United Kingdom VAT & Duties Tribunals (Excise) Decisions

LONDON TRIBUNAL CENTRE

LINDA HILL Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: MICHAEL TILDESLEY (Chairman)

CHRIS PERRY C.ENG MICE (Member)

PAUL ADAMS FCA (Member)

Sitting in public in Plymouth on 24 February 2005

The Appellant appeared in person

Sarabjit Singh, Counsel instructed by the Solicitor for the Customs and Excise, for the Respondents

© CROWN COPYRIGHT 2005

DECISION

The Appeal

1. The Appellant is appealing against the decision of the Respondents on review dated 21 February 2003 to refuse to restore a Rover 620 SI motor vehicle, registration number L 187 GTF, (hereinafter referred to as "the vehicle"). Her ground of Appeal is that she is being penalised for the actions of Mr Birks.

The Issue

2. On 23 April 2001 Customs Officers at Dover Hoverport observed a person fitting the description of Michael Slade placing a number of white carriers bag in the boot of a Ford Fiesta motor car which had been reported stolen. Police Officers later located the stolen Ford Fiesta parked unattended in St Margarets Country Club, Holiday Village, Kent. The Club Manager told the police officers that the Ford Fiesta was registered to chalet 60, which was occupied by the Appellant, Michael Slade and Phillip Birks. The Appellant cared for Mr Birks who was well known to the Respondents for importing excise goods without paying the correct amount of duty. The police and later on Customs Officers carried out searches of the chalet and the Appellant's vehicle (the Rover 620 SI motor vehicle, registration number L 187 GTF) which was parked outside. Customs Officers seized 22 kilograms of hand rolling tobacco from within the chalet, 25 kilograms of tobacco from the boot of "the vehicle" and "the vehicle" itself. The packets of tobacco were in white carrier bags.
3. The Appellant contended that she was not involved with the smuggling of the seized tobacco and did not know that the tobacco had been placed in the boot of her vehicle. The Respondents, on the other hand, submitted that the Appellant was either knowingly involved or been reckless in allowing "the vehicle" to be used for the smuggling operation and if so the decision not to restore "the vehicle" was reasonable and proportionate.
4. The issue to be decided is the level of the Appellant's knowledge and involvement, if any, with the smuggling of the seized tobacco which in turn will determine the reasonableness of the decision not to restore "the vehicle".
5. The Tribunal proceeded on the basis that the tobacco found in "the vehicle" was intended for a commercial purpose.

The Evidence

6. The Tribunal heard evidence on oath from:

(1) Linda Hill, the Appellant;

(2) Graham Crouch, the Review Officer for the Respondents.

7. A bundle of documents was presented to the Tribunal.

Review Officer's Findings

8. Mr Crouch concluded that the Appellant was actively involved in the improper importation of excise goods into the United Kingdom. He relied on the following facts:

(1) The large amount of hand rolling tobacco seized.

(2) The Appellant was in a longstanding relationship with Mr Birks. She knew that on previous occasions Customs and Excise had seized excise goods from him. Mr Birks' premises have been searched on at least two occasions by Customs and Excise which resulted in a seizure of 10.20 kilograms of hand rolling tobacco in March 1998. In addition excise goods had been seized from him on his return to the United Kingdom on three occasions prior to 23 April 2001. Mr Birks did not challenge the seizures before the Magistrates' Courts or the Tribunal.

(3) The tobacco was not hidden from view in the chalet and that the Appellant must have known that the tobacco was in the chalet and in her car.

(4) The Appellant's and Mr Slade's passports were found in "the vehicle" which suggested that the Appellant intended to travel or had travelled to the continent for the purpose of assisting Mr Birks with his activities in the improper importation of excise goods.

(5) The Appellant's disregard of the law following her admission that she had driven "the vehicle" in breach of the conditions attached to a provisional driving licence.

9. Mr Crouch noted that the trade value of "the vehicle" was less than the revenue evaded on the seized tobacco (£2,904.30). In those circumstances he considered that the non-restoration of the vehicle was fair and proportionate.
10. Mr Crouch found that the Appellant suffered no exceptional hardship as a result of the seizure of "the vehicle". At the time she was a provisional driving licence holder and was unable to drive "the vehicle" unaccompanied. Although she worked unsocial hours, her predicament was no different from many people employed for similar hours and having no vehicle to rely upon.
11. Mr Crouch confirmed in his evidence that the Respondents had no record of "the vehicle" crossing the Channel. However, he added that the "automatic number plate recorder" was not always in operation on the Shuttle.
12. No criminal proceedings had been taken against Mr Birks and Mr Slade in respect of this incident. They had not requested restoration of the hand rolling tobacco.

Appellant's Evidence

13. In early 2001 the Appellant gained a job with Mencap which was about 12 miles from her home and required her to work unsocial hours. The Appellant purchased "the vehicle" with her son about one week before it was seized. They paid £1,900 for "the vehicle" to Mr Duggan, a friend of Mr Birks. The Appellant intended to use "the vehicle" for travelling to work whilst her son would have use of it when visiting from Australia. The Appellant held a provisional driving licence in April 2001. She passed her driving test in September 2001.
14. The Appellant has known Mr Birks for about 20 years. Originally they were a couple but this relationship ended about eight years ago. Since then the Appellant has cared for Mr Birks who suffers from diabetes requiring insulin twice daily. Mr Birks visited Dover regularly because his daughter and grandchildren live there. The Appellant was friendly with Mr Birks' daughter. The Appellant accepted that she knew that Customs and Excise had seized excise goods from Mr Birks on previous occasions.
15. The Appellant lived in Ilfracombe. On the evening of 22 April 2001 she received a telephone call from Mr Birks who had an argument and a fight with a person in Dover. Mr Birks had journeyed to Kent to visit his daughter and grandchildren. He had been there for about ten days prior to the 22 April and was staying at St Margarets Holiday Park. The Appellant did not know how Mr Birks had travelled to Kent As a result of the phone call the Appellant was concerned for Mr Birks' welfare because he was not a well man and suffered from diabetes. She decided that she would drive to Dover that evening and bring him home. The Appellant did not get in touch with Mr Birks' daughter to share her concerns. The Appellant contacted a friend who promised to accompany her on the journey as the friend was a qualified driver. Unfortunately her friend failed to turn up with the result that the Appellant decided to drive to Dover unsupervised. She left Ilfracombe at about 2am on 23 April 2001, reaching St Margarets Bay after about five hours of driving along the M5, M4 and M25.
16. The Appellant had been to Dover on previous occasions with Mr Birks but not to St Margarets Bay chalets. She told the Tribunal that it was Mr Birks who informed her by mobile phone that he was in Chalet 60 and how to get there. Later in her evidence the Appellant said that she had gone to the Holiday Park Reception to discover which chalet Mr Birks was staying in. On arrival at the chalet she immediately went to bed. She woke about 12 midday and told Mr Birks that she was going to take him back to Ilfracombe. The Appellant did not take Mr Birks home straightaway because she was now in a position to monitor the situation. She discovered that Mr Birks had rented the chalet with a Mr Slade who she had never met before. The Appellant tidied up the chalet but did not go into Mr Slade's bedroom. In the afternoon the Appellant gave Mr Birks permission to use her car to do some shopping in Dover. He was not away long and returned with the shopping. The Appellant denied that Mr Birks would have had time during the shopping expedition to travel to France to buy excise goods, although she accepted that the Shuttle took about 30 minutes to cross the Channel. Mr Birks and Mr Slade then went to the clubhouse to have a drink, the Appellant remained in the chalet. In the meantime Mr Slade's son turned up in the Ford Fiesta motor vehicle which was later found to be stolen. He joined his father in the clubhouse. The Appellant could not recall in evidence the timing of the various events occurring on the afternoon and evening of the 23 April 2001.
17. At about 11pm police officers arrived at the chalet and questioned the Appellant about the stolen car parked outside. The Appellant told the officers that the car belonged to Mr Birks, however, the Appellant accepted in evidence that she was initially evasive with her responses to the police. The police conducted a search of the chalet and found hand rolling tobacco in Mr Slade's bedroom. The police informed Customs and Excise whose officers later turned up at the chalet seizing the tobacco found there. They also searched "the vehicle" belonging to the Appellant where they found a large quantity of hand rolling tobacco in the boot and two passports in the names of the Appellant and Michael Slade together with a gold key. Customs and Excise officers seized "the vehicle" and the tobacco.
18. The Appellant did not know of the existence of the hand rolling tobacco in the boot of her "vehicle" and in the chalet. She did, however, accept in interview with Customs and Excise officers on 26 July 2002 that she surmised that there was tobacco somewhere because Mr Birks had been in trouble before and by the way that he and Mr Slade were talking in the chalet. The Appellant could not explain why her passport was found with Mr Slade's passport in her "vehicle". The Appellant stated in evidence that she always carried her passport with her. She denied that she took the passport with her to travel to France. The Appellant insisted that she had not travelled to France with Mr Birks in April 2001. She pointed out that the Respondents had no record of her "motor vehicle" going across the Channel. She also referred to the fact that the Respondents had not recorded that her coat was in the "vehicle" when it was seized.
19. Following the seizure of her "vehicle" she purchased an old car from an auction for £80 to get to and from work. The Appellant has since purchased another car for about £1,500. She needed a car to get to work. The buses from home to work run every hour. She worked anti-social hours and her salary was relatively low at about £10,000 per annum.

Jurisdiction of the Tribunal

20. The Respondents' power regarding restoration of goods which have been forfeited or seized is set out under 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.

21. 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".

22. 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 powers regarding restoration of goods. The findings of fact include blameworthiness, the proportionality of the penalty imposed to the policy aims pursued having full regard to the individual circumstances of the case and exceptional hardship. 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 Facts found by the Tribunal

23. The Appellant insisted that she had no knowledge of the tobacco in the boot of her "vehicle". She was adamant that she was not involved with the importation activities of Mr Birks. The Appellant has persisted with her application for restoration of her "vehicle" for four years. In her view if she had been guilty of any infringement she would have given up a long time ago. The Appellant acknowledged that she could not recall all the details of the events of 22/23 April 2001 because of the passage of time. Whilst we accept the fallibility of recalling events after four years, our task is to evaluate the plausibility of the Appellant's assertion that she had no knowledge of the tobacco and the activities of Mr Birks and Mr Slade on the dates in question against the evidence heard at the Tribunal hearing.
24. The Appellant accepted before the Tribunal that she told the Customs and Excise officers in interview on 26 July 2002 that she surmised that Mr Birks and Mr Slade had brought in some tobacco from the Continent by the way they were talking. The Appellant confirmed that this "talking" occurred when she arrived at St Margarets Bay prior to the visit from the police officers. Further the Appellant acknowledged that she was aware that the Respondents had seized excise goods from Mr Birks on occasions previous to the events in April 2001.
25. The Appellant queried why the Respondents had not interviewed Mr Birks and Mr Slade about the incident. She considered that they were the people who should be asked to explain about the tobacco importation not her. The Respondents had no record of interview with Mr Birks and Mr Slade because they had not asked for restoration of the seized excise goods. The Tribunal, however, considers that the Appellant could have called Mr Birks as witness or at least obtain a letter from him to clarify her involvement in the incident.
26. The Appellant took enormous risks in travelling to St Margarets Bay in the early hours of the morning of 23 April 2003. She was an inexperienced driver having not passed her driving test. The Appellant was not familiar with her "vehicle", having purchased it only one week before. She drove it at night when she must have been tired because on her evidence she immediately went to bed on arrival at the holiday park. The Appellant was exposing herself not only to risk of prosecution for failing to comply with her provisional driving licence conditions and not complying with the terms of her vehicle insurance but also risking her life by making such a journey on her own. We consider that a person would only take such risks if there was a real emergency. However, after having slept in the chalet, the Appellant did not immediately bring Mr Birks home. She was content for him to borrow her "vehicle" and for him to have a drink with Mr Slade in the clubhouse despite the fact that recently he had been in an argument and fight. Before making the journey the Appellant did not contact Mr Birks' daughter about her concerns for her father. The daughter was in her thirties, lived in Dover and friendly with the Appellant. The Appellant gave contradictory evidence about how she knew the chalet where Mr Birks was and could not recall the timings of the events on 23 April 2001.
27. We find on the evidence that the Appellant's version of her journey and events on 23 April contradictory and implausible. We note that the Appellant was not sure how Mr Birks had travelled to St Margarets Bay and that she purchased "the motor vehicle" from a friend of Mr Birks. Further there appeared to be no other vehicle parked outside chalet 60 except the stolen vehicle driven by Mr Slade's son. In our view the more plausible explanation is that Mr Birks and the Appellant travelled together to St Margarets Bay in her "vehicle" sometime before 22 April 2001.
28. The Appellant's and Mr Slade's passports were in her vehicle together with a large quantity of tobacco in the boot when "the vehicle" was seized by Customs and Excise officers. The Appellant has offered no explanation for why the two passports and the tobacco were in her vehicle. The Appellant was aware from Mr Crouch's review that the discovery of the passports together with the tobacco constituted very damaging evidence against her. The burden was upon the Appellant to convince the Tribunal on the balance of probabilities that she knew nothing of the illegal tobacco importation. The Appellant was in a position to call either Mr Birks or Mr Slade to explain why Mr Slade's passport and the tobacco were in her vehicle, but she has not called them to give evidence on her behalf. In the absence of an explanation we are entitled to draw the obvious inference from the presence of the two passports and the tobacco in her vehicle that she was involved with Mr Slade with the illegal importation of the tobacco.
29. We conclude from our findings of fact that the Appellant knew that Mr Birks and Mr Slade were involved in the illegal importation of excise goods. Further we are satisfied that there was a strong probability that the Appellant had used or allowed her "motor vehicle" to be used in the importation of excise goods found in the chalet.
30. The Appellant was able to purchase another motor vehicle after the seizure of her vehicle and continue with her employment. The Appellant put forward no compelling evidence that she suffered exceptional hardship arising from the seizure of her "motor vehicle".

Was the Respondents' Review decision Reasonable?

31. Our findings of fact correspond with Mr Crouch's findings and conclusions. We, therefore, conclude that the Review Officer's decision of 21 February 2003 was reasonably arrived at within the meaning of section 16(4) of the Finance Act 1994.

Our Decision

32. In view of our finding that the Respondents' decision 21 February 2003 was reasonably arrived at, we dismiss the Appeal. We make no order for costs.

MICHAEL TILDESLEY

CHAIRMAN

RELEASE DATE: 1 April 2005

LON/03/8077