United Kingdom VAT & Duties Tribunals (Excise) Decisions

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Cite as: [2003] UKVAT(Excise) E00478, [2003] UKVAT(Excise) E478

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More & Ors v Customs & Excise [2003] UKVAT(Excise) E00478 (14 August 2003)

EXCISE DUTIES — Community travellers — cigarettes purchased in Belgium and brought to UK without payment of UK duty — goods and car used for journey seized — car restored on humanitarian grounds — restoration of excise goods refused — whether conclusion that goods held for commercial purpose reasonable — yes — appeal dismissed

MANCHESTER TRIBUNAL CENTRE

MARTIN MOORE, HELENA STEVENSON

& LILIAN PATTISON

Appellants

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE

Respondents

Tribunal: Colin Bishopp (Chairman)

John Davison

Sitting in public in Newcastle-upon-Tyne on 15 July 2003

The Appellants in person

Stuart Graham of counsel for the Respondents

© CROWN COPYRIGHT 2003
 


DECISION

1. In this appeal Martin Moore, his mother Helena Stevenson and her sister (and Mr Moore's aunt), Lilian Pattison, challenge the Commissioners' refusal to restore to them 15,000 cigarettes, 150 cigarillos, 72 litres of beer and 22.5 litres of wine which were seized at the UK Customs control zone at Coquelles on 6 July 2001. The vehicle in which they were travelling and transporting the goods, owned by Mr Moore, was also seized but was immediately restored on humanitarian grounds. A subsequent request for restoration of the goods was refused and that refusal was upheld on review.
2. All of the appellants were present at the hearing, though only Mr Moore spoke on their behalf. None gave evidence and Mr Moore called no other witnesses. The respondents were represented by Stuart Graham of counsel. He too called no oral evidence, but we read the statements of Andrew Bushell, the officer who stopped the vehicle, had a preliminary discussion with the three appellants and subsequently interviewed Mrs Stevenson; of Gary Brazier, who interviewed Mr Moore alone; of Zoë Hoyland, who interviewed Mrs Pattison alone; of Shuna Veitch, who made the decision not to restore the goods; of Lorraine Cunningham, the officer who conducted the review; of David Luckhurst, who operates a number-plate reading machine at the United Kingdom end of the Channel Tunnel; and of Gerry Dolan, who deals with the Commissioners' policy in cases of this kind.
3. Mr Bushell was the officer who decided to seize the goods and the vehicle. The reasons he gave for doing so were that each of the travellers had more than five times the indicative limit for cigarettes (to which we will return), then set at 800 cigarettes per traveller; that each had a low income and his or her ability to fund the purchase was dubious, particularly in Mrs Pattison's case; that there were discrepancies between their respective explanations of the planning of the trip; and because Mr Moore had made frequent trips across the Channel. Those reasons led him to the conclusion that the goods had not been acquired exclusively for the appellants' personal use. Precisely the same reasons were put forward by Miss Veitch as the justification for her refusal to restore the goods. Mrs Cunningham wrote lengthy and very detailed letters, one to Mr Moore and Mrs Stevenson, who live at the same address, and another to Mrs Pattison, who lives at a different address. The letters naturally cover much the same ground. It is quite clear that Mrs Cunningham has examined the material available to her very closely and it is equally obvious that she has not simply adopted the reasoning of those who preceded her in the case. Nevertheless, when boiled down to their essentials her reasons for upholding the earlier decisions are the same.
4. We mentioned the "indicative limit" earlier in this decision. In 2001, the relevant limits were those laid down in article 9 of Council Directive (EEC) 92/12 and in the Excise Duties (Personal Reliefs) Order 1992, article 5 and Schedule. So far as relevant to this case, they were, in relation to each traveller, 800 cigarettes, 400 cigarillos, 110 litres of beer and 90 litres of wine. The 1992 Order has since been revoked and replaced, and separately the limit for cigarettes has been increased to 3,200 per traveller, so far as domestic law is concerned, though the minimum figure of 800 prescribed by the Directive remains. The principal reason for the revocation and replacement of the 1992 Order was that it incorrectly placed the burden of proof (that is, of establishing that the goods are for his personal consumption) upon the traveller whereas the replacement legislation correctly places the burden of proof upon the Commissioners, who must be satisfied that the goods are for commercial use, effectively for disposal in exchange for money or money's worth: see Commissioners of Customs and Excise v Hoverspeed Ltd [2002] EWCA Civ 1804.
5. The only one of the guidelines which was exceeded by the appellants was that in respect of cigarettes. The guideline is, however, no more than that and, moreover, it is only one of several factors — set out at article 9(2) of the Directive and, now, regulation 4(1B)(e) of the Excise Goods (Holding, Movement, Warehousing and REDS) Regulations 1992, as inserted by the Excise Goods, Beer and Tobacco Products (Amendment) Regulations 2002 — which must be borne in mind when determining whether, as the appellants in this case maintain, they were bringing the goods into the country for their own consumption or alternatively whether, as the Commissioners have concluded, they were bringing them in for the purpose of resale. Our task is to determine whether the Commissioners could reasonably come to that conclusion since only if we are satisfied that their conclusion was unreasonable can we allow the appeal: see section 16(4) of the Finance Act 1994. The only underlying issue is whether or not the goods had been bought for the appellants' own consumption; it was not suggested that we need determine any other matter.
6. Mr Moore put the appellant's case, essentially, upon the basis that the quantity of goods being brought into the country, whether or not above the guidelines, was not an unreasonable amount, bearing in mind that the three appellants had travelled to the continent from Sunderland. Five thousand cigarettes each would last for several months, but no further trip was planned. Had this been a single isolated trip or, at least, one undertaken infrequently we would regard that as an argument of some substance. One can well understand that a person living a long way from the Channel ports would be reluctant to undertake the journey frequently, and would be inclined to purchase rather larger quantities than the traveller whose journey was comparatively short. The respondents have not disputed the claim made by Mrs Stevenson and Mrs Pattison that neither had ever previously travelled to the continent to buy excise goods. However, it could not be said that Mr Moore was an infrequent traveller.
7. Mr Moore freely acknowledged at the hearing that he had, in the past, made frequent cross-Channel shopping trips, though he was rather vague (Mr Graham suggested he was evasive) about the number of journeys he had made. However, he maintained that the Commissioners had read too much into the mere fact that he had made several trips, treating them as suspicious when they were not. He maintained, too, that he and the interviewing officer had been at cross-purposes when he was questioned at Coquelles about the frequency of his trips. According to Mr Brazier's statement, the relevant part of their discussion was as follows:

Brazier : When did you last travel?

Moore: About February 2001

Brazier: What did you buy then?

Moore: Cigarettes, 3000

Brazier: Is that the only trip you've done this year?

Moore: I believe so yes

Brazier: Did you travel much last year?

Moore: I came across here to buy cigarettes about three times

Brazier: Do you always buy cigarettes when you travel across here?

Moore: Yes

Brazier: Because my records show you averaged about one trip per month last year.

Moore: No, no way.

8. At this point in his statement Mr Brazier has added "When Mr Moore read my notes at the end of the interview he wished to change this answer [that is, the last we have recorded] to 'Not that I am aware of'". Mr Moore then stated that his brother had used his car once in order to travel to the continent.
9. Mr Moore suggested that the exchange, as recorded in Mr Brazier's statement, did not reflect what had actually been said, but we were able to see that it correctly transcribes what is written in Mr Brazier's notebook, which Mr Moore has signed to confirm that it is a true record. We were impressed by Mr Brazier's having recorded, both in his notebook and in his statement, Mr Moore's wish to change an answer. We are satisfied that the notebook and statement accurately record the conversation.
10. Mr Moore also told us that when Mr Brazier had used the phrase "last year" he had understood him to mean the last twelve months whereas he later realised that Mr Brazier had intended to refer to the calendar year 2000. It was for that reason that he asked to change his reply, as Mr Brazier has recorded in his statement, since he did not feel that his memory for the entirety of the preceding eighteen months was sufficiently reliable. He went on to say that he could not recall every occasion when he had travelled to the continent but he accepted that he might have travelled as frequently as monthly because he was in the habit, with friends who also lived in or near Sunderland, of visiting other friends in London, and he and his friends would often go on from London to travel across the Channel, in order to buy relatively small quantities of tobacco and alcohol. The cost of the trips from his home to London, and from London to the continent, was shared, and he did not have to bear the cost of accommodation since he could stay with his London friends.
11. As he and his friends knew on each such occasion that they would be able to make a similar trip in the near future there was no need to buy significant quantities, and accordingly he had bought only modest amounts, though he agreed that he had bought cigarettes on every occasion. In late 2000, however, his circumstances changed and his frequent visits to London stopped. For that reason his trips across the Channel became less frequent and correspondingly the amount of tobacco he bought on each occasion increased. Mr Moore made the point that it was absurd that frequent trips to buy small quantities should be regarded as acceptable while infrequent trips to buy larger quantities were objectionable, even though overall the traveller bought the same amount in any given period.
12. Mr Luckhurst's evidence showed no more than that Mr Moore's vehicle had travelled across the Channel on seven occasions between 22 August 2000 and 6 July 2001, the day on which he was stopped: specifically, on one occasion in each of August, September and October and two occasions in December 2000, and one occasion in each of February and July 2001. Even if one assumes that each of those trips was made by Mr Moore, rather than by his brother, it is not immediately clear how Mr Brazier was able to say that trips had been made once per month, whether one is considering the previous twelve months, or the calendar year 2000. We observe however that Mrs Cunningham refers in her letter to eleven trips (each with a date) in 2000, and assume, despite what is said in his statement, that Mr Luckhurst was able to go back over the whole of that year. If Mrs Cunningham's letter is correct it is clear that Mr Moore made trips at about monthly intervals during the year 2000, and less frequently, since only two crossings, in early February and July are recorded, in 2001. Mr Moore not only did not deny that he had made frequent trips during 2000, but used that fact as part of his argument (see the preceding paragraph of this decision) and we proceed upon the basis that he was indeed then making approximately monthly trips. Mr Luckhurst's evidence does bear out Mr Moore's contention that the frequency of his trips had diminished significantly in 2001. We mention in passing that although Mr Moore's challenge to the interpretation of his answers about the frequency of his trips was before Mrs Cunningham, his explanation for the diminution in frequency, and of the circumstances in which he had been making trips in the year 2000, were not before her.
13. The statements we had outlining Mrs Stevenson's and Mrs Pattison's interviews show that each said she had bought a box of 5000 cigarettes, using her own money, and that each intended to smoke them all herself. We do not detect any evasion about those matters, nor any reluctance to answer questions about income and savings.
14. Each of the travellers was at the material time in receipt of a relatively modest income — Mr Moore £50 per week, Mrs Stevenson £544 a month and Mrs Pattison £369 per month. Mr Moore told us that an examination of his income alone did not give a fair picture of his true financial circumstances since he had previously worked as a computer programmer, and he still had some savings from his earnings in that employment. At the relevant time he was a student with very limited outgoings, since he lived with his mother. He told us that he paid for his own purchases out of his savings. Mrs Cunningham's letter reveals that she has taken into account the fact of Mr Moore's savings although it is also clear that she has concentrated more closely on the likelihood, as she perceived it, that even with such savings he would not spend so much on frequent trips to France when he had an income of as little as £50 per week. Mrs Stevenson told Mr Bushell, at Coquelles, that she had savings of about £1800 on which she had drawn to fund her purchases, and that assertion has not been challenged. Mrs Pattison said at Coquelles that she had used all her (obviously quite limited) savings in order to buy her cigarettes. Mrs Cunningham has merely observed, in relation to Mrs Stevenson and Mrs Pattison, that she did not consider it realistic that either would spend approximately a month's income on the purchase of cigarettes alone, even leaving out of account their contributions to the cost of the trip itself. It appears that 5000 cigarettes cost £475; the other excise goods were apparently all purchased by Mr Moore at a cost of about £55.
15. We need to determine whether the decision reached by the Commissioners is one they could reasonably have reached. If so, we must dismiss the appeal. If on the other hand we find that the decision was not one which the Commissioners could reasonably have reached, we should allow it. We do not have the power to come to our own view about the matter and, if it differs from the Commissioners' conclusion, to replace that conclusion with our own: see Finance Act 1994, section 16(4). However, in reaching our own conclusion, we can take into account not only the material which was before the Commissioners but also any further material which is before us, though bearing in mind that, before the tribunal, the burden of proof is upon the appellants. In this case, none of the appellants put in evidence in the conventional sense, that is oral testimony tested by cross-examination, and we have no more than the assertions put forward by Mr Moore. We do not, of course, discard those assertions but they necessarily carry limited weight.
16. Having considered Mr Moore's assertions, and the arguments he advanced, we have come to the conclusion that Mrs Cunningham's decision was one she could reasonably have reached, although we do not agree with the entirety of her reasoning.
17. We do agree with Mrs Cunningham that many people of limited income would think it ill-advised to spend so much money (expressed as a proportion of their assets) on cigarettes, but we do not think she has taken into account properly the fact that the difference between the UK selling price of cigarettes and the price for which they can be obtained on the continent is considerable, and that the benefit to be obtained by buying comparatively cheap cigarettes in advance and being spared the cost of buying them in the United Kingdom for a few months is attractive to a confirmed smoker. Had all three travellers been in the position of Mrs Stevenson, with some savings, and making a single trip, we would almost certainly have regarded this is a case in which the Commissioners should have accepted the appellants' contentions. Mrs Pattison's financial position was weaker, but we can understand why she could have been tempted by the savings to be made.
18. Mrs Stevenson told Mr Bushell that the trip had been planned "a couple of months ago". Mr Moore was not asked about the planning of the trip. Mrs Pattison told Ms Hoyland that it had been arranged "just the other day, he rang and asked on Wednesday and asked if we would like to come through". When asked how long she had "been saving for today" she replied "a very long time, a few years." Mrs Cunningham considered these statements to be difficult to reconcile. Although Mr Graham did not rely on this point, we think it right to say that we do not agree. We interpret Mrs Pattison's statements to mean that she had been saving for some years, but not specifically for this trip, and that she had withdrawn her savings in order to buy cigarettes when she was invited to accompany her sister and nephew. We do not think it at all implausible that Mr Moore and his mother, living in the same house, had been planning the trip for a couple of months, but that they had invited Mrs Pattison, who lived elsewhere, to go with them at the last minute.
19. A minor point made by Mrs Cunningham is that, although Mrs Pattison claimed to be an habitual smoker of Regal cigarettes (the brand she had bought), she had with her an open packet of Lambert & Butler. Mrs Pattison was not asked for an explanation at the time, and none was given to us at the hearing. While we accept that Mrs Cunningham's evident suspicion that this factor casts doubt on Mrs Pattison's assertion that she was buying the cigarettes for herself is not unjustified, we do not think it a matter which should be given much weight when the traveller has not been asked for an explanation. Mrs Pattison might, for example, have bought them from an outlet which did not stock, or had run out of, her preferred brand.
20. It is when we turn to Mr Moore's statements about the number and frequency of his journeys that we are driven to the same conclusion as Mrs Cunningham. It is in our view impossible to conclude from Mr Moore's answers to Mr Brazier's questions, as we have set them out, that he understood "this year" to mean the period of twelve months which had just ended; the context clearly shows that the calendar year 2001 was meant. If that is so, his answer is correct — or, at least, is consistent with the Commissioners' records of the number of journeys his car made across the Channel. But if Mr Moore was confused as he contends, his answer was plainly untrue; he had undertaken several trips within the preceding twelve months, a fact which he could not possibly have forgotten. We are likewise quite sure he would have understood "last year" to have meant the calendar year 2000 — that too is obvious from the context — but whether Mr Moore was referring to the preceding twelve months or to the year 2000 his statement that he had undertaken only three trips substantially understates the true number. We do not accept that he could not, or did not, remember that he had made many more.
21. That conclusion necessarily casts doubt on the remainder of what Mr Moore told us. We recognise that London is much closer to the Channel ports than is Sunderland, but journeys from London across the Channel are not without cost and it was not apparent to us why Mr Moore and his friends took advantage of that proximity, not once in a while, but on a monthly basis (and, on each of the eleven occasions identified by Mrs Cunningham, in Mr Moore's car) to travel to the continent to buy only modest quantities of cigarettes. No explanation has been offered of Mr Moore's having made two trips close together, on 17 and 21 December 2000. We were very far from satisfied that Mr Moore had told us, with complete candour, the full circumstances of all of his trips across the Channel and we were by no means satisfied that he had, as he asserted, bought only modest quantities of cigarettes on each occasion. We were not even satisfied that the Commissioners had identified all of the trips he had made.
22. It follows that, in our view, the Commissioners were right to conclude that Mr Moore had sought to conceal the frequency of his trips. The obvious reason for his doing so is to conceal also the quantity of cigarettes he had bought and brought into the country. If it had been true, the explanation he gave to us of the frequency of his trips in 2000 could have been given to Mr Brazier, but it was not. The impression we form is that Mr Moore was taken aback by the revelation that the Commissioners had records of his journeys, and was doing his best, during that discussion, to cast doubt on the reliability of the records. We observe too that Mr Moore did not take the opportunity, in his letters requesting restoration of the goods and a review of the refusal, to correct the impression he had given about the frequency of his trips, or to advance the explanation he gave to us.
23. As we have indicated, the test we must apply is not whether we are satisfied that the goods were being brought into the country for commercial purposes, but whether the Commissioners, in the person of Mrs Cunningham, could reasonably have come to that conclusion. Although we do not agree with her on every point, we have no doubt that there was ample material before her on which she could reasonably come to that conclusion in relation to Mr Moore's goods.
24. The evidence in respect of Mrs Stevenson's and Mrs Pattison's goods was rather less strong and, although we were not addressed by either Mr Moore or Mr Graham about whether we should reach a different conclusion in relation to them, we have nevertheless considered whether we should do so. We proceed upon the basis that their goods were properly seized, as being "found with" Mr Moore's goods (see Customs and Excise Management Act 1979, section 141(1)(b)); the seizure has not been challenged in condemnation proceedings. The weaker evidence relating to them may, however, merit different treatment in the context of restoration.
25. Mrs Cunningham has not distinguished in her letter between the separate travellers' goods, and it is not clear whether she has approached her task upon the basis that this was a joint venture in which the appellants agreed to share the cost of the goods and the rewards to be obtained from selling them, so that all the factors she has identified apply in equal measure to each appellant; or whether she has considered each separately in reaching the conclusion that he or she was making a commercial importation, though on differing, even if overlapping, grounds. Since the frequency of Mr Moore's journeys is a factor Mrs Cunningham says she has relied upon in her decision about Mrs Pattison's goods, we deduce that she has probably treated this as a joint venture.
26. In the end, however, we do not think it matters much since (postulating that Mr Moore's goods, at least, were intended for onward sale) we find it difficult to accept that his mother and aunt were not aware of the frequency of his journeys and of his intentions. If, in those circumstances, they chose to travel with him they were taking an obvious risk and we do not think they can complain if the Commissioners reach the conclusion that their purchases too were to be sold. We conclude therefore that Mrs Cunningham's decision, in relation to Mrs Stevenson and Mrs Pattison, was also reasonable.
27. We add for completeness that Mr Moore did not seek to attack the Commissioners' policy that they would not restore goods imported for commercial purposes save in exceptional circumstances, and that he did not suggest that there were any such circumstances here.
28. The appeal is dismissed.

COLIN BISHOPP

CHAIRMAN

RELEASED: 14 August 2003

MAN/02/8013