United Kingdom VAT & Duties Tribunals (Excise) Decisions

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Cite as: [2005] UKVAT(Excise) E00911, [2005] UKVAT(Excise) E911

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Campbell v Revenue & Customs [2005] UKVAT(Excise) E00911 (12 September 2005)

EO00911

EXCISE DUTY RESTORATION OF GOODS — jurisdiction — traveller with the assistance of legal advice deciding not to require the issue of condemnation proceedings for cost reasons — held to be akin to abuse of process to appeal to tribunal on ground of own use having deliberately elected against condemnation proceedings — traveller allegedly importing a year's requirements of cigarettes and hand rolling tobacco in one trip for own use — eight previous trips to continent in eight months — traveller in receipt of benefits — review letter concluding that importation was commercial — decision held to be reasonable — appeal dismissed

MANCHESTER TRIBUNAL CENTRE

THOMAS WILLIAM CAMPBELL Appellant

- and -

HER MAJESTY'S REVENUE AND CUSTOMS Respondents

Tribunal: Michael Johnson (Chairman)

Warren Snowdon

Sitting in public in North Shields, Tyne and Wear on 23 August 2005

The Appellant appeared in person

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

DECISION

Mr Campbell is appealing against the refusal of Julie Wiggs, a reviewing officer of H M Customs and Excise ("Customs"), to restore to him 5,000 Regal cigarettes and 3 Kg of Golden Virginia hand-rolling tobacco ("the goods"), seized from him by Customs at North Shields Ferry Terminal on 27 May 2004. Mr Campbell was returning to the UK from a mini-cruise to the Netherlands.

Up until the hearing, although not at the hearing itself, Mr Campbell was represented by solicitors, namely Mortons, of 112 High Street West, Sunderland. The correspondence with Customs relating to the appeal has all been written by Mortons on his behalf.

Mortons' first letter to Customs was dated 16 June 2004. That letter states Mr Campbell's position to be that the goods had been brought into the UK for his own use, and so were not liable to UK excise duty. The letter invited Customs to restore the goods on that basis.

Customs raised with Mortons, in a letter dated 27 September 2004, the question whether Mr Campbell wished to appeal against the lawfulness of the seizure of his goods, or just seek restoration of them. On 26 October 2004, Mortons replied that Mr Campbell would accept that the goods were liable to forfeiture but would like Customs to consider restoration of the goods.

On 8 November 2004, Mr A G Musgrave of Customs declined to make restoration, citing policy grounds. He invited Mr Campbell to seek a review of his decision, which Mr Campbell did. On 31 January 2005, Ms Wiggs, in her review letter of that date, upheld the previous decision not to restore.

The jurisdiction that this tribunal is exercising is that under section 16(4) of the Finance Act 1994.

Customs have proceeded on the basis that, having accepted that the goods were justly forfeited, Mr Campbell was effectively barred from contending that the goods were being brought into the UK for a non-commercial purpose. We note, however, that at every stage, including before this tribunal, his case has been that the goods were imported for his own use and not for commercial purposes.

Mortons made that point in a letter to Customs dated 17 December 2004. It was against that background that the solicitors helped Mr Campbell to prepare a 67-paragraph Witness Statement which he served in support of his appeal. Paragraphs 17 to 19 of that Statement read as follows –

"17. I was aware that in order to dispute the legality of the seizure it would be necessary for me to institute Condemnation Proceedings in the Magistrates Court. I was however extremely concerned about the potential risk of costs being awarded against me, as I understand that it is standard practice for [Customs] to apply for costs in these circumstances.

"18. The fact that I could have been made liable to pay [Customs'] costs was the primary reason for me not taking matters further in the Magistrates Court. I had already spent a considerable proportion of my money on tobacco and I could not really afford to have any further cost award made against me should I have been unsuccessful in the Magistrates Court.

"19. As a result I decided to take the second option by applying for restoration of the seized items."

At the tribunal hearing, Mr Campbell told us that he had discussed with his solicitors the way forward in his case, including the respective likelihood of costs being sought by Customs if he lost his case before the magistrates or alternatively before the tribunal. Probably rightly, in our view, Mr Campbell and his solicitors thought that there would, if he lost his case, be an award of costs against him before the magistrates but not before the tribunal. The decision was therefore taken to pursue the tribunal route and not the magistrates court route.

We think, however, that it must have been clear to Mortons that the primary forum for advancing a case that excise goods have been imported for own use, although not necessarily the sole forum (see Gascoyne v Customs and Excise Commissioners [2005] 2 WLR 222 at [54] to [56] pages 233-4), was the magistrates court, not these tribunals. In paragraph 60 of his Witness Statement, Mr Campbell refers to the Court of Appeal decision in Gora v Customs and Excise Commissioners [2004] QB 93; [2003] 3 WLR 160, which deals with this point of jurisdiction. We are sure that this case is referred to because Mortons had read and considered it.

In his Witness Statement, Mr Campbell relies upon the readiness of these tribunals to receive evidence and make findings of fact as to own use notwithstanding the absence of a finding by the court that the seizure of the goods in question has been unlawful. However, in our view it is clear from the cases of Gora and Gascoyne mentioned above, that this can only be done where no "abuse of process", or something akin to that, is involved in so doing – see per Buxton LJ in the Gascoyne case at [55] (page 233 of the report at [2005] 2 WLR).

Ms Wiggs in the present case examined the circumstances surrounding the importation of the goods. She was sceptical about the number of trips to the Netherlands made by the Appellant, indeed eight trips in as many months, and about his ability to pay for purchases of cigarettes and tobacco. As we listened to Mr Campbell in tribunal and as the evidence emerged, we detected a number of contradictions between what Mr Campbell had told Customs at the port and his case as presented to us. At the end of her review decision, Ms Wiggs drew attention to the cases of Gora and Gascoyne respectively, but it is fair to say that her decision was not based just on the matter of jurisdiction but addressed at some length what she perceived to be the evidential lack of merit of the Appellant's case for restoration.

Although the tribunal did not receive oral evidence from Ms Wiggs – we have relied instead upon her Witness Statement dated 27 April 2005 – we find that Ms Wiggs was justified in her reservations. We were not impressed by the Appellant as witness in his own cause. Two matters in particular did not ring true about his evidence.

The first was his statement that he had purchased a year's supply of tobacco on this one trip, when the evidence of Customs, not disputed by the Appellant, was that he had been on mini-cruises to the Netherlands on some eight occasions in the last eight months. We find that the Appellant had been warned previously by Customs about transporting large quantities of cigarettes at one time, yet according to his case he continued to do so. Having regard to his relatively modest income, all from benefits, and his alleged consumption of 40 – 60 cigarettes per day, ie some 15,000-plus cigarettes a year, it is highly unlikely, as we see it, that he would not have bought some part of his requirements on previous trips: more than the mere 200 or so per trip that he admitted to Customs.

Secondly, the Appellant told us that he had altogether stopped travelling to the Netherlands since the seizure in May last year and had not been back once. Given that his case has always been that he travels to the continent through choice, and has welcomed the opportunity to buy cheaper cigarettes there, we cannot understand why his habits should abruptly alter in such way as to deprive him of the opportunity of obtaining his smoking requirements that way.

We accordingly found ourselves disbelieving the Appellant and we reject his evidence. It follows that we are with Ms Wiggs in concluding that he has not put forward a satisfactory case for restoration. We cannot fault the reasonableness of her decision not to restore.

On the particular facts of this case, we moreover find that it has been akin to an "abuse of process" for the Appellant to have proceeded to this tribunal in preference to requiring Customs to institute condemnation proceedings. Whilst we can understand why the Appellant chose to come to tribunal, we think that he must have done so in the knowledge that his case was weak, otherwise he would not have allowed the matter of costs to determine his way forward. After all, if his case was strong, and likely to be accepted by the magistrates court, he would have nothing to fear from an adverse award of costs, as no doubt his solicitors would explain.

Just as it was perceived, we feel, that there was a question-mark over whether the Appellant would succeed if he took his case before the magistrates – which resulted in his rejecting that way forward – so we have found ourselves rejecting his evidence on appeal to us. We accept the submissions of Miss Phillips, appearing for Customs, that both on jurisdictional grounds and on the merits, the appeal is without foundation.

For the above reasons the appeal is dismissed.

MICHAEL JOHNSON

CHAIRMAN
Release Date: 12 September 2005

MAN/05/8012