United Kingdom VAT & Duties Tribunals (Excise) Decisions

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URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2004/E00717.html
Cite as: [2004] UKVAT(Excise) E00717, [2004] UKVAT(Excise) E717

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Wendy Ann McCullim, Sylvia Joy Blake and Barbara Edith Slade v Customs and Excise [2004] UKVAT(Excise) E00717 (04 May 2004)

EXCISE DUTY RESTORATION OF GOODS – Jurisdiction – Application by Customs to stand over restoration appeals pending condemnation proceedings – Condemnation proceedings brought forward – Short stand over directed

LONDON TRIBUNAL CENTRE

WENDY ANN McCULLIM Appellant

and –

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

SYLVIA JOY BLAKE Appellant

and –

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

BARBARA EDITH SLADE Appellant

and –

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: THEODORE WALLACE (Chairman)

Sitting in public in London on 7 April 2004

The Appellants were represented by Mr John Blake

Julian Gregory, counsel, instructed by the Solicitor for the Customs & Excise, for the Respondents

© CROWN COPYRIGHT 2004


 


DECISION ON APPLICATION

1. This hearing concerned applications by Customs in the appeals by the three appellants against review decisions refusing restoration of cigarettes and tobacco seized at Dover Hoverport on 20 August 2003. The appeals were received by the Tribunal on 29 December 2003 and served on Customs on 6 January 2004.
2. Customs applied by notice dated 26 February 2004 for the appeals to be stood over until 12 November 2004 on the grounds that the goods are subject to condemnation proceedings in October 2004 "and these condemnation proceedings must be concluded before this appeal can be considered".
3. The Tribunal directed a skeleton argument from Customs. A submission of 70 paragraphs was provided by Mr Gregory on 31 March and served on the Appellant.
4. Because of the implications of the application the Tribunal directed that it be heard in public.

The subject matter of the appeals and the background to the application

5. The three Appellants were travelling back together from France in a vehicle which was provided to Mrs McCullim under an agreement with Motability a charity which assists disabled persons.
6. Following questions and separate interviews, Customs seized tobacco, cigarettes and alcohol and issued a seizure information (C 156) listing 18 kgs hand-rolling tobacco, 24600 cigarettes, 2.7litres of spirits, 5 cases of beer, 3 cases of wine and 155 cigarillos as liable to forfeiture under section 49 of the Customs and Excise Management Act 1979 ("CEMA"). The Appellants signed the form but made minor amendments to the quantities. The form stated, "Vehicle restored free of charge on humanitarian grounds."
7. On 28 August 2003 the Appellants wrote to the post-seizure unit using Letter B provided by Customs requesting restoration of the seized items stating that they were "solely for our own use including our own consumption and family gifts." On 22 September Customs wrote refusing restoration. The Appellants requested a review and the refusal was confirmed in a review decision on 4 December. The Appellants thereupon appealed.
8. Meanwhile on 15 September 2003 the three Appellants all signed Letter A giving notice of claim against seizure. Customs responded on 20 October stating that condemnation proceedings would be instituted in Dover and East Kent Magistrates Court; the letter stated that any request for restoration could not be considered until the condemnation proceedings were concluded or withdrawn in writing.
9. The Review Officer was not informed of the Notice of Claim against forfeiture.
10. On 5 January 2004 summonses were issued for hearings at East Kent Magistrates Court on 16 February. These were for initial hearings only. The complaint in the summonses stated that the excise goods were concealed or packed in a manner which appeared to be intended to deceive an officer within section 49(1)(f) of CEMA, that they were held for a commercial purpose no duty having been paid, that the quantities exceeded the guidelines, that insofar as any item was not liable to forfeiture it was mixed, packed or found with goods so liable within section 141(1)(b) and that the vehicle was used for carriage of goods liable to forfeiture within section 141(1)(a). The Appellants wrote asking to be excused from attending the Magistrates Court hearing on 16 February stating that the proceedings were contested. On 20 February the Appellants were notified of a full hearing on 7 October 2004 at noon.
11. The Statements of Case by Customs in the restoration proceedings before the Tribunal were due to be served under the Tribunal Rules by 5 February. On 30 January Customs applied for the appeals to be stood over, however the Appellants objected. On 26 February Customs renewed the application for a stand over until the condemnation proceedings due to be heard in October have been concluded. It is that application which is now before the Tribunal. The Statements of Case have not been served pending this application.

Submissions by Customs

12. Mr Gregory did not submit that the Tribunal has no power to hear the restoration appeal before the condemnation proceedings but submitted instead that it should not do so. His submission was thus substantially different from the grounds of the application which were on the basis that the "condemnation proceedings must be concluded" first.
13. In my judgment he was correct to modify his reasons. The decisions subject to appeal are set out in Schedule 5 to the Finance Act 1994. Paragraph 2(1)(r) covers any decision as to whether "anything forfeited or seized" is to be restored or as to the conditions of restoration. If the Tribunal could only consider non-restoration of goods which have been forfeited, the words "or seized" would have no meaning. Furthermore in Customs and Excise Commissioners v Alzitrans SL [2004] V&DR 369 Customs accepted that the belief of the Review Officer that he had to defer his review until after the conclusion of the condemnation proceedings was mistaken. Blackburne J clearly proceeded on the basis that this acceptance by Customs was correct, see paragraphs 19 and 20.
14. Mr Gregory submitted that the Tribunal ought to defer this appeal until the Magistrates have determined the issue of liability to forfeiture that being the forum intended by Parliament.
15. He said that paragraph 52 of the judgment of Neuberger J in Gascoyne v Customs and Excise Commissioners [2003] 2 WLR 1311 no longer represents the law, having been overtaken by the judgment of the Court of Appeal in Gora v Customs and Excise Commissioners [2003] 2 WLR 160 and by that of Peter Smith J in Customs and Excise Commissioners v Dickinson [2003] EWHC 2538 (Ch). In fact he submitted that paragraph 49 of Dickinson was wrong, being contrary to Gora.
16. Mr Gregory said that if the restoration appeal is heard after the condemnation proceedings, then if the Appellants succeeded in resisting condemnation, there would be no need for restoration proceedings; if on the other hand the Appellants did not succeed the Magistrates could be asked to give reasons for forfeiture specific to each Appellant. He said that the Magistrates could be asked to bring the condemnation hearings forward and he said that the service of witness statements and notebooks of the Customs officers could be brought forward. He said that, although in Customs and Excise Commissioners v Newbury [2003] 1 WLR 2131 the Divisional Court had stated that the Court considering forfeiture had a duty to consider whether it was disproportionate, that may not have been directed to a situation where there were concurrent restoration proceedings.
17. He said that he could not advance any reason why the Statements of Case in the restoration proceedings should not be served even if the hearings were deferred. The Tribunal directed orally that the Statements of Case be served by 6 May 2004.
18. Following the application hearing, on 13 April 2004 Customs asked the Kent Magistrates' Court Service to vacate the hearing on 7 October and to bring the hearing forward. On 15 April the Magistrates fixed a new hearing for 2.00pm on 6 May 2004.

Conclusions

19. The application for the restoration proceedings to be stood over for the condemnation proceedings has to a large extent been overtaken by the new date for the condemnation proceedings since. There is no possibility of restoration proceedings being listed before that date.
20. In the circumstances I directed (1) that the restoration appeals be heard together and should be stood over until 7 May; (2) that the Statement of Case be served by 20 May and might be a composite covering each Appellant; (3) that the failure by Customs to serve the Statement of Case by the due date be waived and (4) that Customs serve a copy of the order and decision of the magistrates with the Statement of Case.
21. If the October date for the condemnation proceedings had stood, that would have involved a delay of six months from the directions hearing before the restoration proceedings could be progressed. In my judgment that would not have been acceptable and I would have refused the application of Customs.
22. This particular case is complicated by the fact that although Mrs McCullim's car was returned "on humanitarian grounds", Motability were informed by Customs of the detention and when the contract for that car expired refused to enter into a contract for another car unless she succeeded in her appeal. While this is not relevant to the proceedings themselves, it is relevant to the speed with which they are to be determined.
23. Until the outcome of the condemnation proceedings is known it is not possible to know what impact they will have on the restoration proceedings. Clearly if the Appellants' claims against forfeiture succeed restoration or rather compensation will follow as a matter of course. However Customs are clearly pursuing the condemnation proceedings and believe that the goods will be condemned. The complaint is based on a number of alternative grounds which leave open the basis upon which any condemnation may occur and leaves aside the duty of the magistrates to consider whether forfeiture would be in breach of the Human Rights of the Appellants, see Customs and Excise Commissioners v Newbury [2003] 1 WLR 2131, see per Hale LJ at paragraph 21.
24. As it is I directed that the appeals be stood over until 7 May 2004 and varied the oral direction at paragraph 18 above so as to require the Statement of Case to be served by 20 May 2004 together with a copy of the decision of the Magistrates. I waive the failure of Customs to observe the original time limit under the Rules for the Statement of Case noting that Customs' original application was made before the Statement of Case was due.

THEODORE WALLACE

CHAIRMAN

RELEASED:

LON/04/8000

LON/04/8004

LON/04/8005