United Kingdom VAT & Duties Tribunals (Excise) Decisions

Elliott v Customs and Excise [2005] UKVAT(Excise) E00843 (07 February 2005)

E00843

EXCISE DUTY – Restoration of Porshe Boxster motor vehicle–– whether the 24kg of hand rolling tobacco was for personal or commercial use – commercial use for profit – was the non-restoration proportionate to the Appellant's contravention – yes - did the non-restoration of the vehicle create exceptional hardship – no - was the decision not to restore the vehicle reasonable – yes – Appeal dismissed.

MANCHESTER TRIBUNAL CENTRE

 MR JOHN ELLIOT Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: Michael Tildesley (Chairman)

Brian Strangward

Sitting in public in Birmingham on 3 December 2004

Appellant appeared in person

Mr Ben Mills counsel instructed by the Solicitor for Customs and Excise for the Respondents

© CROWN COPYRIGHT 2005
 


DECISION

The Appeal

1. The Appellant is appealing against the decision on review of the Respondents dated 2 April 2004 not to restore a Porshe Boxster motor vehicle, registration number J11 ELL on the grounds of:

a. Proportionality/ restoration (case of Lindsay) and

b. The review dated 2 April 2004 was unfair and has taken into account details from a previous Tribunal hearing on 9 July 2003 at Birmingham.

The Issue

2. On 6 October 2001 Mrs Susan Mary Hudson, who was driving the Porshe Boxter motor vehicle, was stopped by a Customs and Excise Officer at Eastern Docks Dover. Mrs Hudson had with her 24 kilogrammes of hand rolling tobacco. The Officer after interviewing Mrs Hudson seized the motor vehicle because he was not satisfied that the tobacco was for personal use.
3. The Appellant was the owner of the vehicle. On 9 October 2001 he requested the Respondents to restore his vehicle which was refused on 9 November 2001. On 5 December 2001 the Appellant requested a review of that decision. The review was carried out on 16 January 2002, which re-affirmed the decision not to restore the Porshe Boxster motor vehicle. The Appellant lodged a Notice of Appeal against the January 2002 decision which was heard by the Tribunal on 9 July 2003. The Tribunal adjourned the hearing part-heard until 17 February 2004 when it was agreed between the parties that a further review be undertaken by a review officer with no previous involvement in the case. The Tribunal directed the review officer to have regard to the decision of the Court of Appeal in the case of Lindsay v Customs and Excise Commissioners [2002] STC 588. The Tribunal made no findings of fact. The Respondents carried out a fresh review on 2 April 2004, the findings of which are the subject of this Appeal.
4. The function of the Tribunal is to determine whether the Respondents' decision not to restore the Porshe Boxster motor vehicle 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.

The Evidence

5. The Tribunal heard evidence from Mr Elliot, the Appellant and received the witness statement dated 17 May 2004 of Mr Graham Crouch, the Review Officer. A bundle of documents was also served upon the Tribunal.

The Respondents' Decision on Review dated 2 April 2004

6. Mr Crouch considered the decision afresh and had regard amongst other matters to the Appellant's representations. He decided that Mrs Hudson had deliberately attempted to mislead the Customs and Excise Officer at the time of the interception about the purpose of the importation of the tobacco and the travel arrangements of the Appellant. He found her explanation that the tobacco was bought as Christmas presents for her brothers and sisters contradicted her statement that they did not give presents any more. Further Mr Crouch had not been provided with any additional evidence to support her account about the presents. Mr Crouch considered that Mrs Hudson's assertion that the Appellant did not travel back with her on the ferry was undermined by witness statements which stated that both checked in for the return ferry trip. Mr Crouch was of the view that the Appellant and Mrs Hudson persisted with this deception at the July 2003 Tribunal hearing.
7. Mr Crouch considered the Appellant's and Mrs Hudson's account that they combined a visit to Mrs Hudson's parents for lunch in Le Touquet with the purchase of the tobacco at Adinkerke within a two hour stay in France was unrealistic. Mr Crouch noted that the amount of tobacco brought in exceeded the guide level of three kilogrammes eight times and that the Appellant had not requested restoration of the tobacco. Mr Crouch concluded from his findings that the tobacco was for commercial disposal.
8. Mr Crouch examined the specific representations made by the Appellant's solicitors requesting restoration of the motor vehicle in their letter of 25 February 2004. Mr Crouch accepted that the Appellant and Mrs Hudson made no attempt to conceal the hand rolling tobacco and that they were not previous excise offenders. However, in Mr Crouch's view those mitigating factors were outweighed by the lies of the Appellant and Mrs Hudson and his finding that the importation was for a commercial purpose.
9. Mr Crouch recorded that the vehicle was worth £25,525 at the date of seizure. The excise duty on the hand rolling tobacco was £2,323.44. Mr Crouch, however, was of the view that the value of the car was not relevant where the seized excise goods were imported for distribution at a profit. He relied upon the judgments of Lord Phillips and Lord Justice Judge in the Lindsay case who supported the seizure of cars whatever their value of those who smuggle for profit. Mr Crouch did not regard that the Appellant had suffered exceptional hardship from the considerable inconvenience and expense caused to him by the seizure of his car. Mr Crouch concluded that there were no grounds to depart from the Respondents' policy of non-restoration of private vehicles used for the improper importation or transportation of excise goods.
10. The policy applied by Mr Crouch was as follows

"The Commissioner's general policy regarding private vehicles used for the improper importation or transportation of excise goods is that they will not be offered for restoration.

The policy is designed to be robust in order to protect legitimate trade and revenue and prevent illicit trade in excise goods.

However, at the discretion of the Commissioners vehicles may be offered for restoration or restoration on terms in the following circumstances:

•    Excise goods destined for supply on a not for profit basis, that is, social distribution.

•    Excise goods destined for supply on a for profit basis; dependent on the quantity of excise goods and whether it is a first offence

•    Third party owners who were not present at the time of seizure of the vehicle, and were not involved in the improper importation of excise goods.

In all cases any other relevant circumstances, including humanitarian grounds, will be taken into account in deciding whether restoration is appropriate".

The Appellant's evidence

11. On the 6 October 2001 the Appellant and Mrs Hudson drove to Dover from Leicester which took about three hours where they caught the 1330 hours ferry to Calais. The purpose of the trip was to visit Mrs Hudson's parents who were staying at Le Pans that weekend and to purchase tobacco from Adinkerke. Le Pans was situated 38 miles north of Calais and about five to ten minutes drive away from Adinkerke. The Appellant was not sure until the last moment whether he would make the trip because of his work commitments. However, once the Appellant discovered that he was not working that weekend, he phoned Mrs Hudson's parents to let them know of their impending visit and obtain directions to Le Pans.
12. The Appellant had a few drinks on the ferry, which did not please Mrs Hudson. They arrived in Calais at 1530 hours with Mrs Hudson driving the vehicle off the ferry because the Appellant was unfit to drive. The Appellant directed Mrs Hudson to Adinkerke since she had not been there before. Once at Adinkerke they looked around various shops for the best deal. They decided upon "Real Tobacco" at Garzebekeveldstraat 15, 8660 Adinkerke, where they purchased 24 kilogrammes of hand rolling tobacco, which was loaded in the front and rear boot of their car.
13. The bundle of documents contained four separate receipts, three of the receipts recorded separate sales of 120 packets (50 gramme) of Golden Virginia hand rolling tobacco at £244.80, whilst the fourth receipt was for 120 packets of Drum hand rolling tobacco at £224.40. The timing for the sales was stated at 1631 hours on Saturday 6 October 2001. The Appellant could not understand why there were four separate receipts. As far as he was concerned there was only one receipt, there must have been an error when it was photocopied producing the four receipts. He could not now recall the reason for two brands of hand rolling tobacco, although he believed his son smoked "Drum" at the time of the transaction.
14. After purchasing the tobacco the Appellant and Mrs Hudson travelled to Le Pans, which was about one and half miles away from Adinkerke. They found the bar where they were meeting Mrs Hudson's parents. The Appellant then decided to buy himself another drink, at which point Mrs Hudson went ballistic with the Appellant about his drinking, accusing him of showing her up in front of her parents. Mrs Hudson then stormed out of the hotel taking the vehicle with her. The Appellant and Mrs Hudson had argued in the past about his drinking.
15. The Appellant stayed in Le Pans for about an hour. He tried contacting Mrs Hudson on her mobile but without success. He decided that she was not coming back so he took a taxi to a filling station in Adinkerke, which he knew was used by English lorry drivers to fill up before embarking on the ferry to Dover. At the filling station the Appellant met up with a couple travelling to Calais. They offered the Appellant a lift after learning of his circumstances and suggested on the journey that he might as well return on the ferry with them. The Appellant could not remember which ferry he came back on. He did not know the names of the couple, however, they were in the fifties and from the south of England. They drove an estate or people carrier and travelled regularly to France. The Appellant did not engage the couple in too much conversation. He bought them a drink on the ferry, after which he parted company with them.
16. On the return ferry he received a phone call from Mrs Hudson telling him that Customs and Excise had confiscated the car, whereupon the Appellant rang his son in Leicester to pick them up from Dover and take them home. The Appellant disembarked at Dover as a foot passenger.
17. The Appellant told the Tribunal that he did not need a ticket for his return journey because he was a passenger in the couple's car. He said that in 2001 Customs made very few checks on travellers about whether they possessed the correct documentation (including a ticket) to enter the UK. On his return on 6 October 2001 he flashed his passport and was allowed in.
18. The Appellant stated that he purchased the tobacco for his own consumption and for gifts to his son-in-law in America and to Mrs Hudson's brothers. At the time his vehicle was seized the Appellant smoked daily about 60 cigarettes made up of Golden Virginia tobacco. The Appellant produced to the Tribunal signed letters from Mark Buxton, Mrs Hudson's brother, and Mr Gerard Murtagh, his son-in-law, dated 10 January 2002 and 13 February 2002 respectively and an unsigned undated letter from Phil Buxton. Mr Murtagh and Mr Phil Buxton said that they received Golden Virginia tobacco from the Appellant and Mrs Hudson as presents for Christmas. Mr Buxton also received tobacco from them for birthdays. Mr Murtagh said that he received two boxes of tobacco from the Appellant in September 2001. They both lived in the USA where it was not possible to buy Golden Virginia tobacco. Mr Mark Buxton, who lived in Poole Dorset, was devastated when told by his sister, Mrs Hudson, that she had been bringing back some rolling tobacco for him and all the family for Christmas and ended up without any presents and her partner's car, which he considered unjust particularly as his sister was doing nothing wrong.
19. The Appellant denied that he travelled back with Mrs Hudson, alighting as a foot passenger. He stated that they were not in cahoots trying to mislead Customs about their intentions for the tobacco. He could not explain why Mrs Hudson told the Officer "well, I suppose it is to stop getting pulled" when responding to the Officer's question about why she did not mention buying tobacco earlier. He did not understand why the manifest for Mrs Hudson's return trip recorded two people in the car, other than a mistake by the booking-in clerk. He told the Tribunal that Mrs Hudson made a genuine mistake when she said to the Officer that she was visiting her parents in Le Touquet rather than Le Pans. According to the Appellant Mrs Hudson was confused and mentioned Le Touquet because they stopped there during the summer. The Appellant, however, pointed out that Mrs Hudson's interview was one-to-one with no witness and not recorded on tape. He felt that Customs and Excise breached human rights in the way that they treat people.
20. The Appellant accepted that Mrs Hudson had only been in France and Belgium for about two hours on the 6 October 2001. She was able to find her own way back to Calais because the road was clearly marked from Le Pans about half hour drive from Calais. She checked in at Calais at 1726 hours for the return journey.
21. The Appellant did not seek restoration of the tobacco because he was advised by his solicitors that it was a waste of his time and would not get the tobacco back. The solicitors had been instructed from 5 December 2001. He accepted that he possessed no documents to back up his account about the stop in Le Pans. He had not appreciated how long the process would take which was now in excess of three years. Mrs Hudson's parents could not now provide witness statements because sadly Mrs Hudson's father had since died and her mother was suffering from Alzheimers. The Appellant denied that he mentioned Le Pans for the first time at the Tribunal hearing, he gave evidence about it at the previous hearing of the Tribunal in July 2003.
22. The Appellant had been travelling to Adinkerke annually for nine years to fetch tobacco and cigarettes. He has never been stopped by Customs. The Appellant worked as a driver for a plant hire company in Leicester delivering earth moving equipment. He was also employed as a welder and plant fitter. He did not drive lorries on the continent.
23. After the vehicle was seized the Appellant was able to purchase another car from his own funds. He has, however, lost about £40,000 including legal fees as a result of the confiscation of his Porshe Boxster vehicle. To fund the loss he has used up his savings and worked long hours overtime. In his view the confiscation caused him exceptional hardship.
24. The Appellant was adamant that he and Mrs Hudson had not lied to Customs and Excise. He considered that the seizure of his car was totally disproportionate. Customs and Excise in his view rely on assumptions not hard facts and evidence.
25. Mrs Hudson did not give evidence to the Tribunal. Her interview with the Customs and Excise Officer on the 6 October 2001 was included in the bundle of documents. She said to the Customs Officer that she had been away for the afternoon to see her mother in Le Touquet. Her boyfriend, the Appellant had travelled with her to France and had stayed over there, probably returning tomorrow. She stated that the tobacco was Christmas presents for her seven brothers and sisters, even though they did not give presents any more. Mrs Hudson did not mention buying the tobacco when initially stopped by the Customs Officer because she did not want get pulled by him, however, she was not going to sell the tobacco. Mrs Hudson had never imported a large quantity of tobacco before.

Jurisdiction of the Tribunal

26. The Respondents' power regarding restoration of goods which have been forfeited or seized is set out in 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:

"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.

27. 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:

"…..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".

28. 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 power regarding restoration of goods. The finding of facts includes blameworthiness, the intended use for the excise goods: private or commercial, and the proportionality of the penalty imposed to the policy aims pursued having full regard to the individual circumstances of the case. 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.

The Tribunal's Findings of Fact

The Appellant's Account of Events on 6 October 2001

29. The review officer concluded that the Appellant and Mrs Hudson had embarked upon a deliberate and sustained course of dissimulation to disguise their commercial importation of the hand rolling tobacco. The review officer reached his conclusion by considering the Appellant's explanation in the context of the known facts of the importation, such as: the amount of tobacco, the duration of the journey, and the details on the manifest for the return ferry trip.

28. We have examined carefully the Appellant's account of the events on 6 October 2001 and find his account unconvincing because:

a) The timetable of events described by the Appellant following the purchase of the tobacco at 1631 hours was in our view implausible. In the space of 55 minutes the Appellant and Mrs Hudson left the shop in Adinkerke, placed the tobacco in the front and rear boot of the car, drove to Le Pans, found the hotel where Mrs Hudson's parents were staying, greeted the parents. The Appellant bought a drink at the bar which was followed by an argument between him and Mrs Hudson about his drinking. Mrs Hudson then drove the Porshe Boxster along a road unfamiliar to her for 38 miles to Calais where she registered for the ferry at 1726 hours.

b) The Appellant's explanation of his own movements following his argument with Mrs Hudson was short on detail and not supported by documentary evidence or independent witness statements. He did not tell the Tribunal the names of the hotel in Le Pans, the taxi firm which took him to Adinkerke, and the petrol station where he was dropped. The details of the middle-aged couple who gave him a lift to Calais were sketchy. We also consider that the couple was taking a considerable risk in giving a lift to a stranger who on his own account was the worse for drink. The Appellant could not remember the time of the ferry on which he returned to the UK.

c) The Appellant's account was inconsistent with Mrs Hudson's interview with the Customs and Excise on the day of the seizure in a number of material respects. Mrs Hudson did not mention that she argued with the Appellant and left him in France. Instead she said that he was staying in France overnight and that probably they would meet up the following day to travel back together to Leicester. She told the Customs Officer that she met her mother for lunch at Le Touquet not Le Pans. The Appellant in his evidence suggested that Mrs Hudson had confused Le Pans with Le Touquet where they visited in the summer of 2001. They were aware of the significance placed by the first review officer in January 2002 on the impossibility of combining a visit to Le Touquet and Adinkerke in the time that Mrs Hudson was in France. Yet, neither the Appellant nor Mrs Hudson sought to correct the confusion over Le Pans and Le Touquet until the first Tribunal hearing in July 2003.

29. The Appellant suggested to the Tribunal that his recollection of events was compromised by the long delays inherent in the review and appeal procedures. At the beginning he did not appreciate the procedure he would have to go through to get his vehicle back, which was why he did not retain documentary evidence or obtain independent witness statements to support his account. We are not impressed with the Appellant's explanation. He knew of the seriousness of his position from 16 January 2002 when the first review officer refused restoration of his Porshe. This decision was taken just three months and ten days from the date of seizure. Further the Appellant was advised by solicitors from 5 December 2001 which was two months from the 6 October 2001. In our view the Appellant should have been aware from an early date of the need to gather supporting evidence. His failure to do so casts considerable doubt on the veracity of his account of events on the 6 October 2001.
30. In view of our findings we have no confidence in the Appellant's version of the events on the 6 October 2001. We consider that the Appellant is attempting to divert our attention from the facts of this case. We are satisfied that the Appellant and Mrs Hudson travelled to the continent for the sole purpose of purchasing hand rolling tobacco. Their stay in France and Belgium was two hours which was too short to combine a visit to Adinkerke with a get together with Mrs Hudson's parents whether in Le Pans or Le Touquet. They returned together to the UK on the same ferry as proved by the manifest recorded by the booking-in clerk. They separated before the ferry docked at Dover with Mrs Hudson taking charge of the car and the Appellant alighting from the ferry on foot. They took this action because they believed that a lone woman in a car had less chance of being stopped by a Customs and Excise Officer.

Was the Appellant's importation of tobacco for private/commercial use?

31. This question needs to be considered in the context of the legislative framework. Council Directive (EEC) No. 92/12 lays down a number of rules on the holding, movement and monitoring of products subject to excise duty, in particular so as to ensure that chargeability of excise duties is identical in all Member States. The Directive draws a distinction between, on the one hand, goods held for commercial purposes, in respect of which accompanying documents are required for transportation purposes, and, on the other hand, goods held for personal use. Under Article 8 excise duty for goods held for private use is payable in the Member State in which they are purchased. No document is required when they are transported to another Member State. For Article 8 to apply, however, a number of conditions must be satisfied. The goods on which excise duty is chargeable must have been acquired by private individuals for their own use and transported by them. Article 9.2 sets out criteria for establishing whether goods transported by private individuals are intended for commercial purposes.
32. The provisions of the Directive were originally implemented in the United Kingdom by The Excise Duties (Personal Reliefs) Order 1992 SI 1992 No.3155. The 1992 Order was replaced by the Excise Goods, Beer and Tobacco Products (Amendment) Regulations 2002 SI 2002 No. 2692. Regulation 12 gives guidance on whether the goods are held for own use or commercial purposes.
33. The relevant provisions of Regulation 12 are as follows:

1B(b) "own use" includes use as a personal gift,

(c) if the tobacco products in question are -

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

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

those products are to be regarded as being held for a commercial purpose,

(d) if the products are not duty and tax paid in the member State at the time of acquisition, or the duty and tax that was paid will be or has been reimbursed, refunded or otherwise dispensed with, those products are to be regarded as being held for a commercial purpose,

(e) without prejudice to sub-paragraphs (c) and (d) above, in determining whether tobacco products are held or used for a commercial purpose by any person regard shall be taken of -

(i) that person's reasons for having possession or control of those products,

(ii) whether or not that person is a revenue trader (as defined in section 1(1) of the Customs and Excise Management Act 1979),

(iii) that person's conduct, including his intended use of those products or any refusal to disclose his intended use of those products,

(iv) the location of those products,

(v) the mode of transport used to convey those products,

(vi) any document or other information whatsoever relating to those products,

(vii) the nature of those products including the nature and condition of any package or container,

(viii) the quantity of those products, and in particular, whether the quantity exceeds any of the following quantities -

3,200 cigarettes,

400 cigarillos (cigars weighing no more than 3 grammes each),

200 cigars,

3 kilogrammes of any other tobacco products,

(ix) whether that person personally financed the purchase of those products,

(x) any other circumstance that appears to be relevant."

34. We have applied the criteria set out in Regulation 12(1B)(viii) in arriving at our findings about whether the purchase of hand rolling tobacco on 6 October 2001 was for personal or commercial use. The Appellant was not a revenue trader. The Respondents accepted that Mrs Hudson did not seek to conceal the hand rolling tobacco. The cartons of tobacco were in the front and rear boot of the Porshe motor vehicle and were readily visible when the boots were opened. The Customs and Excise Officer was, however, suspicious why she did not mention the tobacco when stopped. To which Mrs Hudson replied: "Well I suppose its to stop getting pulled. Its not like I'm going to sell it". The Appellant and Mrs Hudson paid for the tobacco in cash.
35. Mrs Hudson told the Customs and Excise Officer that the tobacco was purchased as Christmas presents for her seven brothers and sisters. The Appellant informed the Tribunal that the tobacco was for his own consumption with some of the tobacco given to his son-in-law in the USA. Mrs Hudson would also send some tobacco to a brother in England and to another brother in the USA. The Appellant produced three letters to support his assertion. The letter from Mark Buxton did not mention whether he had received tobacco from the Appellant in the past. He was only aware that he was to receive tobacco as presents when told by his sister, Mrs Hudson, after she was stopped on 6 October 2001. Phillip Buxton's letter was not signed nor dated and in typescript. We attach no evidential weight to these two letters. The third letter was from Mr Murtagh, the Appellant's son-in-law. He stated that he received a box of Golden Virginia tobacco every Christmas from the Appellant. Mr Murtagh then added that the Appellant gave him two boxes of tobacco in September 2001, which leads us to question why the Appellant would send him another box of tobacco from the October 2001 consignment so soon after receiving two boxes of tobacco.
36. The quantity of hand rolling tobacco brought in by the Appellant and Mrs Hudson was eight times the guideline limit set in the 2002 Regulations. On the 6 October 2001 the quantity was 24 times the guideline limit of one kilogramme then operating. The Appellant travelled to France/Belgium annually for nine years to buy tobacco so he must have been aware of the guidelines with respect to quantities and that to bring 24 kilogrammes of hand rolling tobacco into the UK would raise questions from Customs and Excise Officers.
37. The bundle of documents contained four separate receipts for the tobacco from the same shop, three for 120 packets of Golden Virginia and one for 120 packets of Drum. The Appellant said that the Respondents had photocopied the receipts wrongly, there was only one receipt. We have looked carefully at the photocopy, each copy receipt stands on its own, separately topped and tailed with the name of the retailer and the acknowledgement of the sale, the items sold are individually recorded with a specific price. We, therefore, conclude that there were four separate receipts which together with the two brands of tobacco suggests to us that the tobacco was bought to order.
38. After analysing the facts and the Appellant's evidence we are satisfied that the Appellant purchased the tobacco for commercial purposes for profit. In reaching that conclusion we rely on the following facts: the short duration of the journey, the large amount of tobacco purchased, the Appellant's familiarity with the Regulations governing the import of excise goods, the four receipts, the two brands of tobacco and our findings on the Appellant's travel arrangements. We are not persuaded by the Appellant's evidence which was at odds with the version given by Mrs Hudson to the Customs and Excise Officer. We attach no weight to the letters supplied by the Appellant for the reasons given in paragraph 37.

Was the Decision Not to Restore the Motor Vehicle Proportionate to the Aims Pursued?

39. Article 1 of the First Protocol of the European Convention of Human Rights dealing with peaceful enjoyment of possessions was engaged when the Respondents deprived the Appellant of his motor vehicle. The aim pursued by the Respondents is to deter those people who are intent on regularly smuggling tobacco and alcohol in the UK which has caused a massive loss of revenue to the Government since the introduction of the Single Market. The revenue evaded for tobacco was estimated at £3.5 billion for 2000/01.
40. Lord Phillips MR in Lindsay v Customs and Excise Commissioners [2002] 1 WLR 1766 has ruled that the penalty imposed against persons caught bringing in excise goods contrary to the Regulations must be fair and proportionate to the contravention. Where persons are smuggling for a commercial purpose for profit they generally take themselves beyond the threshold whereby a lesser penalty than deprivation of property can be considered.
41. The Appellant sought to argue that the seizure of his car was a disproportionate response to his importation of the tobacco. The car was valued at £25,525 compared with the excise duty of £2,324 on the tobacco. The Appellant's submission, however, was based upon his contention that the tobacco was for his personal use. We have found otherwise, the tobacco was purchased for commercial purposes for profit. In those circumstances the decision in Lindsay is clear that the seizure of the motor vehicle used by those who smuggle for profit is a proportionate response to the contravention, whatever the value of the vehicle involved. We are, therefore, satisfied that the seizure of the Porshe Boxster belonging to the Appellant was proportionate.

Did the Appellant suffer Exceptional Hardship from the Non-Restoration of the Motor Vehicle?

42. The Appellant estimated that he suffered a loss of about £40,000 as a result of the seizure of his motor vehicle. We accept that £40,000 is a significant sum of money. We interpret exceptional hardship as severe suffering or privation that adversely affects the person's way of life and goes beyond the expected consequences flowing from the loss of the vehicle. After the seizure of his motor vehicle the Appellant was able to purchase another vehicle from his own funds. He continued with his employment, albeit working longer hours to make up for the shortfall. We formed the impression that his routine was undisturbed by the loss of his car. We are, therefore, left with the significant financial loss, which in our view does not constitute exceptional hardship because on the evidence the loss has not adversely affected his way of life, it is the expected consequence arising from the loss of his vehicle.

Summary of our Findings of Fact

43. We find that

•    The Appellant's account of the events on 6 October was unconvincing and amounted to an attempt to disguise his true intentions in respect of his purchase of the tobacco

•    The Appellant purchased the tobacco for commercial purposes for profit.

•    The non-restoration of his motor vehicle was a proportionate response to his contravention and the aims pursued by the Respondents.

•    The Appellant did not suffer exceptional hardship as a result of the loss of his motor vehicle.

Was the Review decision of Mr Crouch unreasonable?

44. We are satisfied that Mr Crouch reviewed the available evidence and took account of the new representations made on the Appellant's behalf by his solicitor. We hold some reservations about Mr Crouch drawing conclusions from the evidence given at the previous Tribunal hearing. As far as we are aware the previous Tribunal has made no findings of fact and its notes of evidence have not been distributed. We, however, do not consider the reference to the previous Tribunal hearing material in affecting the reasonableness of the review carried out by Mr Crouch. His reference to the previous Tribunal constituted a small part of his finding that the Appellant and Mrs Hudson had embarked upon a deliberate and sustained course of dissimulation to disguise their true purpose for the tobacco bought. Our findings of fact support his conclusion. Overall we are, therefore, satisfied that Mr Crouch considered all the relevant facts at his disposal and disregarded irrelevant matters in reaching his decision not to restore the motor vehicle to the Appellant.

Our Decision

45. We have decided for the reasons set out above that the Respondents' decision of 2 April 2004 not to restore the Porshe Boxster motor vehicle, registration number J11 ELL to the Appellant was reasonably arrived at within the meaning of section 16(4) of the Finance Act 1994. We, therefore, dismiss the Appeal. We make no order for costs.

MICHAEL TILDESLEY

CHAIRMAN

RELEASED: 7 January 2005

MAN/04/8062