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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 >> McCash v Customs and Excise [2005] UKVAT(Excise) E00862 (30 March 2005)
URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2005/E00862.html
Cite as: [2005] UKVAT(Excise) E862, [2005] UKVAT(Excise) E00862
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- Section 49(1) of the Customs and Excise Management Act (CEMA 1979) which provides for the forfeiture of goods improperly imported.
- Section 141(1)(a) CEMA 1979 which provides for the forfeiture of any vehicle used in the transportation of such goods.
- Section 141(1)(b) CEMA 1979 which provides for the forfeiture of any other thing mixed, packed or found with such goods.
- Section 139(1) CEMA 1979 which provides for the seizure of such goods.
- Para 5 Schedule 3 CEMA 1979 which provides that where no proceedings are taken against the forfeiture decision, such goods are treated as condemned.
- Section 152(b) CEMA 1979 which provides the discretionary power for the Commissioners to restore such goods subject to such conditions as they think proper.
- Article 202 of Council Regulation EEC No 2913/92 which provides for the law relating to excise duty application on importation to the EU to carry forward to any person acquiring or holding the goods who was aware or should have been aware at the time of acquiring or receiving the goods that they had been introduced unlawfully.
- Article 1 Protocol 1 of the European Convention on Human Rights (ECHR).
- Section 16 (4)(b) Finance Act 1994 which provides jurisdiction to this Tribunal where it is satisfied the Commissioners decision on an ancillary matter is unreasonable to require the Commissioners to conduct a further review of the original decision.
- Schedule 5 paragraph 2(1)(r) of the Finance Act 1979 which provides the jurisdiction for this Tribunal in relation to "ancillary matters".
- Gora v Commissioners of Customs & Excise [2003] EWCA CIV 525 (Gora) in respect of which this case had been held over until the Human Rights issue in relation to the jurisdiction of this Tribunal was determined. The finding of the court was that this Tribunal complied with ECHR. In addition on the matter of whether this Tribunal is required to make a finding that duty was unpaid on the goods, the court determined that where goods are forfeit and the forfeiture is not challenged the owner is prevented from claiming in a Tribunal that duty has been paid, because he is then challenging the forfeiture.
- Lett v Commissioners of Customs & Excise – Excise Decision No E00200 (Lett) which at paragraph 76 quotes the 3 questions to be considered by the Tribunal in restoration appeals, with reference to Article 1 of Protocol 1 of ECHR.
- Richell v Commissioners of Customs & Excise – Excise Decision No E00190 (Richell) which condones the entitlement of the Commissioners to have policies affecting restoration entitlement and finds the policy applied in Richell does not fetter their discretion.
- Vehicle Salvage Group Ltd v Commissioners of Customs and Excise – Excise Decision No E00604 (Vehicle Salvage Group) which found in favour of the Commissioners where they applied a policy so that where a person was detected misusing rebated fuel and has a previous road fuel offence they may be treated as a persistent offender.
- Lindsay v Commissioners of Customs & Excise [2002] EWCA CIV 267 (Lindsay) where it was held that a different attitude should be taken by the Commissioners to persons who are making a profit from excise goods, duty unpaid, from those not making a profit. It was also held that where the importation was not for profit the principle of proportionality required each case to be considered on its merit.
- Ayuk Ates v Commissioners of Customs & Excise – Excise Duties Case No E00188 where a vehicle was used without permission.
- Christopher Entwistle and another v Commissioners of Customs & Excise – Excise Duties Case No E000556 which concerned personal reliefs available.
- Rainbow and another v Commissioners of Customs & Excise – Excise Duties Case No E00383 which concerned proportionality.
- Tracie Lorraine Oldland v Commissioners of Customs & Excise – Excise Duties Case No E008073 which related to proportionality and a special claim of hardship.
- John Clarke v Commissioners of Customs & Excise – Excise Duties Case No E00242 which concerned ignorance of the owner of the vehicle that it was to be used for smuggling, and seizure from the borrower.
- Phillip Shergal v Commissioners of Customs & Excise – Excise Duties Case No E00768 which concerned a re-review which a Tribunal had ordered to be carried out by an officer who had not previously been involved in this case and the re-reviewing officer had previously been involved.
- That Mr Roderick McCash, the Appellant is unemployed and has been for some years.
- His daughter Alanah, assisted by his wife Helen ran a second-hand furniture business dealing mainly in electrical goods at 61 Albert Street, Dundee. The Appellant assisted on a random basis by Mr George Duncan would attend various houses to assess electrical items or furniture for purchase. Mr Duncan would assist on occasions where goods were heavy. Mr Duncan would also go to houses himself using the Appellant's vehicle with funds provided by the Appellant or his wife Helen or daughter Alanah to assess and buy goods. If he needed help with lifting goods one of the Appellant's sons-in-law would help.
- The Appellant went to the shop at 61 Albert Street on a regular basis to keep his wife company as his daughter had Crohn's Disease and could not always attend the shop, as she was sometimes unwell.
- In 1999 the Commissioners became aware that cigarettes and tobacco were being retailed at 61 Albert Street. On 24 April 1999 the Appellant was found in possession of excise goods duty unpaid namely cigarettes and hand rolling tobacco in which he was dealing commercially from the premises at 61 Albert Street. These goods and a Fiat van M315 WSN (the Fiat van) were seized from him then. The vehicle was subsequently restored subject to a penalty. The goods were 32.5 kg of hand rolling tobacco and approximately 15,000 cigarettes found after a search in the Appellant's house, the shop at 61 Albert Street, and the Fiat van. 1,740 cigarettes and 12.5 kg of hand rolling tobacco were able to be identified with the Fiat van. The Fiat van was restored on payment of £1,300.
- Acting on anonymous information that excise duty unpaid cigarettes and tobacco were again being sold from the premises at 61 Albert Street, on 26 July 2000 two of the Commissioners' officers called at 61 Albert Street. The Appellant was present. The Commissioners' officers requested permission to search the Appellant's premises and vehicle to which he consented [Note: failing consent the officers carry a warrant authorising such a search without consent]. The officers found no excise goods on the premises but did find excise goods namely 400 Charlie Lux American Blend cigarettes and 360 Buckingham Superking Lights cigarettes in the Appellant's vehicle, the said Land Rover.
- Charlie Lux American Blend cigarettes are not sold in the United Kingdom. The particular cigarettes did not have an EU Tax stamp. They did not carry the UK health warning. The Buckingham cigarettes are also not available in the UK but are available in the EU. The Appellant offered no evidence to the officers of duty being paid on the cigarettes on entry to the UK.
- Mr George Duncan gave evidence that the cigarettes were his which he had purchased from a person on whom he called to value furniture on 25 July 2000. He did not provide the name and address of the person during his evidence, nor had he given it to the Commissioners at any time prior to the Hearing. The Appellant had stated to the Commissioners' officers who seized the vehicle that the cigarettes were not his but also stated he did not know who put them in the vehicle. From the evidence I find the Appellant had allowed Mr Duncan to drive his vehicle on 25 July 2000. He could have disclosed this at the time of the seizure thereby allowing the officers the opportunity of investigating the possibility of the cigarettes not being his. He did not. In addition the Appellant was served seizure information (Tab 6) by the Commissioners that the goods referred to namely the cigarettes and vehicle were liable to seizure. The seizure information letter requests the addressee who was the Appellant to pass it to the owner of the goods, if he is not the owner. He did not pass the form to Mr Duncan. I also find that the forfeiture of the goods was accepted by the Appellant and no request to restore the cigarettes was made. The Appellant had the benefit of legal advice on this whole matter.
- Mr Duncan claimed to have acquired 800 cigarettes and to have removed 2 packets leaving 760 in the car. He also gave evidence that he was an unpaid helper who was given an item here and there as reward. I find he purchased these goods as he stated. I find he purchased these as he would purchase furniture or electrical goods using the Appellant's vehicle and funds, on the Appellant's behalf and with the Appellant's knowledge. Mr Duncan had no use for cigarettes. He does not smoke cigarettes or tobacco. He offered no reason which was credible for leaving the cigarettes in the vehicle. I did not believe he had paid a market price for the cigarettes as he claimed. He described the person selling them to him as desperate; someone for whom he was doing a favour taking the cigarettes off him. I did not believe that Mr Duncan considered the seller of the cigarettes had obtained them legitimately excise duty paid. It would have been simple to check. It would certainly have been simple for the Commissioners' officers to check had they been offered the necessary information earlier than at the Tribunal. I therefore find the Appellant was the owner of the cigarettes. He was the registered keeper of the vehicle. He knew Mr Duncan using his vehicle with his money made purchases on his behalf. The Appellant had already been involved in retailing cigarettes and hand rolling tobacco not legitimately obtained.
- In the request for a review of the initial decision not to restore the vehicle the Appellant through his agent continued the argument that he did not know who put the cigarettes in the vehicle. His agent also asked the Commissioners to consider the proportionality of the offence as the cigarettes amounted to only 760 in number. However the Appellant offered no value for this vehicle then, nor did he justify the request or show exceptional circumstances.
- Although the review request was outside the statutory time limit, Mr Sked the Reviewing Officer admitted the request for review.
- No further information was provided by the Appellant for that review. The Appellant's agent asked Mr Sked for more information about the seizure and claimed no reasons had been given. I find Mr Caddell the officer who refused the restoration on 31/08/00 made it clear that the reason for the seizure was that the vehicle was carrying excise goods on which duty was unpaid. At that time the burden lay with the Appellant to show the duty was paid.
- At the Tribunal the Appellant stated he had paid £7,000 for the Land Rover to his nephew who had restored the vehicle. On further questioning about the source of funds for such a payment the Appellant claimed to have received the money from his wife who had sold a business. He did not and would not disclose the sale price. Later in his evidence he stated he paid his nephew £4,000 in a first payment and the balance in later instalments. No receipt for the vehicle was produced. I did not believe the Appellant had paid £7,000 for the vehicle. I found his answers to the questions about payment for the vehicle inconsistent and evasive I find the value was not determined, and was not relevant.
- Mr Sked was the Reviewing Officer. His review decision is at Tab 5. He considered the following matters:
- 1 That the Appellant was found in possession of American cigarettes not available in the EU. That the other cigarettes mixed with them are not generally available in the UK, but are available in some EU countries. Both lots of cigarettes had been imported. No excise duty was proved to have been paid on these goods.
- 2 That the goods were in a vehicle belonging to the Appellant.
- 3 That the Appellant had a previous seizure and restoration of a vehicle involved in transporting excise goods duty unpaid. The seizure in April 1999 occurred following evidence of the retail of excise goods duty unpaid at 61 Albert Street, Dundee.
- 4 The Commissioners had anonymous information this retailing was re-occurring and had conducted a search of the premises and vehicle on this information, on 26 July 2000.
- 5 The Appellant had denied ownership of the goods but offered no explanation of who owned the goods or how they came into his possession. Mr Sked believed the goods were the Appellant's in the absence of evidence to the contrary. He knew the Appellant was not always truthful having taken into account the previous offence including the record of interview of the Appellant in connection with that offence, at Tab 8.
- 6 He took account of the Commissioners policy that following seizure where there is evidence of previous smuggling or failure to comply with legal requirements that the person knew what they were doing was wrong and that the goods were for a commercial purpose, the vehicle would not be restored.
- Mr Sked did not take into account the possibility of another person owning the goods as that other person was not ever identified to him. I find from his evidence that if that had been disclosed he would still have been required to be satisfied the goods were duty paid before reconsidering his decision in light of the history in this case where the quantity seized on the first occasion was very large. Current policy on restoration could have allowed an offer of restoration for a penalty had the first offence been in respect of a very small amount of goods.
- In addition since the goods were in the Appellant's possession at the time of seizure, if duty is unpaid, that responsibility for payment of duty rests with a subsequent holder. He had explained that in his review letter. In respect of the seizure of the first vehicle the Appellant paid the penalty and the car was uplifted by Mr Duncan's wife although the car belonged to another person altogether.
- Mr Sked still believed that the cigarettes were the Appellant's despite today's evidence.
- Mr Sked did not take proportionality into consideration when reviewing this case due to the seizure being the second seizure. In addition he was not reviewing a seizure on importation. This was a seizure from a person known to deal in excise goods duty unpaid. The quantity specified in the Excise Duties (Personal Reliefs Order) 1992 were not relevant as these goods were not cross-border community imports of excise goods duty paid from another EU country, nor would the Buckingham Lights which may have been an EU import be so treated as they were mixed like the Charlie Lux American Blend which could not be. These excise goods duty unpaid were not therefore exempt from forfeiture. Mr Sked regretted that he had perhaps not explained in his letter of review that he had not taken proportionality into consideration for that reason. No special circumstances applied to the Appellant which might have allowed Mr Sked to exercise his discretion in favour of the Appellant.
EO0862
Excise Duty – Car used in carriage of goods – owner of car has previous offence – goods and car forfeit – no restoration of goods requested – whether reasonable not to restore car – whether Tribunal should send back for further review – appeal refused.
EDINBURGH TRIBUNAL CENTRE
RODERICK MCCASH Appellant
- and -
Tribunal: (Chairman): Mrs G Pritchard, BL., MBA., WS
for the Appellant Mr Devine, Muir Myles Laverty
for the Respondents Mrs Joanna Clark, Shepherd & Wedderburn, WS
© CROWN COPYRIGHT 2005.
This is an appeal against the Commissioners decision dated 15 January 2001 upholding a previous decision of the Commissioners dated 31/08/00 not to restore a vehicle namely a Land Rover C716 AST, which had been seized on 26 July 2000.
Mr Roderick McCash the Appellant was represented by Mr Devine of Muir Myles Laverty. The Appellant and Mr George Duncan gave evidence. The Commissioners were represented by Mrs Joanna Clark, Solicitor, Shepherd & Wedderburn. Mr Ian Sked the Commissioners Reviewing Officer gave evidence. A bundle of documents was produced by the Commissioners and was relied on by both parties. Where reference is made to any document in the bundle the appropriate "tab number" will be given and the document will be treated as repeated here. Already in the possession of the Tribunal was a letter dated 8 November 2004 from Muir Myles Laverty to the Tribunal giving details of the witnesses only one of whom attended and gave evidence namely Mr George Duncan.
The Law used in this Decision
The Statutory Provisions
Case Law
I was referred by either or both parties to the following cases which I considered relevant:
I also make reference to:
I was also referred to the following cases by the Appellant's agent which I did not consider relevant or helpful:
Findings in Fact
From the evidence I find the following admitted or proved facts:
Although the Appellant's agent requested the policy guidelines to which Mr Caddell had referred in his letter, the law itself is clear. Restoration is at the discretion of the Commissioners, as the statutory position is forfeiture on discovery. The Appellant had already been through the whole procedure before, and was legally advised in relation to the previous seizure as well as being advised by Mr Devine on this occasion. Indeed the letter of 23 November 2000 (Tab 2) from the Appellant's agent makes an offer for the restoration to be subject to penalty.
Reasons
I found the Appellant evasive in his answers to the Commissioner's officers at the time of questioning on the date of seizure. I also found him evasive as a witness at the Tribunal. I am satisfied that the cigarettes were the Appellant's, purchased on his behalf by Mr George Duncan, and were left in the Appellant's vehicle which had been used by Mr Duncan to obtain the goods. Mr Duncan's evidence was credible in respect of the use of the vehicle and purchase of the cigarettes but not in respect of the ownership of the cigarettes. I believe he went out on a purchasing exercise, as was the usual arrangement between him and the Appellant. He used the Appellant's vehicle and funds for the purpose of travelling to the house to assess goods and where successful transport the goods back to 61 Albert Street. It is significant that his evidence was that he received funds from the Appellant, his wife or daughter. The Appellant had no interest in the legitimate business. He regularly left the vehicle in the area behind the shop for the Appellant's further use. He did exactly that having purchased cigarettes on 25 July 2000, as he stated. He does not smoke. I did not believe that had paid a commercial rate for the cigarettes, nor did I believe that he considered them a legitimate purchase. Had that been the case his protest at the time of the seizure at which he claimed to be present would have been forceful. There was no evidence of his offering this information at the time, in the seizing officers' notebooks, nor was he identified by the Appellant or his agent to the Commissioners until the Hearing. He appeared well able to argue his case in the witness box but it did seem somewhat late and very lame to expect to be believed, on the legitimacy of the purchase. No check could be made on the source of the cigarettes. Mr Duncan knew of the Appellant's previous difficulties. His wife Isabelle Duncan was also involved then as she collected the Fiat van from the Commissioners once the previous restoration penalty was agreed. There was no innocence and no lack of knowledge in any of the evidence, with regard to risk. Both the Appellant and Mr Duncan were aware of the consequences of their actions. I am confirmed in this assessment of them by the fact that no restoration of the goods was claimed. Neither man smoked cigarettes. I therefore believed the cigarettes were obtained for commercial re-sale for profit. This was not denied at any time. In Gora it was determined that in any event once the excise duty unpaid goods are forfeit, the Appellant cannot at the Tribunal have the opportunity to claim that duty was paid. I allowed evidence on this only because the Appellant had suggested the goods were not his at the time of the seizure. The Commissioners did not have any opportunity before the tribunal itself to know what evidence there was to substantiate that. So far as this matter is concerned, I am following Gora.
I had regard to the matter of the Appellant's Human Rights. As suggested by his agent the seizure and forfeiture of a person's goods constitute a deprivation of his possessions in terms of Article 1 Protocol 1 of ECHR. Seizure and forfeiture is entirely justifiable if it is in the public interest in securing payment of taxes. In this case Mr Sked advised he did not consider proportionality because of the Appellant's history of commercial re-sale for profit of excise goods duty unpaid at 61 Albert Street. The test for this Tribunal is laid out in Section 16(4) of the Finance Act 1979. I am following guidance laid out in Lindsay to which I was not referred by either party but to which I have regard as a leading case in these circumstances. Lord Phillips, in his judgment distinguishes between importation for personal use and use by family and friends and commercial smuggling. He states at paragraph 63:
"…. those who deliberately use their car to further fraudulent commercial ventures in the knowledge that if they are caught their cars will be rendered liable to forfeiture cannot reasonably be heard to complain if they lose their vehicles. Nor does it seem to me that, in such circumstances, the value of the car used need be taken into consideration. Those circumstances will normally take the case beyond the threshold where that factor can carry significant weight in the balance ….."
I had no difficulty therefore with Mr Sked's understanding that the Appellant's behaviour warranted the "use it and lose it" approach. I am satisfied that the seizure of the vehicle was a proportionate response to a persistent offender as found in Vehicle Salvage Group. The tests set out in Lett have been well met by the Commissioners. I am satisfied the Commissioners reached a decision which was reasonable in all the circumstances. I am satisfied the Commissioners took into account all relevant considerations in this case and that they left out of account all irrelevant considerations. I was very impressed by Mr Sked's detailed knowledge of the law and the care which he had taken. I believe that the seizure of the vehicle in the circumstances is a proportionate response to deter the retail activities in respect of excise goods duty unpaid at 61 Albert Street, Dundee.
Decision
The appeal is therefore dismissed.
Expenses
At the conclusion of her submissions Mrs Clark advised that the Commissioners would not seek expenses in the event of success. No expenses are found due to or by either party.
EDN/01/8003