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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 >> Connolly v Customs & Excise [2003] UKVAT(Excise) E00443 (06 June 2003)
URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2003/E00443.html
Cite as: [2003] UKVAT(Excise) E443, [2003] UKVAT(Excise) E00443
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- The review is to be conducted by an officer not previously involved in the case;
- The review is to proceed on the basis of the facts found by this Tribunal and any further information requested by Customs and/or supplied by the Appellant (including the documents produced with the letter dated 30/5/03 from the Appellant's solicitors);
- The review is to be carried out and intimated within eight weeks of the date of release of this decision.
EXCISE DUTIES importation of excise goods above guidelines; forfeiture of goods; whether refusal to restore reasonable; Customs & Excise Management Act 1979 section 141 (1) and 152(b); Appeal relating to ancillary matter; Finance Act 1994 section 14(1)(d), 16(4)&(8), and Schedule 5 paragraph 2(1)(r).
EDINBURGH TRIBUNAL CENTRE
ANNE MEIKLEJOHN CONNOLLY Appellant
- and -
Tribunal: (Chairman) J Gordon Reid, QC., F.C.I.Arb.,
for the Appellants Anne Meiklejohn Connolly
for the Respondents Mr Andrew Scott, Shepherd & Wedderburn, WS
© CROWN COPYRIGHT 2003.
Introduction
This is an appeal against the decision by the Respondents ("Customs") to refuse to restore a quantity of cigarettes, spirits and wine and a motor car, seized on 13 July 2001. A Hearing took place on 9 May 2003. The Appellant appeared in person and gave evidence on oath. She led the evidence of her husband Thomas. Mr Andrew Scott, solicitor, Shepherd & Wedderburn, W.S., Edinburgh, appeared on behalf of Customs. He led no oral evidence but tendered witness statements by Linda Healey and Paul Devlin both senior officers of Customs, and by Gerry Dolan, another Customs Official, to which there was no objection. Both parties produced a bundle of documents. The authenticity and, where appropriate, the transmission and receipt of these documents were not in dispute. The grounds of appeal state that the goods were not being brought in unlawfully; and that they were for the Appellant's own personal use.
Facts
The Appellant is married and resides with her husband in Perth. They have one adult son who lives away from home. He is a non-smoker. In evidence, the Appellant began by giving detailed evidence of her and her husband's finances to demonstrate how they could afford the purchase of a large quantity of cigarettes and why they made such a large purchase. Although currently not in work, the Appellant has had a number of different jobs and businesses over the years. She has an HND in tourism. She at one stage operated a car valet business. For a number of years she was the lottery manager for St Johnstone Football Club, Perth. This involved organising agents to sell weekly tickets, and arrange the draw. She gave up that position in about July or August 2000 due to ill health. The prize varied from £1,200 to £20,000. She has also worked for SNH as a receptionist.
The Appellant and her husband are both heavy smokers. The Appellant smokes 60 to 80 cigarettes a day. She has tried to give up by using nicotine patches, gum, even hypnosis but to no avail. Her husband smokes about 40 cigarettes a day. Cigarettes in Scotland can cost about £36-38 for 200 whereas in France the cost can be about £20 for 200. On a purchase of 30,000 cigarettes, some £2,400, less travel costs, can be saved. According to media reports smuggled cigarettes can be sold at a profit of about £5 for every 200 cigarettes sold. The profit on the sale of 30,000 smuggled cigarettes would yield about £750 less costs.
About twelve years ago, the Appellant's husband was made redundant. The Connollys invested the redundancy payment of about £10,000. They invested in shares and continued to save and invest in shares. Mr Connolly took a job as a heavy goods vehicle driver. The Appellant consulted a financial adviser. They invested wisely and built up their capital and savings. By the end of 2000 they had stocks, shares and savings of over £25,000. The Connollys also had a mortgage over their home which they wished to repay. They had bought a new car in August 2000.
In about December 2000 the Connollys visited friends in London. They all (a party of four) went on a day trip to France taking one car. The Appellant bought 5000 cigarettes costing about £500 and her husband bought 1000 cigarettes and two bottles of wine. Later that month, the Appellant reviewed the family finances. She was aware that she and her husband smoked a large quantity of cigarettes each week and that this was a drain on their resources and their outgoings, about £80-90 per week. She was contemplating paying off the mortgage which could be done at any time without penalty. She saw an advertisement in a newspaper drawing attention to the savings that could be made by purchasing cigarettes and alcohol in France. She worked out that she could save several thousand pounds if a substantial quantity of cigarettes were purchased in France. Her plan was to sell shares to pay off the mortgage and finance the purchase of the cigarettes. The idea was that purchasing cigarettes at almost half the price payable in Scotland would reduce her and her husband's monthly outgoings considerably, by about £200 per month. In early January 2001, she instructed the sale of 250 ordinary Alliance and Leicester ordinary shares. The net proceeds were £1727.60. At the end of January 2001 the Connollys sold further shares the net proceeds of which amounted to about £5,555. This enabled her to meet the credit card bill for the purchases in France. The mortgage was subsequently paid off in June 2001.
She and her husband left Perth on 13 January 2001 and arrived at Dover at about 4am the following morning. They travelled to Calais, taking their motor car with them. They purchased 20,000 Lambert & Butler cigarettes. The Appellant paid for the cigarettes by Visa credit card which had a credit limit of £5,000. They returned to Dover with the car which they had filled up with petrol as petrol was cheaper in France. They returned to Calais as foot passengers, and bought 10,000 Benson & Hedges cigarettes. This was a special offer and included12 litres of vodka. They were able to place their order in Calais and collect the vodka at Dover. The Appellant paid for their purchases with her credit card. The Connollys settled their monthly Visa accounts in full and avoided paying interest charges. At the Terminal at Dover, there is a conveyor belt system which enables Community shoppers to wait and collect their goods. While they were waiting for their goods to arrive, the Appellant decided to look for a trolley. She did so and asked someone where the trolleys were. The person she asked was a Customs official. He then asked the Appellant some questions including what was in her bag. She told him it was 5000 cigarettes. She was then taken to an area that was partitioned off. In the meantime Mr Connolly picked up the 12 litres of vodka from the conveyor belt system, walked through to the main hall and waited five minutes for his wife. When she did not appear he proceeded to the car park and placed the goods in their car.
The Appellant was asked if she was on her own and replied that her husband was at the conveyor belt area. The Customs officer asked for her and her husband's passport, which she had in her bag. She also exhibited her husband's driving licence. The Appellant and the Customs official went to the conveyor belt area but Mr Connolly was not there. They then proceeded to the car park where he was waiting. The Customs officer saw all the other cigarettes and asked the Connollys to drive to another area or compound which they did. They were interviewed separately. In the course of these interviews, Customs were informed that the Appellant visited and looked after her sister and her aunt who were both in poor health; these ladies lived in Paisley; visiting them involved a round trip of about 140 miles in her car; Mr Connolly was a heavy goods vehicle driver. They were asked about the Guidelines and they said they were aware of them. The official examined the Appellant's chequebook. It showed inter alia a cheque dated 10/10/00 for £3000 in favour of Standard Life. This was part repayment of a loan of £25,000 taken out in February 2000. The official asked for details of the Appellant's financial circumstances. She said that she and her husband had about £900 net per month from his earnings, and £200-220 per month Statutory Sick Pay. He took details of the Connollys' monthly house expenses; these were mortgage £95, Council Tax £135, insurance policies £40, food £200, car HP £285 and Gas and electricity £40. The Customs officer suggested they could not afford such large purchases of cigarettes. The Appellant tried to explain how much she was saving by buying cigarettes in bulk. She said she smoked 60-80 cigarettes a day. The trip cost about £3000 and came from savings. Mr Connolly told Customs that he was a heavy goods vehicle driver; that he became separated from his wife at the Terminal; he thought she had gone outside so he went to the car park; that he smoked about 40 cigarettes a day and that his purchases would last about nine months. He told Customs that the purchases were funded from savings. He said that their monthly outgoings were mortgage £150 (the discrepancy in the mortgage figures was unexplained), Car HP £200 (the Appellant's figure is more likely to be correct as it appears on other documents produced), £80-£90 per week on cigarettes and £60 per week on food. He also explained that he saved from his (gross) earnings £250 per month with his employer's share option scheme. His wife dealt with the finances. He explained that he and his wife were saving money buying cigarettes in bulk. The interviews began about 5.25pm and were finally concluded at about 9.30pm. By letter dated 16/1/01, the Appellant wrote to Customs explaining that the purchases had been made out of savings and that she needed her car to care for her elderly aunt and sister. She set out in that letter figures demonstrating how her purchases had saved her over £2000. The Connollys' expenses in relation to their trip to France in January 2001 amounted to about £195 (excluding the cost of cigarettes and alcohol purchased).
The Appellant does not enjoy good health. Her smoking habit cannot help. She had a stroke in April 2000. She was prescribed "beta blockers" in about July 2000. About that time she gave up her job as a lottery manager. She was taken off her medication in December 2000 so that she could be drug free for a medical examination on 16 January 2001 which included heart monitoring. She was subsequently prescribed further medication for high blood pressure. She also suffered from palpitations.
By letter dated 30/4/02 Customs refused to restore the goods. No mention was made of the Appellant's vehicle. By letter dated 29/5/02, the Appellant's solicitors requested a review of that decision. The decision on review was given in a long letter from Customs dated 12/7/02. Customs set out the background upon which their decision is based. The Review Officer, Linda Healey, then referred to various statutory provisions. Thereafter she set out Customs' general policy which is that seized excise goods should not be restored. Restoration may be exceptionally offered. Various factors will militate against restoration. These factors include large quantities of goods which would damage legitimate trade, and any evidence that the goods were for a commercial purpose. The letter then proceeded (page 7) It is for me to determine whether the Commissioners have acted reasonably in this case. She then considered whether the goods were appropriately seized in the first instance. She stated that owing to the quantity of excise goods, the Connollys were properly required to satisfy the officer that the goods were for own use not some other commercial purpose. She then considered the quantities the Connollys smoked and the cost of doing so. She concluded on fairly rough and ready financial information that it was implausible that the Connollys could have been able to afford the smoking habits they claimed to have. She therefore concluded that the goods were being imported not for their own use but that they were to receive monetary repayment for some or all of them from friends, family or persons unknown. She also noted that the Connollys walked separately through the Customs Hall. She drew the conclusion from this that they had separated knowing that they were carrying goods in excess of the guide levels. She noted that Mrs Connolly was aware of the guide levels. She described their vehicle as being used as a consolidation point for excise goods whilst the Connollys undertook a foot passenger trip with Hoverspeed to purchase another 10,000 cigarettes. She observed that on 13 January Customs officers were satisfied that the Connollys had failed to rebut the statutory presumption of commerciality. She too was satisfied that they had not done so. The original decision was therefore confirmed. There was still no mention of the Appellant's vehicle. An appeal was lodged with this Tribunal. The appeal was then sisted pending the outcome of the proceedings before the English Court of Appeal in the Hoverspeed case. Following that Court's decision a further review was carried out. The decision on further review was intimated by letter dated 28/1/03. In that letter the Reviewing Officer, Mr Devlin adopted the background set out in the letter dated 12/7/02. He then outlined the revised policy on restoration of vehicles following the decision in Lindsay on 20/2/02 and subsequently the decision in Hoverspeed in July 2002. He proceeded to examine the circumstances of seizure and noted the large quantity of cigarettes involved, 30,000. He pointed out that there had been a trip abroad a few weeks before the January 2001 trip and some 5000 cigarettes had been bought on that occasion. In January 2001, they spent some £3000 on excise goods. This involved two trips on the same day. He noted their financial circumstances and concluded that the Appellant's expenditure on cigarettes on excise goods was quite disproportionate to what she could afford for her own use. He did not believe that they had cashed in shares to buy cigarettes. He concluded that at least some of the cigarettes imported were for a commercial purpose. No exceptional circumstances had been made out to justify restoration of the goods. As for the vehicle, he applied Customs policy introduced in October 2002. The policy is that restoration will be considered on a first occasion and where the volume of seized goods does not exceed three times the new guide level (the new guide level is 3200 cigarettes). As the latter criterion did not apply he considered that restoration of the Appellant's vehicle should not be offered. The full text of his letter is printed as an Appendix to this Decision.
These are the facts based upon the evidence before this Tribunal. They are based upon the documents produced, the witness statements and the evidence of the Appellant and her husband. The Tribunal found the evidence of the Appellant and her husband to be wholly credible and reliable. They were an ordinary, respectable middle aged couple. The Appellant's account of her and her husband's financial circumstances was quite difficult to follow initially. It eventually became reasonably clear that the Connollys had built up substantial savings in the form of stocks and shares and cash deposits over the years. The Appellant produced manuscript notes detailing various investments and outgoings. It was apparent to the Tribunal that she kept a tight rein on the finances and budgeted carefully for future expenditure. Insofar as it is of any relevance, the Tribunal's overall conclusion on the evidence is that the Connollys purchased the cigarettes for their own personal use as a domestic savings exercise to reduce the large monthly outlay needed to pay for their smoking addiction.
Submissions
Mr Scott helpfully produced a skeleton argument in which he drew the Tribunal's attention to the relevant statutory provisions including Article 9 of Council Directive 92/12/EEC, R (Hoverspeed & Ors) v CC&E 2002 EWHC 1630 (Admin), Lindsay v CC&E 2002 STC 588, especially at paras 60-62; Richell v CC&E LON/01/18057 9/1/02 (Chairman Stephen Oliver Q.C.), and Lett v CC&E LON/00/8052 19/6/01 (Chairman Paul Heim). He reminded us of the scope of our jurisdiction under reference to section 16 of the Finance Act 1994. Mr Scott submitted that Customs had properly applied their policy on restoration. The Appellant had failed to show that the decision by Officer Devlin was not a reasonable decision. The onus was on the Appellant in terms of section 16(6) of the 1994 Act. It was not for Customs to persuade the Tribunal that their decision was reasonable.
The Tribunal raised the question of its fact finding function with Mr Scott and he helpfully provided further written submissions. In CC&E v Peachtree Enterprises Ltd Dyson J held in relation to a security appeal where the Tribunal's jurisdiction was supervisory, that the Tribunal had to limit itself to the facts and matters which existed at the time the decision under appeal was made. The taxpayer could ask the Commissioners to reconsider matters if fresh material came to light. Mr Scott pointed to section 14(5)(a) of the 1994 Act which provides for reconsideration where Customs did not have the opportunity to consider certain facts or other matters. He then referred to John Dee Ltd v CC&E 1995 STC 941, another security appeal and to Gora & Ors v CC&E 11/4/03 Court of Appeal a vehicle restoration appeal, and in particular paragraphs 37-39, and 52-53 relating to the Tribunal's jurisdiction. He submitted that the Tribunal was limited to looking at whether the decision of Customs in refusing restoration was reasonable. The Tribunal cannot interfere with the fact that the goods had been properly seized.
The Appellant pointed out that when her bag was initially checked she had both her husband's and her own driving licenses and passports. If they had separated deliberately on their return to Dover, each would surely have carried their own passport and licence. She also pointed out in a written document submitted to the Tribunal that it simply would not be worthwhile importing cigarettes for commercial use. She developed this argument; profit on 10,000 cigarettes would be no more than £250 less costs. The trip in January 2001 cost her and her husband about £195; the round trip took about 30 hours; that is a rate of about £8 per hour or £4 per hour per person ignoring costs and the time it would take to sell the cigarettes. Following that argument, if all 30,000 cigarettes were sold the profit would be £750 less costs i.e. about £550 or about £9 per person per hour leaving out of account the time taken to sell the goods. This made little sense she said. If the Appellant had the requisite legal skills she could have reinforced this argument by reference to paragraphs 4, 5 and 23 of the Administrative Court's decision in Hoverspeed 31/7/02 2002 3 WLR 1219.
In response to Mr Scott's written submissions on the Tribunal's fact finding function, the Appellant consulted solicitors. By letter dated 30/5/03, Messrs Culley & McAlpine, Solicitors, Perth, made a number of points. They asserted that a notice of claim was sent to the Excise Support Team which was acknowledged by letter dated 24/1/03. (This is new material which was not before the Tribunal at the Hearing; for what it may be worth, it is the Tribunal's view that the letter sent to Customs was not a notice of claim for the purposes of paragraph 3 of Schedule 3 to the 1979 Act). The solicitors also stated that the Appellant was bringing the cigarettes into the country for her own use, that she should be believed, that Tribunal should be satisfied of the genuineness of her purchasing cigarettes to save money over the forthcoming year; and that there would be little point in having evidence if the Tribunal was not entitled to make such findings. They also produced a copy of a letter by the Appellant to Customs enclosing vouching in relation to the sale of investments (this was also new material that was not referred to at the Hearing; the Tribunal has not taken it into account for the purposes of its decision).
Decision
The appeal to this Tribunal arises by virtue of sections 16(4)&(8) of and paragraph 2(1)(r) of Schedule 5 to the 1994 Act. Thus, the appeal is concerned with a decision relating to an "ancillary matter". The issue before the Tribunal is whether the Appellant has established that the decision not to restore the goods and the vehicle was one that Customs could not reasonably have arrived at. It is important to record that this appeal is not concerned with the seizure of the goods or the vehicle. The question of liability to forfeiture falls to be determined in accordance with the procedure laid down in Schedule 3 to the 1979 Act. The Appellant did not serve a notice of claim under paragraph 3 of the Schedule claiming that the goods seized were not liable to forfeiture. The liability of the goods and vehicle to forfeiture has been resolved against the Appellant and cannot be opened up before this Tribunal (see Gora in the Court of Appeal at paras 56-58). We must therefore consider whether we are satisfied that Customs could not reasonably have arrived at the decision (to refuse to restore the goods or the vehicle) on review.
The question whether goods should nevertheless be restored is a matter for Customs' discretion under section 152(b) of the Customs and Excise Management Act 1979. In exercising that discretion, Customs have developed policies and guidelines which have been reviewed from time to time in recent years to take account of decisions of tribunals and the courts. Customs are entitled to have policies and guidelines provided they are reasonable and not disproportionate. The Tribunal's jurisdiction is supervisory, although in accordance with its procedural rules, it is entitled to hear evidence and make findings of fact. Had it been our function to reassess all the evidence and form a fresh view of the circumstances of seizure and of the reliability and credibility of the Appellant's account, we would have held that there was no commercial purpose behind her purchase of the goods and that she acquired them for her own personal use. However, in this type of appeal it is not our function to reopen the question whether the goods and vehicle were properly seized. All these matters could, and perhaps, should have been explored in condemnation proceedings. It is surprising that more use is not made of the condemnation procedure set forth in Schedule 3 to the 1979 Act. Condemnation proceedings were raised in Hoverspeed (see 2002 3 WLR 1219 para 57: and for a recent example see CC&E v Newbury 2003 EWHC 702 Admin, Hale and Moses JJ). It is unfortunate that the Tribunal has no jurisdiction to deal with condemnation proceedings. As a specialist Tribunal, it is ideally placed to deal both with condemnation and restoration proceedings. As the Tribunal's jurisdiction here is supervisory there may often be little point in hearing evidence. Such evidence is unlikely ever to be identical to the facts and circumstances before Customs when they made their decision not to restore. Making findings in relation to so called primary facts is simply confusing and gives appellants a false impression of the nature of the proceedings before the Tribunal. The phrase primary facts appears to be used differently in Lindsay v CC&E 2002 STC 588 para 22 and Gora, Ct of Appeal para38. The practical implications of this point are underlined by the terms of the letter dated 30/5/03 from the Appellant's solicitors; there is understandably confusion in their minds as to the scope and function of hearing evidence in an appeal to this Tribunal.
Gora was mainly concerned with whether Customs' refusal to restore seized goods involved the determination of a criminal charge for the purposes of Article 6 of the Convention, the meaning of detention in the Customs & Excise Management Act 1979, and the tribunal's jurisdiction. The Court makes it clear that it accepted Customs' concession that the Appellants were entitled to attack Customs' policy on the ground that it failed to take into account the alleged blameworthiness of the Appellants; that if such a challenge were successful the decision would be reconsidered by Customs; and if on further appeal an issue arose whether the Appellants were blameworthy the Tribunal could make its own findings in fact about this (paras 38-39); the Court went on to express the view that the Tribunal does not have jurisdiction to reconsider the condemnation of goods as forfeited; that was a matter for the courts under schedule 3 to the 1979 Act. However, considering an Appellant's blameworthiness is liable to open up the whole circumstances in which goods and vehicles came to be seized. In the present case the Appellant has represented herself. The Tribunal has not had the benefit of any submission attacking Customs' policy on the ground that it fails to take account of the alleged blameworthiness of the Appellant. The Tribunal also notes the recent decision of Neuburger J in Gascoyne v CC&E (High Court Chancery Division 21/2/03); this was a restoration appeal concerning cigarettes and a vehicle. The Court considered that both the reviewing officer and the Tribunal could consider the validity of any seizure or forfeiture (para 52 and 117). That view, in England would appear to be wrong in the light of Gora. In Gascoyne, the Court also reviewed Customs' restoration policy and concluded that it was reasonable.
Even if the Tribunal's findings-in-fact differ materially from the facts and circumstances taken into account by Customs in reaching their decision, there is often little a Tribunal can do, as it is difficult to justify a Tribunal with a Wednesbury type jurisdiction (adjusted to take into account an appellant's Community rights, such as the principle of proportionality, and his Human Rights such as Article 1 of the First Protocol and the fair balance test) being concerned with the assessment of the credibility and reliability of the evidence led by or on behalf of either party. However, the Tribunal does consider that it is entitled to examine with the assistance of evidence, the reasonableness of the decision not to restore. If such examination reveals that (i) Customs' investigations (a) were inadequate, (b) were incomplete in the sense that there are facts and circumstances of which Customs ought reasonably to have been aware but failed to investigate or ascertain, or (c) did not justify the conclusions reached i.e. they were unsupported by the information obtained and their own specialist knowledge of profiles and trends (cf Hoverspeed Ct of Appeal para 47), (ii) Customs misunderstood the facts, (iii) misunderstood or misapplied the law, or (iv) acted in bad faith, then the Tribunal would be entitled to conclude that the decision on the issue of restoration made by Customs was one which they could not reasonably have arrived at. It is often a difficult task identifying the relevant evidence, particularly where the Appellant is a party litigant, and gives evidence about matters which either were not before Customs when they made their decision or were before them but in less detail. This is perhaps where section 14(5)(a) of the 1994 Act comes into play. That subsection enables a further review of Customs' decision to take place when additional information is produced. Nevertheless, as the Tribunal has already noted, the evidence before the Tribunal rarely matches what was before Customs when they made their decision. This makes an examination of the reasonableness of Custom's decision particularly difficult in some cases.
In the present appeal, the Tribunal is concerned with the exercise of discretion in relation to goods and a motor vehicle. The basis upon which that discretion is exercised is set out in Mr Devlin's letter dated 28/1/03. It seems to us that the Reviewing Officer's consideration has been coloured by his view of the December 2000 trip. He speculates to some extent on what the cost of the trip must have been. However, he does recognise that they would save some money. In our view that December trip must be regarded as an entirely neutral event. No adverse inference can be drawn from the fact that it occurred only a few weeks before the trip on 13/1/01. Insofar as Mr Devlin was influenced by the fact of the earlier trip, he was taking into account an irrelevant consideration.
More importantly, in the Tribunal's view, the Reviewing Officer has misunderstood the financial circumstances of the Appellant and her husband. He has ignored the fact that Customs were informed at the time that the trip and the purchases were funded out of savings rather than income and the exercise would save them a substantial amount of money given the number of cigarettes they smoked each week. The Reviewing Officer's conclusion is based upon a rough and ready analysis of the Connollys' disposable income without giving any consideration to the fact that the trip in question and the purchases in question were said to be funded out of savings. He had no information entitling him to disbelieve that statement. It does not strike the Tribunal as odd or incredible and we do not consider that a Customs officer acting reasonably would find it odd or incredible either in the circumstances. If the trip and purchases were funded out of savings then the relationship between disposable income and the cost of the trip and the purchases, a matter which Mr Devlin emphasised, is irrelevant. In relying on that matter, Mr Devlin took into account an irrelevant consideration. He also finds it incredible that the Connollys were using credit to buy a car but cashing in shares to buy cigarettes. In reaching that view, he appears to have failed to take into account the fact that the purchase of cigarettes was the Connollys' largest regular outlay and that by buying in bulk they were actually reducing their outlays when they are viewed over an extended period such as nine months or a year. He has therefore formed a view on a misunderstanding of the material before him. The Reviewing Officer refers to the Appellant's letter dated 16/1/01 where he notes that the Appellant stated that the car was a badly missed necessity. He does not allude to the fact that the letter (which really makes the point we have just made) also states that the sum of £3000 had been raised by selling shares "and as tobacco is our highest expenditure we realise to a non-smoker this may seem excessive waste of cash but to us smoke addicts needs outway (sic) costs". The Appellant then sets out the costs and the savings made by comparing cigarette costs in Scotland and in France, producing a saving of over £2000 on the purchase of 30,000 cigarettes. These figures are neither refuted by Customs nor considered in their review in 2003. The Reviewing Officer concludes that at least some of the 30,000 cigarettes were imported for a commercial purpose. That conclusion seems to the Tribunal to be entirely undermined by the Reviewing Officer's erroneous assessment of the Connollys' financial circumstances and in particular the effect of the fact that the trip and purchase were funded from savings. Moreover, the Appellant's submission on the profitability of selling 30,000 cigarettes was a compelling rebuttal, in the particular circumstances of this case, of any inference that might have been drawn that such a quantity was not acquired for the personal use of heavy smokers. It was also pointed out by the Appellant that had she lived in Dover she could easily have made regular trips to Calais purchasing 3200 cigarettes (the current minimum indicative level) on each occasion and accumulate about 30,000 cigarettes in a relatively short period (e.g. nine fortnightly trips).
In his consideration of the restoration of the vehicle, Mr Devlin deals with this very briefly. He appears to apply the policy introduced in October 2002 rigidly and without reference to the particular circumstances of the case. Here, there was at least an argument which deserved consideration that because the Appellant visited her aunt and sister in Paisley who did not enjoy good health, an exception to the policy might have been made.
The conclusion of this Tribunal, having examined the reasonableness of Customs' decision, is that the Reviewing Officer in his letter dated 28/1/03, misunderstood the Connollys' finances and thus misunderstood the facts, took into account irrelevant considerations and failed to take into account relevant considerations. The Tribunal is fortified in its decision by the evidence it has heard and the findings of fact made on the basis of that evidence. The Tribunal therefore allows the appeal and requires Customs, in terms of section 16(4)(b) of the Finance Act 1994, to conduct a further review of the original decision in accordance with the following Directions:-
We allow parties twenty eight days to make any representations they think fit on the question of expenses.
J. GORDON REID Q.C. F.C.I.Arb.
EDN/02/8016