United Kingdom VAT & Duties Tribunals (Excise) Decisions

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Cite as: [2003] UKVAT(Excise) E00485, [2003] UKVAT(Excise) E485

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Aldridge v Customs & Excise [2003] UKVAT(Excise) E00485 (27 August 2003)

RESTORATION – Tobacco goods from Spain found with non-EU goods – No exceptional circumstances found by review officer – Appeal dismissed

LONDON TRIBUNAL CENTRE

HARRY ALDRIDGE Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: MISS J C GORT (Chairman)

MISS A WEST FCA

Sitting in public in Bristol on 15 July 2003

The Appellant appeared in person

Mr S Singh, counsel, instructed by the Solicitor for the Customs and Excise, for the Respondents

© CROWN COPYRIGHT 2003

DECISION

This is an appeal against a decision of the Commissioners dated 22 January 2003 to refuse to restore excise goods seized on 3 March 2002 at Bristol Airport. The goods in question consisted of 7,200 cigarettes and 5.35 kilogrammes of hand-rolling tobacco.

The facts

The Tribunal heard evidence from the Appellant and from two officers of Customs and Excise, Mr Mark Plummer, the seizing officer, and Mr D Harris, the reviewing officer.

The Appellant and his wife were stopped at Bristol Airport on 3 March on their return from Malaga in Spain. At the time they were passing through the blue EU lane at the Airport.

The Appellant was stopped because a large amount of tobacco products had been detected in his luggage.

On being questioned the Appellant said inter alia that he had more tobacco than the minimum indicative level, which at the time was 800 cigarettes and 1 kilogramme of tobacco products.

The Appellant confirmed that he smoked as did his son, and that some of the products would be given to his son and some to friends.

In the course of the interview the Appellant confirmed that he had been out of the country for seven days, staying in Spain at Torremolinas and Malaga. The items had been purchased in Spain, mainly in Malaga. He himself smoked Lambert & Butler but not hand-rolling tobacco. He did not know how many cigarettes he smoked in a day. He and his wife had run a guest house for the previous fifteen years and had an income of between £25,000 and £30,000 a year. They had no dependants. They had no savings.

The Appellant was aware of the guidelines and claimed that nobody had asked him to buy any goods for them, nor contributed towards his travelling costs nor to the cost of the goods. All the cigarettes had been bought in Spain. He had not visited Gibraltar. He was aware that if the cigarettes were to be given in lieu of payment then they would not be classified as gifts, but denied that this was the case.

The holiday had cost the Appellant about £755, the tobacco products had cost £728.

On inspection it became clear that 3,200 of the cigarettes and 1 kilogramme of the hand-rolling tobacco were of non-EU origin as the health warnings were in English and there were no tax paid markings on the packaging. The limits for such goods are set down in the Schedule to the Travelling Allowances Order 1994 as being 200 cigarettes and 250 grams of hand-rolling tobacco.

The Appellant subsequently consulted a solicitor and initially commenced condemnation proceedings but then stopped those proceedings. On 30 October 2002 he wrote to HM Customs asking for restoration of the goods. By letter dated 4 December 2002 he was told that a decision had been made not to restore the goods and on 7 December 2002 he requested a review of that decision.

A statement from a Brian Frederick Dibstall, an officer of Customs and Excise, was produced at the hearing of the appeal. The Tribunal allowed this statement to be taken into consideration. In that statement Mr Dibstall said as follows:

"As neither the 3600 cigarettes or the 1 kilogramme of hand-rolling tobacco bore any evidence of duty payment within the European Union I concluded that they were duty free or originated elsewhere other than the European Union."

Mr Plummer in his evidence confirmed that it was possible either that those items had been exported from the United Kingdom, since they bore the mandatory health warning in English, or that they had originated in some place such as Gibraltar where the language was English. Had they originated in Spain, the health warning would have been in Spanish. They would also have contained a Spanish tax stamp which they did not.

In his evidence the Appellant was adamant that he had not on this occasion visited Gibraltar, although he had previously been to Gibraltar. He had visited Fuengirola, which he considered to be some 2½ to 3 hours drive from Gibraltar. We preferred the evidence of Mr Harris as to the whereabouts of Fuengirola, namely that it was approximately 50 miles from Gibraltar and it would not be a 2½ to 3 hour journey.

The Appellant with his wife owned a guest house and caravan site and they valued the property at some £500,000. They had six beds in their bed and breakfast establishment.

The bed and breakfast season ended in November or December and normally the Appellant went on holiday between then and March. However he also said that he had been to Portugal in the autumn. He and his wife had visited Malta, but his wife had been taken ill and they had come home early. As a consequence they had received insurance money which they had spent on going to France for a weekend in March where they had purchased a quantity of wine, and then on the visit to Spain.

In Spain they had hired a car. The Appellant claimed he had purchased the tobacco goods at a shop in Malaga to which they had returned on several occasions. He had also purchased tobacco products in Fuengirola. The reason the Appellant gave for purchasing the products in different outlets was that the Lambert & Butler cigarettes which he liked to smoke were not readily available in all the outlets, and for the most part they had to be paid for by cash, and it would depend on how much money he had on him at the time. He remembered that one purchase had been made using his credit card. He was unable however to remember which purchase had been made using the credit card, he was unable to remember how many Lambert & Butler cigarettes he had purchased, he was unable to remember the quantities of the other brands, he said that he had not gone to Spain with the specific intention of buying a set amount of tobacco products nor with the intention of spending a fixed amount of money on tobacco products. He had bought in bulk because it was so much cheaper buying tobacco products in Spain, he did not consider that it was cheap to buy them in France.

The Appellant claimed that at the time he had not noticed the difference in markings between those products which emanated from the EU and those which came from outside. He claimed that some of the goods had been bought for a good friend who had looked after the caravan site whilst he had had a suspected heart attack, as this friend would not accept money. The friend smoked Golden Virginia hand-rolling tobacco. He said that he had also purchased cigarettes for another friend who had helped him with the computer who also would not accept any money. He considered that buying such tobacco products as presents was entirely suitable. Some of the cigarettes was said to have been bought for his son as a Christmas present.

The Appellant claimed not to know that excise goods were cheap to buy in Gibraltar. He had not retained the credit card slip, and he could not recall the name of any of the shops from which he had bought the tobacco. He claimed to have purchased all the items from reputable tobacconists.

When it was put to the Appellant that the goods had been purchased by him on occasion which was not close in time to when he had been in hospital he then explained that the friend in question helped constantly, and he referred specifically to work the man had done on a tractor just for a cup of coffee.

Both Mr Harris and Mr Plummer agreed that it would have been possible for one of the people from whom the Appellant had bought the non-EU goods themselves to have purchased such products from Gibraltar and sold them on to the Appellant.

Mr Harris, in the course of conducting his review, had contacted Mr Aldridge by telephone and asked him for an explanation of the origin of the non-EU goods. Because the Appellant could not provide any information as to where he had bought the products nor could he produce any receipts, Mr Harris concluded it was not possible to establish if the purchase had been innocent. Had he been able to provide such information, Mr Harris might well have believed that the Appellant had innocently or inadvertently bought the goods, and therefore he would have considered that there had been exceptional circumstances which would warrant restoration of the goods.

The legislation

Article 2(1) of the Travellers' Allowance Order 1994 provides:

"Subject to the following provisions of this Order a person who has travelled from a third country shall on entering the United Kingdom be relieved from payment of value added tax and excise duty on goods of the description and in the quantities shown in the Schedule to this Order obtained by him in a third country and contained in his personal luggage."

(The Schedule to the Order referred to specifies 250 grammes of hand-rolling tobacco and 200 cigarettes.)

(2) For the purposes of this article –

(a) goods shall be treated as contained in a person's luggage when they are carried with or accompanied by the person or, if intended to accompany him, were at the time of his departure for the United Kingdom consigned by him as personal luggage to the transport operator with whom he travelled.

…

(3) The reliefs afforded under this Order are subject to the condition that the goods in question, as indicated by their nature or quantity or otherwise, are not imported for a commercial purpose nor are used for such purpose; and if that condition is not complied with in relation to any goods, those goods shall, unless their non-compliance is sanctioned by the Commissioners, be liable to forfeiture."

The Customs and Excise Management Act 1979 (CEMA) provides by section 139(1):

"Anything liable to forfeiture under Customs and Excise Acts may be detained or seized by any officer or constable or member of Her Majesty's Armed Forces of coastguard."

By Section 41(1) it provides that:

"Without prejudice to any other provision of the Customs and Excise Acts 1979 where any thing has become liable to forfeiture under the Customs and Excise Acts –

(a) …

(b) any other thing mixed, packed or found with the thing so liable, shall also be liable to forfeiture.

By Section 152(b) of CEMA the Commissioners may "as they see fit":

(b) restore, subject to such conditions (if any) as they think proper, any thing forfeited or seized under the Customs and Excise Acts."

The Appellant's case

By his notice of appeal Mr Aldridge has stated his grounds to be:

"I am a registered disabled person. I have very good friends who help me. As a present and thanks I brought back from Spain cigarettes, this is not for payment. I smoke, our son smokes. These are presents. Listening to the radio I was informed I could bring back what I liked but not for resale. The point cigarettes were purchased outside EU is not true. If the vendor had not paid duty, that was not my fault. I would very much like to contest this decision."

Throughout Mr Aldridge maintained that the cigarettes and hand-rolling tobacco had been purchased for his own use and as gift for friends as well as a present for his son. None of the items had been purchased for resale nor for any commercial purpose. He had not visited Gibraltar, and had not been aware that the goods emanated from outside the EU.

Reasons for decision

We found both the witnesses for Customs and Excise to be sensible and conscientious witnesses. In particular, in carrying out his review Mr Harris had properly considered all the relevant factors, and had gone further than necessary in that he had specifically contacted Mr Aldridge in an effort to understand how he had come by the non-EU products.

The non-EU goods found in the Appellant's luggage would have been restored to him if the Appellant had been able to provide Mr Harris with the information he sought, and establish that exceptional circumstances existed.

We are not aware of any matters which Mr Harris ought to have considered which he did not consider, nor did he take account of matters which he should not have considered.

We ourselves have carefully considered the facts in this case. We take account of the fact that Mr Aldridge had a solicitor acting for him, and by a letter dated 28 March 2002 that solicitor had referred inter alia to the fact that Mr Aldridge had purchased some of the cigarettes and tobacco for himself and some for his son as a present "and some for friends who are looking after their property and animals while they were away." No reference is made in that letter to a friend who helped whilst Mr Aldridge had a heart attack.

We found Mr Aldridge's evidence to be inconsistent and unreliable. He has had plenty of time to consider his evidence in this case, and yet his evidence was often unclear and contradictory. We do not accept that the Appellant would in March buy cigarettes as a Christmas present for his son, particularly when he has travelled to France in between Christmas and March, where cigarettes are considerably cheaper than in the UK. It may well be that some cigarettes were purchased to give to his son, but the Appellant specifically described them as a Christmas present.

We make due allowance for any difficulties the Appellant may have experienced in giving his evidence, but in such a case the burden of proof is upon the Appellant and he has not discharged that burden.

Although he denied that it was the case, we find the most likely explanation for the very large quantity of tobacco goods which the Appellant had on him was that they were to be used as payment in kind for work done for him.

We did not accept the Appellant's evidence that he did not know how many cigarettes he smoked in a day. We do not find that probable.

In this appeal we are governed by section 16(4) of the Finance Act 1994 which confines our powers to deciding whether or not we are satisfied that the Commissioners could not reasonably have arrived at the decision not to restore. In the circumstances we are satisfied that the Commissioners reasonably arrived at their decision.

Insofar as it is necessary to consider separately the seizure of the goods which did emanate from Spain, these goods were seized under section 141(1)(b) of CEMA and we find that these goods were "mixed, packed or found" with the non-EU goods given the ordinary meaning of those words. In the present case, all the tobacco products having been found together in the Appellant's luggage, we find that their seizure was in accordance with the law.

This appeal is dismissed.

No order for costs.

MISS J C GORT

CHAIRMAN

RELEASED:

LON/2003/8045