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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 >> Wadsworth v Customs and Excise [2005] UKVAT(Excise) E00855 (24 February 2005)
URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2005/E00855.html
Cite as: [2005] UKVAT(Excise) E00855, [2005] UKVAT(Excise) E855
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Wadsworth v Customs and Excise [2005] UKVAT(Excise) E00855 (24 February 2005)

    E00855

    RESTORATION OF GOODS — condemnation proceedings — reasonableness of decision not to restore — appeal dismissed

    MANCHESTER TRIBUNAL CENTRE

    WILLIAM WADSWORTH Appellant

    - and -

    THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

    Tribunal: Jean Warburton (Chairman)

    Carole A Roberts

    Sitting in public in Manchester on 20 January 2005

    The Appellant appeared in person

    Andrew Vinson, of counsel, instructed by the Solicitor's office of HM Customs and Excise for the Respondents

    © CROWN COPYRIGHT 2005


     

    DECISION

  1. This is an appeal by William Wadsworth against a decision to refuse to restore 12,600 cigarettes seized at Manchester Airport on 17 October 2002. The decision on review not to restore is contained in a letter dated 3 February 2003.

  2. The Commissioners were represented by Mr A Vinson of counsel, who put in a bundle of copy documents. The Appellant appeared in person and put in a copy bank statement for the period 14 October to 7 November 2002.

  3. We heard evidence on oath from the Appellant. There were agreed witness statements from two officers of Customs and Excise, Andrew Reid, the seizing officer and Maureen Anne Crook, the reviewing officer. There was also an agreed witness statement from Neil Belsey, an officer of the Inland Revenue. The facts were not seriously in dispute and from the written and oral evidence we find the main facts to be as follows.

    The facts
  4. On 17 October 2002, the Appellant was returning from a two day trip to Spain to take out commissioned satellite receivers. He was stopped at Manchester Airport in the baggage hall by Andrew Reid, an officer of Customs and Excise, and 12,6000 cigarettes were found in his luggage. The cigarettes consisted of 32 sleeves of Silk Cut, 30 sleeves of Regal and one sleeve of Lambert and Butler.

  5. Andrew Reid informed the Appellant that he suspected the cigarettes were for commercial use and that if no satisfactory explanation was given he would conclude that the goods were not for the Appellant's own use and seize them. The Appellant declined to stay to be interviewed but signed the officer's notebook.

  6. The Appellant made a request for restoration of the cigarettes by letter of 21 October 2002. The request for restoration was refused by letter dated 24 November 2002. By a letter dated 1 December 2002 the Appellant requested a review of that decision not to restore. By a letter dated 22 January 2003 the Appellant provided further details and documentation about his trips to Spain and income.

  7. The review was carried out on 3 February 2003 by Maureen Crook. She reviewed all the papers including the record of interview and later correspondence. Maureen Crook concluded that restoration of the cigarettes should not be made. She concluded that the goods were not for own use and were held for a commercial purpose. This conclusion was based on the quantity of cigarettes and the Appellant's failure to stay for interview.

  8. The Appellant appealed the legality of the seizure of the cigarettes and condemnation proceedings were taken in the magistrates court. On 26 November 2003, Manchester Magistrates Court condemned the cigarettes as forfeit.

  9. Prior to 17 October 2002, the Appellant had made four holiday trips and three business trips to Spain in 2002.

    Evidence
  10. The Appellant gave evidence that he smoked Regal and his wife smoked Silk Cut cigarettes. The cigarettes were to be used as Christmas presents for his sons-in-law; he would not be paid for them. In earlier correspondence with the Commissioners the Appellant stated that his family smoked on average 90 cigarettes a day and that the 12,600 would cover the period until April 2003 when they or he would start to travel to Europe again. He had not included any Lambert and Butler cigarettes.

  11. The Appellant stated in evidence that he had not stopped to be interviewed on 17 October because Andrew Reid did not know the law, in particular the case of Hoverspeed.

  12. The Appellant gave further evidence that the money for the cigarettes came from taking satellite receivers to Spain. He did not need funds from his bank accounts for their purchase. The copy bank account handed to the tribunal shows a credit balance of £2,475.57 on 14 October 2002, the account having been opened on that day by a deposit of that sum.

    The Law
  13. The law as it applies in this case has been the subject of review by the Divisional Court in Regina (Hoverspeed Limited) v Customs and Excise Commissioners [2002] 3WLR 1219 ("the Hoverspeed case") and to a more limited extent in relation to seizure by the Court of Appeal in Commissioners of Customs and Excise v The Queen on the application of Hoverspeed Limited [2002] EWCA Civ 1804. These cases make it clear that under the Excise Directive 92/12 EEC goods are either held for personal use and subject to excise duty in the member state of acquisition, Article 8, or held for commercial purpose and subject to excise duty in the member state in which they are held, Article 9 (see the Hoverspeed case at [105] and the Court of Appeal at [65]).

  14. The Divisional Court in the Hoverspeed case held that the Commissioners must have reasonable grounds for suspecting an individual of holding goods for commercial purposes before he may lawfully be stopped and searched – see at [180]. On that point, the decision was overruled by the Court of Appeal which held that seizure of cigarettes was not automatically invalid because it was the result of a check which was invalid – see at [49].

  15. In Gora v Commissioners of Customs and Excise [2003] 3 WLR 160 the Court of Appeal stressed that the question as to whether goods are forfeit as being for commercial use is a matter for the magistrates court and not the Tribunal. Commissioners of Customs and Excise v Dickinson [2003] EWHC 2358 (Ch) decided that the issue of private use could be raised in relation to the discretionary procedure of restoration on the issue of proportionality – see at [49]. In Gascoyne v Commissioners of Customs and Excise [2004] EWCA Civ 1162 the Court of Appeal considered the decision in Gora and held that there was no Convention objection to holding that an actual finding in condemnation proceedings either as to lawfulness of seizure on underlying facts binds a tribunal.

  16. The Tobacco Products Regulations 2001 as amended by Excise Goods, Beer and Tobacco Products (Amendment) Regulations 2004 set out a number of factors to be considered when determining whether a person is holding excise goods for a commercial purpose. These include any refusal to disclose intended use and the quantity of goods. The indicative level for cigarettes is 3,200. In the Hoverspeed case it was held that whilst the burden of proof as to commerciality is on Customs, possession of goods in excess of the indicative levels raises an evidential presumption which requires an explanation from the possession of the goods – see at [115].

  17. The Commissioners are empowered by Customs and Excise Management Act 1979 (CEMA) section 49 to forfeit dutiable goods which have been imported or held without payment of duty. All such goods are liable to seizure pursuant to section 139 of CEMA. Such powers must, however, be exercised with due regard to proportionality as they involve the deprivation of a person's property.

  18. Section 152 (b) of the 1979 Act allows the Commissioners as they think fit to restore any goods which have been seized. A review and appeal procedure from decisions of the Commissioners is set out in Sections 15 and 16 of the Finance Act 1994. A holder of goods may appeal against a review decision of the Commissioners taken under Section 15 to the Tribunal. The Tribunal's powers on appeal are, however, limited by Section 16(4) to directing that the Commissioners' decision shall cease to have effect, to directing that a further review be carried out or, if the latter is no longer possible, declaring the decision to have been unreasonable. On appeal, it is for the Tribunal to consider that the response is proportionate in any case – see R (Hoverspeed Limited) v Customs and Excise Commissioners [2002] 3 WLR 1219 at [130(10)] and [196].

    Submissions
  19. The Appellant submitted that no explanation had been given as to why he had been stopped and the Commissioners had not provided any reasonable grounds for stopping him or the seizure of the goods. He relied on the Hoverspeed case. The Appellant further submitted that the cigarettes were for personal use; there was no evidence that the goods were for commercial use.

  20. Mr Vinson for the Commissioners submitted that the question of own use was not one for the Tribunal – the matter had been determined in the condemnation proceedings. He relied on Gora and Gascoyne. The Tribunal was concerned with the reasonableness of the decision on review which he submitted passed all the tests of reasonableness. Mr Vinson further submitted that, in any event, the seizure was valid because of the number of cigarettes involved and the Appellant's failure to remain and answer questions. There were no exceptional reasons which rendered the refusal to restore disproportionate.

    Reasons for decision
  21. The Tribunal's jurisdiction under Section 16(4) of the Finance Act 1994 is not one to try again in the original decision to forfeit but to consider whether the decision on review not to restore goods is one that the Commissioners could not reasonably make.

  22. It is generally accepted that the test of reasonableness requires the Tribunal to ask:

    • Is this a decision which no reasonable panel of Commissioners could have come to?
    • Has some irrelevant matter been taken into account?
    • Has some matter which should have been taken into account been ignored?
    • Has there been some error of law?
    (see Commissioners of Customs and Excise v J H Corbitt (Numismatists) Ltd [1980] STC 231; Associated Provincial Houses Ltd v Wednesbury Corporation [1948] IKB 223)
  23. When Maureen Crook reviewed the decision on 3 February 2003 she clearly reviewed all the evidence then available to her including the information supplied by the Appellant in his letter of 22 January 2003. It is also clear that she did not consider any irrelevant matters. On the evidence available to her, we consider that her conclusion that the goods were not for own use was a reasonable one. In the light of the Commissioners' policy in relation to restoration, which has been accepted by the courts, it was reasonable of her to follow that policy and to refuse to order restoration.

  24. Subsequent to Maureen Crook's review, the cigarettes were condemned as forfeit in the Magistrates Court as being for commercial use. In any event, the quantity of cigarettes seized raised an evidential presumption that the importation was commercial – see paragraph 16 above – and in our view, the Appellant has not rebutted that presumption by his evidence to the Tribunal. There are thus no grounds on which to hold the decision not to restore is not proportionate.

  25. Accordingly, the appeal is dismissed but we make no direction as to costs.

    JEAN WARBURTON
    CHAIRMAN
    Release Date: 24 February 2005

    MAN/03/8053

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