United Kingdom VAT & Duties Tribunals (Excise) Decisions

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Cite as: [2004] UKVAT(Excise) E696, [2004] UKVAT(Excise) E00696

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O'Hara v Customs and Excise [2004] UKVAT(Excise) E00696 (16 April 2004)

EXCISE DUTY – restoration of car and excise duty goods – car already restored to hire purchase company and so restoration impossible – other goods considered to be for commercial use – decision not unreasonable – appeal dismissed

LONDON TRIBUNAL CENTRE

IAIN O'HARA Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: DR JOHN F AVERY JONES CBE (Chairman)

RICHARD CORKE FCA

Sitting in public in Cardiff on 1 April 2004

The Appellant in person

David Manknell, counsel, instructed by the Solicitor for the Customs and Excise for the Respondents

© CROWN COPYRIGHT 2004

DECISION

This is an appeal by Iain O'Hara against a decision on a re-review (carried out following the Court of Appeal decision in Hoverspeed) not to restore a car and excise goods which had been seized on 28 January 2001. The Appellant appeared in person; the Commissioners were represented by Mr David Manknell.

We heard evidence from the Appellant and from the reviewing officer Mrs G M Hurrell. We find the following facts.

(1) The Appellant was stopped by officers in Coquelles on 28 January 2001 driving a Rover 416 registration R466 NAV. He was travelling with his brother-in-law, Mr C K F Osterman.

(2) His initial reply on being asked what he had bought was a box of cigarettes, a few loose cartons of cigarettes and some tobacco. Mr Osterman said he had bought about the same amount. A search revealed that the car contained 18.5 kilos of hand rolling tobacco, 14,320 cigarettes, 27 litres of wine, a bottle of brandy and 25 cigars, of which 8.5 kilos of tobacco, 13,800 cigarettes, 18 litres of wine, the cigars and the brandy belonged to the Appellant, and the balance belonged to Mr Osterman, except that neither claimed to own 3 kilos of tobacco. The Appellant stated at the hearing that these belonged to Mr Osterman but he had been unable to produce the receipts at the time. We have insufficient evidence to find this as a fact. The cost of the Appellant's excise goods was about £1,600. The duty was £4,580.99 including VAT.

(3) The Appellant's initial reply was that he had owned the car for about a year. At the subsequent interview he said that he had acquired it the previous August. The sale invoice is dated 27 August 2000.

(4) His initial reply was that he had last travelled in September or October. At the subsequent interview he agreed with the officer that he last travelled on 18 December (the notes of interview show that he volunteered the date but it is more likely that the officer put the date to him having checked the records for the car). He travelled to Germany every 4 to 6 weeks. There were 5 trips in the car since August 2000 and 4 previous trips in his previous car, a jeep.

(5) He and his ex-wife smoked 120 cigarettes a day between them (at the hearing he reduced this to 100). The higher figure implies that the 11,000 cigarettes would last 13 weeks. He also claimed that the 8.5 kilos of tobacco, comprising three different brands, were for himself, and that he smoked 1½ pouches of tobacco per week, which means that it would last 113 weeks (2 years and 2 months). At the hearing he explained that he only smoked tobacco when he had run out of cigarettes.

(6) His mother, who is disabled, and stepfather paid the cost of 2,000 of the cigarettes.

(7) His income was a profit of £200 per week, after tax, as a self-employed taxi-driver and he also received mobility allowance of £150 per month. He had received £5,000 compensation for an injury the previous March or April and £500 from the Criminal Injuries Compensation board the previous October. He had £8,000 of stock from an ice cream business that he had sold in May 2000. At the hearing he explained that the majority of the stock had been sold by the time of the trip in question.

(8) He normally purchased 10,000 cigarettes for himself and his wife on each of his previous trips.

(9) He owed £9,037.48 to Lloyds UDT in respect of the car which he found out they had sold for £300. He produced a statement of account which does not show the proceeds of sale of the car.

(10) The trip in question was the last time he was going to make regular trips to Germany and so he bought more than normal because of the savings.

(11) Mrs Hurrell considered from information provided by the manufacturer that tobacco has a shelf-life of up to 18 months.

The re-review decision of 15 January 2003 was to the effect that the car had already been restored to Lloyds UDT who had had requested restoration producing proof of ownership, which the Commissioners had granted. It could not be restored to the Appellant. The 2,000 cigarettes, comprising about 7 per cent of the total duty, for his mother and stepfather were accepted to be goods for family and not for profit. The consequence was that they were not for own use and liable to forfeiture. The excise goods were also liable to forfeiture as being found, mixed or packed with the goods for the family (section 141 Customs and Excise Management Act 1979). The statements about personal use were not credible and so the goods would not be restored as there were no exceptional circumstances.

The Appellant contended that the cigarettes and tobacco apart from those for his mother and stepfather were for his and his ex-wife's personal use. He liked a change in the brands he smoked. He was not obliged to declare the goods to the officer as they were for personal use. He agreed that by the time of the trip in question he had acquired about a year's supply of cigarettes on all the previous trips and that after the cigarettes were finished the tobacco would last him a further two years. He considered that the tobacco would last that time and could be moistened again if it dried. He had sufficient funds to pay for the goods on this and the previous trips without selling them.

Mr Manknell for the Commissioners contended that the Appellant had tried to mislead the officers about the quantity of goods in the car, the date of the previous trip (which if he travelled every 4 to 6 weeks he could not have thought was in the previous September or October), and the length of time he had owned the car (which he could not have thought was a year before when it was five months before). It was not credible that these quantities of tobacco and cigarettes were for his and his ex-wife's own use. The three varieties of both cigarettes and tobacco also suggested that they were not for his own use. The expenditure was out of proportion to his income, although he accepted could have been made out of his assets.

Our power in this appeal is solely to review the reasonableness of the review decision in the light of the information available at the time (section 16(4) of the Finance Act 1994).

Having heard the evidence we agree with Mr Manknell that it is not credible that this quantity of cigarettes and tobacco, particularly three varieties of each, were for personal use. We doubt that by the end of the 3 year period (one year for the cigarettes and a further 2 years 2 months for the tobacco) that his consumption implied, the tobacco would be usable. We accept that he did have sufficient funds to make the acquisitions although we agree with Mr Manknell that the amount seems out of proportion to his income. The untrue answers that he initially gave to the officers over the quantity of goods, the date of acquisition of the car, and the date of the previous trip all suggest that the Appellant was trying to hide something.

So far as the car is concerned the re-review concluded that since it had already been restored to Lloyds UDT as the owner it could not be restored to the Appellant. If it could have been restored to him, an appropriate outcome might have been to restore it for a payment equal to the duty. In our view, the Commissioners having restored the car to Lloyds UDT, this is the only decision that the review could have reached, and so there is nothing unreasonable about the decision. A car can be restored only to its owner, which was Lloyds UDT. We have considerable sympathy with the Appellant finding himself continuing to owe them £9,037.48 and he does not seem to have been given any reduction for the sale price of £300, but that is not a matter between the Appellant and the Commissioners who have very properly restored the car to its owner. If the Appellant has any remedy it will have to be against Lloyds UDT and be pursued elsewhere. We have no power to award any compensation in respect of the sum owing.

As to the excise goods, the re-review concluded that the goods for his mother and stepfather, which were conceded to be commercial, might prevent the rest of the goods being restored, but the review did not rely solely on this. It finds that the remaining goods are likely to be held for a commercial purpose. We cannot see anything unreasonable in this conclusion, particularly in the light of the three incorrect answers given to the officers. It is the same the same conclusion that we would have reached.

Accordingly we dismiss the appeal.

J F AVERY JONES

CHAIRMAN

LON/03/8139