United Kingdom VAT & Duties Tribunals (Excise) Decisions

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Cite as: [2005] UKVAT(Excise) E890, [2005] UKVAT(Excise) E00890

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Ash & Anor v Customs & Excise [2005] UKVAT(Excise) E00890 (06 July 2005)

E00890

EXCISE DUTY — RESTORATION OF EXCISE GOODS AND MOTOR VEHICLE — two Appellants — jurisdiction — Gascoyne and Gora considered — no abuse of process — facts found on the importation — review officers placed too much weight on specific facts to the exclusion of other relevant facts — one review officer erred in matters of law — non-restoration unreasonably arrived at — appeals allowed

MANCHESTER TRIBUNAL CENTRE

RICKY ASH and LLOYD BASS Appellants

- and -

HER MAJESTY'S REVENUE AND CUSTOMS Respondents

Tribunal: Michael Tildesley OBE (Chairman)

Carole Roberts JP

Sitting in public in Manchester on 2 March 2005 and 3 May 2005

The Appellants appeared in person

David Mohyuddin, of the Acting Solicitor for HM Revenue and Customs, for the Respondents

DECISION

The Appeal

Ricky Ash

Mr Ash was appealing against the Respondents' review decision to refuse restoration of excise goods dated 6 October 2004. The review was directed by the Tribunal following a previous review, which refused restoration dated 6 September 2001.

The ground of the Appeal was that Mr Ash challenged the legality of the Respondents' stop and search and the seizure of the excise goods.

Lloyd Bass

Mr Bass was appealing against the Respondents' review decision to refuse restoration of excise goods and to offer conditional restoration of a motor vehicle (BMW 318i, registration number D118 WMV) on payment of £235 dated 19 June 2002. The review was directed by the Tribunal on 22 May 2002 without hearing the evidence following a previous review, which refused restoration of the excise goods and the motor vehicle dated 6 September 2001.

The ground of Appeal was that all goods were for personal consumption.

The Circumstances of the Appeal

On the 15 May 2001 at 10.30am Customs and Excise Officers at the UK Control Zone in Coquelles in France stopped Mr Ash and Mr Bass who had travelled in Mr Bass motor vehicle that morning to Calais to purchase a variety of goods. After interview the Officers seized the excise goods purchased by Mr Ash and Mr Bass because they were not satisfied that Mr Ash and Mr Bass had imported them for their own use. The Officers also seized Mr Bass' motor vehicle.

The following excise goods were seized:

Total Excise Goods	Mr Ash's Share	Mr Bass' Share
19,800 cigarettes	10,000 cigarettes (Superkings)	9,800 cigarettes (Lambert & Butler lights)
22.5 litres of beer		22.5 litres of beer
54 litres of wine	27 litres of wine (6 cases)	27 litres of wine (6 cases)
1 litre spirits		1 litre of spirits believed to be gin.

Issues for Determination

Whether the Tribunal has jurisdiction to entertain the grounds of Appeal asserted by Mr Ash and Mr Bass in accordance with the Court of Appeal decision in Gascoyne v HM Customs and Excise [2004] EWCA Civ 1162.

Whether the Respondents' decisions not to restore the excise goods and offer conditional restoration of motor vehicle were decisions, which no reasonable body of Commissioners could have arrived at. In order for the decisions to be reasonable the decision makers must have considered all relevant matters and must not have taken into consideration irrelevant matters.

The Evidence

We heard evidence from

(1) Raymond Brenton, Review Officer who refused restoration of the excise goods in respect of Mr Ash.

(2) Mr B Miles, Customs and Excise Officer who stopped the Appellants and interviewed Mr Bass.

(3) Mr Truelove, Customs and Excise Officer who stopped the Appellants and interviewed Mr Ash.

(4) Mr Ash and Mr Bass, the Appellants.

Witness statements of Gordon Murray, Review Officer in Mr Bass' case, and Janice Rankin, Customs and Excise Officer were admitted under rule 21 of the Tribunal Rules. The Tribunal took no account of the witness statement of Zoe Whitworth, Customs and Excise Officer based at the Post Seizure Unit, because Mr Ash objected to her statement in accordance with rule 21. Miss Whitworth was unable to attend the hearing on 3 May 2005.

A bundle of documents was given to the Tribunal.

Whether the Tribunal has jurisdiction to entertain the grounds of Appeal asserted by Mr Ash and Mr Bass?

Mr Mohyuddin for the Respondents contended that the Tribunal had no jurisdiction to entertain the Appellants' stated grounds of Appeal because they challenged the legality of the seizure of the goods and motor vehicle which was a matter for the magistrates not the Tribunal. Mr Mohyuddin relied upon the Court of Appeal decision in Gascoyne, where Lord Justice Buxton decided that under domestic law Appellants could not raise issues about the lawfulness of the seizure in restoration proceedings because of normal English law rules of res judicata or abuse of process. Lord Justice Buxton, however, recognised that under the European Convention on Human Rights Appellants may be able to ventilate matters relating to the lawfulness of seizure in restoration proceedings where there has been no condemnation proceedings before the magistrates relating to the seized property. In such circumstances Appellants did not have an unfettered right to ventilate these matters, the Tribunal still had to decide whether to re-open the issues appertaining to condemnation having regard to considerations of or similar to abuse of process. The mere fact that there has been no prior condemnation proceedings did not in itself amount to a sufficient reason to allow the Tribunal to re-open issues on the lawfulness of seizure. On the facts of this Appeal Mr Mohyuddin was of the view that it would be an abuse of process for the Tribunal to re-open these issues.

We have found the following facts in relation to the dispute about whether we have jurisdiction to entertain the Appellants' grounds of Appeal:

(1) The Appellants did not give notice in writing to the Commissioners for Customs and Excise claiming that the seized excise goods and motor vehicle were not liable for forfeiture. Thus there were no condemnation proceedings before the magistrates. The goods and the motor vehicle were deemed to have been duly condemned as forfeited in accordance with paragraph 5 of Schedule 3 of the Customs and Excise Management Act 1979.

(2) The Appellants had not ventilated matters before the magistrates about the lawfulness of the seizure of the excise goods and motor vehicle.

(3) Mr Bass was given Notice C156 (Seizure Information) and Notice SEE004C (Seizure of Vehicle). On the reverse of C 156 persons were advised of their right to challenge in court, if they think that Customs and Excise was wrong to seize the goods. The claim must be made in writing within one month of the date of seizure and sent to the office named on the form. The reverse of form SEE004C contained a reference in bold which stated that THIS NOTICE DOES NOT AFFECT YOUR RIGHT TO APPEAL AGAINST SEIZURE which was followed by an explanation about the procedure for making an appeal against seizure.

(4) Mr Ash was only provided with a photocopy of the front sheet of C156. He did not receive the reverse of the form which set out the process for the Appeal.

(5) After the seizure of the excise goods and car Mr Ash asked Officer Miles about getting their goods back. According to Mr Ash Officer Miles responded that the fastest and easiest way to get the goods back were to go through Customs and Excise procedures. The contemporaneous notes of interview recorded that the Appellants requested information about Appeal procedures. Officer Miles in his evidence accepted that he would have told them to write to the post seizure unit, although he could not remember his exact words because of the passage of time. Officer Miles fairly stated that his knowledge of the differences between requesting restoration and challenging seizure was limited. He would not have sought to advise aggrieved travellers about the various routes of Appeal, instead he would have told them to contact the Post Seizure Unit as quickly as possible. We consider that there is broad agreement between the evidence of the Appellants and Officer Miles about what they were told immediately after the seizure about how to appeal. In those circumstances we accept the account given by Mr Ash.

(6) On the same day of the seizure, 15 May 2001, Mr Bass sent a letter to the Excise Support Team at Dover requesting restoration of his vehicle and all goods relating to himself and Mr Ash. The letter set out the details of the journey and the seizure. Mr Bass requested restoration of the goods without charge as all goods purchased were for personal consumption. Mr Ash stated that he wrote a similar letter on 18 May 2001 which he presented to the Tribunal.

(7) On 22 May 2001 Miss Whitworth of the Respondents' Post Seizure Unit responded to Mr Bass' letter of 15 May 2001 which stated:

"Thank you for your letter received at this office on 18 May 2001.

It is not clear whether or not you wish to lodge a formal appeal against seizure under Schedule 3 of the Customs and Excise Management Act 1979.

A claim against forfeiture must be received by us within one month of the date of the seizure. If a valid claim is received, the commissioners are then obliged to institute proceedings for the condemnation of the seized goods. This will involve Court proceedings.

However, if you simply request the restoration of the seized goods and/or vehicle, your request will be sent to the Senior Officer of the team which made the seizure, and a decision will be made whether or not to restore the goods and/or vehicle to you. The Senior Officer will then confirm his decision to you in writing.

Please be aware that although you may request both restoration and appeal against the seizure, the condemnation proceedings will take precedence over the restoration request, and the Senior Officer will decline to give you a decision regarding restoration until such time as the condemnation proceedings are withdrawn or have concluded.

Both yourself and Mr Ash will have to write in asking for return of the goods.

Please could you clarify in writing within 14 days from the date of this letter which course of action you wish to adopt".

(8) Mr Bass stated in evidence that he telephoned Miss Whitworth on receipt of her letter to enquire about the most suitable way to get their goods back. According to Mr Bass, Miss Whitworth suggested that restoration was the quickest and easiest route because it took a long time to obtain a court date. Mr Ash gave evidence of a phone call to Miss Whitworth which he said took place after being stopped by Officers Miles and Truelove. Mr Ash referred to the telephone conversation in his letter to the Review Officer on 17 July 2001 where he repeated the details of Miss Whitworth's advice. Miss Whitworth was unable to give evidence at the resumed hearing on 3 May 2005.

(9) We are satisfied with the accuracy of Mr Bass' recollection about the phone call with Miss Whitworth. The making of the phone call and the enquiry was consistent with the Appellants' conduct of the Appeal. After the goods were seized they enquired immediately about the process for getting their goods back. Mr Bass wrote a letter requesting return the same evening of the seizure. Mr Bass contacting Miss Whitworth fitted the pattern of his previous behaviour of seeking advice from Customs and Excise at each stage of the proceedings. The content of the telephone conversation closely resembled the advice given in the letter of 22 May where the impression given was that restoration was more straightforward than going to court.

(10) In our view, Miss Whitworth gave a clear steer in her letter of 18 May in favour of restoration proceedings. They were simpler than court proceedings which would take longer for the Appellants to get their goods back if they were successful with the Appeal.

(11) On 31 May 2001 Mr Bass responded to Miss Whitworth's letter by adding to his original letter of 15 May a sentence requesting restoration of the goods and motor vehicle. Mr Ash responded on 1 June with his letter starting: "I am writing to simply request the restoration of my goods and my friends car….".

(12) Mr Bass accepted in cross examination that he chose the restoration route because he wanted his goods and car back and the two options presented to him were effectively two routes on a map arriving at the same destination. Mr Ash was of the view that they were only presented with the one option of going through the Customs and Excise procedures.

Mr Mohyuddin contended that on the evidence both Mr Bass and Mr Ash had made a conscious choice to opt for restoration of their goods and motor vehicle rather than institute condemnation proceedings before the magistrates. They made their decision after being provided with clear information about their choices. Miss Whitworth's letter gave them a further opportunity to reflect on the route to take. Mr Mohyuddin referred to Lord Justice Buxton's view in Gascoyne at 71and 72 that the explanation given on the reverse of Notice C156 was expressed in non-technical language and that it was reasonable to assume that the importer would have grasped its meaning. Mr Mohyuddin concluded that as the Appellants had chosen restoration proceedings it would be an abuse of process for the Tribunal to consider those matters which went to the issue of seizure.

We consider that Mr Mohyuddin's submission oversimplified the evidence heard by the Tribunal. We find that the Appellants' choice of restoration proceedings was influenced by the advice given by Officer Miles and Miss Whitworth. The Appellants inferred from the advice there was effectively no difference between the two routes of Appeal except that condemnation proceedings before the magistrates would take longer. Further Miss Whitworth's letter did not set out the differing requirements of the two options, for example, it did not make it clear that the magistrates' court was the proper forum for disputes about personal use of the goods bought. Miss Whitworth was aware from Mr Bass' letter that his dispute concerned personal consumption. Also we consider that the letter of 22 May implied that restoration proceedings were simpler and more straightforward than court proceedings. In view of our findings we are satisfied that it would not be an abuse of process to consider the Appellants' evidence regarding their proposed use of the excise goods bought. This is a situation where the deeming provisions of paragraph 5 of schedule 3 of the Customs and Excise Management Act 1979 are not paramount.

Jurisdiction

Our decision to re-open the facts surrounding the seizure of the excise goods does not mean that we will be considering the lawfulness of the seizure. Our jurisdiction under section 16(4) of the Finance Act 1994 is limited to considering whether the decisions to refuse restoration were reasonably arrived at. Our findings of fact on the Appellants' grounds of Appeal will be a material factor in judging reasonableness from the perspective of whether a reasonable body of Commissioners would have arrived at the decisions to refuse restoration of the excise goods and to offer conditional restoration of the motor vehicle.

The Court of Appeal decision in Gora v Commissioners for Customs and Excise [2003] EWCA Civ 525 at 38 confirmed that the Tribunal has a comprehensive fact-finding jurisdiction in relation to restoration proceedings. The role of the Tribunal is to carry out the fact-finding exercise and then go onto decide whether, in the light of its findings of fact, the decision on restoration was reasonable.

The test for reasonableness is that set out by Lord Lane in Customs and Excise Commissioners v J H Corbitt (Numismatists) Ltd [1980] STC 231 at 239, namely:

"…the tribunal had to consider whether the commissioners had acted in a way in which no reasonable panel of commissioners could have acted or whether they had taken into account some irrelevant matter or had disregarded something to which they should have given weight. The tribunal might also have to consider whether the commissioners had erred on a point of law".

Whether the Review Decisions of 19 June 2002 (Mr Bass) and 6 October (2004) (Mr Ash) were reasonable?

The Review Decision of 19 June 2002 (Mr Bass)

Mr Murray conducted the decision on review which refused restoration of excise goods and offered conditional restoration of the motor vehicle in respect of Mr Bass. Mr Murray in reaching his decision took account of the following matters:

(1) The quantity of cigarettes (10,000) brought was twelve times the indicative levels (800 cigarettes, now increased to 3,200) as set out in the Excise Duties (Personal Reliefs) Order 1992 (hereinafter referred to as the 1992 Regulations). The quantities of wine and beer were within the indicative levels.

(2) Mr Bass did not have the financial means to purchase this large quantity of cigarettes which cost £955.50.

(3) The implausibility of Mr Ash lending him £1,000 to purchase the cigarettes in view of the inability of Mr Bass to repay the sum owed within a reasonable period of time.

(4) The implausibility of Mr Bass not purchasing cigarettes for his partner.

(5) Mr Bass had not satisfactorily rebutted the statutory presumption of commerciality under the provisions of the 1992 Regulations.

(6) Mr Bass was not entitled to benefit from the reliefs available under the 1992 Regulations because in reality Mr Ash purchased the excise goods.

(7) The motor car was offered for restoration on payment of a fee because the cigarettes were destined for sale on a not for profit basis.

(8) The motor car was destroyed in November 2001.

The Review Decision of 6 October 2004 (Mr Ash)

Mr Brenton conducted the decision on review which refused restoration of excise goods in respect of Mr Ash. Mr Brenton in reaching his decision took account of the following matters:

(1) The circumstances surrounding the seizure but not the legality of the seizure which included any claim that the excise goods were for own use.

(2) The quantity of cigarettes brought in was more than three times the indicative levels (3,200 cigarettes) in The Excise Goods, Beer and Tobacco Products (Amendment) Regulations 2002 (hereinafter referred to as the 2002 Regulations). Such quantities were likely to damage legitimate trade in the UK.

(3) The implausibility of keeping large amounts of cash at home and not keeping the cash in a bank.

(4) The implausibility of lending £1,000 to a fellow worker who Mr Ash had not seen for six months with no guarantee of repayment.

(5) The shopping expedition had all the features of a joint commercial importation. Mr Bass would have bought cigarettes for his partner if he was purchasing for personal consumption. Mr Ash paid for the goods in cash.

Mr Brenton in giving evidence before the Tribunal accepted that the excise goods were not concealed and that the mode of transport for carrying the excise goods was not suspicious. He had not researched the occupation of stuntmen which he did not consider to be relevant. Mr Brenton did not dispute Mr Ash's earnings of between £50,000 to £70,000 per annum. He did not speak to Officer Truelove about Mr Ash's allegation that Officer Truelove was satisfied with Mr Ash's assertion that the goods were for personal consumption. Mr Brenton doubted whether a Customs and Excise Officer would say that after an interview. Mr Brenton considered that his job was to look at the correspondence in the file and form a view on that correspondence. He did not examine the Reviews of other Officers because of the danger of plagiarism. Mr Brenton had not read the Review decision in respect of Mr Bass but was aware that compensation had been paid in respect of the motor vehicle because it was not possible to restore it.

Our Findings of Fact

Mr Ash and Mr Bass got to know each other through their occupation as stuntmen. They first met in April 2000 when they were employed in a television episode of "Casualty", and kept in contact afterwards principally by phone. Mr Ash and Mr Bass agreed to go on a shopping trip to Calais in October 2000. Mr Bass gave evidence that they first met in the latter part of 2000. We have resolved this conflict of evidence in favour of Mr Ash's evidence who volunteered this information in his examination in chief which followed Mr Bass' testimony.

Mr Ash and Mr Bass were not regular cross Channel travellers and had not been previously stopped by Customs and Excise Officers. Mr Ash travelled twice in the previous year in June and December 2000. On the December trip he purchased 1,200 cigarettes and wine but no excise goods in June. Mr Bass made a visit in November/December 2000 when he brought back some beers and wine but no cigarettes.

Mr Ash and Mr Bass made no enquiries with Customs and Excise about what they could bring back into the UK before they made the joint shopping trip but were aware that there were no limitations on excise goods provided they were for their personal use.

On 15 May 2001 the Appellants travelled together in Mr Bass' motor vehicle to Calais on a shopping trip. Mr Ash paid the fare for the Euro Tunnel. Mr Bass paid the petrol. They purchased 20,000 cigarettes, 22.5 litres of beer, 54 litres of wine, one litre of spirits, two large boxes of soap powder, one large box of dog food, two bags of cat food and general grocery items.

The 20,000 cigarettes consisted of 10,000 Lambert & Butler Lights and 10,000 Superkings, which were the brands smoked respectively by Mr Bass and Mr Ash. Mr Bass smoked between 30 and 40 cigarettes a day; Mr Ash approximately 30 a day. The cigarettes were expected to last between eight and ten months.

The amount of cigarettes purchased was twelve times the indicative levels for cigarettes in the 1992 Regulations (three times the level in the 2002 Regulations). However, the amounts purchased were not out of proportion with their stated levels of consumption of cigarettes. The wine, beer and spirits purchased were within the indicative levels.

Mr Bass did not purchase cigarettes for his partner who smoked about ten cigarettes a day. She was attempting to give up smoking as they were trying for a baby.

Mr Ash had built up a successful career as a stuntman. He earned between £50,000 to £70,000 per annum, owned his own house and no regular outgoings. Mr Ash had the means to pay for the excise goods and to lend Mr Bass the money to purchase the cigarettes. Mr Ash paid for personal items by cash: business items by credit card or cheque. He adopted this method so that he could keep separate his personal expenditure from his business expenditure.

Mr Bass' earnings from various occupations amounted to £20,000 per annum. His partner also worked. The £3,000 savings in the Jupiter account were in his partners' name. Mr Bass' current account for the 15 May 2001 showed a credit balance of £293.36. He had an overdraft facility with his bank. There was no evidence to suggest that Mr Bass was in debt. Mr Bass did not have readily available cash to purchase the cigarettes on the joint shopping trip. Mr Bass, however, was not worried about borrowing the money from Mr Ash. He would make considerable savings on his normal expenditure on cigarettes by purchasing them in France. Mr Bass was not in an impecunious situation. He was in receipt of regular income from his various enterprises with the possibility of remunerative engagements as a stuntman and the savings he would make from purchasing cigarettes abroad would enable him to repay the loan within a reasonable period.

Mr Ash lent Mr Bass £1,000 to purchase the cigarettes. Mr Ash clearly had the means to make this loan and did not consider that £1,000 was a significant sum in the context of his overall earnings. Mr Ash did not set a date for repayment of the loan but had satisfied himself that Mr Bass would repay him. Initially we were surprised that Mr Ash would be prepared to lend £1,000 to Mr Bass, particularly as there was no guarantee of repayment and that he had only known Mr Bass for one year. However, after hearing from Mr Ash we are satisfied that he did not perceive the loan problematical in that he could easily afford the loan of £1,000 and that he would be repaid at some future date.

Mr Ash and Mr Bass did not conceal the excise goods. Their method of transporting the goods was not considered suspicious by Customs and Excise.

Mr Ash and Mr Bass co-operated fully with Officers Miles and Truelove during their interviews. Officer Truelove accepted that he told Mr Ash that he was satisfied with everything Mr Ash told him which supports our finding that Mr Ash was helpful in interview. Officer Truelove, however, denied that he told Mr Ash that he was satisfied that the excise goods were for personal consumption because it would be up to Officer Miles to make the decision about seizure. We are satisfied that Mr Ash probably misinterpreted Officer Truelove's remarks as confirmation of his own position that the goods were for personal use. There were no inconsistencies between the two interviews, which was recorded by Officer Miles striking out the phrase "some inconsistencies in stories" in the interview notes.

Mr Ash and Mr Bass refused to sign the Seizure Notice, instead they recorded the words: "not signed as not smuggling". Mr Ash and Mr Bass have consistently asserted that the excise goods were purchased for personal consumption. At no time have they suggested that the excise goods were to be given to friends or family at cost. They have pursued their Appeal for four years.

Following the stop and seizure at Coquelles, in October 2001 Officers from the Customs National Strike Force visited Mr Bass at his home to search his premises for excise goods. Mr Bass consented to the search. The Officers reported that Mr Bass was very co-operative and that the search did not result in the finding of any goods of interest to Customs and Excise.

We found two inconsistencies between the evidence of Mr Bass who give his evidence first and Mr Ash. However, these inconsistencies were brought to our attention by Ash volunteering the information in his examination in chief and informing us that Mr Bass was mistaken in his evidence. The inconsistencies concerned the date when they first met and the payment for the cigarettes.

We summarize our findings of fact as follows:

(1) Mr Ash and Mr Bass went on a shopping trip to Calais to purchase principally excise goods but other goods as well which could be obtained more cheaply in France than in the UK.

(2) Mr Ash and Mr Bass were smokers, averaging between 30 and 40 cigarettes a day.

(3) The quantity of cigarettes purchased in France was twelve times and above three times the indicative levels for cigarettes in the 1992 and 2002 Regulations respectively but the quantities bought were not out of proportion with their stated rates of consumption of cigarettes. The quantities of wine, beer and spirits purchased were within the indicative levels.

(4) Mr Ash and Mr Bass did not travel regularly to the Continent to purchase excise goods. The evidence revealed only one such occasion for Mr Ash in the previous year when he purchased 1,600 cigarettes. In Mr Bass case he did not purchase cigarettes on his trip to France in 2000.

(5) Mr Ash had a large disposable income with the means to pay for the excise goods and to lend Mr Bass £1,000. Mr Ash was relaxed about making the loan, satisfied that he would get the money back at some future time. Mr Ash organised his personal and business expenditure by paying cash for the former and using cards and cheques for the latter.

(6) Mr Bass did not have readily available cash with which to purchase the cigarettes. However, he was in receipt of regular income and would make significant savings in his normal expenditure by purchasing his cigarettes in France. There was no evidence that he was in debt. Mr Bass had the financial capacity to repay the loan quickly.

(7) Mr Ash and Mr Bass were fully co-operative in their interviews with the Customs and Excise Officers. There were no inconsistencies in their interviews, no concealment and no obvious lies. Mr Bass co-operation extended to the Officers from the Customs National Strike Force when they searched his home.

(8) Mr Ash and Mr Bass have consistently asserted that the excise goods were purchased for their personal use. At no time have they suggested that the goods were bought to give to friends and family or to sell them at cost.

(9) Many of the features normally associated with commercial importations were missing, such as exaggerated rates of consumption, disproportionate relationship between stated rate of consumption and purchases, frequent travel to the continent to purchase excise goods, no obvious means to pay for the goods, and a determined course of dissimulation on the part of the travellers.

Were the Review Decisions to Refuse Restoration and to offer Conditional Restoration of the Motor Vehicle Reasonable?

We had the benefit of hearing from the Appellants in person. We are satisfied that they were truthful witnesses highlighted by Mr Ash identifying two inconsistencies between their respective testimonies which would not have probably come to light without him volunteering the information. We also had the advantage over the Review Officers, Mr Brenton and Mr Murray of exploring some of the issues in greater detail, in particular the finances of Mr Ash and Mr Bass and the manner in which Mr Ash organised his financial affairs.

In the light of our findings of fact we would make the following observations on the Reviews which apply equally to Mr Brenton and Mr Murray. We consider that they placed too much weight on the quantity of cigarettes purchased and the financial situation of Mr Bass to the exclusion of other relevant facts, such as the financial circumstances of Mr Ash, the relationship between the quantities purchased and their stated rates of consumption, their co-operation and overall conduct in their dealings with Customs and Excise and the facts that militated against commercial importation.

We consider that in respect of Mr Murray alone that he erred on points of law. In his Review he stated that Mr Bass was under an obligation to rebut the statutory presumption of commerciality under the provisions of 1992 Regulations. This may have been a common understanding of the legal position in early 2002. However, the law has been subsequently clarified by the decision in Commissioners of Customs and Excise v Hoverspeed and Others [2002] EWHC 1630 which held that the persuasive burden of proof upon the individual was incompatible with the EC Treaty and Council Directives. We also consider that Mr Murray erred in inferring that Mr Bass purchased the cigarettes for sale on a not for profit basis in that there was no factual basis for drawing this inference.

In view of our findings of fact it would be necessary for the Respondents to re-examine whether the conditional offer of restoration of Mr Bass' motor vehicle was a proportionate response.

We are therefore satisfied that the Review Officers' decisions of 19 June 2002 (Mr Bass) and 6 October 2004 (Mr Ash) were unreasonably arrived at within the meaning of section 16(4) of the Finance Act 1994.

Our Decision

In view of our finding that the Respondents' decisions of 19 June 2002 (Mr Bass) and 6 October 2004 (Mr Ash) were unreasonably arrived at, we allow the Appeals of Mr Ash and Mr Bass. We order that the Respondents pay the costs of the Appellant incurred in connection with this Appeal hearing. If the costs cannot be agreed the parties are at liberty to apply for the directions of the Tribunal.

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

(1) The decisions not to restore the Appellants' excise goods shall cease to have effect from the date of release of this decision. In the case of Mr Bass alone the decision to restore his motor vehicle on payment of a sum of money shall cease to have effect from the date of release of this decision.

(2) The Commissioners shall conduct further reviews of the decisions not to restore the excise goods to Mr Ash and Mr Bass and in the case of Mr Bass the decision to restore his motor vehicle on terms and serve the same on both Appellants and the Tribunal within 30 days of release of this Decision.

(3) Officers not previously involved with the case shall conduct the further reviews. The Commissioners may wish to consider appointing the same Officer for the Reviews of Mr Ash and Mr Bass.

(4) The further reviews shall be on the basis of the Tribunal's findings of fact as set out in paragraphs 22 to 37 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.

(5) The Review Officer shall take account of any further material or representations made by the Appellants 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 5 BZ.

The Appellants will have a further right of appeal to the Tribunal if dissatisfied with the outcome of the further reviews.

MICHAEL TILDESLEY

CHAIRMAN
Release Date: 6 July 2005

MAN/04/8123 & MAN 04/8014