United Kingdom VAT & Duties Tribunals (Excise) Decisions

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Cite as: [2004] UKVAT(Excise) E00720, [2004] UKVAT(Excise) E720

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Peter Bruce v Customs and Excise [2004] UKVAT(Excise) E00720 (17 May 2004)

RESTORATION OF VEHICLE — 25.2 kg of hand rolling tobacco bought at a motorway junction – restoration of vehicle in which the goods were found after purchase sought – proportionality and exceptional hardship considered – appeal dismissed

MANCHESTER TRIBUNAL CENTRE

PETER BRUCE Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: Mrs E Gilliland (Chairman)

Mrs G Pratt (Member)

Sitting in public in York on 26 February 2004

Mr. Martin Legg Solicitor for the Appellant

Miss Sue Hurst of Counsel instructed by the Solicitors office of H.M. Customs and Excise for the Respondents.

DECISION

This is an appeal by Peter Bruce (the Appellant) against the decision of the Commissioners not to restore his vehicle an Audi TT 225 registration number Y698ABL (the vehicle) seized from him subsequent to officers of Customs and Excise attending at his business premises at Goole on 22 April 2003. It is not in dispute that also seized at that time were 25.2 kilograms of hand rolling tobacco but the Appellant's representative has confirmed that that matter is not before the tribunal.

In his evidence the Appellant has told the tribunal that he purchased the tobacco from the driver of a Belgian truck whom he had contacted having been given a telephone number by a friend. They had met at Doncaster at Junction 3. He had first had to pay a deposit. A month later he obtained the goods packaged in two bin liners. The Appellant said that he had not in fact looked into the bin liners but there should have been 250 pouches in each. He insisted that he had bought the goods for his personal use as he and his wife were smokers and it was expensive. He had not been able to buy 10 or 20 packs, it had had to be this quantity for which he had paid £2,000, £4 per pouch. The amount bought would produce one pouch a day for himself and his wife and if they went on to a third pouch they would share it. Using a rolling machine 20 to 22 cigarettes could be produced from a pouch. The quantity would last them about 9 months. After he had bought the goods the Appellant told us that he drove straight to his business premises. About ¾ to 1hr later on the same day (22 April 2003) about 6 or 7 Customs and Excise Officers there. Police were also in attendance. The Appellant says that there was no seizure of any goods at his address.

The Commissioners have drawn the tribunals attention to discrepancies with and in the record of the interview with the Appellant. The Appellant has told us that at the time of the interview he did not know what to say and was anxious that the wagon driver should not lose his job. When asked at the interview how long the goods found in the vehicle had been there he said from 2 months before and this he has told us that he said to protect the lorry driver. He told Counsel for the Commissioners in cross-examination that he did not accept that the quantity he had obtained was huge and his argument was that it was worth spending to save money. He saw it as a shortcut to saving money. Insofar as there were other questions asked at the interview which he refused to answer i.e. "where [was the tobacco] from" and "how much did you pay for it?" he has told us that he did not know then what to say.

Subsequently the Appellant had written formally to the Commissioners asking for the return of the vehicle. He did not think he was doing anything wrong as neither he nor his vehicle had been out of the country. He has said that his mother had in fact lent him £30,000 some of which he had spent on the vehicle. It had been agreed that he would repay this sum to her at £200.00 per month but since the seizure he had had to buy another vehicle a Citroen Saxo costing him £190.00 per month on hire purchase and so he could not pay his mother anything at the moment. He needed a vehicle because of the unsocial hours he worked in his business and public transport was not satisfactory. The seizure and additional finance involved had adversely affected the life style of both the Appellant and his wife. Should the vehicle be restored to him we are told that he would sell it and pay off his debts. Counsel for the Commissioners was told by the Appellant that he could get evidence that his mother had lent him the money though he did not have it with him and we have not seen any to that effect.

It is provided in Section 141 (1) of the Customs and Excise Management Act 1979 (CEMA) that :

"(a) any ship, aircraft, vehicle, animal, container (including any article of passengers' baggage) or other thing whatsoever which has been used for the carriage, handling, deposit or concealment of the thing so liable to forfeiture, either at a time when it was so liable or for the purpose of the commission of the offence for which it later became so liable ; and

(b) any other thing mixed, packed or found with the thing so liable shall also be liable to forfeiture."

The view taken by the review officer was that he was not satisfied that the goods had been imported for personal use and that accordingly the vehicle which was carrying the forfeited goods was itself forfeitable under Section 141. In his Notice of Appeal dated 6 August 2003 submitted by his Solicitors the Appellants contention was : "the seizure is clearly disproportionate. The office (sic) in the case has failed to properly apply the test of proportionality as outlined in the cases of Lindsay and Newbury". We are told that the agreed valuation of the vehicle is £20,000.00. The Appellant's representative has said that the unpaid duty in the case would be £2515.83. He has submitted that the Commissioners had produced no evidence nor explanation that the supply was not for the Appellant and his wife and that they had inadequately considered the issue of personal use or commerciality and used against the Appellant solely the interview record and the quantity of the goods brought in. However in any event so far as the vehicle was concerned the forfeiture of the vehicle was disproportionate its value being £20,000 as against a value for the tobacco of £2,000.

A cross border shopper may import an unlimited quantity of tobacco products so long as these are for personal use. The Excise Goods, Beer and Tobacco Products (Amendment) Regulations 2002 … The Tobacco products Regulations 2001 in 4 (1b) (e) state that in determining whether excise goods are held or used for a commercial purpose regard is to be taken of a number of matters including the location of the products ; the mode of transport used to convey the same and the quantity the guideline being 3 kilograms in respect of hand rolling tobacco.

The record of the interview before us in the bundle of documents was signed by the Appellant at 13.37 hrs on 22 April 2003 and it is clear that he did not make any comment as to where the goods were from nor how they were paid for. He did say however that this was his first purchase and he denied he had been supplying anyone with tobacco or cigarette goods and he had not been selling the goods. He refused to respond as to how long the tobacco had been in his car. The replies given by the Appellant were unhelpful ("no comment") or misleading ("that the tobacco had been bought a few months ago") when reviewed against the evidence before us today. He may have wished to protect the source of supply though one has to question why. His reluctance to respond does not appear plausible when set beside his insistence that the goods were for his own use and that of his wife.

The Appellant's representative referred to what he considered were faults in the Commissioners policy in respect of the non-restoration of the vehicle in that due regard had not been given to the issues of proportionality and exceptional circumstances. He quoted for our attention the decisions in both Commissioners for Customs and Excise v Newbury [2003] EWHC702 (admin) and Lindsay v The Commissioners for Customs and Excise [2002] 2WLR 1766. In Lindsay however a distinction was drawn between goods brought in for a commercial purpose and those brought in for family and friends on a not- for-profit-basis and the latter did not constitute personal use. The Commissioners' policy was altered from 29 October 2002 to distinguish between the persistent smuggler and a first time offender who might have his/her vehicle restored subject to certain conditions. However we accept the submission of the Commissioners that the matter does not fall within Lindsay as the goods held by the Appellant were for a commercial purpose. The seizure has not been questioned in condemnation proceedings and therefore there has been forfeiture by passage of time. Whilst we consider that the tribunal may look at the facts there is not in our view any credible evidence as to other than a commercial purpose. So far as Newbury is concerned the goods in the boot of the vehicle were forfeitable and thus the vehicle which carried them subject to forfeiture.

In Lindsay it was acknowledged that whatever the circumstances exceptional hardship was always a matter which should be given consideration. Counsel for the Commissioners submitted that there was no exceptional hardship relating to the Appellants current circumstances and business. The Commissioners view was that the circumstances were in place when the Appellant made the decision to purchase the goods and thus he contributed to his financial problems by spending £2,000 and then purchasing a new vehicle when public transport was available. The Commissioners did not view the Appellant's debt as constituting exceptional hardship. Whilst the loss of the vehicle may have resulted in further financial difficulties as described to us by the Appellant these do not to our mind fall within a definition of exceptional hardship as envisaged in Lindsay. In our view the decision of the Commissioners not to restore the vehicle was not one which a reasonable body of Commissioners could not have arrived at under S.16 of the Finance Act 1994.

Accordingly the appeal is dismissed. The Commissioners are entitled to costs and if they wish to seek the same and the same are not agreed with the Appellant the Commissioners are at liberty to apply generally

E GILLILAND

Chairman

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