United Kingdom VAT & Duties Tribunals (Excise) Decisions

Holwell v Customs & Excise [2003] UKVAT(Excise) E00450 (17 July 2003)

RESTORATION – Goods and vehicle – Import of 5kg tobacco and 1,000 cigarettes followed by similar quantities two days later – Allowed to keep goods on first occasion – Seizure on second occasion – Appellant falsely denied on second occasion having been stopped by Customs on first – Restoration refused in post-Hoverspeed review – Whether decision reasonable – appeal dismissed

RESTORATION – Goods and vehicle – Appellant and daughter imported 8kg tobacco and 2,000 cigarettes – Seizure on grounds of quantity and inconsistencies between accounts given by Appellant and daughter – Review decision took into consideration erroneous account of interview – Restoration refused – Whether decision reasonable – Appeal allowed – Further review directed

LONDON TRIBUNAL CENTRE

BRIAN HERBERT HOLWELL Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: ANGUS NICOL (Chairman)

MICHAEL JAMES

MRS E M MacLEOD CIPM

Sitting in public in Plymouth on 27 March 2002

The Appellant appeared in person

Katrine Sawyer, counsel, instructed by the Solicitor for the Customs and Excise, for the Respondents

© CROWN COPYRIGHT 2003


 


DECISION

1. There are two appeals in this case. In the first, LON/02/8143, the Appellant, Brian Herbert Holwell, is appealing against a decision of the Commissioners not to restore to him a Vauxhall motor-car and a quantity of excise goods, all of which were seized on 18 May 2001 at Coquelles. On that occasion the Appellant was accompanied by a Mr Barry Cummins. In the second, LON/03/8036, the Appellant was accompanied by his daughter, Miss Theresa Jane Holwell, who was also importing a quantity of excise goods. They were stopped at Coquelles on 10 January 2002. The Appellant was driving a Peugeot motor-car. Neither Mr Cummins nor Miss Holwell is appealing against the refusal to restore their goods.

The facts: 18 May 2001

2. On 18 May 2001, The Appellant, driving a Vauxhall motor-car, R383 CVH, was stopped at Coquelles by Customs officers at about 1510. Mr Barry Cummins was a passenger in the car. The Appellant told the officer who questioned him, Mr Round, that they had been to Belgium, that he had owned the car for about four months, and that he had not been stopped by Customs before. He also said that he had last travelled across the Channel on 16 May, two days earlier, and that he and Mr Cummins each had 100 pouches of tobacco and 1,000 cigarettes. In an interview a little later that day, the Appellant said that the goods had cost something like £350. He said that he had bought 1 kg of Golden Virginia on the ferry on 16 May, and 800 cigarettes in Belgium. He had not bought any tobacco in Belgium as he thought that the 1 kg would be his limit. He thought that Mr Cummins had bought 100 pouches of Golden Virginia and 1,000 cigarettes on 16 May. He said that he had not seen a Notice 1 before, but had a rough idea of what the guidance levels were. He said that he and Mr Cummins had been stopped on 16 May, but had been allowed to go on their way.
3. Mr Cummins, who is not a party to this appeal, was also interviewed. He admitted that half the tobacco was his, and said that he had paid for his own goods, which cost about £300. He said that he smoked between two and two and a half pouches a week, and cigarettes if he had them. The cigarettes that he had bought on this occasion were for his wife. He said that he was aware of the guidance levels, but had decided to buy 12 months worth. He said that he had previously travelled across eight or nine months before. He later admitted that he had bought 5 kg of tobacco on 16 May, and apologised for having denied it, saying that his mind had gone blank. He said that the Appellant had also bought a box of tobacco on 16 May.
4. The goods seized were listed as one box (5 kg) of Amber Leaf, one box (6 kg) of Golden Virginia, 1 kg of Golden Virginia, and 1 kg of Old Holborn, 2,000 Benson and Hedges, 400 cigars, and 30 cigarillos, and some wines and spirits.
5. The Appellant later produced, through his solicitor, a receipt for a purchase on 16 May 2001 in Adinkerke of 5 kg of Amber Leaf and ½ kg Old Holborn as well as 800 Rothmans cigarettes. The solicitor's letter also set out the total of the goods brought in by the Appellant on 16 and 18 May, with which the Appellant agreed, as 10 kg Amber Leaf, 1½ kg Old Holborn, 1,800 cigarettes, and 200 Hamlet cigars, all of which were stated to be for the Appellant's own use, and would last him a year. The letter also added that that trip had been an annual event which the Appellant had undertaken for some time, which the Appellant denied at the hearing. The Appellant's request for restoration of the vehicle was refused in a letter to the Appellant's solicitor dated 14 June 2001, the reasons given being, that the Appellant was carrying excise goods in excess of the guidelines in article 5 of the Excise Duties (Personal Reliefs) Order 1992 ("the 1992 Order"), that he was a regular traveller to the Continent, that he failed to declare all the goods to the intercepting officer, that he misled the officer during the interview, and that he had denied having any previous contact with Customs.
6. The Commissioners carried out a review of the decision which was notified to the Appellant in a letter of 11 June 2002. On 17 December 2002, following the decisions in the Court of Appeal in Lindsay v Customs and Excise Commissioners [2002] 1 WLR 1766 and R (on the application of Hoverspeed Ltd and others) v Customs and Excise Commissioners [2002] 3 WLR 1219, the Tribunal directed that a further review be carried out in the light of the changes in the law. That review decision was contained in a letter dated 15 January 2003. That is the decision under appeal.

10 January 2002

7. On 10 January 2002 the Appellant and his daughter had travelled from Exeter for the purpose of attending Dover Magistrates' Court on the occasion of the hearing of condemnation proceedings in respect of a previous seizure from the Appellant which had taken place on 18 May 2001. They had decided to travel on to France and Belgium, since they had come so far in any event, so as to make the trip worthwhile. They had been to Adinkerke for the purpose of buying tobacco, cigarettes, and spirits. When stopped at Coquelles, as well as some wine and spirits, they had 1,000 cigarettes each and 4 kg (80 pouches) of tobacco each. After the officers had read to the Appellant and his daughter the "commerciality statement", which requires a traveller to satisfy the Commissioners that any excise goods imported by him are not imported for a commercial purpose, the Appellant and his daughter were interviewed separately.
8. According to the statement of case, the Appellant, when first stopped, said that they had been to France and to Adinkerke in order to buy tobacco, cigarettes and spirits, and he declared the amount of cigarettes and tobacco that they had. When interviewed separately from his daughter, the Appellant said that he had owned the vehicle since June or July, and mentioned that his previous vehicle had been seized on 18 May 2001. He explained that the purpose of the journey was to go to Dover Magistrates' Court, and they had travelled to Belgium to buy the goods to make the trip worthwhile. The Appellant said that the Dunhill cigarettes were his and the Bensons were his daughter's. Half the tobacco, the Amber Leaf and six packs of the Old Holborn were his. He considered that the cigarettes would last him about six weeks, and his daughter's would last her and her boyfriend six or seven weeks. The tobacco would last him about 6 months. He said that he smoked between two and three pouches of tobacco and about 200 tailor-made cigarettes a week. He had paid for all the goods, which cost £537; his daughter had given him £100, and still owed him £150. He had also paid for the trip. He said that he had last travelled in May 2001, when he had bought one box of Amber Leaf and 1,000 cigarettes, and the same amount two days earlier. He said that he had never seen a Notice 1 before; the previous time that he had been stopped he was issued with a card.
9. Miss Holwell, when interviewed, said that half the excise goods were hers. She could not remember the name of the brand of tobacco 80 pouches of which was hers. She said that the Benson and Hedges cigarettes were hers. She said that the goods had cost about £500, or £250 each, and that her father had paid cash for all the goods. No-one had assisted her with the purchase, she had drawn money from her own bank account. She said that she usually smoked Royals, and used to smoke Bensons. She did not name the brand of tobacco she smoked, because she chopped and changed. She said that she smoked about 20 cigarettes a day and one pouch of tobacco every two weeks. She thought she got about 50 cigarettes out of a pouch. She did not know how long the goods would last her, she thought perhaps about three or four months. Miss Holwell said that she was employed as a carer in an old people's home. The last time she had travelled abroad had been to Germany about ten years previously.
10. The Appellant produced a statement, headed "True Account", dated 5 October 2002. This began by saying that in May 2001 it so happened that he had three days off work (he was then working on a farm near Bampton). He decided to go to Belgium on the first of those days, Wednesday 16 May, and asked his son if he would like to go too. His son said that he could not manage it, and the Appellant then invited Mr Cummins, who was the father of the Appellant's son's girlfriend. He discovered that to go by the Channel Tunnel it would be much less expensive on the following Friday, £45 instead of £175, and booked for the Friday 18 May. He also made inquiries about travelling on the ferry, and since that was much cheaper decided to travel by that means on 16 May, also with Mr Cummins. The journey on 16 May went without incident, except that they were stopped by Customs but allowed to go together with their imported excise goods. On 18 May he and Mr Cummins were stopped and the car and their goods were seized. He was advised by solicitors to contest the seizure, and after a number of postponements the case was due to be heard on 10 January 2002 at 2.0 p.m. On that day, the Appellant asked his daughter to accompany him, and they left Devon at 3.30 a.m., and decided to make a trip to Belgium on the way. They were stopped, and the Appellant explained that he had to get to Dover Magistrates' Court for 2.0 p.m. He had the impression that the Customs officers did not believe him. In any event, they seized his vehicle and the goods, and he was late in reaching the court, only to find that the case had been decided against him, and that he was faced with paying the Commissioners' costs, and, he said, a fine of £500 for being late.
11. The Appellant mentioned in his "True Account" that in a letter dated 6 December 2001 to his solicitors, the Commissioners said that it was not his possession of goods that was important but that of his passenger, and that the letter almost suggested that he, the Appellant, was innocent. This letter was not produced in evidence. The Appellant was clearly very upset about his predicament, and protested that he was not a smuggler and that the Custom and Excise were persecuting him.
12. In his oral evidence, the Appellant said that he had shewed to the Customs officers the leaflet that he was given by P & O in the ferry, which says that there is no limit to the amount that can be brought in by a person, with "for personal use" added in very small print. He said that on 16 May, with Mr Cummins, they had brought in 5 kg of tobacco and cigarettes, and had been stopped but allowed to go away with the goods. Two days later they were stopped again. He contested the condemnation in November, and the case was, he said, thrown out because Mr Cummins did not contest the seizure. The hearing on 10 January 2002 was an appeal from that decision. On 18 May he had brought in 1,000 cigarettes, 1 box (5 kg) of Amber Leaf, two packs of Old Holborn, and some spirits. He had receipts for those purchases. The total on the seizure information was 12 kg of tobacco, 2,000 cigarettes, and some wine and spirits
13. On 10 January 2002, the Appellant said, the officer who interviewed him found no problem with the interview, but the officer who interviewed his daughter called him a liar, and he swore at her. The Appellant believed that he had been held by Customs on purpose so that he would be late for the hearing in the Magistrates' Court that day, though this was denied by the officer.
14. In cross-examination, the Appellant said that although his son was living with Mr Cummins's daughter, he had not met Mr Cummins before 16 May 2001, nor had they met since 18 May. It had been the Appellant's son's suggestion that Mr Cummins should go with the Appellant to Belgium. Asked why he had made two trips so close together, the Appellant said that he did not think that he would have got through Customs with twice the quantity that he had brought in on 16 May (he produced a newspaper cutting relating that a Mr Nevin had had his appeal allowed having brought in 30 kg of tobacco). He said that he knew what the guideline was, though it was only a guideline, it was not the law. He said that he had said that he had not been stopped before, though not with the intention of giving the impression that he had never been stopped before, but because, though stopped, nothing had happened. He had told the officer later, that he had been stopped on 16 May. He said that it was not really relevant, and it was all confusing. He said that he had not known until after 18 May that Mr Cummins had been stopped before with 61 kg and 22,000 cigarettes. The Appellant said that Golden Virginia tended to become dry and gave him a dry throat; Amber Leaf did not, and he preferred it. He did not mind Old Holborn, though it had rather a sweet flavour; that was why he had bought less of that. Maybe some smokers would stick to one brand, but he did not necessarily do so. As to cigarettes, when buying them in a shop he bought whatever was cheapest. He smoked ready-made cigarettes when driving, because one could not roll them and drive; sometimes he rolled some beforehand.
15. On 10 January 2002, the Appellant said, he and his daughter went to Belgium. They brought back 8 kg of tobacco, half of which was for his daughter, and 1,000 each of Benson and Hedges and Dunhill. He paid for it all, but his daughter gave him £100 towards it, and they would settle up when they arrived home. Later he said that his daughter was to have up to, and not more than, half of the goods. One of the reasons for buying in large quantities was that the more you bought the more free gifts you received. The lager that he brought in was a free gift, and so were the cigars.
16. Theresa Holwell related how she had agreed to go with her father. She said that she was nervous about the shuttle, and worried about it. She said that she was reluctant to go. She quite wanted to, but was apprehensive about going under the Channel in the shuttle. When they reached the other side of the Channel she did not know where they were. On the return journey they were stopped by a woman Customs officer, who asked what they had. They opened the boot and shewed her, and told her that they had to be at court by 2.0 p.m. Miss Holwell said that she was frightened, and did not know what was going to happen. When she was interviewed, she said that it was more like an interrogation. She was asked if she smoked, and how long it would take to smoke a pouch of tobacco. She said that she was very nervous, her heart was in her ears. She thought that the officer meant the whole box, not just one pouch. She had never bought ten pouches before. She said three to four months, making a guess. Now a pouch would last her three to four days, possibly the week. She usually bought two pouches, at a cost of £17. In Belgium that would cost £4. She said that she used to smoke tailor-made cigarettes, Royals or Lambert and Butler, and also whatever was cheapest in a shop. Her favourites were Benson and Hedges, which were very expensive in a shop but much cheaper in Belgium. She used, she said, to buy Golden Virginia tobacco, until her father suggested that she try Amber Leaf, which she liked. When she was interviewed she said that she could not remember what tobacco she had bought, because she was so nervous. She said that she had not realised how much money she would need for the tobacco, and had only drawn out £100. She had not paid her father the balance of £150. Miss Holwell said that her partner smoked more than she did, and would probably smoke at least half of what she had bought. The Customs officer had not asked her if her partner smoked.
17. For the Commissioners, Mr Kelvin Dobbs was the first to give evidence. He was the officer who had interviewed the Appellant. His account of the interview was admitted. The interview lasted from 11.35 a.m. to 12.21 p.m. He said that the Appellant had told him that he had 160 pouches of tobacco and 2,000 cigarettes between himself and his daughter. He also was asked how long his daughter's cigarettes would last, and he said that between her and her boyfriend they would last about six to seven weeks. He said that the tobacco would last him about six months. The Appellant said that he smoked two to three pouches and about 200 cigarettes a week. He said that he had last travelled the previous May, when his car had been seized, and that he had then bought a box of Amber Leaf and 1,000 cigarettes, and the same two days earlier.
18. Zoë Hoyland was the intercepting officer, and also the officer who interviewed Miss Holwell. When intercepted the Appellant answered all the questions asked, except when the commerciality statement was read to them and each was asked if it had been understood. The Appellant said that he had been to Adinkerke to buy tobacco, cigarettes, wines and spirits, and that they had each brought back 1,000 cigarettes and 80 pouches of tobacco. He also mentioned that he had had his car seized the previous May. Miss Hoyland asked where they were going back to that day, and recorded the answer as, "Exeter, but I am going to Dover first to Court for a condemnation, that's why we are here today." After checking the quantities of excise goods, Miss Hoyland read the commerciality statement to the Appellant and his daughter, both of whom said that they understood it. Between 11.33 a.m. and 12.45 p.m. Miss Hoyland interviewed Miss Holwell. She asked how much the goods had cost, and recorded the following exchange:

"T Holwell: £500.00 (five hundred) and something, it was £250 (two hundred and fifty) each.

Hoyland: Who actually paid for the goods?

T Holwell: Both of us, but it's on one receipt.

Hoyland: So who actually handed over the money?

T Holwell: Dad.

Hoyland: But you gave him cash?

T Holwell: Yes."

19. Asked about what she normally smoked, Miss Holwell said that she normally smoked Royals, but used to smoke B & H. Then Miss Hoyland asked,

"Hoyland: What about tobacco?

T Holwell: I normally smoke different brands, just chop and change.

Hoyland: How many cigarettes do you smoke per day?

T Holwell: Probably 20 (twenty) per day.

Hoyland: How many pouches do you smoke a week?

T Holwell: Probably a pouch every two weeks.

Hoyland: Is that as well as cigarettes?

T Holwell: Yes.

Hoyland: How long do you expect your goods to last?

T Holwell: I don't know, it depends, probably about three or four months."

Miss Holwell said that she would get about 50 roll-ups to a pouch, and added, "I'm guessing because I don't always use them all, sometimes they don't stick and you have to throw them away. She said that the tobacco would last her three or four months. Miss Holwell said that she was a domestic in an old people's home, earning about £600 a month, and owned her own home, and had a partner, who had given her no money towards the purchase of the goods. She said that she had never seen a Customs Notice 1 before, and one was issued to her.

20. Miss Hoyland said that she was not satisfied that the goods were for the personal use of the Appellant and his daughter, for the following reasons:

The Appellant: In excess of the guidance levels; previous contact with Customs, and had had a previous seizure, and was therefore fully aware of the guidance levels; his and his daughter's stories were inconsistent:

"...for example over the cash paid and the amounts. Mr Holwell says that Miss Holwell owes him £150.00 (one hundred and fifty) and Miss Holwell says that she has already given the money to her father."

The fourth reason was that on the Appellant's consumption rate the tobacco that he imported on 16 May 2001 should have lasted a minimum of 60 weeks; also, tobacco has a recommended shelf life of six to nine months.

Miss Holwell: In excess of the guidance levels; her consumption rate was not proportionate with the purchases made; on her stated consumption rate, the goods would last her over four years, not three to four months; inconsistencies with her father's story "i.e. cash paid and amounts"; and that it was unreasonable not to know what brands she had purchased for her own use, and that she does not smoke the one brand that she mentioned.

21. Miss Hoyland said that she had not called the Appellant a liar. She also said that she was not aware of the Appellant's 2.0 p.m. Court appearance. She agreed that Miss Holwell was a little nervous, but not upset or scared. It was suggested to her that she might like to reconsider her third reason for not being satisfied that the goods were for the Appellant's personal use, but declined to do so without first looking at Mr Dobbs's notes.

The reviews

1. Seizure of 18 May 2001

22. Mr Harris was the officer who reviewed the decision in relation to the seizure on 18 May 2001, in accordance with a direction of the Tribunal dated 17 December 2002. Mr Harris's review was dated 15 January 2003. He also gave evidence very briefly, adding only that he had also looked at all the documents. He referred to the review decision of Mr Murray, dated 8 March 2002, and to the background to the case set out in Mr Murray's review, which he did not think it necessary to repeat. Having set out the legislation, Mr Harris stated the Customs' policy with respect to restoration of seized vehicles, essentially that they would not be restored except where the traveller establishes that the goods were to be sold at cost and not for a profit, each case being considered to determine whether as an exception restoration can be offered. He said that he had taken a fresh look at the facts of the case, including the officers' notebooks and correspondence, and also considered "the various challenges that have been made against some aspects of legislation". As to the burden of proof, he said,

"The Officer was required to be satisfied that the goods were not held for a commercial purpose. The statutory burden of proof being on the traveller to satisfy Customs has been appealed successfully in the case of Hoverspeed (& Others) v the Commissioners. However, as the quantity of hand rolling tobacco, 6 kilograms comprising two different brands, that you were importing, I do not view it as unreasonable for Customs Officers to take account of that in establishing whether or not the excise goods were held for commercial purposes."

23. Mr Harris referred to those facts which he considered important. First, that when stopped by Customs and asked if he had been stopped before, the Appellant said that he had not, which was not the truth, since he had been stopped two days earlier. Mr Harris took the view that the Appellant was attempting to deceive the officer so that he would be allowed to leave with his car and goods, and that therefore the Appellant knew that what he was doing was wrong. Secondly, on the previous trip on 16 May the Appellant had bought 5 kg of tobacco and 800 cigarettes. That made 11 kg of tobacco in two days, which was the equivalent of between 19,400 and 23,800 cigarettes (including the 1,800 cigarettes imported). At the rate of smoking stated by the Appellant, that would last him at least 431 days. Mr Harris referred to the Edinburgh Tribunal's decision in Boyd, in which the Tribunal took the view that

"where 9.6 kg of hand rolling tobacco are imported it strains credulity beyond acceptable level that this could be for one man's own use. The importation of twenty-odd pounds of the hand rolling variety is sufficient justification in itself for the Respondents not being satisfied that this was for personal use...."

Mr Harris also questioned whether the tobacco would still be "palatable" at the end of 431 days. For those reasons, Mr Harris agreed with the officer who seized the goods and vehicle in not being satisfied that the goods were for the Appellant's own use.

24. Mr Harris referred to the Commissioners' new policy, in force since October 2002, under which if the amount of excise goods is less than or equal to three times the new guidance levels, consideration should be given to restoration of the vehicle on payment of the whole of the revenue evaded. In the present case, the amount of goods seized from the Appellant and Mr Cummins was 13 kg of tobacco and that policy was therefore not applicable. The duty evaded was £720, and the loss of turnover to the legitimate trade was in the region of £1,160. No exceptional circumstances had been established by the Appellant, and restoration would not be offered.

2. Seizure of 10 January 2002

25. The original decision to refuse restoration was contained in a letter of 19 February 2002 addressed to Dunn & Baker, the Appellant's solicitors, signed S Bennett, who gave the following reasons for refusing restoration:

"Your client was carrying excise goods in excess of the guidelines as per Article 5 of the Excise Duties (Personal Reliefs) Order 1992 ["the 1992 Order"]

Mr Holwell has previously had excise goods seized from him.

Having had excise goods seized from him in the past, it is fair to say that he is aware of the Guidelines (Law).

There were inconsistencies between your client's account and his daughter's account regarding who had actually paid for the goods."

The letter then referred to the Commissioners' policy of non-restoration, and said that the correspondence from the Appellant shewed no exceptional circumstances. Another letter of the same date, also from S Bennett to Dunn & Baker, included five factors which "will mitigate [sic] against restoration. These were, evidence of previous smuggling, evidence that the person knew that what he was doing was wrong, evidence that the person was paid to make the journey, large quantities of goods which might damage legitimate trade, and evidence that the goods were for a commercial purpose.

26. The review letter, in response to a letter from Dunn & Baker of 28 February 2002, was dated 24 April 2002. It does not mention that the review is made 55 days after the request, rather than the statutory 45, and that therefore the original decision is assumed under section 15(2) of the Finance Act 1994 to be upheld. Strictly speaking, therefore, the decision under appeal is that of S Bennett. However, whichever is the decision under appeal our decision would be the same.
27. The review letter contains a digest of the interviews, as set out above. As to the interview of Miss Holwell, the letter contained the following passages: "She told the Officer that 80 pouches of hand rolling tobacco were hers. She said that the excise goods had cost in the region of £500 and it was about £250 each. She told the Officer that your client [the Appellant] had paid for the goods in cash." And later, "She was unable to tell the Officer what brand of hand rolling tobacco that she smoked, she "chopped and changed it". [Review officer's emphasis.] Dealing with the Appellant's interview, the review letter included the following: "He told the Officer that he had spent £537 in cash on the excise goods. He had paid for all of the goods. His daughter had given him £100 and owed him another £150." In the case of each of the Appellant and his daughter, one of the reasons for seizure given was that their stories were inconsistent.
28. In the "Consideration" section of the review, the officer first sets out what the guide level was under the 1992 Order, and mentions that both the Appellant and his daughter were required when asked to do so to satisfy Customs that the goods were for their own use and to rebut the statutory presumption of commerciality. The main paragraph of the review letter was as follows:

"With regard to the interview with Miss Holwell I am of the view that several points may be deduced from this evidence. In respect of the tobacco Miss Holwell was not able to name the brand that she had purchased on the trip of 10 January 2002 and also was not able to name the brands of tobacco that she said she usually smoked. Further, she said that she had 80 pouches (80 x 50 gram pouches equates to 4 kilos), she smoked one pouch every two weeks and the tobacco would last 3 or 4 months. By my calculation the tobacco would last just over 3 years and not the 3 or 4 months she expected. I would add that from commercial information from manufacturers tobacco has a shelf life of 14-18 months in ideal storage conditions. I find it highly unrealistic that she would buy such a quantity for consumption so far ahead. In addition, all of the excise goods cost in total £537 to which Miss Holwell had contributed £100. The receipt from Smoke Star shows the tobacco in total cost £291.40, the Benson and Hedges cigarettes cost £95 and £95 for the 1,000 Dunhill cigarettes.... She said that the Benson and Hedges cigarettes were for her, effectively it seems that her £100 paid for these only and not the tobacco. Mr Holwell said that she owed him for her share of the tobacco. Taking all of the above points collectively I consider that Miss Holwell did not in fact have a share of any of the tobacco; she did not know the brand, her alleged consumption was inconsistent with the quantity purchased and she had not paid for the tobacco. I am of the view that her replies to the Officer on this issue were not truthful. Taking this further, I consider that the position was that all of the 8 kilos of tobacco belonged to Mr Holwell."

Mr Crouch, the review officer, then referred to Mr Coutts's decision in the Tribunal in the appeal of Boyd, and adopted the words used, that it strained credulity beyond acceptable levels that 8 kg could be for Mr Holwell's own use. He calculated that the tobacco would last the Appellant, at his own stated rate of smoking, for approximately a year. He continued, "I do find it plausible that he would buy such a quantity for consumption so far into the future, even more so when one considers that tobacco is a perishable product with a limited shelf life." Giving evidence at the hearing, Mr Crouch said that he meant that he found it "implausible", not plausible; if that was a mistake he had not seen fit to correct it when signing the review letter nor at any time before the hearing.

29. Turning to the matter of restoration, the review letter stated that there were matters which militated against restoration. First, the Appellant had previously had excise goods seized from him, on 18 May 2001, when he and Mr Cummins had 13 kg of tobacco and 2,000 cigarettes between them, which, in the review officer's view had been imported for a commercial purpose, and was evidence of previous smuggling. He also took the view that the tobacco in the present case had been imported for a commercial purpose, and was of a quantity that might damage legitimate trade. The goods should not be restored. The vehicle had been used to import excise goods improperly, and, there being no exceptional circumstances, it should not be restored either.

The law

30. The law in this field has undergone dramatic change in the last year or so, and since the dates of both seizures under appeal. These changes have followed two decisions in the Court of Appeal: Lindsay v Customs and Excise Commissioners [2002] STC 588, and Customs and Excise Commissioners v The Queen (on the application of Hoverspeed Ltd and others [2003] 3 WLR 16. In the Divisional Court in Hoverspeed [2002] 3 WLR 1219, it was held that the laying upon an appellant, by the 1992 Order, of the burden of proving that goods in excess of the indicative levels were for his own use was incompatible with the Excise Directive 92/12/EEC. As a result, the 1992 Order was revoked, and the effect is as though that provision had never existed. It was also held that it was for the Commissioners to prove that such goods had been imported for a commercial purpose.
31. The 1992 Order has effectively been replaced by the Tobacco Products Regulations 2001, as amended by the Excise Goods, Beer and Tobacco Products (Amendment) Regulations 2002. So far as they bear upon this appeal, the provisions are 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.

(d) . . .

(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

4,000 cigarillos ...

200 cigars

3 kilogrammes of any other tobacco products

. . .

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

(x) any other circumstances that appeal to be relevant."

32. The effect is, therefore, that it is for the Commissioners to prove, on the balance of probabilities, that the goods were imported by this Appellant for a commercial purpose. In doing so they must consider subparagraphs (i) to (x) of paragraph (1B), set out above.
33. This Tribunal's jurisdiction in this appeal is set out in section 16(4) of the Finance Act 1994:

"In relation to any decision as to an ancillary matter, or any decision on the review of such a decision, 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 persons making that 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 a 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, and

(c) . . ."

This case falls within the definition of "ancillary matter" as defined in Schedule 5 to that Act.

34. In order to determine whether the review decision (or, if necessary, the original decision) not to restore is reasonable, the Tribunal must look at the evidence, for two reasons. First, if the evidence shewed that the seizure was not lawful, the Commissioners would have had no power to seize, and therefore the discretion to refuse restoration could not have arisen. Secondly, if the review decision, or the original decision (where it is the decision appealed against) is based upon evidence which has been erroneously reported to the officer conducting the review, or that evidence contains significant omissions, that will have a bearing upon the "reasonableness" of the decision appealed.
35. In this context, "reasonable" means reasonable in the sense in which that word was used in Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223. In that case, Lord Greene MR said, at page 229,

"A person entrusted with a discretion must, so to speak, direct himself properly in law. He must call his own attention to matters which he is bound to consider. He must exclude from his consideration matters which are irrelevant to what he has to consider. If he does not obey those rules, he may be said, and often is said, to be acting 'unreasonably'.

That passage was cited by Lord Lane in Customs and Excise Commissioners v J H Corbitt (Numismatists) Ltd [1981] AC 22, who then continued:

"[The Tribunal] could only properly [review the discretion] if it were shown that the Commissioners had acted in a way in 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."

The Appellant's contentions

36. The Appellant's principal submission was that there was no direct evidence that he had any intention to sell the excise goods that had been imported. Much of what had been said in evidence by the officers, and of what had been put to the Tribunal by counsel for the Commissioners, was mere surmise. He stated that the officers had lied on oath. He relied upon his own evidence, and that of his daughter. He said, referring to Mr Harris's review, that he had never met Mr Cummins before 16 May 2001, and had never seen him again after 18 May. He had known of him, because his son was living with Mr Cummins's daughter, and they were grandfathers of the son of that union. He had not known until after 18 May that Mr Cummins had been stopped before with a very large amount of tobacco and cigarettes. On 18 May he said that he had never been stopped by Customs before because although stopped they had been allowed to go on their way with their goods and vehicle. The tobacco was for his own use, except that he might have given some to his brother or sister.

The Commissioners' contentions

37. Miss Sawyer, for the Commissioners, provided us with a skeleton argument. She said first that it was reasonable to conclude that the importation on 18 May was commercial since the Appellant had strongly suspected that Mr Cummins was a smuggler. (In fact the Appellant did not say that, he said that on the way to Dover on 18 May he had a rough idea that Mr Cummins might be a smuggler.) His credibility was suspect, Miss Sawyer said, in view of the letter from Dunn & Baker, when the trip was described as "an annual event undertaken for some time", although that had been denied by the Appellant. However, to make two trips in three days suggested that the goods were not for personal use. There was no adequate explanation for the making of two trips. One of his reasons was that if he had brought a larger amount all at once he would not have got past Customs: from that it was reasonable to infer that the goods were imported for a commercial purpose Miss Sawyer relied on four points: first, the quantity of goods imported, six times the then guidelines, twice the present figure, though still considerably greater than the guideline levels. Secondly, the importation two days earlier of 5 kg of tobacco and 800 cigarettes. Thirdly, the misleading answers given in answer to the officer's questions. Fourthly, that the Appellant was travelling with Mr Cummins, whose credibility was also damaged by his inaccurate answers, and who had the previous September been stopped with 61 kg of tobacco and 22,000 cigarettes.
38. As to the second seizure, it was contended that there was reason to doubt Miss Holwell's veracity, since she could not remember the name of the tobacco which she smoked, and had no idea of her consumption rate. It was unlikely that she would import £169-worth of a tobacco which she had only just started smoking. She had been unwilling to go with her father, and had bought three years supply. The inference was that the whole amount of tobacco was for the Appellant and none of it for his daughter. The Appellant had tried to mislead the officers by telling them that half the tobacco was his daughter's when it was actually his own. If that was correct, the amount exceeded the new guideline level by 5 kg. Further, if the Appellant had in fact used the subterfuge of saying that half the tobacco was his daughter's when it was actually his own, that itself shed doubt on the Appellant's assertion that the goods were all for his own use.
39. Miss Sawyer contended that the Commissioners' policy of non-restoration was not unreasonable, since it pursued a legitimate aim. The decisions in this case were not in breach of Article 1 of the First Protocol to the European Convention on Human Rights: there was a reasonable relationship between the means employed and the aim pursued: Air Canada v United Kingdom (1995) 20 EHRR 150. She said that the distinction between importing for a commercial profit and importing for social distribution to family and friends made by Lord Phillips MR in Lindsay v Customs and Excise Commissioners [2002] STC 588 did not apply in this case. In any case, the Appellant had mentioned for the first time at the hearing that he might give some of the goods to his brother, but was intending to keep it all for himself.

Conclusions

40. Our task, as Miss Sawyer pointed out in her skeleton argument, is to look to see whether the two decisions not to restore the Appellant's goods and vehicles were reasonable decisions in the Wednesbury sense. We have no jurisdiction to come to out own decision upon the facts as to whether the goods and vehicles should be restored, whether or not we agree with the decisions themselves. Nor, if we allow either of these two appeals, have we jurisdiction to order that the goods or the vehicles should be returned. Having said that, we look at each of the cases separately.

1: 18 May 2001

41. In this case the decision under appeal is that of Mr Harris. (We mention in passing that had it been that of Mr Murray we would have come to a different conclusion. Mr Murray relied heavily upon the presence with the Appellant of Mr Cummins, and Mr Cummins's history. We do not think it reasonable to decide the matter against the Appellant simply because he was travelling with someone who had imported a very large quantity of tobacco and cigarettes some months earlier. But that is now academic, in view of the fact that Mr Harris did not mention the presence or history of Mr Cummins and apparently did not take it into consideration.) Although Mr Harris dealt somewhat uncertainly with the matter of the burden of proof in his review, we take the view, first, that he did realise that it was for the Commissioners to prove that the goods were imported for a commercial purpose. Secondly, the evidence before him, and us, was of a quantity of tobacco, on each of two occasions, which was in excess of the old and new guideline levels. We consider that it was reasonable to take into account that the Appellant had imported a like quantity on each of the two days, since to import such a total quantity is clearly something that the Commissioners are entitled to take into consideration in determining whether the second importation was for the Appellant's personal use. There is also the fact that the Appellant denied having been stopped before. Even if nothing happened, the fact remains that he had been stopped, and only two days earlier, and he denied it. Having regard to those facts, in our view the conclusion that the goods were not imported for the Appellant's own use was not unreasonable, and, bearing in mind the factors "which militate against restoration" (see paragraph 20 above), the decision not to restore was a reasonable one.
42. For those reasons, the appeal in respect of 18 May 2001 is dismissed.

2: 10 January 2002

43. This review decision relies in a significant part upon the view taken by Mr Crouch that Miss Holwell was not telling the truth and that it could be inferred from that and from what she had said that she was in fact importing the tobacco for her father and not for herself. The Commissioners rely in particular upon what Miss Holwell said in interview: first, that she was not able to name the brand or brands of tobacco which she usually smoked, and secondly, that she had paid only £100 out of a half-share of more than £250, and it was not believed that she owed her father the balance of £150. That evidence can only have come from the interview. But the interview notes as produced by the interviewing officer shew that what Miss Holwell is alleged to have said was not what she did in fact say. She did not say that she did not know what brand she usually smoked, she said only that she smoked different brands and chopped and changed (see paragraph 14 above). As to the money, Miss Hoyland's evidence was that the Appellant had said that his daughter still owed him £150, whereas Miss Holwell said "that she had given him the money already". The interview notes, on the other hand (see paragraph 13 above) shew that she was asked if she had given her father cash, and said that she had. She was not asked and did not say how much cash she had given him. It is quite clear that in these two instances, each of which was of significance in making both the original decision not to restore and the review decision, the review officer was considering an erroneous account of the evidence. As a result, the review officer concluded that Miss Holwell had not been telling the truth, and concluded, "Taking this further, I consider that the position was that all of the 8 kilos of tobacco belonged to Mr Holwell." It should also be noted in passing, though not of such central significance, that Miss Hoyland said that she was unaware of the 2.0 p.m. Magistrates' Court hearing, although it is mentioned in her interview notes; and that Miss Hoyland ignored the existence of Miss Holwell's partner, although she was aware of it.
44. It is therefore clear that Mr Crouch took into consideration two matters which were seriously in error in communicating to him the evidence on which he was to review the case. They were matters which should not have been taken into consideration for that reason.
45. It is also the case that during the interview it could have been put to Miss Holwell that she was bringing in half of the tobacco for her father, so that the amount appeared to be halved between them and not therefore so greatly in excess of the guideline levels. But for some reason no such suggestion was made to her, nor to the Appellant, during the interviews, indeed it was not suggested to either of them in person until cross-examination at the hearing of the appeal. The first time it was suggested was in the review letter. If an inference is to be drawn as to the conduct of a person importing excise goods which the Commissioners say have been improperly imported, then such an inference must be drawn from facts. It is not enough to draw or attempt to draw such an inference from facts which do not exist, nor to draw it from subjective opinions as to the habits of people in general. An instance is, "It is unreasonable to buy such a quantity of tobacco so far ahead." People are not statistics who behave in stereotyped ways, each one the same as the next. They are individuals, and whilst a number of people may and often do act in similar ways, there are many who do do what another person, whether a Customs officer or anyone else, might think unreasonable, or implausible, or foolish. However, the inference may be truly drawn from facts supported by evidence, such as a quantity of tobacco so large that it would be unreasonable to suppose that it could be for the personal use of one person. An illustration of that is to be found in the case of Boyd, already referred to. In this context, it is to be remembered also that Mr Crouch said, in evidence, that he would not have considered 4 kg an unreasonable quantity to import.
46. We remind ourselves that we have no jurisdiction to arrive at a new conclusion on the facts of the case. Whether on the evidence we would have come to the conclusion that the Appellant was importing tobacco for a commercial purpose or for his own use, or using his daughter to assist that purpose, has no part in this decision. We must do no more than consider whether the review decision was reasonable in the Wednesbury sense, as outlined in paragraph 30 above. For the reasons given in paragraphs 38 to 40 above, we consider that the decision was in an important respect based upon error, and was therefore not reasonable.
47. The appeal relating to the seizure of 10 January 2002 is therefore allowed. We give no direction as to costs, since no application for costs was made. However, if either party should wish to be heard as to costs, or in default of agreement as to costs, we give liberty to apply to each party for that purpose. Any such application should be made not later than 30 days after the date of release of this Decision.
48. In accordance with section 16(4)(b) of the 1994 Act, we give the directions below:

THIS TRIBUNAL DIRECTS

1. that in respect of the appeal relating to the seizure of 10 January 2002 (LON/02/8143) the Commissioners shall carry out a further review of the decision to refuse restoration of the goods and vehicle

2. that the further review shall be completed within 42 days after the date of release of this Decision

3. that the further review shall be carried out by an officer who has had no previous connexion with this case

4. that in carrying out the further review the officer shall have regard to all the facts of the case, and in particular to the matters referred to in paragraphs 38 to 40 of this Decision

5. that the decision on the further review, if adverse to the Appellant, shall be a decision against which the Appellant may, if so advised, appeal to this Tribunal

ANGUS NICOL

CHAIRMAN

RELEASED:

LON/02/8143

LON/03/8036