United Kingdom VAT & Duties Tribunals (Excise) Decisions

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Cite as: [2003] UKVAT(Excise) E458, [2003] UKVAT(Excise) E00458

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Summers v Customs & Excise [2003] UKVAT(Excise) E00458 (30 July 2003)

EXCISE DUTY — Seizure of cigarettes — deemed decision not to restore — flawed burden of proof — appeal allowed

MANCHESTER TRIBUNAL CENTRE

PATRICIA ANN SUMMERS Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: Lady Mitting (Chairman)

Mrs M Crompton

Sitting in public in Manchester on 13 May 2003

Mrs P Summers appeared in person

Miss L Clarke of counsel instructed by the Solicitor for the Customs and Excise for the Respondents

© CROWN COPYRIGHT 2003

DECISION

This an appeal by Mrs Patricia Ann Summers against the deemed decision of the Commissioners not to restore to her tobacco products seized from her on 11 March 2002. Mrs Summers had requested the return of her goods by letter dated 19 March 2002. Her request was refused by letter dated 18 April and Mrs Summers wrote on 23 May requesting an independent review. The review was not carried out until 11 July, outside the 45 day limit. Pursuant therefore to Section 15(2) Finance Act 1994, the decision of 18 April is deemed to have been upheld and it is against this decision therefore that Mrs Summers appealed.

The Commissioners had carried out a further review voluntarily, the result of which was notified to Mrs Summers by letter dated 18 February 2003. Miss Clarke had contended that this decision was the one under appeal as it had the effect of quashing any earlier review. We did not accept this contention as this review was carried out outside the statutory framework set out in Paragraphs 14 to 16 Finance Act 1994. Miss Clarke accepted our view and the case proceeded as an appeal against the deemed decision.

We heard oral evidence from Mrs Summers, and from Miss J M Logan who had carried out the review of 11 July 2002. The facts are as follows:

On 11 March 2002, Mrs Summers with three friends with whom she was travelling, was stopped at Manchester Airport. They were returning from Spain. Mrs Summers was found to be carrying 13,840 cigarettes. She agreed to be interviewed. She told the officer she did not understand about the minimum levels of tobacco that could be imported and the officer explained these to her. She went on the say that the cigarettes were for herself, her husband, her daughter and her son-in-law and she had been given £400 by her daughter to buy them. She had not gone out just to buy cigarettes, but for a break and had bought the cigarettes when she saw how cheap they were. The officer seized the cigarettes, noting that he was not satisfied the goods were not for a commercial purpose because of the excess amount and that they had been purchased for non-entitled persons (non travellers) from whom money had been received.

In her letter of 19 March, Mrs Summers explained that the break was a Mother's Day gift from her daughter and husband to give her a well deserved break from caring for her 29 year old Downs-Syndrome son. It was the first time she had travelled abroad without her husband and son. She honestly believed that there was no limit on the amount of cigarettes that one could bring back into the UK for own consumption and she believed that this was the perfect opportunity to stock up on cigarettes for her immediate family. She stressed that the goods were not for sale to anyone else but for the use only of her family and was sincerely apologetic if she had done wrong. She finally offered to pay for any costs involved in the return of the goods.

The decision not to restore was communicated to her in the letter of 18 April in the following terms:

"I would advise that it is this department's policy not to restore seized goods unless there are exceptional circumstances. Having giving due consideration to your case and the details provided in your letter, I regret to advise that I am not prepared to consider restoration of your goods in this case."

In her letter of 23 May, Mrs Summers added that she felt she had done nothing wrong and had never been given any explanation as to why the goods were seized. She and her husband smoked 30 to 40 cigarettes a day and they were expected to last until their next annual holiday some 6 months later. She enclosed a copy of her husband's P60 and explained that he had been in full time work for the past 38 years; their house was privately owned and free of mortgage and the cigarettes were therefore easily affordable.

In her evidence, Mrs Summers added no additional information but reiterated that she did not know what she had done was illegal and she thought it was permitted to accept money from family members.

At the time of the seizure, the Excise Duties (Personal Reliefs) Order 1992 provided that a traveller bringing excise goods into the UK, in quantities in excess of the minimum indicative level, had to satisfy the Commissioners that the goods were for own use, "own use" being defined as:

"own use includes use as a personal gift provided that if the person making the gift receives in consequence any money or money's worth (including any reimbursement of expenses incurred in connection with obtaining the goods in question) his use shall not be regarded as own use for the purpose of this Order."

If the traveller failed to satisfy the Commissioners, the goods were treated as being held for a commercial purpose and UK duty became payable on them. At the time the limit for cigarettes was 800.

Following recent decisions in:

1) Lindsay v Customs and Excise Commissioners [2002] 1WLR 1766

2) Customs and Excise Commissioners v The Queen (Hoverspeed Limited and others) 10 December 2002 CA, the current state of the law is that the above definition of "own use" has been upheld and if therefore an individual acquires products for a purpose other then his own use, such products are to be regarded as held for commercial purposes (Hoverspeed). If friends or family are reimbursing on a not for profit basis this is never the less commercial and duty is payable (Lindsay). Following the decision in Hoverspeed the Commissioners have accepted that the burden of proof should not be upon the traveller to satisfy the Commissioners that the goods were not for commercial purposes but rather upon themselves to show that the goods were held for a commercial purpose.

The test to be applied by the tribunal is whether the decision not to restore was one which no reasonable body of Commissioners could have reached (Section 16(4) Finance Act 1994). We accept in its entirety Mrs Summer's evidence both as presented to us orally and as set out in her letters to the Commissioners. In particular we accept that she did not understand the law with regard to the importation of tobacco and that she genuinely believed that provided the goods were brought in for immediate family, as these were, it did not matter that a member of the family had made a contribution towards the costs of the cigarettes. We fully accept that there was no intention by Mrs Summers to make any profit out of the importation and indeed the Commissioners do not suggest that, other than the £400 from her daughter, any money changed hands. In her earlier letter, Mrs Summers offers to pay for the cost of restoration. We take this to mean that she was offering to make good the duty if the Commissioners would restore the cigarettes to her on this basis.

The letter of 18 April gives no indication of the matters taken into account by the officer or the reasons for his decision. We assume that he must have adopted the seizing officer's reasoning and almost certainly the burden of proof applied by the officer:

"Anything above 800 cigarettes you have to satisfy me that they were not for a commercial purpose"

As already stated the Commissioners accept that this burden of proof was incorrectly applied and it follows that the Commissioners' reasoning must therefore be flawed. By reason of the timing of the deemed decision, the Commissioners would also not have taken account of the contents of Mrs Summer's second letter.

For these reasons we find that the deemed decision not to restore to Mrs Summers her cigarettes was Wednesbury unreasonable. We would still be able to dismiss the appeal, despite this finding, if we were satisfied that any further review undertaken by the Commissioners would inevitably have the same result. However, we do not feel that this is a case in which the facts are such as to give rise to the irresistible inference that the decision would have been the same. There are clearly factors which militate against a restoration, in particular the acceptance of £400 from her daughter. However, on the other hand we are not satisfied that due regard has been taken of the proportionality of the seizure and we have in mind in particular, that this was an honest misunderstanding by Mrs Summers, the offer contained in her letter to make good the duty and that the cigarettes were for immediate family only with no suggestion of making a profit.

We therefore allow the appeal. In accordance therefore with our powers under Section 16(4) we remit the case back to the Commissioners for a further review to be carried out, such review to be carried out within 6 weeks of the release of this decision by an officer who has had no previous connection with the case.

LADY MITTING

CHAIRMAN

RELEASE DATE:

MAN/02/8184