United Kingdom VAT & Duties Tribunals (Excise) Decisions

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Cite as: [2004] UKVAT(Excise) E751, [2004] UKVAT(Excise) E00751

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Lovell & Ors v Customs and Excise [2004] UKVAT(Excise) E00751 (29 June 2004)

E00751

EXCISE DUTY — cigarettes seized from appellants — review decision confirming decision not to restore goods — whether goods imported for commercial purpose — whether review decision reasonable — appeal dismissed

MANCHESTER TRIBUNAL CENTRE

(1) Mr T P LOVELL AND MRS L LOVELL Appellants

(2) AYSHEA BATTISTA

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: Mr J H Fryer-Spedding CBE (Chairman)

Mr J E Davison (Member)

Sitting in public in Newcastle Upon Tyne on 21 April 2004

Mrs Lovell and Miss Battista appeared in person. Mrs Lovell also represented Mr Lovell who did not attend

Mr Ward, of counsel, instructed by the Solicitor's Office of HM Customs and Excise, for the Respondents

DECISION

This is an appeal against decisions dated 29 May 2002 by which a Review Officer, Mr C McFadden, decided to uphold decisions of officers of the Respondents not to restore cigarettes seized from the Appellants.

By a Direction made on 14 October 2003 the Tribunal (Mr M S Johnson, Chairman) directed that appeals made by Mr and Mrs Lovell and Miss Battista respectively should be conjoined and so heard together.

The Appellants were stopped by officers of the Respondents at Newcastle Airport on 12 February 2002. They were returning from Alicante in Spain. Mr and Mrs Lovell had with them 29,980 cigarettes. Miss Battista had 15,000 cigarettes.

At the hearing Mr D J Allum, at the material time a member of the Respondents' special task force, Mr R Webb, then a member of the Respondents' national strike force and Mr McFadden, the Review Officer, gave evidence for the Respondents. Mr D J Griffiths, then based at Newcastle Airport, was available at the hearing. For the Appellants, Mrs Lovell gave evidence.

Mrs Lovell, Mr Lovell and Miss Battista made statements at Newcastle Airport on 12 February 2002. An important part of the Respondents' case is that they alleged that there were inconsistencies between these three statements. It will be necessary, therefore, to refer to the statements in turn in some detail.

In her statement, Mrs Lovell said that the 29,980 king size filter cigarettes, held by her husband and herself, were their joint property. When asked whether there were just the two of them travelling together she replied: "I brought my granddaughter". She said that the granddaughter was aged 8. She said that they had been at Benidorm, near Alicante, for a week. She said that she was employed as a catering manager. Her husband was about to start a new job having finished his last one just before Christmas. She said that she could not remember precisely how much she had paid in Euros for the cigarettes. She had paid both by cash and credit card. They had purchased the cigarettes on several occasions. Both she and her husband had been involved in making payments. She said that her income was approximately £1,000 per month at the time and her husband's earnings were similar. She said that she and her husband had savings. She was going to be made redundant in the near future. The money to purchase the cigarettes had come partly from the bank and partly from savings.

Mrs Lovell said that she normally smoked Regal, 20-30 a day and 40 at a weekend. She said that the imported cigarettes were for her and her husband and they intended to smoke them. They hoped that they would last for a year. She said that they had to make mortgage repayments but she did not know how much the instalments were.

Later in the interview Mrs Lovell was asked again if it was just her and her husband travelling together. She repeated that she had her granddaughter with them. She said that her daughters were "both out there before we booked". She said that her daughters were called Sonya Turnbull and Ayshea Battista. She said that the daughters had cigarettes with them. She had given Sonya money towards their purchase but Ayshea had her own money. The payment to Sonya had been made by paying for her children to come. The payment was about £400. She said that she and her husband normally brought back 800 cigarettes. She said that their last overseas visit had been to Kefalonia, Greece. She and her husband had brought back 800 cigarettes. She said that she expected that she would be getting a pension and compensation for her back as a result of an injury in a car crash. The compensation would be £2,700 approximately. She said that during the past 12 months she had been once to Kefalonia and once to Benidorm in addition to the present trip. She said that she had spent a large amount before becoming redundant because it would give savings throughout the year. When asked whether they had gone abroad with four half empty bags Mrs Lovell said that there was food in them at the time. Before the Tribunal Mrs Lovell said that she was expecting a lump sum of £22,000 on retirement. She said that she had spent about £2,000 on cigarettes. She emphasised that she and her husband had savings. They had ISAs and the benefit of a financial adviser. She produced additional documents relating to her redundancy payment and pension. However, these dated from 1997 and so are of limited value. She also produced a statement of severance benefits from the director of Cityworks dated 21 November 2001. This stated that an estimate of her "pension figures" would be:

(1) a redundancy payment of £7,169 paid by cheque to her home address within two weeks after her leaving date

(2) a pension lump sum for pensionable service (non-taxable) of £11,944 paid direct to her bank or building society by South Tyneside MBC normally within one month of leaving

(3) a pension lump sum for added years of £1,931 paid direct to her bank or building society by South Tyneside MBC normally within one month of leaving

(4) a pension (taxable subject to income) of £4,625 pa paid direct to her bank or building society by South Tyneside MBC on 16^th of each month or next working day

(5) a gratuity payment (taxable) of £761 paid by the City Council via the payroll system a month after her leaving date.

In her evidence to the Tribunal Mrs Lovell emphasised that she and her husband had adequate capital to buy the cigarettes. She said that she had had difficulty in answering questions during her interview because she was "in a terrible state" as a result of the manner of the questioning.

Mr Lovell, when interviewed, said that the cigarettes belonged to himself and his wife and would last a year, thereby saving them money. He said that they had paid approximately 24 Euros for each carton of 200. He said that he had been out of work since 21 December 2001 but had secured a new appointment. He had a small pension from his old job which provided him with £416 a month. He said that he would be retiring the following May. He said that the purpose of the trip was to have a holiday and purchase cigarettes. He said that he had taken three suitcases abroad with him and other suitcases were either purchased abroad or came free with the cigarettes. He could offer no explanation as to why the cases which he said he had obtained abroad were identical to the cases taken out with him. He said that his last holiday was in the previous August when he had travelled to Benidorm. He had purchased 800 cigarettes on that occasion. He had not purchased more on that occasion because he said that he was unaware that he could do so. He said that he smoked approximately 40 cigarettes per day and he did not intend to sell any of the cigarettes.

In her interview, Miss Battista said that she had not intended to supply anybody else with the cigarettes, although she might give some to her boyfriend. She said that she smoked about 40 cigarettes a day. She had an administrative job with a firm of estate agents, earning about £80 a week, part time. She had about £800 savings. She said that she could afford to pay for the cigarettes because she had borrowed money from her mother " in lieu of compensation I am due from a car accident". She thought that the sum was about £500 but she had some money from her boyfriend also, perhaps about £400. She hoped that she and her mother would get about £2,500 compensation each. She said that she had last been abroad to Benidorm in the previous October and before that to Ibiza, in about the previous February. She had brought about 100 cigarettes in Benidorm.

Mr McFadden informed Mrs Lovell of the outcome of his Review by a letter dated 29 May 2002. He summarised relevant statutory provisions, which are set out in further detail in the statement of case. He compared the answers to certain questions of Mr Lovell and Mrs Lovell respectively. In particular, he noted their respective evidence as to who was in their travelling party.

He also noted that Mr Lovell had said that their last trip abroad had been to Benidorm whilst Mrs Lovell said it was Kefalonia. He remarked that Mrs Lovell said that she had not given any money to Miss Battista, but Miss Battista said that her mother had leant her £500. He said that the amount of cigarettes involved would have lasted Mr and Mrs Lovell approximately 14 or 15 months at the rate of consumption given by them. Most importantly, he remarked that the amount of cigarettes was well in excess of the minimum indicative levels.

By a letter also dated 29 May 2002 to Miss Battista, Mr McFadden set out his Review Decision. Again, he noted the divergence of the evidence as between Mrs Lovell and Miss Battista relating to the £500 loan. He also related the cost of the cigarettes to Miss Battista's ability to pay for them out of her income.

In each case, Mr McFadden concluded that the cigarettes were imported for a commercial purpose. We agree with his reasoning and conclusions. We should say, in addition, that we did not find Mrs Lovell a reliable witness. She appeared to be reluctant to give direct answers to questions put to her. She was taken up to a considerable degree with complaining about the way in which the officers had treated her. As regards the discretion of the Respondents through the Review Officer, to direct restoration, we do not think that Mr McFadden made a decision which no reasonable could have made. Further, we find that he correctly took into account all relevant matters, including the statutory provisions, and did not take into account any irrelevant matter. For these reasons, the appeals will be dismissed.

MR J H FRYER-SPEDDING CBE

CHAIRMAN

Release date:29/06/04

MAN/02/8148