United Kingdom VAT & Duties Tribunals (Excise) Decisions

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URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2005/E00841.html
Cite as: [2005] UKVAT(Excise) E00841, [2005] UKVAT(Excise) E841

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Smith v Customs and Excise [2004] UKVAT(Excise) E00841 (21 January 2005)

E00841

EXCISE DUTY — RESTORATION OF SEIZED GOODS — vehicle, trailer and alcohol — jurisdiction — Gora and Gascoyne considered — appeal allowed

MANCHESTER TRIBUNAL CENTRE

ALBERT CHARLES SMITH Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: Richard Barlow (Chairman)

Gilian Pratt

Sitting in public in Manchester on 2 December 2004

The Appellant in person

Mr J Close of counsel instructed by the Solicitor for HM Customs and Excise for the Respondents

DECISION

Introduction

This appeal is against a review decision dated 10 August 2004 by which the Commissioners upheld the earlier decision not to restore to the Appellant a Toyota Land Cruiser, 2195.94 litres of beer, 225 litres of wine and 4 litres of spirits. The excise goods were imported from France in the motor car on 22 May 2004 at Dover and the goods and the motor car were seized on that date. We assume a trailer attached to the car was also seized though the documents do not confirm that.

Jurisdiction issue

As is commonly the case, the Respondents have argued that the tribunal is precluded from making any findings that contradict what they claim to be established facts, arising from the failure of the Appellant to give notice to the Commissioners requiring them to institute condemnation proceedings.

Paragraph 8 of the Statement of Case alleges that the goods were liable to forfeiture by reason of section 49(1) of the Customs and Excise Management Act 1979 (CEMA) or regulation 16 of the Excise Goods (Holding, Movement, Warehousing and REDS) Regulations 1992 (REDS). Paragraph 9 of the Statement of Case alleges that the vehicle is liable to forfeiture under section 141(1) of CEMA.

Section 49(1) of CEMA covers a wide range of grounds upon which goods may be liable to forfeiture under the compendious title "goods improperly imported". It includes, in what may be the most relevant provision in cases of this sort, forfeiture of goods liable at their importation to excise duties, where the goods are unshipped without payment of duty. Regulation 16 of REDS is equally wide ranging and applies to goods in respect of which there is a breach of regulation 6 or Parts IV, V or VI of the regulations. From the Statement of Case it is difficult to identify with certainty a specific breach of a specific regulation which is alleged to have given rise to the forfeiture in this case, though the allegation is made that the goods were imported for a commercial purpose; so the regulation could be identified by someone familiar with the legislation.

The Statement of Case cites parts of regulation 12 of the Excise Goods, Beer and Tobacco Products Regulations 2001, as amended. That provides that the excise duty point is the time at which a person holding goods does so with the intention of transferring them to another person for money or money's worth; which the regulations provide shall be regarded as holding them for a commercial purpose. Regulation 6 of REDS requires that duty should be paid on or before the excise duty point and, if it is not, regulation 16 gives a ground for seizure and forfeiture of the goods.

Our purpose in summarising the Commissioners' Statement of Case in respect of the legislative provisions under which the goods were seized is to illustrate that the allegations made therein are wide ranging and unspecific.

Despite that; the Commissioners argue that because the Appellant did not apply for condemnation proceedings it is to be deemed that the goods were held for a commercial purpose and that that issue cannot now be re-opened. Why, it might be asked, do the Commissioners allege that that issue is settled by the deeming that the goods were liable to condemnation when so many others may have arisen and when that issue may not? For example, as pleaded in the Statement of Case the goods may have been seized by reason of being concealed, giving rise to seizure under section 49(1)(e) of CEMA without reference to any allegation of commerciality.

Had the seizure required the issue of a seizure notice under paragraph 1(1) of Schedule 3 to CEMA, that notice would have stated the grounds for seizure but, as is commonly the case, the goods were apparently seized in the presence of a person whose presence made such a notice unnecessary (as to which see paragraph 1(2) of Schedule 3). An entirely non-specific form C156 giving no details of the grounds for seizure was issued.

It follows that although we are now able to determine how the Commissioners put their case for forfeiture that would not have been open to the Appellant at the time of the seizure or for some time afterwards. Reference to grounds of seizure in the notebook of the officer who interviewed the Appellant does not indicate that the Appellant was told the reason for the seizure; because the statements made do not amount to grounds for seizure but are a summary of the evidence from which the officer concluded the goods were not for the Appellant's own use. There is nothing in the note to say that the Appellant was told that was the ground for seizure.

If due written notice of seizure is given under paragraph 1(1) and served under paragraph 2 of Schedule 3 of CEMA, or if none is required by reason of compliance with paragraph 1(2) (seizure in the presence of an offender or owner), then a person seeking to claim against the seizure must give a "notice of claim", under paragraph 3, within one month of the notice of seizure; or the date of seizure if no notice is required. If no such notice of claim is given paragraph 5 provides that "the thing in question shall be deemed to have been duly condemned as forfeited". If a notice of claim is given, the Commissioners have an unspecified period of time in which to "take proceedings for the condemnation" (paragraph 6) in either a Magistrates' Court or the High Court (paragraph 8). Customs and Excise have argued that that the time for giving notice of claim cannot be extended.

Whilst it is true that the notice of claim does not need to state the grounds for the claim, so that a person who has had goods seized would not need to know the grounds relied upon by Customs and Excise before giving a notice, it is certainly also true that the Appellant was not properly informed about the grounds for seizure and the legal basis for it, until well after the time for claiming had expired, unless the officer making the seizure explained those facts. The Appellant did in fact agree that the officer had said the car was being seized because the goods were being imported for commercial use but we do not regard that as proof that full details were given about the legal basis for the seizure.

Against the above background Customs and Excise have asserted that the Appellant's failure to give notice of claim under paragraph 3 and the deeming that the goods are condemned as forfeit under paragraph 5 create res judicata against the Appellant which preclude him from challenging the non-restoration on the grounds that the goods were for his own use; or that it would be an abuse of process for him to mount such a challenge.

These contentions are based on the judgment of Buxton LJ in Gascoyne –v- HM Customs and Excise (not yet reported). In that case, following Gora –v- Customs and Excise Commissioners [2003] 3 WLR 160, Buxton LJ held that an importer cannot challenge the lawfulness of a seizure by way of an application for restoration of the goods under section 152(b) of CEMA if he has not given notice to the Commissioners to institute condemnation proceedings (see paragraphs 46 and 47 of the judgment). He held that although section 152(b) does not preclude such a challenge "the normal English law rules of res judicata or abuse of process" do preclude it. He went on to hold that the importer's rights under the European Convention on Human Rights do give him the right to challenge the refusal to restore the goods despite what would have been the position about deeming the seizure to be valid in English law if the Convention had not applied.

It should be pointed out that in cases like the present one no question of res judicata can arise because no proceedings have been instituted. If any authority is required for that proposition it is to be found in paragraph 51 of the judgment in Gascoyne where Buxton LJ refers to there being no objection to holding that an actual finding in condemnation proceedings would bind the tribunal.

But where there have been no condemnation proceedings the question is whether an Appellant who has failed to give notice to the Commissioners to institute condemnation proceedings is abusing the process of the tribunal by appealing on the grounds that the original seizure was invalid.

As to that, Buxton LJ said this at paragraphs 54 to 56:

"54 As it seems to me, for an importer to be completely shut out in the only tribunal before which he has in fact appeared from ventilating matters that are deemed to have been decided against him because of paragraph 5 of Schedule 3 does not adequately enable him to assert his Convention rights.

55 In my view, therefore, in a case where the deeming provisions under paragraph 5 are applied, the tribunal can reopen those issues: though the tribunal will always have well in mind, considerations of, or similar to, abuse of process in considering whether such issues should in fact be ventilated before it.

56 The mere fact that the applicant has not applied to the Commissioners, and therefore there have been no condemnation proceedings, would not, in my view be enough. But, in my judgment it goes too far to say that the deeming provisions have always, in every case, got to be paramount."