United Kingdom VAT & Duties Tribunals (Excise) Decisions

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Cite as: [2003] UKVAT(Excise) E479, [2003] UKVAT(Excise) E00479

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Buckley v Customs & Excise [2003] UKVAT(Excise) E00479 (14 August 2003)

EXCISE DUTY — restoration of tractor unit used to import 5.9 million cigarettes from Eire on which UK excise duty had not been paid offered to haulier on terms — equal to value of unit — whether disproportionate — whether appellant negligent in completing CMR on basis of information supplied by storeman —appeal dismissed.

MANCHESTER TRIBUNAL CENTRE

DAVID BUCKLEY Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: Mr J D Demack(Chairman)

Mr C B H Gill FCA

Sitting in public in Manchester on the 1 July 2003

Mr D Flood of counsel instructed by the Appellant

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

DECISION

This is an appeal by Mr David Buckley against a decision on review of the Commissioners of Customs and Excise by letter of 22 February 2002 to offer restoration to him of a seized tractor unit, reg no. 96 – LH – 4181, upon payment of a restoration fee of £20,000.

Mr Buckley appealed against that decision on 25 March 2002 on four grounds. But as only two were pursued before us, we need refer only to them. They were:

"1. The penalty is excessive

2. Negligence is disputed"

The evidence presented to us consisted of a bundle of copy documents from each party, the parol evidence of Mr Buckley himself and that of the Commissioners' assessing officer, Mr C J McFadden, and the witness statements of the following Customs officers:

Mesdames W C Patterson, S E Parkin and

Messrs S Thompson, K Buglass, N M Huthart

From that evidence, we find the following facts to have been established.

On 3 August 2001 Mr Buckley bought the tractor unit from A & M Commercials of Keady, Co Armagh, for £25,000 sterling. (In evidence he claimed to have paid for it in Irish punts, so that in effect he paid somewhat more than the price in sterling. We find that he paid for it in sterling on the basis of the invoice for the vehicle which was raised by the Northern Irish vendor and on information Mr Buckley gave to Customs in interview.)

The tractor formed part of his small fleet of vehicles which he uses to carry on the business of a haulage contractor. The business is based at Ready Penny, Dundalk in the Irish republic.

Mr Buckley was telephoned at his base on 21 October 2001 by one John Hunter of Rom Distribution and asked if he was interested in being contracted to carry a load of "groupage" to Newcastle-upon Tyne "one drop". After enquiring whether the contract involved a "back load" i.e. return load, and being told it did not, Mr Buckley accepted the contract. Mr Hunter faxed confirmation of the arrangement on 22 October 2001.

On the morning of 23 October 2001, Mr Buckley drove the tractor unit to the Blue Bell industrial estate in Dublin where he had been told to collect the load. He took with him a trailer on which the load was to be carried. The trailer belonged to one Shaun Walsh, and had been borrowed by Mr Buckley. He left the trailer for it to be loaded.

Mr Buckley returned between 6 and 7 pm the same evening to find the trailer loaded. He asked a man "in the store" for the paperwork for the load, and was told "make out your own". Having ascertained that the name of the consignee was Freightspeed Ltd of Newcastle, Mr Buckley, without inspecting the load, proceeded to complete an International Consignment Note, known as a CMR. In that section of the CMR marked "Description of goods", on the basis of what he claimed was information provided by the storeman, he entered "39 pallets groupage: 4 pieces". Having driven the tractor to the docks, he handed the CMR to an employee, Mr Brian Lynch, who was to take the load on to England.

On 24 October 2001 English police officers stopped the tractor and trailer on the A66 road between Barton and the A1. They searched the trailer and found it to contain 5,900,000 cigarettes.

Mr Lynch was subsequently interviewed, and said that he had been contacted by telephone by Mr Buckley and instructed to pick up a load of groupage in Dublin, take the ferry to Holyhead, drive to Newcastle and drop the load at Freightspeed. For his trouble he was paid £75 plus expenses. Mr Lynch explained, and those interviewing him apparently accepted, that when he arrived at Dublin port the tractor and trailer were already coupled. He had found a white envelope in the cab with the paperwork for the load. He had not checked the load; it was not sealed, and he was not aware of its contents.

Mr Buckley was interviewed by Customs on 7 November 2001. He confirmed what Mr Lynch had said. He also explained that he had received a telephone call from John Hunter asking whether he was interested in delivering a load to Newcastle. Mr Buckley maintained that that was the first time he had dealt with John Hunter, who had confirmed by fax the arrangements to transport the load. Mr Buckley further explained that when he had gone to Rom Distribution to collect the load, the office had been shut, and it was in those circumstances that he had, incorrectly, completed the paperwork, i.e. the CMR. He had then driven the tractor with its trailer, which was not sealed, to Dublin port for Mr Lynch to pick up.

In evidence, Mr Buckley claimed that it was not the practice in the haulage industry to check loads, so that he maintained that he had not been negligent in not checking what the trailer contained. We shall deal with that claim later in our decision. He also said that he thought it unlikely that cigarettes would be imported into the UK from southern Ireland.

It is common ground that the cigarettes found in the trailer had been imported into the United Kingdom without payment of UK duty, for which they were liable.

By letter of 3 December 2001, Mr Buckley's UK agent, Contach Ltd, sought restoration of the trailer on the basis that Mr Buckley was completely innocent of any wrongdoing, had collected the load in accordance with normal practice in Ireland, and had co-operated with the Commissioners fully. The Commissioners, by letter of 14 December, decided to offer restoration of the tractor on payment of £20,000, that being the lower of 20 per cent of the value of the cigarettes and the value of the vehicle. The vehicle was estimated to be worth £20,000. Those terms of restoration were determined by reference to the Commissioners' departmental policy for "Cases where a driver or haulier has not undertaken reasonable checks which would have made clear the illicit nature of their load". (Throughout the hearing, the trailer was never mentioned. We can only presume that the Commissioners accepted that its owner was an innocent party and restored it to him).

Contach Ltd then asked for a review of the decision conditionally to restore the tractor. The review was carried out by Mr McFadden, and the result, confirming the original decision to restore on terms, was released on 22 February 2002. It is, against that decision that Mr Buckley now appeals.

In the decision on review, Mr McFadden indicated his reasons for confirming conditional restoration and explained the other matter he had taken into consideration in arriving at his decision as:

"

Mr Buckley did not take any reasonable measures to check the contents of the load

[Neither] Mr Lynch nor Mr Buckley made no (sic) attempt to seal the vehicle

There was no proper paper work for the consignment

Checks should be made under the Immigration and Asylum Act 1999 to prevent the carriage by vehicle of clandestine entrants into the United Kingdom

The Carriage of Goods by Road Act 1965 and the Convention for International Road Haulage Journeys requires hauliers or drivers to check the accuracy of delivery notes, the number of packages, apparent condition of the goods, their packing and how they are marked.

If any basic checks had been carried out, it would have been apparent that the load was not as described."

Against that factual background, the law applicable in this case is all to be found in the Customs and Excise Management Act 1979.

Section 49 provides:

(1) Where —

(a) … any imported goods, being goods chargeable on their importation with customs or excise duty, are, without payment of that duty . .. removed from their place of importation . . . those goods shall . . . be liable to forfeiture.

Section 141 provides:

(1) . . . where any thing has become liable to forfeiture under the Customs and Excise Acts –

(a) any . . . vehicle . .. which has been used for the carriage . . . of the thing so liable to forfeiture: and

(b) . . .

(c) shall also be liable to forfeiture.

Section 152(b) provides that the Commissioners may, as they see fit, restore, subject to such conditions (if any) as they think proper, anything forfeited or seized.

Counsel for Mr Buckley, Mr Flood, submitted that the Commissioners' decision on review was Wednesbury unreasonable: their policy document nowhere indicated that exceptional circumstances could be taken into account; effectively the document was a straightjacket. He further submitted that the penalties imposed were disproportionate: in the instant case there was no suggestion that Mr Buckley knew the contents of the load; and as to negligence, that was a question of fact. Mr Flood observed that the policy document contained no suggestions as to what reasonable checks might be carried out, so that the prevailing policy in the haulage industry of not inspecting loads was relevant.

Finally, Mr Flood submitted that the tribunal should follow the decision of the tribunal in Colgen Transport Ltd v CEC (2003) Decision No E00397 and consider the parameter of 20 per cent of the revenue to be evaded sought to be applied as the restoration fee arbitrary, and thus disproportionate. In response, Mr Mohyuddin, counsel for the Commissioners, submitted that the decision in the Colgen Transport case had been wrongly made, and we should distinguish it.

The Colgen Transport case was a decision on its own facts, but in any event we distinguish it. In the instant case not only did Mr Buckley fail to examine the load to ascertain its contents but went much further and prepared the CMR on the basis of what at best was an off-hand response to a question put to a mere storeman. There must be some responsibility on hauliers to carry out checks on loads they are carrying, and whilst they may frequently be able to accept the word of long standing and reputable customers and others as to what they are to carry, where they are dealing with others such as those unknown to them or whose word may perhaps be suspect, they must carry out some checks.. We are not talking here of detailed examination, but merely ascertaining the nature of the entire load. In the Colgen Transport case, the learned chairman, Mr John Walters QC, indicated that the relevant shortcoming of the haulier was "put at its highest, carelessness". That was not the case here. Mr Buckley's conduct in preparing the CMR without examining the load was at best reckless, and grossly irresponsible: the load could have been anything from illegal immigrants to firearms or bombs. Against that background, we see nothing disproportionate in the Commissioners' requirement for a restoration fee equal to the market value of the tractor unit. The Commissioners are entitled to have a policy. In the instant case, we are satisfied that the assessing officer was not fettered by that policy, and came to a reasonable conclusion as to restoration. Consequently, we hold that the Commissioners' requirement was Wednesbury reasonable, and we dismiss the appeal.

Mr Mohyuddin made application for the costs of a number of the Commissioners' witnesses who attended the hearing but whose statements were agreed immediately prior to its commencement, We accede to that application.

David Demack

Chairman

Release Date:

MAN/02/8061