United Kingdom VAT & Duties Tribunals (Excise) Decisions

E00877

EXCISE DUTY — restoration of goods — own use — excise goods seized and forfeited at Birmingham Airport on return of travellers to UK from Spain — review decision confirming decision not to restore goods — no attendance for Customs on hearing of appeal — apparent reversal by Customs of burden of proof as to whether goods held for own use or for commercial purposes — appeal allowed and fresh review directed on correct legal basis

MANCHESTER TRIBUNAL CENTRE

(1) ALAN GRIFFITHS

(2) VERONICA JEAN GRIFFITHS Appellants

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: Michael Johnson (Chairman)

Arthur Brown

Sitting in public in York on 23 March 2005

The Appellants appeared in person

No-one attended on behalf of the Commissioners of Customs and Excise

© CROWN COPYRIGHT 2005

DECISION

1. This is an appeal under section 16 of the Finance Act 1994 against a review decision of the Commissioners of Customs and Excise ("Customs") upholding a previous decision of theirs not to restore certain excise goods ("the goods") belonging to the Appellants. The goods consisted of 14,620 cigarettes and 2 Kg of hand-rolling tobacco.
2. The decision appealed against was dated 6 May 2004 and was made by Mr R Brenton, one of Customs' review officers (Detection South) based in Plymouth.
3. When the appeal was called on for hearing, it was apparent that no-one had attended on behalf of Customs to represent them in the appeal. However, having had the opportunity of studying the contents of the tribunal file, we formed the view that a short but conclusive point arose which meant that we should proceed to decide the appeal in Customs' absence, as we are empowered to do pursuant to rule 26(2) of the Value Added Tax Tribunals Rules 1986 (as amended).
4. The background to the appeal is that the goods were seized from the Appellants by an officer of Customs at Birmingham Airport on the Appellants' return to the UK by air from Spain on 2 March 2004. The seizure was because – and here we quote the first sentence of paragraph 9 of the Statement of Case served by Customs –

"The officer was not satisfied that the goods had been imported for own use and were not imported or held for a commercial purpose".

That was why, it is said, the goods were deemed liable to forfeiture, and were indeed seized.

5. In his decision, Mr Brenton does not, so far as we can see, deal with the point that the officer was, so it appears, placing the burden upon the Appellants to satisfy Customs that the goods were not being imported for a commercial purpose. However Mr Brenton does appear to base his decision, in very large measure if not entirely, upon the proposition that the officer was misled, with the result that the goods were considered to be a commercial importation.
6. As it seems to us on reading his decision, Mr Brenton is adopting the approach that it was for the Appellants to prove to Customs that the goods were not being imported for the Appellants' own use. This is because it appears that, if the Appellants had satisfied the officer that the goods were indeed for their own use, he would not have seized them; however, because they had not so satisfied him – because they were said to have misled him – he proceeded to seize the goods. That procedure appears to have been endorsed by Mr Brenton. In other words, the decision under appeal also assumes, as did the officer who performed the seizure, that the burden of proof was upon the Appellants.
7. In law, this is not however correct. The contrary proposition was established in the decision of the Divisional Court of the Queen's Bench Division in R (on the application of Hoverspeed Ltd and Others) v Commissioners of Customs and Excise [2002] 4 All E R 912 ^[1] ("the Hoverspeed case") . In that case, the court held that the burden of proof is not upon travellers to satisfy Customs that they are not holding goods for a commercial purpose; rather the burden of proof is upon Customs to show that the goods are so held.
8. The approach adopted by the reviewing officer in this case seems to us to be one that no person making the decision should reasonably have adopted, with the consequence that the decision is flawed in the way described in section 16(4) of the Finance Act 1994. We are therefore satisfied that the pre-condition for the exercise of our powers spelt out in that sub-section is complied with in this instance.
9. Paragraph 6 of the Statement of Case in this appeal accepts that the law is as stated in paragraph 7 above; however for reasons that are unexplained, this does not appear to the tribunal to have been the approach adopted here. It is clear to us, therefore, that we should allow this appeal, which we do.
10. We therefore remit this case to Customs for the carrying out of a further review of the decision not to restore the goods. We direct that the further review is to be conducted by a different review officer, and we direct that in so doing, he or she is to take account of the law, established in the Hoverspeed case, that the burden of proof in these cases is upon Customs.
11. We further direct that the fresh review is not to be founded upon the proposition that the officer was misled, so that in consequence it was reasonable for the officer not to have been satisfied by the travellers that the importation was for their own use. That appears to us to have been the basis of Mr Brenton's decision in the review conducted by him, and it was incorrect.
12. We further direct that the fresh review is to be conducted within six weeks of the release of this decision, and that when it is issued, a copy of it is to be sent to the Manchester Tribunal Centre for filing under reference MAN/2004/8085. Finally, if the fresh review results adversely to the Appellants, and they remain dissatisfied, we direct that they may make further application to the tribunal about the matter within these proceedings, without needing to issue a further appeal. .

MICHAEL JOHNSON

CHAIRMAN
Release Date: 5 April 2005

MAN/2004/8085

Note 1    (which went on appeal, see [2003] 2 All E R 553, but not in respect of this point).    [Back]