United Kingdom VAT & Duties Tribunals (Excise) Decisions

Pyrah v Customs & Excise [2003] UKVAT(Excise) E00493 (22 September 2003)

SEIZURE OF EXCISE GOODS AND VEHICLE – 2 travellers – guidance limit for hand rolling tobacco exceeded – amount carried (5kg.) declared when stopped - appeals allowed.

MANCHESTER TRIBUNAL CENTRE

LINDSAY CLARE PYRAH (MAN/01/8366) Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

ANDREW LESLIE BEVINS (MAN/01/8367) Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: Mrs. E. Gilliland (Chairman)

Mrs. R. Dean (Member)

Sitting in public at Manchester on 4 August 2003

The Appellants in person.

Mr. Andrew Vincent of Counsel instructed by the Solicitors Office of Customs and Excise appeared for the Respondent in both appeals

© CROWN COPYRIGHT 2003


 


DECISION

1. There are 2 appeals before the tribunal. The first (reference MAN/01/8366) is by Lindsay Clare Pyrah (Miss Pyrah). The second (reference MAN/01/8367) is by Andrew Leslie Bevins (Mr. Bevins). Both appeals are against the decisions of Mr P A Devlin, the Review Officer, Detections South, contained in a letter dated 25 October 2001 addressed to Miss Pyrah and Mr. Bevins jointly not to restore excise goods seized on 12 June 2001 at Coquelles from Mr. Bevins and Miss Pyrah as they were returning to England. They were travelling together in a Ford Sierra car which belonged to Mr. Bevins' father and which he had lent to them. The car was also seized pursuant to s. 141 of the Customs and Excise Management Act 1979 (CEMA) on the basis that it was being used for the transport of goods which were liable to forfeiture under s.139 of CEMA. We are not however concerned in these appeals with the seizure or restoration of the car. This is a matter which we were informed at the start of the hearing would be investigated further by the Commissioners.
2. The circumstances in which the goods came to be seized are not substantially in dispute. Mr. Bevins and Miss Pyrah both live in Lincoln. Miss Pyrah is Mr. Bevins' girl friend. Shortly before 12 June 2001 they decided to go on a trip to France and Belgium. The purpose of the trip was to purchase tobacco (and also some alcoholic drinks). This was the first such trip by Miss Pyrah. Mr. Bevins however had made 3 previous similar trips. On the first of such trips, which appears to have been in January 2000 Mr. Bevins had been permitted to bring back about 120 pouches of hand rolling tobacco (HRT). His next trip seems to have been early in December 2000 when he had been accompanied by another girl friend. She appears to have been arrested on the ferry back to England for alleged shoplifting and accordingly Mr. Bevins had gone through customs alone in his car. On that occasion he had with him 200 pouches of HRT. He was stopped and questioned but was allowed to proceed. Mr. Bevins and his then girl friend split up soon thereafter and his former girl friend took all the HRT still remaining when she left. Accordingly he decided to make another trip in December 2000. On this trip he was accompanied by an ex- girl friend and her daughter who appears to have been about 16 years of age. On coming back Mr. Bevins was stopped and questioned. He had with him 120 pouches of HRT. His ex-girl friend it appears refused to be questioned. The 120 pouches were seized. It seems that the customs officer took the view that all 120 pouches should be attributed to Mr. Bevins. No allowance was given in respect of his then girl friend (presumably because she would not be questioned ) or her daughter (because of her age).
3. When stopped and searched on 12 June 2001 at Coquelles, it was found that the car contained 100 x 50 gms. pouches (5 kg.) of HRT, 20 cases of beer (approximately 110 litres), 600 cigarettes, and 5 boxes of cigars as well as 1 bottle of sparkling wine. Under the Channel Tunnel (Alcoholic Liquor and Tobacco Products) Order 2000 (the 2000 Order) community travellers such as Mr. Bevins and Miss Pyrah are permitted to bring into the United Kingdom unlimited quantities of tobacco, beer, wines and spirits if they are for their own use. However the 2000 Order also laid down indicative or guidance limits on the quantities of excise goods which if they were exceeded would give rise to a presumption that the goods were being imported for commercial purposes unless the traveller could satisfy Customs that the goods were not being imported for commercial purposes. The relevant indicative or guidance limits in June 2001 were (per person) 1kg. of HRT, 800 cigarettes, 200 cigars, 110 litres of beer and 90 litres of wine. Similar provisions and limits were also set out in the Excise Duties (Personal Reliefs) Order 1992 (the 1992 Order) in relation to community travellers entering the UK otherwise than via Coquelles. It can be seen that only the quantity of HRT in the car on 12 June exceeded the indicative or guidance limit. On the footing that the 5 kg. of HRT belonged to Mr. Bevins and Miss Pyrah equally, they were each some 2.5 times over the relevant limit.
4. Since the dates of the seizures and the review against which the present appeals have been brought, the subordinate legislation contained in the 2000 and in the 1992 Orders has been amended because it failed to give proper effect to European law governing the free movement of goods within the single market. The amendments have removed the presumption in favour of commerciality if the indicative or guidance levels are exceeded and Customs are not satisfied that the goods are not being imported for commercial purposes. It is not for the traveller to prove that the goods are for their own use. Customs must show that the goods are held for commercial purposes and the indicative or guidance limits are merely one factor which has to be considered. The guidance limits have also been significantly increased. The present limit for HRT is now 3kg. per traveller.
5. The basis of the original decision on 12 June 2001 to seize the goods was that Mr. Bevins and Miss Pyrah had failed to satisfy Customs that the goods were not being imported for commercial purposes. Although that approach had been authorised by the 2000 Order, it is now clear that the 2000 Order was invalid and contrary to European Law in placing the burden of proving own use on Mr. Bevins and Miss Pyrah. See R (Hoverspeed) v Customs and Excise [2002] EWHC 1630. That part of the decision of the Divisional Court was not appealed which held that Article 5 (3) of the 1992 Order both in its original and in its amended form was inconsistent with Council Directive EEC 92/12 and Article 28 of the EC Treaty in that it placed a persuasive burden of proof on the traveller to prove that the goods were not held for commercial purposes when the quantity of goods was in excess of the minimum indicative levels laid down in the Directive 92/12.
6. When first stopped and questioned by officer Clark and asked where he was coming from, Mr. Bevins said Calais. When asked if he had been anywhere else he said, as is recorded in officer Clark's notes which Mr. Bevins has signed as a correct record: "No, just the French border" .In fact this was incorrect. They had been into Belgium. When asked what the purpose of the trip had been, Mr. Bevins replied correctly, "to get some tobacco" and he then said that they had 50 pouches each. After some further questions Mr. Bevins said that he had last travelled abroad before Christmas but when he was asked if he had had any previous contact with Customs, he said: "No". This was clearly incorrect and Mr. Bevins, we are satisfied, knew that that answer was incorrect. Miss Pyrah who was sitting in the car and heard this reply also knew that that the reply was incorrect. She did not however say anything. It was at this stage that the car was searched with the agreement of Mr. Bevins and the HRT and other goods were found. Officer Clark also checked Customs' records and discovered that Mr. Bevins has had previous contact with Customs and that goods had been seized. It is clear that her suspicions had been aroused by Mr. Bevins' lie about not having had contact with Customs before and Mr. Bevins and Miss Pyrah were asked to leave the car and be interviewed. They were separately interviewed. Mr. Bevins was interviewed by officer Clark and Miss Pyrah was interviewed by another officer. Miss Pyrah has also signed the notes of her interview as a correct record. The officer showed the notes of his interview with Miss Pyrah to officer Clark and it was she who then made the decision to seize the goods and the car. Following seizure there was a fracas involving Miss Pyrah. She was however permitted to return to England as was Mr. Bevins.
7. During the course of his interview, Mr. Bevins said that the reason he had lied was because he had been nervous, that he had not wanted to think about it, and that he had not wanted to prejudice the present trip. He said that he expected the HRT would last him for some 4 or 5 months but longer if he rolled it by hand. Mr. Bevins said he smoked about 3 or 4 pouches a week. The beer was for barbecues and family get togethers and the cigars were a present for his father as a way of thanks for the loan of the car. He said that he had paid for the goods with cash and that he estimated their cost at £160. He had previously produced the receipts for the goods to another officer. He also said that he "was on the sick" with stress and that he was on income support of £60 a week. He also said that his father had given him some money to help him to get back on his feet and that Miss Pyrah had borrowed £2,000 from the bank. It is clear that Mr. Bevins was well aware of the guidance limits for tobacco.
8. Miss Pyrah in her interview said they had been to France and Belgium and had brought back "50 baccy", that Mr. Bevins was her boyfriend, that he had actually handed over the money in payment for the goods but that the money was "ours". She said she earned £450 -£460 a fortnight at Macdonalds and had about £100 plus roughly at the end of the month after paying her mortgage of £200 a month and bills. She also had savings in the form of an inheritance, she thought of about £4,000, but she was unable to draw on that as her mother kept the passbook. She also said that she had not handed Mr. Bevins any cash: "he already had the cash, but it was mine, ours if you know what I mean. When we were queuing up he asked me what we were getting". When asked how much she smoked she said: "Depends, 40, 50 quite a lot". She said that she would expect the tobacco to last her "about 6 months, I think". She could not say how many cigarettes she would get from a pouch but that a pouch would last her 3 or 4 days. She said this was her first visit to France but that she had been in Spain in November.
9. At the conclusion of the interviews, officer Clark recorded in the notes of the interview with Mr. Bevins that the goods were being seized because she was not satisfied that the goods were not for a commercial purpose. She then listed 6 reasons: 1 because of the guidance levels; 2 consumption rate not credible for Miss Pyrah; 3 expenditure not credible in relation to finances; 4 previous seizure and Notice/ therefore aware of guidance levels/knowledge of law; 5 initially lied about previous Customs contact; 6 inconsistencies in above. As we have already stated, we are satisfied that officer Clark for understandable reasons approached the matter on the footing that it was for Mr. Bevins and Miss Pyrah where the guidance levels were exceeded to satisfy her that the goods were not for a commercial purpose and we find that she relied on the evidential burden being placed on Mr. Bevins and Miss Pyrah to satisfy her that the goods were not for a commercial purpose. In approaching the matter in this way officer Clark was as is now clear from the Hoverspeed case misapplying the law and her decision to seize the goods is open to challenge for this reason. We have considered whether it would be right to conclude that officer Clark had in fact concluded that the goods were actually being imported for commercial reasons but we do not consider that such a view would be consistent with the way officer Clark expressed herself when saying why the goods were being seized.
10. This appeal however is not directly concerned with the original decision to seize the goods but rather with whether the decision of the reviewing officer, Mr. Devlin, not to restore the goods was one which no reasonable officer applying the correct law to the relevant facts could properly reach. Under s. 16(4)(b) of the Finance Act 1994 (the 1994 Act) the power of the tribunal is to require a further review to be carried out if it is satisfied that the decision not to restore was one which could not reasonably have been arrived at. The approach of Mr. Devlin as set out in the latter dated 25 October 2001 was first to consider the whether the goods had properly been seized and secondly to consider whether there were any circumstances which would justify a departure from Customs then policy of not restoring seized goods unless there were exceptional circumstances.
11. In considering the propriety of the original seizure it is clear in our view that Mr. Devlin took the view that because the guidance level for HRT had been exceeded by 2.5 times, "you were properly required to satisfy Customs that [the goods] qualified for relief from excise duty by being for own use. You did not satisfy the officers and I have looked at the reasons they gave for being dissatisfied". Mr. Devlin then referred to the fact that Mr. Bevins had had previous contact with customs and had lied about that and that this cast doubt on what he was telling the officers. He also referred to Miss Pyrah having spent over a month's disposable income and that Mr. Bevins did not appear to have any disposable income, the parental gift being for getting him back on his feet and not for excise goods. "I do not see how you could afford this level of expenditure on own use goods". He also found incredible that Miss Pyrah had said that she smoked 40 to 50 cigarettes a day and that a pouch would last her 3 to 4 days, implying that she obtained up to 200 cigarettes from 1 pouch. Mr. Devlin also referred to Mr. Bevins' mis-statement that he had only been to the French border. Mr. Devlin stated his conclusion as being: "I am satisfied that you were at best prevaricating with the Officers and that their conclusion that you did not make out a satisfactory own use case was reasonable". It is clear in our view that Mr. Devlin also approached the matter on the basis that there was a burden on the travellers to satisfy Customs that the goods were for own use if the guidance level were exceeded and that they had failed to do so. This approach however although in accordance with the 2000 Order was not correct in law. Likewise when considering the question of restoration, Mr. Devlin again referred to the burden being on the traveller to satisfy Customs that the goods were for own use if the limit was exceeded. (See reason 6). This was said in relation to the claim that goods could be imported for own use without limit.
12. In our view Customs approached both the original decision to seize the goods and the decision not to restore them on an incorrect legal basis and imposed a burden on Mr. Bevins and Miss Pyrah to show positively that the goods were for their own use and not for commercial use. The decisions are in our view vitiated by this error. Although it was an error for which neither the individual officers nor Mr. Devlin can fairly be held responsible since they believed they were applying the law as set out in the 2000 Order and which was actually provided for in the Order, nevertheless it was a material error of law and clearly had a significant effect on how the matter was evaluated. We are satisfied that the decision not to restore the goods was one which a reasonable officer properly instructed as to the correct law could not have arrived at and that the requirements of s.16(4) of the 1994 Act have been satisfied. Accordingly the appeal must be allowed and we direct that a further review of the decision not to restore the goods be carried out applying the principle that it is for Customs to show that the goods are for commercial use and not for personal use. We should also state that we have had the advantage which was not open to Mr. Devlin of having seen and heard Mr. Bevins and Miss Pyrah and that we are satisfied that that the likelihood is that the goods were purchased for the own use of Mr. Bevins and Miss Pyrah. We accept that lies were told and that the evidence of both Mr. Bevins and Miss Pyrah should be approached with caution, but in substance there is in our view very little evidence to support the conclusion that the goods and in particular the HRT had been purchased for some commercial purpose. There was no attempt to conceal the amount of HRT they had and they both said that it was for their own use. Although in excess of the then guidance limits, the quantity involved was not large and not in our view sufficient of itself to prove that it had been acquired for commercial purposes. It is within the revised limits and Mr. Devlin clearly accepted that the tobacco should be treated as belonging to them in equal shares. The amounts of other excise goods were consistent with personal use. Miss Pyrah was in error in suggesting that up to 200 cigarettes could be obtained from a single pouch, but this does not constitute a fundamental flaw in her evidence, sufficient to establish commerciality.
13. Accordingly as stated above, the appeals are allowed. The Appellants have not sought costs and we make no direction as to costs.

E GILLILAND

CHAIRMAN

RELEASE DATE:

MAN/01/8366 and 8367.