United Kingdom VAT & Duties Tribunals (Excise) Decisions

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URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2004/E00790.html
Cite as: [2004] UKVAT(Excise) E00790, [2004] UKVAT(Excise) E790

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Blair v Customs and Excise [2004] UKVAT(Excise) E00790 (08 September 2004)

EXCISE DUTY — excise goods and van transporting goods seized at Coquelles when about to return to UK and forfeited — review decision confirming decision not to restore goods or vehicle — held on facts to be reasonable for Customs to conclude against restoration as goods apparently intended for a commercial purpose and not for own use — neither exceptional hardship nor other grounds for restoring vehicle present on the facts — appeal dismissed as to both goods and vehicle.

MANCHESTER TRIBUNAL CENTRE

WILLIAM LOCKEY BLAIR Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: Mr M S Johnson (Chairman)

Miss K Ramm FCA (Member)

Sitting in public in North Shields, Tyne and Wear on 10 August 2004

The Appellant did not appear and was not represented

Miss E Piasecki, of counsel, instructed by the Solicitor's Office of HM Customs and Excise, for the Respondents

DECISION

In this appeal, the appellant is seeking to overturn a review decision of the Commissioners of Customs and Excise ("Customs") upholding a previous decision whereby they refused to restore to the appellant certain excise goods ("the goods") and a Ford Transit van Registration No F588 VDC ("the vehicle"). The vehicle and the goods were seized by Customs at the UK Customs Control Zone at Coquelles, France, on 23 August 2001, when the appellant was about to return to the UK. The goods were seized because Customs formed the view that UK excise duty was due in respect of them, which the appellant was seeking to evade. Customs decided that the goods were being brought into the UK for a commercial purpose. Because the vehicle was being used to transport the goods, they concluded that the vehicle as well as the goods was liable to forfeiture, and that too was seized.

The goods consisted of the following:

1 Kg of hand-rolling tobacco;

1,000 cigarettes;

420 litres of beer;

45 litres of wine;

0.7 of a litre of spirits;

1.5 litres of Martini.

The appellant has not attended at the hearing to present his appeal, nor has he sent a representative. However, the tribunal file shows that he was duly notified of the date, time and place of the appeal hearing. There is no evidence that the tribunal was ever contacted by the appellant with a view to seeking a postponement of the hearing. Accordingly there appears to be no reason for us not to proceed, and that we have decided to do, pursuant to rule 26(2) of the Value Added Tax Tribunals Rules 1986 (as amended).

We have found it possible to derive a full picture of the case from the bundle of documents presented to the tribunal by Miss Piasecki of counsel, who has appeared before us to represent Customs. The bundle shows that the background to the appeal is that more than one review of Customs' initial decision not to restore the goods and the vehicle has taken place. We find that the sequence of events has been as follows:

Event		Date
Seizure of the goods & vehicle		23 August 2001
Letter to Customs from the appellant’s solicitors, A N Jackson & Co of Victoria Road, Hartlepool, seeking restoration of the goods & vehicle		20 September 2001
Initial letter from Customs to the solicitors refusing restoration of the goods		29 October 2001
Further letter from Customs to the solicitors refusing restoration of the vehicle		(undated)
Letter from the appellant in person seeking a Magistrates Court hearing in Dover		(undated)
Further letter from Customs to the solicitors refusing restoration of the vehicle		12 November 2001
Letter from Customs to the appellant stating that the decision not to restore will be reviewed		14 November 2001
Letter from the appellant to Customs taking issue with the seizure & setting out his losses		(undated)
Letter from Customs to the appellant concerning confusion with a previous seizure		5 December 2001
Letter from Customs to the appellant’s solicitors denying right to a Magistrates Court hearing		17 December 2001
First review decision (reviewing officer for Customs: Mr Bernard Wills)		14 January 2002
Second review decision (reviewing officer for Customs: Mr Raymond Brenton)		5 November 2003

Accordingly whilst the appellant's solicitors were seeking restoration of the goods and vehicle, he personally was requiring the institution of condemnation proceedings to dispute the seizure, that is to say, proceedings under Schedule 3 of the Customs and Excise Management Act 1979. However, the appellant evidently accepted that he was out of time in making that requirement, as he was informed by Customs' letter to him dated 17 December 2001, and pursued only the route of appealing to this tribunal.

The fact that the appellant appealed against the first review decision appears from the opening paragraph of the second review decision, which states that Mr Brenton has been required by a direction of the tribunal dated 4 April 2003 to undertake the second review. The first review decision was adverse to the appellant, and the second review decision is adverse to him as well. The appeal with which we are concerned is against this second review decision. The notice of appeal, dated 8 December 2003, states that the appellant wishes to appeal on the following grounds:

"The Review Officer on the 5 November 2003 has all the facts wrong. I forwarded information to Plymouth Review Team. He said I never."

We interpret this as meaning that Mr Brenton allegedly omitted to mention and consider in his review decision relevant information provided by the appellant to the Plymouth Review Team of Customs, that Mr Brenton wrongly maintained in his review decision that there had been no such information provided, and that he accordingly decided the outcome of the review on an incorrect and inadequate factual basis.

As to this allegation, it is clear that Mr Brenton is a member of the Customs Review Team and is based at Plymouth. Of the documents contained in the bundle we have seen, the only information that appears to have been provided by the appellant is that contained in the following letters, viz:

a) The letter from his solicitors to Customs dated 20 September 2001; and

b) The undated letter to Customs from the appellant personally, in which he took issue with the seizure and mentioned his losses.

The first of these letters, the one from the solicitors, refers to a 40^th birthday celebration that the appellant's brother was due to have on 23 August 2001. It was alleged that the beer, Martini and whisky that were seized were due to have been drunk on that occasion. The letter went on to state that the solicitors were attempting to obtain some further clarification of that from their client and would forward this to Customs on receipt. The letter then stated that, of the 1,000 cigarettes seized, 800 were for the appellant's own use and 200 were gifts for his mother.

The second of the letters mentioned, the one from the appellant personally, says nothing at all about the party or the cigarettes. The letter is principally concerned with the price of lager at various outlets at home and abroad, with challenges to the validity of the "guidelines" contained in the Schedule to the Excise Duties (Personal Reliefs) Order 1992 SI 1992/3155 ("the PRO"), with the circumstances of a previous occasion on which the appellant appears to have been stopped by Customs in April 2001, and with setting out the appellant's losses. Nothing in that letter is directed to the appellant's reasons for bringing back the goods in August 2001.

Although the appellant's solicitors had promised to try to provide further information about the alleged 40^th birthday celebration, none has been forthcoming, so far as we can see. Apart from the simple allegations contained in the letter dated 20 September 2001, the information available to Mr Brenton was limited to what he was able to gather from the notebook entries of Customs made when the appellant was questioned prior to the seizure of the goods and vehicle. Mr Brenton did not have any version of events provided by the appellant at any stage.

We have studied the second review decision closely. We find that it does refer to the allegations in the letter of 20 September 2001. However, it also refers to what the appellant is recorded as having said when he was questioned on 23 August 2001. The officer of Customs who questioned him was Mr James Michael Ling. The bundle of documents contains a witness statement dated 18 April 2002 from Mr Ling. Mr Ling did not give oral evidence to the tribunal, but we see no reason to reject the evidence contained in his statement.

Mr Ling says in his statement inter alia – and this evidence is confirmed by the contents of his notebook, written up at the time, offered for signature to and signed by the appellant – that he asked the appellant, "What are you doing with all the beer?" to which the appellant replied, "I will keep it in the van, I am sleeping in the van, whilst I am here, 'cause he [that is, the appellant's mate in Dover] wants to charge £20 a night".

Mr Brenton expresses the opinion in his review decision that the reply given by the appellant to the question, "What are you doing with all the beer?" was an evasive one. The ordinary reply to that question would be to indicate who would be drinking the beer, by saying, for instance, that it was to be consumed at a 40^th birthday celebration. Yet there is no record that the appellant told Customs how, when, where or by whom the beer would be consumed, although, in our view, that is what he must have known Customs were interested in.

We say this being mindful that the appellant must have been familiar with Customs procedures. He had, on his own admission, been to France before, brought back excise goods, and had such goods seized from him. He admitted as much when questioned by Mr Ling. Indeed, he said that he had been stopped 6 times, of which 3 were in the last year. He said that he knew all about the "guideline" levels. Additionally, Mr Brenton had records available to him showing that seizures of excise goods had happened from the appellant in April 2001 (those goods were restored), November 2001 and April 2002 ^[1]. Mr Brenton stated in his decision that he was satisfied that the appellant was a frequent traveller to Europe (using that expression as not including the UK) for the purpose of cross-border shopping, and was probably a very frequent traveller.

This being so, one other matter weighed heavily with Mr Brenton. In 2001 it was the practice of Customs, if they suspected that excise goods were being brought into the UK from the EU for a commercial purpose, to read to the traveller what was known as a "commerciality statement" based on article 5(3A) of the PRO. By that sub-article, Customs might require the traveller to satisfy them that the excise goods he or she was carrying were not being held or used for a commercial purpose.

The Divisional Court of the Queen's Bench Division in R (on the application of Hoverspeed Ltd and Ors) v C & E Comrs [2002] 4 All E R 912 ^[2] ("the Hoverspeed case"), held that the PRO wrongly placed the burden of proof on travellers to satisfy Customs that they were not holding or using excise goods for a commercial purpose, instead of on Customs. Consequently, the PRO was eventually revoked. Customs now accept that the burden of proof as to commerciality is on them. But in 2001 the practice was to rely on the PRO, and that is what Mr Ling did in the present case.

The commerciality statement read by him invited the appellant to stay for an interview with a view to establishing the non-commerciality of the goods, on pain of seizure of the goods otherwise. The appellant, however, immediately stated that he did not wish to stay to be interviewed. He then left, with the goods and vehicle being seized in consequence.

Irrespective of the burden of proof as to commerciality, the failure of the appellant to stay to be interviewed had in our view an adverse effect on the process, because it meant that Customs were not afforded the opportunity further to question the appellant. We are sure that, had Customs had that opportunity, they would have pressed him about his intentions for the beer, and for that matter the cigarettes. They did not have that opportunity, and accordingly were unable to bottom the appellant's purpose or purposes for bringing back the goods.

Mr Brenton's conclusion in his review decision, based on the foregoing, was that this was a commercial importation, with a view to resale of the goods at a profit. He was of the view that the appellant was engaged in evasion of excise duty. Mr Brenton saw no basis on which the goods ought to be restored. We think that that was an entirely reasonable conclusion in all the circumstances.

Mr Brenton did not, in his review decision, separately consider the basis if any on which the vehicle might be restored. However we do not doubt that he will have been aware of the decision of the Court of Appeal in Lindsay v C & E Comrs [2002] 3 All E R 118 ("the Lindsay case"). In that case, the court held that a decision by Customs not to restore a seized vehicle, even where excise goods were seized as not being for the traveller's own use, could be disproportionate. Should Mr Brenton have considered in the present case whether it might be disproportionate not to restore the vehicle to the appellant, irrespective of the commerciality of the importation of the goods? We think not.

We are mindful that, in the Lindsay case, Lord Phillips of Worth Matravers MR stated as follows, at [2002] 3 All E R page 137, letter g viz:

"Those who deliberately use their cars to further fraudulent commercial ventures in the knowledge that if they are caught their cars will be rendered liable to forfeiture cannot reasonably be heard to complain if they lose those vehicles. Nor does it seem to me that, in such circumstances, the value of the car used need be taken into consideration. Those circumstances will normally take the case beyond the threshold where that factor can carry significant weight in the balance. Cases of exceptional hardship must always, of course, be given due consideration".

In the present case, the vehicle was an F-registration van – presumably of low value. In his undated letter, referred to in paragraphs 8(b) and 10 above, the appellant referred to the vehicle. He said that it was taxed, tested and insured, and that he required reimbursement for having been deprived of it. However, the appellant did not mention hardship, exceptional or otherwise. Nor is the tribunal aware of any out-of-the-ordinary circumstances relating to the use of the vehicle that should properly be taken into account in relation to restoration. No such information had reached Customs. In our view Mr Brenton reasonably concluded, consonant with Lord Phillips' intimation in the passage from the Lindsay case set out above, that this was not a case for offering restoration of the vehicle.

In the above circumstances, we did not feel that it was necessary for us to call upon Miss Piasecki, who was prepared to make submissions on behalf of Customs, to make those submissions. We orally rehearsed at the hearing the basis on which we did not feel that the appeal could succeed, and she indicated that her submissions would have corresponded to the views we had expressed.

Accordingly, at the end of the hearing, we let it be known that the appeal was formally dismissed. This is the written decision recording the circumstances of the dismissal and our reasons for it. Customs made no application for costs, accordingly none are awarded.

MR M S JOHNSON

CHAIRMAN

Release Date

MAN/03/8194

Note 1 (on which occasion the appellant failed to stay to be interviewed by Customs, as on the occasion with which we are concerned) [Back]

Note 2 (which went on appeal, see [2003] 2 All E R 553, but not in respect of this point) [Back]