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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 >> Watkinson v Customs and Excise [2004] UKVAT(Excise) E00740 (04 June 2004)
URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2004/E00740.html
Cite as: [2004] UKVAT(Excise) E00740, [2004] UKVAT(Excise) E740
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Watkinson v Customs and Excise [2004] UK E00740 (04 June 2004)

    E00740

    EXCISE DUTY — importation of 34.5kg hand rolling tobacco and 8400 cigarettes by 2 men travelling in vehicle – forfeiture of vehicle and goods – vehicle owned by their sister's partner – claim for restoration of vehicle by owner – whether review decision to offer conditional restoration of vehicle for a fee of £1450 was reasonable – appeal dismissed

    MANCHESTER TRIBUNAL CENTRE

    MARTIN WATKINSON Appellant

    - and -

    THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

    Tribunal: Mr I E Vellins (Chairman)

    Mr J T B Strangward (Member)

    Sitting in public in Manchester on 5 May 2004

    The Appellant appeared in person

    Miss Mayoh, of Counsel, instructed by the Solicitor for Customs and Excise, for the Respondents

    © CROWN COPYRIGHT 2004


     

    DECISION

  1. In this appeal the Appellant is Martin Watkinson who is the owner of a Renault Megane car R937MFR. He appeals against the decision of the Respondents, the Commissioners of Customs and Excise, who, on 3 September 2003 made a decision to vary the terms for the conditional restoration of the car which had been seized on 14 May 2003, by offering to the Appellant the conditional restoration of the vehicle upon payment of a sum of £1450.

  2. At the hearing of this appeal at Manchester on 5 May 2004 the Appellant represented himself. The Commissioners were represented by Miss Mayoh, of counsel.

  3. The facts in this appeal were not in dispute.

    4. The Background
  4. The Renault Megane belonging to the Appellant was intercepted by an officer of the Commissioners at the Dover Eastern Docks on 14 May 2003. The occupants of the vehicle were Mr Macsood Carrie and his brother Mr Kamran Carrie, who are brothers of the partner of the Appellant, Nasreen Carrie. The Appellant cohabits with Nasreen Carrie in Blackburn where they have two small children.

  5. An officer of the Commissioners Mr Vine questioned the Carrie brothers. Macsood Carrie told the officer that he and his brother had been to Calais to get wine beer and tobacco. He told the officer that they had bought 8000 cigarettes and 720 pouches of tobacco together with some wine and beer, all of which would be split between them equally. When asked who the excise goods were for he replied that 400 cigarettes were for his mother, 400 cigarettes and half of the tobacco were for Kamran Carrie who was with him, 4000 cigarettes for his sister and the remaining half of the tobacco was for himself which he hoped would last him a year. He said that his sister had not given him any money for the goods and they were a gift. He told the officer that he was employed on the buses in Scotland and that he was on holiday and would be travelling back to his mother's home in Blackburn. He said that the car had belonged to his sister who was the partner of the Appellant and that it was registered to the Appellant. Macsood Carrie had the car documents with him. He told the officer that he had last travelled about ten or eleven months previously when he had bought 4000 cigarettes. He stated that he used to smoke cigarettes but now smoked tobacco. He would save through the year and then buy enough for the following year. He said that he had never been stopped by officers of the Commissioners before.

  6. Kamran Carrie confirmed that he lived in Blackburn and that their sister knew that they had the vehicle and where they had been. He said that she knew they were getting tobacco but did not know how much.

  7. The vehicle was searched and the officer had found 800 cigarettes in a bag under the drivers seat, 200 cigarettes in wine boxes in the rear passenger seat, 400 cigarettes on the rear seat, 1000 cigarettes in a holdall in the boot, 6000 cigarettes in 2 boxes in the boot, 23.5kg tobacco in 2 holdalls in the boot and 11 kg tobacco concealed under the boot carpet.

  8. Both men told the officer that the tobacco was for them and no one else and they did not know how much it had cost and that they had both paid. The officer read the commerciality statement which both men said they understood and they both declined to stay to be interviewed about the excise goods found in their possession. Macsood Carrie signed the officer's notebook as an accurate account of what was said.

  9. The Commissioners seized the excise goods and the vehicle. The goods seized consisted of 34.5 kg hand rolling tobacco, 8400 cigarettes, 2 litres spirits and 26.25 litres of wine.

  10. The Appellant wrote to the Commissioners requesting restoration of the vehicle in a letter received by the Commissioners on 15 May 2003. His partner Nasreen Carrie also signed the letter. The letter confirmed that they had lent the vehicle to her brother in good faith not knowing that he would be getting a substantial amount of tobacco. They stated that they both worked shifts at a NHS hospital and had 2 young children, and that the vehicle was therefore very important for them getting around. They stated that had they known what Miss Carrie's brother was going to do they would not have lent him the vehicle.

  11. In a further letter received on 16 May 2003 by the Commissioners, the Appellant confirmed the contents of his previous letter but also stated that he was aware that Macsood Carrie was going down south and would be calling in France to get some tobacco whilst down south. He had not questioned Macsood Carrie so closely because he was "family". He confirmed that the vehicle was on hire purchase with British Credit Trust and enclosed a copy of his vehicle registration documents.

  12. The Appellants attended a third party interview at Dover on 22 June 2003. At that interview he told an officer of the Commissioners Mrs Philpott that he was the registered keeper of the vehicle and that his partner mainly drove the vehicle. He had acquired the vehicle on 26 April 2001. The Appellant worked as a nursing assistant. He said that Macsood was on holiday and staying with his mother in Blackburn and had been having trouble with his own vehicle. The Appellant and his partner had then lent the vehicle to Macsood for 24 hours. The Appellant had given him the vehicle documentation in case he was stopped for any reason. He had told them of the seizure of the vehicle the day it happened. He said that Macsood had something to do down south but the Appellant did not know what, and that Macsood had told the Appellant that if Macsood had time he would go over to France and get some tobacco. Macsood was not getting any goods for the Appellant but may have wanted to give some to his sister. The Appellant did not ask for details because Macsood was his brother in law. Macsood drove buses for a living and any driving violations would jeopardise his job so the Appellant trusted him. He said that Macsood did not give him anything for the loan of the vehicle and may have borrowed it in the past but only if he was around Blackburn. Macsood normally lived in Scotland. Macsood had not told him how much tobacco Macsood was planning on getting. The Appellant said that his partner had probably lent the vehicle to Macsood before just for driving around Blackburn but not to go abroad. On this occasion he thought that maybe Macsood had had to go down south for work because he had been to Aldershot to work before.

  13. An officer of the Commissioners wrote to the Appellant on 9 July 2003 offering the vehicle to the Appellant on conditional restoration, namely upon payment of a restoration fee of £2900.

  14. By a letter dated 28 July 2003 the Appellant then wrote asking for a review of the decision stating that the amount asked for was extreme and would put him and his family in financial difficulty. He stated that he had lent the vehicle to his brother in law in good faith and was not present when the vehicle was seized and had had no knowledge of the events until a telephone call. Macsood told the Appellant that if time permitted it he would call to France and maybe get some tobacco but how much was never discussed because it was not a definite trip. He stated that the vehicle was on hire purchase which still had 2 years left to run and that the payments were £197 per month. The Appellants stated in the letter that he had no money in savings and only just managed to meet household bills and felt that the amount of £2900 was extreme. If he had to pay that amount he would face financial hardship and felt that his family would suffer. They had 2 children who were young aged 4 and 1.

  15. On 2 September 2003 the review officer telephoned the Appellant seeking further information. The Appellant confirmed that the finance agreement was in his name and that he did not tell the finance company about seizure. He confirmed that he had obtained 2 other vehicles following the seizure for use by himself and his partner that they were on finance.

  16. On 3 September 2003 the review officer Mrs Hurrell considered the Appellant's request for a review of the decision to restore the vehicle only on payment of a restoration fee of £2900. Mrs Hurrell considered the notes of the interviews and the correspondence together with the applicable legislation and the policies of the Commissioners. The Commissioners considered that the 2 travellers were bringing into the United Kingdom a substantial amount of tobacco and cigarettes namely 34.5 kg tobacco and 8400 cigarettes. The travellers had not known how much the goods had cost them and were not willing to answer further questions concerning the goods. The Commissioners doubted the travellers claimed use of the goods and concluded that the tobacco and cigarettes were for commercial use and were therefore not subject to relief from UK duty. The goods and vehicle were liable to forfeiture and seized. Neither the Appellant nor the travellers appealed to the magistrates' court challenging the legality of the seizure of the vehicle and excise goods which were condemned as forfeit.

  17. The Commissioner had the discretion to restore seized and condemned items and to set conditions as they thought proper.

  18. The officer considered that the amount of tobacco and cigarettes were of such a quantity as not to be for the travellers own use. The officer considered that, had the goods been genuinely purchased by each of them for their own use as they stated, the officer would have expected them to know what they paid for the goods, and the way the goods were stored throughout the vehicle also indicated that the ownership was not likely to have been as they stated. The officer concluded that the travellers were bringing in goods for commercial use of a substantial amount and this weighed against restoration. The officer bore in mind that it was their first recorded offence. The officer concluded that the Appellant was blameworthy in some way in that he had allowed the use of the vehicle without taking steps to avoid its improper use and that he did have knowledge of its potential use. The officer bore in mind that the approximate trade value of the vehicle at the time of the seizure was £2900 and that the revenue on the seized goods was duty of £4782 plus VAT of £1490 totalling £6272. An officer had set the restoration fee at the trade value of the vehicle of £2900 which was lower than the evaded revenue.

  19. The officer also concluded that Nasreen Carrie was the main user of the vehicle, and that her brother had stated that 4000 of the cigarettes were for her ,which was an amount above the guidance levels and would have cost in the region of £400. The officer concluded that she had been fully aware that her brother was bringing to the United Kingdom some excise goods that were not for his own use but for her use. The officer concluded that the Appellant and his partner had apparently lent a vehicle without question and had taken a risk that the vehicle could be used for any purpose. The officer took into account the claimed hardship as claimed by the Appellant and his partner in their letters. The officer concluded that the seizure of the vehicle had been proportionate. No receipts had been shown to the Commissioners showing the cost of the goods and neither Mr Carrie nor his brother were able to state what had been paid for the goods. The officer estimated that the tobacco and the cigarettes would have cost in the region of £2220. The officer considered that there were exceptional circumstances for reasons of proportionality to reduce the restoration fee to the Appellant, who was a third party owner, to a figure below that of the cost value of the goods themselves. The officer varied the contested decision and offered the vehicle for restoration to the Appellant on payment of a restoration fee reduced by 50% from the original figure proposed of £2900 to £1450 in respect of the vehicle.

  20. The Appellant appealed on 31 September 2003.

    21. Evidence at hearing
  21. Evidence was given at the hearing of this appeal by the Appellant himself and by the review officer Mrs Hurrell.

  22. The Appellant gave evidence that he was contesting the amount of the restoration fee. He claimed that he had not been present at the time of the seizure and felt that he should not be blamed when the two travellers had "walked away". He confirmed that he had been cohabiting with Nasreen Carrie for 6 years and that they had two children. The travellers were her two brothers. He confirmed that Macsood Carrie had been in Blackburn visiting his mother and had asked to borrow the Appellant's car. Macsood Carrie had told the Appellant Macsood was going down south. Macsood works for a company called Stagecoach. Macsood told the Appellant that if time permitted that Macsood was going to go to Calais and Macsood had told the Appellant that Macsood had purchased tickets for the ferry just in case. The Appellant had handed to Macsood Carrie the vehicle logbook and MOT certificate and Macsood had the insurance documents. The Appellant had purchased the vehicle two years previously on hire purchase with repayments over 4 years and with no deposit. The vehicle had a mileage of about 33000 miles. Macsood had told the Appellant that Macsood would be travelling with Macsood's brother. Both the Appellant and his partner worked for the NHS. The Appellant is a nursing assistant. Following the seizure he had purchased 2 other vehicles on hire purchase for himself and his partner. The Appellant said that he was not aware as to how much tobacco or cigarettes Nasrenn's brothers were bringing back to the United Kingdom. He had lent them the vehicle without making any enquiries.

  23. Mrs Hurrell gave evidence at the hearing that she considered her review decision to be reasonable and had heard nothing at the hearing that would lead her to a conclusion that the decision should be changed. She had considered the issues of hardship raised by the Appellant and taken these into account. It was open to the Appellant to seek compensation from the two travellers. She considered her decision to be proportionate.

    24. Conclusions
  24. We find that the decision of the Commissioners was reasonable and that there has been no error on a point of law by the Commissioners.

  25. On 14 May 2003 the Appellant's Renault Megane car had been intercepted at Dover, the occupants having been Macsood Carrie and Kamran Carrie. The Appellant had loaned his vehicle to them. When the vehicle was searched officers found in the vehicle 34.5 kg of hand rolling tobacco and 8400 cigarettes together with some spirits and wine. Of those goods 11kg of the tobacco had been concealed under the boot carpet. Both travellers told officers that they did not know how much the tobacco cost. They both declined to be interviewed about the excise goods. The goods and vehicle were seized.

  26. We find that the goods were held by the travellers for a commercial purpose. The amount of the tobacco and cigarette was considerable. By the legislation duty is chargeable when the goods are held for a commercial purpose. The goods and vehicle were rendered liable to forfeiture under the Customs and Excise Management Act 1979. The Appellant made no challenge as to the legality of the seizure and the goods and vehicle were condemned as forfeited under the provisions of that Act. The Act provides that the Commissioners may as they think fit restore subject to such conditions if any anything forfeited or seized. The Finance Act 1994 sets out the procedure in relation to reviews. Section 16 of the Finance Act 1994 sets out the powers of the Tribunal.

  27. We find that the Appellant loaned the vehicle to his partner's brother Macsood Carrie without enquiring what amount of goods would be transported in the vehicle. Macsood had told the Appellant that he intended to drive the vehicle down south and indeed told the Appellant that Macsood and his brother had purchased ferry tickets to travel to the continent if there were time to do so. We find that we are satisfied that the Appellant did know that there was a probability that the travellers would take the vehicle to the continent although we find that he was not aware of the quantity of tobacco and cigarettes that they would be bringing back with them. We find that the Appellant did not make enquiries in depth as to what the vehicle was to be used for and ought to have done so before lending the vehicle to his partner's brothers. In doing so, he accepted the risk.

  28. We find that the officer of the Commissioners took into account all relevant circumstances in concluding that restoration of the vehicle to the Appellant should only be on the condition that the Appellant paid to the Commissioners a sum of £1450. We find that the Commissioners acted reasonably in concluding that there were no exceptional circumstances which would justify the restoration of the vehicle to the Appellant except on those terms and conditions. We find that the review officer acted reasonably in reaching that review decision. He took into account all the circumstances and the information given to the Commissioners by the Appellant, including his submissions of the hardship which he contended had been caused. Furthermore the officer took into account the issue of proportionality and considered the amount of duty evaded and the value of the vehicle.

  29. We find that the decision only to restore the vehicle upon payment of the £1450 was in line with the Commissioner's publicly stated policy and was a reasonable exercise by the Commissioners of their discretion. The decision of the Commissioners was reasonably arrived at, the Commissioners have not acted in a way that no reasonable Commissioners could have acted, they have not taken into account irrelevant matters or disregarded something to which they should have given weight and they have made no error in law.

  30. The appeal is dismissed. The Commissioners did not apply for costs and we make no order as to costs.

    31. MR I E VELLINS
    CHAIRMAN
    RELEASE : 04/06/2004

    MAN/03/8161

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