United Kingdom VAT & Duties Tribunals (Excise) Decisions

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URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2006/E00947.html
Cite as: [2006] UKVAT(Excise) E00947, [2006] UKVAT(Excise) E947

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Euroworld Distribution Services v Revenue & Customs [2006] UKVAT(Excise) E00947 (22 March 2006)

EO00947

RESTORATION OF GOODS – a load of vodka being delivered from spain to the u.k seized – issues of title and evidence of payment considered – review decision reasonably arrived at – appeal dismissed

MANCHESTER TRIBUNAL CENTRE

EUROWORLD DISTRIBUTION SERVICES

Appellant

- and -

THE COMMISSIONERS FOR

HER MAJESTY'S REVENUE AND CUSTOMS Respondents

Tribunal: Elsie Gilliland (Chairman)

David Kippest

Sitting in public in Birmingham on 23 January 2006

Nicola Preston for the Appellant

Claire Chapman, counsel, instructed by the Acting Solicitor for HM Revenue and Customs for the Respondents

© CROWN COPYRIGHT 2006


 


DECISION

1. The appeal before the tribunal was that of Euroworld Distribution Services (the Appellant) against a decision of the Commissioners in a review letter dated 10 March 2005 not to restore to the Appellant excise goods comprising 1144 cases of vodka x 12 (13728 litres) (the goods) seized at Dover Eastern Docks on 9 January 2005. Counsel for the Appellant called 2 witnesses namely Ali (Jaffery) Maleek who described himself to the tribunal as the "owner" of the Appellant and Robert Morris Wyper the driver of the vehicle and trailer in which the goods had been imported from Spain to the United Kingdom. Mr Wyper had had a friend travelling with him named as Ian Robert Hablett. The vehicle and trailer had also been seized but were not a subject of the appeal before the tribunal.
2. Certain facts were not in dispute. When stopped by Customs at Dover and asked to produce his paperwork MrWyper produced a CMR document which he had written out himself by hand that his load was oranges and this he confirmed to the officer. It was only when he was asked to pull over for examination that he told the officer that in fact he was carrying vodka and then produced another CMR and other papers relating to the load said by Mr Maleek to be an AAD and the invoice. Mr Wyper had answered some questions raised by an officer, recorded in interview notes signed by him and copied in the bundle before the tribunal. He had then left. A number of questions as to the reliability the evidence of this witness were raised during the hearing.
3. The evidence of Mr Maleek was that he had set up his business in March 2003. Initially he had traded only in soft drinks, importing the same from Egypt and using a shipping agent at Felixstowe, whom he still used for that kind of business. He decided to move into the import of beer and spirits, which he acknowledged was a different and more complicated procedure. He decided to apply for the appropriate registration in September 2004 and obtained the same on 24 September 2004. He told us that he had been put in touch with a supplier in Spain and had gone to check them out. That supplier was Escomunialmacen S.L. He was satisfied with what he saw and set up a first transaction for the import of vodka in November 2004 intending it for the Christmas market. Although that was not the import the subject of the appeal Mr Maleek and his counsel both referred to it. The second transaction between the Appellant and Escomunialmacen S.L. was for a load in January 2005 the one the subject of the appeal. Again the import was of vodka and Mr Maleek said that the only difference between the two transactions was that the driver was not the same. Mr Maleek emphasised that it was the Spanish supplier which had made the transport arrangements but that the goods were to be delivered to the bonded warehouse chosen by Mr Maleek, namely Rangefield Import Export Warehouse of Purfleet in Essex. So far as the first import was concerned we were told at the hearing that although that load had been detained and held first for Customs at Rangefield Import Export Warehouse and later by Customs themselves at their Queens Warehouse those goods were released to the Appellant in mid-April 2005. On the matter of payment Mr Maleek informed us that with regard to each of the two import transactions he had personally made a trip to Spain to pay for those goods in cash in pounds sterling.
4. The role of the tribunal is to determine whether the decision of the Commissioners not to restore the goods to the Appellant was one which could not reasonably be arrived at as set out in s.16 (4) of the Finance Act 1994. In the exercise of a discretion on a review the officer must follow Wednesbury principles and accordingly take into account all relevant factors not take into account irrelevant ones and must have a proper understanding of the law. Counsel for the Appellant submitted that the decision was flawed that the reasons given were inadequate and that the matter should be sent back to the Commissioners for further review. Mr Maleek sought to establish that as new in the business of importing dutiable spirits he had taken all proper steps to ensure that British rules and regulations were met. So far as the Spanish end was concerned he had met his obligations as a businessman in that field by checking out his source and then relying on that company to satisfactorily comply with the Spanish requirements and also set in place delivery arrangements to the bonded warehouse which the Appellant had named in England. He was concerned that there should not be a "black mark" against his name in business dealings.
5. We have looked at the material which the review officer Helen Belinda Perkins considered in reaching her decision. In this regard we have not only the references in her review letter to the documentation seen but also in her witness statement dated 23 April 2005 to which objection was not raised. We note that the review officer indicated that she was not satisfied that payment for the goods had been made and the Appellant's ownership of them established. This point was dealt with in some detail by the Appellant's counsel in her submissions and by Mr Maleek in his evidence. Ms Perkins relied on the Customs's officer's notebook with the record of the interview with Mr Wyper and of his passenger. She referred to the correspondence between the Commissioners and the Appellant through Mr Maleek in respect of the seizure and the review process; a letter to the Appellant from Escomunialmacen S.L. concerning the load of vodka and the transport (28 January 2005); the letter from the Appellant to the Commissioners enclosing the CMR AAD and the invoice documentation (1 February 2005); and a letter addressed to the Commissioners from the Spanish fiscal authorities (13 January 2005). Mrs Preston drew our attention to the wording used by Ms Perkins in her witness statement as to "other documents" relied upon and submitted that the review officer had other material available not specifically mentioned. In his evidence it was put to us by Mr Maleek that he had produced other paperwork to the Commissioners at an early stage and in particular had completed a questionnaire to which he had attached relevant papers. We do not agree with counsel's interpretation of the words used by Ms Perkins as indicating that there was available to her other material to which she had not specifically referred in her review letter. It is our view that the officer recorded and followed through in her reasoning what she had seen and the weight she placed on that material.
6. As indicated above the review officer had expressed it as her view that there was no evidence that the goods had been paid for and ownership passed. Counsel for the Appellant submitted that legal ownership had never seriously been an issue between the parties and that no one else had asserted ownership of the goods. It was not accepted by the Commissioners at the hearing that payment for the goods had been made and we consider that the matter of title to the goods is one before the tribunal. Mr Maleek had supplied to the Commissioners and the officer had in the paperwork before her an invoice from Escomunialmacen S.L. for the transaction of 7 January 2005 and there was also in the bundle before the tribunal the invoice for the first load. Although much of the information on each was the same there was no receipt attached or endorsed. Mr Maleek said that he had been grateful for the 21 day credit period permitted by the Spanish company which had been slightly extended in respect of the first consignment. It is our judgement that on such a supply of goods title to goods passes only on payment unless there is agreement to the contrary. No evidence was adduced that there was a separate agreement.
7. The tribunal agreed to a short adjournment of the hearing to permit Mr Maleek to produce to us further papers which he said would provide confirmation that the Appellant had paid for the goods and was the owner and thus entitled to reclaim them. He had referred in his evidence to explanatory paperwork by way of bank sheets and flight details which he claimed had already been supplied to the Commissioners. In the event he provided three copy bank sheets of a current account in the name of Euroworld Distribution Service (sic) with Natwest. These were first for the period 17 November 2003 to 3 December2003 (sheet 10); the next sheet (11) was from 3 December 2003 to 9 December 2003; and a third sheet (numbered 33) was for the period from 17 December 2004 to 17 January 2005. The relevant transactions we were told were on the first sheet a cash withdrawal on 2 December 2003 of £8000 and there were recorded three further cash withdrawals on 3 and 9 December 2003 to a total of £22500. Mr Maleek said that money had been withdrawn to pay for soft drinks but that the rest he had kept as cash in his safe to avoid bank charges. This was available for buying the goods though we were not told the amount. He stated that he had paid the invoiced amounts for the two transactions by flying across to Spain with the necessary cash in sterling. However Mr Maleek had previously told us that he did not obtain the registration until September 2004 that is some nine months after the cash withdrawals. We find it difficult to accept that these sums merely remained in the safe unused in the continuing operation of the business against such an eventuality as a change of direction as to the kind of imports the Appellant arranged. We have noted that the current account balances shown on sheets 10 and 11 varied between £11758.62 and £68576.12 whereas on sheet 33 covering 17 December 2004 to January 2005 a more relevant period to the matter before us the current account balances were much less varying between £18.70 O/D and £2351.30. Our attention was drawn on sheet 33 to a card transaction on 5 January 2005 for an Easy Jet flight from Luton (which we were told was to Malaga) to pay for the first invoiced goods (26312, Euros, approximately £19000). The flight cost was recorded as £170.98. There was a handwritten note on the sheet that the second invoice was paid in February 2005 but that the airline ticket was paid for in cash. We cannot accept that these copy statements constitute evidence that payment for the goods the subject of this appeal was in fact made. No receipt for a cash payment has at any stage been supplied either to the Commissioners or to the tribunal. Any prudent businessman would have sought such a receipt for his firm's accounts. In a copy letter in the bundle dated 29 November 2004 Mr Maleek for the Appellant had worked out for the Commissioners a potential profit margin on the first load of £6200.48 less the further cost of transport and warehouse charges. Whilst we have details of an invoiced amount in Euros (28,554,24) we have not been given in respect of the second transaction any details of the precise amount said to have been carried to Spain in pounds sterling nor the calculation date for the exchange rate and as indicated before no receipt for a cash payment has been produced. Again regardless of the implications of such information to this appeal it is basic to the balancing of the firm's books.
8. There are to our mind a number of further inconsistencies in the evidence which has been presented to us and in these respects we find that the actions of Mr Maleek have fallen short of those of a careful businessman operating in a highly regulated European trade. Both he and his counsel have been at pains to point out that he has now changed his procedures and makes any payment by bank transfer and takes control of the transport arrangements. He informed us that he was called upon by the supplier to make payment for the goods which though seized had been "delivered" by it. All the more reason we should have thought to ensure that the payment which he claimed was made in February 2005 that is subsequent to the seizure was in fact properly evidenced. The excise duty on the load for which the Appellant was invoiced at 28,554,24 Euros, (approximately £19600) was £107,407.87 which would be such that meeting the legal requirements of supply and delivery of paramount importance. There is in the bundle in Spanish and in translation a copy letter from the Spanish authorities to Customs on the effect that the timed procedures in Spain were not met by the supplier in that the appropriate regulation necessitated a notification within two hours of a load such as that the subject of the appeal being documented and despatched. We were told that the paperwork was not completed and thus the load despatched until late afternoon on Friday 7 January 2005. On this basis it was submitted that it was in order for the load details to be registered after that weekend that is on Monday 10 January 2005 when in the normal course of transport (though not in the instant case as the vehicle was stopped) the load would already have passed through the Customs areas. We do not accept that this was merely "sloppy administration" or that after the load was dealt with there was a close-down on the notification procedures required by the Spanish authorities especially as it is clear from the letter from them that notice had to be given two hours before the goods were to be sent on their way. Certainly the Internet by which the information was to be relayed does not close down. A copy fax dated 26 May 2005 addressed "to whome (sic) it may concern" was produced as being from the supplier and presenting the explanation. It referred to both invoices and their Euro amounts and stated that they were paid in cash by the Appellant. Counsel for the Commissioners pointed out that this letter was not on the headed fax sheet which other faxes from Escomunialmacen S.L. had been and that it showed a different signatory from the previous contact. More importantly in our view however it was dated more than four months after the events. Further the letter does not give any precise information as to the actual payment. It does not give a date nor an amount for any sterling received. It was subsequent to the date of the review letter and so was not comprised within the documentation before the review officer when she made her decision.
9. We have noted also that Mr Maleek stated that he did not know the transport company but he did supply information about it to the Commissioners on 3 December 2004 and he also said that had he known that the driver was Mr Wyper he would not have used that company. These comments appear to us to be contradictory. Mr Maleek said also in evidence that he did not put any blame on the transport company for the problem with the first load nor was he attributing any blame to the Spanish supplier which he said had confirmed having met Spanish fiscal requirements. He could not understand why this did not in turn satisfy the British authorities. Mr Maleek was bemused as to why Mr Wyper had initially told the Customs officer at Dover that he was carrying oranges and produced an incorrect CMR in his own handwriting when he had the correct CMR, AAD and the invoice with him which he had then handed to the officer. We heard Mr Wyper give evidence on this as based on his fear for his own security as he (or possibly a friend) was hijacked and attacked a number of years ago. We find this explanation implausible. He was not then in a motorway service area but in the Customs zone. We were invited by the Appellant's counsel to make a finding in respect of the evidence of Mr Wyper. We found the same confused and unreliable. We can not go so far as express an opinion on which part of the handwriting on the CMR documentation for the vodka might have been written in by the witness. The CMR purporting to import oranges was not produced to us. The witness had described faxed instructions he had received to collect the load but these he no longer had. The review officer was able to obtain a copy of the fax but in her review letter stated that she could not specifically relate it to the collection date of the second consignment of vodka as it had two dates on the face of it one typewritten was 14 December 2004 and the other handwritten was 4 January 2005. We can not say more than that no clear evidence on the instructions was available to us. Mr Wyper did not claim prior contact with the Appellant but his evidence did not clarify the question of payment and ownership which was the concern of the review officer and an issue before the tribunal.
10. The review officer sought a paper trail for the movement of the goods and the legitimacy of the load from initial instructions to their arrival at Eastern Docks. This she did not find. She stated that the Appellant had not to date presented any evidence that it had paid for the goods or was actually the legal owner. We are satisfied that there was no material before her not reflected in her decision. The officer did consider also in her review whether there were exceptional circumstances such as would justify restoration of the goods the subject of the appeal but found none. We find that in view of the substantial load and the considerable amount of excise duty at risk her decision was one which was proportionate and which could reasonably be arrived at. We do not consider that any evidence presented at the hearing had it been available earlier to the review officer would have affected her decision.
11. We dismiss the appeal.
12. As additional evidence had been produced by the Appellant only at the time of the hearing the Commissioners indicated that if successful they might wish to seek payment of costs. Accordingly we direct that there shall be liberty to the Commissioners to apply on the matter of costs to a tribunal chairman sitting alone.

ELSIE GILLILAND

CHAIRMAN
Release Date: 22 March 206

MAN/05/8014