United Kingdom VAT & Duties Tribunals (Excise) Decisions

You are here: BAILII >> Databases >> United Kingdom VAT & Duties Tribunals Decisions >> United Kingdom VAT & Duties Tribunals (Excise) Decisions >> Barot v Customs and Excise [2004] UKVAT(Excise) E00783 (20 August 2004)
URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2004/E00783.html
Cite as: [2004] UKVAT(Excise) E783, [2004] UKVAT(Excise) E00783

[New search] [Printable RTF version] [Help]

Barot v Customs and Excise [2004] UKVAT(Excise) E00783 (20 August 2004)

E00783

EXCISE DUTY – Personal import of tobacco and beer brought into the UK in a private car – admission of traveller that goods were for a party and another person was paying for some of the beer – whether for a commercial purpose – reasonableness of Commissioners' decision – commerciality as far as appellant was concerned – proportionality considered – appeal dismissed.

LONDON TRIBUNAL CENTRE

INDUPRASAD KESHAVAL BAROT	Appellant
and
THE COMMISSIONERS OF CUSTOMS AND EXCISE	Respondents

Tribunal Chairman: Rodney P Huggins (Chairman)

Michael Sharp

Sitting in public in London on 4 August 2004.

Mrs S Gale, Solicitor, for the Appellant.

David Manknell of Counsel instructed by the Solicitor's Office for Customs and Excise for the Respondents.

... COPYRIGHT 2004

5

10

15

20

25

30

35

40
DECISION

The appeal

1. Mr Induprasad Keshaval Barot (the Appellant) appeals against a decision on review of the Commissioners of Customs and Excise (Customs) contained in a letter dated 7 March 2003 when Customs Senior Officer Mrs Gillian Martha Hurrell (Mrs Hurrell) notified the Appellant that the decision was to offer restoration of the value of the Appellant's Toyota van registration number E934HCD (the vehicle) upon payment of an appropriate sum. This would take into account the conditional restoration fee which would have been due in the event that the vehicle was still held by Customs. The decision also indicated that the excise goods found in the vehicle seized from the Appellant on 30 May 2001 would not be restored.

The relevant law

2. Since 1992, it has been possible to import excise goods, duty paid, from another member state to the United Kingdom under the terms of Article 5 (as amended) of the Excise Duty (Personal Reliefs) Order 1992 (the 1992 Order or PR)). It provides :

"5. relief from duty of excise – conditions

(1) The reliefs afforded under this order are subject to the condition that the
excise goods in question are not held or used for a commercial purpose
whether by the Community traveller who imported them or by some
other person who has possession or control of them; and if that
condition is not complied with in relation to any excise goods, those
goods shall, without prejudice to article 6 below, be liable for forfeiture.

(2) In determining whether or not the condition imposed under paragraph
(1) above has been complied with, regard shall be taken of –

(a) his reasons for having possession or control of those goods;

(b) whether or not he is a revenue trader;

(c) his conduct in relation to those goods and, for the purposes
of this sub-paragraph, conduct includes his intentions at any
time in relation to those goods;

(d) the location of those goods;

(e) the mode of transport used to convey those goods;

(f) any document or other information whatsoever relating to those
goods;

5

10

15

20

25

30

35

40

45

50

(g) the nature of those goods including the nature and condition of any
package or container;

(h) the quantity of those goods;

(i) whether he has personally financed the purchase of those goods; and

(j) any other circumstances which appears to be relevant.

(3) Paragraphs (3A) to (3C) below apply to a person who has in his
possession or control any excise goods afforded relief under this Order are
not being held or used for a commercial purpose.

(3A) The Commissioners may require a person to whom this paragraph applies
to satisfy them that the excise goods afforded relief under this order are
not being held or used for a commercial purpose.

(3B) Where a person fails to satisfy the Commissioners that the excise goods in
question are not being held or used for a commercial purpose the
condition imposed by paragraph (1) above shall, subject to paragraph (3C)
below, be treated as not being complied with.

(4) No relief shall be afforded under this order to any person under the age of
17"

3. The quantities of excise goods specified for the purpose of paragraph 3 of Article 5 were set out in the Schedule to the 1992 Order. At the time of seizure, these quantities were in relation to cigarettes a total of 800 and in relation to beer, 110 litres.

[Since the excise goods were seized the above limits have been increased.]

4. Section 49 of the Customs and Excise Management Act 1979 (CEMA 1979) provides :

"(a) Where –

(1) except as provided for under the Customs and Excise Acts 1979, any
imported goods, being goods chargeable on their importation with
customs or excise duty, are, without payment of that duty –

(a) unshipped in any port …

those goods, subject to subsection (2) below, be liable to forfeiture."

5. Section 139 of CEMA 1979 states :
"(1) Any thing liable for forfeiture under customs and excise Acts may be
seized or detained by any officer or constable or any member of Her
Majesty's armed forces or coastguard."

5

10

15

20

25

30

35

40

45

6. If goods are liable to forfeiture the means of bringing those goods here are also liable to forfeiture by virtue of Section 141 CEMA 1979 which provides :

"(1) Without prejudice to any other provision of the Customs & Excise Acts
1979, where anything has become liable to forfeiture under the Customs
and Excise Acts – any ship, aircraft, vehicle, animal container (including
any article of passengers' baggage) or any other thing whatsoever, which
has been used for the carriage, handling, deposit or concealment of the
so things liable to forfeiture, ether at a time it was so liable or for the
purposes of the commission of the offence which later became so liable
… shall also be liable to forfeiture."

7. The Commissioners have a discretion to restore forfeited items under s.152 of CEMA 1979 providing as follows :

"152 Power of Commissioners to mitigate penalties etc

The Commissioners may as they see fit –

(b) restore, subject to such conditions (if any) as they think proper, any thing forfeited or seized under those Acts."

The Tribunal's Jurisdiction

8. The Tribunal's jurisdiction is this appeal is statutory in nature and is set out in sections 14 to 16 of the Finance Act 1994 (the 1994 Act). Section 14 of the 1994 Act applied to any decision of the Commissioners of a description specified in Schedule 5 to that Act. Decisions made under section 152(b) of CEMA 1979 fall within paragraph 2(1)(r) of Schedule 5. By virtue of Section 14(2) of the 1994 Act decisions of a description falling within Schedule 5 to that Act are subject to review and appeal.

9. Section 15 of the 1994 Act requires that the Commissioners review the decision not to restore the Appellant's vehicle and the excise goods if so requested.

10. In an appeal of this nature the jurisdiction of this tribunal is governed by section 16(4) of the 1994 act which states as follows :

"(4) In relation to any decision as to an ancillary matter, or any decision on the review of such a decision, the powers of the appeal tribunal on an appeal under this section shall be confined to a power, where the tribunal could not reasonably have arrived at it, to do one or more of the following, that is to say –

(a) to direct that 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

5

10

15

20

25

30

35

40

45

(c) in the case of a decision which has already been acted on or taken effect
and cannot be remedied by a further review, to declare the decision to have
been unreasonable and to give directions to the Commissioners as to the
steps to be taken for securing that repetitions of the unreasonableness do
not occur when comparable circumstances arise in future."

The issue

11. The question is straightforward. Was the decision not to restore the Appellant's vehicle and excise goods reasonably arrived at by the Commissioners?

Representation and the evidence

12. The Appellant is a private individual and gave evidence together with his wife, Nikita Barot (Mrs Barot). He was represented by his solicitor, Mrs S Gale (Mrs Gale).

13. A bundle of agreed documents was produced on behalf of Customs by Mr David Mankwell of Counsel (Mr Mankwell). Oral evidence was given on Customs' behalf by the review Officer Mrs Hurrell and the Customs Officer Paul Williams Rowe (Mr Rowe) who seized the vehicle and the excise goods.

14. A witness statement was produced on behalf of customs at the hearing made by Mr Brian John Rowland (Mr Rowland) and not challenged by the Appellant. Mr Rowland identified in a schedule various sailing bookings by the Appellant with P & O Stena Line between Dover and Calais from 14 October 2000 until 30 May 2001.

The facts

15. From the evidence before us, we find the following facts.

16. Mr Barot at the time of the seizure in May 2001 lived with his wife and children in a two bedroomed first floor flat at Flat 2, 47 Calfe Road, Forest Hill, London SE23 2ES. He is normally employed in the building trade but has been out of work for over six months prior to 30 May 2001. His wife was in full-time work but in March 2001 she gave a kidney to a friend (Mrs Patel) and underwent a transplant operation. She was off sick from work recovering from her operation until August 2001.

17. Mr Barot likes to shop in Calais and frequently visits using P & O Stena Line ferries for this purpose.

18. On 30 May 2001 the Appellant and his wife accompanied by their two children went across to Calais on a ferry leaving Dover at 7.45 a.m. The Appellant purchased 800 cigarettes and 40 cases of beer, ten of each being for specific brands of a high alcoholic content. The 40 cases cost 534.61 euros and the total quantity of beer was 516 litres.

5

10

15

20

25

30

35

40

45

19. The Appellant and his family returned on another ferry and after disembarking the vehicle was intercepted by Mr Rowe at Eastern Docks, Dover at about 13.10 hours. He discovered the beer and cigarettes. He then questioned the Appellant who provided the following information :

(i) he was aware of the prohibitions and restrictions relating to drugs and firearms

(ii) they had been to Calais to buy beer and shopping

(iii) he had bought 40 cases of beer. Half of it was for his brother

(iv) his brother was not travelling with him

(v) he expected his brother to give him £130 for the beer

(vi) he did not live with his brother

20. Mr Rowe then left the Appellant in order to write up his notebook and run a check on a computer in a nearby office against the Appellant's name in order to ascertain what information had been recorded over the past six months. A few minutes later he returned and asked the Appellant to verify what was written in his notebook which accorded with the information set out in the previous paragraph of this decision. Mr Barot endorsed the notebook at the end with "I agree with the above" and signed, dated and the time as 13.25 p.m. The Appellant did this at the instigation of Mr Rowe but did so willingly.

21. Further questions were then put by Mr Rowe. The Appellant agreed he had been stopped on 25 November 2000 in similar circumstances when he was found to be bringing back 51 cases of beer and on that occasion he was issued with Customs Notice Number 1.

22. He also agreed that he had travelled on the same route on 4 November 2000, 17 November 2000, 2 December 2000, 15 December 2000, 22 December 2000, 29 March 2001, 8 April 2001, 21 April 2001, 2 May 2001 and 6 May 2001.

23. The Appellant was then informed by Mr Rowe "You have in your possession (or control) excise goods in excess of the guidance levels. Relief from payment of UK Excise duty is afforded subject to a condition that these goods are not imported or held or used for a commercial purpose. If you fail to do so then these goods will be seized as being liable to forfeiture. Do you understand?"

The Appellant replied that he understood.

The Appellant was told that he was not under arrest and was free to leave. The Appellant said that he did not want to stay any longer and answer any further questions.

24. At approximately 13.30 Mr Rowe seized the vehicle and the excise goods packed inside as being liable to forfeiture to the Crown.

5

10

15

20

25

30

35

40

45

25. The Appellant and his family then left. Throughout the interviewing with Mr Rowe, Mrs Barot was asleep in the rear of the van with her daughter.

26. On 31 May 2001, the Appellant wrote to the Commissioners requesting them to restore the excise goods and his vehicle.

27. On 18 June 2001 and 6 July 2001 the Team Leader employed by the Commissioners wrote to the Appellant. The letters informed him that the excise goods and the vehicle registration number E924HCD would not be restored to him. The second letter stated that if the Appellant wanted the decision not to restore the vehicle reviewed then he should contact the appropriate office whose address was given.

28. The Appellant wrote accordingly on 9 July 2001 in the following terms.

"Thank you for your recent letter. I write concerning the decision to seize my vehicle, cases of beer and cigarettes.

The 40 cases of beer were purchases :
a) To celebrate 2 birthdays :
My wife's birthday on 5th June 01
My son's birthday on 8th June 01

b) I regularly entertain in my house and provide beer to my guests.

c) 5 cases of beer were for my brother.

I do not think n these circumstances that my purchase of these goods were excessive. The 800 cigarettes were clearly not intended for sale. They were for my personal use, but if you think it was excessive then I am willing to pay the duty.

The loss of my car has caused great inconvenience and expense. My family was booked to go on holiday to Pontin's in June. My father-in-law who is booked with us is disabled and not able to travel on public transport.

My car is vital to transport him and my family. Because of the seizure of my car I had to hire another car for the holiday."

29. This request for the review was received by Customs on 12 July 2001 and the 45 days for carrying out a review expired on 26 August 2001. Customs were unable to complete a review in this case within the specified time limit and the original decision was accordingly deemed to have been confirmed by operation of law.

30. The Appellant appealed to the London Tribunal Centre and was allocated reference number LON/01/8222.

31. A review of the decision was carried out and the Team Leader's decision was

5

10

15

20

25

30

35

40

45

confirmed. The decision on review was communicated to the Appellant in a letter dated 25 January 2002 from review Officer I F McEntee.

32. In the light of the decision of the Court of Appeal in R v Commissioners of Customs and Excise ex parte Hoverspeed and ors. [2002] EWCA Civ 1804 (Hoverspeed) and the consequent change in policy, Customs applied for this first appeal to be vacated.

On 19 February 2003, the Tribunal directed that the Appeal be vacated, and that the Commissioners carry out a re-review by 17 March 2003.

33. The re-review was carried out by Review Officer G M Hurrell and communicated to the Appellant in the letter dated 7 March 2003.

34. In her witness statement at pages 100/102 inclusive in the bundle of documents before the tribunal Mrs Hurrell set out what actions she took in carrying out her re-review. After hearing her give evidence and taking into account the fact that the Appellant through his representative did not challenge her evidence, the tribunal finds that Mrs Hurrell acted in the following manner as extracted from her statement :

"I am a reviewing officer who was not previously involved in Mr Barot's case and I considered the decision afresh including all the material that was before the Commissioners at the time the decision was made. I also examined and considered any representations that had subsequently been received, as well as the grounds for appeal. I took account of the changes in restoration policy that had occurred since the original decision had been made and accessed the customs computerized information available to me. I also examined the circumstances of the seizure, to identify if any exceptional circumstances existed which should be considered in my review.

The officer who seized the goods was not satisfied that they were subject to relief from duty. On examination of the statements provided during the initial questioning of Mr Barot and subsequent to the seizure, along with the circumstances of the case, I also reached the conclusion that goods were held for commercial use. I found no exceptional circumstances that I considered warranted restoration of the goods. In considering restoration of the vehicle, I concluded that the decision should be varied, as per the findings in Lindsay, due to the receipt of the money being received from a family member. Restoration would therefore be offered on conditional payment of a fee. However, the vehicle had been disposed of, and therefore an appropriate sum, to be agreed with the Post Seizure Unit at Dover, was offered in lieu of the vehicle as a means of settling the matter. The reasons for my decision are fully detailed in my letter dated 7 March 2003… The major points of my considerations concern the condemnation of the goods by the passage of time, the fact that the appellant had declined to be interviewed concerning the ownership and use of the excise goods, the quantity of beer, the information provided concerning money to be received from the appellant's brother for some of the goods, the regular travel to the continent of the appellant, a previous stop of the appellant by Customs when

5

10

15

20

25

30

35

40

45

holding 51 cases of beer, and the arguments put forward to the Tribunal by the appellant's representative."

35. The decision on re-review by Mrs Hurrell was that the decision regarding the excise goods was upheld and the decision regarding the vehicle was varied. The new decision regarding the vehicle was that, had it still been held by the Queen's Warehouse, the appropriate decision would have been conditional restoration, i.e. restoration of the vehicle on payment of a fee, that fee to be based on the evaded revenue on the excise goods. As the vehicle had been disposed of to an auction house and sold for £1,075 on 4 October 2001, the decision on re-review regarding the vehicle was that restoration of the vehicle would be offered by way of an appropriate sum, that sum to take into account the conditional restoration fee that would have been due in the event that the vehicle had still been held by Customs.

Cases

36 The Tribunal was referred by Mr Manknell during the course of the hearing to the following cases.

Lindsay v Commissioners of Customs and Excise [2002] EWCA CIV 267 ("Lindsay")

Hoverspeed

Gascoyne v Commissioners of Customs and Excise [2003] EWHA 257 (Ch) – ("Gascoyne")

Gora v Commissioners of Customs and Excise [2003] EWCA Civ 525 – ("Gora")

Anna Keenan v Commissioners of Customs and Excise [a tribunal decision dated 9 May 2003] – ("Keenan")

Robert Alfred Kinley and Another v The Commissioners of Customs and Excise [ a tribunal decision dated 9 June 2003] – ("Kinley")

The Appellant's Argument

37. Mrs Gale said that there was ample evidence to confirm that the purchase of the beer was for a private family party to celebrate two family birthdays and also to give thanks to the successful donation by Mrs Barot of one of her kidneys to help her friend.

38. She argued that the facts in the appeal were different to those in "Hoverspeed" and distinguishable. She maintained that if the alcohol purchased (beer) was all for the use at the party scheduled to take place about a week after the visit to Calais on 30 may 2001, then it was for the Appellant's own use. The fact that his brother purchased some of the beer was immaterial.

5

10

15

20

25

30

35

40

45

39. Mr Rowe did not explain to Mr Barot when he questioned him what his position was nor did her give him the opportunity of an explanation for the acquisition of the large quantity of beer. The entire proceedings when he was stopped did not last more than twenty minutes. The questioning of the Appellant was therefore unfair.

The Respondents'Argument

40. Mr Manknell put forward the following grounds for the seizure :

(i) the goods were well in excess of the minimum indicative levels

(ii) the Appellant had been issued with Customs Notice No.1. on 25 November
2000 on a previous trip. Therefore he was aware of the law relating to the
importation of excise goods.

(iii) the Appellant was frequent traveller and could have purchased beer on his
previous trips. He did not need to purchase such a large quantity of beer on
this trip.

(iv) there was a frank admission by the Appellant that some of the goods were
for his brother who would reimburse him with part of the cost. He referred to
paragraphs 11 and 12 of the Reply filed by the Appellant's solicitors in the
original appeal.

(v) the Appellant had stated at paragraph 6(a) on page 2 of the said Reply that
at the time of the seizure he was unemployed. This cast doubt on his ability
to finance the purchase of the beer himself.

41. The Court of Appeal decision in Lindsay suggested that where supply of goods is to friends and family at cost price, rather than commercial smuggling for profit, it may not be reasonable to refuse to restore the vehicle. As a result of that decision Customs policy was changed, and as explained in the decision letter, restoration will often be made for a fee. Equivalent to the outstanding duty, in the former type of situation.

In this case, restoration of the vehicle for a fee was made, despite the fact that the appellant was not genuinely bringing in goods solely for his own use. This followed careful consideration of all the relevant factors, and the balancing exercise described in detail in the decision letter. In such circumstances, Mr Manknell submitted that the application of the policy in this case cannot be said to have been disproportionate.

Reasons for decision

Liability to forfeiture and the change in the burden of proof

42. Pursuant to Article 3 of the 1992 Order, the Appellant was only entitled to relief from payment of duty on excise goods if they were for his own use as defined in Article 2(1) of the 1992 Order.

5

10

15

20

25

30

35

40

45

43. The 1992 Order sought to implement the EEC Excise Directive 12/12; however, the Commissioners accept that the Order failed to implement the Directive, which has direct effect, to the extent that :

(i) it made excise goods imported from another Member State chargeable to UK
excise duty without it being established that the goods were imported into the
UK for a commercial purpose; and

(ii) it placed a persuasive burden of proof on the individual to prove that the
goods were not held for a commercial purpose where the goods were in
excess of the minimum indicative levels

44. Whilst it is apparent that the standard statement read out by Mr Rowe to the Appellant, at the time of the seizure, reflected in its terms the misapprehension of the legal position and the burden of proof, the question is as to what attitude the Respondents actually adopted in coming to their conclusion that the goods were liable to forfeiture. This was expressed as follows by Neuberger J in Gascoyne :

"It is clear from paragraph 170 of the judgment in the Hoverspeed case … that the PRO wrongly imposes the burden of proof on the alleged smuggler. However, in my judgment unless it can be show that the burden of proof so far as establishing whether the goods were for the personal use of Mr Gascoyne and/or Ms Gifford played a part in the decision of the commissioners to refuse restoration, or in the review carried out by Officer Tooke, the point can take matters no further forward so far as Mr Gascoyne is concerned. Although the burden of proof can be crucial in some cases, there will be many cases where, in practice, it plays no real part at all. Indeed, the point is well illustrated in connection with the PRO itself by what the court said in the Hoverspeed case, at p 1098, para 173 :

"as Lord Woolf CJ pointed out … no one is in a better position to know whether the goods are to be used for private or commercial purposes than the person in possession of them and, if customs officers do not believe him, there is in practical terms not much difference between his failing to satisfy then that they are not being held for his own use (the PRO test) and them being satisfied that they are being held for 'commercial' use (the test under the Directive). In a borderline case. However, the location of the burden of proof may well make a difference."

45. We agree with Mr Manknell that, in the present appeal, the decision was not reached on the basis of any legal misapprehension or by reference to any burden of proof. The Customs Officer reached a clear conclusion that he believed the excise goods seized were not for the Appellant's own use.

The interrogation process

46. The Appellant through his legal representatives both in his Reply lodged in the original appeal and at the hearing asserted that the interview which took place on 30 May 2001 when he was intercepted was unfair. It is alleged that as the

5

10

15

20

25

30

35

40

45

Appellant is of Indian ethnicity. English is not his preferred language of communication. The interviewing officer (Mr Rowe) was also alleged to have a hostile attitude and did not give the Appellant and his family an opportunity to explain why such a large quantity of beer had been acquired.

47. We found Mr Rowe to be a credible witness. He carried out his interview in a normal manner and there was no evidence provided that he was hostile. We also found that Mr Barot had a good command of English. By her own admission his wife was asleep in the back of the van and we can only assume that was why she was not brought into the conversation.

48. The Appellant chose not to stay after the initial interview. If he had done so, he could have put forward any explanation that he had for the large quantity of excise goods he was importing. He made no mention of the party for which the beer was purportedly being acquired in the short answer he gave. He did not mention the party until he wrote on 9 July 2001.

49. During the course of the proceedings the Appellant has explained that he was unaware of the importance of staying on. However, he must have been aware of his predicament and the necessity to give as much information as possible bearing in mind he travelled to Calais on a regular monthly basis on shopping trips and had been served with a Notice 1 in November 2000 when he had been stopped with an even larger consignment of alcohol.

50. In this appeal, it is necessary for us to determine the reasonableness of the Customs' decision to refuse to offer the goods for restoration and to restore the vehicle without any conditions.

The reasonableness of the Respondents' decision to offer the goods for restoration

51. In Jason Thomas Bowd v Commissioners of Customs and Excise [1995] V & DR 212 the tribunal reviewed the decisions of higher courts when considering the word "reasonably" in a similar excise duty case involving the non-restoration of seized goods.

The tribunal in Bowd said, "In our view, the word 'reasonably' is to be construed in the wider sense used by Lord Greens MR in Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 where he stated at page 229 :

" .. A person instructed with a direction must, so to speak, direct himself properly in law. He must call his own attention to the matter which he is bound to consider. He must exclude from his consideration matters which are irrelevant to what he has to consider. If he does not obey these rules, he may truly be said, and often is said, to be acting 'unreasonably'. Similarly, there may be something so absurd that no sensible person could ever dream that it lay within the powers of the authority. Warrington L J in Short v Poole Corporation [1926] Ch 66 gave the example of a red haired teacher dismissed because she had red hair. This is

5

10

15

20

25

30

35

40

45

50

unreasonable in one sense. In another sense it is taking into consideration extraneous maters. It is so unreasonable that it might almost be described as being done in bad faith; and, in fact, all those things run into one another."

The approach to be adopted by a tribunal in reviewing the exercise of a discretion conferred on the Commissioners (albeit a different discretion) was put in this way by Lord Lane in Customs and Excise Commissioners v J H Corbitt (Numismatists) Ltd [1980] 2 WLR at p.663.

"It 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."

53. Before we look at the application of unreasonableness to the circumstances of this appeal, it is necessary to consider whether the Commissioners are entitled to have a policy regarding the restoration of excise goods which have been improperly imported. We consider that the Commissioners are entitled to have such a policy. However, it must pursue a legitimate aim. Mrs Hurrell, in giving evidence to the tribunal, considered that the aim is the deterring of the importation of goods for commercial purposes without payment of duty and the encouragement of compliance. That, in our view, must be legitimate. This was referred to in another tribunal decision of Mrs V Hopping v Customs and Excise Commissioners released on 9 October 2001 where, in paragraph 24 the tribunal said, "The critical question on this issue is whether the Commissioners have fettered their discretion by refusing to listen to an application that the policy be not applied in any particular case". We agree with the tribunal in Hopping that we do not think the Commissioners have allowed the existence of the policy to fetter absolutely the exercise of the discretion in this appeal. There are circumstances in which the Commissioners will relax their policy but these are, by their very nature, limited.

54. It is quite evident to us that the excise goods were not purchased for commercial resale but on a 'friends and family' basis with the Appellant to be reimbursed by his brother for one half of the cost of the goods. However, it is contended by the Respondents that the goods in such circumstances were still held for a commercial purpose. We agree with that view for the following reasons :

(a) In Hoverspeed, it was held by the Court of Appeal that the concepts of "products acquired by private individuals for their own use" in Article 8 of Council Directive 92/12/EEC and "products held for commercial purposes" in Article 9 were antithetical, so that if goods were not for own use, they were to be regarded as being held for a commercial purpose.

(b) This distinction was reflected in the law applicable at the same time of the seizure. Article 2(1) of the PRO defines "own use" as follows :

"" own use" includes use as a personal gift provided that if the person making the gift receives in consequence any or money's worth (including any reimbursement

5

10

15

20

25

30

35

40

45

of expenses incurred in connection with obtaining the goods in question) his use shall not be regarded as own use for the purpose of this Order".

(c) The antithetical nature of "own use" and "commercial use" as set out in Hoverspeed is also reflected in the law after the 1992 Order was revoked, from 1 December 2002.

55. Mrs Gale argued that even if his brother paid for part of the goods, the beer still remained safely for the Appellant's own use at a party. We do not agree. The intervention of payment by a third party is critical. It alters the situation radically.

56. As the tribunal stated in Keenan in paragraph 40

"We are satisfied that if members of a family are reimbursing, even on a not for profit basis, this is nevertheless commercial and duty is payable. We are satisfied that the Commissioners were entitled to seize the goods, and to come to a decision not to restore the goods."

We concur.

Conclusion

57. In summary, we decide as follows :

(a) The Respondents' decision was a fair and reasonable decision. Mrs Hurrell covered all outstanding points in her well reasoned and comprehensive review letter.

(b) The appeal is dismissed.

(c) There is no order as to costs.

Rodney P Huggins
Chairman
Release Date: 20 August 2004

LON/03/8094