United Kingdom VAT & Duties Tribunals (Excise) Decisions

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Cite as: [2004] UKVAT(Excise) E00737, [2004] UKVAT(Excise) E737

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Keith Harding v Customs and Excise [2004] UKVAT(Excise) E00737 (28 May 2004)

EXCISE DUTY – restoration of van and excise goods – inconsistent information given to the officers – 2,400 litres of beer – review considered this to be a commercial import – appeal dismissed

LONDON TRIBUNAL CENTRE

KEITH HARDING Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: DR JOHN F AVERY JONES CBE (Chairman)

CAROLINE DE ALBUQUERQUE

Sitting in public in London on 20 May 2004

The Appellant in person

Sarabjit Singh instructed by the Solicitor for the Customs and Excise for the Respondents

© CROWN COPYRIGHT 2004

DECISION

Keith Harding appeals against a decision on review to refuse to restore excise goods and a vehicle (registration M797 GBP) seized on 24 June 2003. The Appellant appeared in person; the Commissioners were represented by Mr Sarabjit Singh.

We heard evidence from the Appellant, Mr Brian Carver, and the reviewing officer Mr Raymond Brenton and find the following facts

(1) The Appellant was travelling on 24 June 2003 with Mr William Russell. When first stopped the Appellant said he had 60-70 cases of beer. The officer asked "Is that for both of you" to which the Appellant answered "yes." The officer then asked Mr Russell the same question to which he replied 70 cases. The actual quantity was 200 cases (2,400 litres). The fact that the officer asked the same question to Mr Russell might indicate that the question "Is that for both of you" might have meant "each of you," in which case they declared a maximum of 140 cases out of the 200. When asked about the discrepancy the Appellant said that he had handed over the receipts and that he had asked for £1,000 worth. In addition there were 7 cases of wine (1.5 litre bottles, 6 per case) of which the Appellant claimed 6 cases and Mr Russell 2 cases (out of a total of 7 cases).

(2) Receipts were produced for 50 cases of Stella and 25 of Tennants on one receipt (which is exactly half the total quantity of these) for £920, and 50 cases of Kestrel and 7 cases of wine (which is the correct quantity of these) for £699. The Appellant contended that there was a missing third receipt that he had handed over, which we do not accept. Both the Appellant and Mr Russell said that they had each spent £1,000. If one doubles the amount of the first receipt and adds the second, the total amount spent is £2,539. All payments were made in cash.

(3) The Appellant said that he beer was for the use of him and his family. He said that he had 7 adult children. His solicitors mentioned a family party for his daughter and fiancée but he did not mention this at his interview. He produced an invoice dated 12 June 2003 from Mr S. Awol at the Pitts Head public house for £100 for the "hire of one side of public bar." The handwriting on this is similar to the handwriting on all the communications from the Appellant to the Commissioners and to the Tribunal. The Appellant claimed that he had a broken arm and could not write for 7 weeks around July 2003 and so Mr Carver wrote all of them on his behalf. Mr Carver said that the manager of the pub authorised him to write the invoice and sign it on behalf of the owner Mr Atwal. An undated letter from Mr S. Atwal of the Pitts Head public house was produced to the Tribunal, although it had not been seen by Mr Brenton, for hire of the saloon bar for a joint birthday party for his wife and daughter. We do not accept that the invoice was written before the seizure on 24 June 2003, or that it and all the other communications were written by Mr Carver. We also regard it as unlikely that a pub would hire out a bar and allow the hirer to bring his own alcohol.

(4) The Appellant said that he earned £680 per week and financed the purchase out of wages and savings. Mr Russell said he was unemployed and receiving sickness benefit of £149 per fortnight. He funded the purchase with his two sisters each paying £330.

(5) Mr Russell claimed that the beer was for his sister's 50th birthday party which he stated at interview was in a couple of months. The birthday is on 26 December 2003. We do not accept this or that Mr Russell could afford to buy the beer on his sickness benefit.

(6) Asked about previous trips abroad the Appellant said that he had travelled with his fiancée a week before, the previous trip being 4 to 5 weeks before. He is recorded as travelling alone on 7 June [17 days before] and 14 June 2003 in a different vehicle (registration X867 HKL, which the Appellant said belonged to Mr William Traymore) on both occasions going out at 0900 and returning at 1230 (checking in a 1104 and 1106 respectively). The Appellant has been stopped on 7 June and said at interview on 24 June 2003 initially that he had 30 to 40 cases of beer of beer on that occasion, which he later said was 40 to 50 cases; he was recorded by the Commissioners as having 70 cases (840 litres). He said at interview that of that he had 12 cans left (implying a consumption of 954 litres in 16 days). He said that he did not purchase any excise goods on the 14 June trip and that his fiancée travelled as a foot passenger. Given the timing we do not think that there can have been any other purpose of the trip and do not accept that he did not purchase excise goods on that trip or that his fiancée travelled as a foot passenger on 14 June 2003.

Thus everything that could be checked factually that was said to the officers was wrong. At best, they declared 140 cases of beer; there were 200 cases. The total cost was said to be £2,000 for both of them; it was over £2,500. Between them, they claimed ownership of 8 cases of wine; there were 7 cases. The Appellant said he had travelled prior to the 14 June trip 4 to 5 weeks before; it was 2½ weeks (17 days) before. He said that he bought 40 to 50 cases of beer on 7 June; it was recorded as 70 cases. We are therefore disinclined to accept his other evidence. We have not accepted that he travelled with his fiancée on 14 June 2003 as the booking was for him alone; or the evidence of the pub booking; or that he did not buy excise goods on 14 June; or that he had consumed all but 12 cans bought on the 7 June 2003 trip by 24 June 2003.

Mr Brenton's review concluded that these inconsistencies showed that the import of the excise goods was for a commercial purpose. He also took into account that cash payment was an indicator of commercial activity.

The Tribunal's jurisdiction is contained in section 16 of the Finance Act 1994 which applies to matters contained in Schedule 5 including decisions on restoration. Section 16(4) provides that

"In relation to any decision as to an ancillary matter, or any decision on the review of such a decision, the powers of an appeal tribunal on an appeal under this section shall be 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;…."

Our task is therefore to consider whether Mr Brenton's decision not to restore, the reason for which is that the excise goods were purchased for a commercial purpose, could reasonably have been arrived at. We consider that his decision was entirely reasonable. We would make the same finding of fact that the goods were for a commercial purpose. Why should a person who is genuinely importing beer for family use give inconsistent stories to the officer? It suggests that he is trying to hide something. This was the third trip in 17 days, the earlier two trips being for about an hour in France.

Article 1 of Protocol 1 of the Human Rights Convention provides:

"Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided by law…

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties."

The principle behind this provision is summarised in the decision of the European Court of Human rights in Air Canada v UK 20 EHRR 150 as follows:

"According to the Court's well-established case law, the second paragraph of Article 1 must be construed in the light of the principle laid down in the Article's first sentence. Consequently, an interference must achieve a 'fair balance' between the demands of the general interest of the community and the requirements of the protection of the individual's fundamental rights. The concern to achieve this balance is reflected in the structure of Article 1 as a whole, including the second paragraph: there must therefore be a reasonable relationship for the proportionality between the means employed and the aim pursued."

The Court of Appeal in Lindsay v Customs and Excise Comrs. [2002] EWCA Civ 267 considered this aspect at para.63:

"…I would not have been prepared to condemn the Commissioners' policy had it been one that was applied to those who were using their cars for commercial smuggling, giving that phrase the meaning that it naturally bears of smuggling goods in order to sell them at a profit. Those who deliberately use their cars to further fraudulent commercial ventures in the knowledge that if they are caught their cars will be rendered liable to forfeiture cannot reasonably be heard to complain if they lose those vehicles. Nor does it seem to me that, in such circumstances, the value of the car used need be taken into consideration. Those circumstances will normally take the case beyond the threshold where that factor can carry significant weight in the balance. Cases of exceptional hardship must always, of course, be given due consideration."

Since the Commissioners have treated this as a case of commercial smuggling in the sense explained, and we have decided that they were not unreasonable in doing so, the value of the vehicle can be ignored. Mr Brenton considered that this was not a case of exceptional hardship. While we understand the hardship faced by the Appellant of losing his job in consequence of losing the van as well as the loss of the excise goods, and he told us also the loss of his car as he could not keep up the payments, we agree with Mr Brenton that this is not a case of exceptional hardship. That, for example, would be the case for a disabled driver.

Accordingly we dismiss the appeal.

J F AVERY JONES

CHAIRMAN

LON/03/8203