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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 >> Walsh v Customs and Excise [2004] UKVAT(Excise) E00710 (10 May 2004)
URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2004/E00710.html
Cite as: [2004] UKVAT(Excise) E00710, [2004] UKVAT(Excise) E710
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Mary Janet Walsh v Customs and Excise [2004] UKVAT(Excise) E00710 (10 May 2004)

    EXCISE DUTIES — travellers importing goods liable to seizure — goods and car used for transport seized — whether refusal to restore car reasonable — yes — appeal dismissed.

    MANCHESTER TRIBUNAL CENTRE

    MARY JANET WALSH Appellant

    - and -

    THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

    Tribunal: Colin Bishopp (Chairman)

    Mrs M P Kostick FCA ATII (Member)

    Sitting in public in Manchester on 29 April 2004

    The appellant appeared in person

    Joshua Shields of counsel, instructed by the Solicitor for Customs and Excise, for the

    respondents.

    © CROWN COPYRIGHT 2004


     

    DECISION

  1. This is the appeal of Mrs Mary Walsh against the respondents' refusal, upheld on review, to restore to her a Vauxhall Vectra car which had been seized from her son Joseph at Dover on 12 January 2002. On that day, Joseph Walsh was accompanied by a friend, David Thomas. They had with them, when intercepted on arrival at Dover, quantities of excise goods which they had bought on the continent and were bringing to the United Kingdom. The Commissioners took the view that they had the goods for commercial purposes, that is for resale, and that they were consequently liable to forfeiture. They accordingly seized the goods and the car with them.

  2. The seizure of the goods is not being challenged, and no request for restoration has been made. No condemnation proceedings in respect of the car were instituted, but its restoration was requested, originally by Mr Walsh. It was, however, Mrs Walsh who requested a review of the refusal to restore which resulted from her son's request and it is to her that the review decision, set out in a letter 16 May 2003 written by Jeremy Tooke, was addressed. Despite that, not only Mrs Walsh but also her son and Mr Thomas appealed but it was clear that it was possible for only one of them to do so. At an earlier hearing it was determined that Mrs Walsh, who was not only the recipient of the review letter but also the registered keeper of the car, should be the sole appellant. The appeals of her son and Mr Thomas were struck out and accordingly the only appeal before us was that of Mrs Walsh.

  3. When they arrived at Dover Mr Walsh and Mr Thomas had in their possession 12.5 kilograms of hand rolling tobacco, 9360 cigarettes and 2 litres of spirits. We do not know why they were stopped. Although Joshua Shields, counsel for the respondents, suggested that there was some inconsistency between Mr Thomas and Mr Walsh in their replies to the Customs officer who stopped them about the quantity of goods in their possession and their ownership, we were not satisfied that this contention was made out or, at least, that there was any intention to deceive. It is true that the officer's notebook suggests that Mr Walsh, when first questioned, declared the hand rolling tobacco and whisky but no cigarettes while Mr Thomas said he had cigarettes. However, we bear in mind that the notebook is no more than a summary of a conversation between three people at a time when the officer was leaning through the car window in order to speak to its two occupants. In our view it is dangerous to read too much into a note of an interview conducted in those circumstances, even if (as in this case) Mr Walsh signed it as a correct record. The goods themselves were located in the boot of the car, and the respondents did not suggest there had been any attempt to conceal them.

  4. However, when they were examined it was discovered that the packaging of some of the tobacco indicated that the excise duty on it had been paid in Luxembourg. Both Mr Walsh and Mr Thomas denied that they had travelled to Luxembourg; the tobacco had, they said, been bought in Ostende. They produced receipts (in fact only credit card slips) from a retail outlet in Ostende in support of their contention. Among the documents produced to us were copies of the outbound and inbound ferry tickets which they had also handed over; it was quite clear they had been on the continent for only a short time, and could not possibly have travelled to Luxembourg and back. The respondents did not produce any evidence to support their contention that the tobacco had borne Luxembourg duty, but the contention was not challenged and we cannot imagine that it has been invented. If the Commissioners are right the tobacco is certainly liable to seizure since it could not come with the relieving provisions of the Excise Directive (Council Directive 92/12/EEC, article 8) which entitle a traveller to buy excise goods for his own use in one Member State of the European Union and then transport them to another; for the relief to be available the goods must have borne duty in the country of purchase, in this case Belgium. However, we accept the evidence which we heard from Mr Walsh about the purchase of the goods. We are quite satisfied that he was unaware that the tobacco had borne Luxembourg duty and we accept too that he did not understand until it was explained at the hearing what the significance of that fact was. We are satisfied that Mr Walsh bought the tobacco from what appeared to be a legitimate retail outlet and not, as sometimes happens in such cases, from a trader selling goods in a car park.

  5. When he was first asked at Dover about the ownership of the car, Mr Walsh said that it was his. A little later, when the question was repeated, he said that the owner was "my mum – it is registered to her as I am under 25 and the insurance is cheaper." The first request for restoration of the car was made by Mr Walsh in a long letter which, although undated, was obviously written within a few days of the seizure. In that letter Mr Walsh repeatedly referred to the car as his, although he mentioned that his mother made use of it. The Commissioners took his letter as one requiring them to commence condemnation proceedings, but Mr Walsh later indicated that he did not wish to pursue that route and the intended proceedings were abandoned.

  6. Towards the end of January 2002 Mr Walsh wrote again, asking on this occasion for the restoration of what he referred to as his car. Although, again, he mentioned his mother's use of the car, he described it throughout as his own and he sent with his letter another from his aunt, supporting his claim that he had great need of the car – which she also described throughout as his – in order to travel to work (as he works shifts), and also in case his grandmother, who is elderly and disabled and to whom he is geographically the nearest family member, should require urgent assistance.

  7. Thereafter, however, the Commissioners asked for evidence of ownership and the vehicle's registration document (V5) was produced, showing Mrs Walsh as the registered keeper. It was for that reason she was treated as the person seeking the review. We add in passing that the Commissioners' insistence, manifest in this case, that only the true owner of a vehicle may seek its restoration seems to us misplaced and quite inconsistent with the terms of section 152(b) of the Customs and Excise Management Act 1979 and of paragraph 2(1)(c) of Schedule 5 to the Finance Act 1994. Nevertheless the fact that Mrs Walsh rather than her son is be regarded as the person seeking restoration does not affect the outcome of this appeal.

  8. The evidence we heard from Mrs Walsh and her son was that Mr Walsh had bought the car for the benefit of his mother. He had done so with the assistance of a hire purchase agreement, a copy of which was in the bundle of documents we had, but it was always intended that the vehicle should belong to Mrs Walsh. She was the registered keeper of it (although we observe from the V5 that Mr Walsh had been the registered keeper for a few weeks before the registration was transferred to his mother) and she was indeed the keeper of it since, when the vehicle was not in use, it was normally kept at her home, which is some distance from her son's home. She would often take him to work and then use the car for her own purposes during the day. Sometimes, but by no means every day, he would use the car in the evenings and he might keep it at his own home overnight; but Mrs Walsh took pains to tell us that she was the owner and principal user of the car. Her son agreed with that account and told us also that should his grandmother require urgent assistance, and the car with which we are concerned was not available to him, he could quite easily borrow one from his brother in law, or his father in law, both of whom live near to him or, if that were not possible for some reason, take a taxi. In other words, although he would use the car for the purpose of assisting his grandmother if it were available to him, it was not essential to him for that purpose.

  9. It was apparent from the evidence we hear from Mr Tooke and from his review letter itself that the factors which weighed most heavily on his mind were, first his conclusion that this was a commercial importation and, second, his belief, despite what was ultimately said, that the true owner of the car was Mr Walsh. Since nothing had been shown which could amount to exceptional circumstances justifying the restoration of the car he felt he had no choice but to uphold the refusal to restore it.

  10. In reaching his conclusion that this was a commercial importation he took into account the apparent lack of frankness when Mr Walsh and Mr Thomas were stopped and the discrepancy between their respective accounts of what they had bought; the fact that some of the tobacco, although purchased in Belgium, bore Luxembourg duty stamps; discrepancies in Mr Walsh's account of his rate of consumption of tobacco; and his claim that of the hand rolling tobacco he had bought he intended to give away to friends four boxes costing £80 each. We have already indicated that we see rather less force than Mr Tooke evidently did in the first of those reasons and we are not persuaded that the provenance of the tobacco necessarily points towards a commercial importation, though we can accept Mr Tooke's evidence that in some cases the fact that the tobacco bears inappropriate duty stamps may be an indication of commerciality. We see rather more substance in his observation that Mr Walsh's claimed consumption rate and the time for which he estimated the tobacco would last were inconsistent, and not by merely a small margin. So much was evident both from the officer's notebook and from Mr Walsh's evidence to us. We share Mr Tooke's view that Mr Walsh's claim that he would give tobacco costing £320 to friends, expecting nothing in return, is implausible. It is quite clear from the evidence we heard about Mr Walsh's income and assets that he could not afford to make such generous gifts; it seems to us quite clear that at the least he was expecting to be reimbursed.

  11. On the material before him at the time he undertook his review, it is scarcely surprising that Mr Tooke came to the conclusion that the true owner of the car was Mr Walsh. He had claimed ownership of it when he was first stopped at Dover; even his later indication that it belonged to his mother was equivocal since it suggests that the car was hers only nominally, in order that Mr Walsh could obtain cheaper insurance than would otherwise be available, in view of his age. The letters written to the Commissioners following the seizure, by Mr Walsh and his aunt, all stated quite clearly that the car was his and it was not until the Commissioners asked for some proof of ownership that Mrs Walsh's interest emerged. Mr Tooke's doubts at that time that, despite her being the registered keeper, Mrs Walsh was truly the owner of the car seem to us to be entirely justified.

  12. The evidence we heard from Leslie Smith, a senior policy adviser to the Commissioners, related to the Commissioners' policy in cases of this kind. He explained that in the Commissioners' eyes this could not be a "not for profit" commercial importation (in which case the car might have been restored on payment of an appropriate fee) since Mr Walsh did not claim that he was proposing to pass on the goods he had bought for his friends at cost but — as we have determined untruthfully — that he was intending to give the tobacco away. That inevitably leads to the conclusion that the true intention was to sell some of the tobacco. We agree with Mr Smith on that point and we accept too that he is right in concluding that this was not a small importation; Mr Walsh had with him more than three times the current guideline of a reasonable quantity of hand rolling tobacco for personal consumption, three kilograms.

  13. This tribunal's jurisdiction is conferred on it by section 16 of the Finance Act 1994. We have no other jurisdiction in matters of this kind and by section 16(4) of the Act we can allow the appeal only if we are satisfied that Mr Tooke's decision was one at which he could not reasonably have arrived. It is in our view impossible to say that Mr Tooke's decision can be so described. We differ from him in some respects, but in reality we do so only in our view of the relative importance of the various factors he identified; and we do so with the benefit of hearing evidence, which Mr Tooke could not do. Furthermore, and despite those differences, we agree with him that this probably was a commercial importation; as we have indicated we do not accept Mr Walsh's evidence that he was intending to give away a large quantity of tobacco and we accept too the force of Mr Tooke's comments about the inconsistencies in his claimed consumption rate. If this was a commercial importation, and the vehicle was Mr Walsh's, the Commissioners are entitled to exercise their usual policy of seizing the car and of not restoring it, a policy which has been approved by the courts in, for example, Lindsay v Commissioners of Customs and Excise [2002] STC 588.

  14. We have heard Mrs Walsh's evidence, which was of course also not available to Mr Tooke at the time he made his decision. We are willing to accept on the balance of probabilities that the true owner of the car was in fact Mrs Walsh. Two further questions therefore arise: is that conclusion sufficient to enable us to allow the appeal? If it is, might our remitting the case to the Commissioners for a further review (the only power at our disposal) result in a different outcome?

  15. We have concluded that our differing from Mr Tooke about the ownership of the car is not sufficient to enable us to allow the appeal. The question for our determination, as we have indicated, is not whether Mr Tooke's conclusion was right, but whether it is one at which he could reasonably have arrived. On all the evidence available to him, as we have already stated, it was an entirely reasonable conclusion that Mr Walsh was the true owner of the car. But even if we did allow the appeal, the evidence we heard from Mr Smith made it quite clear that the outcome of a further review could be no different. The Commissioners' policy — again one approved by the Courts — is that while the cars of those owners who are not present at the time of an illicit importation and who are entirely innocent of involvement in that importation should be restored, those whose owners are in some way complicit in the importation should not. Mr Smith's view was that Mrs Walsh was not in the category of an innocent owner; she knew (as her own evidence made clear) precisely what her son was proposing to do. We think that conclusion is entirely justified by the evidence, even though we accept she had no real idea of the quantities he and Mr Thomas were proposing to buy.

  16. For these reasons we are sure that if the case were remitted for a further review, that review would inevitably, and properly, lead to the conclusion that the car should not be restored.

  17. We therefore dismiss this appeal.

    18. COLIN BISHOPP
    CHAIRMAN
    Release date:

    MAN/02/8133

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