United Kingdom VAT & Duties Tribunals (Excise) Decisions

Shanley v Revenue & Customs [2005] UKVAT(Excise) E00897 (26 July 2005)

E00897

EXCISE DUTIES — traveller importing 42 kg of tobacco — goods and car seized — claim that 6 kg intended as gift to father and 18 kg each to be given to agents who had secured large commissions — explanation implausible — refusal to restore car — hardship claimed — no exceptional circumstances — refusal to restore reasonable — appeal dismissed

MANCHESTER TRIBUNAL CENTRE

JOHN ANDREW SHANLEY Appellant

- and -

HER MAJESTY'S REVENUE AND CUSTOMS Respondents

Tribunal: Colin Bishopp (Chairman)

John Lapthorne

Sitting in public in Birmingham on 19 July 2005

The Appellant in person

Ian Speed, counsel, instructed by the Acting Solicitor for HM Revenue and Customs for the Respondents

© CROWN COPYRIGHT 2005

DECISION

1. In this appeal John Shanley challenges the Respondents' refusal to restore to him a Mercedes C220 car seized from him at the entrance to the Channel Tunnel at Coquelles on 15 December 2004. The refusal was upheld on a statutory review undertaken by Gareth Morgan and communicated by letter of 10 February 2005.
2. Mr Shanley represented himself at the hearing, while the Respondents were represented by Ian Speed of counsel. Mr Speed provided us with a bundle of documents. We heard no oral evidence, though Mr Shanley explained the factual background of the case from his perspective.
3. Mr Shanley arrived at Coquelles, alone, and was intercepted (for reasons which we were not given) by a Customs officer. His car contained 42 kg of Golden Virginia hand rolling tobacco. Mr Shanley explained to the officer (and repeated to us) that he had bought one box – 6 kg – as a Christmas gift for his father, and three boxes each for two people with whom he worked. At Coquelles, he described them as employees although he told us that they were merely agents engaged by his own employers; we do not consider that discrepancy to be of great significance. Mr Shanley is the area sales manager for a large flooring manufacturer, his area encompassing the East Midlands, and the two agents work within that area. Mr Shanley is himself an employee, and not an owner of the business. The agents had, he said, been instrumental in securing significant sales, and the tobacco was to be given to them as a reward.
4. He went on to explain, both to the officer at Coquelles and to us, that in the past his employers had rewarded the agents by gifts of champagne and by paying for them to take weekends away. On this occasion, Mr Shanley had decided to reward them himself. Using his own money – and in cash – he bought the tobacco while he was in Belgium, on his employer's business, and brought it back with him. He is not a smoker himself, and does not know how much tobacco a smoker might consume, but decided on an amount he would spend. In fact, the cost of his purchase, including the tobacco destined for his father, amounted to £2268, of which rather more than £900 related to each of the agents. He was aware that they smoked Benson and Hedges and Old Holborn, but decided to buy Golden Virginia because it was cheaper; he retained the receipt in case it was necessary after all to take the tobacco back and change it. Once the tobacco had been seized, as it was, he was obviously unable to give it to his father and the agents, and neither he nor his employers had, in the event, rewarded the agents at all.
5. Mr Shanley did not, however, complain about the seizure of the tobacco; his complaint is that his car, too, was seized and not restored. His case before us was that he had told the truth at Coquelles, that none of the tobacco was to be sold, and that he was suffering severe hardship as a result of the loss of the car. He was not provided with a company car; the policy was that employees should provide their own. He could not perform his work without a car, in which he travelled about 50,000 miles a year. He had to continue to pay the loan instalments on the car which was seized, and in addition had to pay for a replacement. Whereas before he had a monthly surplus of income, he now had a deficit and was overdrawn.
6. The Respondents' case is that Mr Shanley's explanation is implausible. In particular, they say, it is improbable that he would pay for a purchase of such value in cash, and improbable that he would buy Golden Virginia when he knew that two of the intended recipients smoked other brands. They point to a discrepancy between Mr Shanley's giving, as the name of the agents, Callaghan and Jarvis at Coquelles and Callaghan and Anderson in his subsequent letters (a discrepancy which Mr Shanley attributed to a simple mistake). Even if his story is true, they say, the scale of the gifts he proposed to make to the agents and the fact that they were to be rewarded for their work means that the importation must be treated as commercial. They rely on the comments of Lord Phillips of Worth Matravers MR, in Lindsay v Customs and Excise Commissioners [2002] STC 588, to the effect that those who use their vehicles for the purpose of making illicit commercial importations of excise goods cannot complain if their vehicles are seized and not restored. And, they say, the inconvenience and financial burden imposed on Mr Shanley are merely the consequence of his losing his car; they are in no way exceptional.
7. This tribunal's jurisdiction is very limited. We can allow Mr Shanley's appeal only if we are satisfied that the review decision is one at which the officer concerned, Mr Morgan, could not reasonably have arrived. Unfortunately for Mr Shanley, it is in our view impossible for us to reach that conclusion. This was, by any standards, a very large importation. We share the view that it is implausible that Mr Shanley would give away as much as 18 kg of tobacco (itself a very large quantity) of a brand he knew they did not smoke to each of two agents who, in years gone by, had been rewarded not out of his own pocket, but by his employers. It cannot be said that the reviewing officer's conclusion that this was a commercial importation was unreasonable.
8. We accept that Mr Shanley has suffered financial hardship as a result of losing his car but we agree with the Respondents that there is nothing exceptional about his position. If, as Lord Phillips said, those engaging in illicit commercial importations must expect to lose their vehicles, we can see no basis on which we should direct the Respondents to reconsider a decision which has that result in this case.
9. The appeal must be dismissed. There will be no direction in respect of costs.

COLIN BISHOPP

CHAIRMAN
Release Date: 21 July 2005