United Kingdom VAT & Duties Tribunals (Excise) Decisions

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Cite as: [2004] UKVAT(Excise) E00811, [2004] UKVAT(Excise) E811

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Watts v Customs and Excise [2004] UKVAT(Excise) E00811 (21 October 2004)

E00811

Excise duty – restoration of goods – seizure of tobacco - dismissed on facts

LONDON TRIBUNAL CENTRE

PHILLIP BARTLEY WATTS Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: Dr. David Williams (Chairman)

Mr. R Corke, F.C.A. (Member)

Sitting in public in Cardiff on 22 September 2004

The appellant appeared in person

For the Respondents Miss Eleni Mitrophanous of counsel instructed by the Solicitor to HM Customs and Excise

© CROWN COPYRIGHT 2004

DECISION

Mr Watts, the appellant, is appealing against the review decision of Officer Brenton of the respondents (Customs) confirming a decision to seize tobacco and alcohol from him early on 3 August 2003 at Dover Docks.

Mr Watts gave evidence to the tribunal on oath, as did Officer Brenton. The tribunal accepts the evidence of both as honestly and carefully given, and bases its findings of fact on that evidence and the documentary evidence put before it. This includes a statement by Officer Wright of an interview the note of which was agreed as accurate by Mr Watts at the tribunal hearing.

Mr Watts was stopped in the Eastern Docks at Dover late on 2 August 2003. He was a foot passenger travelling with a coach party back to his home in Caerphilly, South Wales from Belgium and France. On being asked, he produced a receipt showing he had purchased 25 boxes of 200 Superking cigarettes, 70 50g pouches of Golden Virginia tobacco, 6 litres of whiskey and 7 cases of beer (24 x 0.25l). He had paid £862.90 for these earlier that day at Adinkerke.

Mr Watts was questioned by Officer Wright about these purchases. He stated that "my wife, son and son in law will be dipping in" to the purchases, which were not all for his own use. He also stated that the other would give money towards the tobacco.

Mr Watts confirmed to the tribunal that this was not the first shopping trip to France and Belgium he had made. He drew up a short list of what he was going to purchase before he went on the trip. The note showed he planned to buy goods he thought would cost £847. He did not have enough cash to pay that much, so his son and his son in law had both contributed towards the sum he would spend. His son had given him £200. His son in law had given him a bit less as he did not have that much money.

Mr and Mrs Watts live together and have a joint bank account and pension. Their daughter and son in law live across the road from them, and their son, who lives on his own, lives about two streets away. They are a close and sharing family. They would have shared the tobacco and cigarettes between them, though they would have been kept in the Watts' house until they were smoked. Mr and Mrs Watts both smoked cigarettes, though Mr Watts also smoked "rollies". Their son smoked mainly rollies and their son in law smoked mainly cigarettes. Mr Watts smoked about 40 cigarettes a day and Mrs Watts about 60.

Mr Watts had made a similar purchase of tobacco on a trip a few months before. The stock of tobacco he had bought then had lasted them about three months. He confirmed that his income (and that of his wife) was about £200 pensions and that they had about £20,000 savings.

Mr Watts challenged the seizure of the goods in a letter two days later. But he did not challenge the condemnation proceedings, so the validity of the seizure is not now open to question.

After an exchange of letters, in which Mr Watts raised a number of points, Officer Brookes wrote to Mr Watts on 5 September 2003 refusing to restore the goods. Mr Watts promptly replied to that decision asking for further information. This was supplied. Mr Watts then objected to the decision. As a result a review was conducted by Officer Brenton. The review letter, dated 17 October 2003, confirmed the decision not to offer restoration with full supporting reasons and documentation.

The grounds for contesting the review decision

Mr Watts raised a number of both general and specific points about the seizure of the goods. The main point he made was that he thought that he was entitled to bring in any goods he wished to now that the United Kingdom was part of the European Union. He was not aware that what he had done had broken any law. He was not told what the limit for imports was, and the customs officer at Dover could not tell him what it was. Had he known the rules he would not have broken them. At the hearing he emphasised that he had not seen anything telling him what the law was.

He also emphasised that the goods have been for his own and the family's use, not for anyone else. He had not been paid to go on the shopping trip by his son or son in law, and he was not selling the tobacco for a profit. All the tobacco was for their consumption. All the alcohol was for his personal consumption.

Mr Watts also complained that the notice of seizure he had been given was faulty because it did not have a seizure number on it.

The case for Customs

On behalf of the respondents, Miss Mitrophanous submitted that on the facts Officer Brenton was fully entitled to confirm the seizure decision as a result of his review. Leaving aside the position of Mrs Watts, it was clear that Mr Watts had received money from others towards the purchase of the tobacco and cigarettes, and that his son and son in law both contributed to, and received some of, the tobacco and cigarettes. Further, on the facts confirmed by Mr Watts, they had or may have contributed more in funds than they received in goods. In any event, the contributions meant that the import of the tobacco was not for "own use" and was therefore commercial.

Mr Watts had therefore not brought the tobacco into the United Kingdom only for his own use. Customs was therefore entitled to seize them and right to refuse to restore them in accordance with its consistent policy. There had been no exceptional circumstances at the time of the seizure or review and none had been indicated to the tribunal.

The alcohol had been seized along with the tobacco. Customs was entitled to seize those goods also as they were seized with the wrongly imported tobacco.

The law

Miss Mitrophanous drew attention to the standard regulation in the Tobacco Products Regulations 2001 and similar regulations dealing with whether goods are for own use or for a commercial purpose. The relevant part of the key regulation is:

"(b) "own use" includes use as a personal gift,

(i) transferred to another person for money or money's worth (including reimbursement of expenses incurred in connection with obtaining them), or

(ii) the person holding them intends to make such a transfer,

those tobacco products are to be regarded as being held for a commercial purpose."

The regulation then sets out a series of factors to be taken into account, without prejudice to the rule in paragraph (c), in deciding if goods are held or used for a commercial purpose. Those factors include the guidelines mentioned above. The relevant guidelines for cigarettes are 3,200 cigarettes and the relevant guideline for tobacco is 3 kilograms.

The European Union's rules about the import of products subject to excise duty are laid down in European Council Directive 92/12/EEC. In summary they provide limitations to the completely free movement of goods within the European Union where goods are subject to excise duty in a member state. The Directive confirms that an individual may import goods on which excise duty has been paid in one member state into another member state without further payment of duty, but only where it is a personal import of goods for the personal use of the individual.

Goods not imported for personal use are regarded as being imported for commercial purposes. The Directive lays down a basis on which it may be determined that goods are imported for commercial purposes. These include guidelines, not strict limits, and this explains why the Customs officers were not able to give Mr Watts a precise answer to his question about these limits, but could only repeat the guidelines laid down in European law. That law and the United Kingdom laws that give effect to that law (and set out in the case papers) are binding on everyone bringing such goods into the United Kingdom, and must be applied in this case.

The tribunal's decision

The original refusal to restore the goods seized from Mr Watts was based on two specific circumstances. The first was that "During questioning it was established that you had received money from family and friends who had not travelled." The second was that "the officer was not satisfied that your consumption rate was proportionate to the excise goods purchased."

Mr Watts took exception to both these reasons. In the case of the first of them, the tribunal agrees with Mr Watts that the statement was not based on anything he had said either in reply to questions or at any other relevant time. He received money from his family only. The tribunal also accepts the points Mr Watts made about the second reason. The pattern of consumption by himself and his wife, as detailed in the letters and confirmed to the tribunal, did not make the consumption rate and purchase disproportionate.

Had the final decision rested on those grounds alone, the tribunal would have given strong consideration to allowing the appeal. The tribunal in particular records concern that Mr Watts' clear and consistent statements about payment were changed and that he was attributed with a statement that the tribunal accept he never made.

Officer Brenton did not repeat those mistakes. He expressly recorded that it was family members who had made the payments. Nor did he rely on the issue about the level of consumption by Mr or Mrs Watts. Instead, he relied on the more limited ground that Mr Watts had received money from other members of the family towards the purchases he made, and he had not brought the goods entirely for his own use.

Having heard from Mr Watts, the tribunal is satisfied that the review decision is a reasonable decision in the light of all the evidence, and that there are no exceptional circumstances that Officer Brenton failed to take into account. The tribunal fully accepted Mr Watts' evidence that he was not aware that in taking money from other members of the family and buying tobacco products for them he was in breach of the excise duty law in not paying British excise duties on the products. But the fact remains that he did receive money from others and he did pass the goods on to those others. The tobacco products were therefore not for his own use and Customs had a right to seize and withhold them. The alcohol was seized at the same time and reasonably included in the same decision.

DR DAVID WILLIAMS

CHAIRMAN

RELEASED: 21 October 2004

LON/03/8211