United Kingdom VAT & Duties Tribunals (Excise) Decisions

Devereux v Customs & Excise [2003] UKVAT(Excise) E00506 (30 September 2003)

Excise duty – Seizure of cigarettes – Refusal to restore – Deemed upholding of decision – Incorrect burden of proof applied – Would a further review lead to a different outcome – No – Appeal dismissed

MANCHESTER TRIBUNAL CENTRE

JAMES C DEVEREUX Appellant

and –

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: LADY MITTING (Chairman)

MRS G PRATT

Sitting in public in Manchester on 1 September 2003

The Appellant did not appear and was not represented

Mr T Somerville of counsel, instructed by the Solicitor for the Customs and Excise, for the Respondents

© CROWN COPYRIGHT 2003


 


DECISION

1. This is an appeal by James Devereux against a decision of the Commissioners to refuse to restore to him 17,200 cigarettes seized from him at Manchester Airport on the evening of 14/15 June 2001.
2. The Commissioners were represented by Mr T Somerville of counsel and we heard oral evidence from a senior officer of Customs and Excise, Ms Julie Marie Logan.
3. The Appellant did not appear and was not represented and, having satisfied ourselves that he had been properly notified of the hearing, we proceeded to hear the case under rule 26(2) Value Added Tax Tribunals Rules 1986.
4. Mr Devereux had initially requested restoration by letter dated 20 June 2001. His request was refused by letter dated 18 July 2001 and a request to review that decision was made by Mr Devereux on 6 August 2001 but as the review was not completed within 45 days, the original decision was deemed to be confirmed by the Finance Act 1994 section 15(2). A review was actually carried out on 24 September 2001. This review was out of time and was of no relevance in the appeal.
5. Mr Devereux was intercepted at Manchester Airport in the late evening of 14 June 2001. He was found to be carrying 17,200 Regal cigarettes.
6. In interview, and before the cigarettes were counted, Mr Devereux told the intercepting officer that he was bringing in 60-70 cartons, that he smoked 25-30 cigarettes a day and expected them to last him 6-8 months. He had paid for the cigarettes himself in Greek Drachma and they had cost him £13.50 per carton of 200. He had bought them in a market and did not have any receipts for them. In response to further questioning, Mr Devereux said that he was an accountant by profession, that he had travelled out to Greece the previous day (the 13^th) to go and visit a lady friend. He had previously travelled to Greece a couple of weeks ago and he had on him a return ticket to fly back to Greece on 18 June. Mr Devereux said that he had not brought any cigarettes back on his previous visit although at the end of the interview he stated that he had bought cigarettes "previously" but not in large quantities. Mr Devereux said he had taken £1,400 or £1,500 out with him because he had intended to purchase some white goods for his friend's apartment. However when they were walking round the market, he saw the opportunity to buy the cigarettes and decided that as buying the white goods was not a pressing issue he would purchase the cigarettes instead. Finally Mr Devereux said that he earned £40,000 per year. He explained the fact that he had no open packet of cigarettes on him and no lighter by saying that he had smoked the last of his cigarettes in Frankfurt and used throw-away lighters. He had not opened any further packet of cigarettes as he was on two no-smoking flights.
7. The officer seized the cigarettes explaining that he was not satisfied they were for Mr Devereux' own consumption because he had 19 months supply, no proof of outward travel, no proof of having changed his sterling into drachma, no receipt for the cigarettes, no open cigarettes and no lighter on him and finally that he had had ample opportunity to purchase cigarettes previously but had not done so.
8. In his letter of 20 June 2001, Mr Devereux stated that he purchased the cigarettes in such quantity for economic reasons and exclusively for his own use. He had been offered no receipt as he bought them at a market. Proof of his outward travel on 13 June was enclosed in the form of a timed car park ticket from Manchester airport. He repeated that on previous trips to visit his friend in Greece he had regularly purchased cigarettes in smaller quantities for his own use and that on this occasion it was cost effective to purchase in bulk. He concluded his letter by stating that he was not seeking to make any financial gain by reselling the cigarettes in the UK.
9. The Commissioners' letter of 18 July 2001, refusing restoration, merely advised Mr Devereux that it was the Department's policy not to restore seized goods unless there were exceptional circumstances and having given due consideration to the case and the contents of Mr Devereux' letter of 20 June, the Commissioners were not prepared to consider restoration. No further reasons were given. It is thus this decision which the Commissioners are deemed to have upheld and against which the appeal lies.
10. Mr Devereux in his notice of appeal gives as his grounds of appeal that "Customs and Excise have seized my goods on an unreasonable premise, without producing any proof at all that the goods seized are not for personal use as allowed under the Excise Duties (Personal Reliefs) Order 1992".
11. The test for the Tribunal is whether the Commissioners' refusal to restore Mr Devereux' goods, deemed to have been upheld on review, was one which no reasonable body of commissioners could have reached (section 16(4) Finance Act 1994).
12. Mr Devereux was given the opportunity to sign the intercepting officer's notebook but refused to do so. He told the officer that he disagreed with the officer's assumption that he had had ample opportunity to purchase cigarettes previously but had not done so, stating that in fact he had bought cigarettes previously but not in large quantities. With this exception, we have no indication from Mr Devereux that the officer's summary of the interview is anything other than completely accurate. It appears to us that the officer, in deciding to seize the goods, took due and proper account of all the answers which Mr Devereux had given and he clearly formed the view that the cigarettes were not for personal consumption but were a commercial importation. The deemed decision appears to uphold the seizing officer's view but provides no further grounds for the decision.
13. Subject to one matter only, we cannot see that the Commissioners have taken any irrelevant matters into account or have taken account of any factors which they should have ignored. The only flaw in the Commissioners' decision is that the intercepting officer required Mr Devereux to satisfy him that the goods were not held for a commercial purpose. It has since been accepted by the Commissioners that this was the incorrect burden of proof and that the burden is in fact upon Customs to satisfy themselves that the goods are held for a commercial purpose. This error in approach would normally render the review decision sufficiently defective as to be fatally flawed leaving the Tribunal to allow the appeal. However if the Tribunal is satisfied that had the Commissioners adopted the correct approach, their decision would inevitably have been the same, the Tribunal can dismiss the appeal (John Dee Ltd v Customs and Excise Commissioners [1995] STC 941). This is a high threshold but one which we believe in this case is reached.
14. The Commissioners clearly believed that Mr Devereux was making a commercial importation and this is a view which we cannot fault. Mr Devereux was a frequent traveller and not only was he importing a vast quantity of cigarettes, considerably in excess of the then minimum indicative limit of 800 but he misled the intercepting officer as to the quantity he was in fact importing, underestimating it very considerably. If the cigarettes were for personal consumption, as he was such a frequent traveller it would have been unnecessary for him to purchase that quantity in one go.
15. In summary therefore, on the evidence before us and without hearing Mr Devereux, despite the flawed approach by the Commissioners we believe that their view that this was a commercial importation was perfectly reasonable and that any review or further review which adopted the corrected burden of proof would inevitably come to the same conclusion. The appeal is therefore dismissed.
16. No application for costs was made and we make no order.

LADY MITTING

CHAIRMAN

RELEASED:

MAN/01/8275