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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 >> Miles v Customs and Excise [2004] UKVAT(Excise) E00816 (03 November 2004)
URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2004/E00816.html
Cite as: [2004] UKVAT(Excise) E00816, [2004] UKVAT(Excise) E816
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Brenda Ann Miles v Customs and Excise [2004] UKVAT(Excise) E00816 (03 November 2004)
    E00816
    EXCISE DUTY – Restoration of seized excise goods – One kilogramme of hand rolling tobacco posted as a gift – review decision unreasonable on the facts found – Appeal allowed – fresh review ordered.

    MANCHESTER TRIBUNAL CENTRE

    BRENDA ANN MILES Appellant

    - and -

    THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

    Tribunal: Michael Tildesley (Chairman)

    Elizabeth Macleod JP, CIPM (Member)

    Sitting in public in Birmingham on 20 July 2004

    Appellant appeared in person

    Ian Speed Counsel for the Respondents

    © CROWN COPYRIGHT 2004

     
    DECISION
    The Appeal
  1. The Appellant is appealing against the decision on review of the Respondents dated 15 March 2004 not to restore excise goods, one kilogram of Golden Virginia hand rolling tobacco. The ground of Appeal is stated in the Appellant's notice, namely: "the tobacco was a gift and as such should not have been seized".

    2. The Hearing
  2. On 20 July 2004 we heard evidence from the Appellant. and considered the witness statement of Ms Helen Perkins, the Review Officer, which was submitted in evidence. The Respondents produced a bundle of documents.

  3. After hearing the evidence and submissions we issued the following directions, namely

    4. a) The Respondents provide copies of their file and all documents associated with the seizure of the 1.5 kg of hand rolling tobacco on 26 February 2002 to the Appellant and the Tribunal by 10 August 2004.
    b) The Respondents supply the Tribunal and Appellant by 4pm on 10 August 2004 with a skeleton argument about which legal provisions were being relied upon by the Respondents to justify the non-restoration. In particular whether restoration was being refused on the ground that it was for a commercial purpose or because it did not meet the requirements for relief under the Excise Duties (Small Non Commercial Consignments) Relief Regulations 1986, in particular the consignment exceeded the quantitative restriction in section 5 of the Regulations, namely 50 grammes of smoking tobacco.
    c) Provided the Tribunal received the skeleton argument and the file relating to the seizure on 26 February 2002 by 10 August 2004, it would make a decision by no later than 24 August 2004 about whether to reconvene the Appeal hearing to hear further submissions or make its decision without the need for a further hearing.
  4. We did not have sight of the February 2002 file until 14 October 2004. We have decided that there is no need for a further hearing. The parties have been advised that the decision would be with them by the end of October 2004.

    5. The Agreed Facts
  5. On 7 October 2003, Customs and Excise Officers at the Parcel Post Depot in Dover intercepted a package addressed to the Appellant from Amsterdam, Holland. The package contained one kilogramme of Golden Virginia hand rolling tobacco, a receipt for the tobacco in the amount of 94.20 euros and a "Get Well" card. The tobacco was not gift wrapped. The card was not addressed to anyone, however, it was signed; " Best to you from all love Paul". The Respondents seized the tobacco and refused restoration of the excise goods.

    6. The Issue
  6. The Respondents in their helpful skeleton argument made it clear that they were not relying on a breach of the Excise Duties (Small Non Commercial Consignments) Relief Regulations 1986 to justify the non restoration of the hand rolling tobacco. The 1986 Regulations were the correct law governing the seizure of the tobacco. However, the Tribunal has no jurisdiction to determine legality of the forfeiture and seizure of the tobacco. The function of the Tribunal was to determine whether the Respondents' decision not to restore the tobacco was a decision which no reasonable body of Commissioners could have arrived at. In order for the decision to have been reasonable the decision maker must have considered all relevant matters and must not have taken into consideration irrelevant matters.

    7. The Respondents' Decision on Review dated 15 March 2004
  7. The Review Officer, Ms Helen Perkins, concluded that there was no exceptional reason for departing from the Respondents' general policy that seized excise goods should not normally be restored. She relied on the following findings to support her conclusion:

    8. a) The Appellant should have become familiar with the requirements governing receipt of excise goods through the post. The Respondents' National Advice Service and Public Notices would have provided the necessary information and advice.
    b) The date of the Appellant's wedding anniversary, 27 September (some ten days before interception of the package of 7 October 2003); no anniversary card; the "Get Well" card in an unsealed plain white envelope were all facts which casted doubt on the Appellant's explanation that the tobacco was a gift.
    c) The enclosure of the receipt suggested that the sender expected recompense from the recipient of the package. She dismissed the Appellant's explanation that the receipt was proof of where the goods were purchased because the wrapping and the foreign writing on the tobacco packaging and the postmark on the parcel would have firmly established its country of origin.
    d) The contradiction in the Appellant's account that her brother, Mr Revell sent the gift of tobacco on 26 February 2002 whereas the Respondents' files showed that the gift was posted by Mr Fed Verwijst.
    e) The brand of hand rolling tobacco (Drum) on 26 February 2002 differed from the brand (Golden Virginia) sent on 7 October 2003. This challenged the Appellant's assertion that the tobacco was intended for the personal use of herself and her husband, particularly as it was widely accepted that people who smoke exhibit a preference for a particular brand of tobacco.
    The Appellant's Evidence
  8. The Appellant told the Tribunal that the parcel had been sent by her brother, Paul Revell, c/o 115/II Westland Grac, Amsterdam. He purchased the tobacco in Holland as a wedding anniversary gift for the Appellant and her husband, who celebrated their anniversary on 27 September. They were married in 1969. The "Get Well" card was for her son who was seriously ill with cancer. Her brother signed the card inside.

  9. The shopkeeper advised her brother to include the receipt with the tobacco to show where it had been purchased. The shopkeeper was aware that other customers encountered problems about proving where their tobacco had been bought. The receipt was timed and dated at 13:54, 26 September 2003.

  10. The Appellant and her husband were social smokers and rolled their own tobacco. The brand of tobacco was "neither here nor there". In any event the tobacco was a gift and it was her brother's decision about the choice of tobacco purchased. It would take many months for them to smoke one kilogram of tobacco.

  11. It was typical of her brother to send the parcel after their wedding anniversary. The Appellant enjoyed a good relationship with her brother. She found him at times irritating and muddled but he was also very thoughtful and a good worker. The Appellant considered that the ten day period between the dates of her wedding anniversary and the parcel being intercepted was reasonable. In her view the period of time did not undermine her contention that the tobacco was intended as a gift. The Appellant had not seen the parcel. The Respondents' bundle of documents did not contain details of the parcel's postmark.

  12. The Appellant received one previous parcel of tobacco from Holland in February 2002. The parcel consisted of 1.5 kilogrammes of Drum hand rolling tobacco. The tobacco was a present from a Fred Verwijst to the Appellant's husband to celebrate his birthday on 2 March. The Respondents initially seized the tobacco because there was nothing in the package to indicate it was a gift. After being provided with a copy of the Appellant's husband's birth certificate, the Respondents released the tobacco with the proviso that the friend should not send tobacco products on a regular basis.

  13. Mr Verwijst and the Appellant's brother were close friends. They shared the same apartment in Amsterdam and together visited the Appellant in England about three years ago. The Appellant's brother had previously worked for Mr Verwijst in a hotel.

  14. The Appellant and her husband were not initially aware of the law when they received the first parcel of hand rolling tobacco. In their dealings with the Respondents on this matter they soon developed an understanding of the legal and policy position for the receipt of excise goods posted in the EC as demonstrated by their correspondence with the Respondents. The Appellant was of the view that she could occasionally receive hand rolling tobacco through the post as a gift provided the amount did not exceed one kilogramme. She had spoken to her brother about the February 2002 incident and told him that one kilogramme of tobacco was permitted.

  15. The Appellant was adamant that the Golden Virginia hand rolling tobacco was a gift from her brother for her wedding anniversary. After being informed that the tobacco had been seized she did not immediately contact the Respondents about its return because her son was very poorly and in hospital. She had many other things to consider and Customs and Excise was not top of her list. Whatever the decision about the tobacco she could not understand why the "Get Well" card for her son was being retained and she requested its return.

    16. The Respondents' File for the February 2002 Seizure
  16. The file contained a letter from L Reid, a Customs and Excise Officer, dated 14 March 2002 to Mr Miles which contained the following paragraph:

    17. "There is no allowance/limit for tobacco products sent through the post only a gift concession. To qualify for this concession, the Customs Officer examining the package has to be satisfied that it is a gift. There was nothing in your package to indicate it was a gift, 1.5 kilos of tobacco is quite a large quantity of tobacco to have sent through the post, considering that 1 kilo is the guideline for the amount you can personally bring into the UK as a traveller from another EU country. A far smaller quantity should be sent as an occasional gift by post".
  17. Mr Miles' letter to the Respondents recited the Respondents' policy about excise goods sent in the post which was:

    18. Can I receive alcohol and tobacco products from elsewhere in the EC?
    "This depends on the nature of the consignment. If you receive a gift through the post we will not make additional charges for alcohol and tobacco, providing all the following conditions apply to the gift:

    •    It must have been sent by a private person resident in another Member State of the EC at the time of despatch to a private person in this country.

    •    It must be for your own use. You would be committing an offence if you sold on to someone else excise goods for which Excise Duty has not been paid.

    •    You must not have paid for the gift, either directly or indirectly, and there must be no commercial or trade element to the contents of the consignment.

    •    It should be of an occasional nature only, for example, for a birthday or anniversary.

    •    The quantities involved must not be excessive".

    Jurisdiction of the Tribunal

  18. The Respondents' power regarding restoration of goods which have been forfeited or seized is set out under section 152(b) of the Customs and Excise Management Act 1979. Once the power is exercised whether in the form of a positive decision to restore on terms or a refusal to restore, the person affected has a right of appeal to the Tribunal. The powers of the Tribunal are limited in the terms set out in section 16(4) of Finance Act 1994 which provides that:

    19. "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;
    c) in the case of a decision which has already been acted on or taken effect and cannot be remedied by a further review, to declare that decision to have been unreasonable and to give directions to the Commissioners as to the steps to be taken for securing that repetitions of unreasonableness do not occur when comparable circumstances arise in future.
  19. The precondition to the Tribunal's exercise of one or more of its three powers, namely, that the person making a decision could not reasonably have arrived at it falls within the guidance given by Lord Lane in the decision in Customs and Excise v JH Corbitt (Numismatists) Ltd [1980] STC 231 at page 239:

    20. "…..if it were shown the Commissioners had acted in a way in which no reasonable panel of commissioners could have acted; if they had taken into account some irrelevant matter or had disregarded something to which they should have given weight".

  20. The Tribunal is entitled to make its own findings on the primary facts which are to be taken into account by the Commissioners when exercising their powers regarding restoration of goods. The finding of facts includes blameworthiness, the intended use for the excise goods: private or commercial, the proportionality of the penalty imposed to the policy aims pursued having full regard to the individual circumstances of the case and exceptional hardship. The Tribunal, however, has no fact finding jurisdiction for the purpose of challenging the legality of the seizure and forfeiture of the goods. The Tribunal will then apply its findings of fact to determine whether the Commissioners acted reasonably in refusing restoration.

    21. Respondents' Policy for Restoration of Excise Goods
  21. The policy is set out below:

    22. "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. In conducting this examination the presence of any one of the following factors will militate against restoration:
    •    any evidence of previous smuggling or failure to comply with legal requirements;
    •    any evidence that the person involved knew what they were doing was wrong;
    •    any evidence that the person was paid to make the journey;
    •    large quantities of goods which might damage legitimate trade;
    •    any evidence that the goods were for a commercial purpose".
    The Tribunal's Findings of Fact
  22. The Respondents' policy for restoration of excise goods identified five factors, the presence of any one of which will militate against restoration. We make the following findings of fact against each of those factors in relation to the disputed matter which is the subject of this Appeal.

    23. Any evidence of previous smuggling or failure to comply with legal requirements
  23. There was no evidence to support a finding of previous smuggling or failure to comply with legal requirements. There was just one previous incident of a consignment of tobacco being sent in the post to the Appellant some 18 months previous to the issue in dispute where the Respondents released the tobacco to the Appellant's husband.

    24. Any evidence that the person involved knew what they were doing was wrong
  24. We are satisfied that the Appellant familiarised herself with the Respondents' requirements about the receipt of excise goods in the post, which was demonstrated by the correspondence with the Respondents over the previous incident in February 2002. She also informed her brother about what had happened. The Appellant considered that the delivery of one kilogramme of Golden Virginia tobacco met the Respondents' gift concession. We conclude that the Appellant had taken all steps to ensure that she and her brother complied with the Respondents' requirements. There was, therefore, no evidence to substantiate a finding that the Appellant and her brother knew what they were doing was wrong.

    25. Any evidence that the person was paid to make the journey
  25. We find that the Appellant's brother purchased the tobacco from a shop in Amsterdam, Holland from his own money. He was a private person resident in Holland. There was no evidence to support a finding that the Appellant's brother was paid to make the purchase.

    26. Large quantities of goods which might damage legitimate trade
  26. The consignment consisted of one kilogramme of hand rolling tobacco. The Review Officer did not suggest that this quantity of tobacco would damage legitimate trade.

    27. Any evidence that the goods were for a commercial purpose
  27. We are satisfied that the Appellant's brother purchased the tobacco as a gift for his sister to celebrate her birthday. We placed weight on the date of the receipt for purchasing the tobacco which was one day before the Appellant's birthday. We placed no weight on the date of the interception of the parcel by the Respondents. The date of the postmark would have been more relevant but the Respondents did not produce evidence of the postmark. The Appellant was not able to supply the postmark because she had not seen the package. We found that the Appellant provided a plausible explanation for the inclusion of the receipt, namely, to prove where the tobacco was purchased. We took the view that the receipt demonstrated that the tobacco had been bought from legitimate outlet and that the appropriate excise duty in Holland had been paid. We accepted the Appellant's evidence that the tobacco was for the personal use of herself and her husband and that they smoked different brands of tobacco. The fact that the parcels of February 2002 and March 2003 involved two different brands of tobacco was consistent with the Appellant's assertion that she had no control over the choice of brand, particularly as the parcels were intended as gifts.

  28. We find as fact that none of the militating factors specified in the Respondents' policy on restoration of excise goods applied to the circumstances surrounding the disputed package of one kilogramme of Golden Virginia hand rolling tobacco. We are satisfied that the tobacco was a gift from the Appellant's brother to celebrate her wedding anniversary.

    29. Was the Respondents' Review decision Reasonable?
  29. We had the benefit over the Review Officer of hearing the Appellant in person. We found the Appellant to be a truthful witness and as a result our findings of fact differ materially from the Review Officer's findings in her consideration. We also consider that the Review Officer placed too much emphasis on specific aspects of the case to the exclusion of other aspects. She dismissed the Appellant's suggestion that the tobacco was a gift for her wedding anniversary on the grounds that the date of interception of the parcel by the Respondents was some ten days after the event. However, we consider that the date of receipt of purchase of the tobacco (not mentioned in the Review Officers' consideration) was a more reliable guide of the senders' intentions. Further the Review Officer overlooked the fact that the receipt demonstrated that the excise goods were purchased from a legitimate retailer with the consequence that the excise duty in Holland had been paid. We could find no reference in the documents provided that the Appellant asserted that her brother sent her the gift of tobacco in February 2002 which questioned the Review Officer's finding that the Appellant had made contradictory statements. In the light of our findings of fact and conclusions on the manner the review was conducted, we are, therefore, satisfied that the Review Officer's decision of 15 March 2004 was unreasonably arrived at within the meaning of section 16(4) of the Finance Act 1994.

    30. Our Decision
  30. We allow the Appeal because of our finding that the Respondents' decision of 15 March 2004 was unreasonably arrived at. No order for costs is made because the Appellant submitted no application despite being invited to do so.

    31. Orders
  31. We make the following orders pursuant to our decision to allow the Appeal and in accordance with section 16(4) of the Finance Act 1994:

    32. a. The decision not to restore the Appellant's excise goods shall cease to have effect from the date of release of this decision.
    b. The Commissioners shall conduct a further review of the decision not to restore the excise goods and serve the same on both the Appellant and the Tribunal within 30 days of release of this Decision.
    c. An Officer not previously involved with the case shall conduct the further review.
    d. The further review shall be on the basis of the Tribunal's findings of fact as set out in paragraphs 22 to 29 of this decision and shall consider whether restoration should be made in the form of compensation and if so shall specify the amount of compensation and the basis of the calculation.
    e. The Review Officer shall take account of any further material or representations made by the Appellant within 14 days from release of this decision. The representations shall be made to HM Customs and Excise, Review Team, Detection South Region, Crownhill Court, Tailyour Road, Crownhill, Plymouth, PL6 5 BZ.
    f. The Appellant will have a further right of appeal to the Tribunal if dissatisfied with the outcome of the further review.

    Although we have no power to make an order we would request the Respondents to consider returning the "Get Well" card to the Appellant.

    MICHAEL TILDESLEY
    CHAIRMAN
    RELEASE DATE: 3 November 2004

    MAN/04/8056

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