United Kingdom VAT & Duties Tribunals (Excise) Decisions

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Cite as: [2005] UKVAT(Excise) E918, [2005] UKVAT(Excise) E00918

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Rory Cooke v Her Majesty's Revenue and Customs [2005] UKVAT(Excise) E00918 (27 September 2005)

EO00918

Excise Duty – Restoration of seized goods and vehicle – Tribunal's jurisdiction if no condemnation proceedings – Reasonableness of HMRC's refusal to restore – not shown unreasonable – Appeal dismissed.

LONDON TRIBUNAL CENTRE

RORY COOKE Appellant

- and -

HER MAJESTY'S REVENUE AND CUSTOMS Respondents

Tribunal: Adrian Shipwright Chairman)

K S Dugdale, FCA, JP

Sitting in public in Lowestoft on 22 July 2005

Rod Cooke (Brother), for the Appellant

Sarabjt Singh, Counsel, instructed by the Acting Solicitor for HM Revenue and Customs, for the Respondents

© CROWN COPYRIGHT 2005

DECISION

Introduction

This is an appeal under section 16 Finance Act 1994 against a decision of the Respondents ("HMRC") contained in a letter of 26 July 2004 ("the Decision"). The Decision upheld on review the earlier refusal by HMRC of the restoration of excise goods ("the Goods") and a Range Rover registration number TX1 4113 ("the Car"). The Goods and the Car had been seized on 21 April 2004.

Issues

This case raises essentially two issues:

(a) Whether the Tribunal has jurisdiction to hear the Case as there had been no condemnation proceedings ("the Jurisdiction Issue"); and

(b) Whether the refusal on review to restore the Goods and the Car was within the range of decisions that could reasonably be made ("the Restoration Issue").

The Law

The relevant law includes the following legislation:

Section 14 FA 1994 allows a person to require an internal review of a matter falling within Schedule 5 (see subsection (1)(d)).

Section 15 FA 1944 sets out the review procedure.

Section 16 FA allows an appeal to the Tribunal in respect of the internal review. The powers of the Tribunal in this respect are limited.

Section 16(4) FA provides:

"In relation to any decision as to an ancillary matter, or any decision on the review of such a decision, the powers of an appeal tribunal on an appeal under this section shall be confined to a power, where the tribunal are satisfied that the Commissioners or other person making that decision could not reasonably have arrived at it, to do one or more of the following, that is to say:

(a) to direct that the decision, so far as it remains in force, is to cease to have effect from such time as the tribunal may direct;

(b) to require the Commissioners to conduct, in accordance with the directions of the tribunal, a further review of the original decision; and

(c) (c) in the case of a decision which has already been acted on or taken effect and cannot be remedied by a further review, to declare the decision to have been unreasonable and to give directions to the Commissioners as to the steps to be taken for securing that repetitions of the unreasonableness do not occur when comparable circumstances arise in future".

An ancillary matter is a decision of a description falling within Schedule 5 (as here) subject to certain exceptions which are not in point here. It is also provided that the onus of proof is on the Appellant subject to limited exceptions.

Cases

We were handed copies of the following cases:

Lindsay v CCE [2002] EWCA Civ 267

Gorg v CCE [2003] EWCA Civ 525

Dickinson v CCE [2003] EWHC 2358

Gascoyne v CCE [2004] EWCH Civ 1162

The Tribunal also drew attention to the recent Tribunal decisions in Crozier (E00861, 29 March 2005) and Haywood (E00863, 29 March 2005).

Evidence

Oral evidence was given by Rory Cooke and Helen Belinda Perkins, Review Officer with HMRC. Witness Statements were produced for Helen Belinda Perkins, Scott Roger Dawtry, HM Customs Officer and Raymond Robert Andrews, HM Customs Officer. No objection was taken to the admission of these Statements and which were duly admitted in evidence.

No agreed Statement of Facts or agreed bundle of documents was produced. However, HMRC produced its own bundle of documents. No objection was taken to their admission or authenticity.

Findings of Fact

From the evidence and documents, we make the following findings of fact:

(1) Rory Cooke ("the Appellant") was the owner and registered keeper of the Car.

(2) The Appellant and his brother, Mark Cooke, went to Belgium and France on 21 April 2004 in the Car.

(3) The Appellant and his brother were in the Car when it was intercepted at Dover Eastern Docks on their return from the Continent.

(4) The Car, when stopped, contained 25.24kg of hand rolling tobacco, some cigarettes, ten cases of beer, six bottles of wine and a bottle of whisky. Various receipts were also found in it.

(5) The Appellant and his brother were interviewed separately. They each signed the respective Customs Officer's Notebook to confirm that it was a true and accurate record of the interview.

(6) The Appellant, in his interview and evidence, said that:

(i) he confirmed that 200 pouches of tobacco in the Car belonged to him;

(ii) he earned about £200 per week as a lorry driver;

(iii) his wife had a job but he was not sure of her earnings;

(iv) his mortgage was about £170 per month;

(v) he had made three to four trips to the Continent in the previous 12 months;

(vi) on each of those trips he had purchased about the same amount of tobacco for cash;

(vii) he changed the money in the jar into bank notes of relatively high denominations to take on the trip to pay for the Goods. Money was saved in a jar for these trips.

We find all this to be so as a matter of fact.

(7) The Appellant also said that he had not received any payment for the tobacco and that it was intended for personal consumption and for giving mainly to his family. We make no findings in respect of this.

(8) The Appellant produced two receipts for his purchases on 21 April 2004. These related to tobacco, one was for £303.85 and the other for £375.50 making a total £679.35. Other goods were purchased on that day. This would mean he had spent about £2,800 in the four trips in the 12 month period.

(9) No corroborated evidence was forthcoming as to the source of this money to fund these trips and purchases.

(10) The Appellant's brother, Mark, indicated to HMRC that the Appellant's family also contributed to the cost of the tobacco.

(11) We were informed by HMRC that the Car was sold in October 2004 for £510.

(12) The Appellant had a number of vehicles registered in his name and ran a vehicle breaking business.

(13) The Reviewing Officer considered the case carefully and at length.

(14) She concluded that neither the Car, nor the Goods, should be restored as she was not satisfied that the Goods were for personal use. In reaching this conclusion she placed particular importance on the quantity involved, the failure to declare all the trips, the frequency of travel, the level of income of the Appellant and the evidence of his brother Mark "who believed [the Appellant's] family were contributing toward the Goods".

Submissions

Appellant's Argument

Mr Cooke who appeared for his brother Rory, the Appellant argued strongly and forcefully that the Goods and the Car must be returned to his brother. This was for a number of reasons, including the following:

(a) The Goods were duty paid in a member state;

(b) The provisions of EU law allowed the free importation of goods duty paid in another member state to the UK from the EU;

(c) The UK legislation was subject to EU law;

(d) HMRC Guidelines were just that; guidelines that were not binding but at most gave an indication.

The Lindsay case decided that duty paid goods acquired in the EU could be imported freely into the EU. This is what was involved in this case.

HMRC's Arguments

In essence Mr Singh's arguments resolved themselves into two points:

(a) There was no jurisdiction to hear the case; and

(b) Even if there was, (which was not admitted) the Reviewing Officer's decision not to restore the Car and the Goods was reasonable.

The parties' submissions are considered further below.

Discussion

The arguments of the parties raise the Jurisdiction Issue and the Restoration Issue. The Jurisdiction Issue is considered first as logically it arises first.

The Jurisdiction Issue

The argument of HMRC was that as the Appellant was seeking to argue that the goods were for his own use there was no jurisdiction to hear the case as this involved a challenge to the legality of the seizure and so an abuse of process. Reliance was placed, in particular, on Gora v Customs & Excise, and Gascoyne v Chairman VAT and Duties Tribunal in support of this proposition.

We reject HMRC's argument and hold that we have jurisdiction to hear the case. This is essentially for two reasons:

(a) the argument misreads paragraph 5 Schedule 3 CEMA;

(b) it places too much emphasis on paragraphs 54 to 56 of Gascoyne.

As regards paragraph 5 Schedule 3 CEMA we adopt what was said in Crozier (Colin Bishopp, Chairman) at paragraph 3:

"Before we deal with the circumstances of this case, we think we should deal, as briefly as we can, with a point raised by Miss Piasecki. She pointed out that Mr Crozier had not caused the Commissioners to instigate condemnation proceedings in the magistrates' court and, consequently, this was deemed to have been a commercial importation; thus we should not hear, or at least heed, Mr Corzier's evidence and contentions that he had bought the goods for his own use. That assertion goes too far. Paragraph 5 of Schedule 3 to the Customs and Excise Management Act 1979, the statutory provision on which Miss Piasecki relied, provides that if notice of claim is not made within one month of the seizure, "the thing in question shall be deemed to have been duly condemned as forfeited". It does not follow from that provision that the goods in question must be deemed to have been forfeited for any particular reason. In this particular case, the goods were forfeited because the Customs officers who dealt with the matter believed that the importation was commercial, but paragraph 5 certainly does not say that the officers' conclusion is deemed to be correct. Of course, if the magistrates' court has made findings of fact, including a finding that the importation was commercial, the tribunal cannot go behind that but where, as here, there have been no such proceedings, it does not seem to us that the provisions of paragraph 5 have any greater effect than to prevent a person in Mr Crozier's position from challenging the unlawfulness of the seizure."

We do not see that there is an abuse of process. HMRC requested us to make a formal record that we had considered whether there was an abuse of process. We have considered the matter and as we are not concerned with the legality of the seizure we find that there is no abuse of process. We do not see that there is an abuse of process in using a procedure specifically laid down by Parliament in FA 1994.

The Restoration Issue

This requires the Appellant (for him to succeed) to satisfy us that the Commissioners or other person making the decision could not reasonably have arrived at the decision made (see section 16 FA 1994).

As was said in Haywood (Lady Mitting, Chairman) at paragraph 25:

"In exercising its jurisdiction, the test of reasonableness required the Tribunal to ask whether the decision was one which no reasonable panel of Commissioners could have come to; whether some irrelevant matter had been taken into account; whether some matter which should have been taken into account had been ignored or there had been some error of law."

Whilst we might not have reached the same decision, on the evidence presented to us and our findings of fact, we consider that the review decision was within the range of possible reasonable decisions.

The onus is on the Appellant to show that the decision was unreasonable. It does not seem to us to be unreasonable to conclude that the Goods and the Car should not be restored particularly in the light of the following.

(a) The Appellant's brother admitted importing tobacco on behalf of his wife and children through a system which had been operating for a number of years where the family would pay into a pot for tobacco, which they used.

(b) The Appellant's brother, Mark, indicated that the Appellant's family also contributed to the cost of the tobacco.

(c) The Appellant paid over £700 to purchase Goods on the day of the seizure, in the light of the 3 other trips within the twelve month period he must have spent £2,800 in twelve months which he had saved in that period. He stated his earnings were £200 a week and he had a mortgage of £170 per month. In these circumstances it seems unlikely that the Appellant would have been able to fund such purchases of large quantities of excise goods on a regular basis on his own.

(d) The failure to disclose that the Appellant and his brother travelled on 14 December 2003 was unhelpful.

(e) The level of Goods imported was over 4 times the guide level in the Tobacco Products Regulations 2001. There had been three other such trips in the preceding year.

(f) The Goods were paid for in cash, which HMRC say was a common feature in cases where excise goods are not acquired for own use.

We do not consider that the decision not to offer restoration of the Goods and the Car was disproportionate. It accorded with the published policy of HMRC which was held lawful in the Lindsay case. The Reviewing Officer's conclusion that there were no exceptional circumstances here in our opinion does not conflict with the Lindsay decision.

Conclusion

For the reasons given above we decide:

(a) That we had jurisdiction to hear the case which did not concern the legality of the seizure but the reasonableness or otherwise of the review decision; but

(b) We are not satisfied that the decision appealed against has been shown to be unreasonable.

We conclude that:

(a) the decision was one which a reasonable panel of Commissioners could have come to;

(b) no irrelevant matter has been taken into account;

(c) no matter which should have been taken into account has been ignored; and

(d) there has been no error of law.

Accordingly the appeal is dismissed. We make no order as to costs.

ADRIAN SHIPWRIGHT

CHAIRMAN

RELEASE DATE: 27 September 2005

LON/04/8071