United Kingdom VAT & Duties Tribunals (Excise) Decisions

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Cite as: [2003] UKVAT(Excise) E529, [2003] UKVAT(Excise) E00529

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Saunders v Customs and Excise [2003] UKVAT(Excise) E00529 (31 October 2003)

E00529

EXCISE DUTY - community traveller entering the UK with tobacco in excess of minimum indicative levels - goods found not to be for own use but held for a commercial purpose - Customs' review decision not to restore goods held to be reasonable - appeal dismissed

MANCHESTER TRIBUNAL CENTRE

MICHELLE SAUNDERS Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: Mr M S Johnson (Chairman)

Mr R Presho FCMA

Sitting in public in York on the 25th September 2003

The Appellant appeared in person

Mr R Toone, counsel instructed by the Solicitor for the Customs and Excise, for the Respondents

© CROWN COPYRIGHT 2003

DECISION

In this case the appellant is appealing against the outcome of a review by the Commissioners of Customs and Excise ("Customs") upholding a decision to refuse the restoration to the appellant of 10 kilogrammes of hand-rolling tobacco ("the goods").

The goods were seized from the appellant by Customs at Hull Ferry Port Terminal on 15 February 2003 as she was re-entering the UK on her return from Zeebrugge. They were seized and forfeited because Customs decided that unpaid duty was payable in respect of them. Customs took the view that the goods were held or used for a commercial purpose. The appellant maintained that the goods were for her own use and so were not dutiable.

She sought restoration of the goods by a letter to Customs dated 26 February 2003. Customs replied to that letter on 10 March 2003, setting out the circumstances of the seizure and declining to restore the goods on policy grounds. By letter dated 14 March 2003, the appellant sought a review of the decision in that letter not to restore. The review letter, dated 29 April 2003, upheld that decision.

The appellant therefore appeals to this tribunal pursuant to section 16 of the Finance Act 1994 ("the Act"). She invites the tribunal to exercise its powers under section 16(4) of the Act. She seeks a further review of the decision resulting in the restoration of the goods to her.

The sole witness from whom we heard evidence was the appellant herself. She was cross-examined by Mr Toone, appearing for Customs. He called no witnesses, but he helpfully provided the tribunal with a bundle of documentation relevant to the appeal and a type-written skeleton argument.

We find the following facts.

The appellant had travelled to the continent by ferry with her mother specifically for the purpose of purchasing tobacco. She took the ferry from Hull to Zeebrugge and went from there by coach to Bruges, and thence by train to Ostend, where she bought the goods. She then returned to Zeebrugge and took the ferry back to Hull. She was away altogether for less than 48 hours.

The appellant was interviewed by an officer of Customs at Hull Ferry Port Terminal between 08.12 and 08.43 on 15 February 2003. She was carrying the goods. She told Customs that she had paid £480 for the goods; that she smoked roll-up cigarettes only; that she would get about 60 cigarettes out of a packet; that she smoked 30 to 40 cigarettes a day; that she had not worked out how long the goods would last her, but that this might be about 6 months; that her income was £900 per month with outgoings of £250; that she travelled abroad 3 or 4 times a year; and that she had been stopped by Customs on a previous occasion in Dover in 2001, when 100 packets of tobacco had been seized from her. The appellant informed the tribunal that she had appealed on that occasion, but had not pursued the appeal. Significantly, in the light of what we say in paragraphs 15 and 23 below, the appellant also stated that she had smoked her last prepared cigarette the previous night before she went to bed, and had forgotten to bring her roller to make more.

When the appellant was interviewed, her mother was nowhere to be seen. She was said by the appellant to have disembarked from the same ferry as the appellant, and the appellant said that she had probably caught a bus to the station. The appellant claimed that he mother was carrying the roller and papers necessary to make cigarettes and the appellant's lighter. The appellant when interviewed was not in possession of the means to prepare any cigarettes, or of any made-up cigarettes ready to smoke.

Customs went to try and find the appellant's mother, but did not find her in the arrivals lounge. The appellant told the tribunal that she had become separated from her mother on disembarking, and thought that she might have gone to the toilet. Customs never did find and interview the appellant's mother. The appellant indicated to the tribunal that it had been planned that her mother would make a witness statement for the assistance of the tribunal, but in the event this had not been done. Nor had the appellant's mother been able to attend the tribunal: this was because the appellant's father was in hospital, and her mother was unable to concentrate on anything other than that fact and on her father's well-being.

Customs found it strange that the mother was not to be found at the time that the appellant was interviewed, and strange that the appellant was not in possession of a single cigarette ready to be smoked. They also reckoned that the cost of the goods was excessive, having regard to the appellant's stated income; that the quantity of goods was more than the appellant might reasonably have been expected to smoke, given her stated rate of consumption; and they noted that the appellant had previously had tobacco seized from her. For these reasons Customs decided that the goods were not for the appellant's own use and were thus impliedly held for a commercial purpose.

In cross-examination by Mr Toone, the appellant accepted that one could expect to roll more than 60 cigarettes per packet of tobacco. When asked why she would need to bring back the equivalent of, say, 12,000 cigarettes, she replied that she would hand over cigarettes to her workmates and partner. She claimed never to have directed her mind to how long the goods might last.

The appellant is a reasonably frequent traveller to the continent. She had holidayed in Benidorm, and had also been to Bruges, as well as to Rotterdam and Calais for shopping.

She claimed to have rolled the equivalent of 50 or 60 cigarettes before she left on her trip to Belgium, to last her until she got back. She accepted that she was carrying no equipment to roll more cigarettes, and that she could not roll by hand. She said that the reason why she was carrying no cigarettes ready for smoking was that she had smoked more than usual, had used all her pre-rolled cigarettes and thereafter had depended upon her mother to give her cigarettes as required.

This contrasts markedly with the appellant's previous account. In her letter of 14 March 2003, the appellant stated:

"On the day I was stopped by the Customs officer my mother was travelling with me. We became separated leaving the ferry. My mother asked for a cigarette and I handed her one, gave her my lighter as well and this is the reason I did not have a lighter with me."

The appellant was unable to explain to the tribunal where her mother in reality was at the time Customs interviewed the appellant. The appellant gave no indication of what her mother might have said had she made a witness statement or attended the tribunal. We have not been helped by the absence of the mother's evidence.

Regulation 12(1A) of the Excise Goods, Beer and Tobacco Products Regulations 2001 (as amended) applies in determining whether excise goods are held or used for a commercial purpose or for own use. Customs contend that it is proper to have regard to the provisions of regulation 12(1A)(e) in that connection, as was done in this case. They accept that the burden of proof as to the goods being held or used for a commercial purpose rests upon them, to the civil standard.

In the review letter in this case, the reviewing officer reiterated the circumstances of the interview and upheld the decision not to restore the goods on the grounds that the appellant had previously had excise goods seized from her in 2001, and that she had not adequately explained the absence of her mother or why the appellant was not in possession of smoking equipment.

On behalf of Customs, Mr Toone submitted that the inference to be derived from the evidence was that the goods were not for the appellant's own use, because she had no need for them. Her story was incredible, firstly because she had no conception how long the goods might last, and secondly because the indications were that the appellant was not in fact a smoker. The involvement of the mother was unexplained in any way that made sense. The appellant's income was not such as to appear to justify an expenditure at one go on such a quantity of tobacco, given the appellant's other trips to the continent. Mr Toone invited us to find that Customs' conclusion was reasonable, in that it had been proved that the goods were not for the use of the traveller and must therefore have been held for a commercial purpose.

The appellant invited the tribunal to find that the decision not to offer restoration of the goods was one that could not reasonably have been arrived at, and that, upon the facts, the goods were imported for the appellant's own use. Customs should therefore, she submitted, be required to conduct a further review of the original decision not to offer restoration.

The appellant has inexplicably failed to arrange for her mother to prepare and submit to the tribunal a statement containing the mother's version of events surrounding the disembarkation from the ferry. We can understand that the appellant's mother felt unable to attend the tribunal, having regard to the explanation of the appellant as to her father's ill-health, but we do not see why the mother's evidence should not long since have been put into a statement, the appellant having had months to prepare for this hearing.

The tribunal therefore does not know what the appellant's mother might have said firstly about her absence when her daughter was interviewed and secondly about the lack of the smoking equipment which the appellant might be expected to have had in her possession.

Moreover we are troubled by the contradiction between what the appellant wrote in her letter dated 14 March 2003 and what she told the tribunal in evidence. According to the letter, the mother had run out of cigarettes on the day of disembarkation, so the appellant gave her one of hers. In evidence before the tribunal, the appellant was clear that she (the appellant) had run out of cigarettes, so she smoked her mother's instead. These two versions are obviously incompatible and, when considered with what we say in the final sentence of paragraph 8 above, they lend force to the submission that the appellant's credibility is questionable.

When the matter just mentioned is coupled with the unexplained strangeness of the mother's absence at the time of interview, the appellant's lack of smoking equipment in her possession, the amount of the goods, and the apparent frequency of travel of the appellant, we find that it was reasonable for Customs to conclude that restoration should not be offered in this instance.

That being so, we dismiss this appeal.

M S JOHNSON

CHAIRMAN

RELEASE DATE: 31 October 2003

MAN/03/8087