United Kingdom VAT & Duties Tribunals (Excise) Decisions

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Cite as: [2004] UKVAT(Excise) E00689, [2004] UKVAT(Excise) E689

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Treverton v Customs and Excise [2004] UKVAT(Excise) E00689 (05 April 2004)

RESTORATION OF GOODS — reasonableness of decision not to restore — proportionality — appeal allowed

MANCHESTER TRIBUNAL CENTRE

ANTHONY TREVERTON Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: Miss J Warburton (Chairman)

Mr N H Phillips

Sitting in public in Manchester on 11 March 2004

The Appellant did not appear and was not represented

Ms M Mayoh of Counsel by the Solicitor for HM Customs and Excise for the Respondents

DECISION

This is an appeal by Anthony Treverton against a decision to refuse to restore cigarettes and spirits seized at Portsmouth Harbour on 21 June 2003. The decision on review not to restore is contained in a letter dated 5 September 2003.

The Commissioners were represented by Ms M Mayoh of counsel instructed by the solicitor for the Customs and Excise. The Commissioners put in a bundle of copy documents. No one appearing on behalf of the Appellant, the tribunal determined to proceed under rule 26(2) of the Value Added Tax Tribunal Rules 1986.

The issue in this case is the reasonableness of the decision of the Commissioners to refuse to restore 4,800 cigarettes and 18.60 litres of spirits to the Appellant.

The documents before the Tribunal included a witness statement from Graham Crouch, an officer of Customs and Excise, who undertook the review of the decision together with copies of the notebook of the officer who seized the goods. We also had two copy letters from the Appellant to the Commissioners setting out his explanation of the purchase and transportation of the goods.

The basic facts appearing from the documents are straightforward. A Mr Leeder, driving a lorry, was stopped at Portsmouth Harbour on 21 June 2003. In addition to declaring his own goods, he declared that he had cigarettes and spirits belonging to the Appellant. The Appellant had been working with him in Spain but had flown back earlier. A receipt was produced for the Appellant's goods which was a VISA copy signed by the Appellant with a contact telephone number for the Appellant written on the reverse in case of queries about the goods. Officers seized the 4,800 cigarettes and 18.6 litres of spirits as the goods had not been transported into the country by the Appellant personally.

The Appellant wrote requesting restoration of the goods in a letter received by the Commissioners on 10 July 2003 that set out the circumstances surrounding the purchase. Restoration was refused by letter of 28 July 2003. The Appellant requested a review of that decision by a letter dated 5 August 2003 which repeated the details in the letter of 10 July 2003.

The review was carried out by Mr Crouch on 5 September 2003 who set out his decision to confirm non-restoration in a letter of the same date. His grounds for refusing restoration were that the goods had not been transported by the Appellant which was a breach of legal requirements for relief from excise duty. Under the Commissioners' policy failure to comply with legal requirements was sufficient reason not to order restoration. There were no exceptional circumstances which would warrant restoration.

In correspondence, the Appellant, who works for a transport company, set out that, unusually, he was required to work on a trip to France and Spain. Before going he checked with other employees how many cigarettes and how much alcohol he could bring back and also checked the Commissioners' website. The relevant pages are attached and make no reference to the need for self-transportation. As he was not needed for further work on the trip with the lorry he was flown back by his employers. He left the goods he had purchased in Southern Spain to be brought back by the lorry driver and also left his receipt with the driver. The Appellant stated that he had saved up for the goods and paid for them on his own VISA card.

Alcoholic drinks and cigarettes and tobacco are liable to excise duty on importation into the United Kingdom - Alcoholic Liquor Duties Act 1979, s.5 and Tobacco Products Duty Act 1979, s.2(1). There is an exception, and no liability to duty, where goods are acquired for personal use and transported by that person into the United Kingdom - the Excise Goods (Holding, Movement, Warehousing and REDS) Regulations 1992, as amended, reg. 4(1A) and the Tobacco Products Regulations 2001, as amended, reg.12 (1A).

The Commissioners are empowered by the Customs and Excise Management Act 1979 (CEMA) section 49 to forfeit dutiable goods which have been imported or held without payment of duty. All such goods are liable to seizure pursuant to section 139 of CEMA. Such powers must, however, be exercised with due regard to proportionality as they involve the deprivation of a person's property. In the case of goods imported on a not-for-profit basis for friends or neighbours regard should be had to scale of importation, whether it is a 'first offence', any attempts at concealment and hardship in determining whether to forfeit goods – see Lindsay v Customs and Excise Commissioners [2002] STC 588 paras. 52 and 64.

Section 152(b) of the 1979 Act allows the Commissioners as they think 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 of the Finance Act 1994. A holder of goods may appeal against a review decision of the Commissioners taken under section 15 to the Tribunal. The Tribunal's powers on appeal are, however, limited by Section 16(4) to directing that the Commissioners' decision shall cease to have effect, to directing that a further review be carried out or, if the latter is no longer possible, declaring the decision to have been unreasonable. On appeal it is for the Tribunal to consider that the response is proportionate in any case – see R (Hoverspeed Limited) v Customs and Excise Commissioners [2002] 3 WLR 1219 at paras 130(10) and 196.

Ms Mayoh for the Commissioners submitted that the decision on review of 5 September 2003 not to offer restoration was reasonable. It was a proportionate response. Evidence that the Appellant did not realise he must transport goods himself to be exempt from duty was not a reason for the Commissioners to depart from their policy; ignorance of the law did not amount to exceptional circumstances.

The Tribunal's jurisdiction under section 16(4) of the Finance Act 1994 is not one to try again the original decision to forfeit but to consider whether the decision on review not to restore goods is one that the Commissioners could not reasonably have come to.

It is generally accepted that the test of reasonableness requires the Tribunal to ask:

is this a decision which no reasonable panel of Commissioners could have come to?

has some irrelevant matter been taken into account?

has some matter which should have been taken into account been ignored?

has there been some error of law?

(see Customs and Excise Commissioners v J H Corbitt (Numismatists) Ltd [1980] STC 231; Associated Provincial Houses Ltd v Wednesbury Corporation [1948] 1KB 223)

It is clear from the letter of 5 September 2003 that Mr Crouch considered all the evidence available to him when he reviewed the decision. He does not appear to have considered any irrelevant matters. The question remains as to whether the decision not to restore the goods was a proportionate response.

The factors relevant when considering proportionality in relation to not-for-profit importation for friends were set out in the Lindsay case (see para 10 above). Failure to self-transport goods intended for personal use is an analogous situation. A similar list of factors to those in the Lindsay case appears in the Commissioners' letter of 28 July 2003; the original decision to refuse restoration. The evidence in this case is that the Appellant purchased the goods with his own funds for his own use, that he was not aware he was doing wrong by asking his fellow employee to transport the goods, that there was no attempt at concealment and that the quantity of goods was not large. There is no evidence that the Appellant had previously been involved in smuggling. There is no reference to any of these factors, other than rejection of the argument of lack of knowledge of the law, in Mr Crouch's decision. Accordingly we find that Mr Crouch did not consider all relevant factors in relation to proportionality when making his decision and allow the appeal.

Under the power in section 16(4)(b) of the Finance Act 1994 we direct as follows:

(1) that the Commissioners' conduct a further review of the decision to refuse restoration of the goods and serve the same on the Appellant and the Tribunal within 45 days of the release of this Direction

(2) that the review be conducted by an officer not previously involved and that the review shall take account of the factors set out in para 16 above.

Ms Mayoh made an application for costs in the sum of £141, her brief fee. In the circumstances we make no direction as to costs.

MISS J WARBURTON

CHAIRMAN

Released:

MAN/03/8152