United Kingdom VAT & Duties Tribunals (Excise) Decisions

Thomas & Anor v Customs and Excise [2005] UKVAT(Excise) E00844 (28 January 2005)

E00844

RESTORATION – Vehicle and goods seized – Vehicle at time owned by another – Transfer of ownership to appellant Thomas after seizure – Whether Thomas able to appeal – Held no appeal available to him – Tribunal not satisfied goods for own use – Appeal dismissed

LONDON TRIBUNAL CENTRE

STEVEN THOMAS & PAMELA LEWIS Appellants

and –

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: MISS J C GORT (Chairman)

MR M JAMES

Sitting in public in Plymouth on 24 November 2004

The Appellants in person

Mr G Facenna of counsel, for the Respondents

© CROWN COPYRIGHT 2004


 


DECISION

1. This is an appeal against the Commissioners' decision of 17 December 2003 not to offer for restoration a Ford Sierra vehicle and excise goods seized from the Appellants on 4 October 2003. The grounds of appeal are that the goods were for the Appellants' own use.
2. At approximately 11.00am on 4 October 2003 an officer of the Commissioners stopped the vehicle at Dover Eastern Docks. Mr Steven Thomas was driving the vehicle and Pamela Lewis was a passenger. During initial questioning by the officer Mr Thomas said that the Appellants had been to Adinkerke in Belgium for the day to buy some tobacco. He said that the vehicle belonged to a friend of his who knew that he had taken the vehicle to France. He had brought back 400 pouches of tobacco, having taken out a bank loan to pay for it.
3. Having been read a formal statement to the effect that it was suspected they may be holding goods for a commercial purpose and being warned of the liability of the goods and the vehicle to be seized as forfeit, both Appellants indicated that they had understood this and elected to remain for further questioning.
4. Mr Thomas told the officer that he was unemployed but received incapacity benefit and disability allowance of £68 a week and £60 per month respectively. He also worked part-time in a café earning between £30 and £40 a week. He informed the officer that he had with him four boxes of Golden Virginia tobacco, some cigarettes and two packets of Drum tobacco, the last being a gift for their baby sitter. Half of the excise goods were his and the goods were to be shared between him and Miss Lewis, his girlfriend. She had paid for the goods by Visa and they had also paid in part with ?1,300 which they had taken with them.
5. Mr Thomas told the officer that he and Miss Lewis had worked out that they would need 600 pouches of tobacco between them to last for a year. Miss Lewis had obtained the bank loan for £3,000 which he believed was obtained for a car. Neither of them were expecting to receive any payment for any of the goods. He personally smoked an ounce and half a day but it very much depended on what he was doing. He would smoke between three and four pouches a week. However if he were busy then he did not smoke so much. He did not know how many roll-ups he could get out of a pouch.
6. In addition Mr Thomas said that he had previously travelled about two weeks previously when he and Miss Lewis had brought a friend's daughter over to do some shopping, using her mother's car. On that occasion they had been given three free bottles of wine on the boat. Prior to that he had come over some two years previously and on that occasion his car and the tobacco he had bought were seized because he had hidden the tobacco in the door panels. In respect of this he said in the interview: "I wasn't aware at the time, if I had just left it in the car it would have been O.K."
7. In the course of her interview Miss Lewis told the interviewing officer that she had taken out a bank loan to pay for all the goods which were for her and Mr Thomas. In addition the Drum tobacco was for her daughter who was looking after her son for her. She did not intend to give any of the goods to anybody else. The loan that she had taken from the bank had been used to buy a car on which she had spent £500. The cost of the excise goods was over £1,000. She would be repaying the loan at the rate of £92 a month. She personally smoked about three packs a week of hand-rolling tobacco but smoked cigarettes as well when she went out. When asked how many cigarettes she would get out of a pouch she said: "About 15, I am a heavy smoker." She too expected the goods to last about twelve months. It was put to her that, as the term of the loan was five years, she would still be paying for the cigarettes in five years time. She explained that this was why she could not afford to keep coming over. She had in fact asked the manager for a loan of £1,000 to buy the car but she was offered £3,000 which she took. The money helped to pay her bills. She worked in a café earning £160 a week, she also had child benefit of £16 a week. She was completely familiar with her outgoings which she was able to list precisely to the officer. She currently had £2,300 in her bank account. According to Miss Lewis they had travelled over the previous week. They had not thought about buying tobacco on that occasion. They had been looking for a shopping centre and had been unable to find it.
8. It was not stated in the officer's witness statements at what point the car had been searched and the excise goods were found. However on 12 October 2003 Mr Lawrence, the officer who had interviewed Mr Thomas, made a later entry into his notebook noting that during the rummage of the vehicle he had found 24 kilos and 700 grams of Golden Virginia tobacco, 1 kilo of Drum tobacco, 1,400 cigarettes, 1 litre of brandy and 3 bottles of white wine. The goods were found in the boot and on the back seat. All those goods were seized on the 4 October.
9. The reasons given by the officer for seizing the goods were set out as follows:

1. Large quantity of excise goods

2. Misdeclaration. Initially declared 400 pouches of tobacco

3. Admitted payment in kind. 1 kilo of Drum being given for baby-sitting duties

4. Unreasonable to take out £3,000 loan to purchase excise goods

5. Excessive consumption rate for Lewis 15 roll-ups per pouch

6. Recent opportunity to purchase excise goods

7. Inconsistent story with co-traveller over repayment of loan

8. Unreasonable to still be paying back £92 a month on loan four years after excise goods have been consumed.

10. The Appellants were issued with a notice of seizure of vehicle and also a notice of seizure information. Mr Thomas signed the notice of seizure of vehicle. That notice states:

"If the vehicle does not belong to you then you must pass this form to the owner of the vehicle as soon as possible."

It also says in bold type in capitals towards the end of the notice:

"At the end of the 30-day period the vehicle will be disposed of or destroyed unless communication is received from the owner."

11. On 6 October 2003 Mr N Mathews wrote a note stating:

"I have today sold my Sierra Sapphire registration H295 WVJ to Mr Steven Thomas due to it being sized (sic) from him by Customs all paperwork MOT etc were in the car when taken. Mr Thoms (sic) paid me £450.00 cash …"

12. By a letter dated 13 October 2003 solicitors, Woollcombe Beerr Watts, acting on behalf of the Appellants, wrote to the Commissioners stating that the Appellants sought return of the seized items and the vehicle. By letter dated 11 November 2003 the Commissioners refused the request for restoration of the items and stated that in respect of the application for restoration of the vehicle as Mr Thomas was not the owner of the car, they declined to answer his request for restoration. Subsequently, by a letter dated 24 November 2003, the Commissioners wrote to the Appellants' solicitors stating that since their letter of 11 November they had received the letter from Mr Mathews informing them that he had sold the vehicle to Mr Thomas on 6 October 2003. The Commissioners' policy regarding private vehicles which had been seized as a result of being used for the improper importation of excise goods was then sent out. The circumstances of the case were considered and set out in the letter and, there being no evidence of exceptional circumstances justifying a departure from the Commissioners' policy, restoration was refused. Mr Thomas was given 45 days from that date to ask for a review of that decision. Following further correspondence and a request from the Appellants that the goods and vehicle be restored, a full review was carried out by Mr P A Devlin, an officer of Customs and Excise and he concluded that the excise goods and vehicle should not be offered for restoration.
13. Mr Devlin gave evidence before the Tribunal and it was his evidence that there were no exceptional circumstances which would allow restoration and the matters he had taken into account were first of all the quantity of the goods which was at the upper end of the cases he had dealt with, and indicated a commercial purpose taken in conjunction with the Appellants' financial circumstances. Secondly, the importation was large in relation to previous importations by Mr Thomas and, given that the loan would have to be repaid over five years, it would seem improbable that they would buy such a large quantity when they had shown that they were prepared to make fairly frequent trips. He had also found it "absurd" that Miss Lewis had said that she obtained 15 cigarettes from one pouch of tobacco when it would be expected that a person would obtain 50 to 60 cigarettes if using a machine and up to a hundred if hand-rolling. Mr Devlin did not accept the suggestion that Miss Lewis had simply said the first figure that came into her head, because she had been put on warning by the officer that it was a serious matter, and when asked if she had anything to add she did not correct it nor did she do so when given the opportunity to read through the notes of interview. Whilst he accepted that smokers could not readily say how many cigarettes they would obtain from a pouch, he would have expected a more realistic figure.
14. Mr Devlin had also taken account of the fact that the Appellants had travelled the previous week, and given their financial situation and how both time consuming and expensive it was to get to Dover, he did not accept the suggestion that on the previous week they had gone over and had been unable to find the Cité d'Europe, which was very well signed and very visible. He did not consider it likely that they would have come back with no tobacco goods in the circumstances. He did not accept that the goods were for the Appellants' own use, and, with regard to the car, it was the policy that a vehicle should not be restored where the importation reached a certain level above the guide levels, the guide levels being 3,200 cigarettes and 3 kilogrammes of hand-rolling tobacco. It was also part of the Commissioners' policy not to restore a vehicle where a person had had a vehicle seized on a previous occasion, as was the situation here.
15. In cross-examination Mr Devlin said that he believed he had taken into account everything before him and that at no stage had he believed that the Appellants had taken out a loan solely to buy tobacco, although he had not seen the Appellants' bank statements. He was aware that the goods had been bought with ?1,300 and also a Visa card. He had not taken into account all the matters taken into account by the seizing officer, because he accepted that some of the tobacco was for Miss Lewis' daughter, and he accepted that this was payment in kind, being for a member of the family.
16. Mr Thomas gave evidence to the Tribunal, Miss Lewis did not. It was Mr Thomas' evidence that Miss Lewis had taken out the loan to purchase a car and to pay off various debts, which they had done. At the time she had asked for £1,000 loan but the bank offered £3,000 which she accepted. The parties' biggest expenditure was tobacco, as he smoked about 40 cigarettes a day, and Miss Lewis smoked almost the same perhaps a bit less. They were spending about £30 to £40 per week on tobacco, and decided it was sensible to purchase in bulk as it entailed a great saving.
17. Mr Thomas' explanation of the trip the previous week was that they went in a car belonging to a friend of Miss Lewis, and took the friend's daughter with them as her father had died and she had some money so they planned to go to the Cité d'Europe. When they got over on the ferry they went onto the motorway out of Calais from where they could see the Cité, but they got confused and ended up going into the entry for the Euro tunnel, and a special barrier had to be opened up to let them out because they were not supposed to be there. A great argument developed in the car and in Mr Thomas' words "things got more and more out of hand" and so in the end he turned round and they came back. The cost to the Appellants on that occasion was roughly £60, as Miss Lewis' friend had paid for the tickets and the petrol. The Appellants had taken about £150 with them on that occasion and their friend had some £400 with her. They had bought a few cigarettes on the boat.
18. The Appellants had come over in a friend's car because, although by the time they came Miss Lewis had obtained the loan and had bought a car which had cost £500 at auction, the car did not have an MOT and it was waiting for further work to be done. Mr Thomas had seen on the news that the European Commission were taking action against the United Kingdom government, and that it was said that people could bring over as much tobacco as they wanted for their own use. He was aware of the guidelines. On the previous occasion when his car was seized, he had brought in goods in excess of the guidelines which were then current and he had not appealed on that occasion when the car and the goods were seized even though the goods were for his own use, because he believed that you were only allowed to bring in an amount up to the guidelines. He had not at the time been aware that even then, if the goods were for your own use, you were entitled to bring in as much as you liked.
19. Mr Thomas produced bank statements from 30 June to 29 September 2004 which showed that his account was continually in credit, with money regularly going into the account. He also produced a wage slip which showed that he was working as a security guard as at 18 November 2004, and had up till that date received a total pay of £5,322.38. He received £522 .44 net pay every two weeks. He had been in that employment since May and from the previous October until May he had been working as a caretaker. Whilst he was temporary unemployed at the time of the seizure, he had never been unemployed before for any very long periods of time. He did receive disability benefit, which he was receiving at the time of this importation, and which he was still receiving even though he was in work, at the rate of some £62 per month. Miss Lewis worked in a non-smoking café and received about £160 per week plus child benefit of £16 a week.
20. On behalf of the Commissioners Mr Facenna accepted that the Commissioners have initially made an error when they had purported to refuse restoration of the vehicle, it not being possible for ownership to be transferred once the vehicle has been seized. It was therefore not open to the Appellants to appeal against the seizure of the vehicle. For the purpose of the present appeal however it was accepted that the Tribunal could proceed on the basis that the Appellants could so appeal, but, if the Tribunal were minded to send the matter back to the Commissioners to consider restoration of the vehicle again, then such a decision should be subject to further argument on ownership.
21. It was submitted that the Commissioners' decision not to restore the excise goods or vehicle should be upheld on the grounds that the contested decision was, in all the circumstances, reasonable and there were no exceptional circumstances that rendered the decision unreasonable.
22. The Appellants' case was that the goods, with the exception of the small amount of Drum tobacco for Miss Lewis' daughter, were all for their own use. Mr Thomas submitted that he would not have risked a car being seized on the second occasion because the Commissioners would be looking out for him, because of the previous seizure. He claimed that the Appellants did not like to be in debt, and that he was for the most part employed.

Reasons for decision

23. With regard to the position of the car, we accept that the proper position in law is that the ownership could not be transferred to Mr Thomas after it had been seized by the Commissioners. The consequence of this is that the proper person to have appealed against it would have been the then owner, Mr Mathews. It was said by Mr Thomas that the position was not made clear to him, and certainly there is some force in this, given that the Commissioners themselves initially treated the matter as being one which was open to Mr Thomas to appeal. However the documents which were given to Mr Thomas at the time of the seizure do state quite clearly that if the vehicle did not belong to him then he should pass it on to the owner of the vehicle as soon as possible. Whilst there may be a human rights issue here, the aggrieved person is not Mr Thomas, but Mr Mathews who lost the opportunity to appeal by virtue of the Commissioners treating the appeal as being available to Mr Thomas. It is not a matter which this Tribunal can deal with.
24. With regard to the excise goods, we cannot say that in the circumstances the decision of the Commissioners not to restore them to the Appellants was unreasonable. They were entitled to take account of the previous journeys made by Mr Thomas, in particular the occasion when he had had a vehicle seized and a subsequent occasion only a week prior to the present occasion when he had travelled over but had apparently not bought more than a very few excise goods. It is an extraordinarily long journey that was undertaken by the Appellants on that occasion, and to return with only some 60 cigarettes was a matter for which no reasonable explanation was given at the time, and the explanation before us that they could not find the Cité d'Europe, whilst extraordinary, still does not explain why they did not make purchases elsewhere.
25. Whilst there was evidence before us which showed that the Appellants' financial circumstances were somewhat better than that they had appeared to the Commissioners, given that Mr Thomas told us, and we accept that is the case, that he is more often in work than not, nonetheless they were clearly not in good financial circumstances at the time of the importation, given that the loan had been taken out not only to purchase a car but to pay off debts. Mr Thomas said to us that the Appellants did not like debt, and yet clearly debts had been run up prior to the taking out of the loan. Mr Thomas also gave evidence to us that Miss Lewis smoked nearly 40 cigarettes per day, and yet he also attempted to explain her saying she only obtained 15 cigarettes per pouch of hand-rolling tobacco as being because she was not a regular user of hand-rolling tobacco. If that is in fact the case, then there remains a question mark over the necessity to import such a large quantity of hand-rolling tobacco. His evidence as to this was inconsistent and we are unable to find as a fact that the Appellants were importing the tobacco solely for their own use.
26. In all the circumstances this appeal is dismissed. No order for costs.

MISS J C GORT

CHAIRMAN

RELEASED: 28 January 2005

LON/04/8010