United Kingdom VAT & Duties Tribunals (Excise) Decisions

Formosa v Revenue & Customs [2005] UKVAT(Excise) E00899 (25 July 2005)

E00899

EXCISE DUTIES – Restoration of commercial vehicle – Vehicle and trailer seized after search revealing nearly 2.8 million cigarettes – Restoration of vehicle offered on payment of £5,400 – Market value of vehicle materially less – Appeal dismissed upon undertakings by HMRC to restore vehicle on payment of £2,500

LONDON TRIBUNAL CENTRE

DARREN FORMOSA Appellant

and –

HER MAJESTY'S REVENUE AND CUSTOMS Respondents

Tribunal: NICHOLAS ALEKSANDER (Chairman)

SHAHWAR SADEQUE

Sitting in public in London on 24 May 2005

The Appellant in person

Sarabjit Singh, counsel, instructed by the Solicitor for Her Majesty's Revenue and Customs, for the Respondents

© CROWN COPYRIGHT 2005


 


DECISION

The Appeal

1. This is an appeal by Darren Formosa ("the Appellant") against a decision of Her Majesty's Revenue and Customs taken upon review contained in a letter dated 9 July 2004 confirming the earlier decision not to restore to the Appellant his seized Scania tractor unit, but varying the earlier decision by offering to restore the vehicle upon payment of 20% of the revenue evaded, or the value of the vehicle, whichever is lower. The Appellant had initially sought restoration of the seized vehicle by letter dated 5 January 2004 from his representatives. On 18 May 2004 the Respondents informed the Appellant's representatives that the vehicle would not be offered for restoration. A request for a review of that decision was made by the Appellant's representatives by a letter dated 26 May 2004.

Background Facts

2. The background facts were not disputed.
3. The Appellant is a director of the company which owns a Scania 143M tractor unit, registration number BUL002 ("the Vehicle"). On 19 September 2003, the Vehicle and a trailer were intercepted as Eastern Docks, Dover. The Appellant was the driver. After the Vehicle and the trailer were examined by Customs officers, 2,780,000 cigarettes were discovered concealed underneath ice cream cones. The Vehicle and the trailer were seized and the Appellant arrested.
4. The Appellant was interviewed the following day with the aid of an interpreter and he provided the following information in response to questioning: He knew nothing about the cigarettes in the trailer. He did not own or rent trailers, he was contracted to pick trailers up and deliver them. The Appellant had been contacted by a man known as "Rob" in early September 2003 and travelled to Spain to make a delivery. He was then contacted again and asked to take the empty trailer to the Netherlands and await instructions to pick up another load to take to the UK. He received a text message on his mobile phone telling him to be at a specified address on 19 September 2003. 18 pallets were loaded onto the trailer at this location.
5. The Appellant was then instructed to go to a service station which was one to one-and-a-half hours drive away. He waited there for two hours when two men arrived in a car and signalled him to follow them. He went down some country roads to a warehouse, where he was instructed to open his rear doors and reverse up to the warehouse doors. The Appellant was then instructed to remain in his cab, which he did. The loading took approximately three hours, during which time the Appellant slept – although he was aware of movement consistent with loading of the trailer. Eventually he was escorted to a roundabout and shown directions to England. Once in England the Appellant expected to be contacted with delivery instructions.
6. In a letter dated 5 January 2004, the Appellant's representatives sought restoration of the Vehicle. On 18 May 2004 the Respondents informed the Appellant's representatives that the vehicle would not be offered for restoration. A request for a review of that decision was made by the Appellant's representatives by a letter dated 26 May 2004. The review was carried out by Mrs Hilda Marshall, a Review Officer employed by the Respondents based in Plymouth. She varied the original decision by offering to restore the Vehicle on payment of 20% of the revenue evaded or the value of the Vehicle, whichever is lower.
7. The revenue evaded was £456,232.06, whereas the vehicle was valued by the Respondents at £5,400. Restoration was therefore offered for the latter amount.

Valuation of the Vehicle

8. Immediately prior to the hearing, it transpired that the basis upon which the Respondents valued the vehicle was incorrect. The Respondent's valuation was based upon the age of the vehicle calculated from the date of first registration shown in the Vehicle's registration document, namely March 1993. However the date of manufacture of the Vehicle (also shown in the registration document) was 1989. Mr Singh acknowledged that the value of the vehicle on this basis would be materially less than £5,400. Mr Singh told us that he had an extract of "Glass's Guide" going back to 1990, and the trade value of the Vehicle if it had been manufactured in 1990 was stated as £3875.
9. We were invited by both the Appellant and Respondents to dismiss the appeal on the basis that Her Majesty's Revenue and Customs undertook to restore the Vehicle to the Appellant on payment of £2500.

Decision

10. Mr Singh gave an undertaking on behalf of Her Majesty's Revenue and Customs to restore the Vehicle upon payment of £2500, and on that basis the Tribunal dismisses the appeal. No application for costs was made at the conclusion of the hearing.

NICHOLAS ALEKSANDER

CHAIRMAN

RELEASED: 25 July 2005

LON/2004/8063