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 >> Ware v Customs and Excise [2004] UKVAT(Excise) E00735 (27 May 2004)
URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2004/E00735.html
Cite as: [2004] UKVAT(Excise) E00735, [2004] UKVAT(Excise) E735

[New search] [Printable RTF version] [Help]

Mr R Ware v Customs and Excise [2004] UKVAT(Excise) E00735 (27 May 2004)

RESTORATION OF GOODS — reasonableness of decision not to restore – appeal dismissed

MANCHESTER TRIBUNAL CENTRE

MR R. WARE Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: Miss J Warburton (Chairman)

Mrs M Crompton (Member)

Sitting in public in Manchester on 6 May 2004

The Appellant did not appear and was not represented

Mr J Shields of Counsel, instructed by the Solicitor for the Customs and Excise for the Respondents

DECISION

This is an appeal by Roy Ware against a decision to refuse to restore hand rolling tobacco, beer and wine seized at Coquelles on 7 August 2003. The decision on review not to restore is contained in a letter dated 6 October 2003.

The Commissioners were represented by Mr J Shields of Counsel instructed by the Solicitor for the Customs and Excise, the Commissioners put in a bundle of copy documents. No one appearing on behalf of the Appellant, the Tribunal determined to proceed under rule 26 (2) of the Value Added Tax Tribunal Rules 1986.

The issue in this case is the reasonableness of the decision of the Commissioners to refuse to restore 10 kg of hand rolling tobacco, 120 litres of beer and 27 litres of wine.

The documents before the Tribunal included witness statements from Graham Crouch, an officer of HM Customs and Excise who undertook the review, and Jon Barnard an officer of HM Customs and Excise who interviewed the Appellant at Coquelles. We also had copy letters from the Appellant to the Commissioners and the Tribunal setting out his explanation of the circumstances of the purchase and seizure of the goods.

The basic facts appearing from the documents are straightforward. The Appellant was stopped in the UK Control Zone at Coquelles whilst travelling as a passenger on a coach which was on a day trip from Leeds. When questioned the Appellant said that he had Golden Virginia tobacco, beer and wine and produced the relevant receipts. The goods had cost in total about £770.

On further questioning the Appellant stated that the tobacco was for himself and his wife who was bedridden. Both he and his wife had smoked since their teens. He got 70 to 80 cigarettes from a pouch and he and wife used about one and a half pouches a day. The Appellant did not have cigarette papers or a lighter with him saying that they only had one tin and his wife insisted on having it.

The Appellant is a 70 year old pensioner who when questioned said that he had no savings and that the money for the goods had come from what had been saved from his wife's cleaning, cash in hand, job. Mr Barnard considered the goods were for a commercial purpose and seized the tobacco, wine and beer.

The Appellant requested restoration of the goods in a letter received by the Commissioners on 19 August 2003. Restoration was refused by a letter of 8 September 2003. The Appellant sought a review of that decision by a letter received on 6 October 2003 in which he stated that he was not smoking on the journey as he was travel sick and had taken medication. The goods were to last him and his wife a year.

The review was carried out by Mr Crouch on 23 October 2003 who set out his decision to confirm non-restoration in a letter of the same date. His grounds for refusing restoration were that, having reviewed all the documents, he was of the view that some if not all the tobacco was destined for resale. There were no exceptional circumstances to vary the Commissioners policy of non-restoration.

In his Notice of Appeal to the Tribunal the Appellant stated that the goods were for himself and his wife. He made the trip once a year. He disputed that he said his wife was bedridden or that he was given money by anyone else to make purchases.

The law as it applies in this case has been the subject of review by the Divisional Court in Regina (Hoverspeed Limited) v Customs and Excise Commissioners [2002] 3WLR 1219 ("the Hoverspeed case") and to a more limited extent in relation to seizure by the Court of Appeal in Commissioners of Customs and Excise v The Queen on the application of Hoverspeed Limited EWCA Civ 1804. These cases make it clear that under the Excise Directive 92/12 EEC goods are either held for personal use and subject to excise duty in the member state of acquisition, Article 8, or held for a commercial purpose and subject to excise duty in the member state in which they are held, Article 9 (see the Hoverspeed case para 105 and the Court of Appeal at para 65.) The Divisional Court in Commissioners of Customs and Excise v Ian Newbury [2003] EWCH 702 (Admin) has confirmed that duty is only payable in the country of origin under Article 8 if goods are acquired by a private individual for their own use which does not include purchase as an agent (see para).

The Tobacco Products Regulations 2001 as amended by the Excise Goods, Beer and Tobacco Products (Amendment) Regulations 2002 set out a number of factors to be considered when determining whether a person is holding excise goods for a commercial purpose. These include reference to the quantity of goods and the indicative level for tobacco is 3 kgs. The relevant regulations apply to the UK Control Zone at Coquelles by the Channel Tunnel (Alcoholic Liquor and Tobacco Products) Order 2000.

The Commissioners are empowered by the Customs and Excise Management Act 1979 (CEMA) section 49 to forfeit dutiable goods which have been imported or held without payment of duty. All such goods are liable to seizure pursuant to section 139 of CEMA. Such powers must, however, be exercised with due regard to proportionality as they involve the deprivation of a person's property. In the case of goods imported on a not-for-profit basis for friends or neighbours regard should be had to scale of importation, whether it is a 'first offence', any attempts at concealment and hardship in determining whether to forfeit goods – see Lindsay v Customs and Excise Commissioners [2002] STC 588 paras. 52 and 64.

Section 152 (b) of the 1979 Act allows the Commissioners as they think fit to restore any goods which have been seized. A review and appeal procedure from decisions of the Commissioners is set out in sections 15 and 16 of the Finance Act 1994. A holder of goods may appeal against a review decision of the Commissioners taken under section 15 to the Tribunal. The Tribunal's powers on appeal are, however, limited by Section 16(4) to directing that the Commissioners' decision shall cease to have effect, to directing that a further review be carried out or, if the latter is no longer possible, declaring the decision to have been unreasonable. On appeal it is for the Tribunal to consider that the response is proportionate in any case – see R (Hoverspeed Limited) v Customs and Excise Commissioners [2002] 3 WLR 1219 at paras 130(10) and 196.

Mr Shields for the Commissioners submitted that as there had been no condemnation proceedings in the Magistrates Court and on the authority of Gora v Commissioners of Customs and Excise [2002] EWCA Civ 525 para 56-58, the goods were deemed to be held for a commercial purpose. In any event there were considerable indications from the conflicting answers to questions at Coquelles given by the Appellant that the goods were not for personal use.

Mr Shields further submitted that the decision on review was a reasonable one and that there were no exceptional circumstances to provide grounds to rebut the Commissioners' policy of non-restoration.

The Tribunal's jurisdiction under section 16(4) of the Finance Act 1994 is not one to try again the original decision to forfeit but to consider whether the decision on review not to restore goods is one that the Commissioners could not reasonably have come to.

It is generally accepted that the test of reasonableness requires the Tribunal to ask:

is this a decision which no reasonable panel of Commissioners could have come to?

has some irrelevant matter been taken into account?

has some matter which should have been taken into account been ignored?

has there been some error of law?

(see Customs and Excise Commissioners v JH Corbitt (Numismatists) Ltd [1980] STC 231; Associated Provincial Houses Ltd v Wednesbury Corporation [1948] IKB 223)

It is clear from the letter of 23 October 2003 that Mr Crouch considered all the evidence available to him when he reviewed the decision. He does not appear to have considered any irrelevant matter. He concluded that the goods were not for personal use and on the evidence available to him we consider that that was a reasonable conclusion. In the circumstances, particularly in the light of the quantity of goods involved, we consider non-restoration to be a proportionate response.

Accordingly we dismiss the appeal

Mr Shields made an application for costs in the sum of £95. We consider that sum reasonable and direct that the Appellant shall pay the sum of £95 costs to the Respondents within 42 days of the release of this decision.

MISS J WARBURTON

CHAIRMAN

MAN/03/8184