United Kingdom VAT & Duties Tribunals (Excise) Decisions

Beere v Customs & Excise [2003] UKVAT(Excise) E00495 (25 September 2003)

EXCISE DUTY – restoration of excise goods in excess of the then minimum indicative limit but within the current limit – whether reasonable to suppose goods were brought in for commercial use – no

LONDON TRIBUNAL CENTRE

RAYMOND TREVOR BEERE Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: DR JOHN F AVERY JONES CBE (Chairman)

ALEX McLOUGHLIN

Sitting in public in London on 19 September 2003

The Appellant in person

Richard Smith, counsel, instructed by the Solicitor for the Customs and Exicse, for the Respondents

© CROWN COPYRIGHT 2003


 


DECISION

1. Mr R T Beere appeals against the deemed refusal to restore 2 litres of gin, 0.25 kg of hand rolling tobacco, 200 Marlboro light cigarettes, 80 Gauloise cigarettes and 800 Benson and Hedges king size filter cigarettes, that had been seized on his arrival at Dover on 30 April 2001 (the minimum indicative limits at the time being 800 cigarettes, 1 kg of hand rolling tobacco, and 10 litres of spirits). The Appellant appeared in person; Mr Richard Smith represented the Commissioners.
2. We heard evidence from the Appellant, Mr J M Durrant, the officer who stopped the Appellant and later interviewed him, and Mr I W Austin who took the decision not to restore the goods. No review of the decision not to restore the goods was carried out in time and so the appeal is against the deemed refusal to restore the goods.
3. Mr Durrant took the view, which is not disputed by the Appellant, that on 30 April 2001 the Appellant was too drunk to respond sensibly to questions at the time. The only matter recorded is that the Appellant said that he did not have any receipts because he had put the receipt into a raffle on the boat. Accordingly he arranged an interview on 15 May 2001. During the interview the Appellant said that he preferred to smoke Benson and Hedges. Mr Durrant asked "Why didn't you just buy Bensons when you went over?" to which he replied "Well I don't know. I can remember buying the tobacco because I fell over when I came out of the shop." He said that he did not remember buying the Gauloise cigarettes. He also said that he thought that if he did not bring in the full limit of tobacco he could bring in more cigarettes. On 1 May 2001 (the day after being stopped; the Appellant said two days after but the following Tuesday appears to be the day after) he bought 400 Benson and Hedges cigarettes, 10 pouches of hand rolling tobacco and some beer, which was to replace the seized goods. He said that he took £250 with him on the day, and that he had savings of £100 for his television licence. As a result of the interview Mr Durrant decided to seize the goods that had been detained on 30 April 2001.
4. Mr Austin wrote to the Appellant on 27 June 2001 giving as reasons for non-restoration of the goods (a) that the quantities of goods were over the guidelines; (b) the expenditure was not consistent with the Appellant's income; (c) the Appellant had on at least two occasions been issued with Notice No.1; and (d) the stated consumption was considered to be unreasonable. Since there is no review, these must be taken to be the reasons for the deemed refusal against which the appeal is made. Mr Austin said that if the current limits had then been in force, under which the Appellant would be within the limits, he would have come to the same decision, as his decision was not based solely on the limits.
5. In evidence Mr Durrant said that in working out the Appellant's consumption rate he calculated that the 1000 cigarettes that the Appellant had brought in on the previous trip on 19 April 2001 would have lasted until 5 May. In making the decision to seize the goods he also took into account that the Appellant had travelled on at least two occasions in April 2001 and was stopped both times carrying goods around the limit which were not seized. Mr Durrant also took into account that the Appellant had said that he was travelling alone whereas another officer was told by a Mr Stevens that they were travelling together. The Appellant had told him that he knew the person as Mike but did not know his surname, which Mr Durrant did not believe as they had travelled together in Mr Stevens car on a number of occasions before.
6. Mr Austin said that he took into account that the Appellant had travelled in a car with Mr Stevens on 3 March 2002 when each had brought in 1000 cigarettes and 2 kg of hand rolling tobacco (the Appellant says it was 1.5 kg); and on 13 April 2001 when no excise goods were recorded (the Appellant says he would have brought something in); and, as already mentioned, on 19 April. Assuming that, as the Appellant stated, he smoked 60 cigarettes a day and assuming that he obtained 60 cigarettes from a pouch of tobacco, Mr Austin calculated that the goods purchased on 3 March 2001 would last the Appellant until 10 days after the next trip, and the goods purchased on 19 April 2001 would last until 5 May 2001 for the cigarettes and another 30 days for the tobacco. Essentially the reason for the seizure and the non-restoration was that the officers considered that the Appellant was buying the goods for commercial sale.
7. There is a relief from excise duty under article 3 of the Excise Duties (Personal Reliefs) Order 1992 for goods which a Community traveller has obtained for his own use in the course of cross-border shopping which he has transported. Own use is defined to include use as a personal gift provided that the person does not receive in consequence any money or money's worth (including the reimbursement of expenses incurred in connection with obtaining the goods). Under article 5(1) of the Order the relief is subject to the condition that the excise goods are not held or used for a commercial purpose. It is common ground that the effect of European law is that the burden of proof of proving commerciality is on the Commissioners and not on the Appellant as the Order provided and as the Commissioners acted in this case. Not being so satisfied seized the goods as liable to forfeiture under sections 49(1) and 141(1) of the Customs and Excise Management Act 1979.
8. Section 152 of the Customs and Excise Management Act 1979 provides that: "The Commissioners may, as they see fit…(b) restore, subject to such conditions (if any) as they think proper, anything forfeited or seized…." By section 14(2) of the Finance Act 1994 a person affected by a decision of the Commissioners, which includes a decision under section 152(b), may require it to be reviewed.
9. The Tribunal's jurisdiction is contained in section 16 of the Finance Act 1994 which applies to matters contained in Schedule 5 including decisions on restoration. Section 16(4) provides that

"In relation to any decision as to an ancillary matter, or any decision on the review of such a decision, the powers of an appeal tribunal on an appeal under this section shall be confined to a power, where the tribunal are satisfied that the Commissioners or other person making the decision could not reasonably have arrived at it, to do one or more of the following, that is to say—

(a) to direct that the decision, so far as it remains in force, is to cease to have effect from such time as the tribunal may direct;

(b) to require the Commissioners to conduct, in accordance with the directions of the tribunal, a further review of the original decision;…."

10. The Appellant contended that the goods were for his own use. Mr Smith contended that it was reasonable to assume that they were for commercial use. He accepted that the burden of proof was on the Commissioners but contended that the different understanding on this point made no difference on the facts of the case.
11. Our task is therefore to consider whether the decision not to restore, the reason for which is that the goods were purchased for commercial sale, could reasonably have been arrived at. The quantities of goods are calculated to last the Appellant a matter of days beyond the next trip. If the cigarettes bought on 19 April 2001 were calculated to last until 5 May we do not think that this supports an argument that the trip on 30 April 2001 was for commercial purposes. It seems to us entirely reasonable that the Appellant should wish to travel before the cigarettes ran out even though he might still have some tobacco. Similarly, the cigarettes purchased on 3 March 2001 would last until 18 March and with the hand rolling tobacco until 10 days after he travelled on 13 April where no goods were recorded, but (against his own interests) the Appellant says there were some purchases of excise goods. In our view such a pattern is much more consistent with someone who lives near Dover, has a friend with whom he can travel frequently to France and who stocks up with the quantities of tobacco that he can easily use for his own consumption, than it is with commerciality.
12. Does the existence of three brands of cigarettes brought in on 30 April 2001 affect this? We can understand the officers being suspicious about different brands as this suggests that the other brands are bought for resale. The Appellant's explanation at the hearing was that the Marlboro cigarettes were selling more cheaply on the boat in separate packets. He said that they had a similar taste to Benson and Hedges. Mr Smith contended that as the Appellant gave no reason for the different brands at interview on 15 May, we should not take any account of an explanation by the Appellant given two years later. The Appellant had no explanation for the purchase of the Gauloise cigarettes and said at the interview that he did not remember buying them. Since he was clearly drunk when he brought them in we do not read much into the lack of reasons for their purchase. The quantities of the brands of cigarettes that the Appellant did not prefer to smoke with which we are dealing here is only 200 Marlboro and 80 Gauloise cigarettes which does not suggest commerciality to us. Nor does bringing in 0.25 kg of hand rolling tobacco when the minimum indicative limit was 1 kg suggest commerciality. The Appellant frankly stated at the hearing that he smoking tobacco with cannabis, which may be illegal but does explain his buying tobacco as well as cigarettes. Taking into account the cost of travel, we are doubtful that it is reasonable to suppose that it would be worth purchasing these quantities for a commercial purpose even taking the quantities purchased on the other trips into account.
13. So far as his income was concerned he told Mr Durant that he received £75 per week disability benefit and a travel allowance of £140 per month. He spent £30 to £40 on food, £12 to £15 on household bills and £35 per quarter on telephone bills and was paid a rent allowance. He said he had £100 of savings. He told us that he had previously won over £1,000 on the horses, and had £350 on him at the time he was stopped, but this conflicts with his saying at the interview that he took £250 out with him that day. He claimed that he had told Mr Durrant about the £350, but it is not recorded. Bearing in mind that he was too drunk to be interviewed at the time his recollection may be at fault, but that does not mean that he did not have any money on him. At the interview he mentioned only £100 of savings for his television licence (although that would relate to his situation at the time which was after another trip to replace the goods seized). This factor does not cause us to consider that our preliminary view that the goods were not purchased for commercial use is incorrect.
14. The lack of any receipts for the goods is also something about which the officers were entitled to be suspicious as possibly indicating that the Appellant was carrying goods belonging to someone else. However the Appellant gave an explanation for this, which is plausible.
15. Standing back and looking at all the facts and bearing in mind that the burden of proof is on the Commissioners to show that the goods were purchased for commercial use, we do not consider that the officers' conclusion that the goods were so purchased to be one that was reasonably arrived at. We find as a fact that the goods were for the Appellant's own use. Accordingly we direct the Commissioners to conduct a further review in the light of our findings by a different reviewing officer within 30 days of the date of release of this decision.
16. We direct the Commissioners to pay the Appellant his costs of attending the hearing.

J F AVERY JONES

CHAIRMAN

LON/01/8179