United Kingdom VAT & Duties Tribunals (Excise) Decisions

 


Watkins v Customs and Excise [2004] UKVAT(Excise) E00602 (14 January 2004)

E00602

RESTORATION – Goods and vehicle seized – Vehicle offered for restoration on payment of duty on seized goods – Amount of goods in excess of new guidelines – Appellant's case that review decision based on surmise, not evidence – Whether review decision reasonable – Appeal allowed – Further review directed

LONDON TRIBUNAL CENTRE

NIGEL JAMES WATKINS Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: ANGUS NICOL (Chairman)

GEORGE MILES

Sitting in public in Cardiff on 26 September 2003

The Appellant in person

Christopher Mellor, instructed by the Solicitor for the Customs and Excise, for the Respondents

© CROWN COPYRIGHT 2003

DECISION

1. The notice of appeal in this case was dated 2 July 2002, and was an appeal against a decision, dated 5 June 2002, reviewing an earlier decision by the Commissioners to refuse to restore to the Appellant a Daihatsu vehicle, in which excise goods had been imported. Following the decision of the Court of Appal in Customs and Excise Commissioners v The Queen (on the application of Hoverspeed Ltd and others) [2003] STC 898, the Tribunal directed that a further review of the decision not to restore the Appellant's vehicle be carried out. That was done, and the decision to refuse restoration was varied in a review letter dated 16 January 2003, which offered restoration of the vehicle on payment of the amount of duty that should have been paid in respect of the goods, which was £1,795.98. The Appellant has in fact paid that sum and the vehicle has been restored, and appeals against the imposition of the condition.
2. The letter concluded by advising the Appellant to contact the Tribunal in order to progress the existing appeal, and that the further review decision would be substituted for the original decision. That advice was incorrect, since a fresh notice of appeal was required to initiate an appeal against the new decision. Of this the Appellant was clearly unaware until the hearing began. Accordingly, we gave leave to the Appellant to appeal out of time. The other requirements of rules 4 and 5 of the Value Added Tax Tribunals Rules 1986 were then satisfied by prompt use of facsimile communication between the Appellant and the London Tribunal Centre. The new appeal was given the reference number LON/03/8187. The existing statement of case had not been amended in the wake of Hoverspeed. The existing grounds of appeal were deemed to apply, mutatis mutandis, to the new decision.

The evidence

3. The Appellant, together with two others, Peter Watkins and Richard Watkins, was stopped on 10 March 2002 at Eastern Docks, Dover. The Appellant was driving the vehicle. When first questioned, they all said that they had been to Adinkerke and had each bought a 6 kg box of tobacco, and these were found in the vehicle. The officer then read the "commerciality statement" to them, which stated that they were required to satisfy the officer that the goods had not been imported for a commercial purpose. The Appellant was asked when he had last travelled, and said that it had been in early February 2002, and he had then bought half a box of tobacco (3 kg). After that, the three travellers were interviewed.
4. The Appellant said that he had bought 120 pouches of tobacco and 400 cigarettes, costing respectively £190 and £244.80. Asked when he had last travelled, he said that it had been in early February, when he had bought 25 pouches of tobacco and 400 cigarettes. He said that he had gone to France for the weekend in December 2001, and had brought back 25 pouches of tobacco, which he described as "the normal", and 400 cigarettes. Asked how many times he had travelled in the previous six months, he said, "Four times, December 2001, February 2002, September 2001 and approximately two months before." Then the officer asked why he had bought 120 pouches on this occasions, and the Appellant said, "Because my father travelled a fortnight ago and was stopped with a box and was allowed to proceed." He said that he knew what the Customs guidelines were. He said that he earned £210 to £220 a week as a production worker in a brewing factory and had between £50 and £60 left after outgoings, and he had no savings. The Appellant said that he had paid for the petrol and the ferry tickets, a total of about £125, which he had paid by credit card. He said that the tobacco would last him 12 months, and he smoked 40 or 50 hand made cigarettes a day and 60 to 70 ready made cigarettes in a week. The officer who interviewed the Appellant recorded that he was not satisfied that the goods were for the Appellant's own consumption for the following reasons: excess MILS (minimum indicative levels), that he misled the officer by not saying that he had travelled twice in December, that he was a regular traveller, that one of his companions, Peter Watkins, had had goods seized before, that his income did not match his expenditure, and that his consumption rate did not match imports, since he had brought in 25 pouches early in December.
5. Peter Watkins, when interviewed, said that he had bought one box of Golden Virginia in Belgium and had paid about £250 for it. He produced a receipt shewing that he had paid £244, which he said he had paid in cash. He said that he smoked two to three pouches a week, and considered that the box would last him about a year, and he was intending to smoke it himself. He said that he was unemployed and on incapacity benefit of £76 a week, and was living with his sister and saving with the Credit Union. He had taken out a loan from the Credit Union, having intended to use it for a cheap holiday, but had decided to use it instead for this purchase. He was repaying the loan at £5 a week. He had last been abroad the previous year, to Lanzarote, and had had cigarettes and tobacco confiscated on the return journey. He had seen a Notice 1. The officer gave the following reasons for seizure: excess MILS, his income did not match his expenditure, and the fact that he had suffered a previous seizure and knew about the guidelines.
6. Richard Watkins was also interviewed. He, too, said that he had bought one box, of 120 pouches, of Golden Virginia, and had paid £244.80. He smoked about three pouches a week, and expected that the tobacco would last him about nine months. He had travelled about a fortnight before, to Ostend, where he and his father had spent one night. His daughter was at Greenwich University, and whenever he dropped her there he would go across the Channel. His father liked shopping over there. On that occasion they had brought back some beer, wine, and shopping, but no tobacco. He said that he was on disability benefit. He also said that his father, who had had a bonus from an insurance company, had given him some money, which he had spent on tobacco. He said that he was familiar with Notice 1. The reasons for seizure in his case were given as excess MILS and that he was a frequent traveller.
7. The Appellant's solicitors wrote to the Commissioners on 27 March 2002, asking for an internal review of the decision to confiscate the goods and vehicle. The letter pointed out that the tobacco was to be shared equally between the three of them, as were the 400 cigarettes. As to the vehicle, the Appellant lived in a remote part of Wales and relied upon his vehicle to travel to work. Also his father was disabled and wholly reliant upon the Appellant to transport him to hospital and other places. That letter was answered on 17 April 2002 by the Post Seizure Unit at Dover, giving reasons why the vehicle was not to be offered for restoration. The reasons were that the amount of goods exceeded the guidelines set out in the 1992 Order (which was then in force), that the Appellant had said that the goods would last him six months when they would, on his estimate of consumption, have lasted him over a year; that he had also travelled in February and imported 25 pouches of which he should still have had some remaining; and that the vehicle was used in an attempt to import 18 times the guideline quantity of tobacco.
8. We pause here to observe that, first, the reasons for refusal were confined to the reasons for seizure, and that the matters raised by the Appellant's solicitors do not appear to have been considered. Also, two of the reasons for seizure, the second and fourth, were erroneous. The Appellant had said that he thought the tobacco would last him about a year, not six months. The amount imported by the Appellant was six times, not 18 times, the guidelines. However, it was not this decision but the review decision that was under appeal.
9. The Appellant wrote on 3 May 2002 asking for a review of that decision. He said that he lived with his mother, who is partly disabled, and who helps to look after the Appellant's 13-year-old son (the appellant being a widower), and he shares his tobacco with her. Her assistance in this way enables him to do a full-time job. His mother would not take any payment for this, nor did he receive any money for the tobacco. He also mentioned the fact that Customs allow some people to bring in one box of tobacco. He had never been given any warning that he was exceeding the guidelines; had he been he would not have risked his vehicle being seized.
10. The review of the decision, contained in a letter dated 5 June 2002, set out the facts in summary quite accurately. However, the reviewing officer stated that her function was to determine whether or not the decision to refuse restoration was reasonable. That was not the reviewing officer's proper function, which was to consider the matter afresh and come to her own conclusion. The review was also carried out before the revocation of the Excise Duties (Personal Reliefs) Order 1992 ("the 1992 Order"), and the law has changed since then. For that reason, the Commissioners were directed to carry out a further review in the light of the Court of Appeal decisions in Customs and Excise Commissioners v Lindsay [2002] STC 588, [2002] 1 WLR 1766, and Customs and Excise Commissioners v The Queen (on the application of Hoverspeed Ltd and others) [2003] STC 1273. As a result, a further review was carried out and the decision under appeal is to be found in a letter dated 16 January 2003, from Mr I F McEntee.
11. That review letter referred back to the facts as set out in the previous review letter. Mr McEntee then referred to the changes in the law resulting from the Lindsay and Hoverspeed decisions, and then went on to consider "whether or not the refusal to restore your car would still be proper ... if the decision were to be made today and not on 5 June 2002...." Mr McEntee said that he had considered the matter afresh, including all the material that was before the Commissioners when the decision was made, and any representations made then or subsequently. He also took note of the fact that the decision in Hoverspeed in the Divisional Court ([2002] 3 WLR 1219) had reversed the burden of proof. He set out in summary the interviews of the three travellers by the officers. He inferred from what had been said that the Appellant was a frequent traveller. He considered that the Appellant's reason for bringing more goods back than usual, that his father had been stopped with one box of tobacco and allowed to retain it and go on his way, did not make much sense, because "it would not be viable to travel from Wales to Belgium at a cost of at least £125 each time and to spend less than £90 on tobacco that would last you around 12 weeks and cigarettes that would last you around 6 weeks." He expressed strong doubt that the Appellant had only purchased 25 pouches on the previous trips. He also inferred that the Appellant should still have had some 45 pouches left from earlier trips, and there was no need for him, therefore, to buy such a large quantity on this occasion. He noted that the Appellant gave some tobacco to his mother, but observed that that was no explanation since he had tobacco left from earlier purchases.
12. Mr McEntee said that he found Peter Watkins's explanation highly implausible, since it would take him, an unemployed man, some 48 weeks to repay the amount borrowed, neglecting the matter of interest. He was also aware from records that in May 2001 Peter Watkins and his wife had returned from the Canary Isles with 4,200 cigarettes and 2.35 kg of tobacco, which were seized. He also regarded as implausible Richard Watkins's explanation, who had travelled with the Appellant in December and February and still found it necessary to purchase 9 months supply in March. He was also a frequent traveller. Mr McEntee summed up his review in these words:

"Looking at the case in the round, I find the information supplied by all 3 of you to be highly implausible. I fail to comprehend why 3 men with different financial backgrounds, some of whom cross the Channel on a frequent basis should all travel to Belgium in order to all purchase exactly the same large quantity and brand of hand rolling tobacco, unless they purchased the tobacco with the intention of supplying it to others for profit."

Mr McEntee mentioned the changes in policy in October 2002 which allowed the restoration of vehicles on condition of payment of an amount equal to the duty on the goods imported when the amount in excess of the guidelines was moderate and the importer had not previously been involved with Customs. His decision was that the vehicle should be offered for restoration on payment of £1,795.98, which was the duty on 18 kg of tobacco and 400 cigarettes.

13. Mr McEntee also gave evidence at the hearing. He said that he had had all the documents which had been available to Mrs Healey when she carried out her review. He considered that if the Appellant had made a "genuine trip" he would have brought back more cigarettes. He took the view that the Appellant and his companions had brought the goods in to sell. The Appellant had tried to conceal the fact that he had made two trips in the previous December. He had brought back 75 pouches in three months. It was not cost-effective to cross only to buy 25 pouches at a time. Mr McEntee agreed that the Appellant would save £75 each trip if he bought 25 pouches, and added, "but why not buy more?" Peter Watkins had borrowed in order to buy tobacco, and he was unemployed. He had also misled officers in Cardiff on his return from Lanzarote, and had possibly done so again on this occasion. The burden of proof made no difference to this case: there was enough evidence to establish commercial use. Mrs Healey had obtained a valuation of £2,650 for the vehicle, and he agreed that the revenue lost was less than that. The hardship suffered by the Appellant was no more or less than would be suffered by any other person; his father had access to another vehicle. There were no exceptional grounds for not applying the Commissioners' policy. In cross-examination, he said that he based his decision on the evidence that had been before him, and the answers given by the three travellers. He doubted the figures given by the Appellant for the previous trips. He had not looked at Mrs Healey's decision to see whether it was reasonable, but had considered the matter again and come to his own decisions.
14. The Appellant, who appeared in person, also gave evidence. He agreed that he was a frequent traveller, and that the trip had been made in order to buy tobacco. He said that his father had been stopped about two weeks earlier with a box containing 120 pouches, and had been allowed to proceed retaining the tobacco. The Appellant therefore followed that example, and supposed that it was all right to bring in a year's supply rather than a lot of smaller quantities. He admitted that he had omitted to mention one of the trips in the preceding December. He said that he had been on the road for about 12 hours and had difficulty remembering all the trips that he had made, and was being asked about events six months before. He said that when being questioned one did go into a sort of state of shock. He said that the trip which he had forgotten to mention was not a tobacco trip but just a social trip, and they had brought back some wine and beer. They went to Ostend and had a night out and came back the next day. Occasionally they went to Ostend for the weekend. The controlling factor in bringing back wine and beer was the weight. They had made no attempt to conceal anything, the goods being openly displayed. In cross-examination he said that he gave the approximate number of trips, and gave the months not the dates. There was no point in concealing just one trip out of a number; he had not concealed that he was a frequent traveller. The trips did not all cost £125. The cost would depend upon what offers were available. Quite often a social trip would cost £125 between four travellers. Buying tobacco in December could have saved the cost of a later trip, but that was not what they had done. He agreed that he had said that his disposable income was £50 to £60 a week, but added that he could afford to make these trips. It was more cost-effective to buy more goods. There were notices on the ferry which said that you can bring in an unlimited amount if it is for your own use. He said that he was not intending to sell the goods. He agreed that he had bought 75 pouches in three months, and had about 45 left at the time of the trip. He said also that he had at present about 30 pouches, and was intending to go to Belgium again at the weekend to a beer festival, and would probably bring back some tobacco. There was nothing wrong in keeping a stock. There had been no need to seek guidance from Customs, as they had given the green light by allowing his father to bring in 6 kg.

The law

15. Since the date of the seizure the law in this area has undergone considerable changes as a result of the decisions in Lindsay and Hoverspeed: hence the further review. In the Divisional Court in Hoverspeed, from which the case went to the Court of Appeal, it was held that the imposing upon a person importing goods, by the 1992 Order, of the burden of proving that imported goods in excess of the indicative levels were not held for a commercial purpose was incompatible with the Excise Directive 92/12/EEC. Following that decision the 1992 Order was revoked. It was also held that it is for the Commissioners to prove that such goods are imported for a commercial purpose.
16. What is meant by "a commercial purpose" was discussed in both Lindsay and Hoverspeed. In the latter case, at paragraph 65, the Court of Appeal held,

"that, if an individual acquires (or having acquired for his own use subsequently decides to hold) products for a purpose other than his own use, such products are to be regarded as held for commercial purposes."

17. The 1992 Order has effectively been replaced by the Tobacco Products Regulations 2001 ("the 2001 Regulations"), as amended by the Excise Goods, Beer and Tobacco Products (Amendment) Regulations 2002. So far as they bear on the present appeal the 2001 Regulations provide:

"12. Excise duty point

. . .

(1A) In the case of tobacco products acquired by a person in another Member State for his own use and transported by him to the United Kingdom, the excise duty point is the time when those products are held or used for a commercial purpose by any person.

(1B) For the purposes of paragraph (1A) above—

(a) . . .

(b) 'own use' includes use as a personal gift;

(c) if the tobacco products in question are—

(i) transferred to another person for money or money's worth (including an reimbursement of expenses incurred in connection with obtaining them), or

(ii) the person holding them intends to make such a transfer,

those products are to be regarded as being held for a commercial purpose.

(d) . . .

(e) without prejudice to subparagraphs (c) and (d) above, in determining whether tobacco products are held or used for a commercial purpose by any person regard shall be taken of—

(i) that person's reasons for having possession or control of those products,

(ii) whether or not that person is a revenue trader (...),

(iii) that person's conduct, including his intended use of those products or any refusal to disclose his intended use of those products,

(iv) the location of those products,

(v) the mode of transport used to convey those products,

(vi) any document or other information whatsoever relating to those products,

(vii) the nature of those products including the nature and condition of any package or container,

(viii) the quantity of those products, and in particular, whether the quantity exceeds any of the following quantities—

3,200 cigarettes

4,000 cigarillos ...

200 cigars

3 kilogrammes of any other tobacco products

. . .

(ix) whether that person personally financed the purchase of those products,

(x) any other circumstance that appears to be relevant."

18. The effect is, therefore, that it is for the Commissioners to prove, on the balance of probabilities, that the goods were imported by this Appellant for a commercial purpose. In doing so, they must consider the matters set out in paragraph (1B)(e) above.
19. This Tribunal's jurisdiction is set out in section 16(4) of the Finance Act 1994:

"In relation to any decision as to an ancillary matter, or any decision on the review of such a decision, the power 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 persons making that 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, and

(c) . . ."

The restoration of goods or vehicles falls within the definition of "ancillary matter" as defined in Schedule 5 to that Act.

20. In order to determine whether the review decision not to restore is reasonable, the Tribunal looks at the evidence, for two reasons. First, if the evidence were to shew that the seizure was not lawful, the Commissioners would have had no power to seize and therefore the discretion to refuse restoration could not have arisen. Secondly, if the review decision is based upon evidence which has been erroneously reported to the officer conducting the review, or that evidence contains significant omissions, that will have a bearing upon the "reasonableness" of the decision under appeal.
21. In this context, "reasonable" means reasonable in the sense in which that word was used in Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223. In that case, Lord Greene MR said, at page 229,

"A person entrusted with a discretion must, so to speak, direct himself properly in law. He must call his own attention to matters which he is bound to consider. He must exclude from consideration matters which are irrelevant to what he has to consider. If he does not obey those rules, he may be said, and often is said, to be acting unreasonably."

That passage was cited in Customs and Excise Commissioners v J H Corbett (Numismatists) Ltd [1981] AC 22 by Lord Lane, who then said,

"[The Tribunal] could only properly [review the discretion] if it were shown that the Commissioners had acted in a way in which no reasonable panel of Commissioners could have acted; if they had taken into account some irrelevant matter or had disregarded something to which they should have given weight."

The Appellant's contentions

22. The Appellant relied upon the information which he gave to the officers who interviewed him. He agreed that he was a regular traveller, not always for the purpose of importing tobacco. He did not believe that he had done anything wrong, and he had had no intention of selling the tobacco. He also pointed out that much of the Commissioners' case was no more than supposition and assumption and was not supported by evidence.

The Commissioners' contentions

23. Mr Mellor, for the Commissioners, produced a skeleton argument. He contended that the evidence arising from the seizure itself and the travellers' answers in interview provided enough evidence to discharge the burden of proving that the goods were imported for a commercial purpose. The Commissioners' conclusion had not been based upon any presumption nor on any misappreciation of the burden of proof. The Commissioners relied in particular upon the following matters. First, that the Appellant had attempted to mislead the officer by failing to declare that he had crossed the Channel twice in December 2001. It was less than credible, Mr Mellor said, that the Appellant had not bought tobacco on one of the December trips but had then bought some seven days later. Secondly, that he was a frequent traveller. Thirdly, that it was not credible that he would only bring back 25 pouches and 400 cigarettes each trip as it would not be economically viable, and even if he did the. There would have been no reason to purchase the quantity imported on this occasion as he would have had plenty of tobacco remaining from previous trips. Thirdly, that it was not credible that Peter Watkins would purchase a year's supply of tobacco using borrowed money, he also being unemployed. Fourthly, that Peter Watkins had been stopped at Cardiff airport in May 2001 with 4,200 cigarettes and 2.35 kg of tobacco between him and his wife, having only declared 800 cigarettes each. Fifthly, Richard Watkins was also a frequent traveller, and had plenty of opportunity of buying tobacco, and therefore had no need to import so large a quantity. Lastly, that it was implausible that three men with different financial backgrounds, some of whom were frequent travellers, should travel together and purchase exactly the same brand and amount of tobacco unless there was a commercial intention.
24. The Commissioners' policy did not fetter their discretion to allow restoration. The policy was followed only after due consideration of the facts and of representations made by the Appellant. The decision achieved a fair balance between deterrence of smuggling and protection of the revenue as against the right to enjoy one's own property. Since the Commissioners had reasonably concluded that the goods were intended for sale at a profit, the matter of the relationship between the duty lost and value of the vehicle did not arise the situation was distinct from that outlined by Lord Phillips of Worth Matravers MR in Lindsay at paragraph 64. And in any event, notwithstanding that the Commissioners had concluded that the goods were imported for sale at a profit, they had restored the vehicle on payment of a sum equal to the duty on the goods.

Conclusions

25. The Commissioners are required to make two decisions in cases such as this one. First, the decision is made whether or not to seize the goods and the vehicle. That is a necessary prerequisite, since until it has been decided that goods and vehicle should be seized the question whether to restore either of both of the goods and the vehicle to the owner who has imported them cannot arise. If the evidence is such that it is not established on the balance of probabilities that the appellant in such a case has imported goods for a commercial purpose, then either no decision to seize can be made, or, if made, it has been unlawfully made. In the former case the goods and vehicle will not be detained. In the latter, if they are detained, then either the review of the decision or an appeal to this Tribunal will establish that the seizure was unlawful and that the goods and vehicle must be restored to the owner. The second decision is, seizure having been lawfully effected, whether to restore either the goods or the vehicle to the owner. It follows that further matters must be taken into consideration in determining the matter of restoration. It would not be right for the Commissioners to say, simply, on the facts, seizure was lawful and therefore the goods or vehicle will not be restored. For that reason, review decisions nearly always begin with a statement by the review officer that he or she has first looked at the facts to make sure that the seizure was lawful, before proceeding to consider restoration.
26. The Commissioners have formulated a policy in respect of the decision whether or not to restore goods or vehicles, and apply that policy in making the decision. The courts have held that such a policy is, with some qualification, legitimate. In the Court of Appeal in Lindsay [2002] 1 WLR 1766 at page 1784, paragraph 52, Lord Phillips of Worth Matravers MR held:

"The Commissioners' policy involves the deprivation of people's possessions. Under Article 1 of the First Protocol to the Convention such deprivation will only be justified if it is in the public interest. More specifically, the deprivation can be justified if it is 'to secure the payment of taxes or other contributions or penalties'. The action taken must, however, strike a fair balance between the rights of the individual and the public interest. There must be a reasonable relationship of proportionality between the means employed and the aim pursued: Sporrong and Lönnroth v Sweden (1982) 5 EHRR 35, 50-51, para 61, and Air Canada v United Kingdom (1995) 20 EHRR 150.... I would accept Mr Baker's submission that one must consider the individual case to ensure that the penalty imposed is fair. However strong the public interest, it cannot justify subjecting an individual to an interference with his fundamental rights which is unconscionable."

And later, in paragraph 55, Lord Phillips said,

"Broadly speaking, the aim of the Commissioners' policy is the prevention of the evasion of excise duty that is imposed in accordance with European Community law. That is a legitimate aim under Article 1 of the First Protocol to the Convention. The issue is whether the policy is liable to result in the imposition of a penalty in the individual case that is disproportionate having regard to the legitimate aim."

The Master of the Rolls then went on to consider the Commissioners' policy in the light of the scale of the evil against which it is directed, in relation to the loss to the revenue resulting from improper, or commercial, importation of excise goods, and that travellers are warned of the consequences of importing excise goods otherwise than for their own use and of smuggling. He also distinguished, in paragraphs 63 and 64, between the commercial smuggler in the sense of importing to sell at a commercial profit, and the import of goods for the family and friends of the importer where there is no attempt to make a profit. In paragraph 73, Judge LJ said,

"In my judgment, the question whether the power to seize the vehicle of a non-profit-making smuggler should be exercised is fact-dependent, requiring a realistic assessment of all the circumstances of the individual case, including the alternative sanctions available to the Commissioners, rather than the virtually automatic imposition of a burdensome and, at times, oppressive prescribed penalty."

27. It is therefore the duty of the reviewing officer to take all relevant circumstances into consideration in determining whether the Commissioners' policy should be followed, and restoration refused, or whether in all the circumstances the goods or vehicle should be restored and whether conditionally or not. It is usual for review letters to state that all the circumstances have been taken into account.
28. Bearing in mind our powers under section 16(4) of the 1994 Act (see paragraph 18 above) we consider the review decision in order to see whether it was a decision at which the Commissioners, in the person of Mr McEntee, could not reasonably have arrived, reasonably, that is, in the Wednesbury sense. We observe, first of all, that Mr McEntee has approached the matter on the basis that he should consider whether the refusal to restore was properly made having regard to the law as it now is, and that he considered the matter afresh, including any representations made by the Appellant. In our view this was an entirely proper approach. The 1992 Order has been revoked following Hoverspeed, and the burden of proving that the goods were imported for a commercial purpose lies upon the Commissioners. It is their case that on the facts known, including the quantities of tobacco and what the three travellers said in interview, that that burden is discharged.
29. We find as fact that the Appellant and his companions between them imported 18 kg of tobacco and 400 cigarettes. Unlike many of this type of case, there was no underdeclaration by any of them of the amount of tobacco imported. We find that the Appellant himself was a frequent traveller. It is admitted by him that he did not mention that he had made two trips in December 2001. However, he made no secret of the fact that he had travelled in February, December, and the previous September. We do not consider that the mere omission of one of five trips over the previous six months establishes that the Appellant was attempting to conceal from the officer that he was a frequent traveller, particularly since he mentioned months only and not the days of the month. However, it is clear from those facts that the Appellant had plenty of opportunity to purchase and import any quantity of tobacco products. But that is true of anyone who travels across the Channel, whether for the first or the twentieth time. It is also the case that there was no evidence either before us nor before Mr McEntee that the Appellant had ever previously imported large quantities of such goods, nor had he ever been stopped before. His evidence was that he normally brought in 25 pouches and 400 cigarettes, and that on some of his trips he brought in no tobacco.
30. The circumstances surrounding Peter Watkins and Richard Watkins is undoubtedly relevant. We find that neither of them was employed, and each was receiving benefit. That would tend to suggest that each of them was of limited means such that travelling frequently to Belgium might be beyond their means and that laying out some hundreds of pounds on tobacco would also use up their income for some weeks. The fact that one of them had a loan and used the money borrowed for the purchase of tobacco instead of the holiday which he had had in mind is curious. Evidently the lender considered that he had sufficient financial stamina to service that loan, though a weekly outgoing of £5 from a man who is unemployed and receiving a small amount of benefit must have been something of a burden. On the other hand, if he is an inveterate smoker, it is obviously preferable to pay in Belgium about a quarter of what he would pay in Britain for his tobacco. If he spent some £250 on tobacco in Adinkerke, the probability is that the same amount would cost him nearer to £1,000 in Britain.
31. Significant elements in Mr McEntee's review, and upon which his decision is based, were his subjective view that the Appellant and the other two travellers would necessarily behave in the way which he considered acceptable. He considered it implausible that the Appellant (and others, not always the same companions) should travel from Wales to Belgium, at a cost of £125, to buy less than £90 worth of tobacco. But that outlay, divided by three or four, depending upon the number of travellers, together with the cost of the goods, would amount to a small proportion of what it would cost to walk round the corner in Britain and buy tobacco or cigarettes in a shop. He said that he very much doubted that the Appellant only purchased 25 pouches on his previous trips, although there was no evidence that more had been bought. Again, Mr McEntee found it incredible that Peter Watkins would spend £244 out of a sum that he had borrowed in order to buy tobacco, even though that tobacco was so very much cheaper in Belgium than in Britain. There seems little difference between spending a borrowed sum on a holiday, after which there is nothing to shew for it, and on tobacco which is procured for consumption. It seems to us that what Peter Watkins said was at least capable of belief: not everybody conducts his financial affairs with prudence and good sense. All in all, he found the information given by all three travellers highly implausible. There was perhaps some ground for doing so as far as Peter Watkins was concerned, since he had been stopped previously and had underdeclared the amount of tobacco and cigarettes being imported. But that would be more significant if there had been any underdeclaration in the present case. One cannot say that simply because a person lied on one occasion that he has necessarily done so on another.
32. It was the Appellant's case that the reasons for the decision were based on assumption and surmise, and it appears to us that that is true of at least some of the basis for the decision. It was also the fact that, if the Appellant is to be believed, he had imported a larger quantity than usual because his father had been allowed to bring in one box of tobacco. This was unchallenged, although it was said for the Commissioners that no records were kept where a person is allowed to proceed with his goods and that they could not confirm or deny it. If that is the case, then it would supply an explanation for the Appellant bringing in that same amount, being a considerably larger amount than usual. It seems to have been accepted by Mr McEntee that the Appellants father had brought in a box of tobacco, since he included, as part of the reasons for his decision, the statement that "Your father obviously did not feel constrained by the guide levels when he purchased a box of tobacco on his last trip and I very much doubt that you only purchased just 25 pouches on each of your previous trips." That is a statement with no basis in evidence. His father's attitude can have no bearing upon the Appellant's conduct on another occasion unless, as it appears to us, his having been allowed through Customs with 6 kg really did suggest to the Appellant that importing that amount was permissible. The matters relied upon in respect of Richard Watkins appear to be confined to the fact that he was unemployed and had had previous opportunities of importing moderate amounts of tobacco. Again, there is no evidence of what, if anything, he actually did import on earlier trips.
33. Mr McEntee's conclusion (see paragraph 12 above) is based upon his subjective views which have no evidential foundation. It appears to us that they are not necessary inferences from established facts either. It does not appear to us to be true that the only conclusion that can be drawn from such facts as there are is that the goods were imported for the purpose of sale for a commercial profit. It seems to us that more is required before a subject is deprived of his property, or before he is required to pay a substantial sum in order to recover his own property. Applying the test of reasonableness set out in Wednesbury and Corbett, we find ourselves drawn to the conclusion that the decision included and in part depended upon the consideration of matters which were not relevant. Matters of surmise for which there is no evidence cannot be relevant to such a decision. For that reason, in our view, the decision was not reasonable.
34. For the above reasons, we allow this appeal. We direct that the Commissioners shall carry out a further review of the decision to impose the condition upon restoration, taking into account in particular the matters set out in paragraphs 29 to 32 above. That further review should be completed not later than 42 days after the date of release of this decision. If it should be adverse to the Appellant it will give rise to a new right of appeal, should the Appellant be so advised.
35. At the end of the hearing each of the parties declared the intention of not seeking costs. Accordingly, we give no direction as to costs.

ANGUS NICOL

CHAIRMAN

RELEASED: 14 January 2004

LON/02/8179