United Kingdom VAT & Duties Tribunals (Excise) Decisions

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URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2003/E00471.html
Cite as: [2003] UKVAT(Excise) E471, [2003] UKVAT(Excise) E00471

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Leonard v Customs & Excise [2003] UKVAT(Excise) E00471 (08 August 2003)

EXCISE DUTY — cigarettes seized at Liverpool airport on importation from Spain — interview notes challenged — interviewing officer failing to ask sufficient questions — decision inevitably unreasonable — appeal allowed

MANCHESTER TRIBUNAL CENTRE

ROY LEONARD Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: Colin Bishopp (Chairman)

Rayna Dean

Sitting in public in Manchester on 9 July 2003

The Appellant in person

Rosie Springer of counsel, instructed by the Solicitor for the Customs and Excise, for the Respondents

© CROWN COPYRIGHT 2003


 


DECISION

1. In this appeal Roy Leonard seeks to challenge the refusal of the Commissioners to restore to him 15,000 cigarettes which were seized on 7 October 2002, as Mr Leonard entered the country at Liverpool airport. He had arrived from Spain where he had purchased the cigarettes. Mr Leonard asked for restoration of the cigarettes which was refused; he duly requested a review of that refusal which was upheld on review.
2. Mr Leonard represented himself at the hearing and gave evidence, as did his son, with whom he had been travelling. The Commissioners were represented by Miss Rosie Springer of counsel, who called no oral evidence although we had before us a short statement from the officer who conducted the review – in effect confirming what is set out in her letter describing her review and its outcome – and the statement of Gerry Dolan which deals almost exclusively with the Commissioners' policy regarding the seizure of motor vehicles used for the transport of goods and whose relevance to the circumstances of this case we consider to be somewhat tenuous.
3. Mr Leonard is a native of this country but, as he explained to us, he had spent 30 years working in New Zealand as a scaffolder. He returnied to the UK in July 2002, when he retired, in order to look after his elderly mother, into whose home he moved. His son, Teariki, joined him a month or two later.
4. In October 2002 Teariki was to celebrate his 17^th birthday. We were told that his family – we understood his grandmother, his aunt and his uncle – clubbed together to buy him a week's holiday in Spain as a birthday present. Mr Leonard senior went with him, paying for his own holiday.
5. Mr Leonard senior told us that they had not gone to Spain with the intention of buying cigarettes. Although he was aware that the cost of cigarettes in British shops was a good deal higher than he had been accustomed to paying while he was living in New Zealand, he was not aware that cigarettes were available much more cheaply in Spain than in the UK. It was only when he arrived in Spain and realised that other holiday makers were buying cigarettes to take home with them that he became aware that it would be worth his while to do likewise. He was a rather heavier smoker than his son but the intention was that the 15,000 cigarettes should be shared equally between them, save for a few packets which would be given to family members on their return. He provided most of the purchase price – about £1,760 – himself but his son contributed about £300; he was therefore subsidising him to a significant extent.
6. Strictly speaking, both Mr Leonard and his son should have asked for restoration of the cigarettes and should, now, be appellants. One of the reasons given to them at the time for the seizure of their cigarettes was that Mr Leonard junior was not entitled to any allowance at all, since on his return to Liverpool airport he was still a few days short of his 17^th birthday. That was not a factor relied upon, according to their letters, by either the officer who initially refused to restore the goods or by the reviewing officer, Julie Logan, but it is in our view an adequate explanation for Mr Leonard senior, alone, having asked for restoration and having pursued the matter thereafter. We have ourselves considered this as an importation made by two people, rather than one. We add parenthetically that we have some doubts whether the limitation of reliefs in respect of tobacco to those aged 17 and over, even though tobacco can be bought lawfully by persons aged 16 in the United Kingdom and (so we were told) in Spain, is compatible with Article 8 of Council Directive (EEC) 92/12, but as the respondents did not rely on this ground either in their letter explaining the outcome of the review or at the hearing it is not necessary for us to dwell on the matter.
7. The appellant and his son were stopped as they passed through the customs area of Liverpool airport and, in the usual way, Mr Leonard was interviewed before the decision was taken to seize his goods. His son was present at the interview although the officer's notes, of which a copy was before us, show us that he played little part in the interview, merely confirming his date of birth. Mr Leonard senior has signed the notes but, significantly, has not written in a statement to the effect that he was doing so to confirm they were a true record.
8. At the hearing, he maintained that they were only a partial record, since they were written in a way which distorted the meaning of his replies.
9. It is clear from the notes that neither the Appellant nor his son made any effort to conceal the quantity of cigarettes that they had with them. Mr Leonard was asked "who are the goods for?" to which his recorded reply is "me and him and the family some for my daughter etc". He was asked what his occupation was, and is recorded to have replied that he was on benefits; when asked how much he replied £97 per week. There is no record of any further questions about his means, although Mr Leonard is recorded to have said that he lived with his mother and had no outgoings by way of rent. The officer was evidently exercised by Mr Leonard's inability to produce receipts for the cigarettes; he said he had simply thrown them away. There is then the following recorded exchange:

"Officer: Are you familiar with customs law about bringing cigarettes into the country?

Mr Leonard: I was told I could bring them for the family.

Officer: So they did a whip round for you?

Mr Leonard: Yes.

Officer: How many do you smoke a day?

Mr Leonard: About 20.

Officer: How long do you think these cigarettes will last?

Mr Leonard: I don't know but I have to give some to the family for the whip round."

10. The interview concluded with a discussion about Teariki's age, and a note by the officer that the appellant was told that his age disqualified him from bringing in excise goods into the country. The officer has also later added a note that the travellers' suitcases contained only a small amount of clothing.
11. Mr Leonard's case, as he explained it to us, was that these notes gave the false impression that his income was limited to £97 per week. That was the amount he received, by way of attendance allowance or some similar benefit, for looking after his mother; he had planned his retirement from his work in New Zealand, and had made other provision for his income during retirement. He also had savings. It was his habit to carry a substantial amount of cash with him since he was distrustful of banks. He had gone to Spain with around £3,000 in his pocket; he was always careful to ensure he had enough money with him to cater for any problem which might arise. When he had realised how much of a saving could be made by purchasing cigarettes in Spain, he had converted sufficient sterling into euros in order to buy the cigarettes which had been seized. The whip round to which he had referred was not one which had been made in order that cigarettes could be bought, but the clubbing together to pay for his son's holiday. The indication that cigarettes would be given to the family in exchange for the whip round was a material distortion; he was certainly proposing to give some cigarettes to his daughter and his brother but as a gift and not in exchange for their having paid for his son's holiday, still less for their having contributed to the cost of the cigarettes. It was not he but his son who smoked 20 cigarettes a day; his own consumption was nearer to 50 per day. Throughout his evidence, Mr Leonard was adamant that he had no intention of selling any of the cigarettes; apart from those which would be given away, he and his son had intended to consume them all themselves. He agreed that there was little clothing in the suitcases; he said that little was needed in Spain in the summer.
12. Teariki's evidence merely confirmed what his father had told us; he added nothing new.
13. Miss Springer sought to cast doubt on what Mr Leonard had said though she was somewhat handicapped by not having any oral evidence of her own, and she was unable to extract any concessions from Mr Leonard. We bear in mind that we have heard only one side of the story regarding the interview – the Commissioners did not put forward any evidence from the officer concerned, and we had only her notebook – but we were impressed by the forthrightness of Mr Leonard's assertions that the cigarettes were not to be resold, even to members of his family. We are not satisfied that the interview notes represent fairly what Mr Leonard said or would have said had he been asked the right questions. In particular, Mr Leonard was asked only limited questions about his financial circumstances. There was no follow up question, such as is usual in cases of this kind, about savings.
14. That, in our view, is a significant failing since Mr Leonard's apparent inability to pay for the goods was quite clearly a major factor – probably the most important factor – in Miss Logan's reasoning on review. In her letter she made the point, too, that the assertions made by Mr Leonard in his letters seeking restoration and review, which coincided with his evidence to us, were inconsistent with the notebook entries. It is true that there are inconsistencies, and it is not unreasonable to be sceptical about assertions made later, when the traveller has had time to think, which are inconsistent with statements made at interview. However if, as we find, the interview notes themselves must be treated with some caution that objection has rather less force. We have mentioned already that Mr Leonard's signature in the notes is not preceded by a statement that they are a true record, and we do not consider that it is open to the respondents to argue that his signature, alone, amounts to the same thing. What is clear, whatever view one otherwise takes about the notes, is that the interviewing officer did not obtain all of the information she should have obtained about Mr Leonard's means. The result is that the decision to seize the goods and the decision not to restore them, and to confirm that decision on review, were all based on inadequate information. The Commissioners have in consequence failed to take account of a relevant matter, and their decision must inevitably be unreasonable; the requirement of section 16 of the Finance Act 1994 which must be met if we are to allow the appeal is therefore satisfied. The circumstances of the case are not, we think, such that the conclusion would be bound to be the same if all the relevant material was taken into account.
15. We considered Mr Leonard and his son to be witnesses of truth. We were satisfied that it was not their intention to sell any of the cigarettes and that any which were handed on to other members of the family would be given as gifts, and not in exchange for money or money's worth. The quantities involved were not, in our view, inconsistent with such a conclusion; at an aggregate consumption of 60 per day, rather less than Mr Leonard claimed, the cigarettes would last 250 days, or about 8 months, a period which would be diminished to some extent depending on the number given away.
16. As we indicated at the conclusion of the hearing, we decided to allow the appeal and to exercise the only power available to us and relevant in this case, namely to direct the Commissioners to carry out a further review, taking into account the findings which we have made and which are set out in this decision. That review is to be carried out by an officer who has not previously been involved in this case and is to be concluded by 29 August 2003. The decision must be communicated to Mr Leonard, in writing, immediately it has been reached and a copy of the communication is to be sent to the tribunal.
17. We direct that by the same date the Commissioners are to reimburse the appellant and his son their travelling expenses of £20.

COLIN BISHOPP

CHAIRMAN

Release Date: 6 August 2003

MAN/03/8024