United Kingdom VAT & Duties Tribunals (Excise) Decisions

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Cite as: [2004] UKVAT(Excise) E813, [2004] UKVAT(Excise) E00813

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Gostage & Anor v Customs and Excise [2004] UKVAT(Excise) E00813 (29 October 2004)

E00813

EXCISE DUTY – restoration of excise goods and vehicle – discrepancies in declarations by the travellers – appeal dismissed

LONDON TRIBUNAL CENTRE

NORMAN AND STACIE GOSTAGE Appellants

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: DR JOHN F AVERY JONES CBE (Chairman)

SHAWAR SADEQUE MBCS

Sitting in public in London on 21 October 2004

The Appellants did not appeal and were not represented

Sarajbit Singh, counsel, instructed by the Solicitor for the Customs and Excise, for the Respondents

© CROWN COPYRIGHT 2004

DECISION

Norman and Stacie Gostage appeal against a decision on review dated 7 November 2002 not to restore excise goods and to restore a car on payment of 100 per cent of the duty on the excise goods. The Appellants did not appear and were not represented; Mr Sarabjit Singh represented the Commissioners.

We heard evidence from the reviewing officer, Miss Helen Perkins. Five other officers who had given witness statements were present but not called. Mr Singh explained that although their witness statements had not been objected to, he had required their attendance so as to be able to rebut the grounds of appeal which referred to mistakes and discrepancies by officers, attitudes and intimidation by them, one of the travellers being too drunk to interview, and their decisions being based on the alcohol-fuelled statements of the other travellers.

We find the following facts.

(1) The Appellants and their two passengers Mr J D McKendry and Ms A J May were stopped at Dover on 13 May 2002 with a total of 20 kg of tobacco, 6,000 cigarettes, 400 cigars, 1.9 litres of spirits, 7.92 litres of low alcohol beverages and 48 litres of beer, which were seized together with the car in which they were travelling belonging to Mr Gostage.

(2) The travellers all signed letters electing not to contest seizure and to request restoration, which was refused. A review was requested which was carried out by Miss Perkins who recommended restoration of the car on payment of 100 per cent of the duty on the excise goods, and not restoring the excise goods.

(3) Miss Perkins' review letter took into account the quantities of goods and the other trips made by the travellers, including that Mr Gostage had travelled once or twice a month including the previous week, and that Ms May's partner, Mr L Murdoch had travelled one week earlier without, it was claimed, purchasing any excise goods but had given Ms May the money to purchase 5 kilos of tobacco on this occasion. Ms May had travelled two weeks earlier but had claimed not to have purchased any excise goods then.

(4) Ms May admitted that her partner had given her some money, although she could not say how much, to purchase her 5 kg of tobacco. Such tobacco is not therefore within the definition of being for own use.

(5) Mr Gostage stated that using a machine he would produce 28 cigarettes per pouch of hand rolling tobacco. Miss Perkins estimates that the figure should be 120 with a machine, or 80 to 100 without a machine.

(6) Ms Gostage, who is Mr Gostage's daughter, declared that she purchased 100 pouches of golden Virginia while the receipt she produced showed the purchase of 50 pouches of Golden Virginia and 50 pouches of Old Holborn. She said that she had withdrawn the money for the purchase from the bank but has never produced any evidence of this. She said she handed £500 to her father who paid for the goods for her, which conflicts with Mr Gostage's claim that each person had paid separately for their goods. She estimated that her cigarettes and tobacco would last 3 months. Miss Perkins calculates that using her stated consumption rate it would last 42 weeks.

(7) Mr McKendry estimated that his tobacco would last 2 to 3 months. Miss Perkins calculates that using his stated consumption rate it would last 5½ months. 2,000 Benson & Hedges cigarettes were not claimed by any of them but were on the receipt produced by Mr McKendry. Mr McKendry was, in the opinion of the officer who tried to interview him, originally too drunk to be interviewed but 20 minutes later he said that he was sufficiently sober to be interviewed.

Miss Perkins made the following corrections to her review letter, which did not change the substance of it: that a machine for making cigarettes from hand-rolling tobacco would be likely to produce 120, rather than 60, cigarettes per pouch; Mr McKendry's receipt was for 5 kilos, not 5.4 kilos of tobacco (100, not 108, pouches) which would be likely to last him in the region of 5½, not 6, months. Her conclusion was that the excise goods were for commercial use for sale at a profit but that under the policy operating from 29 October 2002 (a few days before the review letter) she would offer the car for restoration (or compensation in lieu) on payment of 100 per cent of the duty.

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;…."

The question for us is whether the decision in Miss Perkins review letter was one that she could have reasonably arrived at. We consider that her decision was entirely reasonable. Even allowing for the fact that originally Mr McKendry was thought to have been too drunk to be interviewed and his statements may have been confused, the statements by the travellers contain a number of contradictions that we have outlined above. We consider that regular smokers would know exactly what they had purchased, how many cigarettes could be produced from a pouch of tobacco, and how long the cigarettes and tobacco would last them. The fact that there were these discrepancies suggests that they were not telling the truth to the officers.

Mr Singh referred us to Gascoyne v Customs and Excise Commissioners [2004] EWCA Civ 1162 in particular the passage in paragraphs 44 to 56 on whether the Tribunal can make findings of own use when the appellants have decided not to contest forfeiture. In our view these questions do not arise in this case because we consider that Miss Perkins's conclusion that the goods were for commercial use is entirely reasonable and, even if we had power to decide that the goods were for the Appellants' own use, we would not have decided that it was. The implications of the decision will need to be explored in other cases.

Accordingly we dismiss the appeal. Mr Singh asked for costs and, whatever the outcome, for the costs of the officers' attendance as this was necessary to meet the allegations in the notice of appeal. Since no warning that costs would be asked for was given to the Appellants we do not consider that we should award costs generally, but we do award the Commissioners the costs of attendance of the officers other than Miss Perkins, whose attendance was necessary in any event.

JOHN F. AVERY JONES

CHAIRMAN

RELEASE DATE:29 October 2004

LON/02/8346