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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 >> Wilmore v Customs & Excise [2003] UKVAT(Excise) E00484 (19 August 2003)
URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2003/E00484.html
Cite as: [2003] UKVAT(Excise) E484, [2003] UKVAT(Excise) E00484
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Wilmore v Customs & Excise [2003] UKVAT(Excise) E00484 (19 August 2003)

    EXCISE GOODS – mixed goods of vehicle owner and three passengers – not for own use – not identifiable that any owned by any person other than the Appellant – proportionality considered – appeal dismissed.

    MANCHESTER TRIBUNAL CENTRE

    KEITH DUNCAN WILMORE Appellant

    - and -

    THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

    Tribunal: Mrs. E. Gilliland (Chairman).

    Mrs. G. Pratt (Member

    Sitting in public at York on 29 May 2003

    The Appellant in person

    Miss Kate Huyton of counsel instructed by the Solicitors Office of H. M. Customs and Excise for the Respondent.

    © CROWN COPYRIGHT 2003


     
    DECISION
  1. This is an appeal by Keith Duncan Wilmore (the Appellant) against a decision of the Commissioners not to restore excise goods (the goods) and a vehicle, a Rover 800 registration H779 MOV belonging to the Appellant (the vehicle) seized at Eastern Docks, Dover on 29 April 2001.

  2. It is not in dispute that the Appellant was travelling with three passengers, namely Martin Peter McCook whom he has described in his evidence before the tribunal as a friend and business colleague, his grandson Byron Thomas Eastick who at the relevant time was aged 17 years and 6 months, and Peter Allen Stearman a friend of his grandson who was then aged almost 16 years. When first questioned the Appellant confirmed to the officer that he had "been to Paris to deliver a load of scarves and into Belgium to get some tobacco". As to the quantities he had bought, the Appellant said that there were 2 boxes of tobacco each for the 3 of them ( himself, Mr McCook, and Mr Eastick), and that Mr Eastick had got some cigars "for his Dad". The Appellant also said that he had last travelled to France the previous week to arrange the order for the scarves. At that time he had not bought anything. When the car was inspected on 29 April 2001, it was found that there were 39kg. of hand rolling tobacco, 1,900 cigarettes, 100 cigars, 6.1 litres of spirits, 4.5 litres of wine, and 6 litres of beer. The 2 adults and Mr Eastick were then interviewed separately.

  3. In response to the questions put to him at the personal interview, the Appellant said that his son-in-law had paid for his ticket as they were taking replacement stock to their French agents in Paris and his son-in-law could not go himself as he was on QVC at midnight; he did not do regular trips for his son-in-law, this being the first time in 2 years, except for the previous week when they went to meet the agents. That week also, Mr McCook was with him and another person whose name he did not immediately remember but subsequently recalled as "Michael". He said he knew Martin and Michael as they had helped set up the stands at exhibitions and game fairs for his son-in-law. The Appellant's occupation was that he was setting up a car valeting company and was in computer hardware. However he was not at the moment doing anything. He lived with his wife who had retired and the cash to pay for the goods had been drawn out of the Building Society on the previous Thursday. He said that he had spent approximately £500 - £600 on 29 April; that he smoked 3 to 4 pouches a week, and that his wife smoked another 2 pouches. Although he said that he had never previously travelled to France to buy tobacco he then said that when he had been stopped by Customs previously, he might have had 200 cigarettes and 10 pouches of tobacco and a few bottles of spirits. When asked as to exactly what he had bought on 29 April 2001, the Appellant said that he had 2 boxes of Golden Virginia; all the other cigarettes apart from 3 packets that Peter Stearman had bought, and some that Mr McCook had bought. He had 3 bottles of spirits which had been free and he had bought a bottle of Baileys and 2 bottles of Grouse. The officer asked him to explain a piece of paper he had found with written on it:

    4. "Blackie = 250@ 3.30 = 825 and Juliet = 30 @ 3.00 = 90.00

    915.00

    At first, he said that he had no idea but when it was suggested by the officer that they equated to tobacco pouches, he said that they were computer discs. The Appellant then said that he had bought 1 box of Drum tobacco for himself and his grandson and had helped his grandson to about £200 pounds worth. He had also bought a box of Samson and 1000 cigarettes. The Appellant corrected the interview note by saying that he did not run a company selling scarves but that his daughter did and he also asked to add a statement that he did not know anything about the selling on of tobacco products. The officer seized the goods pinpointing 8 reasons. Mr McCook and Mr. Eastick were separately interviewed. Mr McCook said that he had 2 boxes of Samson tobacco producing a receipt for 300 pouches costing £531.00. He said that he had a bottle of Jack Daniels, 100 Regal cigarettes, and a couple of bottles of beer. Mr. Eastick said that he had 2 boxes of Golden Virginia tobacco for which he had paid £489.60 but the receipt had been taken from him and that he also had 50 cigars. The box of Drum tobacco belonged to his grandfather. The cigarettes belonged to Peter Stearman who had them for his parents and Peter would pay him for the cigarettes.

  4. On his financial circumstances, Mr McCook told the officer that he had permanent ill health and had ceased working some 5 or 6 years before. His income was £69.75 a week with a pension of £25 a week. He had saved his pension for 5 to 6 months to buy the tobacco. He had £195 savings in his pocket. He also disclosed that he was to go to Court in May 2001 for non-payment of Council tax and was expecting something similar for water rates soon. As to his smoking habits, he smoked 5 to 6 pouches of tobacco a week and expected his purchases to last for about 12 months. He had travelled abroad the previous week but had not bought excise goods because they were too expensive in Calais. He had been abroad about 5 times since January 2001 including the previous week when he had been a foot passenger and 3 to 4 weeks previously to Rotterdam. He had bought only 300 to 400 cigarettes on these occasions because he could not afford more. Mr Eastick said that he earned £270 a week with outgoings of £20 per week housekeeping and £80 in the pub. He did not have any access to his savings until he was 21. He had paid the £489.60 in cash for the Golden Virginia tobacco. He himself smoked 20 cigarettes a day consuming 4 or 5 pouches a week and obtained 25 to 30 cigarettes from a pouch. He expected the tobacco to last him for 8 to 9 months.

  5. The officer's notebook shows the reasons for seizure as: " excess of guidance levels; consumption rate credible?; ownership of goods not tally; inconsistent and conflicting stories; goods for non-entitled person; income vs expenditure; unreasonable to travel last week and buy nothing; frequent traveller". The vehicle was seized because it carried the goods and all the goods were seized since they were being carried together in the same vehicle (Section 141 of the Customs & Excise Management Act 1979) (CEMA).

  6. The next date in the sequence of events is that of 3 May 2001 when the Appellant wrote setting out his intention to appeal the seizure. On 15 May 2001 HM Customs &Excise Law Enforcement Post Seizure Unit wrote to him to say that the Commissioners were required to institute proceedings for the condemnation of goods seized and that if he wished to contest the seizure as being unlawful no further action was required from him but that if he did not wish to contest the seizure then he was to give immediate notification to prevent unnecessary proceedings being commenced. There was further correspondence and it would appear some confusion. The hearing was not contested and the goods were ordered condemned as forfeit to the Crown. The Appellant however had written on 6 May 2001 to the Commissioners at Dover requesting the return of the property. He had enclosed a chronological order of events, a copy Building Society account with details of withdrawals and the reasons for them, together with an explanation for the sheet of paper with names (Blackie and Juliet) and the figures found by the officer and referred to at the interview. These, he said, related to tee shirts and not to computer discs or tobacco. On 23 July 2001 he sent a reminder and had a response dated 2 August 2001 but was told no decision could be made until the condemnation proceedings were concluded. The next response from the Commissioners was on 29 January 2002 when H. M. Customs & Excise Law Enforcement Post Seizure Unit Detection South Region wrote to the Appellant in response to his letter dated 9 May 2001 refusing to restore the goods or the vehicle since the seizure had been in accordance with policy and there were no exceptional circumstances to justify a departure from policy.

  7. The Appellant by letter dated 4 February 2002 requested a review of the decision of 29 January 2002. He supplied some further information in his letter: namely he disclosed in it that the week before the 29 April 2001, he had imported 4 x 3 litre packs of wine, 2 bottles of brandy, 2 bottles of Campari, 200 cigarettes and 5 packets of tobacco. Mr McCook who was with him had purchased a quantity of wine. Both had known that they were going abroad to Paris the following week taking the car and he himself knew that he would have £1,000 spending money as a birthday present from his wife. Another colleague had been stopped by the Commissioners on 22 April 2001 but was allowed to continue. The Appellant had been abroad on 2 occasions since the incident, within some 6 weeks of it, and on each occasion he had purchased a case of tobacco. His grandson was the son of wealthy parents and "although they keep him on a tight financial reign (sic) even though he works for them, he is not wanting for finance". The Appellant said the only guaranteed ownership of the confiscated goods was that of Mr McCook who had purchased 2 cases of tobacco plus 100 cigarettes and a bottle of Jack Daniels. Mr McCook had purchased 1 case of beer en route. His grandson and Peter Stearman had each bought 600 cigarettes for their respective parents and he, the Appellant, had lent his grandson £200 to help him buy his 2 cases of tobacco. Three bottles of spirits, free with the tobacco, and the wine, free with the ferry tickets, and the beer taken with them all belonged to the 2 adults and his grandson, he presumed, jointly. The Appellant also complained that he had not been informed about the condemnation proceedings. On 18 February 2002 he was told that the Law Enforcement Review Team had passed his letter to the Customs and Excise Review Team who had the responsibility to review appealable matters. It is clear also that the Appellant wrote to the Commissioners on several occasions expressing dissatisfaction with various matters associated with the conduct of his case. This however is not a matter for the consideration of the tribunal.

  8. The Appellant had a further letter from the Commissioners on 8 April 2002 to say that as the review referred to in the previous correspondence had not been completed within the appropriate 45 day period, the earlier decision was deemed to have been upheld and that the next stage was for the Appellant, if he wished, to appeal direct to the tribunal.

  9. The Appellant in presenting his case to the tribunal has emphasised that there are no limits to the number of times anyone may go abroad and bring back goods so long as they are for personal use and that guidelines are not themselves the law. He has said that nothing in the vehicle was concealed. Because of health problems he had some memory loss and this would explain some discrepancies in answers given and inconsistencies with the witness statements. The Appellant has also suggested to the tribunal that the initiative to stop at Dover was his and that as such he had not been intercepted in that he had realised that he needed guidance on the position as to goods acquired for the minor travelling with them (by this he meant Peter Stearman and not his grandson). He considered that this would indicate an innocent rather than a guilty traveller. We do not have any evidence from the Commissioners as to any circumstances arising prior to the point of interview. Whatever the background however, the Appellant was interviewed and the vehicle checked and the case before the tribunal arises from that.

  10. In cross-examination the Appellant said that the week before the trip of 29 April 2001 he had gone to France to check the conformity of a vehicle that he was buying and he used the opportunity also to meet the agent in connection with the scarves which were delivered the next week.. The trip was also a shopping trip. In the previous 3 or 4 months he had been over a few times bringing over cars. He was very busy and did not know then when he could go abroad again. He also wanted his grandson to see Ypres. Counsel for the Commissioners referred to the interview when he had been asked about the last time he had been in France and had said that he had bought nothing. The Appellant's explanation to counsel was that he had meant "not outside the guidelines". His son-in-law had bought his ticket for the trip on 29 April 2001 even though it was not entirely a trip for business purposes because that was the way his son-in-law did it as a business expense. Mr McCook was a business associate who had been helping him considerably when he had a broken arm and that was why Mr McCook also had been abroad with him on a couple of occasions. On being questioned by counsel in connection with the piece of paper relating to Blackie and Juliet, the Appellant pointed out that the review officer, Mr Brian Anthony Rayden, who has given evidence to the tribunal had accepted the explanation which the Appellant had given on 2 May 2002 that this related to tee shirts donated to flood relief and the relevant stock audit computer record. Having seen and heard Mr. Wilmore's evidence we do not accept that this is the correct explanation.

  11. In his evidence to the tribunal, Mr Rayden summarised the bullet points for his refusal to restore on 17 May 2002. He had concluded that the Appellant had failed to declare cigarettes and alcohol and that if the Appellant had had nothing to hide, the Appellant would have declared it all; the ferry ticket had been paid for by his son-in-law, a non-traveller and thus he was outside the definition of "for his own use" in the Excise Duty (Personal Reliefs) Order 1992 as amended (the PRO); the goods brought in by Mr Stearman were not covered by the PRO as he was an unentitled minor; the statement that the Appellant had not imported previously had been contradicted in his letter dated 4 February 2002; the Appellant and Mr Eastick had both imported 12 times the guidelines relating to hand rolling tobacco and Mr McCook 15 times, which he Mr Rayden considered an incredible quantity; £531.00 was a large amount for Mr McCook's small income unless he was getting money in return for the goods; in Mr Rayden's calculation, to use the quantity , Mr. McCook would have to be smoking 70 cigarettes a day which again was more than would normally be considered genuine; Mr Eastick's consumption of the hand rolling tobacco said to be his would last him for 3 years and not 8 months. He did not consider that Mr McCook and Mr Eastick were convincing importers for their own use and his conclusion was that this was either a joint commercial enterprise or that the goods were really the Appellant's for the same purpose. Mr Rayden confirmed that he had since reviewed the decision in the light of recent changes in the Commissioners' procedures and policies and case law. Mr Rayden said that when he made his review, he knew that an appeal had been made and that was why he had sent it to the Solicitors Office.

  12. The first matter to be considered is the nature of the appeal itself. There was a "deemed" decision of 8 April 2002 because the Commissioners had failed to review the decision of 29 January 2002 within 45 days of being required to do so. The Commissioners are then under Section 15(2) of the Finance Act 1994 (the Finance Act) deemed to have confirmed the original decision. As the Appellant was informed by letter of that date, an appeal lies against that deemed confirmation under Section 16(1)(a) of the Finance Act . It is for the tribunal to consider the reasonableness of the deemed decision. In the instant case however there has been a further development in that on 17 May 2002 Mr Rayden, the assessing officer, produced a review of the decision in the letter of 29 January 2002 refusing to offer restoration of the goods and the vehicle in response to a latter dated 4 February 2002 from the Appellant where he expressed his dissatisfaction with the January decision. Mr Rayden has purported to treat the letter as a valid requirement to conduct a review within the two tier system of reviews and appeals created under Section 14 and schedule 5 to the Finance Act. He makes no reference to the deemed decision. In response to questions from the tribunal, he has indicated that after his review there was no further review although he had looked at the case again but not formally and he could technically have stopped the process. When he made his review on 17 May he knew that an appeal had been submitted by the Appellant to the tribunal and it was for that reason that he had sent his review to the Solicitor's Office to be served on the Appellant through the tribunal. It would appear however from the evidence of the Appellant that he did not know until June 2002 that a decision had been made when he was sent a witness statement.

  13. Having failed to review the original decision within the 45 day period, the original decision is deemed to have been confirmed. The subsequent review carried out by Mr Rayden was not one which had been sought by the Appellant under Section 14 of the Finance Act. Neither have the Commissioners applied for a direction by the tribunal for a further review under Section 16(4)(b). Although the Appellant has raised no objection to today's hearing taking place, the tribunal does not have the power to consider any decision other than the deemed decision. The reasonableness of that decision has to be judged by the tribunal on the correct facts as to seizure and all other matters brought to the attention of the Commissioners. Sending the review letter of 29 January 2002, Miss T J Wheeler, the Team Leader Law Enforcement, had stated that she had considered the facts and was unable to restore and that there were no exceptional circumstances which would justify a departure from policy. While she does not confirm so, the correspondence referred to earlier from the Appellant setting out his case would have been received by her.

  14. In determining whether or not the deemed decision was reasonable, the tribunal has to approach the matter in the light of the principles set out in Associated Provincial Picture Houses Lt. v Wednesbury Corporation [1948] 1 KB 223:- "…a person entrusted with a discretion must so to speak direct himself properly in law. He must call his own attention to the matters he is bound to consider. He must exclude from his consideration matters which are irrelevant to what he has to consider. If he does not obey these rules, he may truly be said to be acting unreasonably" (per Lord Greene MR at p.229). It is not for the tribunal to substitute its own view of what would be reasonable. The true question is whether the decision under consideration is one which a reasonable person directing himself properly as to the law and taking into account all the relevant facts and excluding all irrelevant matters could properly have arrived at.

  15. The Appellant's Notice of Appeal was submitted on 13 April 2002 and the grounds were set out as "that I have not broken any law nor committed any misconduct and also that HM Customs Officials have misled me and also refused to give me requested information. Thereby being in breach of their approved code of conduct. And outside of their statutory regulations".

  16. It is the case that travellers within the European Union may without restriction exercise cross-border shopping so long as the goods are for the travellers own use. Since the seizure of the goods and the vehicle, there have been changes in the case law and an amendment to the statutory regulations. It is now clear and is accepted by the Commissioners that the burden of proof of showing that the goods being imported are not for the traveller's own use falls on the Commissioners. Further, the Excise Goods, Beer and Tobacco Products (Amendment) Regulations 2002 (the 2002 Regulations) provide (among other matters) that in determining whether excise goods are held or used for a commercial purpose (and thus not for own use) regard shall be taken of the quantity of those goods and in particular whether the quantity exceeds the amounts set out in the 2002 Regulations, namely 10 litres of spirits, 90 litres of wine, 110 litres of beer, 3,200 cigarettes, 400 cigarillos, 200 cigars, and 3kg. of any other tobacco products. These increased quantities are the ones which we bear in mind in coming to our decision.

  17. We have also been referred to the decision of the Divisional Court in Customs and Excise Commissioners v Newbury [2003] EWHC 702 (Admin). In that case it was established that it does not follow that all the goods of those travelling in a vehicle are liable to forfeiture when they are "mixed, packed, or found with" chargeable goods which are liable to forfeiture under Section 141(1)(b) of CEMA.

  18. The Appellant has submitted that the goods in the vehicle belonged to 4 people, one of whom it is acknowledged was under 16 years of age. The Appellant has denied that all the goods were in reality his. The Commissioners did not consider that the Appellant's denial was supported by the evidence. They did not believe that the Appellant's 2 travelling companions (Mr McCook and Mr Eastick) could have financed their share on the evidence given at the interview as to their financial position. We agree with that conclusion. We also find implausible the evidence given by the Appellant in relation to the Drum tobacco. At first the Appellant said that he had bought only 2 boxes of Golden Virginia tobacco but he then said that he had bought the Drum for his grandson and himself. He later said in correspondence that his grandson had borrowed £200 from him to make up his purchase money on 2 cases of tobacco. This was contrary to the evidence of his grandson who at the interview had said the Drum belonged to his grandfather.

  19. There are clear inconsistencies in the evidence as to who owned which goods. The Appellant has suggested that the discrepancies arose from the fact that some of the goods were free i.e. 3 bottles of spirits (given with the tobacco purchases) 4.5 litres of wine (given with the ferry tickets) and as to the beer, it had been said that they had taken that with them to use en route and that Mr McCook had purchased beer. We do not accept that explanation. Further the amount of the hand rolling tobacco brought in is so substantial that even divided into 3 shares it is not credible that it was for personal use and indeed on the interview evidence it is clear that the interviewees had no real comprehension as to how many cigarettes could be produced from the pouches or how long each would last.

  20. We find ourselves unable on the evidence satisfactorily to divide the goods into individual entitlements. We consider on the balance of probabilities that the purchases were under the control of the Appellant rather than a joint venture. But even if it were a joint venture, we are satisfied that the decision not to restore the goods was well founded and that there are no circumstances present which would justify the non - application of Section 141 of CEMA. Having seen and heard the Appellant give evidence and be cross-examined, we are satisfied that his evidence is not reliable. We do not believe that the goods were being brought into the United Kingdom for the "own use" of the Appellant or that of his travelling companions. We have no doubt that the Appellant was engaged in a commercial importation of the goods with a view to selling them on. We accept the Commissioner's submissions that the Appellant was a frequent traveller. We are also satisfied that the Commissioners were entitled to come to the conclusion that the goods were not being imported for personal use and that they should not be returned to the Appellant.

  21. We have considered whether the refusal of the Commissioners to restore the goods and the vehicle was proportionate in all the circumstances. We are satisfied that it was a reasonable and proportionate decision. This is a case involving substantial quantities of excise goods being imported not for personal use but for commercial purposes. The Appellant's dissatisfaction with how he was treated by the Commissioners staff and his complaint as to inefficiencies in their administrative system are not matters which are relevant to the questions whether the goods were being imported for own use by the Appellant or his travelling companions or whether they should be restored to the Appellant

  22. Accordingly the appeal is dismissed. The Commissioners have not asked for costs and we give no direction.

    23. MRS E GILLILAND
    CHAIRMAN
    RELEASE DATE:

    MAN/02/8072

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