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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 >> Fella v Customs and Excise [2005] UKVAT(Excise) E00873 (06 April 2005)
URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2005/E00873.html
Cite as: [2005] UKVAT(Excise) E00873, [2005] UKVAT(Excise) E873
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E00873
Excise Duties – FA 1994 Section 16(4) – substantial quantities of tobacco and alcohol imported from EU into UK – whether goods held for commercial purpose – whether forfeiture of van used by Appellant reasonable – Appeal refused.
EDINBURGH TRIBUNAL CENTRE
ANTONIO FELLA Appellant
- and -
Tribunal: (Chairman): Mr Kenneth Mure, QC
(Member): Mr K Pritchard, OBE., BL., WS
for the Appellant Mr Cameron Miller
for the Respondents Mr Andrew Scott, Shepherd & Wedderburn WS
© CROWN COPYRIGHT 2005.
Introduction
In this Appeal the Appellant appeared in person and was assisted by a personal friend, Mr Cameron Miller. (Mr Miller had acted earlier on his behalf: see Document 4). The Respondents were represented by Mr Andrew Scott, Solicitor, Shepherd & Wedderburn WS.
The Appellant confirmed that he was not disputing the legality of the seizure of the goods, viz quantities of tobacco, cigarettes, beer and spirits and that, notwithstanding the possibly ambiguous terms of his former solicitor's letter of 23 June 2004 (Document 1). The matter at issue was whether, following on the seizure of these goods, the forfeiture of his van in which they were being transported was reasonable and justifiable in the whole circumstances and having regard to particularly Section 16(4) FA 1994.
The Law
Alcoholic drinks, cigarettes and tobacco are chargeable with excise duty on importation into the UK for a commercial purpose from other EU member states. Reference is made to Articles 8 and 9 of the Council Directive 92/12/EEC which have been implemented by the UK. Further reference is made to The Excise Goods, Beer and Tobacco Products Regulations 2001 and the relative amending Regulations of 2002 and the Channel Tunnel (Alcoholic Liquor and Tobacco Products) (Amendment) Order 2002.
Section 49 Customs & Excise Management Act 1979 provides:
"(1) Where –
(a) any imported goods, being goods chargeable on their importation with customs or excise duty, are, without payment of that duty –
(i) unshipped in any port,
(ii) unloaded from any aircraft in the United Kingdom,
(iii) removed from their place of importation …
those goods shall … be liable to forfeiture."
Section 139 thereof further provides –
"(1) Any thing liable to forfeiture under the Customs and Excise Acts may be seized or detained by any officer or constable or any member of Her Majesty's armed forces or coastguard".
Section 141 thereof provides –
"(1) … where any thing has become liable to forfeiture under the Customs and Excise Acts –
any ship, aircraft, vehicle … which has been used for the carriage, handling, deposit … of the thing so liable to forfeiture … and
… any other thing mixed, packed or found with the thing so liable, shall also be liable to forfeiture."
Finally Section 152(b) thereof provides –
"The Commissioners may, as they see fit –
(b) restore, subject to such conditions (if any) as they think proper, any thing forfeited or seized under the Customs and Excise Acts."
Finance Act 1994 Section 16 provides for an appeal to this Tribunal inter alia against forfeiture of vehicles used for importation. In particular Subsection (4) provides
"(4) In relation to any decision as to an ancillary matter, or any decision on the review of such a decision, the powers of an appeal tribunal on an appeal under this section shall be confined to a power, where the tribunal are satisfied that the Commissioners or other person making that 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; and
(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 the decision to have been unreasonable and to give directions to the Commissioners as to the steps to be taken for securing that repetitions of the unreasonableness do not occur when comparable circumstances arise in future".
Mr Scott referred to the decisions in Lindsay v C&E [2002] STC 588 and in Philip J Lett (LON/00/8052), and Mr Miller referred us to a Press Release no IP/04/1255 of the European Commission about seizures of tobacco and cars in cases of Cross-Border Shopping.
The Facts
We heard evidence from the Appellant. The notebooks of the officers of Customs and Excise containing his and his companion Mr McGonigle's responses were copied and produced (Documents 7 & 8). These had been signed by them both. The Appellant did not dispute the terms of his noted response.
The following matters were not controversial and we find as fact the following:-
(1) The Appellant with Mr McGonigle (his stepson) had travelled from Glasgow to the Continent in his van registration number T394 LRT having left about 1 am on 11 June 2004.
(2) The van had been purchased second hand about a year previously. It was then about 4 or 5 years old.
(3) The Appellant had purchased in Belgium tobacco and cigarettes, viz 9 kg hand-rolling tobacco, 400 cigarettes, and 100 cigarillos. He had purchased also in Calais 319.92 litres of beer and 3.5 litres of spirits. He was transporting these in his van with the intention of returning to Glasgow when he was intercepted on 12 June 2004 at the UK Control Zone at Coquelles, France. The tobacco had cost £450, the cigarettes £52 and the drink £360.
(4) The quantities of tobacco and alcohol were substantially in excess of the UK's published Guide Levels for determining "commercial purpose". In particular the amount of hand-rolling tobacco was 3 times that level and the volume of beer almost 3 times the stipulated level. All the items were seized by Customs & Excise.
(5) In the 7 months preceding the Appellant had travelled to the Continent on about 9 occasions, by ferry and via the Channel Tunnel. He had been intercepted by Customs & Excise officers on previous occasions and on at least three of these occasions, goods had been seized. The Appellant was well aware of Customs & Excise practice and policy on the import of such products from other EU member states.
(6) The Appellant, who worked as a chef on a divers' boat offshore from Aberdeen obtained tobacco from a bond on the ship for personal consumption.
(7) The tobacco and alcohol seized had been acquired for a commercial purpose and not personal use, including consumption following payment or reimbursement by members of his family.
There were certain other controversial aspects spoken to by the Appellant in evidence. We found his evidence on these aspects contradictory and unsatisfactory. In particular he asserted in evidence that half of the goods seized belonged to him and the other half to Mr McGonigle. He had not suggested that earlier, for instance in his response to Customs & Excise officials, or in his solicitor's letter of 23 June 2004 (Document 1). Further, this was not claimed by Mr McGonigle in his account to Customs & Excise officers. In the interview notes of the Appellant (Document 7 page 35) the Appellant indicated that he did not expect payment from his stepson. In any event a half share of the goods would still have exceeded substantially the UK's "Guide Levels". We rejected his evidence on this aspect.
Although the Appellant claimed as a reason for his travelling abroad that he was to meet a friend "Angela", she was not identified (Document 7 page 34) and the timetable of his travelling seemed to conflict with the time of the claimed meetings. Moreover the travel costs and distances involved were substantial, not justifying economically the purchase of beer alone. The Appellant did not explain away these aspects satisfactorily.
Finally, the Appellant protested about the hardship which forfeiture of the van caused. It had cost £3,000.00 a year previously, he claimed, but no evidence of current valuation eg Glass's Guide entry, was produced. The Appellant travels to Aberdeen regularly to work offshore. Although he accepted that there was a frequent train service from Glasgow to Aberdeen, for some reason (unclear to us) this was not usually convenient.
Submissions for the Respondents
Considering that the Appellant was not professionally represented we invited Mr Scott to address us on behalf of the Respondents first.
Having explained the various charging provisions imposing duty on the importation of tobacco and drink products from the EU to the UK, he then referred to the terms of the Respondent's decision not to restore the vehicle. This is set out in detail in Document 6. Mr Scott argued that the reasoning there showed that all relevant facts had been considered and no extraneous matters had influenced the decision. It was reasonable for the Review Officer to conclude that this exercise did not qualify as being "not for profit". He criticised the evidence of the Appellant as having been contradictory and not credible. He distinguished the decision in Lindsay v C&E, founding on, in the present case, the discrepancies in evidence, the admitted and in any event obvious commercial purpose, the previous trips and previous seizures, and the financial outlays involved as all supporting forfeiture. He referred us also to the decision in Philip J Lett which related to the importation of tobacco and alcohol products which had resulted in the forfeiture of a Rolls Royce worth about £12,000.00. In particular he referred to paragraphs 75 and 76 of the Tribunal's decision as identifying the issue for us in the present case. That was whether forfeiture was "reasonable" in the context of Section 16(4) FA 1994. Was the decision one which could not reasonably have been reached? Had all relevant considerations been taken into account and all irrelevant considerations been ignored? Mr Scott submitted that forfeiture was reasonable and that the Appellant, on whom the onus lay, had not shown otherwise. Accordingly, Mr Scott submitted, the Appeal should be dismissed.
Submissions for the Appellant
Mr Miller invited us to allow the Appeal and submitted that forfeiture of the vehicle was unreasonable in the whole circumstances. He referred to the Press Release, reference IP/04/1255, and in particular the following paragraph –
"The seizure of property is, by its very nature, a severe and intrusive sanction. It may be justified for certain situations but the Commission considers that, when applied to minor fiscal offences of a "not for profit" character, it goes further than is strictly necessary and represents an unacceptable obstacle to the free movement of goods".
Mr Miller emphasised that on the evidence the purchases were apparently for family and friends. The goods purchased had all been of British origin. The visits abroad were not always for purchasing beer and tobacco but were undertaken for social reasons. Although items had been seized previously there appeared to be differing approaches taken by different officers of HM Customs & Excise and they did not follow consistently the published "Guide Levels".
Accordingly, Mr Miller argued, the Appeal should be allowed.
Decision
The issue for determination is whether the Respondents acted reasonably in their refusal to restore the seized vehicle T394 LRT to the Appellant having regard to particularly Section 16(4) FA 1994 and Section 141(1) CEMA 1979.
We consider that this decision was eminently reasonable and wholly justified in the circumstances. There is clear evidence of commercial purpose. The excursion in question was one of a series to import dutiable goods. On this occasion the cost of the goods was relatively substantial, viz about £860. The duty too was significant – almost £1,400. The goods were not for purely personal use. The Appellant had been stopped before and goods seized on 3 prior occasions. He was well aware of Customs & Excise policy and practice.
While Mr Scott chose to distinguish Lindsay v C&E, the comments of Lord Phillips MR, are appropriate in relation to persons using their vehicles for commercial or smuggling purposes as is the case here:-
[63] Having regard to these considerations, I would not have been prepared to condemn the Commissioners' policy had it been one that was applied to those who were using their cars for commercial smuggling, giving that phrase the meaning that it naturally bears of smuggling goods in order to sell them at a profit. Those who deliberately use their cars 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 those 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. Cases of exceptional hardship must always, of course, be given due consideration.
We do not consider that an issue of hardship arises. The value of the van was not substantial. We are not satisfied that the Appellant's having to travel to Aberdeen for his work has become significantly more difficult given the frequent rail service from Glasgow. In our view forfeiture of the vehicle is not disproportionate.
In the report of Ms Perkins, the review officer (Document 6) all the relevant circumstances, as we view the matter have been taken account of. It is detailed and logically argued.
We found the evidence of the Appellant unsatisfactory. In his account to the Tribunal and earlier in interview there were unresolved contradictions which undermined the value of his evidence.
For these reasons we dismiss the Appeal.
Expenses
Mr Scott indicated that in the event of success the Respondents did not seek expenses. Accordingly no award is made.
Finally we thank Mr Miller and Mr Scott for their assistance in presenting their respective arguments.
EDN/04/8007