United Kingdom VAT & Duties Tribunals (Excise) Decisions

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Cite as: [2004] UKVAT(Excise) E00757, [2004] UKVAT(Excise) E757

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Irlam v Customs and Excise [2004] UKVAT(Excise) E00757 (06 July 2004)

E00757

RESTORATION OF EXCISE GOODS — lorry driver — regular trips to the continent — 10,000 cigarettes and 5.5 kgs hand rolling tobacco seized — credible witness — decision not reasonably arrived at — appeal allowed

MANCHESTER TRIBUNAL CENTRE

ROBERT MICHAEL WILLIAM IRLAM Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: Mrs E Gilliland (Chairman)

Miss C Roberts (Member)

Sitting in public in Manchester on 6 September 2002 and 30 April 2004 2004

The Appellant appeared in person on 6 September 2002 and did not appear and was not represented on 30 April 2004

Mr J Puzey, of counsel on 6 September 2002 and Mr J Shields of counsel on 30 April 2004 both instructed by the Solicitor's Office of HM Customs and Excise, for the Respondents

DECISION

The appeal before us is that of Robert Michael William Irlam (the Appellant) who was stopped by officers of Customs and Excise at the Channel Tunnel U.K. Control Zone Freight) at Coquelles on 11 January 2001 and from whom on that date excise goods comprising 10000 cigarettes and 5.5 kgs. of hand rolling tobacco (the goods) were seized. The case first came before the tribunal for hearing on 6 September 2002 when the Appellant presented his own case and gave evidence on oath and was cross-examined. Mr. J. Puzey on that occasion represented the Commissioners. After that hearing the tribunal held back the release of a decision pending the judgement of the Court of Appeal in Commissioners of Customs and Excise -and- The Queen on the application of Hoverspeed and Others [2002] EWCA Civ 1804 and afforded to the parties the opportunity to put to the tribunal legal submissions subsequent to it. That is the purpose of today's hearing. We have been informed by the Appellant that he is unable to attend and Mr. J.Shields has replaced Mr. Puzey. We have determined to proceed.

On the first hearing date we were told by the Appellant that he was a self-employed lorry driver who did a weekly run to Italy but who every 3 or 4 months went to Luxembourg. He would buy cigarettes there as the duty was lower. When first stopped on 11 January 2001 he was asked if he had cigarettes and he replied that he had 50 cartons. He said that he was immediately directed to Bay 2 and did not get a chance to say more. It was in the examination yard that the quantity of hand rolling tobacco was found. The Appellant was interviewed and a copy of the manuscript record is before us. The interviewing officer endorsed the following: "I believe that steps have been taken to evade the payment of Excise Duty on the tobacco in your possession." He then seized the goods. The matter in due course went to review and in a letter dated 5 April 2001 S.C. Pemberton Review officer South confirmed the refusal to restore the goods made on 9 February 2001 by M.Savage Team Leader. The Appellant in a Notice of Appeal to the tribunal dated 3 May 2001 set out his grounds as: "The goods seized were not for commercial purposes. They were for personal use only and as there is no limit for goods for personal use I believe the Customs officer was wrong to confiscate them. I have never had goods confiscated before and there is no evidence the goods were for commercial use".

In response to cross-examination the Appellant had said that he did not think that 10,000 cigarettes was a lot for a 3-4 month period. As to his purchase of the tobacco he had thought he might use it more and it was handy to have. He had been smoking it on and off for two years though did not know if he would go over to it 100%. He had bought so much because it was so cheap. I n a letter to the Commissioners (16 January 2001) he had said that he and his wife wanted to cut down by rolling their own cigarettes and for that reason he had bought the tobacco but he still did not see why he should not have bought the amount that he did.

Ms.Pemberton did not attend to give evidence though we did have her witness statement of 25 September 2001 in which she confirmed her review decision. In her consideration she was not satisfied with the Appellant's calculation of usage of the cigarettes let alone how he intended to smoke the tobacco. It was her view that as a regular traveller it was unlikely that he would not have had some awareness of the minimum indicative levels (mils); that he could in any event have sought information and that he had imported goods at substantially beyond the statutory guidelines as well as not declaring the tobacco. The basis of the seizure had been that the goods were for a commercial purpose and she was satisfied that under the policy of the Commissioners that precluded restoration.

Mr Shields has acknowledged that Hoverspeed is relevant to the instant case but submits that the decision not to restore was still properly made. It is however clearly stated in the Divisional Court in Hoverspeed that the burden of proof as to commerciality is on the Commissioners. Counsel has referred us to the paragraphs on the burden and standard of proof in Gascoyne v Customs and Excise Commissioners [2003] EWHC 257 (Ch) (paras. 83-86) where it is stated that although the burden of proof may be crucial in some marginal cases there are many where it plays no real part. Mr. Shields has put it to us that the initial decision was based not solely on the excess over the mils. but on the misdeclaration of the Appellant as to what he was importing; and the review officer had drawn attention to clear facts in her review letter which he submitted was not couched in terms of rebutting commerciality but setting out positive reasons to show why the goods were held for a commercial purpose. He has also referred to John Dee Ltd. v Customs and Excise Commissioners [1995] STC 941 for the proposition that where it can be shown that despite the defects the decision would inevitably have been the same the tribunal may dismiss an appeal.

The power of the tribunal in matters such as the appeal before us is limited to a consideration as to whether the decision of the Commissioners appealed against could not reasonably have been arrived at and if we so find we may direct as set out in s. 16 (4) (a),(b), and (c) of the Finance Act 1994. This power does not extend to authorise the tribunal to order a restoration of the goods. Further we are bound by the forfeiture of the goods by passage of time though we consider that we may look at the background of the seizure.

We have found the Appellant a credible witness. We do not believe that he was seeking to mislead the officers by not on being stopped mentioning the tobacco. We accept his statement that he was immediately moved on and did not have a chance to do so at that time. He knew the matter would arise when he was seen at the Bay and there is no indication in the papers before us that the Commissioners considered that the goods or any part of them were being concealed. As to the positive facts in the review decision as referred to us by Counsel for the Commissioners it is our view that the amount brought in was not inconsistent with the Appellant's declared usage and he had done the calculations. So far as the tobacco was concerned he and his wife were smokers even if they wished to cut down and the Appellant saw that the tobacco was cheap and decided to buy it. It was suggested at one stage that the Commissioners were not saying that some of the goods were not for own use but that there was a commercial element as well but we know of no breakdown having been put forward as to figures. Counsel has drawn our attention also to the review officer's reference to " mils". Whilst he agrees that post-Hoverspeed these are no longer relevant as such he submits that the claimed lack of knowledge of a regular traveller must go to question his credibility. The cross-border traveller is however entitled to bring in an unrestricted quantity of excise goods for his own use. The Appellant said at the interview that he thought he could bring back as much as he wanted and said also when presenting his case to the tribunal that the message at the "duty free" was that as much as wanted could be brought back for personal use. We note also that in her review Ms. Pemberton has defined her role as being "to determine whether or not the contested decision is one which a reasonable body of Commissioners could not have reached". That is not correct. That is the function of the tribunal. The review officer being independent of any operational work areas is to look afresh at the papers and information in the matter. In dealing with the applicable legislation the officer has included details of the mils on beer and wine which did not arise in the contested decision and as no vehicle was seized s. 141 of the Customs and Excise Management Act 1979 does not relate. This leads us to conclude that a standard format was in place rather than a new approach taken. We do not consider that the decision was reasonably arrived at.

The appeal is allowed and we require the Commissioners under the provisions of s.16 (4) (b) to carry out a further review of the decision to be undertaken by an officer independent of any previous involvement in the matter.

The Appellant had not sought costs at the first hearing and has not attended the second accordingly we make no direction as to costs.

MRS E GILLILAND

CHAIRMAN

Release date:06/07/2004

MAN/01/8067