United Kingdom VAT & Duties Tribunals (Excise) Decisions

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URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2004/E00797.html
Cite as: [2004] UKVAT(Excise) E00797, [2004] UKVAT(Excise) E797

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Kurasamy Sureshkumar v Customs and Excise [2004] UKVAT(Excise) E00797 (15 October 2004)

E00797

EXCISE – Restoration refusal – Vehicle used to carry 768 litres of beet – Finding that commercial purpose – Joint venture – Loss of £505 revenue – Refusal not disproportionate – Appeal dismissed

LONDON TRIBUNAL CENTRE

KURASAMY SURESHKUMAR Appellant

and –

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: THEODORE WALLACE (Chairman)

JOHN ROBINSON

Sitting in public in London on 20 September 2004

N Weiniger, instructed by M K Sri & Co, solicitors, for the Appellant

Sarabjit Singh, instructed by the Solicitor for the Customs and Excise, for the Respondents

© CROWN COPYRIGHT 2004


 


DECISION

1. This appeal was against a review decision refusing to restore the Appellant's Nissan Serena which was seized by Customs on 7 December 2002 at Dover.
2. The vehicle was seized because it was carrying 768 litres of beer and the seizing officer, Mrs Tracy Brown, was not satisfied that they were not for a commercial purpose. The duty on the beer at the time of seizure was £505.09 under section 36(1AA) of the Alcoholic Liquor Duties Act 1979, which specifies the duty as £11.89 per 100 litres per cent of alcohol in the beer.
3. We heard four witnesses : the Appellant, Mrs Brown, Alex Esposito, who interviewed Mr Selvakumar who was driving another vehicle but bought beer at the same time as the Appellant, and Raymond Brenton, the Review officer.
4. Mrs Brown was on duty at Eastern Docks at 4.00am in the Inspection Hall when the Appellant's vehicle, which was a people carrier, was referred by a selecting officer for inspection.
5. The Appellant handed her his passport and said that he had been to Calais on a day trip and had 20 cases of Holsten Pils, 40 cases of Stella Artois and 5 other cases and 1600 cigarettes. He handed her a manuscript receipt for the Holsten and Stella showing 532 plus TVA making 637.46. The amount was in sterling although the receipt did not say so. A further P&O Ferries receipt was for the cigarettes.
6. She noted the Appellant as saying that this was the first time he had travelled, that he was travelling back to Southall and that he was not travelling with anybody else.
7. The Appellant did not ask for an interpreter and Mrs Brown did not feel that there was any language problem although he was softly spoken.
8. Mrs Brown said that she suspected that he might have goods for a commercial purpose and invited him to be interviewed. She kept a contemporaneous note of the interview.
9. She noted him as saying that the beer was for a Christmas party, "The party is on the 27^th December and its for friends when they come round." He expected nearly 50 to come altogether, both men and women. The women would drink beer. No one else was contributing to the cost.
10. The Appellant told Mrs Brown that he employed 18 people at his business, Euro Cleaners. None of the beer was to be given to them, but they would come to the party.
11. He said that his income after bills was £600 to £700 a month. He had paid for the beer from saving. Normally he bought beer for £1.20 a can locally.
12. He had said that a friend, Kumar S, had paid for the ticket with a credit card. He knew the initial but could not remember the name. He then agreed that his name was Selvakumar, the man when Mrs Brown's colleague was interviewing. Asked by Mrs Brown why he had denied travelling with anyone else, he said that originally his wife was coming but she was unwell and he thought Mrs Brown meant travelling in his van. He said that he had misunderstood. He said that he would pay Mr Selvakumar back for the ticket later. They had each paid the cash for their own beer.
13. The Appellant signed the note at that point. This was after just under an hour.
14. Mrs Brown checked some records and asked him if he had travelled to France or Belgium before and noted that he said, "No". She said records showed the car travelling on 18 October to which he agreed. He said that he had travelled to Germany with his wife and nephew and niece for a week.
15. He said that the party would be at his house and that he would pay for the food. He did not know what it would cost in total with the beer.
16. After informing the Appellant that the goods and vehicle were seized, Mrs Brown told the Appellant that she would note that he had been co-operative and had not been in trouble before.
17. Mr Esposito interviewed Mr Selvakumar who was driving a Toyota Previa and had 65 cases of beer of four different types. He had denied travelling with anyone else and had initially denied buying the Appellant's ticket.
18. In his review Mr Brenton concluded that the beer was not for the Appellant's own use but was held for a commercial purpose and that the Appellant was acting in collusion with Mr Selvakumar. The excise goods were worth over £1,843 in UK shops at £1.20 a can. He concluded that the refusal to restore the vehicle was "reasonable, equitable and proportionate."
19. The Appellant gave evidence through an interpreter. He said that he had been in England since 1989, originally seeking asylum from Sri Lanka, and had been given a British passport in 2000.
20. He said that the beer was for a party for his birthday which was on 22 December and for his staff for Christmas. He had paid £643.46 in sterling to the shop in France.
21. He said that Mr Selvakumar had asked about booking his ticket two days before they went. He did not know when Mr Selvakumar booked them but he had called at 3.00pm and said they were going that night. The Appellant's wife was not feeling well; he did not know whether a ticket had been booked for her. Mr Selvakumar was given a reference number and the Appellant got the ticket that night from the counter.
22. When asked about travelling to France he had thought the officer meant travelling to purchase beer. He had gone to Germany, going through France, to go to a wedding. He had produced an invitation to a wedding at Bremen on 20 October 2002. He denied trying to mislead the officer. He said that he called his friend S Kumar and did not know that his name was Selvakumar. When asked whether he was travelling with anyone he thought he was being asked about someone in his vehicle.
23. The Appellant agreed that he and Mr Selvakumar had bought their beer at the same shop but said that it was at different counters.
24. He said that he had mentioned to Mrs Brown that the beer was also for his birthday. He was expecting 50 or more if they brought friends and had made arrangements to serve hot Sri Lankan food in tents in the garden. He planned to offer guests beer but some would drink wine. He was not offering spirits because if his staff consumed too much they would not come to work next day. Only a few of the women would drink alcohol.
25. He agreed that he had not asked for an interpreter when interviewed and had understood the questions. Mrs Brown read the answers she recorded to him. He trusted that she had written what he said. He had not read the notebook himself at any time.
26. Mr Singh submitted that in view of the judgment of Buxton LJ in the Court of Appeal in Gascoyne v Customs and Excise Commissioners on 28 July 2004 (EWCA Civ 1162) the Tribunal should not consider the issue of whether the beer was for the Appellant's own use since the Appellant had not made a claim that the goods were not liable to forfeiture in accordance with Schedule 3, paragraph 3 of the Customs and Excise Management Act 1979 so that after one month they were deemed to have been duly condemned as forfeited under paragraph 5.
27. He said that Customs accepted that it would not be consistent with the Appellant's rights under the European Convention on Human Rights for the Appellant to be completely shut out from re-opening the own use issue before the Tribunal. However he said that the Tribunal should be conscious of abuse of process in considering whether the issue should be ventilated before it, see paragraph 55 of Buxton LJ.
28. Mr Singh submitted that there was no special reason such as illness, being abroad, or being badly advised, why the Appellant had not made a claim.
29. He said that if the Tribunal did consider the own use issue there was ample evidence that the beer was bought for a commercial purpose. The Appellant had misled the officer when asked about previous trips and when asked whether he was travelling with anyone else, being evasive about Mr Selvakumar. 1536 cans of beer was incongruous for a party for 50 people; he had not mentioned a birthday party to Mrs Brown. Mr Selvakumar had dishonestly denied travelling with anyone or buying the Appellant's ticket. He submitted that it was a joint enterprise.
30. He said that Mrs Brown had taken a note at the interview and had had no communication difficulty with the Appellant.
31. In his skeleton argument Mr Singh cited Lord Phillips MR in Lindsay v Customs and Excise Commissioners [2002] STC at paragraph 63 where he said that when cars are used to further fraudulent commercial ventures the value of the car need not normally be taken into consideration by Customs. There were no exceptional circumstances in this case.
32. Mr Weiniger said that the Appellant had a real argument as to own use which should not be shut out. Many of the points taken against him were matters of language and interpretation. When matters had been put to him at the interview he had clarified them credibly. He said that every single answer at the interview had been judged unfairly. However Mrs Brown had said that he had co-operated. Although in a sense the Appellant had travelled together with Mr Selvakumar they were not in the same car and there was not a joint purpose. The Appellant should not be tainted by association.
33. The refusal of restoration had caused significant hardship, since £6,500 remained to be paid on hire purchase out of the original £18,351. The cash price of the van in July 2001 was £14,390 before finance charges. The decision was not proportionate.

Conclusions

34. The Appellant did not dispute the greater part of the notes made by Mrs Brown of the interview. He must therefore have understood the questions sufficiently to give relevant answers for the most part although there was no interpreter. He did not ask for an interpreter at the interview. We do however accept that some of the questions and answers may have been misunderstood.
35. Although Mrs Brown's statement said that the Appellant was informed of the appeal process, the documents produced by Customs contain no explanation as to the procedure for making a claim against seizure. The legal procedure and terminology is confusing even to a person for whom English is the first language. The Tribunal does not consider that there is any abuse of process in the Appellant raising the own use issue without having made a claim. We note that he does not appear to have instructed solicitors until the Commissioners refused to return the vehicle by which time it was too late to make a claim against forfeiture.
36. We turn therefore to the facts.
37. The basic fact is that the Appellant had 768 litres of continental beer, which appears to have been in 1536 cans of 500 cl packed in 64 cases of 24 cans each. The vehicle must have been very full. There was no suggestion of concealment.
38. The Appellant's evidence was that this was for a party at his house at which he expected 50 or more guests including staff and that some would drink wine. He said that he was using a tent or tents in his garden. Although he told the Tribunal that as well as a Christmas party it was his birthday on 22 December, he did not suggest that there were to be two parties and a witness statement produced by him only referred to one party.
39. Stella Artois and Holsten Pils is more alcoholic than normal British beer. The amount of beer which he bought would provide over two gallons a head for 80 people and well over three gallons a head for 50 people before any wine was served. We are wholly unable to accept that such a large quantity of beer was bought for a party as claimed. The Appellant said that he did not offer spirits because his staff were working next day. The effect of that quantity of beer would be no different. In our judgment only a modest proportion of the beer would have been needed for a party.
40. Once the Appellant's evidence that the beer was for a party is rejected, the clear inference is that it was for a commercial purpose. Canned beer is much cheaper in France and Belgium than it is here and there was a considerable potential profit on resale even well under the normal retail price.
41. We consider that the probability was that he was engaged on a joint venture with Mr Selvakumar who booked his ticket paying by credit card and who went with him to the shop in France buying beer at the same time.
42. While the value of the vehicle was substantial, perhaps £11,000 being 18 months old, and while considerable hire purchase instalments remained, the potential profit was considerable and was part of a joint venture. Not only was there a loss of £505.09 excise duty but there was also damage to legitimate traders in beer since the Appellant had paid only a little over a third of the UK retail cost..
43. We do not regard the refusal to restore the vehicle used to carry the beer as disproportionate.
44. The appeal is dismissed.

THEODORE WALLACE

CHAIRMAN

RELEASED: 15 October 2004

LON/03/8112