United Kingdom VAT & Duties Tribunals (Excise) Decisions

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Cite as: [2004] UKVAT(Excise) E00762, [2004] UKVAT(Excise) E762

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Aspy v Customs and Excise [2004] UKVAT(Excise) E00762 (06 July 2004)

E00762

EXCISE — Commissioners' decision to offer conditional restoration of vehicle — reasonableness of the decision — appeal dismissed

MANCHESTER TRIBUNAL CENTRE

ALAN JOHN ASPY Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: Lady Mitting (Chairman)

Mrs M P Kostick BA FCA CTA (Member)

Sitting in public in Birmingham on 9 June 2004

The Appellant appeared in person

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

DECISION

The decision under appeal is that of the Commissioners take on re-review to offer only conditional restoration of the Appellant's vehicle seized on 23 June 2001. Mr Aspy had requested restoration by letter dated 4 July 2001. The decision to refuse restoration was made on 25 July 2001, this decision being upheld on review by letter dated 26 September 2001. Mr Aspy appealed this decision to the VAT and Duties Tribunal, the appeal being allowed on 13 October 2003 and a further review being directed. The tribunal directed that the re-review should take specific account of current case law; a proper interpretation of the data relating to previous journeys; an investigation into whether an earlier vehicle had been seized from the appellant; a letter from Mr Aspy's passenger dated 8 October 2003 and proportionality.

The re-review was dated 5 December 2003. It was carried out by Mr Gordon A Murray and the original decision to refuse restoration was varied to offer restoration conditional upon a payment of £2,615.82, this sum representing 200% of the excise duty due on the seized goods.

We heard oral evidence from Mr Aspy but the Commissioners called no evidence.

Mr Aspy was a regular traveller to France and Belgium to purchase excise goods and he was normally accompanied by his friend, Mr Alan Lumley and very occasionally also by Mr Lumley's parents. The journeys made were always of short duration, their sole purpose being to purchase excise goods. On this occasion, on 23 June 2001, Mr Aspy and Mr Lumley were travelling in Mr Aspy's Peugeot estate car L625 GUW. They were intercepted at Coquelles and found to be carrying 7.1 kg tobacco, 2,000 cigarettes, 216 litres of beer, 114 litres of wine and one litre of vodka.

When initially intercepted, the interviewing officer asked Mr Aspy, the driver, how much cigarettes and tobacco had been purchased to which Mr Aspy replied 10 cartons of cigarettes and 5 kg tobacco. He produced receipts to the officer which matched his declaration. Goods matching the declaration were found in the boot of the vehicle.

However another officer examined the front of the vehicle and found a further 2 kg tobacco. There was a factual dispute about where the tobacco was found. The intercepting officer's note reads that it had been found under the driver's seat. However Mr Aspy told us that this was not the case and in fact it was contained in Mr Lumley's holdall which was in the passenger footwell as Mr Lumley had been carrying it between his feet. We were told that after the two men had made their purchases and set off back towards Coquelles, Mr Lumley asked Mr Aspy to stop because he wanted to buy some sweets. Mr Lumley got out of the car, taking his bag with him, went into a shop and then returned to the car and they set off again. Mr Aspy did not know and had no reason to believe that Mr Lumley had purchased anything other than sweets.

The intercepting officer asked the two men why they had failed to declare the additional tobacco. Mr Aspy immediately replied "I didn't know it was there" and Mr Lumley replied "because there was no room in the box…"

Unfortunately Mr Lumley was unable to attend the tribunal hearing through work commitments but he had written a letter which supported Mr Aspy's evidence. We have no reason to doubt that Mr Aspy was being entirely truthful and we accept that the additional 2 kg tobacco had been purchased by Mr Lumley, without the knowledge of Mr Aspy. We are also satisfied that the tobacco was not actively concealed and, given Mr Aspy's lack of knowledge of its purchase, he did not make any false declaration.

Both travellers agreed to stay for interview. In his interview, Mr Aspy told us that he had paid approximately £700 for the declared goods and that half of them belonged to him. Mr Lumley would reimburse him for his half share. Out of Mr Aspy's share, he would supply his son who would pay him what he himself had paid for them. Mr Aspy smoked some 70-80 cigarettes per day. Mr Aspy's income was £140 per week made up of a pension, disability allowance and income support and he had approximately £6,000 savings. He had previously been given a Public Notice 1 and he had previously travelled to France some five weeks earlier when he had purchased 22 cases of beer. He travelled every five or six weeks.

In his interview, Mr Lumley said that he had been unemployed for 13 months and had funded his purchase out of his savings and only had £5 left. He told the officer that he had seven pouches of tobacco and some of the beer. He consumed three and a half pouches per week and expected his purchase to last between six and seven weeks. He had spent £200, maybe more and had paid cash. He also confirmed that he had last travelled some five or six weeks previously with Mr Aspy.

Mr Murray, in his review letter, summarised the facts as known to him taken from the seizure file and the interview notes. He applied the increased guidance levels even though these had not been in force at the time of the seizure. Their 7.1 kg therefore exceeded the guide level of 6 kg for the two of them. Mr Murray knew from Mr Aspy's interview that he intended to supply his son at cost. Mr Murray also had before him Mr Aspy's original grounds of appeal to the tribunal in which Mr Aspy had said that when they got back home Mr Lumley's parents would pay him for half the goods which he and Mr Lumley had bought. It was therefore clear to Mr Murray that Mr Lumley's parents were also being supplied at cost out of this purchase.

Mr Murray had before him records of previous journeys made by Mr Aspy in his vehicle. Going back to 17 May 2000, Mr Murray had found 14 recorded journeys through the channel tunnel (including 23 June 2001) and one by P&O ferry. Mr Murray, in his review, questioned why such a large quantity of excise goods would need to be purchased when journeys were made so regularly.

Mr Murray had also ascertained that Mr Aspy had been stopped by Customs on 10 May 1999 and 4 July 2000. On the first occasion he was travelling on his own with 5 kg tobacco. On the second occasion he also had 5 kg tobacco but was travelling with a friend. It is not entirely clear what took place on 10 May 1999 although Mr Aspy told us in evidence that he had been given a Public Notice 1 on that occasion. It is clear, however, that on 4 July 2000 he was given another Public Notice 1 although he was allowed to proceed with his vehicle and his goods.

Mr Murray's view of the 2 kg tobacco found under, as he believed it, the driver's seat was that it had probably not been concealed but that Mr Lumley and Mr Aspy had been "less than forthcoming as to the true amount of the tobacco" which they carried. He also pointed to the conflict between the interviews of the two men in that Mr Lumley had claimed only seven pouches of tobacco whereas in a later letter he had claimed some 2 kg. There was also confusion over exactly how much Mr Lumley had paid towards the goods.

Taking all these matters into account, Mr Murray concluded that the goods had not been purchased for own use but were destined for sale on a not-for-profit basis. The Commissioners' policy as amended in February 2002 provided that in cases of not-for-profit smuggling, on first detection the vehicle would be seized and restored for 100% of the revenue or the value of the vehicle whichever was the lower. On second detection the vehicle would be seized and restored for 200% of the revenue and on third detection not at all. Mr Murray treated this as a second detection and that the appropriate decision was therefore to offer restoration on payment of 200% of the duty, this being a lesser sum than the value of the vehicle. He refused restoration of the goods.

In his oral evidence, Mr Aspy added little. He was quite unable to explain why Mr Lumley should have told the officer that only seven pouches of the tobacco were his. Mr Aspy was clear that the purchase was to be shared between them, that of his share he would supply his son and that Mr Lumley would, of his share, supply his parents and that he would be repaid by all of them at cost. This, we understood to be the standard and established arrangement

The jurisdiction of the tribunal is to consider the reasonableness of Mr Murray's decision. We have to consider whether or not the decision he reached was one which no reasonable body of Commissioners could have reached, whether he took into account some irrelevant factor or failed to take into account some factor which he should have considered.

We have already summarised in some detail Mr Murray's review letter which was very full, running to some 12 pages. It was not entirely clear from Mr Murray's letter whether he thought Mr Aspy was aware of Mr Lumley's purchase of an additional 2 kg and was therefore making a quite deliberate non-declaration. He refers, on page 9 of his letter, to "I am of the view that you and Mr Lumley were less than forthcoming as to the true amount of tobacco in your and Mr Lumley's possession". He goes on to discuss Mr Lumley's quite obvious and clear under-declaration, later concluding "… you said that you paid for the goods and from this I consider you were aware of the true quantity of the tobacco that you had. I consider you did not fully declare the tobacco and this is not the reaction we would expect from bona fide travellers genuinely bringing in excise goods for own use". From his use of the word "travellers" in the plural it would imply that he was still taking the declaration as a joint declaration and saying that between the two of them there had been an under-declaration. This accords with our own view.

It is not so much the quantity imported that influenced Mr Murray but the purpose to which it was put. He summarised the view he took in the following terms

"I further add that, taking into account the above, in many respects this case may be viewed as one of joint enterprise; you had travelled together to buy the goods together,… one of you had paid for the goods and the other had or would pay you for his share, most importantly some of the goods were destined for your family (your son) and some for Mr Lumley's family (mother and father) with monies to be received from them to cover the cost"

This is in effect precisely the nature of the undertaking described by Mr Aspy in his evidence to us and, as such, the arrangement clearly falls outside the definition of "own use". On at least one and possibly two occasions Mr Aspy had been given a Public Notice 1 and must have been aware that this was so. Again we consider that Mr Murray very fairly treated this interception as only a second detection whereas it appears, in fact, to have been the third. We are also satisfied that Mr Murray took into account all the factors directed by the tribunal and we find his decision to be reasonable. It is not a decision which no reasonable body of Commissioners could have reached and we believe all relevant factors have been considered.

The appeal is therefore dismissed. Mr Baker made no application for costs and no order is made.

LADY MITTING

CHAIRMAN

Release date:06/07/2004

MAN/03/8196