United Kingdom VAT & Duties Tribunals (Excise) Decisions

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Cite as: [2006] UKVAT(Excise) E974, [2006] UKVAT(Excise) E00974

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Philip John Donelly v Revenue & Customs [2006] UKVAT(Excise) E00974 (19 April 2006)

EXCISE DUTY – preliminary issue of whether the Appellant can raise the issue of own use – Appellant withdrew condemnation proceedings on being told that they could take up to 12 months – not prevented from raising the issue

LONDON TRIBUNAL CENTRE

PHILIP JOHN DONNELLY Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: DR JOHN F AVERY JONES CBE (Chairman)

PRAFUL DAVDA FCA

Sitting in public in London on 7 April 2006

The Appellant did not appear and was not represented

Sarabjit Singh, counsel, instructed by the Solicitor for the Customs and Excise, for the Respondents

© CROWN COPYRIGHT 2006

DECISION

This is an appeal by Mr P J Donnelly against a review decision refusing to restore a minibus and excise goods. When this appeal was called on the Appellant was not present and the tribunal made telephone contact with the number on the notice of appeal and spoke to his daughter from which it transpired that he did not receive the notice of the hearing (which we accept), and he wanted an adjournment. Customs were represented by Mr Sarabjit Singh. Mr Singh applied to hear the issue of law whether the Appellant was entitled to raise the issue that the goods were for his person use based on the Appellant's assertions of the facts. Bearing in mind that the Appellant was representing himself we considered that we could look after his interests on a point of law and so we agreed to this on the basis that it might shorten the eventual appeal.

For the purposes of this preliminary issue of law we shall assume the following facts:

(1) The Appellant was the driver of a minibus which was stopped by Customs at Dover on 5 February 2006 as a result of which Customs seized the minibus and (from the Appellant and the passengers together) 19,400 cigarettes, 86.8 kilograms of hand-rolling tobacco, 1,000 cigars and 20.25 litres of wine, of which 1,400 cigarettes, 5 kg of tobacco and 2 cases of wine were the property of the Appellant. The guide levels at the time were 3,200 cigarettes and 3 kilos of tobacco.

(2) On 10 February 2005 the Appellant applied for both condemnation and restoration proceedings, which his representative, the Legal Advisory Service Limited, reiterated on 16 February 2005. On 25 February Customs advised that condemnation proceedings had been initiated. By letter of 25 February 2005 the Legal Advisory Service Limited withdrew such proceedings. Customs confirmed on 3 March 2005 that condemnation proceedings had been withdrawn.

(3) Notice 12A was handed to the Appellant at the time of seizure and recorded in the Officer's notebook. That Notice states in paragraph 2 that

"You must challenge the legality of the seizure if you insist that the thing was not liable to seizure…, for example because things were for you own use…".

In paragraph 2.20 it states

"If you do not lodge an appeal against seizure by submitting a valid Notice of Claim within one month from the date of seizure, ownership of the seized thing will pass automatically to Customs and you will then be unable to appeal against the legality of the seizure. However, you can still ask us to consider returning the seized thing—see section 3. You should note that we are very unlikely to return seized excise goods solely on the grounds that you maintain that they were not liable to seizure (eg alcohol or tobacco goods were for your 'own use')."

(4) Restoration proceedings continued and a decision not to restore the goods was made on 7 March 2005 which was confirmed on a review on 25 April 2005, against which this appeal was brought on 24 May 2005.

Mr Singh took us through the cases of Gora v Customs and Excise Commissioners [2004] QB 93, Gascoyne v Customs and Excise Commissioners [2005] Ch 215, Smith v Commissioners of Revenue and Customs (17 November 2005) and Weller v Commissioners of Revenue and Customs (23 February 2006). These last two cases have clarified the two earlier Court of Appeal authorities. In Smith Lewison J says:

"22. It is, in my judgment, clear from that passage [from Buxton LJ's judgment in Gascoyne at [76]] that in the run of the mill case where there has been failure to give a paragraph 3 notice invoking the condemnation proceedings the deeming provision will operate against the applicant in any subsequent appeal to a Tribunal. The Tribunal's function, therefore, is analogous to a sentencing court once a defendant has been convicted. No matter that the defendant still protests his innocence of the charge against him, the function of a sentencing court is to accept mitigation but not to question the original conviction.

23. Lord Justice Buxton's reference to abuse of process or to considerations analogous to abuse of process, in my view, references to the well-known principle that it may be an abuse of process to raise in one tribunal matters that could and should have been raised in another. So the relevant questions will always be, first, could the applicant have raised the question of lawfulness of forfeiture in other proceedings and, if the answer to that question is yes, why did he not do so? In the light of his reasons for not raising the matter in condemnation proceedings the Tribunal can then answer the question should he have done so and if they answer that question 'yes', then it will be, in most cases, an abuse of process for him to raise the question before the Tribunal."

In Weller Evans-Lombe J, after quoting that passage, said at [16]

"I respectfully agree with Mr Justice Lewison's approach in this case, namely, that whether or not an importer, having suffered a deemed forfeiture under paragraph 5 of Schedule 3, is able to raise the validity of the forfeiture on a review by the Commissioners and on appeal fro them to the Tribunal, depends on two questions, first, did the importer have a realistic opportunity to invoke the condemnation procedure and, secondly, if he did are there nonetheless reasons, disclosed by the facts of the case which should persuade the Commissioners or the tribunal to permit him to reopen the question of the validity of the original seizure on an application for return of the goods. The first question will almost always be answered in the affirmative, since facts would have to be very unusual to base a conclusion that an importer was prevented, in the 30 days succeeding forfeiture, from giving notice to the Customs to initiate condemnation procedure in the Magistrates court.

Applying these two tests. The answer to the first is clearly "yes" since the Appellant did in fact start condemnation proceedings and then withdrew them on advice. The answer to the second (should he have applied for (or in this case continued) the condemnation proceedings?), is more difficult. On 16 February 2005 the Legal Advisory Service Limited wrote to Customs saying: "We place on record the urgency of this case as our client is a self-employed gas fitter and is unable to earn his living without the vehicle you confiscated….Your actions have caused hardship to our client and his family and we stress that time is of the essence for you to give swift consideration in the release of the vehicle." In the letter of 25 February 2005 withdrawing the condemnation proceedings they said "The release of his vehicle is of paramount importance in order for our client to commence work." In their letter of 9 March 2005 they state:

"We respectfully draw your attention to earlier fax transmissions and correspondence addressed to Bev White and Mrs Wouldham at Dover outlining the urgency in restoring our client's vehicle in order for him to earn his living as a self-employed gas fitter

I cannot stress enough the urgency regarding the situation and place on record that this company left 3 messages on an answering machine for Bev White and Mrs Wouldham to return. No replies were received.

Previously Mrs Woodham [presumably Wouldham] told the writer that considering our client intended to issue proceedings the hearing could take up to 12 months to reach court, during which time our client's vehicle would not be released.

If our client wanted consideration for his vehicle to be released he would have to withdraw proceedings and wait a further 20 days for a decision."

In the Appellant's absence we accept the truth of these statements for the purpose of this preliminary issue. The Appellant needed the vehicle in order to work and the urgency of the situation was pointed out to Customs in the three letters we have quoted. The Legal Advisory Service Limited were told that condemnation proceedings could take up to a year, but if he withdrew them he could have a decision on restoration within 20 days, which was duly made on 7 March 2005, 10 days later. The Appellant must also be taken to have read and understood the passages quoted above from Notice 12A. We return to the second question. We do not consider that a reasonable appellant in the circumstances of the actual Appellant should have done so. If the vehicle was required urgently, who would wait for up to 12 months for condemnation proceedings, when Customs would give a decision possibly restoring it within 20 days? Accordingly we find that it would not be an abuse of process for the Appellant to raise "own use" in this appeal. We have accepted the truth of the assertion by the officer that condemnation proceedings can take up to 12 months. We hope that Customs officers in the post seizure unit in Dover keep in touch with the Dover and East Kent Magistrates' Court and give prospective appellants up-to-date estimates of how long it takes before condemnation proceedings are likely to be heard.

The result is that the Appellant is free to continue the appeal raising both the "own use" issue and exceptional hardship. We direct that a further hearing be fixed before the same tribunal at a date to suit the parties.

JOHN F AVERY JONES

CHAIRMAN

RELEASE DATE: 19 April 2006

LON/05/8061