United Kingdom VAT & Duties Tribunals (Excise) Decisions

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URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2004/E00761.html
Cite as: [2004] UKVAT(Excise) E761, [2004] UKVAT(Excise) E00761

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Balmford & Anor v Customs and Excise [2004] UKVAT(Excise) E00761 (06 July 2004)

E00761

EXCISE DUTIES — cigarettes and tobacco purchased in Canary Islands — goods in excess of duty free allowances — appellants intercepted whilst passing through UK Customs "green" channel — undeclared goods seized — appellants erroneously under impression that goods not requiring to be declared — restoration of goods sought — appellants failed to seek authoritative information as to duty free allowances — reasonable for Customs to decide that restoration should not be offered — appeal dismissed

MANCHESTER TRIBUNAL CENTRE

(1) Mr COLIN BALMFORD Appellant

(2) Mrs CHRISTINE BALMFORD

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: Mr M S Johnson (Chairman)

Mr J P M Denny (Member)

Sitting in public in Manchester on 23 April 2004 2004

The Appellants appeared in person and were not represented.

Mr A Vinson, counsel instructed by the Solicitor for the Customs and Excise, for the Respondents.

© CROWN COPYRIGHT 2004


 


DECISION
1. This is an appeal against a decision of the Commissioners of Customs and Excise ("Customs") refusing to restore to the appellants 6,000 cigarettes and 500 g of tobacco ("the goods"). The goods were bought by the appellants whilst on holiday in Lanzerote and seized by Customs on the appellants' return to the UK.
2. Lanzerote is one of the Canary Islands. The Canary Islands, part of the Kingdom of Spain, are not a territory to which Council Directive 92/12/EEC ("the Directive") applies – see article 2(1) of the Directive. Rather, the duty free allowances applicable to travellers to the UK from the Canary Islands are those laid down in the Travellers' Allowances Order 1994 SI 1994/955. These allowances are, so far as relevant, 200 cigarettes or 250 g of smoking tobacco per person.
3. The tribunal had the opportunity of hearing oral evidence from both of the appellants, and from one witness on behalf of Customs. We find that the facts are as follows.
4. The appellants live in Cheshire. Their holiday in Lanzerote, which took place between 23 and 30 September 2002, was a last-minute replacement for an intended holiday in Salou, cancelled because of the unexpected collapse of the travel company Springleaf Travel. The appellants flew out from and returned to Manchester Airport.
5. The appellants were unsure of the duty free allowances from Lanzerote, so they asked at one of the Manchester Airport duty free outlets before their departure. They were told that the allowance was 200 cigarettes each, if bought at the airport. However they were also told that if they bought cigarettes at the resort, quantities were unlimited and cheap.
6. The appellants also asked two other people about duty free allowances. Firstly, they asked the holiday representative in the hotel at the resort on the island. The representative said that unlimited cigarettes could be bought in the resort. Secondly, the appellants asked at the tobacconists in Lanzerote where they bought their cigarettes and tobacco. The tobacconists told them that they could take unlimited quantities back home with them.
7. We find that the appellants' reason for checking duty free allowances was that they wanted to be sure of getting these right. As a bank employee, the appellant Mrs Balmford is used to having to ascertain and provide accurate information to customers who request it, or else refer them to a source which can provide such information. She told the tribunal that, if she does not know the answer to a question, she will ask for advice from somebody who does. In this instance, she had not been provided with proper information as to duty free allowances, so she set out to get it.
8. On their return to Manchester Airport, the appellants were confronted, as is normal with non-EU flights, with "red" and "green" Customs channels. The appellants first waited for their bags to come round on the carousel in the arrivals hall. Believing that the goods were free from duty in the UK, the appellants then made to pass through the "green" channel. They were thereupon intercepted by an officer of Customs, a Miss Jane Anne Barnes.
9. Miss Barnes made a witness statement dated 25 June 2003, a copy of which is contained in a bundle of documents relevant to this appeal, helpfully provided to the tribunal by Mr Vinson of counsel, who appeared for Customs. Miss Barnes has not been required to attend tribunal for cross-examination on her statement.
10. Miss Barnes asked the appellants, according to her contemporaneous note of the conversation she had with them, whether they were aware of their duty free allowances. According to Miss Barnes, the appellants replied, "Yes, 200 cigarettes and 1 litre of booze". This contrasts with the appellants' case. They say that they told the officer what they had been told on three separate occasions, namely that they could bring back unlimited quantities of tobacco goods. We note however that Miss Barnes has not recorded that the appellants said that or anything like it, and this conflict of evidence casts a doubt on what the appellants did say.
11. Miss Barnes was not satisfied with what she had been told, so she seized the goods.
12. On 7 October 2002, the appellant Mrs Balmford wrote a letter to Customs seeking restoration of the goods. Her letter included this paragraph:

"Acting in good faith my husband and I purchased cigarettes on holiday in Lanzerote in the resort ^[1] believing we could purchase any amount we wanted without problems as long as they were not for re-sale. The Airtours representative and the shop where the cigarettes were purchased also told us the same".

The letter went on to say that Mrs Balmford explained to the Customs officer "the resort allowances and the airport allowances".

13. Customs replied to that letter by a letter, addressed to Mr Balmford, dated 14 October 2002. Customs' letter mentioned the differences between the treatment of goods obtained by EU and non-EU travellers respectively, and stated inter alia as follows:

"You were over your allowance and did not attend the red point to pay the UK duty and VAT on the excess. You did in fact commit an absolute offence under section 78 of the Customs and Excise Management Act 1979 and could have been prosecuted for that offence. In this case the officer limited his (sic) action to seizure of the goods only and you were allowed to proceed".

Customs' letter informed the appellants of their right to seek a review of the decision not to restore.

14. On 25 October 2002, Mrs Balmford replied, indicating that she would be seeking such a review. Her letter made the following points relevant to this appeal:

That the appellants had repeatedly checked their allowances, both in Manchester before departure and on the island;

That there was a confusing inconsistency between EU and non-EU allowances, so that tourists could not be expected to know what their allowances are;

That the exceptional circumstances of the appellants' situation justified restoration;

That whilst the legality of the seizure was not disputed, no-one had taken responsibility for considering the appellants' particular position; and

That the appellants were being punished for wrong information given to them at the airport itself.

15. By a second letter also dated 25 October 2002, Mrs Balmford sought the review mentioned. She described the background to the purchase of the goods and she set out the circumstances leading to their seizure. She ended her letter as follows:

"We have never known anything like this or had anything of this nature happen to us before. We have no wish for it to happen again or to anyone else. I look forward to hearing from you with the date of the review.

"I hope the outcome will be that my husband and I receive our cigarettes back and Manchester Airport are supplied with clear instructions of allowances and leaflets being available for people – instead of them having to gain the information from the press and MPs after bad events".

16. The review was conducted by Ms Julie Marie Logan of Customs. Ms Logan attended tribunal and gave oral evidence. She was cross-examined by the appellants.
17. Ms Logan's review decision was dated 21 March 2003. This was not within 45 days of the request for a review, as required by section 15(2) of the Finance Act 1994 ("the 1994 Act"). Irrespective of the review decision, therefore, Customs are by the 1994 Act to be assumed to have confirmed their original decision not to restore. Technically, there is no necessity for us to consider the contents of the review decision, but we do so out of interest in what Ms Logan had to say.
18. In her review, Ms Logan described the seizure of the goods. She then referred to section 78 of the Customs and Excise Management Act 1979 ("CEMA").
19. Section 78(1) of CEMA provides inter alia that any person entering the UK must declare anything contained in his baggage or carried with him which he has obtained outside the UK, in respect of which he is not entitled to exemption from duty and tax.
20. Section 78(1B) of CEMA provides inter alia that that section does not apply to persons entering the UK from the EU. However, as explained in paragraph 2 above, travellers entering the UK from Lanzerote are not classed as doing so from the EU.
21. Section 78(2) of CEMA provides inter alia that any person entering the UK is to answer such questions as the proper officer of Customs may put to him with respect to his baggage and anything contained therein or carried with him.
22. Section 78(3) of CEMA provides inter alia that any person failing to declare anything as required by that section is liable on summary conviction to a penalty.
23. Section 78(4) of CEMA provides inter alia that anything chargeable to duty or tax which is not declared is liable to forfeiture.
24. Ms Logan also referred to sections 139, 141 and 152 of CEMA, and to the provision made by the 1994 Act for reviews and appeals to this tribunal in respect of the non-restoration of goods which have been seized and forfeited.
25. After referring to Customs policy, directed to smuggling and the wrongful importation of goods on which duty and tax have not been paid, Ms Logan proceeded to consider the circumstances of the appellants' case. In the course of so doing, she stated:

"You state that you made enquiries about your allowances from the duty free shop and from your travel representative. It is not clear why you chose not to ask Customs & Excise directly in order to ensure you were given the correct information. Just because you can buy as much as you like does not mean you could import as much as you like into the UK. All shops are trying to sell as much as they can, a prudent traveller would not rely on them for information about UK Customs regulations. Duty free shops do not employ airport 'officials', they employ sales people who are not directly controlled by Customs & Excise. Most people are well aware that there are UK Customs regulations and try to inform themselves about them before travelling, especially with the prominent media coverage of tobacco smuggling cases. All travellers need to ensure they are fully aware of what they can and cannot do and bring back when entering any country. Customs is the correct place to make enquiries about your allowances."

26. Ms Logan went on to explain the official sources of information as to Customs allowances, ranging from Customs' Notice No 1 to the Customs site on the internet. She stated that Customs' policy was clear and she concluded that there appeared to be no circumstances justifying the restoration of the goods.
27. Under cross-examination, Ms Logan said that Customs had no power over what the duty free shop at the airport might have said. All that those shops needed to do, in order to be able to sell, was to inspect a traveller's boarding card for their flight. She said that she was not suggesting that the appellants were smugglers. She pointed out that the offence of not declaring dutiable goods under section 78 of CEMA was an absolute liability offence.
28. On behalf of Customs, Mr Vinson submitted that it was apparent that the appellants were fully aware beforehand that they had to obtain proper information as to the duty free allowances applicable to Lanzerote. The appellants appreciated, he submitted, that the information they were seeking needed to be correct. He submitted that they knew, or ought to have known, that the sources of the information obtained would have to be reliable. They should therefore have contacted Customs for the information, as Ms Logan said in her review decision. Instead they consulted unreliable sources.
29. Alarm bells should have been triggered, Mr Vinson said. Were the answers received from the sources asked by the appellants likely to be accurate? He submitted that it was unreasonable to place reliance upon them. He submitted that Ms Logan was correct to conclude that restoration should not be offered, seeing that the appellants had not asked some-one who could be depended upon the key question, "How much can we bring back?" He submitted that the appellants had deliberately chosen not to know the answer to that question. He invited us to dismiss the appeal.
30. The appellants submitted that exceptional circumstances attached to their case. In the first place, the Lanzerote booking had been done in a rush, following the unexpected last-minute cancellation of their planned holiday in Salou. Secondly, it was reasonable to think that Lanzerote was part of the EU. There was little or nothing to suggest otherwise to the casual observer.
31. The appellants said that they had made it plain that they were not appealing against the legality of the seizure. But they submitted that the attitude of Customs was unreasonable. The appellants submitted that they had acted in a prudent and sensible fashion. They had not previously experienced any problems of this kind. They had done what they ought to have done to discover what if any duty free restrictions applied. It was not to be presumed against them that they should have been aware of the rules and regulations. They invited us to allow the appeal.
32. As appears from section 16(4) of the 1994 Act, we have to ask ourselves whether we are satisfied that Customs could not reasonably have arrived at the decision not to restore. If so, we are empowered to intervene as described in that sub-section; otherwise the decision of Customs must stand.
33. We sympathize with any lack of appreciation on the appellants' part that Lanzerote was not an EU destination. Politically, the Canaries are part of Spain. A flight to the Canaries could seem for most purposes to be just like a flight to any other Spanish destination, albeit taking rather longer than normal to get there. It would be easy to assume, in the lack of information to the contrary, that a trip to Lanzerote would be, for present purposes, no different from a trip to Benidorm. This point is made in the correspondence from Mrs Balmford.
34. However the appellants have not shown that they assumed that importations from Lanzerote had any particular treatment for the purposes of UK duty. On the contrary, that was their reason for asking what the duty free allowances for that island were. The fact that they asked about this three times shows, in our view, that they were not satisfied with the initial answers they received.
35. It seems to us that a reasonable person would, if dissatisfied with an answer initially received, look for a more authoritative answer next time. In the present case, the answer obtained at Manchester Airport before departure was deemed insufficient. An answer of sorts was next obtained from the tour representative on the island, but again does not seem to have been deemed sufficient, because a third answer was sought from the tobacconists themselves.
36. In our view, matters should not have rested there. The tobacconists were in fact less likely to give an authoritative answer to the question of duty free allowances than Manchester Airport or the tour representative. The tobacconists are, after all, in the business of selling as much as they can to people from many different places whom they may never see again.
37. We do not think that the tobacconists are likely to have taken proper responsibility for the correctness of whatever they may have said about duty free allowances from Lanzerote to the UK, nor was it reasonable to expect them to have done so. As we see it, therefore, when the appellants set out to return to the UK, the matter of duty free allowances remained at large so far as they were concerned.
38. It appears to us that it must have been obvious to persons of the intelligence of the appellants that there existed at every stage an authoritative source par excellence for establishing their duty free allowances. That source was H M Customs & Excise. A reasonable person would, we feel, have asked for a Customs leaflet at Manchester Airport before departure, or else asked a Customs officer. No Customs officer, asked about duty free allowances, would have failed to respond helpfully, as prevention is as much a part of an officer's duty as is detection.
39. We indicated during the course of the hearing that we might have felt able to allow this appeal if it were based solely on understandable ignorance. If, for example, a traveller who previously holidayed in the EU has simply assumed that he can bring back from Lanzerote as many cigarettes as required for his own use, on the basis that Lanzerote as a holiday destination is no different from his previous continental holiday destination, that might be understandable, particularly if the traveller has not now sought information from Customs because he did so on a previous trip to the EU and believed he understood the law. That is not however this case.
40. In our view what we have in this appeal is simply an example of the standard situation where the onus is upon the traveller to be sure of the duty free allowances applicable in his case. The last-minute change of destination and the failure to distinguish between EU and non-EU destinations are as we see it irrelevant in this case, because it was correctly appreciated by the appellants that they did need to ascertain the applicable allowances for Lanzerote.
41. The appellants made enquiry of various sources as to the allowances position, but they obtained incorrect information. Having regard to the nature of the appellants' sources, we consider that there was a real risk that the information might be wrong. The appellants were prepared to run that risk. However it was their responsibility to go to an authoritative source for their information, and seeing that they failed to do so, it is a not unreasonable outcome that they should suffer the consequences of the information being incorrect.
42. Accordingly we decide that it was reasonable for Customs to have declined to restore the goods, seeing that the appellants have not demonstrated, either in tribunal or previously, that they placed reasonable reliance on the inaccurate information as to duty free allowances that they had obtained. In so deciding, we emphasize the responsibility upon every non-EU traveller to acquaint himself or herself with the amounts of UK duty free allowances, and to adhere to these, on pain of breaking the law at the port of entry if goods are not declared.
43. This appeal is therefore dismissed. The case may be restored to the list for purposes of argument as to costs if required.

M S JOHNSON

CHAIRMAN

Release date:06/07/2004

MAN/03/8084

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