United Kingdom VAT & Duties Tribunals (Excise) Decisions

Tribunal: Michael Tildesley (Chairman)

Mohammed Farooq

Sitting in public in Birmingham on 28 January 2005

The Appellants appeared in person

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

© CROWN COPYRIGHT 2005

DECISION

The Appeal of Mr Frost

1. Mr Frost appealed against the decision on review dated 28 July 2004 to refuse restoration of excise goods namely 12 kilograms of Golden Virginia hand rolling tobacco, 2600 Embassy cigarettes, 30 bottles of wine, one bottle of vodka and one bottle of champagne.
2. Mr Frost's grounds of Appeal were that the Review Officer's reasons for refusing restoration were unjust and unfounded. Further Mr Frost claimed that the excise goods brought in were for personal use and distribution at cost to close members of his family.

The Appeal of Mr Mason

3. Mr Mason appealed against the decision on review dated 28 July 2004 to refuse restoration of his motor vehicle (Vauxhall Vectra, registration number VK51 YNA).
4. Mr Mason's grounds of Appeal were that the excise goods seized with the motor vehicle were for personal use and distribution to family and friends. Further Mr Mason required his car to care for his father and one of his grandchildren.

The Issues in Dispute

5. The principal issue in dispute was whether the Review Officer's decision to refuse restoration was reasonable. The Appellants have to demonstrate on the balance of probabilities that the Review Officer had acted in a way in which no reasonable panel of Commissioners could have acted; in that she took into account some irrelevant matter or disregarded something to which she should have given weight.
6. Mr Frost contended that the Review Officers' decision to refuse restoration of excise goods was based on peripheral matters. She did not consider his intended use for the excise goods.
7. Mr Mason argued that the Review Officers' decision to refuse restoration of his motor vehicle was disproportionate. He did not supply the excise goods for profit. Further she failed to take account of the exceptional hardship occasioned to him and his wife by the loss of his car.

The Evidence

8. We received evidence upon oath from Mr Frost and Mr Mason, the Appellants. We received the witness statements of Julie Wiggs, the Review Officer, Paul Bassant and David Woolard (Customs and Excise Officers who stopped the Appellants). The statements had been previously served upon the Appellants.

Background

9. In early May 2004 Mr Mason delivered goods to the company where Mr Frost worked when they arranged to travel together to France and Belgium to purchase excise goods. Originally a Mr Morgan was to travel with them as well but he dropped out at the last moment. On the evening of 7 May 2004 Mr Mason picked up Mr Frost at Cheltenham and drove to Dover in Mr Mason's car where they caught the Shuttle. Mr Frost paid in advance for the Shuttle which cost £56.93. Mr Mason agreed to pay for the diesel estimated to be in the region of £60. After crossing the Channel they first travelled to Adinkirke, Belgium where they purchased tobacco and cigarettes. They each bought two boxes of hand rolling tobacco because the second box came with an offer of a free bottle of spirits. They returned to France to buy the wine. Customs Officers stopped the Appellants at Coquelles at about 10am on 8 May 2004. The Appellants each paid about £930 for the excise goods. After interviewing the Appellants separately the Officers seized the following excise goods and Mr Mason's motor car because they considered the excise goods had been purchased for commercial purposes:

? 12 kilograms of hand rolling tobacco, 2600 Embassy cigarettes, 30 bottles of wine, one litre bottle of vodka and 18 litres of ESP beer belonging to Mr Frost.

? 12 kilograms of hand rolling tobacco, 500 grams of Samson hand rolling tobacco, 1,400 Lambert and Butler cigarettes, 200 Silk Cut cigarettes, 600 Superkings cigarettes, four and one half litres of sparkling wine, one litre of whisky belonging to Mr Mason.

10. The Appellants did not apply to the Magistrates' Courts to challenge the seizure of the excise goods and car. Mr Frost told the Tribunal that he found Customs Notice 12A (October 2002) confusing about the two Appeal routes. He eventually chose the "restoration route". Respondents' counsel did not raise the "abuse of process" argument, which questions the Tribunal's jurisdiction to determine whether the Appellants purchased the excise goods for their own use.
11. Respondents' counsel conceded that the Appellants did not embark on a joint enterprise. Therefore, it was appropriate for the Tribunal to deal with their Appeals separately.

Review Decision for Mr Frost

12. Ms Julie Wiggs noted that Mr Frost did not challenge the legality of the seizure of the excise goods before the Magistrates' Courts, and therefore he was not entitled to claim that the excise goods were for own use.
13. Mr Frost admitted that he received money for some of the excise goods.
14. Mr Frost failed to mention straightaway in interview with the Customs Officer about his purchases of alcohol. It was necessary for the Officer to ask him a specific question before Mr Frost volunteered the required information. Ms Wiggs concluded that the Appellants had given vague replies about the payment for and the ownership of the alcohol purchased.
15. There were inconsistencies between the Appellants' accounts about how they decided upon the arrangements to travel to France and Belgium to buy the goods.
16. Mr Frost appeared to be a regular traveller. Mr Frost travelled with Mr Mason to France in April 2004. On that trip Mr Frost bought goods for others rather than himself because before leaving he changed his currency to Euros which he said restricted his purchasing power. Ms Wiggs did not understand why he did not purchase goods for himself on the April trip particularly as he could have exchanged the Euros back for sterling..
17. Ms Wiggs concluded that Mr Frost's version of events contained a number of inconsistencies which affected the credibility of his claim. She found no evidence of exceptional circumstances which justified departure from the Respondents' general policy of non- restoration of seized excise goods.

Mr Frost's evidence

18. Mr Frost purchased the 12 kilograms of hand rolling tobacco for his wife (6 kilograms) and three kilograms each for his mother-in-law and father, who each gave him £150 for the tobacco prior to the trip. Mr Frost disclosed the financial contribution from his mother-in-law and father to the Customs and Excise Officer during his interview. The Embassy cigarettes were for him. The bottles of wine and one litre of vodka were for a house-warming party. The Champagne was for his wedding anniversary whilst the case of small French lager was an impulse purchase. Mr Frost produced a copy of his marriage certificate which confirmed 1 June as his wedding anniversary. In addition he supplied a letter from his solicitors confirming completion of the house purchase on 5 August 2004.
19. Mr Frost smoked ready made cigarettes. His wife smoked hand rolling tobacco consuming two to three pouches weekly.
20. Mr Frost disputed that he was a regular traveller to France and Belgium. He had been to France with Mr Mason once before in April 2004. They visited the same tobacco shop as in May where Mr Frost purchased six kilograms of hand rolling tobacco for his wife and friends of which he had three kilograms remaining by the time of his second visit. Prior to making the April trip he changed about £300 into Euros, only to find out on arrival at the shop that the tobacco would have been cheaper if he paid in sterling. In his view Ms Wiggs' comments about changing the Euros back into sterling were not sensible. Mr Frost would have lost money by exchanging the Euros back, it made greater sense to use the Euros to buy goods. Mr Frost chose tobacco instead of cigarettes for himself because it was a better deal. The tobacco was for his wife which would benefit him by the savings made on their joint expenditure.
21. Mr Frost perceived no significant inconsistency between his account and Mr Mason's about the arrangements for the trip. Effectively they were both saying the same thing that they shared the cost of the trip.
22. Mr Frost challenged Ms Wiggs' finding about failing to disclose straightaway his purchase of alcohol. Mr Frost pointed out that he and Mr Mason had already separated out their purchases including the alcohol in the garage prior to being interviewed. The Customs and Excise Officers, therefore, knew that he bought alcohol. Mr Frost accepted that he did not remember the precise amount of bottles of wine bought which he considered reasonable because they were purchased on price rather than quantity and from a warehouse style shop where they did not stay long.
23. Mr Frost has been in the same employment for five years earning about £24,000 per annum. At the time of the seizure he held about £11,000 in savings.
24. Mr Frost considered that Mrs Wiggs concentrated on minor points of detail. She did not address the central issue about why he bought the goods. He also felt that the Respondents were vague about the criteria used for deciding restoration. The concept of exceptional circumstances appeared to him to be elastic and allowed the Respondents to move the goalposts at each stage of the restoration proceedings.

Review Findings for Mr Mason

25. Ms Julie Wiggs noted that Mr Mason did not challenge the legality of the seizure of the excise goods before the Magistrates' Courts, and therefore he was not entitled to claim that the excise goods were for own use.
26. Ms Wiggs, however, did examine in some detail Mr Mason's claim that he purchased the tobacco and cigarettes for his own use and distribution to members of his family. She was sceptical that he smoked five to six pouches of tobacco a week which would have meant in her opinion that he would be smoking on average one cigarette every 15 minutes of the waking day. She was surprised that he had no smoking materials on him when he was stopped particularly as he was such a heavy smoker. Mr Mason's explanation for this anomaly was that his wife did not like him smoking in the car, which Ms Wiggs found difficult to accept. She also disputed Mr Mason's assertion that the tobacco purchased in May would last him about seven months. On her calculations the tobacco would last for ten months using his stated rate of consumption. On his previous trip with Mr Frost in April 2004 Mr Mason bought six kilograms of tobacco, of which he only had ten pouches left. Ms Wiggs doubted his veracity about the number of pouches left.
27. Ms Wiggs was not satisfied with Mr Mason's explanation about the purchases for his sons and their wives. In interview he initially stated that he bought each of his sons 200 cigarettes and then for the rest of the interview talked about how many pouches of hand rolling tobacco they smoked. Mr Mason also had with him when stopped in May a slip of A4 paper upon which he written various amounts of cigarettes and tobacco plus one case of Bourgoyne Allicontie. Ms Wiggs found it unusual that he would have a list to remind him what members of his family smoked.
28. Ms Wiggs considered Mr Mason to be a regular traveller. He made a day trip from Dover to Calais departing on 9pm on 23 January 2004 returning on the 8.45pm ferry the following day.
29. Ms Wiggs also pointed out the various inconsistencies between the accounts of Mr Mason and Mr Frost regarding the arrangements for the trip and the ownership of the wine.
30. Ms Wiggs noted that Mr Mason had never claimed that the excise goods were not for supply for profit. She, therefore, concluded that Mr Mason had failed to demonstrate that the excise goods were to supplied at purchase price, in which case she declined restoration of his motor car.
31. Ms Wiggs then went onto to consider the hardship suffered by Mr Mason by the loss of his car. She noted Mason's claim that he needed his car to look after his elderly father who lived 30 miles away and required constant attention. Also his wife required the car to care for their six year old granddaughter. Mr Mason used his savings to buy the car. Ms Wiggs, however, enquired of DVLA and discovered that there were three other cars registered at Mr Mason's address. In those circumstances Ms Wiggs considered that there were no grounds for exceptional hardship because Mr Mason had access to three vehicles.

Mr Mason's Evidence

32. Mr Mason told the Tribunal that the main purpose of his trip to France and Belgium on 7/8 May 2004 was to purchase alcohol for his niece's 18th birthday party. He purchased one case of Bourgoyne Alliconte which was a wine his sister drank and some bottles of still wine. In addition he bought 12 kilograms of Golden Virginia hand rolling tobacco, 500 grams of Samson hand rolling tobacco, 1400 Lambert and Butler cigarettes, 200 Silk Cut cigarettes and 600 Superkings cigarettes.
33. The Golden Virginia tobacco was for himself and his three sons and their families. Originally he intended to buy one six kilogram box of Golden Virginia tobacco. However, he bought a second box because of an offer of a free bottle of spirits. Also there was a sign in the shop reminding travellers that there were no quotas for excise goods provided they were purchased for private use. The Lambert and Butler cigarettes were for his wife, the Silk Cut for his mother-in-law, the Superkings were for his sons and Anne who lodged with Mr Mason and his wife. The Samson hand rolling tobacco was for his father.
34. Mr Mason accepted the offer of an interview with the Customs and Excise Officer because he believed he had done nothing wrong and the excise goods he had acquired were not for a commercial purpose. Mr Mason did his best to answer all the questions. However, he acknowledged that his replies to the Officer about the amounts of tobacco and cigarettes smoked by members of his family were guesses. Mr Mason felt that he had to provide answers to these questions because he was being pressed to do so by the Officer. Mr Mason also agreed that he probably exaggerated his own consumption rate of hand rolling tobacco. In May he smoked about four to five pouches of tobacco not the five to six mentioned in the interview. He considered that he was being asked to explain so much during the interview that he probably stretched the truth about his consumption rate in order to explain why he bought the quantity of the Golden Virginia hand rolling tobacco. Mr Mason did not know why he told the Officer that he owned the car for five years which was clearly an error because the car was registered new in October 2001. Mr Mason's explanation for this mistake was that he was tired and needed to go the toilet. The Officer refused him permission to go to the toilet at the beginning of the interview.
35. Mr Mason gave conflicting evidence before the Tribunal about for whom he bought the various brands of cigarettes. Initially, he told the Tribunal that the SuperKings were for his wife but later changed this to Lambert and Butler. Mr Mason did not normally buy cigarettes for his wife. Also he got it wrong because he was so keyed up about the Tribunal hearing.
36. Mr Mason did not have a cigarette lighter with him when he was stopped. He had used up his tobacco in Belgium and there was a lighter in the car. He was under strict instructions from his wife not to smoke in the car, particularly as she had cleaned it the previous day to the trip in question.
37. Mr Mason used the last of his redundancy money to pay for the excise goods. His family was close knit and very supportive of each other. The purchase was a way of saying thank you to members of his family. On the day it was necessary to purchase the alcohol by credit card because he spent his cash on the extra box of hand rolling tobacco.
38. Mr Mason explained that he was an inveterate compiler of lists as reminder of things to do. He produced to the Tribunal a series of "to do" lists supporting his assertion. The list he had drawn up for 7 May followed his normal practice of keeping notes. He did not hide it from the Customs and Excise Officers.
39. Mr Mason denied that he was a regular traveller to the Continent to buy excise goods. The day trip 23 January 2004 was to attend a Telephone Card Fair in Paris with a friend. Mr Mason produced a letter from a Mr Munder to corroborate his evidence. He had travelled about five to six weeks previous to 7 May to Belgium with three others including Mr Frost where he purchased six kilograms of hand rolling tobacco. Mr Mason could not remember whether he bought the tobacco in the same shop where he purchased the tobacco on 7/8 May 2004. The tobacco bought on this occasion was shared between himself and his three sons.
40. Mr and Mrs Mason bought the vehicle in 2002 for about £11,000 with his redundancy money from "Birds Eye Walls". They decided to pay for the car in cash as they were fast approaching retirement age. The vehicle was Vauxhall Vectra Diesel Estate which had completed about 40,000 miles at the time of seizure. Mrs Mason in her letter to the Respondents' Review Officer stated that the vehicle was her lifeline and it was impossible for them to afford another vehicle.
41. Mr and Mason relied on the vehicle to visit Mr Mason's father who was 88 years old and lived 30 miles away from their home. Mrs Mason also looked after her granddaughter who was six years old. She needed the car to take her granddaughter to school which was three miles from their home, and to the doctors and dentists.
42. Mr and Mrs Mason did not have access to the three vehicles as alleged by Ms Wiggs. The blue Toyota Starlet registration number NNV 697Y had been scrapped in 1987. Mrs Anne Nicholls was the owner of the Citroen Saxo registration number X574 RDE. Mrs Nicholls lodged with Mr and Mrs Mason and required the car for her personal use as she was employed as a carer on 24 hour call-out. She confirmed in a letter that no one else has access to the car. The final car a blue Nova registration F246 PDG required a major piece of work doing on the engine and gearbox. Mrs Mason was advised in April 2004 by Mr Wiseman to keep the car off the road and not to drive it. Since the seizure of their motor vehicle in May Mrs Mason had been lent a car by her son to look after her grandchild. However, the Tribunal was informed that the loan arrangement was about to come to an end. Mr Mason was able to cycle to work but he was concerned about the security of his job.

Jurisdiction of the Tribunal

43. 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."

44. 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".

45. 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 finding of facts includes blameworthiness, the intended use for the excise goods: private, not for profit or commercial subject to the decision in Gascoyne, 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.
46. The recent Court of Appeal decision in Gascoyne v Customs and Excise Commissioners [2005] 2 WLR 222 has ruled that the Tribunal in restoration proceedings should not revisit the facts necessary to establish the legality of the seizure or forfeiture, such as, whether the excise goods were acquired for personal use. The effect of this ruling is relaxed when there has been no condemnation proceedings before the magistrates' court, in which case it may be open to the Tribunal to revisit the facts regarding the Appellant's intended use of the excise goods provided the Tribunal is satisfied it does not amount to an "abuse of process".
47. The Respondents did not raise the "abuse of process" argument at the hearing. Neither Appellant pursued the route of condemnation proceedings before the magistrates, instead each Appellant chose to ask for restoration. Mr Frost took the restoration route because he was confused by the advice given by the Respondents in its Notice 12A. The Respondents issued a revised Notice 12A in October 2004 to provide clearer advice about the various appeal routes which gives credence to Mr Frost's confusion.
48. We consider that Mr Frost's principal argument that he intended the excise goods for a mixed use; personal and distribution at cost are proper matters within the jurisdiction of the Tribunal when considering reasonableness of the decision not to restore. Mixed use of the kind asserted by Mr Frost cannot amount to a challenge to forfeiture and seizure because the definition of commercial purpose includes goods provided at cost. Also once the goods have been contaminated by a commercial purpose the whole consignment is liable to forfeiture. Thus we are not precluded from considering the factual basis for Mr Frost's assertion of mixed use because it does not challenge the legality of the seizure and forfeiture and is outside the decision in Gascoyne.
49. Mr Mason's case is different from Mr Frost. Mr Mason contended throughout that the excise goods were purchased for his own use or as gifts for members of his family. He never asserted that the goods were for distribution at cost. However, Mr Mason's Appeal is for restoration of his motor vehicle embracing the issues of proportionality and hardship which are not a direct challenge to the legality of the forfeiture and seizure.

The Facts found by the Tribunal

Mr Frost

50. Mr Frost was straightforward with his testimony which was supported where appropriate by documentary evidence. He readily volunteered to the interviewing Customs and Excise Officer that he received money from his mother-in-law and father to buy the hand rolling tobacco and that he bought the tobacco for them and his wife. We found his explanation that he exchanged sterling for Euros on the April trip believable and consistent with his assertion that he was not a regular traveller. We concluded that he only travelled twice to France and Belgium including 7 May for the specific purpose of purchasing tobacco and alcohol. We did not consider that there was a conflict between the versions of Mr Mason and Mr Frost about their arrangements for the May trip, essentially they were saying the same thing. We concluded that Mr Frost did not try to mislead the Customs and Excise Officers with his responses about the amount of alcohol purchased. It is clear from the Officers' statements that Mr Mason and Mr Frost had already identified the ownership of the goods by separating them out in the garage prior to the interview. Thus Mr Frost had nothing to gain from his initial failure in interview to mention the alcohol bought. We did not consider it unusual that Mr Frost could not remember the precise number of bottles of still wine he purchased that day, particularly as they were packed in boxes. We concluded that Mr Frost was a convincing and honest witness. We found no inconsistencies in his evidence or in his interviews with the Officers to undermine his credibility.
51. We found that the amount of hand rolling tobacco brought in was four times the indicative level as set out in The Excise Goods, Beer and Tobacco Products Regulations 2001. Mr Frost, however, provided convincing evidence that he purchased the hand rolling tobacco for his wife and for distribution at cost to his mother-in-law and father. He produced letters from his mother-in-law and father who stated that they had asked him to buy the tobacco for them and in the case of his father gave him the money to purchase the tobacco. His wife's stated rate of consumption of two to three pouches of tobacco a week was realistic and consistent with what he told the Officer in interview. His purchases of cigarettes and alcohol were well within the indicative levels in the 2001 Regulations. The cigarettes bought matched his stated rate of consumption. The alcohol was purchased for specific events, house warming and wedding anniversary, which were corroborated by documents confirming the house purchase and date of marriage. Mr Frost had sufficient means to pay for the purchases. We are, therefore, satisfied that Mr Frost purchased the excise goods for his personal use and for distribution at cost.

Mr Mason

52. The quantity of hand rolling tobacco including the 500 grams of Samson brought in by Mr Mason was over four times the indicative level for tobacco as stipulated in the 2001 Regulations. The other excise goods brought in were within the indicative levels for cigarettes and alcohol.
53. Mr Mason's stated that his prime purpose for travelling on 7 May was to buy alcohol for his niece's 18^th birthday. However, he spent considerably more on tobacco products than he did on alcohol on the May trip.
54. Mr Mason changed his evidence regarding the intended recipients for the cigarettes. Initially he said that the SuperKings were for his wife but after further questioning he substituted SuperKings with Lambert and Butler. We find this a surprising error as it would be reasonable to expect a husband to know the cigarette brand smoked by his wife. Mr Mason could not remember whether he previously visited in April the shop where he purchased the tobacco from in May. Mr Frost had no hesitation in confirming it was the same shop. In his evidence Mr Mason added qualifications to his interview with the Customs and Excise Officer. He accepted that his responses regarding the smoking habits of his family were guesses and he modified his own weekly consumption rate of tobacco. We acknowledge that giving evidence before a Tribunal and being interviewed by Customs and Excise Officers may be a stressful experience for certain individuals. However, in Mr Mason's case we considered that there was a thread of inconsistency and mistakes running throughout his interview and evidence particularly dealing with aspects of the case which could prove most damaging to his assertion about the intended use of the goods. We, therefore, are not impressed with Mr Mason's testimony and formed the view that he had something to hide.
55. Mr Mason produced letters from his sister and two of his sons stating that he was bringing back tobacco for them as well as wine for his niece's birthday. We consider, however, that the quantity of tobacco bought and the thread of inconsistency and mistakes prevailing Mr Mason's evidence outweighed the supporting statements in these letters. We, therefore, conclude that some of the tobacco imported was destined for sale at a profit.
56. There was no evidence to support a finding that Mr Mason was a persistent smuggler of tobacco. He had not been stopped by Customs and Excise before. He was not a regular traveller to the Continent for the purpose of buying cheap excise goods.
57. Mr Mason produced a series of letters, two of which were signed by persons who were not members of his family, explaining that the three vehicles registered at his address were either not available for use by Mr and Mrs Mason or had been scrapped. We accept this evidence. We are persuaded by Mrs Mason's letter that the car was needed by her to look after her grand daughter. Mr Mason had used his redundancy money to purchase the vehicle. On the evidence presented it appeared that they did not have the funds to buy another vehicle and were reliant on their son to lend them his car. In those circumstances we consider that these grounds may constitute exceptional hardship especially as the loss of the vehicle has had an impact on other members of Mr Mason's family.

Was the Respondents' Review decision in the case of Mr Frost Reasonable?

58. Ms Wiggs did not give detailed consideration in her Review decision to Mr Frost's principal assertion that he purchased the excise goods for a mixed use, namely, personal use and distribution at cost. She may have felt that the issue of mixed use was not central to the restoration proceedings. We, however, have arrived at a different conclusion and do not consider that mixed use challenges the legality of the original forfeiture and seizure (see paragraph 48). We have found as fact that Mr Frost bought the excise goods for the mixed use, which was, therefore, a relevant matter for Ms Wiggs to examine in her review decision
59. We have come to a different finding from Ms Wiggs about Mr Frost's credibility. We found his version of events consistent and plausible. We are of the view that Ms Wiggs should have examined the evidence as a whole rather than focus on isolated discrepancies. The overall tenor of his interview with the Customs and Excise Officers was one of co-operation and a willingness to disclose potentially adverse information, such as receiving money for the goods.
60. We, therefore, conclude that the Review Officer's decision of 28 July 2004 was unreasonably arrived at within the meaning of section 16(4) of the Finance Act 1994.

Was the Respondents' Review decision in the case of Mr Mason Reasonable?

61. Our findings of fact support Ms Wiggs' principal conclusion that she was not satisfied that Mr Mason had purchased the excise goods for himself and members of his family. She declined to offer restoration of the vehicle on the ground that Mr Mason could not substantiate that the goods were to be supplied at purchase price and not for profit.
62. Ms Wiggs did not consider that Mr and Mrs Mason suffered exceptional hardship from the loss of their vehicle. She dismissed Mrs Mason's claim that the vehicle was needed to care of her grand child and her father-in-law because the DVLA check revealed that three other cars were registered at Mr and Mrs Mason's address. We have had the benefit of considering further evidence about the ownership of the three vehicles which was not available to Ms Wiggs when she carried out her review. In the light of this additional evidence we are of the opinion that the question of exceptional hardship should be reconsidered afresh, particularly the consequences of the loss of the car to Mrs Mason and her grandchild.
63. We, therefore, conclude that the Review Officer's decision of 28 July 2004 was unreasonably arrived at insofar as the question of hardship within the meaning of section 16(4) of the Finance Act 1994.

Decision

64. We, allow the Appeals of Mr Frost and Mr Mason. We make no order for costs.

Orders under Section 16 of the Finance Act 1994

Mr Frost

65. Our reasons for allowing Mr Frost's appeal are that we found that Mr Frost purchased the excise goods for mixed use: personal use and distribution at cost. The question of mixed use was not considered by Ms Wiggs in her review decision. We suspect that the excise goods have now been destroyed which renders any issue of restoration meaningless, although the Respondents do have the power to give compensation instead. We also share Mr Frost's concern about the elasticity of the Respondents' present restoration policy for goods. We consider that exceptional circumstances lack definition and may lead to arbitrary decision making. It may be that our finding of mixed use does not meet the criterion for exceptional circumstances. We note that the Respondents' previous policy for restoration of excise goods provided examples of factors which would militate against restoration. We do not know when and why the policy changed. On balance we consider that the appropriate orders to make are under section 16(4)(a) and 16(4)(b).
66. We, therefore, make the following orders pursuant to our decision to allow the Appeal and in accordance with section 16(4) of the Finance Act 1994:

a. The decision not to restore the Appellant's excise goods shall cease to have effect from the date of release of this decision.

b. The Commissioners shall conduct a further review of the decision not to restore the excise goods and serve the same on both the Appellant and the Tribunal within 30 days of release of this Decision.

c. An Officer not previously involved with the case shall conduct the further review.

d. The further review shall be on the basis of the Tribunal's findings of fact as set out in paragraphs 50 and 51 of this decision and shall consider whether restoration should be made in the form of compensation and if so shall specify the amount of compensation and the basis of the calculation.

e. The Review Officer shall take account of any further material or representations made by the Appellant within 14 days from release of this decision. The representations shall be made to HM Customs and Excise, Review Team, Detection South Region, Crownhill Court, Tailyour Road, Crownhill, Plymouth, PL6 5BZ.

67. The Appellant will have a further right of appeal to the Tribunal if dissatisfied with the outcome of the further review.

Mr Mason

68. We make the following orders pursuant to our decision to allow the Appeal and in accordance with section 16(4) of the Finance Act 1994:

a. The decision not to restore the Appellant's motor vehicle shall cease to have effect from the date of release of this decision.

b. The Commissioners shall conduct a further review of the decision not to restore the motor vehicle and serve the same on both the Appellant and the Tribunal within 30 days of release of this Decision.

c. An Officer not previously involved with the case shall conduct the further review.

d. The further review shall be on the basis of the Tribunal's findings of fact as set out in paragraphs 52 to 57 of this decision.

e. The Review Officer shall take account of any further material or representations made by the Appellant and his wife on the grounds of hardship within 14 days from release of this decision. The representations shall be made to HM Customs and Excise, Review Team, Detection South Region, Crownhill Court, Tailyour Road, Crownhill, Plymouth, PL6 5BZ.

69. The Appellant will have a further right of appeal to the Tribunal if dissatisfied with the outcome of the further review.

MICHAEL TILDESLEY

CHAIRMAN
Release Date : 31 March 2005

MAN/04/8095 & MAN/05/8001