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United Kingdom VAT & Duties Tribunals (Excise) Decisions
You are here: BAILII >> Databases >> United Kingdom VAT & Duties Tribunals Decisions >> United Kingdom VAT & Duties Tribunals (Excise) Decisions >> Anderson v Customs & Excise [2003] UKVAT(Excise) E00442 (16 June 2003)
URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2003/E00442.html
Cite as: [2003] UKVAT(Excise) E442, [2003] UKVAT(Excise) E00442
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- If the haulier can demonstrate that all reasonable steps have been taken to prevent one of his drivers smuggling – seizure of tractor unit and restoration free of charge.
- If the haulier has not taken all reasonable steps – seizure of tractor unit and restoration for 100% of the revenue value or the value of the tractor unit, whichever is the lower.
- In all cases where there is a second or subsequent detection within six months the tractor unit is to be seized and not restored.
- In cases where the second or subsequent detection is more than six months after the previous detection – seizure of the tractor unit and restoration for 100% of the revenue value or the value of the tractor unit, whichever is the lower.
Restoration of commercial vehicle – application to have refunded the sum paid for release – refusal to restore – reasonableness – proportionality – Commissioners' Heavy Goods Vehicles Policy – Commissioners required to conduct further review; Section 16FA 1999.
EDINBURGH TRIBUNAL CENTRE
ALEXANDER JAMES ANDERSON Appellant
- and -
Tribunal: (Chairman) T Gordon Coutts, QC
for the Appellant Mr M Freeman
for the Respondents Mr R MacLeod, Shepherd & Wedderburn, WS
© CROWN COPYRIGHT 2003.
This appeal in which the facts were agreed and in short compass was concerned with the review decision of the Respondent dated 30 December 2002 in which they refused to restore the sum which the Appellant had paid to achieve release of his vehicle.
A Paul O'Kane was engaged by the Appellant as a driver. He had undertaken 6-8 weeks as a temporary probationary driver and was then engaged full time. Three days after his engagement, 27 September 2002 he was discovered at Coquelles to have 14.9 kg of hand rolling tobacco in his cab. That was liable to UK Excise Duty of £1,142.47. The goods and the lorry were seized, immediate restoration of the lorry was offered on condition of payment of a fee of that sum. It was paid by credit card over the telephone; the driver was released without charge, although his goods were forfeit.
For the review there was produced to the Reviewing Officer a sample pay slip used by the Appellant for all drivers which bore the legend, "it is a dismissible offence to acquire over the recommended limits of duty paid tax free goods; it is also a dismissible offence to sell duty paid or tax free goods." The main terms of employment were set out in a statement provided for summary dismissal for selling duty free materials which were imported. There was also a specific letter which was to be sent to all drivers relating to the amount of goods which could be imported stating that any illegal importation by any driver would be considered a dismissible offence.
The driver was dismissed and never collected his outstanding wages. It was further explained to the Reviewing Officer that although the driver should have signed for receipt of the written statement of his contract of employment when he began full time in work he did not do so because a member of staff who would normally have dealt with it had been absent. He would however have received a copy of the employees handbook referred to in that statement.
In the said review letter it is indicated that "Mrs Anderson did not know if Paul O'Kane had been given a verbal warning or instructions against smuggling".
The letter contained an account of the Commissioners' policy as follows:
Freight Vehicle Restoration Policy – Driver abuse of duty reliefs.
The Commissioners' policy concerning the restoration of heavy goods is designed to rigorously tackle cross-border smuggling and significantly disrupt the supply of excise goods to the illicit market. In the case o drivers abusing cross-border shopping reliefs, the following policy is applied by Customs. This policy has been effective since 15 March 2002.
Same haulier – second or subsequent detection:
The Officer then proceeded to give his consideration as follows:
One of your vehicles had been seized in the past, and although that was more than six months earlier, you should have been aware of the smuggling risks involved with your vehicles.
I also looked at whether you have been able to show that you took all reasonable steps to prevent the driver in this case from smuggling in your vehicle. My view is that you did not.
You did not implement the provisions that you had ready to use. Whether this was the fault of a member of your staff is irrelevant in my opinion. You had a standard contract of employment available, which included warnings against smuggling, but you did not issue it to Paul O'Kane, the driver in this case. He had been in your employ for 6 to 8 weeks, albeit on a casual basis, but he had also travelled in SA51AJA via Portsmouth to Cherbourg on 17 September 2002, according to shipping operators' records. There was ample time for you to have issued him with the formal contract that you had at your disposal to use; yet you failed to do so.
In view of this, I have concluded that you did not take all reasonable steps to prevent Paul O'Kane from smuggling. I therefore confirm the restoration fee.
It was submitted by Mr Freeman representing the Appellant that the circumstances surrounding this offence had not been properly taken into account or weighed against the aim and object of the Respondent's seizure policy in general. There had been a blanket application of a policy without consideration of the particular circumstances. The Appellant had acted reasonably viewed in general.
For the Commissioners it was submitted that because this was a review jurisdiction of the Tribunal in connection with "ancillary matters" in accordance with Section 16(4) of the Finance Act 1994 the Tribunal was confined to the question of whether it was satisfied that the Commissioners could not reasonably have arrived at the decision they did. The Commissioners were not satisfied on the evidence provided by the Appellant that they had taken all reasonable steps to prevent the driver from smuggling. The Respondent's submissions referred to the case of Colin John Richell (E00190) where comment was made that the Commissioners policy was draconian but a proportionate response. The onus it was said was on the Appellant to show that the Commissioners had acted in a way which no reasonable panel of Commissioners could have acted, and whether they had taken into account some irrelevant matter or had disregarded something to which they should have paid attention (quoting from Lord Lane in Customs and Excise Commissioners v J H Corbitt (Numismatists) Ltd 1982 WLR 653 at 663).
The decision of the Tribunal is that there should be a further review. In the first place it did not seem that the Respondent had by adopting the quoted policy left a sufficient opening for the exercise of a sensible discretion in the particular circumstances of any case. To demand that a party prove that they have taken "all reasonable steps" (my underlining), may go too far in an individual case. For example if it were shown that the policy of the Appellant was reasonable and that reasonable steps had been taken to promulgate it but in a particular case some aspect of the Appellant's policy or system had been omitted for a sensible reason then in the view of this Tribunal there requires to be some exercise of judgment in applying rules or policies for restoration or otherwise.
Further the Commissioners policy does not it, appears, properly allow for any measure of discretion as to a restoration fee. In the present case the amount involved was 15kg of tobacco. Had it been 50kg of tobacco the position of the Respondent would have been that a much larger sum would have been required. But in the circumstances of this case any fault or omission on the part of the Appellant would be precisely the same. He was wholly innocent in the matter of the activities of their driver and it is in the Tribunals view somewhat artificial to suggest that the signing of a contract of employment could make all the difference between whether some employee did or did not break the law while driving one of the Appellant's vehicles. The driver knew perfectly well, as is apparent from his interview, that he was smuggling; the fault was entirely his. There was collusion; no special adaptation of the vehicle; nothing other than that the driver's luggage contained more excise goods than it should have done. In all these circumstances it is doubtful if it can reasonably be said that the vehicle was permitted by the Appellant to be used for evasion of duty or that such a use was in some way ignored or condoned by the Appellant.
In the light of the facts of this case it is clear that the Appellant did have a general policy of issuing various warnings, for whatever use that might have been in a circumstance like the present, where, if a driver was determined to bring in excessive quantities of excise goods for his own purposes it would not matter whether he had been told not to do so by his employer. He knew that he shouldn't do so in any event. Why should an employee have to be told that he must not break the law? The giving or otherwise of "a verbal warning or instruction against smuggling appears to be an irrational basis upon which to decide whether or not to restore the Appellant's vehicle. Matters must be looked at sensibly and with commercial and employment reality. What possible use would instructions against smuggling have in this case.
The non-signing of the contract of employment was in any event wholly explicable and not a matter of fault or "failure" as it was put by the officer of the Appellant to behave reasonably in an employment context. The officers use of the words "yet you failed to do so", is indicative of an attitude of mind by that officer and an irrelevant gloss on events.
In all these circumstances the Tribunal was persuaded that the Respondent had not acted reasonably in the whole matter whether that be because of the unthinking application or perceived application of a policy or indeed in the individual circumstances. It is disproportionate that the actual smuggler escapes merely by having his goods forfeited whereas the Appellant is fined £1,442.47. There is an impression that in the present case that the Appellant was a "soft target" for the acquisition of funds by the Respondent instead of and as opposed to a prosecution of the actual guilty party.
Accordingly the Tribunal requires the Respondent to undertake a fresh review of the whole circumstances of this case and in particular to consider the appropriateness of the penalty imposed in the circumstances either in total or in amount and also to have regard to whether what the Appellant did was reasonable as opposed to enquiring whether he took all reasonable steps to prevent smuggling in this case. They should have in mind the appropriateness and proportionality of penalising an innocent party while failing to prosecute the actual delinquent. They should also consider whether it is correct to fetter their discretion by having a policy which means that an unknown arbitrary penalty can be imposed on the employer, without consideration of modification.
EDN/03/8001