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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 >> Stirling v Customs & Excise [2003] UKVAT(Excise) E00466 (04 August 2003)
URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2003/E00466.html
Cite as: [2003] UKVAT(Excise) E466, [2003] UKVAT(Excise) E00466
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- Mrs Kathryn Stirling appeals against a decision of the Commissioners of Customs and Excise by letter of 8 October 2001 refusing to restore to her a Vauxhall Astra car registration no. P647 SWX seized on 2 June 2001.
- In the review letter, Mrs H M Marshall, the review officer, explained the factual background to the seizure in this way:
- Those facts are not in dispute. Mr Taylor did in fact have 2000 cigarettes – which he admitted when later interviewed. In the notes of interview, and in evidence before us, he explained, and we accept, that he panicked when asked what goods he had and inadvertently gave the wrong answer.
- But we must add to the factual background. Mr Taylor and Mrs Stirling each had a car, and they were not used interchangeably. However, on the occasion of Mr Taylor's visit to the continent, the two agreed that he should travel in her car. She knew he was going to purchase excise goods. Mr Taylor was given no warning that Miss Harvey, Mr Harvey's daughter, was to travel as one of the party. We find that her participation in events was tolerated by him rather than accepted.
- Each traveller was interviewed individually. Mr Taylor, Mr Wain and Miss Harvey were all told that as they had excise goods in excess of Customs guide levels they would have to satisfy the interviewing officer they were not held for commercial purposes. Mr Taylor and Miss Harvey were also told that they were not under arrest and were free to leave at any time, but without their goods.
- No evidence was adduced by Customs about the circumstances in which the car was stopped and searched. We observe that, following the unappealed part of the decision of the Administrative Court in R (Hoverspeed Ltd and others) v CEC [2002]3 WLR 1219, the Excise Duties (Personal Reliefs) Order 1992 is incompatible with Council Directive EEC/92/12 of 25 February 1992 and article 26 of the EC Treaty in so far as arts 3 and 5 of the Order created a presumption that excise goods held in excess of the minimum indicative levels were held for a commercial purpose and therefore chargeable to additional excise duty in the UK, and placed the burden of proving that such goods were not held for a commercial purpose on the individual importer. As the interviewing officers thus violated the community law rights of the three travellers in question, the seizure and subsequent proceedings would appear to have been flawed.
- According to the notes of an interview of Mr Taylor, upon which Mrs Marshall relied, he explained that he had paid £1466 for all the goods, and the other three travellers had then reimbursed him in cash for what he or she had bought. His own goods consisted of 1 box (6 kilos) of hand rolling tobacco, 1000 Superkings cigarettes and 1000 menthol cigarettes. He added that he smoked 5-6 pouches of tobacco per week, and got about 50 cigarettes per pouch. His salary was approximately £1350 per month, and he had outgoings of £600. He had savings of £9000. He smoked 20 cigarettes per day, plus 5-6 pouches per week. He said the goods were for his own use, including 1000 cigarettes for Mrs Stirling.
- In interview, Mr Wain claimed 1 box (6 kilos) of tobacco, plus 7 pouches bought with "loose change", 200 menthol cigarettes and 1200 Superkings cigarettes, bought for a total of £356.20, plus 2 cases of beer. He admitted to having been unemployed for 15 years and having no savings, but said that he and his wife received £686 per month plus £34.16 per week as foster carers. He smoked 1 – 1½ pouches per week. He had bought 10 pouches of tobacco the previous January but no cigarettes. He accepted that he had been served with Public Notice 1, but said he had not read it.
- Mr Harvey claimed 6 kilos of tobacco, 1000 Superking cigarettes and 18 bottles of wine, which had cost him £388. He claimed to smoke 2 pouches of tobacco a week, and expected his tobacco purchase to last him all year. His average monthly income was £1500.
- Miss Harvey was only 16 years of age. Consequently, she was interviewed in the presence of her father. She claimed 6 kilos of tobacco and 1000 cigarettes. She said she smoked 40 cigarettes a week "when out" and estimated the tobacco would last her a year smoking it at a rate of 2 pouches a day (sic). She also said she spent £50 per week on tobacco out of her income of £600 per month.
- The review letter then records that the goods of the four travellers were seized, as was Mrs Stirling's car, and that the goods seized consisted of::
- 85 kilos of hand rolling tobacco
- In excess of the guide levels
- Unreasonable consumption rates
- Truth not told about goods imported on a previous occasion
- Unreasonable expenditure on low income.
- In her decision, Mrs Marshall explained Customs' restoration policy as to privately owned vehicles as follows:
- She then proceeded to consider Mrs Stirling's application for restoration, opening with the sentence, "It is for me to determine whether the decision that you are contesting is one which a reasonable body of Commissioners could not have reached." That was not what was required of Mrs Marshall: by s. 15 of he Finance Act 1994 she had to confirm, vary or withdraw the decision not to restore Mrs Stirling's car. Then, dealing with whether the goods and vehicle were "appropriately seized in the first instance", she observed that "because of the volume of excise goods the travellers were importing they are required under the legislation, when asked to do so, to satisfy the officer that the goods are for own use and rebut the statutory presumption of commerciality." We earlier dealt with the decision of the Administrative Court in the Hoverspeed case, and indicated that the 1992 Personal Reliefs Order wrongly placed the burden of proof as to commerciality on the traveller. We merely repeat that the seizure and subsequent proceedings appear to have been flawed.
- Mrs Marshall then said:
- When first asked what excise goods they had, Mr Taylor declared only 1000 cigarettes, when he had 2000. Mr Wain declared 800 cigarettes initially, then later said he had 7 sleeves or 1400 cigarettes. Mr Harvey had 1000 cigarettes and Miss Harvey had 1000 cigarettes. None of these combinations adds up to the 4600 cigarettes they actually had between them. There is an obvious discrepancy here which leads me to believe that, a) there were attempts to mislead the \officer in the first instance and b) someone was declaring goods that were not actually theirs, again, presumably to mislead the Officer.
- They all said they had not seen Public Notice 1 when questioned initially. Mr Wain admitted later that he had been issued with the Notice before, although he had not read it.
- During the separate interviews, Mr Taylor told the Officer that the goods had been purchased at a garage. Mr Wain said they had been purchased at 'Eastenders' which I believe to be a tobacco warehouse. Again, there appears to be a discrepancy.
- Mr Wain said he had purchased only 10 pouches of tobacco on his previous trip in January. Our records show he had in fact purchased 3 Kgs [60 pouches] of tobacco and 1000 cigarettes. Mr Wain had not told the Officer the truth. He had also denied having had goods seized before, which was untrue
- Mr Taylor said he had 1 box of wine. Mr Harvey said he had 18 bottles of wine. There appear to have been only 17 bottles of wine, so someone was not telling the truth.
- Miss Harvey appears to be a very heavy smoker for a 16 year old. She told the Officer that she smoked 14 pouches of tobacco per week and 40 cigarettes. She would have to be smoking 100-200 cigarettes per day which I feel is unrealistic. If it were possible, her tobacco would only last her 11 weeks, not 1 year as she contended. She also said she normally spent £50 per week on tobacco in the UK. That would only buy approximately 6 pouches of tobacco. Her account is inconsistent.
- No one claimed to own the bottle of spirits or the cigarillos.
- Of the observations at the first bullet point, we would merely say that the seizing officer found 4600 cigarettes. It should have been a simple matter for him to ask who claimed ownership of them, and to deal with the surplus (if any) by further questioning the travellers. He chose instead to require each traveller to indicate how many cigarettes he or she claimed. By that means he found a discrepancy, or discrepancies, in the declarations which enabled him to conclude that "someone" was misleading him.
- Mr Wain's admission in interview that he had been issued with Public Notice 1, having previously denied having seen it, takes matters little further. And the trivial, indeed irritating, point taken at bullet point 3, that Mr Taylor told the interviewing officer that the goods had been purchased at a garage, whereas it was plain that they had been bought at Eastenders warehouse in Adinkerke, merely serves to weaken the Commissioners' case. (In evidence Mr Taylor explained that the goods were bought at a large warehouse – a "garage like" place – which is probably a not unreasonable description of Eastenders' warehouse).
- Clearly Mr Wain was untruthful in saying that he had bought only 10 pouches of tobacco on his January trip. But as to the allegation, also at bullet point 4, that he denied having had goods seized previously, no evidence whatsoever was adduced. That such an important matter could be glossed over so casually greatly concerns us, particularly as it was something relied on to refuse Mrs Stirling the restoration of her car. In the absence of evidence, we propose to ignore the seizure, but to accept Mr Wain's untruthfulness.
- We shall deal with bullet points 5 and 7 together. In response to a question put to all the travellers about what excise goods they had purchased, Mr Taylor said, inter alia, "one box of wine". His response did not indicate any claim to ownership of the wine. Mr Harvey claimed ownership of 18 bottles of wine. Strictly speaking there were only 17 bottles of wine, but there was also a single bottle of "Archers". We are in no doubt that Mr Harvey was referring to the "Archers" as a bottle of wine in making his claim. And as to the cigarillos, as anyone who has the most superficial knowledge of the sale of tobacco products in Belgium and France must be aware, they are given as a bonus to purchasers. It was probably the case that the cigarillos came as part of the package of purchases made by the travellers and were to be shared between them by agreement. We therefore find it unsurprising that none of the group claimed them; and we discount it as a reason for seizure.
- None of the four travellers has sought restoration of his or her excise goods. That does not mean, and we are not prepared to treat the fact as indicating, that the group were smugglers.
- As Miss Harvey was under 17, by the 1992 Order she was not entitled to relief from excise duty on goods imported by her for personal use. The 1992 Order has since been revoked, but in any event we are not satisfied that its provisions in relation to importations by infants were compatible with the 1992 EC Directive. The Directive contains no restrictions on purchases by infants, and since the law of the UK allows persons aged 16 to buy cigarettes, we see no reason why the 1992 Order should have imposed some other age limit. We therefore proceed on the basis that Miss Harvey was entitled to import cigarettes and tobacco for her own use which she personally imported.
- In the past twelve months there have been a number of developments in the law in the area of importation of excise goods, and it is against that background that we continue our decision.
- Mrs Marshall concluded that because each traveller had some 7 times the then minimum indicative level of tobacco for personal use and "had apparently attempted to mislead the officer, they knew they were doing wrong". She proceeded to confirm that Mrs Stirling's car would not be restored
- Mrs Stirling's car was seized because it was used to transport chargeable goods. There is a countervailing right engaged under art 1 of Protocol 1 to the European Convention on Human Rights:
- Lord Phillips MR considered that article in his judgment in Lindsay v CEC [2002] 1 WLR 1766, saying this at para 52:
- Lord Phillips went on to distinguish importations for social distribution to family and friends in circumstances where there was no attempt at profit from fraudulent ventures, saying that in the latter case those involved could not complain about the loss of their car.
- Mr Taylor gave evidence to us, as did Mrs Stirling. It satisfied us that neither was involved in any sort of fraudulent venture, so that, to return to the judgment of Lord Phillips in Lindsay (para 64), we are told that each case should be considered on its particular facts, including scale, whether it was a first offence, whether there was any attempt at concealment or dissimulation, the value of the vehicle and the degree of hardship caused.
- Dealing first with the scale of importation, we observe that hand rolling tobacco is generally sold in boxes of 6 kilos. Thus each traveller (ignoring Mr Wain's loose change purchase) had one box – as convenient a method of transportation as could probably be devised, and as likely a reason for an individual purchase as one could think of. Ignoring the question of a previous seizure from Mr Wain for reasons we gave earlier, there was no suggestion that it was other than a first "offence" in any case. There was no attempt at concealment or dissimulation. In evidence, Mrs Marshall claimed the value of Mrs Stirling's car, as per Glass's Guide, to be between £2000 and £3000 (compared with the total duty allegedly evaded of £3994): Mr Taylor thought the car worth £5000; Mrs Stirling did not put a value on it, merely saying she had bought it two years before the events concerned for £6000. We heard no evidence as to any hardship the loss of Mrs Stirling's car had caused.
- Mrs Walmisley, counsel for the Commissioners, accepted that they were under a duty to act proportionately as that term was used in ECHR, and maintained that since Mrs Stirling had been aware that her car had been taken abroad to carry excise goods back to the UK, she was compliant in the import of excise goods not for own use, and therefore it was proportionate that the vehicle should not have been restored.
- We are unable to accept Mrs Walmisley's submission that, because Mrs Stirling had allowed her car to be taken abroad to purchase excise goods, she was "compliant" in the import of excise goods not for own use. By EC Directive 92/12 community travellers are entitled to import into the UK excise goods for their own use which they have personally transported. The Commissioners are required to respect that right, and if they seize goods from community travellers and refuse to restore them they are required to prove that they were held for a commercial purpose. In the instant case, the Commissioners adduced no evidence that the goods of Mr Taylor, Mr Wain and Mr Harvey were held or to be used for a commercial purpose.
- Mrs Walmisley submitted that, at the time the travellers were interviewed, there were discrepancies between their versions of events such that it was reasonable to conclude the answers to the seizing officer's questions were intended to, and did in fact, mislead the Customs' officers as to the ownership and purpose of the goods. She highlighted the previous seizure of goods from Mr Wain (which we have totally discounted). She also mentioned Mr Taylor's claim that the goods had been bought at "a garage", in contrast to Mr Wain's evidence that they were purchased at Eastenders. (That matter we also dealt with earlier). Finally, Mrs Walmisley noted that some goods were not claimed by any traveller. (That too we dealt with earlier). She submitted that the Commissioners' decision on review not to restore the car was consistent with their policy, was proportionate, and in all the circumstances was reasonable. Mrs Walmisley observed that Miss Harvey's tobacco and cigarette consumption rates did not seem credible and must have been grossly underestimated
- Of the submissions as to the credibility of Miss Harvey's tobacco consumption rates, we need merely say that we regard the young lady's claim, as that which one might expect from an immature, and perhaps irresponsible, person determined to prove that she was just the opposite. In so behaving, she contributed to the problems of the whole group of travellers, and by extension to those of Mrs Stirling. We see no reason to attribute the behaviour and claims of Miss Harvey to Mr Taylor, or for that matter to Mrs Stirling.
- And whilst we acknowledge that goods mixed, packed or found with goods chargeable to excise duty are by s. 141(a) of CEMA 1979 liable to seizure, and so by section 141(b) is any vehicle used to transport them, we consider the Commissioners refusal to restore Mrs Stirling's car on any terms a disproportionate interference with her rights under the European Convention on Human Rights. It follows that we allow the appeal.
- We direct the Commissioners to carry out a further review of their decision not to restore Mrs Stirling's car to her, such review to be carried out by an officer other than Mrs Marshall. We further direct that the review be completed by 15 August 2003 and that a copy thereof be sent to the Manchester Tribunal Centre.
EXCISE DUTY — commissioners refusal to restore appellant's car to her following its seizure for having been used by her partner and three passengers to transport excise goods in excess of MILS — whether refusal disproportionate interference with appellants' rights under ECHR— appeal allowed.
MANCHESTER TRIBUNAL CENTRE
KATHRYN STIRLING Appellant
- and -
THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents
Tribunal: Mr J D Demack (Chairman)
Mrs G Pratt
Sitting in public in Manchester on the 23 May 2003
The appellant in person
Mrs Walmisley of counsel instructed by the Solicitor for the Customs and Excise for the Respondents
© CROWN COPYRIGHT 2003
"On 2 June 2001, your partner, Keith Taylor, was stopped by Customs at Eastern Dock, Dover. He was driving vehicle registration No P647 SWX and was accompanied by John William Wain, Neil Harvey and Gemma Louise Harvey.
They had been to France and Belgium for the day to do some shopping. Mr Taylor told the officer he had 1 box of tobacco [150 pouches], 1000 cigarettes, 2 cases of beer and 1 box of wine.
John Wain had 1 box of tobacco [150 pouches], 800 cigarettes, 2 cases of beer and a further 7 pouches of tobacco.
Neil Harvey told the Officer that he had 1 box of tobacco [150 pouches] and 1000 cigarettes.
Gemma Harvey had 1 box of tobacco [150 pouches] and 1000 cigarettes.
You knew he was making the trip in your car which you had owned for approximately two years.
They were travelling back to Yorkshire
None of them had seen Public Notice 1 before or had goods seized before.
Mr Wain had travelled twice in the previous 12 months, but it was the first journey for the others.
They did not have any prohibited or restricted items with them.
Mr Taylor and Mr Harvey told the Officer that they were warehouse operatives, Gemma Harvey was a presser and Mr Wain was unemployed.
They all signed the Officer's notebook agreeing that it was a true account of the interview."
4600 cigarettes
150 cigarillos
4 cases of beer
17 bottles of wine
1 bottle of spirits
The officer gave the following reasons for seizure:
"With effect from 14 July 2000 the Commissioners' policy regarding privately owned vehicles used for the improper importation of excise goods is that they will not be restored, even on the first occasion they are so used. That policy applied at the time of the seizure of the vehicle. The car may however, be restored to a third party where it has been stolen and the matter was reported at the time."
"Whilst considering all the information available to me, I have noted the following:
In view of the inconsistencies noted above, the fact that the travellers each had a large amount of tobacco – 7 times the guide levels and had apparently attempted to mislead the Officer, I can only conclude that they knew they were doing something wrong.
Mr Taylor and his passengers failed to satisfy the Officer on the day, that the tobacco goods were not for a commercial purpose and they have failed to satisfy me too. I therefore believe that they were liable to seizure under the appropriate legislation. The vehicle and any other excise goods packed with them were also liable to seizure under the Customs and Excise Management Act 1979, Section 141.
With regard to the restoration of your vehicle, may I draw your attention to the Commissioners policy shown above. You will see that the policy is not to restore the vehicles used to transport improperly imported goods, except in exceptional circumstances. I regret I have not found any exceptional circumstances in this case.
In reaching my decision, I am satisfied that you have been treated no more leniently nor harshly than anyone else in a similar position."
"Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.
The preceding provisions shall not, however, in any way impair the right of the state to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties."
"The commissioners' policy involves the deprivation of people's possessions. Under art 1 of the First Protocol to the convention such deprivation will only be justified if it is in the public interest. More specifically, the deprivation can be justified if it is 'to secure the payment of taxes or other contributions or penalties'. The action taken must, however, strike a fair balance between the rights of the individual and the public interest. There must be a reasonable relationship and proportionality between the means employed and the aim pursued (Sporrong and Lönnroth v Sweden (1982) 5 EHRR 35, para 61; Air Canada v United Kingdom (1995) 20 EHRR 150, para 36). I would accept Mr Baker's submission that one must consider the individual case to ensure that the penalty imposed is fair. However strong the public interest, it cannot justify subjecting an individual to an interference with his fundamental rights that is unconscionable."
MAN/01/8328