United Kingdom VAT & Duties Tribunals (Excise) Decisions

Green & Anor v Customs & Excise [2003] UKVAT(Excise) E00476 (13 August 2003)

EXCISE DUTIES — Community travellers — large quantity of cigarettes purchased in Portugal and brought to UK without payment of UK duty — goods seized and restoration refused — review based on incorrect burden of proof — failure to take all material into account — decision unreasonable — appeal allowed and further review directed

MANCHESTER TRIBUNAL CENTRE

MICHAEL & CATHERINE GREEN

Appellants

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE

Respondents

Tribunal: Colin Bishopp (Chairman)

Roland Presho

Sitting in public in Newcastle-upon-Tyne on 16 July 2003

The Appellants in person

Christopher Rose of counsel for the Respondents

© CROWN COPYRIGHT 2003
 


DECISION

1. The appellants, Michael and Catherine Green, who are husband and wife, appeal against the Commissioners' refusal, upheld on review, not to restore to them a total of 16,120 cigarettes seized from them at Manchester airport on 22 October 2001, when they returned from a holiday in Portugal.
2. Mr and Mrs Green represented themselves at the hearing, and we heard evidence from each of them. The Commissioners were represented by Christopher Rose of counsel, who called no oral evidence. We had however a bundle of documents which included a copy of a short statement from the officer who conducted the review, Julie Logan, a statement by Gerry Dolan, who deals with the Commissioners' policy regarding the seizure of cars and which appears to have been included in the bundle for no practical purpose, and copies of the notes of the interviews conducted at the airport by Customs officers of Mr and Mrs Green, initially together and thereafter separately. There was no documentation detailing the reasons for which the goods had been seized, nor the reasons for which restoration had been refused.
3. It is apparent from Miss Logan's letter, on which she does not elaborate in her statement, that three factors were influential in her decision: the frequency of the appellants' trips abroad, the number of cigarettes which they had purchased, not only on this but on their previous trips; and their financial circumstances. Her view of the latter led her to the conclusion that they would have had considerable difficulty in funding such a high volume of purchases.
4. The evidence we heard from Mr and Mrs Green about their means was consistent with what they had told the officers at interview, as it is recorded in their notebooks. Mr Green suffered an accident at work in 1997 (Miss Logan has incorrectly recorded the date as 1979, but we suspect that is no more than a typing error) as a result of which he had received some compensation, which he had used to pay off the mortgage on their house, and he was now in receipt of a pension which gave him an income of about £200 per week. Mrs Green worked in a hospital laundry, earning about £170 per week. They had savings of about £2,000. In their evidence they expanded by telling us that these were cash savings; they had some investments in addition.
5. It was not disputed that Mr and Mrs Green had made several trips abroad over the preceding months, nor that in December 2000 they had had 21,000 cigarettes seized from them at Luton airport. Of the cigarettes they had with them on this occasion, they told us, each intended to consume 7,500 while 1,000 were to be given to Mrs Green's mother. She had not made, and was not expected to make, any contribution to the cost. That evidence was entirely consistent with what they had said at the airport. The remaining cigarettes were, we deduced, what was left of a pack of 200 which Mr and Mrs Green were in the course of smoking. Part of their case was that they were heavy smokers, smoking between them about 500 cigarettes per week. Following the seizure of these cigarettes, they had been forced to buy their supplies from local retailers and Mr Green produced a large bundle of receipts showing purchases of substantial quantities of cigarettes during the following weeks. Miss Logan had considered the same receipts, and had come to the conclusion that the number purchased did not match the claimed rate of consumption. Though we have not checked her arithmetic in detail for ourselves, we accept that there is some discrepancy, although the number of cigarettes purchased is certainly considerable.
6. Mr and Mrs Green explained that they have no children and, having paid off their mortgage, have little by way of regular outgoings. Their pleasures in life are taking holidays and smoking and they spend as much as they can afford on those activities, combining their holidays with the purchase of cheap cigarettes when they can do so. They did not always bring such large quantities home with them; the amount they purchased would depend upon the date of their next intended trip. They had bought quite a large quantity on this occasion because they had no further trip planned for some time.
7. We detect a number of flaws in Miss Logan's review, at least as it is set out in her letter. First, she comments that the appellants had provided no evidence of their earnings, savings, or their ability to fund their purchase. That is simply untrue; Mr and Mrs Green were asked at the airport about such matters, and replied to the questions which were put to them. If Miss Logan means that no documentary evidence had been supplied, then in our view that is a most unfair criticism since at no time were they asked to provide such evidence or told that it would assist their case if they did provide it. Secondly, Miss Logan has, as far as we can tell, failed to take into account what Mr Green said at the airport about the very low level of his and his wife's outgoings. It is true that, by modern standards, their joint income of about £370 per week is not high, but it is by no means low and, when one takes into account the low level of their outgoings, their disposable income is significant. It was apparent from their evidence that they take comparatively inexpensive holidays, using charter flights and self-catering accommodation. It seems to us that Miss Logan has given insufficient weight to that factor, and to the fact that Mr and Mrs Green did have some savings, even if they disclosed at the airport only Mr Green's cash savings, and that she has not taken into account the practical value to a traveller of buying cheap cigarettes in advance in order to reap the savings by being relieved of the cost of buying cigarettes in the United Kingdom following his return.
8. Third, Miss Logan has mentioned the earlier seizure at Luton airport in her letter. Whether she considered that it was a factor which counted against the appellants is not clear, since she mentions it as a fact without any further comment, though one can only assume from the context that she did. While we do not suggest that a history of earlier forfeitures — or even of one forfeiture — is necessarily irrelevant, the fact that goods have been seized on one occasion is not, of itself, evidence that goods found in a traveller's possession on a later occasion have been brought into the country for a commercial purpose. The history may suggest persistent bootlegging. Or it might indicate that the traveller, having suffered one forfeiture, will be careful to avoid another (the quantity Mr and Mrs Green brought in on this occasion was a good deal less than was taken from them at Luton). It is not even a certain indication that goods previously seized were correctly seized. The traveller's failure to challenge the seizure (and the consequence that, as a matter of law, the goods are deemed to be forfeit) may be due to ignorance, or reluctance to expend time and money on a challenge, and not to his accepting that the goods were properly seized.
9. Lastly, Miss Logan has applied the wrong burden of proof. That is understandable; at the time she conducted her review in March 2002 it was thought that it was for the traveller to satisfy the Commissioners that excise goods he was bringing into the country were for his personal consumption and it was not appreciated that the correct test was whether the Commissioners were satisfied that the goods were being brought in for a commercial purpose.
10. For these reasons we have concluded that the Commissioners' decision was reached without taking into account all of the relevant material, and is based upon a misunderstanding of the law. It is, therefore, unreasonable within the meaning of section 16(4) of the Finance Act 1994, and the appeal must consequently be allowed. We accordingly direct that a further review be undertaken (that being, in the context of a case such as this, the only remedy open to us), by an officer who has not previously been involved in this case, and that such review is to be concluded within six weeks after the release of this decision. Its result is to be communicated to Mr and Mrs Green immediately it has been concluded, and a copy of that communication is to be sent to the tribunal. The officer carrying out the further review is to take into account the contents of this decision, and the tribunal's finding that Mr and Mrs Green are truthful witnesses. If the officer conducting the further review considers that the earlier seizure is a material factor, we would expect him or her to explain why.

COLIN BISHOPP

CHAIRMAN

RELEASED:

MAN/02/8081