United Kingdom VAT & Duties Tribunals (Excise) Decisions

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URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2005/E00880.html
Cite as: [2005] UKVAT(Excise) E880, [2005] UKVAT(Excise) E00880

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Smith & Anor v Revenue and Customs [2005] UKVAT(Excise) E00880 (11 May 2005)

5 10 15 20 25 30 35 40 5 10 15 20 25 30 35 40 5 10 15 20 25 30 35 40 5 10 15 20 25 30 35 40 5 10 15 20 25 30 35 40 5 10 15 20 25 30 35 40 5 10	ANNEX 1 1. The decision under appeal was that of the Commissioners to refuse to restore to the Appellants various excise goods seized from then on 21 April 2001 at Eastern Docks, Dover. The goods seized were 20,000 mixed brand cigarettes, 7.5 kg hand rolling tobacco and 16.7 litres of mixed brand spirits. The goods had been carried in a hired Vauxhall Estate motor car in which Mr and Mrs Smith were travelling. The vehicle was seized but immediately restored on humanitarian grounds. 2. Mr and Mrs Smith had, by letter dated 22 April 2001, requested restoration of their goods. A further letter dated 3 May was submitted by Mr and Mrs Smith in support of their request. By letter dated 12 May 2001, the Commissioners refused restoration. By letter dated 16 May 2001, Mr and Mrs Smith requested a review of that decision. No review was carried out within the statutory 45 day time limit and the earlier decision to refuse restoration was therefore deemed upheld. A review had been carried out on 20 December 2001 but as this was several months out of time, it was accepted by Mr Speed that it was of no relevance to the appeal before us. 3. Three factors immediately became apparent when the appeal came on for hearing. First, the Commissioners had applied throughout the incorrect burden of proof in that they had expected Mr and Mrs Smith to satisfy them that the goods were not held for a commercial purpose. Secondly, the letter dated 12 May merely set out the Commissioners' general policy on restoration and concluded that, all factors having been considered, there were no exceptional circumstances to justify restoration. No reasons directly applicable to Mr and Mrs Smith's case were given and it was therefore quite unclear exactly what factors had been considered by the Commissioners. Thirdly, as the letter of 12 May was the deemed decision, no account had been taken of the representations made by Mr and Mrs Smith in their letter of 16 May which should have been taken into account had a review been carried out. For all these reasons, Mr Speed believed it would be right for the Commissioners to concede the appeal and for the tribunal to direct, in line with their jurisdiction, a re-review. We were concerned that the seizure had taken place almost three years previously, Mr and Mrs Smith had come expecting the case to be heard and there were three Customs Officers present, With the full approval of both parties, it was therefore agreed that we should hear oral evidence and make findings of fact upon which the re-review would then be based. On this basis we proceeded to hear the case. 4. Oral evidence was given by Mr Smith and on behalf of the Commissioners by Mr Graham Bushell and Miss Lorraine Cooper. The evidence 5. Mr and Mrs Smith were intercepted at Eastern Docks, Dover on their return from the continent. We were told by Mr Smith that he and his wife were in the disembarkation queue and Miss Cooper was walking down the queue looking into the cars. When she came to Mr and Mrs Smith's car, we were told that she put her head through the window and asked them what they had and on being told by Mr Smith that they had bought 100 cartons of cigarettes and at least 100 pouches of tobacco, she directed them into the search bay. Miss Cooper had no recollection of this but accepted that if that was what Mr Smith said had happened then she could not disagree. In the search bay, Mr and Mrs Smith vacated the vehicle and handed over the keys at which point they were joined by Mr Bushell. Mr Bushell asked Mr and Mrs Smith some preliminary questions including to ask what the purposes of the trip had been to which the recorded answer from Mr Smith was "look for a car to buy". A further question was to ask what they had in the way of cigarettes, alcohol and tobacco to which the recorded answer was "100 cartons cigarettes between us and 100 pouches of tobacco." 6. Mr Smith contested the record of both these answers. He told us firstly that he had told Mr Bushell that the purpose of the trip had been to shop and to look for a car. More importantly, he told us that when giving details of their purchases, as he could not remember precisely how much tobacco he had bought, he in fact told Mr Bushell that he could do no better than telling him. He could hand over a list, which according to Mr Smith, he then did. Mr Bushell remembered having seen the list but had no recollection of when it was handed to him or under what circumstances. 7. The list in question contained some 15 items. The first four items covered the excise goods purchased, the remainder being made up of groceries, comestibles and bedding. Mr Smith told us it was a list of everything they had purchased. They had made it up in their hotel room the night before with a view to costing everything out but had been too tired to add the costs. The entries on the list with regard to the excise goods contained a full declaration of everything they purchased. 8. After these preliminary questions, Miss Cooper and Mr Bushell carried out a search of the vehicle. During the course of the search. Miss Cooper found 1.5 kg tobacco which she maintained had been hidden because, as she told Mr Smith, she had had to "remove a panel" and it was only when he had done this that she found the tobacco. A row then ensued between Miss Cooper and Mr and Mrs Smith when they both vehemently denied any attempt to conceal the goods. 9. After the search, the goods revealed being precisely those contained on the list, Mr Bushell presented his notebook to Mr and Mrs Smith for them to read his record of preliminary questions. Mr Smith refused to sign the notebook before he had added that they had in fact answered that they had been shopping and to look for a car and he also added "told them approx amounts but gave them a list". 10. Mr and Mrs Smith then both agreed to remain for further questions. It was Mr Bushell who interviewed Mr Smith. Mr Smith told Mr Bushell that they had spent approximately £2,200 on the tobacco products, himself and his wife paying half each. Nobody has assisted in the purchase and there was no intention to supply others. He said that initially the goods had been purchased in Belgium although later in the interview added that some had also been purchased in Luxemburg. They had been to a car showroom in Calais to look for a car. He smoked 40-45 cigarettes a day, either cigarettes or roll ups. He was retired, his income being £12,000 - £14,000 per year pension and he and his wife had savings of £4,000 - £5,000 and they owned a second home. He and his wife had last travelled abroad approximately 1 month previously and had made between 8 and 10 trips within the previous 12 months. On a couple of occasions Mr Bushell asked about previous purchases of excise gods, contradictory replies being given. On the first occasion, Mr Smith replied that they had purchased excise goods before but not in this quantity and when pressed by Mr Bushell Mr Smith replied that it would have been roughly 8-10 cartons of cigarettes. Later in the interview, Mr Smith explained that it was necessary to purchase such a large quantity on this occasion because they normally had a substantial load at home but had completely run out. He added that they had bought a similar amount last year and on their various subsequent trips they topped up. 11. Mrs Smith in her interview, said that she smoked Embassy cigarettes (of which 75 cartons had been found) and her husband smoked Benson & Hedges (of which 25 cartons had been found) and the hand rolling tobacco. She said that she smoked 50 cigarettes a day and it was expected that the purchase would last them a year. She had travelled to France some three weeks previously on a day trip with her daughter and grandchildren and on that occasion had purchased two cartons of cigarettes. She said that they had travelled abroad quite frequently for various reasons. She had known that some tobacco was in the rear panels of the boot as it had been put there to stop being squashed. Normally, she and her husband would bring back three cartons of cigarettes each as they travelled so frequently, She told the officer that they would be travelling again in the near future but would not be bringing back any cigarettes. 12. It was Miss Cooper's decision that the goods and the vehicle were to be seized, the reasons for seizure as recorded in her notes being : (i) the large amount of goods imported and that only 100 pouches of tobacco had been declared whereas 150 pouches had been found (ii) the inconsistencies in the answers given in interview (iii) they were frequent travellers (iv) there was no evidence of the purchase by way of till rolls or receipts. 13. Mr Bushell and Miss Cooper added very little in their oral evidence as they obviously had no clear recollection of the events and were relying on their notes. 14. Mrs Smith did not give oral evidence but had taken no exception to the record of her interview and indeed also confirmed that Miss Cooper had correctly recorded in her witness statement the altercation which had taken place during the search. Findings 15. The fundamental issue between the parties is whether or not the tobacco was purchased for Mr and Mrs Smith's own use. We will however deal with the other two areas of dispute already referred to. The Commissioners do not dispute that Mr Smith at some stage handed over to Mr Bushell a list which gave a full declaration of the excise goods purchased. Mr Smith contended that he had handed over the list during the preliminary questions, the purpose of it being to inform Mr Bushell precisely how much had been purchased as he could not remember exactly. Mr Smith's submission was therefore in effect that his list constituted a voluntary and full disclosure, at the earliest possible stage, of everything that had been purchased. Mr Speed, on the other hand, contended that the list had not been handed over until after the search had taken place by which time the goods in excess of those declared had already been found. Mr Bushell had no recollection of when he was shown the list and we see no reasons to doubt Mr Smith's evidence on this. We note that in Miss Cooper's contemporaneous note of the search she refers to asking Mr Smith why he had hidden 1.5 kg tobacco in the rear panel to which he replied that he had forgotten about it but that it appeared on his list. This implies to us that the list had already been tendered to the officers, Equally, Mr Smith told us that he had already declared goods considerably in excess of the guidelines quite voluntarily to Miss Cooper while he was in the disembarkation queue and we believe that in the matter of his declaration of goods purchased, he was open and frank with the Commissioners. There is, in fact, no evidence to support Mr Speed's contention that the list was put in after the search. Certainly, Mr Smith made the amendment to Mr Bushell's notebook after the search but that was because that was then the notebook was presented to him. He could hardly amend the notebook before he had seen it. 16. The second area of dispute concerned the alleged concealment of 1.5 kg tobacco. Mr Smith told us in his oral evidence that 6 kg tobacco were packed in a couple of zip up canvas bags. The remaining pouches, however, would not fit in the bags and as they were loose and Mr Smith did not want then to get squashed, he stowed them in the storage area in the boot. The allegation of concealment comes from Miss Cooper and is bases on her assertion that the pouches were hidden behind a rear panel situated in the boot which she had to remove before the pouches became visible. Mr Smith produced photographs of the boot and of the "panel". In fact to our mind this is not a panel at all but a hinged flap which, on a single manual turn of two clips, falls down to reveal an extensive storage area behind it. The flap has marked on it the signage for a medical kit and warning triangle as these would normally be fitted in that area if the vehicle carried them. We should also say there is a similar although slightly smaller storage space on the other side of the boot, and again access is gained into it in precisely the same way, behind a hinged flap. There is also the point, made by Mr Smith, that he would have had little to gain from concealing such a small proportion of the entire consignment. We see nothing unreasonable in stowing the loose pouches in what was quite clearly a defined and intentional storage area and we do not believe that these pouches were deliberately hidden from view or concealed from the officers. 17. We then come to the major question of whether or not the tobacco goods were for Mr and Mrs Smith's own use. Their case has always been that the goods were for their own personal consumption, there never being any suggestion that they were to be given away as gifts. We find that Mr and Mrs Smith's contention is just not credible. In their interviews, Mr and Mrs Smith said that they had purchased so much because they liked to have a stock at home but had run out and were therefore restocking. The reason given by Mr Smith in his oral evidence to us was that he was due to have a knee operation which would render him unable to drive for some two to three months and he had not therefore been expecting to mount another trip abroad for 12 - 18 months – hence the necessity to purchase a large stock. Further questioning, elicited that the operation was not due to take place for another 9 – 12 months and we can therefore see no reason why they should have had to make a purchase for this reason when they did. We also have in mind that Mr Smith's assertion that they were not going to be mounting another trip for 12-18 months was in direct contradiction to Mrs Smith's answer in her interview that they would be travelling again in the near future. We are also mindful of the contradiction in Mr Smith's interview in that he initially said that he had not previously purchased anything like this quantity, their purchases being no more than 8-10 cartons. Later in the interview he said that in fact they had purchased a similar amount the previous year and had topped up on subsequent trips. In his oral evidence to us he said that they had in fact brought back between ½ and ¾ of the amount on their trip a year before. Mr and Mrs Smith were frequent travellers. They purchase tobacco goods on, we understand, almost every trip they made. There was no reasons to support Mr Smith's contention that they would not be travelling again for 12 – 18 months and indeed as we say this was in conflict with Mrs Smith's evidence. 18. For all these reasons we do not find it credible that Mr and Mrs Smith made this entire purchase for their own personal consumption and we therefore conclude that the purchase was not for their own use. 19. These, therefore, are our findings of fact. In the light of Mr Speed's concession of the appeal, we direct that a further review be carried out within six weeks of the date of release of this decision by an officer who has had no previous involvement in the case.