United Kingdom VAT & Duties Tribunals (Excise) Decisions

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URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2005/E00857.html
Cite as: [2005] UKVAT(Excise) E00857, [2005] UKVAT(Excise) E857

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Lawson v Customs and Excise [2005] UKVAT(Excise) E00857 (24 February 2005)

E00857

EXCISE DUTY — travellers bringing excise goods into United Kingdom for distribution at cost to friends and family — goods and vehicle seized — vehicle offered for restoration for its value, being less than the duty evaded — whether decision reasonable — yes — appeal dismissed.

MANCHESTER TRIBUNAL CENTRE

MICHAEL LAWSON  Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: Colin Bishopp (Chairman)

Carole Roberts

Sitting in public in Manchester on 18 January 2005

The Appellant in person

Samantha Holland, counsel, instructed by the Solicitors office of HM Customs and Excise for the Respondents

© CROWN COPYRIGHT 2005


 


DECISION

1. On 14 March 2004 the Appellant Michael Lawson arrived at the United Kingdom control zone at the French entrance to the channel tunnel in his Renault Laguna car. He was accompanied by his daughter Emma. They were intercepted (we do not know why) by Customs officers who found that the car contained 29.5 kilograms of hand rolling tobacco, 3,000 cigarettes, 231 litres of wine and small quantities of spirits and beer. The officers came to the conclusion that the goods were not being brought into the United Kingdom entirely for Mr Lawson's and his daughter's personal use and they seized all the goods together with the car. They have refused to restore any of the goods but they offered to restore the car to Mr Lawson on payment of the sum of £4,125. Mr Lawson has paid that sum, in order to recover his vehicle, but he challenges the decision, which was upheld on a review conducted by Gareth Morgan.

2. We heard evidence from Mr Morgan and from Andrea Smith, the officer who intercepted Mr Lawson and his daughter. Mr Lawson did not give evidence, but he attended to put his case to us and we naturally take into account what he said.

3. Mrs Smith told us that a number of factors had influenced her in reaching her decision that the goods should be seized. They included the fact that the excise goods contained in the car were declared only in stages, as Mrs Smith found them during the course of her search; that there were some minor discrepancies between what Mr Lawson and his daughter said; and, most importantly, because Mr Lawson told her that some of the goods were intended not for his own consumption but were to be supplied to others who had either given him money in advance, or who would give him money in exchange for the goods on his return. Mr Lawson made the point, both at Coquelles and before us, that he would not make any profit from his trip; he would be passing on the goods he bought for other people at cost price.

4. It seems to us clear from the candour of his replies to Mrs Smith's questions, at Coquelles, and from what he told us that Mr Lawson thought, and still thinks, that it is legitimate to buy excise goods in other Member States of the European Union, bring them to the United Kingdom and supply them to others provided no profit is made. Unfortunately for him, that is not the case; it is a criminal offence to sell within the United Kingdom, even without making a profit, goods liable to United Kingdom excise duty on which that duty has not been paid.

5. European Community legislation, which the United Kingdom has to follow, provides that excise duty is chargeable by the Member State in which "the release for consumption" of excise goods takes place: see Council Directive (EEC) 92/12, article 6. For present purposes, "release for consumption" means disposal in exchange for money; that the money paid for the goods may be no more than their cost price is irrelevant and it is also irrelevant that the goods may already have borne duty in another Member State: see article 7(1) of the same directive.

6. Some relief from those requirements is afforded by article 8 of the directive, which provides that duty may be paid only in the country of acquisition – in the present case Belgium – provided the products are "acquired by private individuals for their own use and transported by them". The goods which Mr Lawson was proposing to pass on to his friends and family, in return for the cost price, did not come within that category since they were not transported by the people who were going to consume them. Those goods therefore came within the general rule, which in this case means that United Kingdom duty was due on them.

7. Mr Lawson did not declare the goods and was not intending to do so since, as he made clear to us, that he was under the impression that he had no need to do so. Sadly for him, his ignorance of the law does not help him. Because he did not make, or attempt to make a declaration, all the goods he had in his possession, including those he and his daughter intended to consume themselves, as well as his car were liable to be seized by Customs and Excise, and forfeit to the Crown, by virtue of section 141(1) of the Customs and Excise Management Act 1979.

8. The Respondents' policies regarding the seizure of excise goods and vehicles used to transport them, and the restoration of such goods and vehicles, have been considered on many occasions by this tribunal and, although less frequently, by the higher courts, most particularly in Lindsay v Customs and Excise Commissioners [2002] STC 588 in which the Court of Appeal indicated that it would be by no means disproportionate to seize and not to restore excise goods brought into the country for onward sale at cost, and that it would not be disproportionate or unreasonable to seize vehicles used for the transport of goods, although when the Respondents were considering whether or not to restore such vehicles, factors such as the scale of the importation, and whether the traveller had had property seized for similar reasons on a previous occasion would be relevant. The Commissioners' subsequent policy, which again has been considered by this tribunal and the higher courts, is to restore vehicles used by "first time offenders" for the importation of goods for distribution at cost to friends and family on terms which, broadly speaking consist of the payment of the duty sought to be evaded, or the value of the vehicle, whichever is the less. That is precisely the policy which has been applied here: Mr Lawson's vehicle was offered to him for its value since that amounted to less than the duty evaded of £5,011.62. The policy is not, in our view, unreasonable or unfair. It is designed to protect United Kingdom revenues, and to protect also the interests of legitimate traders selling excise goods on which UK duty has been paid. We accept that the policy must be harsh if it is to achieve its objective of deterring those who break the law.

9. We can allow Mr Lawson's appeal only if we are satisfied that Mr Morgan's decision to uphold the refusal of the goods, and to confirm the offer to restore his vehicle to him for the payment of its value, was unreasonable. That is the extent of the tribunal's jurisdiction: see section 16(4) of the Finance Act 1994. It is quite impossible to say that Mr Mogan's conclusion was unreasonable; on the contrary, we think it was both reasonable and justified.

10. In those circumstances we are unanimous that the appeal must be dismissed.

    COLIN BISHOPP

    CHAIRMAN

    Release Date: 24 February 2005

    MAN/04/8082