United Kingdom VAT & Duties Tribunals (Excise) Decisions

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URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2005/E00891.html
Cite as: [2005] UKVAT(Excise) E00891, [2005] UKVAT(Excise) E891

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Guest v Customs & Excise [2005] UKVAT(Excise) E00891 (06 June 2005)

Guest v Customs & Excise [2005] UKVAT(Excise) E00891 (06 June 2005)

E00891

EXCISE DUTIES — Seizure of goods at Newcastle ferry port — condemnation proceedings before magistrates instituted and abandoned at instance of Appellant — whether issue of importation of goods for own use can be raised by Appellant before tribunal — whether decision on review to refuse restoration reasonable — irrespective of jurisdiction of tribunal the Appellant's case found to be incredible and properly rejected by reviewing officer — appeal dismissed

MANCHESTER TRIBUNAL CENTRE

GEORGE GUEST Appellant

- and -

HER MAJESTY'S REVENUE AND CUSTOMS Respondents

Tribunal: Michael Johnson (Chairman)

John E Davison

Sitting in public in North Shields, Tyne and Wear on 22 June 2005

Terence Sweeney, friend of the Appellant, for the Appellant

Lee Fish, counsel, instructed by the Acting Solicitor for HM Revenue and Customs, for the Respondents

© CROWN COPYRIGHT 2005


 


DECISION

1. On 16 June 2004 the Appellant returned to Newcastle Ferry Port from a trip to the Netherlands. He had with him 5,460 cigarettes of mixed brands and 3 Kg of hand-rolling tobacco ("the goods"). He was intercepted and interviewed by Her Majesty's Customs and Excise ("Customs"), as they were then known. The result of the interview was that Customs seized the goods.
2. The Appellant sought restoration of the goods but this was declined on the particular facts of the case and on policy grounds. He then sought a review of the decision not to restore. We have read and considered copies of the correspondence sent to Customs by the Appellant, in which he sets out the facts and arguments now amplified in this appeal. The review of the Appellant's case was conducted by Ms Julie Wiggs, one of the reviewing officers of Customs. Her decision was dated 13 September 2004 and resulted adversely to the Appellant. Restoration of the goods was again refused. The Appellant is now appealing that decision to this tribunal pursuant to section 16 of the Finance Act 1994.
3. The reasons for the seizure of the goods by Customs appear from the interviewing notes of the officer of Customs who spoke to the Appellant at the ferry port. They were the following –

The records of Customs showed that the Appellant had travelled to the continent 14 times in the previous 11 months and he was suspected of bringing into the UK substantial amounts of excise goods on each occasion;

The Appellant was disbelieved as to his smoking habits: whilst stating that he smoked 60 cigarettes a day, he said that he believed that the goods would last him 5 years, instead of the six months or so that the goods might be expected to last;

As a retired gentleman said to be on a pension of £100 per week, it did not appear that he could afford all the trips that he had made abroad.

4. It also appeared that the Appellant had contradicted himself during the course of the interview, by denying previous travel abroad until details of his previous trips were read out to him by Customs. This was found by Customs to be suspicious. Customs' records moreover showed that on 7 June 2003 the Appellant had been stopped by them and found to be in possession of 6,400 cigarettes and 13 Kg of hand-rolling tobacco. They therefore considered that it had been shown that the goods being transported on 16 June 2004 were held for a commercial purpose rather than for the traveller's own use, and were subject to seizure as liable to forfeiture.
5. The Notice of Appeal in this case is dated 9 December 2004, and was received by the Manchester Tribunal Centre on 14 December 2004. The Appellant's application for leave to appeal out of time was granted unopposed without a hearing.
6. The grounds of appeal attached to the Notice of Appeal are as follows –

a) The Appellant was misled by posters on the ferry suggesting that he could bring into the UK as much in the way of EU duty-paid goods as he liked;

b) The goods were for the Appellant's own personal use;

c) The Appellant was well able to afford the goods.

7. Customs appreciated that the foundation of the Appellant's case was the assertion that the goods were not dutiable because they were not held for commercial purposes but were for the traveller's own use. They therefore took it that they were being requested to institute condemnation proceedings before North Tyneside Magistrates pursuant to Schedule 3 of the Customs and Excise Management Act 1979. They duly did this, under reference 312/04.
8. For reasons that are not entirely clear, but which appear to have had to do with the costs that the Appellant might incur before the magistrates, the Appellant abandoned those proceedings. He enlisted the assistance of the Student Law Office of Northumbria University to draft and send a letter for him to the magistrates to that effect dated 14 December 2004. That letter was contemporaneous with the lodging of the appeal to these tribunals.
9. This appears to be yet another in the series of appeals heard by these tribunals in which the Appellant seems to have failed to appreciate that the jurisdiction of these tribunals is a limited one and does not extend to the legality of the seizure of the goods – see Gora v Customs and Excise Commissioners [2004] QB 93; Gascoyne v Customs and Excise Commissioners [2004] EWCA Civ 1162; Johnstone v Customs and Excise Commissioners [2005] EWHC 115 (Admin). Having listened to Mr Sweeney, representing the Appellant as his friend, and to the evidence of the Appellant himself, we think that the refinements of the respective jurisdictions of these tribunals on the one hand and the magistrates on the other hand were not fully taken on board at the time the condemnation proceedings were abandoned.
10. As previous courts and tribunals have stated, we think that it has become urgent that steps should be taken to ensure either that the law is less complex and confusing, so that mistakes are not made about the proper forum to which travellers should have recourse in order to present their cases in respect of seized excise goods, or else that the jurisdiction should be concentrated in the hands of one system of courts or tribunals, so that travellers do not by inadvertence find themselves without a remedy.
11. Ms Wiggs' review decision proceeded on the basis that the legality of the seizure of the goods was a matter for determination in due course, one way or the other, in condemnation proceedings. She might, therefore, have declined to consider the points put forward by the Appellant in correspondence in support of the proposition that the goods were for his own use. She did not however do that; prudently, we feel, she addressed the Appellant's whole case in her review and dismissed it as incredible.
12. Ms Wiggs wrote that, in interview, the Appellant had admitted 14 previous trips to the continent in the previous 11 months, and alleged that he had brought back 200 cigarettes per trip. These were short excursion trips, not involving a stay. Each trip was said to have cost about £40, plus about £5 for food and drink. Ms Wiggs calculated that altogether the trips would have cost about £1,577, including the cost of the cigarettes.
13. She noted that the Appellant said that he smoked 60 cigarettes per day. She calculated that the cigarettes bought abroad would last him about 44 days at that rate of consumption. Therefore in a period of 11 months, 292 days' consumption was presumably bought within the UK.
14. If those cigarettes were bought within the UK, then @ £4.30 per packet, they would have cost £3,766.80, or £2,660 if half the Appellant's consumption was UK-bought hand-rolled tobacco, and the other half UK-bought cigarettes.
15. Within the given period of 11 months, therefore, the Appellant had notional expenditure on trips and UK-bought cigarettes of (£3,766.80 + £1,577 = ) £5,343.80, or (£2,660 + £1,577 = ) £4,237 for trips and UK-bought cigarettes and hand-rolling tobacco, on a half-and-half basis. This fell to be compared with his income over the like period @ £100 per week of £4,800.
16. Ms Wiggs moreover doubted whether the Appellant in reality smoked at all. She felt that he must have known, if he was a genuine smoker, that the goods could not possibly have lasted 5 years.
17. In tribunal, the Appellant was the only witness from whom we heard oral evidence. We had in addition the unchallenged evidence contained and referred to in the witness statement of the reviewing officer.
18. The Appellant accepted in evidence that he had said that the goods would last 5 years and that that was "way out". He said that he was confused, under pressure, and was no good with numbers. He said that he was nearly 68 years of age and was a recovering alcoholic.
19. He also admitted that he had told the Customs officer that the last time that he had travelled was to Malta three years previously. However he told us that he did not count the trips to the continent as "travelling". When confronted with the evidence of those trips by Customs, he readily admitted them. He classified these trips in interview as "travelling on the sea", which he told the tribunal he was fond of doing, as a former member of the Royal Navy. His trips were, he said, a way of avoiding the stress and strain of everyday life and were cheap at the price.
20. The Appellant also told the tribunal that he is accustomed to visit his daughter by air in Spain once or twice a year. This is not mentioned in the interview notes.
21. The Appellant said that he had savings as well as his pension. He pointed to a lottery win of £1,000 that had enabled him to spend some £700 on the goods on the occasion in issue. However he accepted that there was no reference to this source of funds in the interview notes. We also observe that in the grounds of appeal the lottery win is stated to have been £2,000.
22. The interview notes are silent as to the amount of the Appellant's savings. He is recorded as stating that he didn't know how he managed to save enough for his trips. One of the grounds of appeal is that he was in receipt of a £321 monthly disability allowance and £47 per month personal pension, as well as £107 basic state pension each week. His wife is also said to have supported him with what the grounds of appeal term "amalgamated funds", but we have no details of these.
23. The grounds of appeal also suggest that the Appellant was generously supported by gifts from his ten grandchildren in making his trips. The evidence given by the Appellant in tribunal did not however support this. Rather, we were told that the Appellant might be given a few pounds to buy himself something on a special occasion. We accordingly find that the Appellant was not supported in his travelling by gifts from his family.
24. A suggestion was also made that the Appellant had a motive in travelling to the Netherlands, consisting of his desire to visit the fleshpots of Amsterdam. This was emphatically rejected by the Appellant in tribunal, who described himself as too old for such attractions. We discount this as a reason for the trips.
25. Appearing for Her Majesty's Revenue and Customs, Mr Fish submitted that the Appellant was barred from contending that the goods were for his own use, by reason of his having abandoned the condemnation proceedings, being the only forum for challenging the legality of the seizure. He referred us to the cases mentioned in paragraph 9 above.
26. Mr Fish submitted that it was clear that the Appellant had been asked questions that had produced unsatisfactory, if not contradictory, answers. He submitted that in conducting the review, Ms Wiggs had performed her task properly and conscientiously. She had examined the credibility of the Appellant as to his own use claim, even though the matter of the legality of the seizure was not in the event challenged.
27. Ms Wiggs' conclusion that there were no circumstances for restoration was, Mr Fish submitted, an entirely reasonable one, and the tribunal should not interfere pursuant to section 16(4) of the Finance Act 1994. As Mr Fish put it, "Every box has been ticked".
28. For the Appellant, Mr Sweeney submitted that there were four basic shortcomings in this case that should lead to the appeal being allowed.
29. First, the record of interview was misleading when it came to the matter of credibility. Although the Appellant's answers may have been vague, the questions asked were vague. The Appellant had understandably misunderstood the question as to the last time on which he had travelled. He had corrected himself when he saw what Customs meant. He was also confused as to numbers.
30. Secondly, it had been assumed by Customs that the Appellant could not have financed his trips himself. But he had sources of income that Customs had not explored.
31. Thirdly, it had been concluded that the Appellant was in reality a non-smoker. But there was no evidence as to that. The Appellant had maintained throughout that he smoked 60 cigarettes per day, and there was nothing to indicate otherwise.
32. Finally, the Appellant could not prove that the earlier trips had not been to bring back excise goods. But he had given an explanation that he asked the tribunal to accept. It was for the tribunal to say whether Customs' conclusion about his trips was a reasonable one.
33. When pressed by the chairman, Mr Sweeney said that the most important point in the case, from the Appellant's point of view was the examination of the evidence. We should have regard to the Appellant's state of health, and the scope for his having become confused, and we should allow the appeal on grounds of fairness and equity and on humanitarian grounds.
34. In considering our decision, we find ourselves in agreement with Mr Sweeney that, the matter of our jurisdiction apart, the examination of the evidence is the key to this case. It is also, of course, the case that in law there is no limit to the amount of excise goods that an EU traveller can bring to the UK from the Netherlands, purchased there duty-paid, without incurring excise duty here, so long as those goods are for the traveller's own use. As posters on the ferries state, the suggested amounts for importing are merely guidelines.
35. As a witness, the Appellant appeared to us to be nervous and embarrassed. He did not give his evidence convincingly.
36. We have difficulty in accepting the Appellant's explanation as to why he suggested that the goods might last 5 years. We take Mr Sweeney's point that this does not, in itself, show that he was a non-smoker. But whether or not he was a smoker, he could so easily have specified a shorter period. Considered with the rest of the Appellant's answers, this reply shows a lack of sincerity.
37. We also find it very unlikely that he would not have mentioned the lottery win if that was truly a factor in funding his trip.
38. We do not accept the Appellant's explanation as to why he did not initially mention his previous trips to the continent when asked about "travelling". True, the trips in question were sea trips, and he understandably liked the sea, but they were sea trips with a destination. We feel that the Appellant must have appreciated that what he was being asked about were trips similar to that from which he was just returning – ie that the question included excursions on the ferry.
39. Making due allowance for the Appellant's age, condition and propensity for becoming confused, we still do not feel that the course of the interview has been adequately explained. We do not find that the Appellant was misled by any particular question or line of questioning.
40. A significant point seems to us to be that it remains unclear how the Appellant funded all his trips abroad, if not by receiving substantial financial assistance apart from that disclosed. Even with a larger pension than initially mentioned, funds for the level of expenditure mentioned by Ms Wiggs would be unreasonably tight otherwise. We do not feel that Ms Wiggs' figures have been properly addressed and dealt with by the Appellant.
41. Allied to that is perhaps the key point, which is the lack of a satisfactory explanation for the sheer number of trips, if not to bring back quantities of excise goods. As we see it, the question is: what was the purpose of all these trips? We think that the Appellant might have been able to afford and have wanted to undertake occasional trips for recreational reasons, but not 14 such trips in 11 months. We think that the Appellant has not come forward with a proper explanation for making all these trips, apart from that relied upon by Customs.
42. We therefore conclude that Mr Fish is right when he submits that Ms Wiggs' review decision is unimpeachable. This is not a case in which we ought to interfere, exercising our jurisdiction under section 16(4) of the Finance Act 1994.
43. Mr Fish is also correct when he submits that it is highly questionable whether we could properly entertain this appeal, whether on equitable or humanitarian grounds or otherwise, in the light of the abandonment of the condemnation proceedings by the Appellant.
44. There are limited circumstances in which, following the decision in the Gascoyne case, an appellant might contend before these tribunals that goods have been imported for own use and not for a commercial purpose. But in a case where condemnation proceedings have actually been instituted, and have for whatever reason been abandoned at the instance of the traveller, it seems to us to be highly problematic for the traveller to adopt the stance that the case that he should properly have presented before the magistrates can be relied on in lieu before the tribunal.
45. This is, as we say above, an area of law in which statutory intervention is urgently required.
46. For the above reasons, we dismiss this appeal.

MICHAEL JOHNSON

CHAIRMAN
Release Date: 6 July 2005

MAN/04/8124