Freely Available British and Irish Public Legal Information
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]
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 >> McGuinness v Customs and Excise [2004] UKVAT(Excise) E00793 (04 October 2004)
URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2004/E00793.html
Cite as: [2004] UKVAT(Excise) E793, [2004] UKVAT(Excise) E00793
[New search] [Printable RTF version] [Help]
E00793
EXCISE DUTIES; importation of excise goods above guidelines; forfeiture of goods; whether refusal to restore reasonable; Customs & Excise Management Act 1979 section 152(b);Finance Act 1994 section 14(1)(d), 16(4) & (8), and Schedule 5 paragraph 2(1)(r)- appealed dismissed.
EDINBURGH TRIBUNAL CENTRE
WILLIAM MCGUINNESS Appellant
- and -
Tribunal: (Chairman): J Gordon Reid, QC., F.C.I.Arb.,
(Member): Mrs Charlotte Barbour, CA., ATII
for the Appellant Mr William McGuinness
for the Respondents Mr Andrew Scott, Shepherd & Wedderburn, WS
© CROWN COPYRIGHT 2004.
Introduction
This is an appeal against the refusal by the Respondents ("Customs") to exercise their discretion under section 152(b) of the Customs & Excise Management Act 1979 in favour of the Appellant and restore excise goods, namely a quantity of cigarettes and hand rolling tobacco, seized, and subsequently deemed to have been condemned as forfeited. The refusal was confirmed on internal review. The Appellant ("Mr McGuiness") appeared in person. He gave evidence on oath at the Hearing on 26 July 2004 and led the evidence of an acquaintance, Mr Neil McGlynn. Andrew Scott, Solicitor, Shepherd & Wedderburn W.S, Edinburgh, appeared on behalf of Customs. He led no oral evidence. He produced a statement by Julie Wiggs, a senior Customs Officer, who was the Review Officer in this case. Customs also produced two bundles of documents. There was no dispute in relation to the authenticity, and, where appropriate, the transmission and receipt, of these documents. Customs also produced a bundle of authorities.
Facts
In December 2003, Mr McGuiness went on a trip to Zeebrugge with an acquaintance, James Stevenson. The purpose of the trip was to buy tobacco. On 8 December, they returned to Hull Ferry terminal. They were travelling in Mr Stevenson's vehicle. They were intercepted by Customs at the car terminal. The vehicle was examined and the following goods were found within the vehicle:-
50kg of hand rolling tobacco
6400 cigarettes of which 1000 were Lambert & Butler and 5,400 were Superkings
50 cigarillos
1 litre bottle of whisky and 2 bottles of vodka.
Mr McGuiness and Mr Stevenson were interviewed separately. Mr McGuiness told the interviewing officer inter alia that (i) 25kg of hand rolling tobacco and 3200 cigarettes belonged to him, (ii) he paid £1750 for the goods, (iii) he smoked mainly Lambert & Butler, (iv) he smoked 40 cigarettes a day or 80 hand rolled cigarettes a day; he also said he smoked 14 pouches per week, (v) the cigarettes were for him and not for his wife or family, (vi) for health reasons he did not work and nor did his wife; he received weekly State Benefits of £150; his wife received £120 per week in State Benefits; that his outgoings were £500 per month to which his two adult sons contributed £40 per week. He was not asked about his savings, (vii) all members of his family smoked.
According to Customs' contemporary handwritten notes the basis of seizure was income inconsistent with expenditure, consumption and quantity; the price paid, erroneously thought to be £750, was inconsistent with known costs; and the rate of consumption was not credible.
Mr Stevenson was also interviewed. The written record of that interview, the accuracy of which was not challenged and which we have therefore no reason to doubt disclosed that Mr Stevenson stated inter alia that (i) he and Mr McGuiness bought 3200 cigarettes each of which 1000 were Lambert & Butler and 5400 Superkings, (ii) they each paid for their own goods, the tobacco costing £1,300 and the total for cigarettes and tobacco being £1,675, (iii) his goods were for his own use and he did not intend to receive any cash from others for the tobacco; he smoked two 50g pouches a day; his purchases would last a year, (iv) he was unemployed, disabled and in receipt of weekly State Benefits of £185, (vi) he had no savings but had £200 in cash with him. He was asked about previous trips abroad about which he appears to have been somewhat reticent.
The tobacco goods were seized along with Mr Stevenson's vehicle. He obtained restoration of the vehicle on the spot on payment of £200. According to Customs' contemporary handwritten notes the basis of seizure was insufficient funds and income, the rate of tobacco consumption was not credible and Mr Stevenson had lied about his previous trips abroad.
Mr Stevenson challenged the forfeiture but his challenge was rejected at Kingston Upon Hull Magistrates Court on 10/6/04. No reasons are given in the copy order of the court produced (B2/5).
Following the seizure, Mr McGuiness engaged the services of a solicitor who wrote to Customs. Not all the correspondence appears to have been produced but by letter dated 6/2/04 to Customs, the solicitors sought a review of the decision to refuse to restore Mr McGuiness' goods which, by that stage if not earlier were identified, as 2700 Superkings, 500 Lambert & Butler, 25 cigarillos and 25kg of hand rolling tobacco. The letter was treated by Customs as out of time to constitute a notice of claim for the purposes of Schedule 3 to the Customs & Excise Management Act 1979. That view was not challenged at the time or subsequently. By letter dated 25/2/04 to Customs, the solicitors explained that "it remains our client's position that the items purchased were for personal consumption and for gifts for friends and family. Our client has a large extended family almost all of whom are smokers". They also pointed out, correctly, that buying gifts in December was not unknown.
By letter dated 23/3/04, an internal review having been carried out by Julie Wiggs, Customs refused to restore the goods. The letter narrates the factual background as recorded in Customs' contemporaneous records. The letter then quotes from the relevant legislation. It then records Customs' policy as follows:-
"Restoration Policy for Excise Goods"
It is this Department's general policy that seized excise goods are not restored. However, each case is examined on its merits to determine whether or not restoration may be exceptionally offered".
The circumstances in which goods may be "exceptionally offered" are not identified and were not given or put in evidence. The letter considers the circumstances of seizure and analyses in some detail the statements Mr McGuiness is reported to have made at the time. She concludes, from her own knowledge and investigations, that what Mr McGuiness said about his smoking habits was simply not credible. The fact that both Mr McGuiness and Mr Stevenson stated that they smoked 14 pouches of tobacco per week made the account even less credible. She also noted the discrepancy between Mr McGuiness' statement that the goods were for personal consumption and the statement in correspondence that the goods were partly for gifts. She also questioned his ability to fund expensive gifts. Her conclusion was that there were no exceptional circumstances justifying the departure from the current policy of non- restoration.
Finally we record a number of facts based on Mr McGuiness' evidence to the Tribunal. He is a former alcoholic. He worked in a distillery but lost his job five or six years ago as a result of his addiction. Mr Stevenson, who is disabled and cannot walk, was allowed to retain two bottles of vodka in his possession and Mr McGuiness was allowed to retain a bottle of whisky in his possession. He has five adult children who are all now married; two of his sons lived at home from time to time, thus explaining their contribution to the family budget referred to above.
We also record Mr McGuiness' evidence that the bottle of whisky was said to have been purchased for one of his sons who did not smoke. Mr McGuiness accepted that his reference in interview to smoking 14 pouches of tobacco per week was a lie. At the material time he claimed to have been in a state of panic.
Submissions
Mr McGuiness said that he had told a lie to Customs. He said he was under pressure from Mr Stevenson. He added little to what he said in evidence and what had been said on his behalf on correspondence.
Mr Scott summarised the law as set out in Customs' Statement of Case. When excise goods were seized an Appellant had three options, namely (i) challenge the forfeiture under the procedure in Schedule 3 to the 1979 Act, (ii) seek restoration under section 152(b) of the 1979 which involved the exercise by Customs of their discretion which was reviewable under sections 14(1)(d), 15 and 16 of and Schedule 5 paragraph 2(1)(r) to the 1979 Act, and (iii) judicial review. The validity of forfeiture cannot be challenged in this Tribunal. The Tribunal is not entitled to make a finding of fact as to whether the goods were for own use or for commercial purposes. The task of the review officer was to consider whether there were any mitigating or exceptional circumstances which would allow a departure from Customs policy of non restoration. A review officer will consider questions of quantity, cost and financing.
Mr Scott referred to Gora v CC&E 11/4/03 Ct of App. Paragraphs 52, 57, 58, CC&E v Dickinson 7/10/03 High Ct Chancery Div, Peter Smith J., paragraphs 19-22, 26-28, 41, 42, and 45, Gascoyne v CC&E 2003 EWHC 257 (Ch), Neuburger J.21/2/03 paragraphs 49 and 85. Gora should be preferred to Gascoyne. The nature of the commerciality should be considered by the Tribunal. If the Tribunal makes findings in fact as to the nature of the commerciality which the Reviewing Officer failed to take into account, then that would be a basis upon which the Tribunal could remit matters to Customs for a further review in the light of the findings in fact made by the Tribunal.
Mr Scott also referred to William Wilkinson v CC&E 9/5/03 (a decision of this Tribunal) and accepted that the law was correctly stated therein. This case had been referred to in other cases but had not been adversely commented upon.
As for the facts in the present case, Mr Scott submitted that there were a number of confliction explanations which rendered the Appellant's account incredible. He was willing to lie to Customs. There was no flaw in the decision making process, and the Appellant had failed to show that the decision was unreasonable.
Discussion
The grounds of appeal appear, in effect, to be that (i) Mr McGuiness was within the guidelines except in relation to the hand rolling tobacco, (ii) the purchases were for personal consumption and gifts for friends and his large extended family, (iii) he funded the purchase himself having funds from a Bingo win, a backdated benefit cheque and a successful reparation claim (these matters being vouched), (iv) he was badly advised by Mr Stevenson.
These grounds are really directed to the validity of seizure and forfeiture rather than the exercise by Customs of their discretion under section 152(b) of the 1979 Act.
In evidence, Mr McGuiness described how he came to meet Mr Stevenson (at Bingo) and how he relied on him. Mr McGuiness maintained that all the Lambert and Butler cigarettes were his. He panicked at Hull and said some things that were not true. In the light of what the Appellant said at Hull, the Reviewing Officer was entitled in our opinion, to view with some suspicion the subsequent assertion that the goods were truly purchased for friends and family as well as for the Appellant himself. Where the truth of the matter lies, is difficult for us to tell. Mr McGlynn's evidence was to the effect that he had known Mr Stevenson for about one to one and a half years and that he had known Mr McGuiness for about 30 years. The relevance of this escapes us. Mr McGlynn was not cross examined.
We adopt what the Tribunal said on the law in Wilkinson which reflects what the same Tribunal also said in Connolly v CC&E 6/6/03. On the evidence presented to us, it cannot be said that Customs' investigations were, in the circumstances, inadequate, incomplete, or did not justify the conclusions reached. Nor can it be said that they misunderstood the facts as presented to them, or misunderstood or wrongly applied the law or acted in bad faith. There is no challenge to the policy on non restoration of the goods. We asked Mr Scott to give us examples of exceptional circumstances whereby the restoration of goods would be "exceptionally offered". He could not identify any circumstances at all and we are not aware of any. Customs' so called policy on restoration of goods appears to be more of an inflexible rule fettering their statutory discretion, rather than a general policy which they are, of course entitled to have. The policy was mentioned in such terms in Gora at paragraphs 18, and 19. However, as the issue was not discussed in any detail we are not prepared, in this appeal, to condemn the policy as disproportionate or contrary to the terms of section 152(b) of the 1979 Act.
Finally, we should record, that we have reservations as to the soundness of Dickinson. The case was not discussed in detail before us but it seems to us that for an appellant to argue before the Tribunal that the goods were purchased for his own use, is tantamount to challenging the validity of the forfeiture. The proper forum to mount such a challenge is the court in condemnation proceedings. The nature of commerciality may be raised before the Tribunal i.e. whether purchases were made for profit or for social distribution on a non profit making basis (see Gora paragraphs 57-8). In this respect we remain of the view, expressed in Wilkinson, that paragraphs 52 117 in Gascoyne is too widely expressed and is inconsistent with Gora.
In the foregoing circumstances, it cannot be concluded that the decision to refuse to restore the goods was one which could not reasonably be arrived at. Accordingly, the appeal must fail.
Result
The appeal will be dismissed. Mr Scott accepted that if he were successful no expenses should be awarded. We therefore find no expenses due to or by either party.
J. GORDON REID Q.C. F.C.I.Arb.
CHAIRMAN
Release Date: 4 October 2004
EDN/04/8005