United Kingdom VAT & Duties Tribunals (Excise) Decisions

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URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2004/E00730.html
Cite as: [2004] UKVAT(Excise) E00730, [2004] UKVAT(Excise) E730

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Mr Michael Anthony Shelton v Customs and Excise [2004] UKVAT(Excise) E00730 (24 May 2004)

EXCISE DUTY – Restoration of seized excise -- whether the goods were for personal or commercial use – commercial use for profit - the non-restoration proportionate to the Appellant's contravention – yes - was the decision not to restore the excise goods reasonable – yes – Appeal dismissed.

LONDON TRIBUNAL CENTRE

MR MICHAEL ANTHONY SHELTON Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: Michael Tildesley (Chairman)

Keith Dugdale FCA (Member)

Sitting in public in Lowestoft on 25 March 2004

The Appellant appeared in person

Christopher Mellor Counsel for the Respondents

© CROWN COPYRIGHT 2004


 


DECISION

The Appeal

1. The Appellant is appealing against the decision on review of the Respondents dated 8 May 2003 not to restore excise goods, namely three kilograms of Golden Virginia hand rolling tobacco, three kilograms of Samson hand rolling tobacco, 4,000 Superkings cigarettes, 3,200 Lambert & Butler cigarettes and 2.1 litres of spirits.

The Grounds of the Appeal

2. The grounds of Appeal were set out in a letter accompanying the Notice of Appeal received by the Tribunal on 11 June 2003:

" I was stopped by Customs Officers on 18.1.03 at Eurotunnel Coquelles France. At the time I was a coach passenger. The coach was allowed to proceed, and I was detained for questioning. I was questioned for more than two hours approx. before any written statement was made. At no time was I allowed representation or a break. Neither was it explained how I would be allowed to return to the UK. My statement has been corrupted, even though I have signed it. I was asked how many times I had travelled abroad in the last month, and I replied 4 or 5 times. The officer then took my passport and left. Maybe 5-10 minutes later, he returned and told me that I was travelling more than that in the last 6 months. I was never asked how often I've travelled in 6 months. The coach had left almost 2 hours before the written statement was taken. In my statement I told the officer that I had made a purchase of the same amount at the beginning of December, at which time I was travelling with my wife. I personally did not buy 2 limits, it was bought between us, this was 7 weeks prior to this seizure. Custom Officials have concluded that it was only 3 weeks since I purchased tobacco products. I have never stated that I had purchased tobacco products on the 28.12.02 and this is not in the written statement. Neither did I state that I had consumed all of my previous purchase. This is customs interpretation of events. Even though they are not included in the statement taken on 18.01.03. The fact is on the 11.01.03 myself and my wife purchased the allowed tobacco limit for two people. During a visit to a wine warehouse, the car was broken into, and all the tobacco bags (easily recognisable) were stolen, along with all the car documents (driving licence, V5, insurance certificate and MOT). Not knowing how long it would take to replace these (can't take a car abroad without documents). My wife booked the only one seat available on a coach trip for 18.01.03. As my wife is disabled, and cannot manage stairs alone the decision was made for myself to go on the understanding I would purchase tobacco for my wife and son who was living with my wife at the time. I purchased 7,200 cigarettes and 6 kilogrammes of tobacco. This quantity was for my immediate family and not for sale. I do not sell any tobacco products and there is not evidence of any trade sale. I am not a bootlegger, smuggler or anything else of that ilk. This appeal I hope takes into account of this is a person allowed to make purchases for their immediate family where no profitable intention is involved. Also I would like the Tribunal to look into the quantity involved as I produced a receipt for 7,200 cigarettes and 6 kg of tobacco, the 3 bottles of spirits involved were a free gift from the tobacconist. However the seizure notice states the quantity taken from me was only 3,600 cigarettes, which means 3,600 cigarettes have disappeared. Where and why?"

The Issue

3. The function of the Tribunal is to determine whether the Respondents' decision not to restore the excise goods was a decision which no reasonable body of Commissioners could have arrived at. In order for the decision to have been reasonable the decision maker must have considered all relevant matters and must not have taken into consideration irrelevant matters.

The Evidence

4. The Tribunal heard evidence from the Appellant and from Mr Harris for the Respondents. A bundle of documents was presented to the Tribunal which included witness statements of Customs Officers, Adrian Alvey and Alan Goodall. Mrs Shelton attended the hearing in support of her husband.
5. On 18 January 2003 at the UK Control Zone (Tourist), Coquelles, France at 1740 hours Mr Alvey, Customs and Excise Officer, intercepted the Appellant who was travelling on a coach owned by Fenn Holidays Ltd of Whittlesey Road, March, Cambridgeshire. The Appellant caught the coach at 0405 hours at Kings Lynn on 13 January 2003 destined for Bruges Belgium and was returning to the UK when stopped by Mr Alvey.
6. The Appellant was asked by Mr Alvey what goods he had bought. He said the same as last week and then produced a receipt for six kilogrammes of hand rolling tobacco and 7,200 cigarettes to the value of £1,017.40 from March Tobacco Warehouse, Belgium. The Appellant explained that his car had been broken into the previous week and gave Mr Alvey a copy of the French Police report into the theft. He was also asked when he last travelled abroad and how many trips he had made in the last six months. According to Mr Alvey's statement the Appellant replied December, and four or five trips. The Appellant signed Mr Alvey's notebook as being accurate. He was then read the commerciality statement and agreed to stay for interview.
7. In interview the Appellant explained that the excise goods belonged to himself and his wife. The Superkings and the Samsons hand rolling tobacco were for himself. He paid for the tobacco and cigarettes in cash, part Euros and part Sterling. The Appellant denied that anyone had given him money to buy the excise goods. He intended to take the goods home and put them in the cupboard until they were needed. The Appellant had to buy English cigarettes that week because they were nearly out. He smoked Samson hand rolling tobacco when he was not driving and Superkings cigarettes when he was busy or socializing. The Appellant stated that he smoked about two pouches of tobacco a week and anything between 20 and 200 cigarettes a week. His wife smoked Lambert and Butler cigarettes. The Golden Virginia hand rolling tobacco was bought for his son who did not pay for the tobacco because he was at college. The Appellant earned about £250 - £300 a week and paid rent of £55 a week. He and his wife were still a couple but lived at separate addresses and between them had about £600 a week expendable cash. The Appellant accepted he owned a motor vehicle registration number M833THE. He could not honestly remember the number of trips abroad he made in the vehicle during the last six months but it was frequent probably about 20 including visits to Valkenberg, Ostend, Luxembourg, Lille, Boulogne and Calais. Mr Alvey challenged the Appellant about his earlier response of four or five trips to which the Appellant responded that he thought Mr Alvey had said the number of trips in the last six weeks. The Appellant explained that he last bought tobacco and cigarettes in December which he had smoked.
8. At 1905 hours on 18 January 2003 Mr Alvey seized the excise goods because:

•    The Appellant misled him regarding recent travel

•    The Appellant's consumption rate which in Mr Alvey's view was implausible. Mr Shelton purchased 60 pouches of tobacco in December and given his stated rated of consumption would still have 50 pouches left.

•    The Appellant had by his own admission spent approximately £3,000 on tobacco goods in the previous three weeks.

The Appellant refused to sign the Notice of Seizure.

9. The witness statement of Mr Alan Goodall, Customs and Excise Officer, dated 10 July 2003 revealed that the Automatic Number Plate System operating at the UK Terminal of the Channel Tunnel at Cheriton, Kent and the French Terminal at Coquelles recorded 32 movements on 23 separate dates of motor vehicle, registration number M833THE between 29 June 2002 and 26 April 2003.
10. On 27 January 2003, Hawkins Solicitors on behalf of the Appellant, requested restoration of the excise goods. The solicitors explained that the Appellant was exceptionally fond of travelling abroad, averaging about 40 trips a year. The Appellant and his wife were "shopaholics". The Appellant purchased the cigarettes and tobacco for the personal use of himself and his wife.
11. On 5 March 2003, Mr Matthews of the Respondents' Post Seizure Unit Detection South Region refused to restore the excise goods to the Appellant. He took into account the following circumstances when arriving at his decision:

•    The Appellant was found to be carrying a large quantity of excise goods

•    The Appellant gave misleading information concerning his previous travel

•    The Appellant purchased around three kilogrammes of tobacco (60 pouches) in December. At his stated rate of consumption, no more than around 12 pouches would have been consumed which questioned the need to purchase a further quantity of tobacco in January.

•    The Appellant's income could not support the level of expenditure committed to the purchase of tobacco.

•    The Appellant's previous travel gave him the opportunity to purchase similar quantities of excise goods on those occasions.

12. On 3 April 2003, Hawkins Solicitors on behalf of the Appellant requested an independent review of Mr Matthews' refusal to restore the excise goods. The solicitors attached to their letter a series of receipts which demonstrated the Appellant's purchasing abroad of a range of goods other than tobacco and alcohol. The solicitors relayed the details of Mrs Shelton's serious illnesses and that she was given only six months to live, which was the reason why they both looked forward to the frequent trips abroad. Fenn Holidays had cancelled a booking of the Appellants because of the incident on 18 January 2004.
13. Mr Harris carried out the independent review on 8 May 2003. He set out the Respondents' policy on the restoration of excise goods:

Restoration Policy for Excise Goods

"It is this Department's general policy that seized excise goods are not restored. However, each case is examined on its merits to determine whether or not restoration may be exceptionally offered. In conducting this examination the presence of any one of the following factors will militate against restoration:

•    any evidence of previous smuggling or failure to comply with legal requirements;

•    any evidence that the person involved knew what they were doing was wrong;

•    any evidence that the person was paid to make the journey;

•    large quantities of goods which might damage legitimate trade;

•    any evidence that the goods were for a commercial purpose".

14. Mr Harris placed weight on the following matters in reaching his decision:

•    The Appellant's initial response to Officer Alvey about the number of trips he made in the previous six months. Mr Harris considered that Mr Shelton was clearly being mendacious in the responses he gave to the Officer. Mr Shelton signed the Officer's notebook as accurate on two separate occasions. Mr Harris concluded from these actions that the statements were made with intent to deceive the Officer.

•    Initially the Appellant informed the Officer that the goods were for him and his wife. However, later on in the interview he stated that three kilogrammes of tobacco were for his son.

•    The Appellant informed the Officer that he purchased a quantity of tobacco and cigarettes in December which had all been smoked. Mr Harris believed that this journey took place on 28 December 2002 which meant that the Appellant and his wife would have consumed the equivalent of 17,200 cigarettes in 21 days or 409 cigarettes daily. In Mr Harris' opinion the claimed rate of consumption was clearly implausible and stretched the bounds of credulity beyond acceptable limits.

Mr Harris considered the correspondence of the Appellant but noted that the receipts produced were dated after the date of seizure. Mr Harris concluded that there were no exceptional circumstances which would warrant a deviation from the Respondents' policy not to restore the excise goods.

15. The Appellant in his evidence told the Tribunal that he was the third child of a family of ten to a Catholic father. The Appellant was taken into care as a boy, became institutionalised and learnt how the system worked to his cost. He did not break out of the cycle of institutionalisation until he was 30 when he met his wife. Mr and Mrs Shelton had been together now for 20 years and have two children. The Appellant depended upon his wife for life skills particularly managing the finances. He provided well for his family earning with overtime around £14,000 to £15,000 per annum.
16. Mrs Shelton was seriously ill. She suffered from bowel cancer, a lung disease and troublesome hips. She was prescribed about 50 tablets a day. The prescription produced to the Tribunal revealed that Mrs Shelton was taking 16 different medicines. Mrs Shelton had been in a hospice for a while and was the only survivor from the group of people that she lived with in the hospice. She managed her life by setting weekly, monthly and long term goals. One of her long term goals was to reach her 50^th birthday which she did in 2000. Many of her friends gave her money rather than presents. Mr and Mrs Shelton decided to use the money gifted to pay for a trip to Amsterdam. This journey abroad lifted her spirits so much that Mr and Mrs Shelton embarked upon regular trips to the continent. Initially they went by coach but this was very difficult for Mrs Shelton to cope with because of her medical condition, so they travelled by car. The Appellant learnt to drive in his early 40's and had a clean driving licence.
17. The trips abroad provided the Appellant and his wife with a new dimension to their lives. They made lots of new friends on their journeys. They found shopping abroad a lot cheaper than in the UK. They actively sought out bargains. Mr Shelton produced to the Tribunal a Belgian Father Christmas and Christmas music lights which he purchased on the 28 December 2002 for 15 Euros and £4 respectively. Their cost in the UK would have been £40 for the Father Christmas and £25 for the lights. They purchased their normal family shopping in France, particularly items for Mrs Shelton such as oranges which were considerably cheaper abroad. Mr Shelton talked about the pleasure of watching the sunset with his wife from the cliffs overlooking Boulogne Harbour. The object of these journeys was not to buy tobacco but to give Mrs Shelton pleasure and for her to gain life.
18. On the 11 January 2003 trip, disaster struck. Their vehicle was broken into and their shopping together with the Appellant's driving documents were stolen. The Appellant was unable to travel abroad in his car without the necessary documents. He was unsure how long it would take to get his documents back so his wife booked him a day trip across the Channel with Fenn Holidays for the 18 January 2003 for the purpose of replenishing their stock of cigarettes and tobacco.
19. On his return from Belgium on 18 January 2003 he was stopped at Coquelles at 1740 hours and questioned by Office Alvey in a small room. The Appellant was tired and distressed at being stopped. He formed the impression that no matter what he said the tobacco and cigarettes would be seized. The coach driver was not prepared to remain at Coquelles. The Appellant had no idea how he would get back to the UK. The Appellant accepted that he signed the Officer's notebook but he did not read what the Officer had written down. He stated that he suffered from a hearing difficulty which meant that he could not hear low notes. The Appellant was adamant that he misheard Officer Alvey's first question about the number of times he travelled during the last six months. He thought Officer Alvey was asking him the number of trips during the last six weeks. The Appellant referred to his later response to the question where he replied he honestly did not know. In the Appellant's view he would not have given that answer if he was trying to deceive the Officer. Also the Appellant was a seasoned traveller and knew all about the Respondents' computer records and cameras. There was no point for him to lie about previous trips because he knew he would be found out.
20. He accepted that he gave inconsistent answers about the intended recipient of the tobacco and cigarettes by not mentioning his son earlier in the interview. However, he was tired and distressed. He was entitled to make mistakes as were Customs Officers. The Appellant pointed to the error made on the Notice of Seizure which only recorded 3,600 cigarettes seized rather than the correct figure of 7,200 cigarettes. This is why the Appellant refused to sign the Notice of Seizure because he considered that by signing it he would be condoning an unlawful act. The Appellant also drew the Tribunal's attention to errors in Mr Harris' witness statement which referred to the seizure of a vehicle as well as the excise goods. No vehicle was seized on the 18 January 2003.
21. The Appellant agreed that he made more trips abroad than what was recorded on Officer Goodall's witness statement. The statement contained no details of the trips for the 15 March and 29 March 2003 for which the Appellant had produced purchase receipts. He made several trips through Sea France which has not permitted the Respondents to use cameras to record the movements of vehicles crossing the Channel. The Appellant stated that he bought tobacco and cigarettes about two or three times a year. He did not buy tobacco on his trip abroad on the 28 December 2002. That trip was to search for bargains in the Christmas sales. He agreed that he told Officer Alvey that he bought a similar amount of tobacco and cigarettes to his purchase on 18 January 2003 in December but he could not remember the precise date. On reflection he felt that the correct date was the 23 November 2002 when he spent about £900 on 6,400 cigarettes and six kilogrammes of tobacco. He did not buy Superkings cigarettes on that occasion.
22. The Appellant smoked the Samson hand rolling tobacco because it was rougher tobacco. Sixty pouches would normally last him between four and six months. The Golden Virginia was for his son who required a lighter tobacco for his smoking activities. The Appellant accepted that he should not have run out of tobacco and cigarettes by the 18 January considering the quantities purchased on 23 November. However, stocks were low he even had to buy cigarettes in England. He felt the reason for being low was that they had give away some tobacco and cigarettes as Christmas presents. Also his son had smoked some of his cigarettes and when with friends his wife and himself would pass round the cigarettes. The Appellant had gone back to the continent on the 25 January 2003 and purchased another lot of tobacco and cigarettes which in his view proved his point about the stock of tobacco and cigarettes being low.
23. The Appellant explained that his wife held the purse strings. He normally handed over his wages to her, although there were occasions when he gambled some of his money. His wife received about £300 a week in disability benefits and his income amounted to £230 a week. Their incomes were pooled together and Mrs Shelton would give him the money to purchase the various items on their travels. Their outgoings were about a £100 a week. The Appellant did not trust banks. He invested his money in various items such as a valuable doll for his wife. They held various bonus cards which enabled them to receive discounts on purchases abroad. The Appellant informed the Tribunal that the more they travelled the cheaper it became with the various promotions on offer. The Appellant accepted that he spent about £4,000 on tobacco products in a space of nine weeks from 23 November 2002 to 25 January 2003 (£3,000 of that expenditure had taken place in a space of 14 days). The Appellant explained that he used some of his investments to fund his spending spree including the savings reserved for his wife's funeral and some of the sovereigns he bought for his wife. This hurt his wife so much that they separated for a while. The Appellant said that he was in debt to the tune of £1,800 but then produced £1,000 in cash to the Tribunal to demonstrate that he could afford the money spent on the excise goods.
24. The Appellant and his wife lived in separate residences. He had a bedsit, whilst his wife lived in a house which was adapted to her needs. Sadly Mrs Shelton had been driven out of her previous home by thugs.
25. The Appellant had not challenged the forfeiture and seizure of the excise goods before the magistrates' court because Officer Alvey had told him that the hearing would be at Dover Magistrates' Court which would have been a long way for him to travel. Also his solicitors applied too late to start condemnation proceedings.
26. The Appellant was knowledgeable about his legal rights as a Community traveller to import goods. He was fully aware of the Respondents literature on this topic and had been stopped previously once before about 12 months ago.
27. The Appellant felt aggrieved about the actions taken by Customs and Excise. He was not a smuggler nor a bootlegger. The tobacco and cigarettes were for the personal use of himself and his wife and gifts to friends and family. He felt he was being made an example and had to prove his innocence.
28. Mr Harris in his evidence apologised for the error in his witness statement. He used a pro-forma statement and failed to delete the references to vehicle. Mr Harris had also checked the mistake about the quantity of cigarettes on the Notice to Seizure against the "Tally Sheet" which recorded the correct amount of cigarettes seized. Mr Harris was, therefore, satisfied that the Customs Warehouse received the 7,200 cigarettes and that it was a clerical error on the Notice of Seizure.
29. Mr Harris having heard the evidence of the Appellant was still of the same view that there were no exceptional circumstances to depart from the Respondents' policy not to restore seized excise goods. Mr Harris calculated that Mr and Mrs Shelton would have smoked 100 cigarettes a day each to have used up by the 18 January 2003 the supply of tobacco and cigarettes purchased on 23 November 2002. Mr Harris accepted that he did not see firm evidence about whether the Appellant could afford the expenditure on excise goods, which was why he did not include implausibility of expenditure as one of his reasons for refusing restoration. However, he noted from the evidence before the Tribunal the large outlay on the purchase of excise goods by the Appellant in a short period of time. The receipts produced by the Appellant did not in his opinion alter the commercial nature of the transaction on the 18 January 2003. The receipts merely demonstrated another purpose for the frequency of the trips. He accepted that the Appellant could have been confused about his initial response to the question by Officer Alvey about the frequency of trips abroad.

Jurisdiction of the Tribunal

30. The Respondents' powers regarding restoration of goods which have been forfeited or seized is set out under section 152(b) of the Customs and Excise Management Act 1979. Once the power is exercised whether in the form of a positive decision to restore on terms or a refusal to restore, the person affected has a right of appeal to the Tribunal. The powers of the Tribunal are limited in the terms set out in section 16(4) of Finance Act 1994 which provides that:

"confined to a power, where the Tribunal are satisfied that the Commissioners or other person making the decision could not reasonably have arrived at it, to do one or more of the following, that is to say –

a) to 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) to require the Commissioners to conduct, in accordance with the directions of the Tribunal, a further review of the original decision;

c) in the case of a decision which has already been acted on or taken effect and cannot be remedied by a further review, to declare that decision to have been unreasonable and to give directions to the Commissioners as to the steps to be taken for securing that repetitions of unreasonableness do not occur when comparable circumstances arise in future.

31. The precondition to the Tribunal's exercise of one or more of its three powers, namely, that the person making a decision could not reasonably have arrived at it falls within the guidance given by Lord Lane in the decision in Customs and Excise v JH Corbitt (Numismatists) Ltd [1980] STC 231 at page 239:

"…..if it were shown the Commissioners had acted in a way in which no reasonable panel of commissioners could have acted; if they had taken into account some irrelevant matter or had disregarded something to which they should have given weight".

The Tribunal is entitled to make its own findings on the primary facts which are to be taken into account by the Commissioners when exercising their powers regarding restoration of goods. The finding of facts includes blameworthiness, the intended use for the excise goods: private or commercial, and the proportionality of the penalty imposed to the policy aims pursued having full regard to the individual circumstances of the case. The Tribunal, however, has no fact finding jurisdiction for the purpose of challenging the legality of the seizure and forfeiture of the goods. The Tribunal will then apply its findings of fact to determine whether the Commissioners acted reasonably in refusing restoration.

The Tribunal's Findings of Fact

Was the Appellant's importation of tobacco/cigarettes for private/commercial use?

32. This question needs to be considered in the context of the legislative framework. Council Directive (EEC) No. 92/12 lays down a number of rules on the holding, movement and monitoring of products subject to excise duty, in particular so as to ensure that chargeability of excise duties is identical in all the Member States. The Directive draws a distinction between, on the one hand, goods held for commercial purposes, in respect of which accompanying documents are required for transportation purposes, and, on the other hand, goods held for personal use. Under Article 8 excise duty for goods held for private use is payable in the Member State in which they are purchased. No document is required when they are transported to another Member State. For Article 8 to apply, however, a number of conditions must be satisfied. The goods on which excise duty is chargeable must have been acquired by private individuals for their own use and transported by them. Article 9.2 sets out criteria for establishing whether goods transported by private individuals are intended for commercial purposes.
33. The provisions of the Directive were originally implemented in the United Kingdom by The Excise Duties (Personal Reliefs) Order 1992 SI 1992 No.3155. The 1992 Order was replaced by the Excise Goods, Beer and Tobacco Products (Amendment) Regulations 2002 SI 2002 No. 2692. Regulation 12 gives guidance on whether the goods are held for own use or commercial purposes.
34. The relevant provisions of Regulation 12 are as follows:

1B(b) "own use" includes use as a personal gift,

(c) if the tobacco products in question are -

(i) transferred to another person for money or money's worth (including any reimbursement of expenses incurred in connection with obtaining them), or

(ii) the person holding them intends to make such a transfer,

those products are to be regarded as being held for a commercial purpose,

(d) if the products are not duty and tax paid in the member State at the time of acquisition, or the duty and tax that was paid will be or has been reimbursed, refunded or otherwise dispensed with, those products are to be regarded as being held for a commercial purpose,

(e) without prejudice to sub-paragraphs (c) and (d) above, in determining whether tobacco products are held or used for a commercial purpose by any person regard shall be taken of -

(i) that person's reasons for having possession or control of those products,

(ii) whether or not that person is a revenue trader (as defined in section 1(1) of the Customs and Excise Management Act 1979),

(iii) that person's conduct, including his intended use of those products or any refusal to disclose his intended use of those products,

(iv) the location of those products,

(v) the mode of transport used to convey those products,

(vi) any document or other information whatsoever relating to those products,

(vii) the nature of those products including the nature and condition of any package or container,

(viii) the quantity of those products, and in particular, whether the quantity exceeds any of the following quantities -

3,200 cigarettes,

400 cigarillos (cigars weighing no more than 3 grammes each),

200 cigars,

3 kilogrammes of any other tobacco products,

(ix) whether that person personally financed the purchase of those products,

(x) any other circumstance that appears to be relevant."

35. Applying the criteria set out in Regulation 12(1B)(viii) the Tribunal finds that

i. The Appellant had travelled abroad on the 18 January 2003 with the sole purpose of buying tobacco and cigarettes. The reasons he gave to the Customs Officer for holding these goods were for the personal consumption of himself and his wife. He later modified that initial statement to include his son as the recipient of the Golden Virginia hand rolling tobacco.

ii. The Appellant was not a revenue trader.

iii. The Appellant gave contradictory replies in his interview about the frequency of trips in the last six months. However, we accept his explanation that he misheard the question the first time it was put to him because of his hearing difficulties. However, we are not convinced with his explanation about not mentioning his son earlier in the interview. Also he stated before the Tribunal that some of the cigarettes and tobacco were given away as Christmas presents which he did not raise during the interview. The Appellant said he was tired and confused during the interview, however, he had the presence of mind not to sign the incorrect " Notice of Seizure".

iv. The excise goods were carried by the Appellant.

v. The Appellant travelled alone by coach to Belgium. His normal mode of transport abroad was by his own vehicle. However, the Appellant had a reasonable explanation for not travelling by car because it had been broken into the previous week with the thieves stealing his driving documents.

vi. The excise goods were purchased from Belgium. The cost of these goods was not in dispute and a valid receipt was produced.

vii. The goods purchased were two brands of cigarettes, Lambert and Butler and Superkings, and two brands of hand rolling tobacco, Samson and Golden Virginia.

viii. The Appellant was travelling alone. Thus the quantity of cigarettes brought in was more than twice the guideline of 3,200 recommended by the Regulations, whilst the quantity of hand rolling tobacco brought in by the Appellant was six kilogrammes twice the guideline of three kilogrammes. This large quantity was purchased within eight weeks of buying another similar large quantity of tobacco and cigarettes. The Appellant's purchasing pattern did not fit with his stated rate of consumption of two pouches of tobacco per week. The 60 pouches of Samson hand rolling tobacco purchased in November 2002 should have lasted him until June 2003. The Appellant offered no substantive explanation for the large quantity of Golden Virginia purchased other than it was for his son.

ix. The Appellant stated that he funded the purchase on 18 January 2003 from the pooled income belonging to himself and his wife. He also stated that his son did not give him any money towards the Golden Virginia hand rolling tobacco. However, these statements have to be weighed against his outlay on tobacco products. In a period of just over eight weeks his outlay was about £4,000 which was equivalent to eight weeks of the joint net income of his wife and himself. His spending spree on tobacco products hurt the most important person in his life, his wife. We find it incomprehensible that he would risk his marriage to purchase tobacco products for personal consumption.

x. The Appellant travelled frequently to the continent. We accept that he did this for reasons other than just the buying of excise goods. The travel gave him and his wife great pleasure and certainly provided Mrs Shelton with a new lease of life. However, we also acknowledge that the travel presented the Appellant with the opportunity to purchase excise goods.

36. We recognise the value placed on travelling abroad by Mr and Mrs Shelton and that it gave Mrs Shelton a new purpose to her life. The trip, however, on the 18 January was different. Mr Shelton went alone with the sole aim of buying excise goods. He travelled by coach not in his own vehicle. He bought quantities of tobacco products which was over twice the guideline quantity recommended for single Community travellers. Mr Shelton was knowledgeable about the Regulations governing the importation of excise goods. He must have known that he was at risk of being stopped by Customs Officers. The quantity of products imported when viewed in conjunction with the amount purchased in November 2002 was well in excess of his stated consumption rate of tobacco. His explanation for the purchase of the Golden Virginia hand rolling tobacco was unconvincing. The expenditure committed to tobacco was considerable putting his marriage at risk by his spending spree in January 2003. When we put these facts together we are driven to the conclusion that the tobacco goods bought on 18 January 2003 by the Appellant were for a commercial purpose for profit.

Was the Decision Not to Restore the Excise Goods Proportionate to the Aims Pursued?

37. Article 1 of the First Protocol of the European Convention of Human Rights dealing with peaceful enjoyment of possessions was engaged when the Respondents deprived the Appellant of his excise goods. The aim pursued by the Respondents is to deter those people who are intent on regularly smuggling tobacco and alcohol in the UK.
38. Lord Phillips MR in Lindsay v Customs and Excise Commissioners [2002] 1 WLR 1766 has ruled that the penalty imposed against persons caught bringing in goods contrary to the Regulations must be fair and proportionate to the contravention. Where persons are smuggling for a commercial purpose for profit they generally take themselves beyond the threshold whereby a lesser penalty than deprivation of property can be considered.
39. The Appellant suffered the loss of the excise goods and the money expended upon them. He also had been barred from travelling abroad on coaches owned by Fenn Holidays because of the incident on the 18 January 2003. However, given our finding that the Appellant purchased the tobacco products for a commercial purpose for profit the Respondents' decision not to restore the excise goods was proportionate to the Appellant's contravention and the aim pursued of deterring smuggling.

Was the Review decision of 8 May 2003 unreasonable?

40. Our findings of fact support the principal conclusion of Mr Harris' review that the excise goods purchased on the 18 January were for a commercial purpose. We shared Mr Harris' view about the large quantity of tobacco products bought and the incompatibility of that quantity with the Appellants' stated rate of tobacco consumption. We also agreed with the emphasis he placed upon the Appellant's late revelation about his son being the recipient of the Golden Virginia hand rolling tobacco. We placed less weight than Mr Harris on the Appellant's response to questions from Officer Alvey about previous trips abroad but more weight on the Appellant's wherewithal to fund his spending spree on tobacco products. However, those differences in approach were due to us having the benefit of hearing the Appellant in person
41. However, we do not consider that these two differences of emphasis between our findings and those of Mr Harris would materially affect the outcome of his Review decision. Overall we are, therefore, satisfied that Mr Harris considered all the relevant facts at his disposal and disregarded irrelevant matters in reaching his decision not to restore the tobacco and cigarettes to the Appellant.

Our Decision

42. We have decided for the reasons set out above that the Respondents' decision of 8 May 2003 not to restore the excise goods to the Appellant was reasonably arrived at within the meaning of section 16(4) of the Finance Act 1994. We, therefore, dismiss the Appeal. We make no order for costs.

MICHAEL TILDESLEY

CHAIRMAN

RELEASED:

LON/03/8137