence of exceptional circumstances. Officer Weston's decision was, further, that the Appellant had failed to show relevant exceptional circumstances.
16. In addition, following the decision of the Divisional Court in The Queen on the application of Hoverspeed Limited and others v Commissioners of Customs and Excise [2002] EWHC 1630 (Admin), [2002] 3 WLR 1219 (handed down on 31^st July 2002) it is clear that Officer Hardon's approach – authorising seizure of the cigarettes and the vehicle because he "was not satisfied that the goods were for Mr. Batchelar's personal use" – was incorrect: it is for the Commissioners to prove that goods are imported for commercial purposes, rather than for the person concerned to prove that they are not.
17. It was common ground at the hearing that the central issue for us as the fact-finding Tribunal is whether the Commissioners' decision that the Appellant was engaged in commercial smuggling was correct.
18. Ms. Sawyer, for the Commissioners, submits that the fact that (as the Justices adjudged) the cigarettes were concealed in a manner appearing to be intended to deceive an officer, is cogent – and conclusive – evidence that the Appellant intended to sell some or all of the cigarettes imported. She asks why the Appellant would conceal 2,200 cigarettes from officers if he intended that they would be used by himself (and his wife). She reminds us that not only did the Appellant conceal them, he also lied to the officers, in failing to declare them.
19. Mr. Woodhouse, for the Appellant, points out that the 5,100 cigarettes seized amounts to less than 3 months' smoking requirements for the Appellant and his wife at their declared rates of smoking. He also relies on the Appellant's evidence as to his infrequent trips abroad – besides the day trip to Cherbourg in May 2001, which he told Officer Johnson about at the interview on 15^th September 2001 (and on which occasion he brought back 800 cigarettes), he says in his Witness Statement that "sometime in 2000 [he] had taken the fast cat [to Cherbourg] with [his] nephew who was visiting from Canada so that he could say he had been to France". Mr. Woodhouse submits that on these facts it would have been uneconomic for the Appellant and his wife to sell the 5,100 cigarettes unlawfully, because they would only have to replace the cigarettes sold by (more expensive) cigarettes for their own use. When he put this to Officer Weston in cross-examination, the Officer replied that it didn't make economic sense, but that the Appellant wouldn't be the first person to do it. Officer Weston accepted that there was no evidence that the Appellant had ever been involved in the illegal selling of cigarettes. Mr. Woodhouse also relied on the evidence that Customs and Excise had searched the Red White and Blue in the Appellant's absence and found no tobacco goods, except for hand-rolling tobacco belonging to the Appellant's stepson.
20. The Appellant's case on the issue of why he did not declare the cigarettes stored under the tool tray cover is that he was nervous when questioned by Officer Johnson and he did not declare those cigarettes, not because he intended to sell them on illegally, but because he thought he would be more likely to be waved through if the officer thought he had less rather than more cigarettes in his car.
Decision
21. The Tribunal considers that it does not inevitably follow from the fact found by the Justices that the cigarettes under the tool tray cover were concealed or packed in a manner appearing to be intended to deceive an officer, that the Appellant intended to sell them on illegally – i.e. that he was a commercial smuggler.
22. It is possible that, instead, he intended to deceive an officer as to the number of cigarettes he had in his car, so that he would have less difficulty in persuading the officer that the cigarettes which he did declare were being brought in for his (and his wife's) own use. Such a course would obviously have been – as the Appellant said at the time – "foolish". Nevertheless in the Tribunal's judgment it is a credible explanation of the Appellant's conduct.
23. The supporting evidence – the rate of smoking of the Appellant and his wife, the fact that they were infrequent travellers to the Continent, the fact that no cigarettes for illegal sale were found when the Red White and Blue was searched, the fact that the Commissioners had no evidence that the Appellant had ever before been involved in the illegal sale of cigarettes – persuades the Tribunal that the Appellant's explanation is the truth and that he was not, therefore, in the terms of the Lindsay decision, a "commercial smuggler".
24. On the basis of this finding we will allow the appeal and direct a further review under section 16(4)(b) FA 1994. The further review will take our Decision into account. We direct that it be conducted within four weeks of the date of release of this Decision by an officer hitherto unconnected with this case.
25. Following Lindsay, at paragraph 64, the principle of proportionality must be applied in the further review and this will involve considering:

a. the scale of importation (relatively low);

b. whether it is a "first offence" (it is);

c. whether there was an attempt at concealment or dissimulation (there was);

d. the value of the vehicle (it was bought by the Appellant in July 2001 for £6,500); and

e. the degree of hardship that would be caused by forfeiture.

26. In relation to the last factor mentioned, we accept the Appellant's evidence that the confiscation of his vehicle (now over 18 months ago) has caused great hardship. He needs the vehicle in his work – to collect bulky and heavy goods from a cash and carry warehouse, and from a brewery. The substitute vehicle which he has obtained is not satisfactory and he has hurt his back using it. He is also concerned about its reliability. In his Witness Statement the Appellant gave unchallenged evidence to the effect that he was still repaying a bank loan of £5,500 to fund the purchase of the vehicle.
27. The appeal is allowed accordingly. Each party has liberty to apply to a Chairman sitting alone in relation to costs.
JOHN WALTERS QC CHAIRMAN RELEASED: 11 July 2003

LON/02/8215