United Kingdom VAT & Duties Tribunals (Excise) Decisions

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Cite as: [2004] UKVAT(Excise) E00768, [2004] UKVAT(Excise) E768

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Shergold v Customs and Excise [2004] UKVAT(Excise) E00768 (16 July 2004)

E00768

RESTORATION – Appellant imported 10kg hand-rolling tobacco with other excise goods – re-review of decision to refuse restoration ordered by Tribunal to be carried out by an officer not previously involved in the matter – further review carried out by Mr Gordon Murray – Mr Murray had previously been involved in that he had spoken to the Appellant and expressed an opinion adverse to the Appellant – whether review flawed for bias – wrong burden proof used – vehicle disposed of prior to review not referred to by reviewing officer – appeal allowed

LONDON TRIBUNAL CENTRE

PHILIP SHERGOLD Appellant

and –

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: MISS J C GORT (Chairman)

MISS S C O'NEILL

Sitting in public in Bristol on 24 February 2004

Mr Angus Nicol, counsel, for the Appellant

Mr Robert Kellar, counsel, for the Respondents

© CROWN COPYRIGHT 2004

DECISION

This is an appeal against a decision of the Commissioners dated 13 January 2003 not to restore the Appellant's vehicle and various excise goods which were seized on 3 October 2001.

The decision was made on a re-review of a decision made on review by a letter dated 16 January 2002. The further review was carried out following the decisions in the cases of Lindsay and Hoverspeed further to a direction of the tribunal on 2 October 2002 that a further review be carried out by an officer not previously involved in the matter.

The further review was not in fact carried out in accordance with the terms of that direction in that the review officer, Mr Gordon Murray, had, on 28 December 2001, spoken to the Appellant on the telephone about the case and a comprehensive note of that telephone conversation was made by Mr Murray and is included in the papers. The relevance of this will be considered later.

The facts

We heard oral evidence from the Appellant himself, and also from Mr Murray, the review officer and from two further officers of Customs and Excise, Mr Steven Waller and Mr Andrew Siggins. The Commissioners produced a bundle of documents and in the course of the hearing a bank statement from the NatWest and a statement relating to a NatWest Visa card were produced on behalf of the Appellant.

We find the following facts. On 3 October 2001 the Appellant was stopped by Mr Siggins when disembarking from the ferry at Dover. His 12 year old son was with him at the time.

There was some dispute as to what was said and done following the Appellant being stopped by the Customs and Excise officers.

The Appellant works in some capacity for the Ministry of Defence. He also runs a discotheque in his spare time. He is married and his wife also works. The Appellant's evidence was not always straightforward.

When the Appellant was stopped initially and asked what he was bringing back, he said he had 'some tobacco and some booze.' When asked how much tobacco he said he had 20 pouches. In fact he had 2 boxes of tobacco containing 10 kilogrammes of hand-rolling tobacco. On being asked for an explanation the Appellant said: "No, I've got 20 boxes."

The Appellant was then interviewed, the interview is recorded as starting at 16.40 hours and terminating at 17.32. By a letter which was undated, but which was received by the Commissioners on 22 October 2001, the Appellant set out at length his version of the events on 3 October. The letter was treated both as a request for restoration and as constituting a complaint.

The Appellant's lengthy statement and his evidence to us, whilst essentially not being at variance with the matters recorded by the officers, nonetheless contains an account of conversations and incidents which do not appear in the officers' notes. The Appellant claims that from the moment the interview started his son became very upset. We prefer the evidence of Mr Waller who said that the son did not start becoming upset until after the interview when the Appellant himself became agitated on being told that the goods and the vehicle were to be seized. According to the Appellant, prior to the interview he was given the option of driving away in his car, but leaving the excise goods behind, or staying for the interview. He chose to remain for the interview because he believed the goods were for his own personal use. We do not accept this evidence. It is not the Commissioners' policy to allow anyone in the Appellant's circumstances to take the car away and leave the excise goods. It is their policy to offer such persons the opportunity of leaving without their vehicle or the excise goods and without going through an interview. We find that this is what was offered to the Appellant in this case.

We accept that the Appellant was very distressed by what occurred. In such circumstances we consider it unlikely that he would remember the events precisely, and accept that he believed he was given such a choice.

Mr Waller, the officer who spoke to the Appellant after he had been stopped by Mr Siggins, explained the apparent discrepancy between the number of questions asked and the total time the interview took by saying that after the initial questioning, and having himself spoken to the Appellant about what he was bringing in with him, he had taken time to record the earlier questions and answers, which he had not written down verbatim, but he had then taken down the subsequent interview verbatim.

In the early questioning the Appellant was asked who the tobacco was for, to which he replied that it was for his own personal use, for himself, his wife and two brothers. In the course of the verbatim interview he said that 100 pouches of tobacco were for his own use and the rest was chiefly for his wife and a few pouches of tobacco were for his brother's birthday.

The Appellant had informed the officer that he had previously travelled as a foot passenger in August and had purchased 2 kilogrammes of tobacco on that occasion.

On the present occasion he had paid for the tobacco by using a Visa card, and he had paid for the other excise goods he had with him by using his Switch card. He did not expect to receive any money for any of the goods. His income was £13,500 a year. His wife earned about £4,000 a year. He gave his outgoings as a mortgage of £250 a month, a loan of £50 a month and bills of between £200 and £250 a month. He claimed he had no savings but he had an outstanding credit card debt of about £900 for the purchase of a motorbike. The tobacco itself had cost £540. He earned approximately £200 each month net from his part-time job as a band manager and mobile DJ.

The Appellant gave confusing evidence about his rate of consumption which was in part because his wife used a machine to roll cigarettes for both of them, and therefore he was unable to be specific about the number of cigarettes obtained from each pouch. He said that he smoked 20 a day, possibly more, but also that he used 3-5 pouches of tobacco a week. His wife used between 2 and 3 pouches a week. The Appellant had no smoking materials at all with him on that day. In his evidence to the Tribunal he said that he had not smoked at all in the course of that day. In interview his explanation was that he did not smoke and drive because it made him very ill. The Appellant lives in Salisbury, some considerable distance from Dover. The Appellant signed the officer's notebook saying he agreed the notes were accurate. In his subsequent letter he said he just flicked through the notes and signed them under duress. His evidence to us was that at the time he had stated that he was signing under duress. We do not accept that this was so, it not having been mentioned in his very full letter.

It is clear from the questions asked by Mr Waller, and by his evidence to us, that Mr Waller does not properly understand the term "personal use". He asked the Appellant: "Why do you mention your two brothers if it's for personal use?" The reasons given by Mr Waller for the seizure are as follows:

Excess mils

Not all for personal use

Income v expenditure (no savings)

Could not produce any smoking materials

Consumption rate 3-5 pouches a week – not tally with 20 a day

Discrepancy in story (initially for two brothers)

Misdeclared to colleague.

After the interview was completed, and the decision was taken to seize the Appellant's vehicle and the excise goods, the Appellant was allowed to collect his possessions from the car, but in fact he left various items in the car. None of those items appear to be of any substantial value. However, the Appellant wished to collect them and contacted Customs and Excise. There were apparently several conversations about this matter, including the conversation with Mr Murray on 28 December referred to above, which appeared to focus more on the issue of a review of the seizure than on reclaiming the items. In his notes of that conversation Mr Murray writes inter alia: "Explained whole restoration policy – robust. Explained that a cursory look at papers his case not good." In his evidence to us Mr Murray said that he was trying to assist the Appellant by not building his hopes up and by pointing out to him matters that he needed to be aware of. The Appellant made a further call to the Commissioners in the new year and in the course of that conversation was told that his car had been disposed of. This fact is not mentioned in any of the letters or documents produced by the Commissioners in this case.

With his letter of October 2001 the Appellant produced various items including inter alia:

A receipt from a motor auction dated 12.1.01 in the sum of £1,292 for a Ford Ryan

A letter dated 12.10.01 from a Mrs A E Bingham, of the Occupational Welfare Staff at Ward Barracks in Salisbury.

A letter dated 17.10.01 from a Dr Grummitt of the Cross Plain Surgery.

Mrs Bingham's letter is largely self-serving, but refers to the Appellant's need to have a car to get to work and to take his children to and from school each day. Dr Grummitt refers to the fact that the Appellant only smokes hand-rolled cigarettes, that he has a responsible job with the Ministry of Defence, that he has known him for ten years, that he has had a depressive illness in the past and that he considers him to be an honest and upright member of the community. The receipt shows the amount paid for the seized vehicle.

The bank statements produced by the Appellant at the hearing dated from between 14 August 2001 and 2 January 2002. The account was in the joint names of the Appellant and his wife. On 3 October the account was in credit to the sum of £1,095.37. There were only three occasions when the account was overdrawn, 19 and 22 October and 29 October. The maximum it was overdrawn was on 19 October when the amount overdrawn was £96.74. The Visa card statement is between 15 August and 13 October 2001. This account is in the Appellant's name only, although it was his evidence that the account was for both his own and his partner's use for business purposes, the business being called "the Intrepid Dynamic Duo". The card showed a considerable number of payments being made in different countries in Europe. It was the Appellant's evidence that all those withdrawals were made by his partner who had gone on a motorcycle trip to the continent. At the end of September a total of £2,144.78 was owing on the card. Of that amount some £930.75 had been spent by the Appellant for his motorcycle and related matters, and only £35.94 had actually been applied to purchases which related to the business. On 5 October 2001 a sum of £2,144.78 was paid off. The Appellant informed the Tribunal that he had paid off the £900 which related to the purchase of his motorcycle and the £35.94 which related to the business. The balance was paid by his partner. However, the statement only refers to the payment of a single sum in the full amount. The Appellant told the Tribunal also that he kept sums of money in cash in his house and had used some of that money to pay off his part of the bill. The bank statement also shows that a loan was made to the Appellant on 19 December in the sum of £1,500. This was in respect of the purchase of the new vehicle which he had bought following the seizure of his previous vehicle.

At the conclusion of the hearing the Tribunal directed that the Appellant produce evidence in respect of his NatWest visa card. Such evidence was eventually produced some considerable time after the expiry of the time limit of 14 days directed by the Tribunal, however the Respondents took no objection to this they did not wish to make any response and the Tribunal has accepted the evidence which is as follows.

By a letter dated the 1 March 2004 NatWest stated that an additional card was held on Mr Shergold's account in the name of Mr Peter B Lee. The credit limit on the account was £4,500 which was the total amount that could be spent between Mr Shergold and Mr Lee. Mr Shergold also produced a letter dated 2 March 2004 from Mr Lee by which he confirmed that the amounts which were initialled on the visa card statement which had been produced at the hearing were attributable to his purchases. This bore out Mr Shergold's evidence that such purchases had been made when Mr Lee was on a motorcycling holiday abroad.

The Respondents' case

In respect of the decision not to restore the vehicle and the excise goods the Respondents relied on the following factors:

The Appellant's initial misrepresentation that he had 20 pouches of tobacco

The inconsistencies between his saying initially the tobacco was for his brothers and later saying it was a present for one brother.

The fact that the Appellant had no smoking paraphernalia on him.

The discrepancy between the Appellant's stated rate of consumption at the time of the interview and the rate he subsequently gave both in correspondence and in the course of the hearing. It was submitted that the Appellant had exaggerated his rate of consumption during the course of the interview in order to make the size of the purchase consistent. This went to the Appellant's credibility.

The quantity of tobacco which was three times more than the current guidelines of 3 kilogrammes, but at the time that the Appellant was stopped the guidelines only allowed 1 kilogramme and therefore it was considerably more. It represented over a year's supply for the Appellant and his wife.