United Kingdom VAT & Duties Tribunals (Excise) Decisions

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URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2004/E00784.html
Cite as: [2004] UKVAT(Excise) E784, [2004] UKVAT(Excise) E00784

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Bochenski v Customs and Excise [2004] UKVAT(Excise) E00784 (20 August 2004)

EXCISE – Restoration conditions – Commercial vehicle – Tractor and trailer – Trailer adapted without owner's knowledge and used to smuggle 220,800 cigarettes - £8,000 required for restoration – Proportion of duty lost – Failure by owner to check state of trailer – Proportionality – Alzitrans SL [2003] V&DR 369 considered – Appeal dismissed

LONDON TRIBUNAL CENTRE

HENRYK BOCHENSKI Appellant

and –

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: THEODORE WALLACE (Chairman)

SUNIL K DAS ACIS

Sitting in public in London on 16 August 2004

The Appellant did not appear and was not represented

The appeal was heard in the absence of the Appellant under Rule 26(2)

Richard Smith, counsel, instructed by the Solicitor for the Customs and excise, for the Respondents

© CROWN COPYRIGHT 2004

DECISION

This is an appeal from a review decision requiring £8,000 as a condition for restoring a tractor and trailer seized from the driver employed by the Appellant, a Polish haulier.

The sum was set as being some £2,000 more than one-fifth of the excise duty on 220,800 cigarettes which were concealed, the addition being because the Appellant had failed to check the trailer which had been adapted to conceal goods. The vehicle has been restored, so that the appeal is solely concerned with whether the condition stands.

The Tribunal heard evidence from the Review Officer, David Leavesley, and considered statements from other officers served under Rule 21, correspondence from the Appellant and photographs of the trailer.

The facts were as follows.

On 10 October 2001 Mr Mastalerz, the Appellant's driver, and a passenger, Mr Mazur, who was not an employee but who was driving, were stopped with the vehicle and trailer at Dover.

Mr Mastalerz produced TI and CMR documents for a consignment of furniture from Lublin, Poland, to Preston. He produced a small quantity of cigarettes. Customs decided to search the vehicle.

The officer who had detained the vehicle looked underneath the trailer and saw a pallet locker with doors on hinged lids on either side. The locker extended seven or eight feet along the vehicle and across its width. The officer noted that the pallets were narrow, apparently leaving a void space in the centre. The vehicle was then electronically scanned. Packages were located within the central void. There was no access to the void except through a riveted side plate. Other officers drilled the rivets out and levered the plate off. Inside were packages containing 183,600 Superking cigarettes.

The officers noted that the pallet locker was old and well used with considerable dirt visible around the bolts securing the locker to the trailer. Photographs produced to the Tribunal satisfied us that it could not have been recently fixed. The locker had three compartments separated by metal walls with the void between the two side compartments.

Mr Massagers and Mr Mazur were present during the search. No evidence was given as to any conversation with either during or after the search. Neither was arrested. The vehicle and cigarettes were seized, including a further 37,200 cigarettes found concealed in two spare tyres.

The Appellant faxed a letter on 12 October asking why the truck and cargo were being held as the furniture was for delivery. A further letter of 18 October stated that the cigarettes were not the Appellant's property although the trailer was and that the Appellant could not explain why the cigarettes were there.

A further letter stated that the tractor was a 1996 Volvo FM-12 and the trailer was made in 1992.

On 18 December 2001 Customs refused to restore the vehicle and trailer because the vehicle had been adapted for the purpose of concealing goods. That decision was confirmed on Review and the Appellant appealed.

On 4 November 2002 with the Appellant's consent the Tribunal directed a further review within 28 days. Customs failed to carry out the Review. On 11 March 2003 the Tribunal directed that unless the Review was completed by 20 March 2003 the Appeal would be allowed under Rule 19(4), Customs applied for a direction for a further review on the grounds that there was no jurisdiction to make a direction allowing the appeal.

On 15 October 2003 the Tribunal decided (Decision No. E 511) that there was power to make the direction allowing the appeal but that applying Kett v Customs and Excise Commissioners [2003] V&DR 363 (E 386) the Tribunal had power to extend the time for the Review under Rule 19(1) and that in the circumstances such a Direction was appropriate rather than leaving the Appellant to complain to the Adjudicator.

In those circumstances the review now under appeal was carried out.

The Review stated that excise duty involved was £30,110.13 and that the value of the tractor was approximately £12,000. Mr Leavesley's decision proceeded on the basis that the Appellant was unaware of the smuggling or the adaptation. He referred to a letter from Mr Mastalerz in October 2001 saying that when he was refuelling at Poznan he was asked to take a palette closure and two spare tyres to England as quickly as possible as the tyres were needed for a car that had an accident in England. From a further letter he concluded that the driver was guilty. He wrote,

"I consider you to have been totally reckless (due to a total lack of reasonable checks) and the normal restoration fee would have been 20% of the revenue involved, which amounts to £6,002.22 (sic). However, there is the guilt of the driver and also a long-standing adaptation to the vehicle that requires consideration.

I am aware that you have been without the use of this vehicle for 21 months and that this has resulted in a … loss of earnings."

He offered restoration of the vehicle and trailer for £8,000 conditionally on the Appellant removing the adaptation.

In his evidence Mr Leavesley said that in making his decision he did not rely on the involvement of the Appellant's employee. In view of the reference in the Review to "the guilt of the driver" this does not appear to be correct.

In his evidence Mr Leavesley stressed the fact that the adaptation was not new but that the Appellant was unaware of it and could not have checked the vehicle since it was carried out. We accept this conclusion. Furthermore this was not one trailer in a large fleet but the Appellant's only trailer. While we would not apply the "epithet" reckless without more evidence, the Appellant cannot have made any checks for some time. Poland was not a member of the EU at the time so that no question of freedom of movement of goods applied.

Mr Smith accepted that the principle of proportionality applies to a commercial haulier, see per Blackburne J in Alzitrans SL v Commissioners of Customs and Excise [2003] V&DR 369 but submitted that the conditions were reasonable and proportionate.

We accept this submission. Mr Leavesley correctly took account of the substantial time for which the Appellant was deprived of the use of the vehicle. We observe that much of the delay was due to Customs failure to comply with the Direction of 4 November 2002.

The adaptation however was substantial as was the duty involved.

The Appellant in his appeal letter complained that Customs did not investigate to establish the true smuggler. We accept Mr Smith's submission that in the circumstances that is not relevant. We do not need to consider the driver's involvement since Mr Leavesley did not rely on that before us. We have great difficulty however with the filling station/tyre explanation given by Mr Mastalerz since the hidden compartment would have had to be there already, it was sealed and there was no evidence as to the destination of the cigarettes which was not suggested to be the furniture company.

We consider that the requirement of £8,000 for restoration was proportionate. The appeal is dismissed.

THEODORE WALLACE

CHAIRMAN

RELEASED:

LON/03/8222