United Kingdom VAT & Duties Tribunals (Excise) Decisions

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Cite as: [2005] UKVAT(Excise) E00909, [2005] UKVAT(Excise) E909

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Lamport & Anor v Revenue & Customs [2005] UKVAT(Excise) E00909 (12 September 2005)

E00909

RESTORATION — sixth trip abroad — stopped at Dover Eastern Dock — three passengers — 9.5 kg hand rolling tobacco, 200 cigarettes and 1992 litres of assorted beer — same quantity 10 weeks earlier — equivalent to 12 pints each per night — Mercedes sprinter van returned on payment of £2,163.45 — refusal to restore cigarettes and spirits reasonable — appeal dismissed

MANCHESTER TRIBUNAL CENTRE

GORDON KEVIN LAMPORT Appellants

and

WILLIAM HENRY ALLAN EVANS

- and -

HER MAJESTY'S REVENUE AND CUSTOMS Respondents

Tribunal: David S Porter (Chairman)

Elizabeth M Pollard

Sitting in public in North Shields on 5 July 2005

The Appellant in person

Angela Philips, of counsel, instructed by the Acting Solicitor for HM Revenue and Customs for the Respondents

DECISION

Gordon Kevin Lamport and William Henry Allan Evans (the Appellants) appeal against the refusal contained in a letter from Customs of 10 September 2004 to restore to them their third share each of 9.5kg hand-rolling tobacco, 200 cigarettes and 1992 litres of assorted beer seized on 12 June 2004.

The Appellants appeared in person and Angela Philips appeared on behalf of Customs and produced a bundle to the tribunal.

We found the following facts. Mr Lamport and Mr Evans are son and father- in- law respectively and they run a business repairing and maintaining domestic appliances. They employed Kevin Charles Gunn for some 14 months and it was he who told them about the benefits of purchasing goods abroad. He accompanied them on the 12 June 2004 on the trip to Belgium. His appeal was dismissed on 16 February 2005 and he did not apply for his share of the goods to be restored. Customs have restored the Mercedes Sprinter Van at the request of the Appellants on the payment of £2163.45. Customs were unsure whether the goods were to be sold to members of the family without any profit (which would have enabled them to return the vehicle on terms) but on balance considered it was reasonable in all the circumstances to return the vehicle.

The Appellants travelled to London for three weekends to assist Mr Lamport's brother who was moving house. Whilst in London on 12 June 2004 they and Mr Gunn had taken the opportunity to travel to Belgium to buy lager and cigarettes. Ben Goddard, who attended the hearing, a Customs Officer stopped them at Dover and inspected the vehicle. The van was full to capacity with 1,992 litres of lager, plus the tobacco and cigarettes. At their interviews both the Appellants confirmed that they earned in excess of £25,000 per annum from their partnership. They are well-built men; Mr Lamport and his wife drink between 6 and 8 cans of beer every night. Mr Evans and his wife drink between 8 and 12 cans of beer each night. The lager had been bought for Bar-B-Qs, social evenings watching football and for friends who came round to see them. Mr Evans, who suffers from a heart condition, smokes some 600 cigarettes each week. He rolls about 100 cigarettes to a pouch. Mr Lamport smokes 4 to 5 pouches each week and rolls a similar number to Mr Evans from each pouch. This trip had cost in excess £4,300 including the purchase of the goods. They had been to Belgium with Mr Gunn on several occasions previously. On the first occasion to familiarise themselves with the procedure. On the next two occasions they had not bought anything. They had been about five times in the last twelve months and had bought a similar quantity of goods ten weeks earlier but had been allowed to keep the goods.

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.

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

Miss Philip submitted, as a preliminary matter, that this Tribunal could not consider whether the goods have been purchased by the Appellants for their own use because there has been a deemed forfeiture arising from the Appellants' 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 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 Appellants for their own use.

This point is consistently raised by Customs in the majority of similar cases. We do not accept that the Appellants cannot raise the issues as to the purchase of the goods for their own use. The advice given to appellants by Customs at the time of the seizure and thereafter is far from clear. Appellants 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. They will also have received a letter from Customs asking them to clarify which appeal option they wished to pursue. The letter is far from clear. There are two choices. If appellants believe that the items should not have been seized (that is that they had been bought for their own use) they can challenge the seizure. The process takes place in the Magistrates Court and they must raise the issue that they purchased the goods for their 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.

If appellants accept that Customs were legally entitled to seize the goods appellants 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 appellants think that the goods were purchased for their own use is by this stage irrelevant as the goods will have been deemed forfeit. (See paragraph 5) If restoration is refused then appellants can ask for a review by Customs. If the review upholds the forfeiture appellants can appeal to the tribunal. As an alternative appellants can pursue both of these remedies but Customs will not consider restoring the goods until the Magistrates Court have confirmed the validity of the seizure. Appellants are advised that if no reply is received then proceedings will be instigated without further notice.

Appellants then have to indicate from the options at the end of the letter which course they wish 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 that appellants can only allege that the goods were bought for their own use in the Magistrates Court. We are sure that the majority of appellants will say that they want their goods and vehicle back and they are 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 seizure, the goods will be deemed forfeit and appellants appear not to have the right to argue before a tribunal that they bought the goods for their own use.

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.

55 In my view, therefore, in a case where the deeming provisions under paragraph 5 are applied, the tribunal can reopen these issues; though 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."

In our view the only occasions in which it would not be open for appellants to raise the issue of "own use" would be where either the case has been fully ventilated by them in the Magistrates Court, or appellants had been advised of the Magistrates Court hearing and had chosen not to attend, with no good reason not to do so. Neither of these circumstances applies in this appeal.

In the present case we have therefore decided that the Appellants can raise the issue that they had purchased the goods for their own use.

Miss Philips also submitted that the evidence given by the Appellants was not credible. They admitted that they had been to Belgium on at least five previous occasions. The amount of lager they drank and the cigarettes that they smoked were not credible. They had 5 –6 times the guideline limit. They also had some goods left from their previous trip. No new evidence had been forth coming and the Review Officer had acted reasonably in not restoring the goods.

Mr Lamport submitted that they worked hard and played hard. The goods had been for their own use to share with their families and friends. He was concerned that at no time during the interview were any questions asked to substantiate that the goods had been purchased for commercial purposes. The goods had not been hidden and there had been no attempt to conceal what they had purchased. The goods were for their own use and they were not smugglers.

We have considered the facts and the submissions and have decided that the Customs' Review Officer acted reasonably in refusing to restore the goods and we dismiss the appeal.

Both the Appellants are large men but we do not believe that they could possibly consume on a daily basis the amount of lager they allege. Mr Evans suggested at the tribunal, that he rolled 50 cigarettes to a pouch but doubled that figure to 100. He also said that the cigarettes were very thin and often went out. In those circumstances he threw them away and lit another one. The Appellants purchased the goods in Belgium to save money; it is unlikely that they would roll their cigarettes so thinly that they had to throw them away half smoked. The visits to London ostensibly to help Mr Lamport's brother move into his new house gave them a useful base from which they could travel abroad. In the circumstances we dismiss the appeal.

Customs have not asked for any costs and we award none.

DAVID S PORTER

CHAIRMAN
Release Date: 12 September 2005

MAN/04/8107