United Kingdom VAT & Duties Tribunals (Excise) Decisions

Bell v Revenue & Customs [2005] UKVAT(Excise) E00898 (26 July 2005)

E00898

RESTORATION — third trip abroad — stopped at Dover Eastern Docks — goods within the guidelines — purchased for the Appellant and his family — Appellant seriously depressed after death of father — encouraged to go abroad to buy the goods by aunt — refusal to restore cigarettes and spirits reasonable — appeal dismissed

MANCHESTER TRIBUNAL CENTRE

JAMES BELL Appellant - and - HER MAJESTY'S REVENUE AND CUSTOMS Respondents Tribunal: David Porter (Chairman) Rowland Presho FCMA

Sitting in public in North Shields on 18 May 2005

Maureen and James Simpson for the Appellant

Susan Hurst of counsel instructed by the Acting Solicitor for HM Revenue and Customs for the Respondents

© CROWN COPYRIGHT 2005

DECISION
1. James Bell (the Appellant) appeals against the refusal, contained in a letter from Customs of 12 November 2004, to restore to him the 3200 cigarettes and 3 kg of hand rolling tobacco seized on 29 August 2004.
2. The Appellant was apparently too depressed to attend the hearing and his Aunt, Maureen Simpson, and his Uncle, her brother James Simpson, attended on his behalf. No doctor's certificate was produced as to the Appellant's state of health. Miss Hurst appeared on behalf of Customs and produced a bundle to the tribunal.
3. In the absence of the Appellant the tribunal relied on the evidence produced by Customs. The Appellant had been stopped on 29 August 2004 at Dover Eastern Dock carrying 3200 cigarettes and 3 kg of hand rolling tobacco. These amounts are within the recommended guidelines. He had been abroad on two previous occasions: in March 2004 he went to Majorca with his girlfriend and he said in interview that he brought back no goods from this trip; on 9 April 2004 he travelled abroad again, when he brought in a similar quantity of goods to those brought into the country on 29 August 2004. His father died in May 2004 and left him £1500. It was unclear from the evidence whether the £1500 had been given to him by his brother or by one of his aunts, Maureen Simpson, or Mrs Mossman. We are satisfied that the money had been paid into his building society account leaving him free to withdraw such sums, as he required. He had been unemployed since December 2003.
4. When he was stopped on 29 August 2004, he had attended an interview, which was longer than usual. He had spent £550 on the goods and £45 on the trip using part of his inheritance. It would appear that he did not smoke himself as he refused a cigarette at the interview and he had no smoking equipment with him. He alleged he smoked a pouch per week.
5. The legislation is contained in The Excise Duties (Personal Reliefs) Order 1992 as amended at article 3 which states:-

"Subject to the provisions of this Order a community traveller entering the United Kingdom shall be relieved from the payment of any duty of excise on excise goods which he has obtained for his own use in the course of cross-border shopping and which he has transported"

'Own Use' is defined in the Order as:-

'Own Use' includes use as a personal gift provided that if the person making the gift receives in consequence any money or money's worth (including any reimbursements of expenses incurred in connection with obtaining the goods in question) his use shall not be regarded as own use for the purpose of this Order."

The Commissioners may require the person to satisfy them that the goods are not being held for commercial purposes.

6. Paragraph 2 of Article 9 of the Council Directive 92/12/EEC provides the criteria which must be taken into account in establishing whether or not the products are intended for commercial use: -

The commercial status of the person holding the products, and his reason for holding them

The place where the products are located or, if appropriate, the mode of transport used

Any documents relating to the products

The nature of the products

The quantity of the products

7. Miss Hurst submits, as preliminary matter, that this Tribunal cannot consider whether the goods have been purchased by the Appellant for his own use because there has been a deemed forfeiture arising from the Appellant's failure to bring condemnation proceedings. (See paragraph 5 schedule 3 of the Customs and Excise Management Act 1979). She referred to Barry Gasgoigne V (1) H M Customs and Excise (2) The Chairman of the VAT and Duties Tribunal 2004 EWCA C iv 1162 , Gora v The Commissioners of Customs and Excise [2003] EWCA 525 and Anthony Johstone V The Chairman of the VAT and Duties Tribunal 2005 EWHC 115 (admin) as authorities for that contention.. Gora at paragraphs 56-58 makes it clear that the Tribunal does not have the jurisdiction to reconsider the legality of the seizure. To do so would allow a party a choice of fact-finding Tribunals. In Gasgoigne whilst accepting that the findings in Gora were, "in technical terms … obiter" (paragraphs 42-43) the Court had the benefit of argument from leading Counsel on both sides. Buxton LJ observed that, in a deeming case under paragraph 5 schedule 3 of the Customs and Excise Management Act 1979, it may be open to a Tribunal to consider the grounds for seizure and forfeiture. However, this was subject to significant restrictions namely:

a. The Tribunal should first consider whether to allow such issues to be raised and re-determined would be an abuse of process (paragraph 55). This would depend on whether the Appellant has had an opportunity to challenge the legality of the seizure such that, not to re-open that issue would infringe his right to a fair trial.

b. The normal English law rules of res judicata.

In this case it is not therefore open to the Tribunal to consider whether the goods were purchased by the Appellant for his own use.

8. This point is consistently raised by Customs in the majority of similar cases. We do not accept that the Appellant cannot raise the issues as to the purchase of the goods for his own use. The advice given to Appellants by Customs at the time of the seizure and thereafter is far from clear. The Appellant will have been handed notice 12A, explaining the procedure. Notice 12A stresses the delay and inconvenience of condemnation proceedings without explaining the delay that will occur if there is a request for a review possibly followed by an appeal to the tribunal. He will also have received a letter from Customs asking him to clarify which appeal option he wished to pursue. The letter is far from clear. There are two choices. If the Appellant believes that the items should not have been seized, that is that they had been bought for his own use, he can challenge the seizure. The process takes place in the Magistrates Court and he must raise the issue that he purchased the goods for his own use. The letter does not say which Magistrates Court, but the cases are frequently heard at Dover. The request has to be made within one month of the seizure.
9. If the Appellant accepts that Customs were legally entitled to seize the goods an Appellant can write to the Post Seizure Unit and ask for the items to be restored. In the request for them to be restored, it is necessary to provide further evidence and detail of any exceptional circumstances as may exist to support restoration. The fact that the Appellant thinks that the goods were purchased for his own use is at this stage irrelevant, as the goods will have been deemed forfeit. (See paragraph 5) If restoration is refused then the Appellant can request a review by Customs. If the review upholds the forfeiture the Appellant can appeal to the tribunal. As an alternative, the Appellant can pursue both of these remedies, but Customs will not consider restoring the goods until the validity of the seizure has been confirmed by the Magistrates Court. The Appellant is advised that if no reply is received then proceedings will be instigated without further notice.

An Appellant then has to indicate from the options at the end of the letter which course of action he wishes to pursue:

"Option 1: I confirm that I would like to request the restoration of my goods and/or the vehicle.

Option 2: I confirm that I would like to challenge the validity of the seizure. I am aware this will involve court proceedings."

It is unclear from the letter from Customs that the Appellant can only allege that the goods were bought for his own use through an appearance in the Magistrates Court. We are convinced that the majority of Appellants will state that they want their goods returned to them and are therefore likely to sign option 1. In so doing, an application will not be made to the Magistrates Court. Once one month has passed from the time of the seizure, the goods will be deemed forfeit and the Appellant appears not to have the right to argue before the tribunal that he purchased the goods for his own use.

10. Buxton LJ in Gasgoyne said:

"54 As it seems to me, for an importer to be completely shut out of the only tribunal before which he has in fact appeared from ventilating matters that are deemed to have been decided against him because of paragraph 5 of Schedule 3 does not adequately enable him to assert his convention rights

In my view, therefore, in a case where the deeming provisions under paragraph 5 are applied, the tribunal can reopen these issues; thought the tribunal will always have well in mind, considerations of, or similar to, abuse of process in considering whether such issues should in fact be ventilated before it."

11. In our view, the only occasions in which it would not be open for an Appellant to raise the issue of "own use" would be where either the case has been fully ventilated by an Appellant in the Magistrates Court, or the Appellant had been advised of the Magistrates Court hearing and had chosen not to attend, with no good reason for not doing so.
12. In the present case we have decided that the Appellant can raise the issue that he had purchased the goods for his own use.
13. Miss Hurst submitted that there were substantial inconsistencies in this case. It was unclear where the money came from to buy the goods. The Appellant had spent £550 on the goods and £45 on transport, a total of £595 on each trip. The April trip was prior to his father's death. He had purchased the same quantity of goods on that occasion and as a result he should have had 40 pouches left at the time of his next trip. The Appellant had been given two opportunities to smoke, but declined to do so, he was also unclear as to the cost of the Tobacco. Taking everything into account the tribunal must find that the goods could not have been purchased for his personal use and the appeal should be dismissed.
14. Mrs Simpson submitted that the Appellant was very distressed. She conceded that although he was not able to attend at the tribunal, he had been able to go with his father's friend to repair motor vehicles today. His distress arises from several factors: his sister death some five years ago from a drug overdose, his Mother is an alcoholic, and his Father's recent death. The Appellant was easily confused and he would have answered the questions to satisfy the interviewing officer, whether his answers were correct or not. He had only been abroad twice before
15. We have considered the facts and the submissions and have decided that the Customs Review Officer acted reasonable in refusing to restore the goods and we dismiss the appeal.
16. In the absence of the Appellant, the lack of a medical certificate, and in view of the fact that the Appellant has chosen to go with his Father's friend to repair motor vehicles rather than attend the tribunal, we do not believe he is as distressed as Mrs Simpson would have us believe. We have heard many of these cases previously and note that the Appellant's interview was somewhat longer than we would have expected. If he was as distressed as it is alleged, we believe that the Customs Officers would have terminated the interview. Mrs Simpson indicated on two occasions that the Appellant had only been abroad twice. This is not correct. He has been abroad three times although it is alleged that he only purchased tobacco on two occasions
17. It was unclear from Maureen Simpson's evidence whether the Appellant lived with his mother from time to time or indeed with her. She stated that the Appellant lived with her and that she had received the money from the Appellant's brother when the Appellant's father's estate was wound up. She confirmed that the details to that effect, set out in the letter of 1 September 2004, were correct. The Chairman pointed out that the letter was from Mrs B Mossman (Maureen Simpson's sister) and that the letter stated that the Appellant lived with Mrs Mossman and it was she who had given the £600 to the Appellant. We are not persuaded by any of the evidence given by Maureen Simpson and have difficulty believing it.
18. We are satisfied that the Appellant has purchased the goods to sell and they were not acquired for his own use.
19. Customs have not asked for any costs and we award none.

DAVID PORTER

CHAIRMAN
Release Date: 26 July 2005

MAN/04/8128