United Kingdom VAT & Duties Tribunals (Excise) Decisions

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URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2006/E00970.html
Cite as: [2006] UKVAT(Excise) E00970, [2006] UKVAT(Excise) E970

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Awais v Revenue & Customs [2006] UKVAT(Excise) E00970 (12 July 2006)

E 00970

EXCISE — commercial importation of tobacco — seizure of vehicle — whether vehicle owned by blameless third party — no — whether hardship — no — review decision to refuse restoration reasonable — appeal dismissed

MANCHESTER TRIBUNAL CENTRE

MRS FAQRA AWAIS Appellant

- and -

THE COMMISSIONERS FOR

HER MAJESTY'S REVENUE AND CUSTOMS Respondents

Tribunal: Lady Mitting (Chairman)

Peter Whitehead

Sitting in public in Manchester on 26 June 2006

Mrs M K Hussain, solicitor, for the Appellant

Ms E McClory, counsel, instructed by the Acting Solicitor for HM Revenue and Customs for the Respondents

© CROWN COPYRIGHT 2006


 


DECISION

1. The decision under appeal is that of the Respondents, taken on review and notified by letter dated 30 December 2005, to refuse restoration to the Appellant of a Vauxhall Astra motor car ML51 WHK, which had been seized at Coquelles on 20 October 2005.
2. The Appellant gave oral evidence but the Respondents called no evidence.

The Evidence

3. The vehicle had been intercepted at the UK Control Zone at Coquelles on 20 October 2005. The Appellant's husband, Mr N Awais, had been driving it and he was accompanied by two passengers, Mr Mohammed Tahir (the Appellant's brother) and Mr Shaukat Ali (a friend of Mr Awais). Found in the vehicle were 42 kilograms of tobacco of which Mr Awais claimed 18 kilograms and his passengers, 12 kilograms each. All three men were interviewed, following which, the officer, being satisfied the goods were held for a commercial purpose, seized all 42 kilograms of tobacco and the vehicle (Section 141(1) CEMA 1979).
4. By letter dated 21 October 2005, Mrs Awais wrote to the Post Seizure Unit informing them that she was the legal owner of the vehicle and enclosing her registration document. On receipt of her letter, the Respondents wrote asking for clarification as to whether she was seeking restoration or appealing against the legality of the seizure. Mrs Awais replied that she was seeking restoration and was invited to attend interview, which she did at Dover on 14 November 2005.
5. In the course of the interview, Mrs Awais told the officer that her husband had borrowed the vehicle just for the day to go and meet some friends in London. When asked if he had borrowed it before, she replied "Yes, he drops off the kids at school and picks them up". She had not known, she told the officer, that he was taking the car abroad and it had proved very inconvenient for her to be without it when it was not returned. She said the vehicle had been purchased by both of them from their savings. Her husband had previously owned a BMW which had been sold some two or three months earlier. She said that the couple also owned a van which she used if she needed to. She was asked if both vehicles (the van and the Astra) were jointly owned and jointly used to which she replied that the Vauxhall Astra was bought specifically to take the children to school and run around in because it was cheaper to run. Her husband would only take the children to school if she was ill. The officer asked her about the "communal pot" of money out of which her husband had taken the money to fund his purchase of tobacco. She said that this was a cash sum kept at her mother's house for safety. Her husband, she was later told by her mother, had gone round to collect the cash about 2 pm on the 20^th.
6. Mrs Awais was told on the 14^th November that the vehicle would not be restored to her and on the 15^th she wrote in seeking a review on the grounds that the vehicle was legally owned by herself as witness registration document and insurance certificate. The latter was in her name as policy holder with her husband being named as an additional driver. She went on to say in her letter that she had not been aware the vehicle was to be taken abroad and she was not present at the time; it was the first time the vehicle or her husband had gone to France; the tobacco was nothing to do with her and she was not aware of the trip or of the intention of bringing any tobacco back and finally that the vehicle had been bought specifically for her to use and without it she was struggling and had to borrow a car.
7. The review officer who considered the matter and made the decision now under appeal was Mr G Morgan. He reviewed the facts surrounding the seizure, the interview with Mrs Awais and all her correspondence. In his review letter he set out the Respondents' policy on restoration. The general policy was that private vehicles used for the improper importation of excise goods would not normally be restored. However, they would be considered for restoration, at the discretion of the Commissioners, and in certain circumstances subject to conditions, in the following circumstances:

? If the excise goods were destined for supply on a "not for profit basis"

? If the excise goods were destined for supply for profit, the quantity was small and it was a first occurrence

? If the vehicle was 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.

8. For a number of reasons, which were not challenged before us and which we need not detail, Mr Morgan concluded that all the tobacco had been imported for resale at a profit. In response to Mrs Awais's plea for restoration to herself, Mr Morgan pointed out that the vehicle had been jointly purchased, was insured for and was used by both of them and that "to restore it to you would be tantamount to restoring it to him, the person involved in the attempt at smuggling. I therefore decline to restore the car to you as a genuine third party owner".
9. Mr Morgan went on to consider hardship but pointed out that she had the use of (as confirmed in interview) her husband's van. He had also traced that there was a BMW car still registered to her address, even though she had maintained in interview that it had been sold. He considered that she had not suffered exceptional hardship and saw no reason to vary his refusal to restore.
10. In her evidence in chief, Mrs Awais told us that at that time of the trip she had been living with her husband and two children, aged nine and two. She and her husband have since separated. He had asked her if he could borrow the car to go and meet some friends in London, telling her he would be back that night. He had not told her he would be travelling to France and had she known, she would have asked him why. Her husband was the registered keeper of a Mercedes van which he used for business. She did not drive it because she found it rather large and was scared of it. She had found life without the vehicle very difficult. At first, she had borrowed her brother's car but he had since sold it and she was dependant upon taxis and friends helping out. The vehicle was used for all household trips including taking her children to and from school.
11. In cross examination, Ms McClory pointed out the discrepancy between what she had told the officer in interview and what she had said in oral evidence over her husband's use of the vehicle to drop the children off at school. Mrs Awais replied that she couldn't understand how she had come to tell the officer what she had done.
12. We, the tribunal, also put a number of questions to Mrs Awais to try and elicit more information about the purchase and use of the Vauxhall. Mrs Awais told us that the Vauxhall had been purchased in September 2005. It had cost £4,000, had been a cash purchase, the cash coming out of the "cash pot" which was fed by her husband from any money he had left over at the end of the week. She herself had not worked for four years and all the family savings and the contents of the cash pot had therefore been provided by her husband. She and her husband had a history of buying and selling vehicles which were rarely kept for more than a few months. All were purchased out of her husband's earnings but all were registered in her name. She explained that this was for insurance purposes. She could get insurance cover more cheaply than her husband because she had a no claims discount and an age discount but she could not be the policy holder on the insurance certificate unless she was the registered keeper of the vehicle. In the months leading up to the seizure, the couple had owned a BMW which had been sold in February 2005. Her husband drove this vehicle regularly. The BMW was sold for £18,000, £10,000 of which was used to repay a loan to a friend and the remaining £8,000 was put into the cash pot. The BMW was replaced by a Honda which again her husband had driven but neither of them had liked the Honda and it was therefore sold very quickly and replaced by a Vauxhall Astra which needed too much work doing and that again was therefore sold and replaced by the Vauxhall Astra which is the subject of this appeal.
13. Mrs Awais told us that her husband did not enjoy driving the Astras as they were not very smart and he liked driving rather smart, luxurious cars. We did, however, ask her a straight question as to whether he ever drove the seized Vauxhall to which she replied that he did drive it if he needed it and if she wasn't using it.

Submissions

14. It was Ms McClory's submission that Mrs Awais must have known the purpose of the trip. It was unreasonable that at 2 pm, Mr Awais should have asked if he could borrow the vehicle to travel from Oldham to London and still be back that night. It was her contention that the trip had to have been pre-planned and Mrs Awais must have known of it. She contended that Mr Awais had open access to the vehicle, otherwise he would not have been able to take it at one hour's notice and she pointed out the discrepancy in the evidence as to Mr Awais's use of the vehicle. It was Ms McClory's contention that Mrs Awais was not a blameless third party owner.
15. Mrs Hussain asked us to take into account that both Mr and Mrs Awais had been interviewed without solicitors. We tried to explore this point as we were uncertain of the relevance of it and Mrs Hussain confirmed that it was not contended that the questioning had been intimidatory and she was not making any contention that Mrs Awais had not understood any of the questions. Mrs Hussain stressed that Mrs Awais had had no prior knowledge of the trip and had only given permission on the day. As she had no knowledge of the real intention of the trip she could have done nothing to prevent it. Mrs Awais was totally blameless in the venture of which she had been given no advance warning and there were no reasonable steps which she could have taken to prevent it.
16. Mrs Hussain went on to stress the hardship which Mrs Awais was suffering. Mrs Awais was now a single mother, separated from her husband, not working and with two school aged children. She could not afford to replace the vehicle and could no longer rely on either her husband or her brother. Mr Awais had taken the Mercedes van with him when he left and she was therefore left with no vehicle which she could use.

Conclusions

17. Mrs Awais did not seek condemnation proceedings and nor did any of the travellers in respect of their goods. No challenge having been made to the legality of the seizure of either the tobacco or the vehicle, the goods are now deemed to have been held for a commercial purpose (paragraph 5, Schedule 3 CEMA 1979). There was no suggestion before us that this conclusion was incorrect or that the importation was for anything other than a commercial purpose. The sole issue before us as defined by Mrs Hussain in opening was whether or not Mrs Awais was a genuine blameless third party owner. To this, of course, has to be added that there was also a submission of exceptional hardship.
18. There was no contention by Mrs Hussain that the Respondents' policy on restoration was unreasonable, her contention being that (in the words of the policy) the vehicle was owned by a third party (Mrs Awais) who was not present at the time of the seizure and who was either blameless or had taken reasonable steps to prevent smuggling in the vehicle. To succeed, Mrs Awais has to satisfy us on a balance of probability of three factors. First, that she was a genuine third party owner of the vehicle; secondly that she had not been present at the time of the seizure and thirdly that she was either blameless or had taken all reasonable steps to prevent the vehicle being used for smuggling. It is easier, in this decision, for us to deal with the latter two points first. It is not in dispute that Mrs Awais was not present on the trip to France or at the time of seizure. We reject Ms McClory's submission that Mrs Awais must have known about the purpose of the trip. We totally accept it had probably been pre-planned but this would have been by Mr Awais and we are quite certain that he did not tell his wife of the trip and she was utterly ignorant of it. We accept her evidence that she had no reason to suspect the true purpose for which the vehicle was to be used and consequently she would see no reason to prohibit him from taking the car abroad. We find that she was blameless and in the circumstances, there were no other reasonable steps which she could or should have taken to prevent the venture.
19. However, the fundamental issue in this case is the true ownership of the vehicle and we have to conclude that Mrs Awais was not a genuine third party owner. This is not because we disbelieve anything we were told but arises from our interpretation of what we were told. We were told that the vehicle was purchased out of funds provided only by her husband. The vehicle was certainly registered in her name but not to reflect that she was the genuine legal owner but for insurance purposes because that was the way they could obtain cheaper insurance. The vehicle was the last of a succession of vehicles, all of which had been similarly purchased out of funds provided by Mr Awais and insured and registered in Mrs Awais' name. The evidence as to Mr Awais's use of the vehicle was contradictory. Conflicting answers were given in interview with the officer and what we were told was also contradictory. However, in answer to the final question from us, Mrs Awais did say that her husband did drive the vehicle if he needed to and she was not using it. It might well have been that she had prior call on it if she needed it for any purpose connected with the children but that is not nearly the same as saying that she was the sole user. Equally, it may well have been that Mr Awais did not much like driving the Vauxhall, certainly not as much as he would have liked driving the BMW but again this does not mean that he did not have the right to use it if he so wished. As was identified by Mrs Hussain, the mere fact that Mrs Awais is the registered keeper of the vehicle does not automatically denote that she is the legal owner.
20. For all these reasons, we conclude that Mrs Awais was not a genuine third party owner. This was a jointly owned family vehicle. For Mr Morgan to have restored it would have been tantamount to restoring it to Mr and Mrs Awais equally and as such the refusal of restoration was perfectly reasonable.
21. Turning to the question of hardship, there is a complicating factor here that was not present when Mr Morgan made his decision in that Mr and Mrs Awais have since separated. Mr Morgan's decision appears to have been based on two factors, one was that he thought, as it turns out possibly incorrectly, that Mr and Mrs Awais still owned a BMW but secondly that Mr Awais was the owner of the Mercedes van which, in interview, Mrs Awais had said that she could use if she needed to. In those circumstances, he did not consider that any hardship which Mrs Awais might have been suffering was sufficiently exceptional to merit restoration. The reasonableness of Mr Morgan's decision can only be viewed on the facts which pertained at the time the decision was made and the evidence which he had. At that time, by her own admission in interview, Mrs Awais did have access to and the right to use the van even though she may not have liked driving it. Mr Morgan's decision was therefore perfectly reasonable. The fact that later events have made life considerably more difficult for Mrs Awais, and for this of course we have the utmost sympathy for her, cannot detract from the reasonableness of the original decision. What has happened since cannot render unreasonable a decision which was reasonable on the facts as they were at the time the decision was made.
22. In addition, whilst clearly it would be far more convenient for Mrs Awais to own and run her own vehicle, we heard no evidence on the availability of public transport or the financial resources to which Mrs Awais might have access and for this reason also, we cannot find that this is a case of exceptional hardship.
23. Our jurisdiction is limited to considering the reasonableness of Mr Morgan's decision; whether he took all relevant factors into account or whether he took into account anything that was not relevant or gave excessive or insufficient weight to anything. Only if we find that his decision is one which no reasonable body of Commissioners could have taken could we overturn it. For all the reasons which we have given, we believe that his decision was reasonable and the appeal is therefore dismissed.
24. The Respondents made no application for costs and we make no order.

LADY MITTING

CHAIRMAN
Release Date: 12 July 2006

MAN/06/8002