United Kingdom VAT & Duties Tribunals (Excise) Decisions

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Cite as: [2003] UKVAT(Excise) E00459, [2003] UKVAT(Excise) E459

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Montheith v Customs & Excise [2003] UKVAT(Excise) E00459 (30 July 2003)

EXCISE DUTY — restoration of 12,000 cigarettes — own use — review letter out of time — deemed decision — appeal allowed

MANCHESTER TRIBUNAL CENTRE

WILLIAM MONTHEITH Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: Mr D S Porter LLB(Chairman)

Mr C B H Gill (Member)

Sitting in public in Manchester on the 11 July 2003

The Appellant appeared in person

Mr David Mohyuddin of counsel instructed by the Solicitor for the Customs and Excise for the Respondents

DECISION

By Notice of Appeal dated 20 August 2002 the Appellant appealed against the seizure of 12,000 cigarettes brought into the country on the 25 January 2002 .

The Appellant appeared in person and produced some documents. Mr D Mohyuddin of counsel appeared for the Respondents and produced a bundle.

The Facts

The Appellant flew in from Malaga landing at Liverpool airport on the 25 January 2002 at 1o'clock in the morning.

He came off the plane and went to the carousel to collect his bags. Some bags came through on the carousel but his was not amongst them. After those bags had been retrieved a message came over the tannoy to say that there were a large number of cigarettes in some of the bags and they would now be coming through and people may feel that they did not want to claim them. The bags then came through some 20 minutes after the first set of bags and he collected his bag along with others. He was then directed to an interview room which was spartan and in which their were three other people. Those individuals were interviewed and he could hear what was being said. He was eventually interviewed about 45 minutes later and at that stage was very upset, cold and angry. The details of the interview appear at Folio 15 in the Commissioners' bundle and it is clear from that interview that the Appellant refused to answer all the questions. The Appellant alleged however that he had answered some questions indicating that the cigarettes were for his own use; that he wanted to make a telephone call to his solicitor but had been advised that if he did that he wouldn't be allowed back into the room and other questions that he could not remember. He didn't sign the interview note.

He subsequently left and his cigarettes which he bought for his own use which he assumed included his fiancée at that time now his wife. He wrote to HM Customs and Excise asking for his goods back and indicated that they had been acquired for his own use but did not indicate that his own use included his fiancée. His solicitors, Stevensons, wrote on the 16 May explaining for the first time that the goods had been bought for himself and his wife for their own use. They also provided copies of his bank statement and his credit card with the National Westminster Bank. The credit card showed that he was £2,860.73 in debt which he could repay at the rate of £85 per month. His bank balance showed that he had £714.25 in his account.

In evidence he also indicated that he had received £1,500 from a whiplash injury but no formal proof of that was produced.

On the 21 June the Respondents wrote to Stevensons solicitors advising that they had received their request for a review on the 20 May and that the review would have to be given in 45 days so that the outcome would need to be given by 4 July 2002. The purporting review letter was in fact dated the 8 July and was therefore out of time although the Appellant had agreed in his notice of appeal that he had no objection to the review date being extended.

Mr Mohyuddin called Jane Louise Potts who had been the reviewing officer. He referred to her witness statement (which had been objected to) which appears at pages 13 and 14 of the Commissioners' bundle. She took the view that the evidence before Mr Houghton, the officer who had interviewed the Appellant, was such that it was right and proper for the Commissioners to refuse to restore the cigarettes. She also confirmed that in spite of the change of the laws since then and what she had heard in the tribunal today she would have come to the same decision.

Mr Mohyuddin summed up as follows:

It was significant that the Appellant had not answered any questions at interview

Throughout the correspondence he had referred to personal use meaning for no one else than himself. At the tribunal he had suggested that the cigarettes were for himself and his fiancée, now his wife

He refused to confirm whether he had brought in cigarettes on previous trips

His financial circumstances at best were straightened and it was not credible that he would spend either £650 or £850 on 12,000 cigarettes

It was unclear how much the Appellant had paid for the cigarettes. He had indicated £650. Miss Potts had indicated that from their records of the costs and exchange rate at the time of the offence that the amount involved would have been £850. Either way it was a lot of money

As to the timing of the review, the Appellant had accepted that the time scale for the review could be extended and in fact it was only 4 days late.

In the circumstances there was nothing in the facts today which showed that the reviewing officer had acted unreasonably.

The Appellant summed up and said:

That whilst it might appear that his financial position was precarious he was in fact pretty good compared with many of his other student friends who owed substantially more money then he did

Although it had not been produced in evidence, he confirmed that he had a payment of £1,500 for the whiplash

He confirmed that he received £150 when working as a taxi driver. That his wife had a student grant; that he received tax credits of £100 for their child; and that he only needed to pay £85 off his credit card to keep his credit.

He answered some of the questions initially but he was angry at the attitude of Mr Houghton and refused to answer any further questions. He accepted that that was perhaps foolish with hindsight but he was being treated as if he was a criminal; he had been their over an hour; and it was 2o'clock in the morning after a flight from Malaga.

He had not signed the statement and there were various matters that he had raised that were not included in the statement. It was not his intention to sell the cigarettes. He thought that if he could save £150 or more for 12 months smoking it was money well spent given his financial position.

Decision

The Tribunal can make the following decision:-

Section 16(4) of the Finance Act 1994 requires the tribunal to-

(a) direct the decision so far as it remains in force to cease

(b) require the Commissioners to conduct a further review

(c) it is not possible to carry out such a review to declare the decision to have been unreasonable and give direction to the Commissioners as to steps to be taken for securing that repetition to the unreasonableness do no occur.

Section 15(2) of the Finance Act 1994 provides where-

(a) it is the duty of the Commissioners in pursuance of a requirement by any person under section 14 above to review any decision; and

(b) they do not, within the period of 45 days beginning with the day on which the review was required, give notice to that person of their determination on the review,

they shall be assumed for the purpose of this chapter to have confirmed the decision.

It is clear that the review letter of the 8 July was outside the 45 days and therefore there is a deemed decision. It is nothing to the point that the Appellant agreed that the time scale could be extended. No evidence was given as to the basis on which that request was made and we feel sure that had the Appellant been told that if the review was late the evidence of the officer at the time of the seizure would be the only evidence available, he would nor have agreed to the adjournment. In any event the law is mandatory in this regard and we have therefore dealt with this matter on the basis that there was a deemed decision.

As a result of that we need to consider the facts before Mr Houghton, the officer who seized the goods. It is clear that the Appellant was in no mood to be interviewed, was clearly distressed and it was very late. Our view is that the officer at that stage had insufficient information to be able to make a decision one way or another and he should have suggested to the Appellant that an interview would take place at a later date.

Although it is right to say that the Court of Appeal in Hoverspeed confirmed that the fact that the Appellant was illegally stopped would not itself make this seizure invalid, we are however concerned that the Respondents clearly examined all the bags as they came off the plane and separated out those which had cigarettes in them. No evidence was given as to why that was done other than on a draconian basis.

In any event the passengers were warned that if the bags were taken then there would be an interview. Clearly if the Appellant had deliberately acquired goods to sell them he would not have taken his bag. We are satisfied from the evidence of the tribunal today that the goods were bought for his own use and that of his fiancée. We are also satisfied that he did not consider himself to be in a perilous financial position. His position was no different (and in his view) a great deal better than most of the other students coming out of university. He expected in due course to become a teacher and would look to his income at that time to repay his debts.

In the circumstances we do not believe that Mr Houghton acted reasonably nor that he had sufficient evidence to seize the goods and we therefore require that there should be a further review.

Mr Mohyuddin also confirmed that if the decision was in the Appellant's favour he would have no objection to costs. Those costs should be agreed between the parties and failing agreement be brought back to this tribunal and we so order.

D S PORTER LLB

CHAIRMAN

Release Date:

MAN/02/8234