United Kingdom VAT & Duties Tribunals (Excise) Decisions

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URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2003/E00503.html
Cite as: [2003] UKVAT(Excise) E503, [2003] UKVAT(Excise) E00503

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McNicolas v Customs & Excise [2003] UKVAT(Excise) E00503 (02 October 2003)

EXCISE DUTIES — traveller arriving from Spain with large quantity of cigarettes — goods seized and restoration refused — refusal upheld on review — whether decision reasonable — whether all information taken into account — no — whether conclusions drawn reasonable — no — appeal allowed — further review directed

MANCHESTER TRIBUNAL CENTRE

JOSEPH McNICOLAS Appellants

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: Colin Bishopp (Chairman)

Mr J T B Strangward

Sitting in public in Manchester on 4 September 2003

The Appellant appeared in person

Mark Kellet of counsel instructed by the Solicitor for the Customs and Excise for the Respondents

© CROWN COPYRIGHT 2003


 


DECISION

1. This is the appeal of Joseph McNicolas against the refusal of the Commissioners, upheld on review, to restore to him 15,600 cigarettes and 500 grams of hand rolling tobacco which were seized from him at Liverpool airport on 12 January 2002, when Mr McNicolas returned from a visit to Spain. Mr McNicolas has already appealed to the tribunal against the refusal, which had been deemed to be upheld by reason of the Commissioners' failure to carry out a review in time, and his appeal had been allowed by the tribunal and a further review directed. That further review was carried out by Maureen Crook and her decision, conveyed by letter of 31 March 2003, was that the decision to refuse restoration should be upheld. This appeal is against Mrs Crook's decision.
2. The reasons given by Mrs Crook for her decision start with her conclusion that the goods were properly forfeited. That conclusion depends, according to her letter, on three factors, that the quantity of goods in Mr McNicolas's possession far exceeded the guideline figure of a reasonable quantity for personal consumption (then 800 cigarettes and 1 kilogram of hand rolling tobacco, but subsequently increased to 3,200 and 3 kilograms respectively); that there was inconsistency about replies Mr McNicolas had given about a trip he had undertaken about six months previously; and that there was inconsistency between what he said about his savings history and his ability to pay for the goods. There is some overlap and, in our view, some confusion within Mrs Crook's reasons for upholding the decision to refuse restoration.
3. She mentioned her disbelief that Mr McNicolas would have brought back with him only 200 cigarettes on his earlier trip, when one of his travelling companions, as she knew from a letter he had written in support of Mr McNicolas on this occasion, had brought back 3,600. She also thought there was a discrepancy between what Mr McNicolas is recorded to have said to the officer who stopped him at Liverpool Airport, namely that he thought he could bring back only 200 cigarettes on that earlier occasion, and the reason he had given in his letter seeking restoration, which was that he did not have room in his suitcase for a greater quantity of cigarettes than 200. She referred again to inconsistencies which she detected between Mr McNicolas' saving history and his ability to pay for the goods, and also mentioned that the bank statements of which he had produced copies did not support the conclusion that he had withdrawn a significant sum of cash in order to pay for his goods on this occasion.
4. The Commissioners had served a statement from Mrs Crook but Mr McNicolas had objected to its being put in evidence without Mrs Crook's attending for cross examination. Mrs Crook was not present at the hearing but Mark Kellet of counsel, who represented the Commissioners, elected to go on without her. We have, therefore, no more than is set out in her letter. We did, however, have evidence from Mr McNicolas. He told us that he had planned his trip carefully. He smoked between forty and fifty cigarettes per day, an average of 320 per week or 15,360 per year. He bought a few more than that when he was in Spain because the surplus would be consumed by his wife, who was a light smoker. He was able to buy that number of cigarettes in Spain for £1,092, representing a saving of £1,596 on the price he would have had to pay for the same cigarettes if he had bought them in the United Kingdom. He was very keen to stay within the law and it was for that reason that he had bought only 200 cigarettes on his trip in July. Although one of his travelling companions, and indeed other British people whom he met, told him that he could bring back more than 200, he was not willing to take their word for it and was not prepared to buy more than 200 cigarettes until he had checked for himself that it was lawful to do so. He had made those checks on his return to the United Kingdom, and had satisfied himself that he could bring a greater quantity than 200; it was then that he had planned his trip in January 2002. He agreed that in his letter he had stated that he would not have been able to fit any more in his suitcase in July; what he meant by that was that even if he had bought more than 200 cigarettes, he would not have been able to transport them because of the lack of space. He was aware that his travelling companion had bought more than 200 cigarettes, but did not know precisely how many.
5. Mr McNicolas also told us that he had a bank account primarily because his employers insisted on paying his earnings into a bank; his preference was to keep his money in cash. Among the documents produced to us were two pages of bank statements which confirmed what Mr McNicolas told us about his employers. We also observed that there were some direct debit transactions, but no cheques had been drawn on the account. There were several cash withdrawals. During the period covered by the statements we had, the account was always in credit. Mr McNicolas told us that when he and his wife went shopping he would often withdraw a fairly substantial sum and if any were left over he would place it with other cash in his home, rather than return the money to the bank. He was also a fisherman – we deduce from what he told us a very competent one – and he had won some prizes; those winnings too went into his cash savings at home. He was not short of money and had been well able to fund his purchase.
6. We were quite satisfied that Mr McNicolas was telling us the truth. Mr Kellett made the point that his evidence contained new information which had not been before Mrs Crook when she made her decision. We accept that that is right. Mr Kellett argued that on the information available to her, Mrs Crook's decision could not be regarded as unreasonable. That is true in the sense that such information as Mrs Crook had could support her conclusion. The problem for the Commissioners is that Mrs Crook did not have all of the information which ought to have been before her, not because of any failing by Mr MaNicolas but because the questioning of him at the airport was very superficial. He was asked for how long he had been saving and replied about ten or eleven months; that he said to us, coincided with the beginning of the fishing season in April when he had begun putting money aside, including a large win. A little later in his interview Mr McNicolas was asked about his earnings and outgoings – on which nothing turns – before he was asked "you say you have been saving for 11 or 12 months, roughly how much were you putting aside?" to which his recorded answer in "£10 or £20 sometimes £50, if I did overtime I put it away." Mrs Crook proceeded from that limited information upon the assumption that Mr McNicolas was saving £20 a month. In our view Mr McNicolas' answer does not support any such conclusion; it does not give any indication of the frequency with which he would put aside money (we observe from the bank statements that his earnings were credited weekly), nor is there any indication of the amount of overtime which he might have earned and put away. In addition, as Mr McNicolas pointed out at the hearing, no questions were asked about his wife's financial circumstances.
7. It is evident from what we have said before that Mr McNicolas' ability to pay for his goods, and perceived inconsistencies in what he said about his financial circumstances, were important factors in Mrs Crook's reasoning. If the reasoning is based upon patently inadequate information – and, moreover, unwarranted assumptions are made – it is inevitable that the resulting decision will be unreasonable, as we find that Mrs Crook's decision was.
8. In those circumstances we allow the appeal. We direct that a further review be carried out, by another officer not previously involved in the case, and that he or she shall take into account our findings that Mr McNicolas is a truthful witness, that he was well able to fund his purchase and that the goods that he bought were for his and his wife's own consumption. That review is to be carried out within 6 weeks of the release of this decision, and is to be communicated in writing to Mr McNicolas. A copy of the communication is to be sent to the tribunal.
9. We make no direction in respect of costs.

COLIN BISHOPP

CHAIRMAN

Release Date:

MAN/03/8086