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United Kingdom VAT & Duties Tribunals (Excise) Decisions

You are here: BAILII >> Databases >> United Kingdom VAT & Duties Tribunals Decisions >> United Kingdom VAT & Duties Tribunals (Excise) Decisions >> Peace v Customs and Excise [2004] UKVAT(Excise) E00701 (23 April 2004)
URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2004/E00701.html
Cite as: [2004] UKVAT(Excise) E701, [2004] UKVAT(Excise) E00701
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Frank Peace v Customs and Excise [2004] UKVAT(Excise) E00701 (23 April 2004)

    RESTORATION — trip by four retired men — large quantity hand rolling tobacco bought to be shared between them — own use — deemed decision —Commissioners acted unreasonably — appeal allowed.

    MANCHESTER TRIBUNAL CENTRE

    FRANK PEACE Appellant

    - and -

    THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

    Tribunal: Mr D S Porter (Chairman)

    Mrs M C Ainsworth (Member)

    Sitting in public in Manchester on 17 March 2004

    Mr Edwards of counsel for the Appellant

    Mr J Vinson of counsel for the Respondents

    © CROWN COPYRIGHT 2004


     

    DECISION

  1. This is an appeal by Frank Peace (the Appellant) against a deemed decision of the Commissioners of Customs and Excise refusing to restore certain excise goods and a Fiat Uno motor car reg. M 893 LKH seized on 27th June 2001. The Appellant states that the trip had been for the purpose of buying hand-rolling tobacco for four people making the trip. They had pooled their resources and purchased the goods for their own use. The Respondents believe that in view of the quantity of the goods involved that they had been purchased for the purpose of reselling them and had not been acquired for the parties' own use.

    2. The Parties
  2. Mr Vinson of counsel appeared for the Respondents and produced a bundle of documents for the Tribunal, and called Miss Ross (now Bailey), Mr Baldwin and Mr Benton. Mr Edwards of counsel appeared for the Appellant and called the Appellant, Mr Goulding and Mr Wrigley. All witnesses took the oath.

    3. The Facts
  3. Mr Peace, Mr Goulding, Mr Wrigley and Mr Grimshaw who did not attend the Tribunal) decided to go to Belgium to buy hand-rolling tobacco for each of them. (Mr Peace's statement appears at page 94 in the bundle). Mr Peace stated that they had shared the £30 cost of the ferry and that he had bought 120 packs of hand-rolling tobacco, which cost him £224. He smokes 30 to 40 cigarettes a day. He thought that the Tobacco would last him and his wife about 6 months. At the interview (see page 38 of the bundle) he indicated that he had no savings. In his statement he states that he saved money at his Working Man's Club Account. He paid 50p per week and usually saved a further £10 each week. His income was £121 per week as he was paying off a debt for a loan he had had to make when his wife's handbag had been stolen. He had borrowed the money for the trip and tobacco from his mother-in-law who he would pay back on a weekly basis. He had been asked if he had been stopped on a previous occasion. Mr Peace thought the Customs Officer had meant on a return trip and he stated he had not. It transpired at the tribunal that he had been stopped previously. The Respondent produced a computer print out of an alleged trip on 21/02/2001. Mr Vinson, of counsel, was unable to verify where the print out had come from; who had made it; and whether the reference to "Where Ferry/Train From: Franc. Port of departure: Cal UK port of arrival: Dov" meant the Train was in bound or out bound. Mr Peace and Mr Wrigley were both adamant that they had been stopped on an out-bound journey in February. Mr Peace knew how many goods he could bring in, but believed that he could bring as much as he liked for his own use.

  4. He had been made redundant and had persuaded his wife, against her better judgment, that they should buy the car, which had now been seized. He had to look after an elderly Mother and his Mother and Father–in-law, which was proving very difficult without a car.

  5. Mr Leonard Wrigley had accompanied Mr Peace. (His statement appears at page 96 in the Bundle). He bought 120 packets of Samson tobacco, as did the other two members of the party. He, his wife and his son had been saving for sometime and he used the money to buy the cigarettes for the three of them The family smokes about five packets a week between them and expected the tobacco to last them about eight months. He does not work and he receives £213 mobility allowance each month and £126 per week. His wife gets £15 per week. His son contributes £10 to the family as he lives with him. He had been to France/Belgium in February and bought eight packets of ten cigarettes then.

  6. Mr Wrigley needs to use a nebuliser every four hours. He attempted to get back into the car, which had been seized, in order to plug the nebuliser into the cigarette lighter point, but was pulled out by the Police, who had been called to assist the Customs Officers. Mr Benton the Customs Officer allegedly said that Mr Wrigley was not to "try the sympathy vote" and that if Mr Wrigley "walked through the door and dropped dead, he would not shed a tear".

  7. Mr Kenneth Goulding confirmed that the three of them had been saving for some two months to go on a trip to Belgium to buy tobacco for themselves and their wives. This was the first time that he had been abroad. He and his wife smoke about 4 packets of tobacco each week. He could roll about 100 cigarettes if he used a machine and the supply would last them approximately thirty weeks. He and his wife had about £60 to spend on them selves each week. They had neither rent nor rates to pay and shopped at the charity shops.

  8. Miss Ross confirmed that she had stopped the Appellant and his friends who all told her how much tobacco they had and produced the receipts. They had not been evasive. Mr Baldwin had interviewed Mr Goulding and denied that he and his colleagues had been unpleasant. He confirmed that he had had to call the police to remove all of them from the building and Mr Wrigley from the car.

  9. We find as fact the matters set out in paragraphs 3 to 7 above.

    10. The Law
  10. The Excise Duties (Personal Reliefs) Order 1992 as amended at article 3 states:-

    11. "Subject to the provisions of this Order a community traveller entering the United Kingdom shall be relieved from the payment of any duty of excise on excise goods which he has obtained for his own use in the course of cross-border shopping and which he has transported"

    "Own Use" is defined in the Order as:-
    "Own Use" includes use as a personal gift provided that if the person making the gift receives in consequence any money or money's worth (including any reimbursements of expenses incurred in connection with obtaining the goods in question) his use shall not be regarded as own use for the purpose of this Order."
    • The Commissioners may require the person to satisfy them that the goods are not being held for commercial purposes.
  11. My virtue of The Customs and Excise Management Act 1979 any vehicle which has been used for the carriage of the goods is also liable to forfeiture, although the Commissioners may restore the vehicle on such terms as they think proper.

  12. Paragraph 2 of Article 9 of the Council Directive 92/12/EEC provides the criteria which must be taken into account in establishing whether or not the products are intended for commercial use:-

    • The commercial status of the person holding the products, and his reason for holding them
    • The place where the products are located or, if appropriate, the mode of transport used
    • Any documents relating to the products
    • The nature of the products
    • The quantity of the products
    Summing up
  13. Mr Vinson summed up by stating that the Appellant and his colleagues had had a substantial quantity of hand-rolling tobacco. Mr Wrigley had received payment from his son and wife and could not therefore claim that the goods were for his own use and they were correctly seized. Although the review was out of time there was substantial evidence that the goods were to be used for commercial purposes. The amount of hand-rolling tobacco substantially exceeded the guidelines; the tobacco was all of the same brand; the amount that the individuals smoked meant that the tobacco would last a very long time; The Appellant was unemployed; had a substantial loan for the loss of his wife's handbag, but was still minded to borrow even more money from his mother-in-law; The Appellant had denied at interview that he had any savings, when in fact he had savings at his club; He denied having been stopped before when it was apparent that he had been stopped in February and knew the details of the guidelines for bringing goods into the United Kingdom. In all the circumstances his story was not credible and it was reasonable for the Respondents not to restore the goods. Further there appeared to be no special circumstances, which would warrant the return of the motorcar. The car was valued at £1500 and the duty was in excess of £2800. The appeal should be dismissed.

  14. Mr Edwards advised that the Appellant was legally aided and summed up by saying that the Respondents had no grounds to stop the Appellant and his colleagues. The case of Commissioners of Customs and Excise V The Queen on the application of Hoverspeed and others C/2002/1743 (Hoverspeed) made it clear that the burden of proof was on the Respondents to show that they had reasonable grounds upon which to stop the Appellant. No such grounds existed nor had there been any evidence given as to why the Appellant had been stopped. In the circumstances the burden of proof had not been satisfied and the seizure was illegal.

  15. Four friends aged between 56 and 67 and living in the Doncaster area had decided to go to Belgium to buy the cheapest hand-rolling tobacco. The object of the trip was to save money in the long term. At interview they had not attempted to hide anything and they had all been very candid both then and before the Tribunal. They had been treated like criminals and the Appellant had had cause to raise a complaint about the behaviour of the customs officers at the time of the seizure. The appeal should be allowed and the case remitted to the Respondents for a further review.

    16. The Decision
  16. My colleague and I have considered the evidence and allow the Appeal. We are satisfied from the evidence that we have heard that the Appellant and his colleagues had purchased the hand-rolling tobacco for their own use. We accept that they have little money but that they genuinely intended to buy the tobacco for their own use. We are unimpressed by the suggestion that as Mr Wrigley had used money supplied by his wife and son, the goods could not have been purchased for Mr Wrigley's own use. It is not uncommon for families to save together on the basis that the money belonged to all of them. We are satisfied that Mr Wrigley rightly treated the money as his own.

  17. Mr Edwards argued that as the Respondents had given no evidence as to why the Appellant had been stopped the seizure was invalid as the burden of proof since the Hoverspeed case lay with the Respondents. Lord Justice Mance summarized the position with regard to the burden of proof. He stated at clause 55 on page 24 of the decision as follows :-

    18. "The seizure of the cigarettes, tobacco and alcohol from the three individuals in this case cannot be regarded as axiomatic invalid, merely because it occurred as a result of a check which was invalid"

    he also remitted to the divisional Court for further consideration any claim any of the individuals may have under European Community Law or the Convention on Human Rights for damages arising from the invalid check.

    Any potential damages arising from the invalid check are not matters with which this Tribunal can concern itself. Our powers are limited by section 16(4) of the Customs and excise Management Act 1979 to:-

    (a) 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) Require the Commissioners to conduct, in accordance with the directions of the Tribunal, a further review of the original decision; and
    (c) In the case of a decision which has already been acted on or taken effect and cannot be further remedied by a further review, to declare the decision to have been unreasonable and to give directions to the Commissioners as to the steps to be taken for securing that the repetitions of the unreasonableness do not occur when comparable circumstances arise in the future.
  18. We note that there was extensive correspondence with the Adjudicator's Office with regard to the treatment that the four of them had received on their return from the continent. Having heard the evidence of Mr Brenton we are by no means satisfied that his behaviour was other than described by the Appellant and his colleagues.

    19. a. THIS TRIBUNAL HEREBY DIRECTS under section 16(4)(b) of the Finance Act 1994:-

  19. that the Commissioners do conduct a further review of the decision to refuse restoration of the goods and the vehicle and serve the same on both the Appellant and the Tribunal within 30 days of the release of this direction

  20. that the Review be conducted by an officer not previously involved, and shall be on the basis of the finding by the Tribunal that the goods were held for the Appellant's own use and shall consider whether restoration should be made in the form of compensation and if so shall specify the amount of compensation and the basis of the calculation

  21. that the Review officer shall take account of any further material or representations made by the Appellant within 14 days to 31 Devon Court Denaby Main Doncaster DN12 4HY

  22. that the Appeal is determined on the above basis and the Appellant is entitled to apply within 60 days of the release of the direction for costs that if dissatisfied with the Review the Appellant will have a further right of appeal to this Tribunal

  23. Costs are awarded to the Appellant to be agreed between the parties on a legally aided basis and failing agreement to be referred back to this Tribunal.

    24. MR D S PORTER
    CHAIRMAN

    MAN/01/8309

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