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United Kingdom VAT & Duties Tribunals (Excise) Decisions
You are here: BAILII >> Databases >> United Kingdom VAT & Duties Tribunals Decisions >> United Kingdom VAT & Duties Tribunals (Excise) Decisions >> Webb & Anor v Revenue & Customs [2006] UKVAT(Excise) E00945 (14 March 2006)
URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2006/E00945.html
Cite as: [2006] UKVAT(Excise) E945, [2006] UKVAT(Excise) E00945
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- and –
- The appeal is against a decision of the Respondents ('the Commissioners') which was notified to the Appellant on 16 June 2004 not to restore to the Appellants their excise goods, pursuant to sections 49 and 139 of the Customs and Excise Management Act 1979 ('CEMA 1979').
- On 14 August 2004 the Appellants were stopped by Customs at Dover Eastern Docks. Mr Caldicott was driving a Peugeot 106 which was owned by Mr Webb, who was travelling in the car with Mr Caldicott. The search of the car revealed 37.5 kilogrammes of mixed brand hand-rolling tobacco, together with 3 litres of vodka and 22.5 litres of wine.
- The Appellants were both asked to satisfy Customs that the goods they had purchased were not held or to be used for a commercial purpose. It was explained to them that if they failed to do so, then the goods would be seized.
- The Appellants claimed that the cigarettes were all for their personal use, Mr Caldicott said that 200 pouches were for his girl friend and Mr Webb said that his were all for him. The tobacco had been purchased on Mr Webb's part by spending ?950 in cash and Mr Caldicott had used a debit card in the sum of ?1,337.50, making a total of ?2,287.50. Receipts for these amounts were produced.
- Mr Caldicott said he had not travelled before, Mr Webb said that his last trip abroad had been to Cuba some two years previously, and that he had not been stopped before.
- The commerciality statement was read to both Appellants and both agreed to stay for further interview. In the course of his interview Mr Webb repeated that he had purchased the goods solely on his own behalf. He said that he smoked both Golden Virginia and Drum tobacco and smoked probably between 40 and 50 roll-ups a day. He had expected the tobacco to last for about two years. He was employed as a builder and his disposable income amount to about £250 per week. He lived in his brother's house paying about £50 a week in rent but sometimes he did work for his brother which meant the rent varied. He was paying out £260 a month on a personal loan.
- Mr Webb told the officer that he had previously travelled abroad in December when he had gone to Cuba, before that he had been to Gran Canaria. He had also been to Holland but did not remember when.
- He was again asked about his tobacco consumption and said it was about 3 or 4 pouches a week on average and that he got about 150 to 200 cigarettes out of a pouch. He would buy tobacco from Spar, but sometimes bought 50 gram pouches from "blokes in the pub". The cost in the shop was about £8.60, whereas in the pub it was about £4.50 to £5.00.
- Although he owned the car, it was registered in his father's name because he had lost his licence following a conviction for drink driving and it was needed to insure the car for his girl friend to drive.
- Mr Webb had taken out a personal loan in the sum of £10,000 with Lloyds TSB in order to pay off credit card debts, to buy the car and the rest of the money was in his savings account. He did not buy petrol for the car, which was paid for by his girl friend. He paid £36 a month in insurance and £40 a month for the telephone bill. He would go out to play pool on a Monday and occasionally at the weekends, and he would spend £30 to £40 when he went out. He would spend about £40 to £50 a month on tobacco.
- Mr Caldicott was also interviewed and said that the Old Holborn and the Drum tobacco was for his own use and the Golden Virginia was for his fiancée. He smoked 40 to 50 roll-ups per day and expected his supplies to last him for twelve months. It was some time since he had bought a pouch of tobacco in the United Kingdom, although he had bought some in Spain two years ago and he was supplied by his father-in-law with tobacco. He customarily purchased tobacco from somebody in the pub.
- Mr Caldicott also worked in the construction industry, for the same company as Mr Webb, taking home some £450 a week before stoppages. He paid rent of £340 a month, he had a food bill of about £400 a month, electricity bill £40 a month and Council tax £69 per month. He had an outstanding mortgage which he was paying off at £10 a month, leaving him with about £200 a month disposal income for him, his wife and his child.
- Customs concluded that all the goods were held for a commercial purpose and seized both the goods and the vehicle in which they had been imported.
- The seized goods comprised 20 kilogrammes of drum hand-rolling tobacco, 2.5 kilogrammes of Old Holborn hand-rolling tobacco, 15 kilogrammes of Golden Virginia hand-rolling tobacco, 3 litres of Vodka and 22.5 litres of win.
- By a letter dated 18 August 2004 both Appellants requested the return of their goods and the vehicle. A standard letter was sent to each of the Appellants by Customs detailing the procedure for condemnation of the seized goods and the fact that Dover and East Kent Magistrates Court would decide whether the goods were liable to be seized, and decide on the awarding of costs. The Appellants were informed that any request for restoration would not be considered until such time as condemnation proceedings had been concluded or been withdrawn in writing. By a letter dated 3 September 2004 both Appellants confirmed that they wished to withdraw their appeal against Customs and Excise. However they asked Customs to consider restoration of both the goods and the vehicle. At this stage neither Appellant was represented. Consideration was then given to restoration and both Appellants were notified by letter dated 4 October 2004 that the excise goods and the car would not be restored to them. At some point thereafter both Appellants consulted solicitors, Alexander & Co, who requested a review of the decision not to restore and set out the case on behalf of each Appellant in separate letters.
- On behalf of Mr Caldicott it was submitted that the tobacco and alcohol were well within "own use" limits. Mr Caldicott worked on a building site and would quite frequently roll-up a cigarette not just for himself but also some for his "mates" at the same time. He had sufficient money to pay for the goods. It was disputed that the quantity of cigarettes brought in was large, given that they had cost less than £1,000 and were intended to last Mr Caldicott and his partner for 12 to 18 months. Various other matters were raised, and it was also submitted that Mr Caldicott had suffered, and continued to suffer great hardship following the confiscation. No evidence of the nature of this hardship was produced.
- With regard to Mr Webb it was submitted that the tobacco and alcohol were well within the "own use" limits and it was disproportionate to have seized the motor vehicle. The same submissions were made about his work on the building site as were made in respect of Mr Caldicott, and it was said that he could well afford the sum of £1,000. It was further said that he had purchased the tobacco on behalf of his wife. With regard to the car it was submitted that it had only recently been purchased and was worth £2,000. It was used by Mr Webb and his partner as a family car, he had no other vehicle and nor did his partner. It was their biggest personal asset. His girl friend was learning to drive on it, and it was submitted that it was disproportionate to seize a family motor car.
- It was further submitted on Mr Webb's behalf that it was the first time he had gone abroad to purchase excise goods. He was entitled to purchase them and it was not relevant for the officer to state that the vehicle was used for the transportation of a large quantity of excise goods, since the question to which he should have directed himself was as to whether these were in excess of Mr Webb's own consumption. It was not considered to be a very large quantity of goods, since it was considered it would last Mr Webb and his partner for 12 to 18 months.
- Following receipt of this letter from Alexander & Co, Customs replied that the letter would be passed to the review team for review. That letter stated inter alia:
- The review was carried out by a Mrs D C Gillespie. She set out her conclusions in a letter dated 16 December 2004. She set out the total quantity of excise duty on the goods being imported as £3,976.80. Having considered the interviews of both Appellants, and the letters written by them and by the solicitors on their behalf she set out Customs' restoration policy for excise goods, which was that they would not normally be restored. With regard for the restoration of private vehicles the policy was the same, and was intended to protect legitimate UK trade and revenue and prevent illicit trade in excise goods. However, vehicles might be restored at the discretion of the Commissioners subject to any conditions they might think proper if :
- When considering the matter of restoration Mrs Gillespie stated that the Appellants had been invited to provide any further information in support of the request for a review, but, as nothing had been received, she had to make her decision based on the evidence she already had. She also referred to the fact that she was not considering the legality or the correctness of the seizure itself, and if that was contested, the Appellants should have proceeded with their appeal to the Magistrates Court.
- Mrs Gillespie considered the fact that between them the Appellants were importing 37.5 kilos of tobacco, which was more than six times the guide level of 3 kilos per person. She considered in respect of Mr Webb and his stated consumption of 40-50 roll-ups per day, that the imported tobacco would last him nearly two years, which was well beyond the tobacco's shelf life. She found it implausible that he would spend such a large sum of money on tobacco, only to allow a large proportion of it to go stale. As he had claimed to obtain an "incredible" 150-200 roll-ups from each pouch, and if he smoked four pouches a week obtaining 200 cigarettes from each, he would be consuming at a rate of 114 per day. This fact combined with his vagueness about his recent tobacco purchases led Mrs Gillespie to wonder whether he was a regular smoker of hand-rolling tobacco at all. Similarly Mr Caldicott was vague about his tobacco purchases and said he had not bought any in the UK for a while, and claimed to be able to obtain 100-150 roll-ups per pouch. Again at this rate 250 pouches would last over 18 months.
- She considered their limited disposable income and the fact that they had a ready market at the building site where they worked. Both had admitted purchasing tobacco from somebody in the pub. She considered that the tobacco was destined to be sold for a profit. She also took account of the fact that Mr Webb when interviewed had not referred to the fact that his wife would be smoking any of the tobacco but had stated that it was all for him. She considered it improbable that the tobacco would be given away to mates on the building site.
- Because she considered that the majority of the goods were to be sold for a profit, Mrs Gillespie declined to restore the vehicle. She had considered the degree of hardship caused by the loss of the car, and while she sympathised with Mr Webb's difficulties, she did not regard either the inconvenience or expense in this particular case amounted to exceptional hardship over and above what was to be expected. She took account of the fact that official records showed that there were at least fourteen vehicles registered to Mr Webb's home address.
- The Tobacco Products Duty Act 1979 provides:
- Charge and remission or repayment of tobacco products duty
- The Excise Goods, Beer and Tobacco Products (Amendment) Regulations 2002:
- By Regulation 16 of the Excise Goods (Holding, Movement Warehousing and REDS) Regulations 1992 (SI 1992/3135) excise goods, in respect of which duty has not been paid, shall be liable to forfeiture where there has been a breach of regulations.
- Section 49 of the Customs and Excise Management Act 1979 ("CEMA") provides:
- Section 139 CEMA 1979 provides:
- Section 141 CEMA provides as follows:
- Section 152(b) CEMA 1979 provides that the Commissioners may as they see fit restore, subject to such conditions (if any) as they think proper, anything forfeited or seized. Section 152 CEMA 1979 provides that:
- The jurisdiction of the Tribunal is pursuant to the Finance Act 1994, section 16(1), 16(4) and Schedule 5. This matter falls to be an ancillary matter as defined in Schedule 5 to the Act and the Tribunal, if it finds that the Respondents have acted unreasonably in not restoring the thing seized, can make an order under the Finance Act 1994, section 16(4):
- Mr Webb gave evidence on behalf of both Appellants and Mrs Gillespie gave evidence on behalf of the Commissioners. Mr Webb's evidence was to the effect that he had recently become engaged to his partner with whom he had been living for the past two years. They were saving to get a house and their only vice was smoking. He calculated that by going to Belgium to buy tobacco they would save £2,840 on 400 pouches of tobacco, given that it cost £9.50 a pouch for 50 grams at Spar, and the cost in Belgium was £2.50 per pouch. He further calculated that if he had sold all the tobacco that he had brought in, given that he would be able to sell it at around £4.50 per pouch, he would have made £1,900 but would have none left to smoke. It therefore did not make economic sense to sell it on. Mr Webb told the Tribunal that the car had been bought only five months previously for him to teach his fiancée to drive so she would not have to continue to take taxis to work. She herself worked as a care assistant in a home for the elderly.
- With regard to his answers in interview, Mr Webb said he had been extremely nervous, and he was anxious on behalf of his fiancée and that is why he had not referred to her in the course of the interview. She in fact smoked one to two pouches of drum a week, he himself smoked Golden Virginia. With regard to the quantity, he had contacted American Tobacco and been told that the shelf life was some 12-18 months, but as it was in sealed packets they did not put a shelf life on the packets.
- With regard to his previous trips abroad, he said that he had been stopped on his return from Holland when he had some 10-20 pouches and the car had been searched on that occasion, but they were allowed through. He claimed not to have been aware at that time, or subsequently, of the guidelines. He had read that it was possible to bring in as much as you like for your own consumption, and he considered he would not risk losing the car he had bought if he had been aware of the guidelines. A further reason he gave for the large quantity purchased was that he did not like driving long distances.
- Mr Webb accepted that it was not realistic to say that he had obtained 150-200 roll-ups from one pouch and it was probably less than 100. He put this over estimate down to his having panicked and feeling threatened. With regard to Mr Caldicott Mr Webb said that he was still working on the building site, and that Mr Caldicott liked to smoke Old Holborn but it affected his throat, so from time to time he would smoke a different brand for a while and then go back to Old Holborn. He too would thought his supply would last roughly two years. All the alcohol belonged to Mr Webb.
- It was Mrs Gillespie's evidence that it was accepted by the Commissioners that it was normal to get 80-100 roll-ups from a 50 gram pouch, but with the machine you could get 120. It was also accepted wisdom that tobacco would last for about 12 months maximum if kept in ideal conditions. Whilst she accepted that passengers tended to be told in the shops selling the hand-rolling tobacco that they could purchase as much as they liked, there were signs on ferries and in the Ports setting out the guidelines, and in addition it was beyond question that when he had previously been stopped by Customs Mr Webb would have been told about the guidelines.
- It was contended on behalf of the Commissioners that their refusal to restore the Appellants' excise goods and vehicle was reasonable for the reasons set out in the decision letter dated 16 December 2004. It was submitted that it was not open to the Appellants to argue that the goods were purchased for their own use. The correct forum to present that argument which effectively questioned the legality of the seizure, was in the Magistrates Court. The Appellants had clearly indicated that their decision was not to take that course and it was therefore not open to them to challenge the legality of the seizure in the Tribunal.
- The Tribunal was referred to the cases of Gascoyne v HM Customs and Excise [2004] EWCA Civ 1162 and Anthony Johnstone v Chairman of the VAT & Duties Tribunal [2005] EWHC 115 (Admin). In the case of Gascoyne, two people travelling together had hidden in the boot of the vehicle 10,000 cigarettes and 32 kilogrammes of hand-rolling tobacco. Buxton LJ had said in the course of his judgment dismissing the appeal:
- It was not accepted by Miss Daroch that Mr Webb did not know of the guidelines previously. She pointed to the fact that Mr Webb was clearly an experienced smoker, and yet he was very vague about how many cigarettes he could obtain from a pouch of tobacco and there had been a great deal of uncertainty in many of his answers. It was for the Tribunal to decide whether it was reasonable for Mrs Gillespie to draw the conclusions that she had, based on the evidence given about the Appellants' finances. A considerable amount of money had been spent by the Appellants considered as a proportion of their income, and considering their outgoings. Both men were used to purchasing tobacco in the pub, and were well aware that they would be able to make a profit were they to sell the tobacco.
- Miss Daroch submitted that it would have been open to Mr Webb's fiancée and to Mr Caldicott to come and give evidence, but they had not done so. The Commissioners had had to make a decision on the basis of the evidence they did have. The Appellants had not produced at the hearing any evidence which would be sufficient to allow the Tribunal to draw any other conclusion than that the tobacco was not exclusively for their own use. Indeed Mr Webb's circumstances may well have given him an incentive to play an active part in the market that he knew existed for the sale of hand-rolling tobacco.
- With regard to the restoration of the vehicle, Mrs Gillespie had considered the Commissioners' policy in respect of restoration. The Tribunal was referred to the case of Lindsay v Commissioners of Customs and Excise [2002] EWCA Civ 267 in which Lord Justice Judge had stated:
- Mr Webb submitted that the hand-rolling tobacco was purely for the use of himself and his fiancée. He did not consider that the expenditure of £1,000 was disproportionate, given that he had a loan and would have to be paying that back in any event. He relied on the fact that, given the consumption rate of him and his fiancée he would in fact be effecting a saving through making a large purchase. If he had sold the hand-rolling tobacco he would not have been able to make that saving.
- Mr Caldicott did not appear and Mr Webb on his behalf re-iterated that the goods were for his own use.
- Because the Appellants did not contest the proceedings at the Magistrates Court, there was a deemed forfeiture of the goods. Where a forfeiture has been deemed, no facts have been found by the Court, and therefore we consider it to be open to the Tribunal to find what the relevant facts are in this case and accordingly decide whether the Commissioners' decision was soundly based factually. This follows the dicta of Lloyd LJ in the case of Golobiewska v Customs and Excise Commissioners [2005] EWCA Civ 607, in which the Court of Appeal had decided unanimously that the Tribunal had failed adequately to explain why they had concluded that the appellant consciously allowed the driver to use her car for smuggling. Before reaching that conclusion Lloyd LJ had stated that to determine whether a decision is reasonable within section 16(4) of Finance Act 1994 the tribunal must find the relevant facts and decide whether the decision was "soundly based factually". He had applied the case of Gora [2004] QB 93. We do not accept the Commissioners' argument set out in their statement of case that it would be an abuse of process for the appellant to advance any arguments relating to personal use. The Tribunal must make its own findings and give reasons for those findings rather than simply consider whether the review officers factual conclusion are reasonable. Throughout the burden of proof remains on the Appellants in this appeal.
- Although the point was not raised by Mr Webb on either his own or Mr Caldicott's behalf, nonetheless we consider it appropriate to consider whether or not the Appellants had been properly aware of the difference between the proceedings and the Magistrates Court and those in the Tribunal, and whether or not they had been given sufficient opportunity to explain their case prior to the reconsideration by the reviewing officer.
- With regard to the procedure in the Magistrates Court, at the conclusion of the hearing we were shown a copy of Notice 12A dated October 2002, a copy of which had been given to the Appellants at the time of the seizure. We are satisfied that this properly lays out the procedure for appealing in the Magistrates Court and also that for appealing to the Tribunal. However, the consequences of not contesting the forfeiture in the Magistrates Court are nowhere properly explained. It is highly probable that the majority of people would opt for an appeal to the Tribunal, given that in paragraph 2.14 which is headed "What will happen if I am successful at the condemnation hearing ?" It states: "If the Court finds in your favour the items may be returned. However, if we have already disposed of them/it compensation will be offered." In 2.15 it is stated that seized perishable goods will be disposed of as quickly as possible and non-perishable goods, such as vehicles and spirits, will be disposed of after 45 days unless Customs have received an appeal against seizure or a request for their return. It is also stated that the Court may order an appellant to pay at least a couple of hundred pounds to Customs in costs. Nowhere are the full consequences of a person not contesting the seizure in the Magistrates Court set out, and this booklet appears to us to be designed to discourage anyone from contesting the seizure.
- With regard to submitting evidence for the reviewing officer to consider, we consider that the letter sent to the Appellants is at best ambiguous and at worst does not indicate that it is essential for the reviewing officer to have all necessary evidence prior to making a decision. Neither in Notice 12A nor in the letter subsequently sent about the review procedure is it stated that the Tribunal's powers are limited to remitting the matter back to the Commissioners for them to re-consider it on the basis of the findings made in the Tribunal, and that the Tribunal has no power of itself to order restoration of the goods.
- Whilst we were concerned about the information given by the Commissioners to a person in the position of these Appellants, we cannot ignore the fact that both Mr Webb and Mr Caldicott did seek legal advice, admittedly after they had taken the decision not to appeal against the seizure, but it must be taken that Alexander & Co were aware of the nature of the proceedings before the Tribunal, and of the necessity of submitting all relevant evidence for the consideration of the reviewing officer. In the circumstances it cannot be said that either Appellant was disadvantaged in this case to any great extent.
- Whilst Mr Webb argued his case plausibly, and as a matter of simple calculation it is evident that there was a financial benefit to him and to his fiancée in retaining the tobacco for their own use, it is equally evident that if he had sold the tobacco or some of the tobacco, he could have made a substantial profit on the sale and of course would be free to travel again to purchase more. It was therefore disingenuous of him to argue on the basis, that it would not make economic sense for him to sell the tobacco.
- We find it quite reasonable of the Commissioners to be sceptical about Mr Webb's vagueness both as to the amount of cigarettes he got from one pouch of tobacco and as to the amount he smoked per week. In many respects Mr Webb did not come across as a vague man, and given that he is now 33 and has smoked since 19 years of age, he might be expected to know by now how many cigarettes he smoked in a week and how many he could obtain from a packet of hand-rolling tobacco.
- When Mrs Gillespie was considering the matter she had before her, the evidence showed that Mr Webb had not been open with the officer who interviewed him in that he had claimed that the tobacco was purely for his own use, when in fact it was both for his own use and for his fiancée. Whilst this would of course make the quantity he had brought in seem more likely to be for own use, it must be wondered just why he sought to conceal this information. In his evidence he said that he did not want to "drop her in it". It seemed to us that the only conclusion one can draw from this is that he was aware that he had done something wrong, otherwise there would be no question of his fiancée being in any sort of trouble. Both Mr Webb and Mr Caldicott were well aware that they could sell tobacco at a profit in their local pub, both having purchased tobacco in this way quite frequently, as it would appear.
- A matter which was not known to Mrs Gillespie at the time she made her review, but which Mr Webb admitted in evidence before us, was that he had previously been stopped by Customs on his return from Holland. This adds considerable weight to her conclusion that he would have been aware of the guidelines, despite his protestation that he was not. We do not accept his evidence that he was unaware of the guidelines, it was apparent that he had travelled abroad previously and he would certainly have been handed a notice specifying the guidelines when he was stopped on his return from Holland.
- There are two matters which concern us about the review decision: first of all Mrs Gillespie placed weight on both Appellants' income, and concluded that the expenditure of approximately £1,000 each was excessive. We do not consider this is a reasonable conclusion. Mr Webb had been able to obtain a loan of £10,000 on the strength of that income, and he had used £1,000 to purchase tobacco. Given that he had some expenditure at least each week in regard to hand-rolling tobacco, as did his fiancée, there would undoubtedly have been a saving made had he been retaining the tobacco for his own use. Given that the bank was prepared to lend him such a large sum, we do not consider it an unreasonable amount to expend. It was also the fact that the loan had been granted some time prior to the trip to Belgium, and this is a fact which was not taken into account by the Commissioners. We did not have specific details of Mr Caldicott's financial circumstances, but these days loans are very readily available, especially to people in work as Mr Caldicott was at the time. It is just such people as the Appellants who are on comparatively low incomes who are the most likely to want to take advantage of the lower duties prevailing on the continent. The second matter which Mrs Gillespie took into account which we do not consider she should have done without more was the fact that she had made enquiries and found that there were at least 14 vehicles registered to Mr Webb's home address. Mr Webb presented evidence that these cars were owned by his brother who owned a car hire and taxi business. We do not consider it reasonable for Mrs Gillespie to have taken this matter into account without at least contacting Mr Webb to find out to whom the vehicles belonged, and whether they were available to him. It was his evidence before us, which we accept, that his brother would not hire any vehicle to him at anything more than a £1 discount.
- We do not consider that these matters are sufficient to render the review decision unreasonable and we have insufficient evidence to take a different view of the facts. We have not heard from Mr Caldicott, and he relies principally on the answers given by him at interview and the matters put forward on his behalf by Alexander & Co and subsequently by Mr Webb.
- With regard to the matter of restoration of the vehicle to Mr Webb, there is no evidence of exceptional hardship. At the time of the seizure Mr Webb was not even able to drive, given that he had been disqualified and so it made no difference to his ability to get to work. The disadvantage was to his fiancée, who was learning to drive, but she did not give evidence before us and given that she had not at the time of the seizure passed her driving test, it would not have interfered with her ability to get to work in the short term. We are unable to take a view on whether there were long-term disadvantates to her because we were given no evidence as to this.
- In all the circumstances neither Appellant has satisfied us that the tobacco was for his own use nor that the Commissioners' decision was unreasonable and these appeals are dismissed.
- There is no order for costs.
EO00945
EXCISE DUTY – Restoration – Forfeiture in Magistrates' Court not contested – Reasonability of reviewing officer's decision considered – Appeal dismissed
LONDON TRIBUNAL CENTRE
STEPHEN WEBB & ADRIAN CALDICOTT Appellants
THE COMMISSIONERS FOR HER MAJESTY'S REVENUE & CUSTOMS Respondents
Tribunal: MISS J C GORT (Chairman)
MR C PERRY C.Eng
Sitting in public in Birmingham on 24 January 2006
Mr Webb for the Appellants
Miss F Darroch of counsel for the Respondents
© CROWN COPYRIGHT 2006
DECISION
Background
"They are independent of any operational work areas and will examine all papers and other available information relating to this case. … If … you have any queries or further information which you would like to provide in the support of this request, please contact the review officer …"
(1) The excise goods were destined for supply on a "not for profit" basis, for example, for re-imbursement.
(2) If the excise goods were destined for supply for profit, the quantity of excise goods is small and it was a first occurrence.
(3) If the vehicles owned by a third party who was not present at the time of the seizure and was either blameless or had taken reasonable steps to prevent smuggling in the vehicle.
The legislation
"1. Tobacco products
(1) In this Act 'tobacco products' means any of the following products, namely:
(a) cigarettes;
(b) cigars;
(c) hand-rolling tobacco;
(d) other smoking tobacco, and
(e) chewing tobacco,
Which are manufactured wholly or partly from tobacco or any substance used as a substance for tobacco, but does not include herbal smoking products.
(2) Subject to subsection (3) below, in this Act 'hand-rolling tobacco' means tobacco –
(a) which is sold or advertised by the importer or manufacturer as suitable for making into cigarettes; or
(aa) which is of a kind used for making into cigarettes; or
(b) of which more than 25 per cent by weight of the tobacco particles have a width of less than 1mm.
(1) There shall be charged on tobacco products imported into or manufactured in the United Kingdom a duty of excise at the rates shown, […], in the Table in Schedule 1 to this Act.
(3) …"
The Tobacco Products Regulations 2001 state:
"4-(1) Amend the Tobacco Products Regulations 2001[8] as follows;
(2) In the definition of "duty" in regulation 3(1) before the word "means" insert –
"except in regulation 12(1B)9d) below,"
(3) In regulation 12, after paragraph (1) insert –
"(1A) In the case of tobacco products acquired by a person in another Member State for his own use and transported by him to the United Kingdom, he excise duty point is the time when those goods are held or used for a commercial purpose by any person."
(1B) For the purposes of paragraph (1A) above –
"(a) 'Member State' includes the Principality of Monaco and San Marino, but does not include the Island of Heligoland and the territory of Busingen in the Federal Republic of Germany, Livigno, Campione d'Italia and the waters of Lake Lugano in the Italian Republic, Ceuta, Melilla and the Canary Islands in the Kingdom of Spain, or the overseas departments of the French Republic …".
(b) "own use" includes use as a personal gift,
(c) if the goods in question are –
(i) transferred to another person for money or money's worth (including any reimbursement of expenses incurred in connection with obtaining them), or
(ii) the person holding them intends to make such a transfer,
those goods are to be regarded as being held for a commercial purpose,
(d) if the goods are not duty and tax paid in the Member State at the time of acquisition, or the duty and tax that was paid will be or has been reimbursed, refunded or otherwise dispenses with, those goods are to be regarded as being held for a commercial purpose,
(e) without prejudice to sub-paragraphs (c) and (d) above, in determining whether excise goods are held or used for a commercial purpose by any person regard shall be taken of –
(i) that person's reasons for having possession or control of those products,
(ii) whether or not that person is a revenue trader (as defined in section 1(1) of the Customs and Excise Management Act 1979),
(iii) that person's conduct, including his intended use of those goods or any refusal to disclose his intended use of those products,
(iv) the location of those products,
(v) the mode of transport used to convey those products,
(vi) any document or other information whatsoever relating to those products,
(vii) the nature of those products including the nature and condition of any package or container,
(viii) the quantity of those products, and in particular, whether the quantity exceeds any of the following quantities –
3,200 cigarettes
400 cigarillos (cigars weighing no
more than 3 grammes each)
200 cigars
3 kilogrammes of any other tobacco
products
(ix) whether that person personally financed the purchase of those products,
(x) any other circumstances that appears to be relevant.
(4) In regulation 23(1), after paragraph (a), insert –
"(aa) they were acquired by a person in another member state for his own use and transported by him to the United Kingdom."
(Emphasis added)
"1. Where –
(a) except as provided by or under the Customs and Excise Acts 1979, any imported goods being goods chargeable on their importation with customs or excise duty, are, without payment of duty –
(i) unshipped in any port,
(ii) unloaded from any aircraft in the United Kingdom,
(iii) unloaded from any vehicle in, or otherwise brought across the boundary, into, Northern Ireland, or
(iv) removed from their place of importation or from any approved wharf, examination station or transit shed;
… those goods shall … be liable to forfeiture.
"(1) Any thing liable to forfeiture under the customs and excise Acts may be seized or detained by any officer or constable or any member of Her Majesty's armed forces or coastguard."
"(1) … where any thing has become liable to forfeiture under the Customs and Excise Acts – any ship, aircraft, vehicle … which has been used for the carriage, handling, deposit … of the thing so liable to forfeiture … and any other thing mixed, packed or found with the thing so liable, shall also be liable to forfeiture."
"The Commissioners may, as they see fit –
(a) …
(b) restore, subject to such conditions (if any) as they think proper, any thing forfeited or seized under the Customs and Excise Acts."
"…
(a) to direct that the decision, so far as it remains in force, is to cease to have effect from such a 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) 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 given 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."
The evidence
The Respondents' case
"The amount brought in in this case was enormous, and Her Majesty's Customs were entirely entitled to take the severe view that they did."
It was submitted in the present case that the 37.5 kilos of hand-rolling tobacco brought in was an amount that could reasonably suggest that the goods were not for the Appellants' own use and would justify the commerciality statement being given. It was for the Appellants to demonstrate to the officers at the time that the tobacco was for their own use.
"Given the extent of the damage caused to the public interest, it is, in my judgment, acceptable and proportionate that subject to individual considerations, whatever they are worth, the vehicles of those who smuggle for a profit, even for a small profit, should be seized as a matter of policy."
Mr Webb had produced no evidence to indicate that there were any exceptional individual considerations which would lead the Commissioners to depart from that policy.
The Appellant's case
Reasons for decision
MISS J C GORT
CHAIRMAN
RELEASED: 14 March 2006
LON/058008