United Kingdom VAT & Duties Tribunals (Excise) Decisions

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Cite as: [2003] UKVAT(Excise) E528, [2003] UKVAT(Excise) E00528

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Hickin v Customs and Excise [2003] UKVAT(Excise) E00528 (31 October 2003)

E00528

EXCISE DUTIES — importation of tobacco goods above the guidelines — forfeiture of goods and vehicle — reasonableness of the Commissioners' decision — Gora — appeal dismissed.

MANCHESTER TRIBUNAL CENTRE

MISS SHARON HICKIN Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: Lady Mitting (Chairman)

Mr J D Kippest (Member)

Sitting in public in Birmingham on Monday 8 September 2003

The Appellant appeared in person

Mr James Puzey counsel instructed by the Solicitor for the Customs and Excise for the Respondents

DECISION

Background to the Appeal

This is an appeal by Miss Sharon Hickin against the Commissioners' refusal to restore to her cigarettes and tobacco seized at Dover Hoverport on 22 April 2001 and the terms upon which restoration of her vehicle was offered. Miss Hickin was travelling in the car with her partner Mr Christopher Hill, his sister Miss Dawn Hill and her (Miss Hickin's) 4 year old son Jamie. The vehicle was intercepted and following interviews with all three the vehicle was seized together with 4.5 kilograms of hand rolling tobacco and 7,560 cigarettes and 0.7 litres of spirits. Miss Hicken and Mr Hill wrote to the Commissioners an undated letter received by the Commissioners on 26 April 2001 claiming the goods purchased were for personal use and seeking the return of their vehicle and goods. This letter was treated by the Commissioners as a request for restoration which was refused by letter dated 4 May 2001. All three travellers then instructed Messrs Parkinson-Wright, solicitors, who wrote to the Commissioners on 7 June 2001 seeking a review of the decision to refuse restoration and also seeking to appeal against seizure under Schedule 3 Customs and Excise Management Act 1979 (CEMA). By this time the time limit for seeking condemnation proceeding had already expired and the matter therefore proceeded as a review of the decision to refuse restoration. Correspondence followed and by letter dated 15 August 2001, the Commissioners wrote to Parkinson-Wright advising that no review had been carried out within the 45 day time limit and the original decision not to restore had thus been deemed upheld. Notices of appeal to the Tribunal were lodged by all three.

Following the cases of Lindsay against Customs and Excise Commissioners (2002 1WLR 1766) and R(Hoverspeed Limited and Others) against CEC (2002 EWCA 1804), the Commissioners carried out reviews of a number of cases on which these two decisions might have an impact. Miss Hickin's case was one such. The Commissioners requested a direction from the tribunal that the appeal be allowed and a further review directed. Parkinson-Wright objected to this course of action but before the Commissioners received notification of the objection, Mr Paul Devlin had carried out the re-review and notified Miss Hickin of it on 30 May 2003. The re-review refused restoration of her goods but offered restoration of the vehicle on payment of the duty evaded on the entire consignment (£1,728.21). Miss Hickin wished to appeal against this decision but technically, because her original appeal was never allowed owing to the objection from Parkinson-Wright, Mr Devlin's review carried no statutory weight and was not therefore appealable. It was however decided, on Mr Puzey's suggestion, that the pragmatic approach which would save a further appeal would be for Miss Hickin to withdraw her solicitor's objection to the original application, her first appeal thus being allowed and a re-review ordered; Mr Devlin's review taken as the re-review and Miss Hickin be deemed to be appealing against it. The decision under appeal now is therefore that of Mr Paul Devlin dated 30 May 2003.

Miss Hickin's grounds of appeal were that she purchased the goods for personal use on the advice of Euro-tunnel staff and was not involved in smuggling.

We heard oral sworn evidence from Miss Hickin and Mr Devlin.

Evidence

Miss Hickin appeared in person and her evidence was based on a signed statement prepared and submitted on her behalf by Parkinson-Wright. She is a single parent supporting three children currently earning £170 per week net. Her car had been purchased in February 2001 at a cost of £6,000 of which £4,000 was paid cash and the balance of £2,000 on finance. She no longer smokes but used to smoke 40 cigarettes a day. We were told that in the months leading up to April 2001, she and Mr Hill and members of their extended family were actively looking for a cheap property to buy and renovate in France. This necessitated a number of trips to look at and identify suitable properties. She would be accompanied on such trips by Mr Hill and other members of the family. In her signed statement Miss Hickin said that "on occasion" she would buy tobacco on these trips for her own use. This conflicted with her oral evidence in which she said that she and Mr Hill had only once brought tobacco back. On no occasion had tobacco ever been brought back with the view to reselling it. She did not believe her purchases had ever exceeded the limited recommended by Customs staff.

On this particular trip, Miss Hickin was accompanied by her partner and his sister who was making her first trip to France in twenty years. Miss Hickin wanted to buy cigarettes and tobacco and she provided the money to Mr Hill who made the purchase.

When the travellers were interviewed, initially they were interviewed together and Mr Hill, answering on behalf of all of them, said that they had travelled out the previous night and had brought back 2,000 cigarettes and 1.5 kilograms of tobacco each (3 packets of 10 pouches). A few questions later when it was put to him again that they had each 2,000 cigarettes, he answered "well 2,200". All three signed the officer's note book at the foot of these questions and they were then interviewed separately.

When Miss Hickin was interviewed, she didn't know the value of the goods purchased saying it would be worked out when they got home; no one had contributed to the purchases and all the cigarettes and tobacco were for her own use, her consumption being 40 to 50 filter cigarettes a day. She was asked how many pouches of hand rolling tobacco she got through in a week to which she answered "not a lot" but she went on to say that she would not be coming back for a good while. She had "never thought about" how many roll ups she got from a pack. She said she worked in a warehouse with take home pay of £130 to £140. her savings were "not a lot" and when pressed she "hadn't a clue." She had last travelled to an EC country a couple of weeks previously and had been to France a couple of times that year. She had been to the Cité D'Europe. She was asked specifically how often she had been in April to which her reply was "I don't know I have". She was asked if anyone else had the use of her car to which she said her mother had used it "the other week". Miss Hickin was asked if her mother had travelled to France in the car. The written response in the notebook to this question was in part illegible. What was readable was as follows:

"I don't ~~think so.~~ She (one illegible word) and (one illegible word) about it, she wanted a reliable car"

The response does not appear under any interpretation to say that her mother had been to France. Neither of the illegible words had a capital letter or bore any resemblance to the name of a country.

Miss Hickin was then asked if she had been to France on Friday 20 April to which she replied "I don't think so". The Commissioners had found in Miss Hickin's handbag a receipt for tobacco from Adinkerke dated 20 April 2001. Miss Hickin was asked why she had it in her bag and merely stated "I wasn't there on the 20^th". She was asked about a brown envelope found in her bag containing money which she said was a Kay's catalogue money.

The officer then decided to seize her goods and the vehicle, the reasons for seizure being given as:

(1) Unable to explain previous trips

(2) Unable to explain receipt for tobacco in bag

In cross examination, Miss Hickin stated that the receipt from the 20 April was in fact her mother's, her mother having travelled to France that day in Miss Hickin's car. Miss Hickin had found the receipt on the floor of her car and to keep the car tidy she had picked it up and put it in her bag.

In response to a further question she said she did not know how many cigarettes she used to get from hand rolling tobacco because she always got someone else to make them for her.

Mr Puzey referred Miss Hickin to a printout taken from the Commissioners' number plate readers at Cheriton and Coquelles which had recorded Miss Hickin's vehicle had made twelve trips across between 24 February 2001 and 20 April 2001. Four of these trips had been on 3^rd, 7^th, 10^th and 20^th April. Of the trips, 5 showed an outward journey with the return unrecorded, 1 showed an overnight trip and the remaining 6 recorded visits lasting between 2 and a quarter and 5 hours. On two occasions trips were made on consecutive days, returning to England mid afternoon one day and leaving again early the following morning. On the latter of these back to back trips (23 March 2001) the outward journey is timed at 07:51 and the return as 09:26. We also ascertained that the reader at Cheriton is positioned at the ticket booth which would mean that the outward time would be before queuing and travelling and a minimum of 45 minutes should therefore be deducted from the visit time to ascertain the length of the stay in France. Miss Hickin said she had possibly been on half these trips, the others being undertaken by her partner and members of the family. Her own mother and Mr Hill's mother had each travelled once. She couldn't remember whether she had travelled before acquiring the car in February but possibly once or twice. Her answer to the interviewing officer that she had travelled only a couple of times had been a figure of speech. She had probably been saying that she had been to the Cité D'Europe twice and had been to look at properties on other occasions. She was asked why there should have been two back to back trips to which Miss Hickin first said she didn't know but then that possibly one of them might have been when members of the family had been staying in Kent and she had seen a property, wanted to discuss it with the family and had come back to take them back to see it the following day. The reason trips were so short was that they knew where they were going to view each property, having seen them advertised, usually in Dalton's Weekly. Miss Hickin stated that had the vehicle not been seized, she and Mr Hill would have continued their house hunting visits to France. In the light of this answer, we, the Tribunal, asked her why she had told the interviewing officer she was not coming back for a while because we took this in the context of the question to which it was replying to imply that she was purchasing in bulk to stock up as she was not expecting to visit again in the near future. Her response was that she was throughout the interview worried and anxious about the safety of her son Jamie who was running around and could have been snatched or hit by a vehicle.

Mr Devlin in his review letter explained the changes in policy brought about following Lindsay and Hoverspeed. He had had before him when he made his review all the documents which we the tribunal had before us (120 pages) except perhaps the signed statements but these added little or nothing to what he already knew. He reviewed the interviews of all three travellers and the ensuing correspondence. He formed the impression that the goods were not in fact for own use but were not of a volume that indicated any worthwhile profit could be made if they were resold. He took the view that some of the goods were probably for passing on to others at cost. He therefore believed the Lindsay restoration terms should apply and the goods should not be restored but that the vehicle should be on payment of the duty of £1,728.21. The most important factors influencing his decision were:

(1) The lack of explanation for the receipt in the vehicle

(2) The mixed tobacco products and the claimed consumption of the other travellers

(3) The number of trips and the short duration of most of them which he considered inconsistent with house hunting

(4) The financial position of Miss Hickin and Mr Hill did not support the ability to make such a purchase

(5) The unsatisfactory explanations given to the officer in interview

In support of their contention that they were seeking a property in France, Mr Hill put in evidence to us a brochure dated February/March 2001 of properties in the Calais/Boulogne area. We were told that they had had this brochure on them when they were stopped. We were not referred to any specific properties and there was no supporting evidence of the search for French property.

Findings of Fact

Miss Hickin claimed ownership of roughly 1/3 of the cigarettes and 1.5 kilograms of hand rolling tobacco. We do not accept that any of the hand rolling tobacco belonged to Miss Hickin or that she smoked it. Her answers in interview and indeed cross examination were too vague to support any assertion that she smoked it at all and to have purchased and smoked 1.5 kilograms, she would have had to have been a serious hand rolling smoker. When asked in interview how much she smoked, she stated 40 to 50 filter cigarettes, making no mention of smoking hand rolled cigarettes. Equally it is not particularly practical to suggest, as she did in cross examination, that having purchased 30 pouches of hand rolling tobacco, someone else made all the cigarettes up for her.

We also note Miss Hickin's reply in cross examination that her share of the goods cost her approximately £200. Mr Hill had told the interviewing officer that the cigarettes had cost £19 per pack of 200. £200 would therefore have purchased Miss Hickin's 2,200 cigarettes but not the hand rolling tobacco as well.

We therefore find that contrary to Miss Hickin's assertion the tobacco was not purchased by her and was not for her own use but she allowed a portion of the import to be allotted to her, presumably to reduce the amount brought in by the others.

We also do not find credible Miss Hickin's or Mr Hill's (similar) explanation for the frequent trips to France. Her answers in interview, given before she knew of the existence of the number plate readings, were inconsistent with the unchallenged record of crossings and with the answers she gave in cross examination. We also find it most unlikely that a couple would go to the trouble and undoubted expense of travelling from the Midlands so frequently to spend only an hour or two looking at a property and then returning. No realistic explanation was given of the two back to back trips. We believe that at least some of these trips, especially the shorter ones, were shopping trips.

Equally we find it very hard to accept that the trip on 20 April was made by Miss Hickin's mother. There was no supporting evidence whatsoever of this and it would be in direct contradiction to Miss Hickin's answer in cross examination that her mother had used the vehicle "the other week". She would surely have been able to recall if her mother had borrowed the car just two days previously and would almost certainly have known if she had been to France in it. Even if she had for some reason, in the stress of the moment, overlooked the fact in interview, it would surely have come back to her when she thought about everything in the cold light of day or discussed it with her mother. Yet she never referred to this in correspondence or in her statement, it coming out for the first time in oral evidence.

We should say we accept that it must have been difficult for Miss Hickin to give her full attention in interview to the questions and her answers, given that she was at the same time trying to ensure the safety of her son in a strange and potentially dangerous environment. She may have been distracted but this can not explain clearly incorrect answers which she never sought to rectify afterwards in either correspondence or in her solicitor's statement.

Conclusion

At the time of seizure and the review decision, the Excise Duty (Person Reliefs) Order 1992 provided that a traveller bringing in excise goods into the UK in quantities in excess of a minimum indicative level had to satisfy the Commissioners that the goods were for own use, "own use" being defined as:

"own use includes use as a personal gift provided that if the person making the gift receives in consequence any money or moneys worth (including any reimbursement of expenses incurred with connection with obtaining the goods in question) his use shall not be regarded as own use for the purpose of this Order"

If the traveller failed to so satisfy the Commissioners the goods were treated as being held for a commercial purpose and UK duty became payable on them. At the time of the seizure the limit for cigarettes was 800 and for tobacco 1 kilogram.

Section 49 CEMA empowers the Commissioners to forfeit goods which have been imported or held without payment of duty. Section 152(b) allows the Commissioners as they see fit to restore any goods which have been seized. A review and appeal procedure from decisions of the Commissioners is set out in Sections 15 and 16 Finance Act 1994.

Our jurisdiction is strictly circumscribed by Section 16(4) Finance Act 1994 which gives us only the power to review the reasonableness of the Commissioners' decision. Looking at Mr Devlin's review and having heard his evidence we find his decision to have been entirely reasonable. He took into account all relevant factors and no irrelevant ones. In no sense can it be seen as a decision which no reasonable body of Commissioners could have reached. We have made a finding of fact that the hand rolling tobacco did not belong to Miss Hickin and was not thus for her own use. It had never been her case that it was gift for someone else and there must therefore be assumed to have been a commercial purpose, albeit to a minor extent. As such the tobacco was liable to UK duty which had not been paid and was therefore correctly seized. The cigarettes were equally liable to forfeiture as part of the same consignment (Section 141(1)(b) CEMA. Equally the car was also liable to forfeiture as being the vehicle used to carry the goods. (Section 141(1)(a)).

There was no challenge to the reasonableness of the Commissioners' policy which we do in fact believe to be reasonable and to have been correctly applied.

Miss Hickin's submission to the tribunal was that the goods were for her own use. Mr Puzey submitted that in the light of Gora and Others against Customs and Excise Commissioners (Court of Appeal 2003 EWCA 525) this was not a question which it was open to the tribunal to address. We accept Mr Puzey's interpretation of Gora. If a traveller does not serve a notice of claim under Schedule 3 CEMA within the statutory time limit or if he does but condemnation proceedings fail, "the goods shall be deemed to have been duly condemned as forfeited". It follows from this that these goods must have been deemed not to have been for personal use and this is not an issue which can be reopened before the tribunal. We are not therefore concerned with the seizure of the goods and the only issue before the tribunal is whether Miss Hickin has established that the decision not to restore the goods and the terms upon which restoration of the vehicle was offered were decisions which no reasonable body of Commissioners could have arrived at. As we have already expressed our view and in the light of our findings of fact, we find that the decision was Wednesbury reasonable. We also consider although this was not argued before us, that the terms of the restoration were fair and proportionate.

The appeal fails. We make no order as to costs

LADY MITTING

CHAIRMAN

Release Date: 31 October 2003

MAN/01/8197