United Kingdom VAT & Duties Tribunals (Excise) Decisions

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Cite as: [2004] UKVAT(Excise) E00759, [2004] UKVAT(Excise) E759

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Thomson & Ors v Customs and Excise [2004] UKVAT(Excise) E00759 (09 July 2004)

E00759

REGISTRATION – Goods – Appellants purchased goods in Spain – Goods transported to UK by others, none of the Appellants being present – Whether Appellants entitled to relief from duty – No – Commissioners' publications do not state expressly that an importer must travel with his goods – Law misunderstood by Appellants – Commissioners' policy not to restore goods on payment of duty – Whether compatible with statutory discretion – No – Appeal allowed: further review directed – CEMA 1979, s.152(b)

LONDON TRIBUNAL CENTRE

JOHN THOMSON, ROBERT BRASTOCK, Appellants

AND GORDON YEOMANS

and –

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: ANGUS NICOL (Chairman)

SHAHWAR SADEQUE Mphil, BSc

Sitting in public in London on 22 June 2004

John Thomson in person and representing the other two Appellants

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

© CROWN COPYRIGHT 2004

DECISION

This is an unusual appeal, against a decision of the Commissioners refusing to restore certain excise goods which were imported by the three Appellants. The aspect of it which is unusual is the fact that the Appellants bought the goods in Spain, but they were transported to the United Kingdom by a friend of theirs. As the situation is described, the travellers were not the importers and the importers did not travel.

In their notice of appeal, the Appellants said,

"1. It was unreasonable for the Commissioners to seize the excise goods as they were declared on a CMR note.

The owner offered to pay the excise duty as indicated by the Customs and Excise information web page.

The Review officer's decision is on its face unreasonable as he has given undue weight to irrelevant matters and not taken all factors into proper consideration.

The decision not to offer the goods for restoration, whether free or on some payment, was disproportionate."

At the hearing, Mr John Thomson, who represented all three Appellants, conceded that the goods had been properly seized, and accepted the position under the provisions of the Excise Duties (Personal Reliefs) Order 1992 ("the 1992 Order"), which was then still in force.

The facts

The facts were not in dispute, and we have taken the facts of the interception and seizure from the statement of case. Mr Thomson mentioned certain factual matters at the hearing, and other facts were disclosed in correspondence by the Appellants, and we accepted those.

On 12 July 2002 Customs intercepted a van at Poole Ferry Port. The occupants were Mr Gareth Howells, the owner of the van, and Alexander Morgan. In the van the officers found 289.5 litres of wine and 48 litres of spirits. Mr Howells produced to Customs a CMR consignment note, delivery notes, and receipts for all the goods, together with a list of names of those to whom the goods were to be delivered, who were the three Appellants and two others.

Mr Howells told the officers that he had taken a load of furniture out to Denim and Benidorm and had picked up the excise goods on the return journey. He knew two of the Appellants, Mr Brastock and Mr Yeomans, but none of the others. He said that on an earlier occasion he had carried a dozen cases of champagne into the United Kingdom for Mr Brastock some months previously. On that occasion, he had said, the Customs officers had looked at the goods and released them. He said that he was not aware of the regulations about importing excise goods. The goods and vehicle were then seized, and the vehicle later restored to Mr Howells with no charge. The seizure was because the owners had not travelled with the goods and therefore relief was not allowed under article 3 of the 1992 Order.

The review

The Appellants all requested restoration of the goods, and when that was refused asked for the decision to be reviewed. The first review was carried out by Mr Morgan, who unfortunately sustained a severe injury, Mr Truscott told us, and it was thought best that a further review should be undertaken, by an officer with no previous connexion with the case and who would be able to attend the hearing to give evidence. It is Mr Truscott's review decision that is under appeal. We refer below to the review letter sent to Mr Thomson (there were minor differences between the three letters).

Under the heading "Consideration", Mr Truscott began by saying that he had taken a completely fresh look at the facts. He also set out the relevant law. He then continued:

"The persons in possession of these goods at the point of importation were Messrs Howells and Morgan. They had not purchased the goods, neither did the goods belong to them, and as such they were not community travellers importing those excise goods as a result of cross-border shopping.

You, Mr Brastock and Mr Yeomans purchased the wine, however you had not transported it, as prescribed in the legislation I have outlined previously. As such, these excise goods at the point of importation did not qualify for relief from UK excise duty within article 3 of the Excise Duties (Personal Reliefs) Order/Article 8 of EC Directive 92/12.

Moving on from this point, since the excise goods did not qualify for relief from UK excise duty, it was incumbent upon you to have arranged either for prepayment of the duty due, or for that to be guaranteed. I have indicated above the processes for this within the REDS Regulations. Since neither relief from duty nor payment of duty had occurred the excise goods were liable to forfeiture under article 16 to the [REDS Regulations] and section 49(1)(a) to the Customs and Excise Management Act 1979. The officers therefore had no choice other than to seize those goods under section 139 of that Act. I would add also that the vehicle used for the purpose of the improper importation was also liable to forfeiture under section 141 of that Act, however whilst the vehicle was seized, I am aware that it was immediately restored free of charge."

That was the conclusion to which Mr Truscott came on the matter of the seizure. He then turned to the question of restoration of the goods:

"I have examined carefully the matters you have raised to support your claim that restoration should be offered. In your letter of 9th October 2002 you have asked Customs to comment upon a website. I am required within this review process to consider all that is relevant and disregard all that is not relevant, and find no relevance with regard to this website. I will not comment therefore."

As it turned out at the hearing, the website to which Mr Truscott was here referring was not that upon which Mr Thomson had asked for his views. The website to which Mr Truscott referred (which was produced) was clearly of no relevance. That to which Mr Thomson had referred in his letter was the Commissioners' own website, and was clearly relevant. We refer to this again later. The review letter continued:

"The information in this letter to the effect that the haulage of your excise goods was free of charge also has no relevance in this matter. Your comments regarding the contents of the Notice 'Shopping Across the Channel' I regret I am at variance with. You did not bring the goods back.

I have set out that it is the Commissioners' policy not to restore seized excise goods other than in exceptional circumstances. Whilst I concede that none of the elements that would militate against restoration are present, neither do I find any exceptional circumstances within this case to persuade me to deviate from the policy I have outlined. Whilst I do not believe there has been any deliberate attempt to defraud or evade by you or Messrs Yeoman [sic] and Brastock, I do not consider such misunderstanding in itself sufficient to warrant restoration, neither do I find any exceptional hardship arising."

Consequently Mr Truscott upheld the decision not to restore the goods.

Mr Truscott also gave oral evidence. He explained that the further review which he carried out was not directed by the Tribunal in order to take into account the changes in the law consequent upon the decision of the Court of Appeal in R (on the application of Hoverspeed Ltd and others) v Customs and Excise Commissioners [2003] STC 000, but was the result of Mr Morgan's injury. He repeated that he had taken a completely fresh look at the circumstances of the case, and that he had not found any circumstances that were sufficiently exceptional to warrant departing from the Commissioners' policy. There had, he said, been a misunderstanding of the law by the Appellants. To restore the goods in such a case would be tantamount to authorising the unaccompanied transporting of imported goods. What had happened was, he said, that goods had been purchased duty paid in another Member State and had been brought in unaccompanied by the purchasers. The view taken was, therefore, that this was not a personal import. But it did not fulfil the conditions for a commercial importation either. It fell between the two. He said that there was a distinction to be drawn between the words "transported by them" and "causing to be transported", and both the European and domestic legislation used the former.

He said that the page from the website which had been produced was an old page, now superseded, and would have attached the August 1999 edition of Notice 1. If one visited the website, it was possible to download the current edition (at the time) of Notice 1. Mr Truscott said that all the notices carried the exhortation, "Do not bring in goods for anyone else", though that particular edition had not included those words. The Notice 1 of June 2001 was produced, and bore no resemblance to that which had been produced earlier. He agreed that neither the website nor the edition of Notice 1 available to the Appellants at the time of the import said unequivocally that to qualify for relief from duty the purchaser of excise goods must travel with the goods. The nearest that Notice 1 came was under the heading "Smuggling", when it advised that one should not carry goods for another person: that came in a paragraph that was dealing with prohibited and restricted goods. Asked what he would have done by way of research as to what he was allowed to bring in as a member of the public under the same circumstances as the Appellants, he said that he would have done exactly the same, though he would have downloaded the Notices attached to the website. He said that to allow a misunderstanding of the law to permit restoration of the goods would not be within the spirit of the legislation. Nor was it within the Commissioners' policy to allow importation in such circumstances with a condition of payment of the duty. In any case, by now the goods would have been destroyed.

Mr Truscott said that he had not been aware of any previous trips that Mr Brastock may have made. He was surprised to learn that he had been allowed to import the goods on that occasion, but added that in some cases action might not be taken: it would depend upon the degree to which a person brought in goods in excess of the minimum indicative levels. Finally he said that in his view the law was quite clear and it was that which had driven the review decision.

The relevant parts of the website page and Notice 1 contained the following. The website page refers to Notice 1 as follows:

"Notice 1 (PG)

A pocket customs guide for travellers entering the UK

August 1999

Travelling within the EU

You do not have to pay any tax or duty in the UK on goods you have bought duty paid in other EU countries for your own use.

If challenged by Customs and Excise, you must satisfy us that the goods are for your personal consumption. If you bring back goods for anyone else for money given by them, you are liable to pay the full amount of duty."

The page continues by pointing out that failure to declare goods which are not for personal consumption can lead to severe penalties. The page also says that Notice 1 sets out the guidelines in more detail, and gives the website reference for it. The downloaded version of Notice 1 from the website is entitled "Shopping across the Channel? Bringing back cigarettes or alcohol?" Under the heading "Shopping within the EU", it says:

"You can

• Bring back into the UK as much EU duty paid tobacco and alcohol as you like as long as it is for your own use, which includes:

• Bringing back goods for your own consumption

• Bringing back gifts for family and friends.

You cannot:

• Bring back goods for payment - even payment in kind.

• Bring back goods for friends and family if they are paying you, giving you the cost price or paying for some or all of your travel costs

• Bring back goods for resale.

The notice also set out the guidelines as to the amounts of tobacco and alcohol which were considered reasonable for a traveller's own use.

The June 2001 edition of Notice 1 was also produced. That was entitled "A customs guide for travellers entering the UK". Under the heading "Travelling within the EU", it said:

"If you are travelling to the UK from another European Union (EU) country"

And briefly explained the procedure undergone by travellers arriving in the United Kingdom. The notice then listed the European Union Member States, and proceeded to another heading: "Goods you buy in the EU". Under that is said:

"You do not have to pay any tax or duty in the UK on goods you have bought in other EU countries for your own use, but please remember the following:"

Under that preamble it defines "own use" and details the possible consequences of bringing in excise goods intending to resell them. The last bullet point in this section was:

• "If you let a coach, ferry or aircraft store your goods while travelling back to the UK you must make sure that they are clearly marked, so that when you land you can collect the exact goods you bought."

We include that paragraph because Mr Thomson said that the goods bought by each of the Appellants was clearly labelled. The next section of Notice 1 was directed to those travelling to the United Kingdom from outside the European Union. The last page was first headed "Prohibited and restricted goods", which were then listed. Finally a short section headed "Smuggling". That section said:

• "Never carry anything into the UK for someone else.

• Never bring prohibited goods into the UK.

• If you are driving, make sure that everyone travelling with you knows what goods are prohibited or restricted. If you smuggle goods in a car, the car may be taken off you.

• If you are in doubt, go to the Customs enquiry point.

• A pet may be tame, but rabies is a killer. Don't even think of smuggling an animal into the UK. It could be carrying rabies and the consequences could be disastrous."

The law

The law which is of particular relevance to this appeal is contained, first, in Article 8 of Council Directive 92/12/EEC, which provides:

"As regards products acquired by private individuals for their own use and transported by them, the principle governing the internal market lays down that excise duty shall be charged in the Member State in which they are acquired."

So that duty has to be paid on the purchase of the goods, but in the country of purchase, and no further duty has to be paid on importing the goods into the United Kingdom. At the time of the Appellants' purchase of their goods, the 1992 Order was in force. Article 3 provided:

Subject to the provisions of this Order a Community traveller entering a control zone of the United Kingdom shall be relieved from payment of any duty of excise on excise goods which he has obtained for his own use in the course of cross-border shopping and which he has transported."

As a result of the decision in Hoverspeed (mentioned above) the 1992 Order was revoked, and therefore has no force, and is as though it had never been. However, the Appellants purchased their goods and had them brought to the United Kingdom before that revocation, and it was in force at that time. The importance of it in the context of this appeal is only that it uses the words, "and which he has transported". Those words exactly reflect the wording of Article 8, which remains in force.

The Excise Goods (Holding, Movement, Warehousing and REDS) Regulations 1992 (usually known as "the REDS Regulations", REDS meaning Registered Excise Dealer and Shipper) cater for the "occasional importer", that is the importer who is not importing as a business and wishes to import an amount of goods greater than the MILs and wishes to sell them. Regulation 15(3) provides that in each case the importer must:

(a) before the excise goods are dispatched to him—

(i) inform the Commissioners that he is expecting the above-mentioned goods and shall supply such further particulars with respect to the consignment as the Commissioners may require;

(ii) pay the duty or provide a guarantee satisfactory to the Commissioners securing payment of the duty; and

(iii) furnish the consignor with a certificate stating that the duty has been paid or otherwise accounted for, or that the payment of duty has been secured to the satisfaction of the Commissioners.

(b) as soon as the excise goods have been received by him, inform the Commissioners of the arrival of the goods;

(c) retain the consignment intact with any seals unbroken for one hour or such other period as the Commissioners may allow or require; and

(d) pay any duty that has not been paid in such manner as the Commissioners may direct."

That regulation shews what the Appellants ought to have done if they were bringing the goods in as occasional importers. In such a case, a breach of regulation 6 will result in forfeiture of the goods (see regulation 16). The Commissioners have a discretion to restore anything forfeit or seized, subject to conditions if they think fit, under section 152 of CEMA.

The review procedure is laid down in sections 14 and 15 of the Finance Act 1994. If a review is properly sought by a person against whom a decision has been made refusing restoration, the Commissioners may confirm the decision, or may withdraw or vary it.

The jurisdiction of this Tribunal in such appeals as this is laid down in section 16(4) of the Finance Act 1994, which provides:

"(4) 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 that 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; and

(c) . . ."

The restoration of goods and vehicles falls within the definition of "ancillary matters" as defined in Schedule 5 to that Act. The effect of section 16(4) is that the Tribunal is not empowered to substitute its own decision, whether or not to restore the goods, and can only look at the review decision and determine whether, in all the circumstances, it was reasonable for the Commissioners to arrive at that decision.

The word "reasonable" in this context means reasonable in the sense in which that word was used in Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223. In that case, Lord Greene MR said, at page 229,

"A person entrusted with a discretion must, so to speak, direct himself properly in law. He must call his own attention to matters which he is bound to consider. He must exclude from consideration matters which are irrelevant to what he has to consider. If he does not obey those rules, he may be said, and often is said, to be acting unreasonably."

That passage was cited in Customs and Excise Commissioners v J H Corbett (Numismatists) Ltd [1981] AC 22 by Lord Lane, who then said,

"[The Tribunal] could only properly [review the discretion] if it were shown that the Commissioners had acted in a way in which no reasonable panel of Commissioners could have acted; if they had taken into account some irrelevant matter or had disregarded something to which they should have given weight."

The Appellants' contentions

The Appellants relied principally upon the failure of the Commissioners' publications, the website and Notice 1, to make it clear that in order to qualify for relief from excise duty an importer had to travel with his excise goods. Mr Thomson said also that even the new and revised website did not make it plain that one has to accompany one's goods if travelling from another European Union Member State, though it does make this clear if you are travelling from outwith the European Union. They stressed that they had attempted to do what was correct, and were misled by the website and Notice 1.

The Commissioners' contentions

Mr Sarabjit Singh, who appeared for the Commissioners, said that seizure was no longer challenged. Article 8 of Council Directive 92/12 EEC makes it quite clear that goods have to be transported by the importer if they are to qualify for relief from duty, and article 3 of the 1992 Order had also made that clear. Under regulation 4(1A) of the REDS Regulations, it was stated in plain terms that it applied to "excise goods acquired by a person in another Member State for his own use and transported by him to the United Kingdom". So far as the Commissioners' publications were concerned, the website page exhibited in this case, and relied on by the Appellants, made it clear that it applied only to travellers. The then current edition of Notice 1 attached to the website refers to relief from duty for travellers who "bring back" excise goods. That makes it clear that the importer had to be present. This the Appellants ought to have known, and it would have been evident from Notice 1. That Notice was entitled "A Customs guide to Travellers", and could therefore only apply if the importer was travelling with the goods.

In this case, Mr Singh contended, the travellers, Mr Howells and Mr Morgan, were in possession of the goods at the point of importation, but had not themselves purchased the goods and the goods were not their property. They were not, therefore, community travellers (under the legislation then in force) who were importing the goods in the course of "cross-border shopping". Correspondingly, the Appellants had purchased the goods but had not transported them as required by Article 8 and article 3 of the 1992 Order. None of them was, therefore, a community traveller and they were, therefore, not entitled to relief. Ignorance of the law was not an excuse for breaching the requirements

As to the matter of proportionality, Mr Singh contended that the seizure and the decision not to restore the goods was proportionate. He relied upon the following. First, that the goods were dutiable and duty had been neither paid nor guaranteed. Secondly, that such an importation of goods would damage legitimate trade and the protection of the revenue. It was also the fact that Mr Brastock had imported goods on an earlier occasion, so that legitimate trade had already been damaged to some extent. Thirdly, the Appellants being in breach of the statutory requirements there had to be some penalty, or those requirements would become redundant. Fourthly, if restoration was offered upon payment of the outstanding duty the deterrent to prevent breaches of the statutory requirements would be weakened and the penalties ineffective; the penalty would be no more than requiring payment of duty which should have been paid in any event, and would increase the risk of travellers importing goods for others which the legislation was intended to prevent. The policy of non-restoration struck a fair balance between the subject's right to enjoy his own property on the one hand, and compliance with revenue law and the protection of the revenue on the other. There were no exceptional circumstances which justified restoration.

Conclusions

We start from the provisions of section 16(4) of the Finance Act 1994 (see paragraph 17 above), which permit us only to determine whether the decision of the Commissioners not to restore the goods was reasonable in the light of the information then before the Commissioners, or rather before Mr Truscott to whom it fell to make that decision. That having been stated, we look at the legal framework surrounding the facts. It appears to us that the wording of Article 8 of Directive 92/12 is perfectly clear, and provide that duty is only to be charged in the Member State in which the goods are acquired by a private individual if they are for his own use and if they are transported by him. That was reflected in article 3 of the 1992 Order, which relieved from payment of duty a Community traveller who obtained goods for his own use and who transported them. Although that Order has been revoked, it was the law in force at the date of importation, and that which the Commissioners were administering. It was also the law which was paraphrased in the Commissioners' publications.

The facts are not in dispute. The important facts are that the Appellants had purchased the goods and the goods had been transported by Messrs Howells and Morgan. The procedure adopted between them was neither one thing nor the other. The Appellants did not comply with the procedure for importing excise goods in such a way that Article 8 would have applied, nor was there a commercial importation under the REDS Regulations since the duty was nether paid nor guaranteed. The unfortunate aspect about this case is that, bearing in mind that the amount of goods was only slightly greater than the MILs which would have applied, without more, if three people had transported the goods themselves, and bearing in mind that each of them was intending to cater for functions at which substantial quantities of wine would be consumed, they may well have had no difficulty in passing through Customs on importation as cross-border shoppers.

As we have said, the law was quite clear. But the question is raised, whether the sources of the legal requirements consulted by the Appellants clear? Mr Thomson, on behalf of himself and the other two Appellants, contended that it was not clear from those sources, both of which were published by the Commissioners, that it was essential for the importer to travel with his goods. We have read the website page and the pages that went with it which were exhibited, and the then current edition of Notice 1. The intention of those publications appears to be to set out the legal requirements very simply in ordinary plain English that everyone can understand. One thing which emerges, as Mr Truscott acknowledged, is that nowhere in those publications does it state unequivocally that a cross-border shopper had to travel with his goods. Why the publications could not have been so drafted that they did say so in plain terms remains a mystery. One further line, for example "Remember: you must travel with your goods if you wish to import them free of duty. Do not get someone else to bring them into the country for you," or words to that effect, would have put the matter beyond any doubt. It is interesting to observe that Notice 1 bears on the front a "Crystal Mark" which says, "Clarity approved by the Plain English Campaign".

However, having said that, the fact remains that the Notice and the website page were both directed specifically at travellers. Notice 1 refers in all material places to bringing back goods into the United Kingdom. There was one sentence in the website page which was, it appeared to us, ambiguous: "If you bring back goods for anyone else for money given by them, you are liable to pay the full duty." Mr Thomson thought that that referred to paying someone to transport your goods back to the United Kingdom. Our immediate view was that it referred to the purchase of excise goods in a Member State on behalf of another person in the United Kingdom who was going to pay for them. The words are apt to mean either, and no indication is given as to which is intended. Another potentially misleading sentence in the website page is "You do not have to pay any tax or duty in the UK on goods you have bought duty paid in other EU countries for you own use." By itself, that suggests that there may be no requirement that you should transport them yourself. However, it must be observed that that comes under the heading "Travelling within the EU". But it is not happily drafted. It is not wholly clear that the person who bought the goods must also be the traveller. The fact that it is specifically mentioned in connexion with travel to the United Kingdom from outwith the European Union that you must travel with the goods in order to obtain duty free allowances if anything suggests that there is a distinction between such travel and travel from a European Member State. It does not make for clarity. Neither the website nor Notice 1 refers the reader to the sources of law; yet these publications are intended by the Commissioners to be read and acted upon by the public.

However, there is no getting round the fact that the overall references are to travellers from other European Union countries. The context and the headings make this clear. We are led by that to the conclusion that those publications could convey to the reader that they applied to people who were travelling with their goods. If they did not, they must at least have raised such a query in their minds that they should have sought clarification. But it cannot be said that the Commissioners are wholly blameless in the Appellants' misunderstanding.

We turn to the matter of proportionality. We did not wholly agree with Mr Singh's contentions. Mr Singh referred to the potential damage to legitimate trade and the protection of the revenue. As we have already pointed out, the amount of goods imported, between three people, was only slightly in excess of the MILs, and each of them was about to entertain in a fairly large way. The amounts were less than the revised MILs. If everyone who wished to do so imported the exact MILs of goods the damage to the legitimate trade, and the damage to the revenue, would be immense, and there would be nothing, short of legislation, which could be done about it. The seizure of the goods and their subsequent destruction denies the revenue any duty that might have been payable. It is not suggested in this case that there was any intention to sell the goods commercially or at all. Mr Brastock, we were led to believe, was permitted to enter and to take his imported goods with him. It is not at all clear in what way legitimate trade had been thereby damaged. Mr Singh went on to say that for a breach of statutory requirements there must be a penalty. The legislation does not suggest that that is necessarily so. Under section 152(b) of CEMA, the Commissioners have a discretion to "restore, subject to such conditions (if any) as they think proper, any thing forfeited or seized". That means that they have a discretion to refuse restoration, to offer restoration subject to conditions, such as payment of any duty that would have been exigible on the goods, or to restore the goods with no charge. It is therefore clear that it is not imperative that there should be a penalty. And if there should be a penalty, it is also clear that that penalty could be the imposition of the duty which might have been payable. However, Mr Truscott said that it was not within the Commissioners' policy to allow importation on payment of duty. It appears to us that such a policy prevents the Commissioners exercising the discretion given to them by statute.

In Lindsay v Customs and Excise Commissioners [2002] 1 WLR 1760 Lord Phillips of Worth Matravers MR said, in paragraph 64,

"64. The Commissioners' policy does not, however, draw a distinction between the commercial smuggler and the driver importing goods for social distribution to family or friends in circumstances where there is no attempt to make a profit. Of course even in such a case the scale of importation, or other circumstances, may be such as to justify forfeiture of the car. But where the importation is not for the purpose of making a profit, I consider that the principle of proportionality requires that each case should be considered on its particular facts, which will include the scale of importation, whether it is a 'first offence', whether there was an attempt at concealment or dissimulation, the value of the vehicle and the degree of hardship that will be caused by forfeiture. There is open to the Commissioners a wide range of lesser sanctions that will enable them to impose a sanction that is proportionate where forfeiture of the vehicle is not justified."

There are, of course, differences between Lindsay and the present case. This case concerns goods only, Lindsay concerned the restoration of a vehicle. In this case there is no suggestion that the import was for a commercial purpose, while the above passage discussed the different degrees of commerciality. The principle, it seems to us, is the same, and in the present case applies more strongly in the absence of commerciality, where the "offence" is merely a mistake in the proper procedure for importing excise goods. There is a wide range of lesser sanctions available to the Commissioners, right down to no sanction at all. But the Commissioners' policy, according to the evidence of Mr Truscott, refuses to consider such a possibility.

So far as the requirements for importing the goods are concerned, if there were nothing more, the law would be against the Appellants on a technical point, though in our view there would be considerable mitigation. As we have already said, the legitimate trade in the United Kingdom was not in any real jeopardy as a result of this import, nor was the revenue. But the rigidity of the policy has, in our judgment, the result that the "penalty" is disproportionate. For that reason, in our view, the decision of the Commissioners not to restore the goods was not reasonable. The fact that the goods will by now have been destroyed is, in our view, nothing to the point. They will have been destroyed at a time when it was known that there was to be an appeal, and some other means may have to be found of redressing the matter in the event of a further review which is in favour of the Appellants. The Appellants therefore succeed on the fourth ground of their notice of appeal.

For the above reasons, we allow this appeal. We direct that a further review shall be carried out by the Commissioners within 30 days after the date of release of this decision, by an officer not previously connected with the matter. In carrying out this further review, we direct that the Commissioners shall have regard to the matters set out in this decision. If the further review should be adverse to the Appellants, they shall have the right to appeal against that decision.

Both parties expressed their intentions of not applying for costs in this appeal, and consequently we make no direction as to costs.

ANGUS NICOL

CHAIRMAN

RELEASED:09/07/2004

LON/03/8114