United Kingdom VAT & Duties Tribunals (Excise) Decisions

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Cite as: [2004] UKVAT(Excise) E798, [2004] UKVAT(Excise) E00798

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Andreas Demetriou and Panico on behalf of A.D. Coachworks v Customs and Excise [2004] UKVAT(Excise) E00798 (15 October 2004)

E00798

EXCISE DUTY – restoration of van and excise goods – whether commercial or friends and family – commercial – appeal dismissed

LONDON TRIBUNAL CENTRE

ANDREAS DEMETRIOU AND PANICOS DEMETRIOU

On behalf of A.D. COACHWORKS Appellants

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: DR JOHN F AVERY JONES CBE (Chairman)

ALEX MCCLOUGHLIN

CAROLINE DE ALBERQUERQUE

Sitting in public in London on 13 October 2004

The Appellants in person

Andrew O'Connor, counsel, instructed by the Solicitor for the Customs and Excise, for the Respondents

© CROWN COPYRIGHT 2004

DECISION

Mr Andreas Demetriou and Mr Panicos Demetriou on behalf of themselves and A D Coachworks appeal against a decision in a second review letter dated 24 January 2004 not to restore excise goods and a van. The Appellants appeared in person; Mr Andrew O'Connor represented the Commissioners.

We heard evidence from Mr Andreas Demetriou (AD), the reviewing officer Mr Brian Rayden, and officer CT Poland. There were witness statements from six other officers which had been objected to but at the hearing the Appellants said that they did not want to cross-examine them and accordingly we accept the contents of their witness statements. We find the following facts.

(1) AD and two passengers were stopped at Coquelles Channel Tunnel Customs control point on 11 June 2001 when excise goods and a Ford Transit van registration G561 HAX were seized. The Appellants have not contested the seizure.

(2) There is a dispute both about the total excise goods and what was owned by each of them. As to the total, the review letter lists 6 kilos of hand rolling tobacco, 50 cigarillos, 2,400 mixed cigarettes, 21.2 litres of spirits, 135 litres of mixed wines and 511 litres of mixed beers. The seizure form C 156 on which is stamped

"These seized goods have not yet been tallied. Any amounts quoted hereon are based upon [illegible]. Any discrepancy discovered after tally will result in a duplicate issue of this form."

and which is signed by the three travellers as agreeing that the description of the things seized is correct lists 1 box (6 kilos) of hand rolling tobacco and 1,400 cigarettes, 40 packs of beer and 12 boxes of wine. No later duplicate form was produced. A P&O job product sheet (we understand that they were responsible for taking the seized goods away) contains a detailed list including 2,400 cigarettes and 6 kilos of hand rolling tobacco. Officer Round's notebook lists the goods including 6 kilos of tobacco and 2,400 cigarettes. AD declared in reply to the officer's initial questions one box of tobacco and 2,400 cigarettes. On the balance of probability, we find that the goods included 6 kilos of tobacco and 2,400 cigarettes. The guide levels were then 1 kilo of tobacco, 800 cigarettes, 10 litres of spirits, 90 litres of wine and 110 litres of beer.

(3) As to ownership of the goods one of the passengers, Mr Eleftheriades, claimed 30 pouches of tobacco and 800 cigarettes and no beer as his; the other passenger, Mr Shiakelli claimed 800 cigarettes and no tobacco or beer as his; AD claimed that each of the passengers owned 20 pouches (1 kilo) of tobacco and 20 cases of beer, which would leave AD with 4 kilos of tobacco and 2,400 cigarettes, 25 cases of beer, one case of spirits and 24 cases of wine. On the balance of probabilities, we find that AD owned at least 4, and probably 5, kilos of tobacco and all the 2,400 cigarettes and alcohol. Excise goods and a vehicle had been seized from Mr Eleftheriades on 29 March 2000.

(4) The van had been through the Channel Tunnel on 20, 27 January, 10, 20 February, 3, 24 March, 7 April and 11 June 2001 (when it was seized) but there is no record of whether AD travelled. It had also travelled by P&O ferry to France on 17 February without AD, and with him on 20, 21 and 28 April, 19 May and 9 June 2001. This is a total of 14 trips (the review letter states 15) between 20 January and 11 June 2001, of which AD is recorded as travelling on 6 occasions, and there is no record of who travelled on another 7 occasions (the channel Tunnel trips). He told us, and we accept as the minimum number, that he travelled on 10 occasions. Mr Rayden also had records of "A Demetriou" travelling with a minibus of a further five occasions when the recorded registration number was slightly different: J561 HAK, J561 HAX, G56Y HAX, J561 HAS. We consider that on the balance of probabilities that these additional five all relate to AD so that he travelled on almost all these 19 occasions.

(5) AD had been stopped at Gatwick on 11 January 2001 by officer C T Poland with 10,600 cigarettes which were seized and AD was given a warning letter. Mr Poland told us, and we accept, that AD claimed that they were for his family, and the rules about import for own use were explained to him.

(6) AD told the officers that he had received £2,500 from his son to buy goods and had spent £1,600 which was taken by Mr Rayden to mean that he was making a profit. He told us, and we accept, that this was a misunderstanding and that one son, Mr D Demetriou, (DD) had paid £2,500 for him and his wife to go on holiday in Cyprus, out of which he had paid the £1,600 pending reimbursment from his other son, PD, for the goods.

(7) The goods were stated by AD to be for a party for PD on 27 June 2001 which he told the officer was while he was away and told us was the day after he returned. We accept the existence of the party but not that the tobacco and cigarettes were for the party.

(8) The van is owned by AD Coachworks [Limited?] of which PD and his brother DD are directors and, we infer, shareholders.

The Tribunal's jurisdiction is contained in section 16 of the Finance Act 1994 which applies to matters contained in Schedule 5 including decisions on restoration. Section 16(4) provides that

"In relation to any decision as to an ancillary matter, or any decision on the review of such a decision, the powers of an appeal tribunal on an appeal under this section shall be confined to a power, where the tribunal are satisfied that the Commissioners or other person making the decision could not reasonably have arrived at it, to do one or more of the following, that is to say—

(a) to direct that the 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;…."

Mr Rayden's review finds that AD was a habitual smuggler of excise goods and that all or most of the goods were for resale at a profit. The van had made the trip on at least 15 previous occasions that year and so the two sons who indirectly owned the van were complicit in the smuggling attempt.

The only point made by Mr Rayden with which we disagree is that AD was making a profit from PD. We find that he was reimbursed at cost by PD. We do not consider that this would have changed Mr Rayden's decision. We accept that at least some of the alcohol was for PD's party, in which case to that extent it is a case of import for friends or family rather than for AD's own use. However, we see nothing unreasonable in Mr Rayden doubting that the tobacco or cigarettes were for the party; it would be odd to provide 4 (or possibly 5) kilos of tobacco and 2,400 cigarettes for a party. Given the number of trips the tobacco and cigarettes cannot have been for the family's own use. We see nothing unreasonable in Mr Rayden concluding that the excise goods were for resale at a profit, and that AD's sons knew that the van was being used for this activity. The van had travelled at least 14 times and probably 19 times that year, the previous trip being only two days before. AD had been told that only imports for his own use were permitted and not when the goods were paid for by members of his family when he was stopped at Gatwick on 11 January 2001. This is not an isolated case of friends and family reimbursing the cost of goods when the traveller did not know the rules. It is a case of repeated trips in the same van by someone who had had cigarettes seized before, where AD did not pay for the goods himself and the quantity of goods coupled with the frequency of trips strongly suggests that they were not for use by the family.

Since we agree with Mr Rayden that this is, at least in relation to the tobacco and cigarettes, a case of commercial smuggling it is not necessary to consider proportionality. However, even if we did consider this to be a case of import by AD for his friends and family we do not consider that the non-restoration of the van is disproportionate. Mr Rayden valued the car using Glasses's Guide at £600. PD said that this was too low as it had been purchased for £1,750 the previous November. We cannot make a finding of fact about its value on this evidence but even if the value is in the range of £600 to £1,000 this must be compared to the value of the duty evaded of £1,716.75. On that basis we do not consider the non-restoration to be disproportionate.

We can see nothing unreasonable in Mr Rayden's decision and accordingly dismiss the appeal.

JOHN F AVERY JONES

CHAIRMAN

RELEASE DATE: 15 October 2004

LON/01/8240, 8253