United Kingdom VAT & Duties Tribunals (Excise) Decisions

Bennett v Revenue & Customs [2006] UKVAT(Excise) E00978 (14 August 2006)

E00978

EXCISE DUTIES – seizure of excise goods and car – refusal to restore – Appellant did not cause Respondents to take condemnation proceedings – only issue whether reviewing officer could reasonably have upheld refusal to restore – decision reasonable – appeal dismissed

MANCHESTER TRIBUNAL CENTRE

KAREN BENNETT Appellant

- and -

THE COMMISSIONERS FOR

HER MAJESTY'S REVENUE AND CUSTOMS Respondents

Tribunal: Colin Bishopp (Chairman)

Sitting in public in Manchester on 10 July 2006

Mr Jonathan Grierson, counsel, instructed by Pannone & Partners for the Appellant

Mr A W Phillips, of the Solicitor's office of HM Revenue and Customs for the Respondents

© CROWN COPYRIGHT 2006

DECISION

1. This is an appeal against the refusal by the Respondents, upheld on a review carried out by Brian Rayden, to restore to the Appellant, Karen Bennett, a car, 24.95 kg of hand rolling tobacco and 400 cigarettes, all of which had been seized from her at Dover on 5 December 2003 when Mrs Bennett and her travelling companion, Richard Grimes, arrived on a ferry from France. The outcome of Mr Rayden's review is set out in a letter written by him to Mrs Bennett on 19 February 2004.
2. Mrs Bennett's appeal has already been heard once by this tribunal, and determined in her favour. The Tribunal's decision was challenged by way of an appeal to the High Court. While the appeal was waiting to be heard, the judgment of Lewison J in Commissioners of Revenue and Customs v Albert Charles Smith (2005, unreported) was delivered. In the light of that judgment Mrs Bennett's advisers recognised that the tribunal's decision could not stand and by agreement an order was made by the High Court remitting the matter to the tribunal for the appeal to be heard again; it came before me on 10 July 2006 for that purpose.
3. Mrs Bennett was represented by Jonathan Grierson of counsel, and the Respondents by A W Phillips of their Solicitor's office. I heard evidence from Mrs Bennett and Mr Rayden and was provided with a bundle of relevant documents and authorities relating to the tribunal's jurisdiction.
4. Mrs Bennett said that she had travelled to France and Belgium with Mr Grimes, a friend, in her own car, which at the time was only six months old. Their intention had been to buy some cigarettes. They travelled on the ferry to Calais and then drove straight to Adinkerke in Belgium in order to buy the cigarettes but, discovering that they were more expensive than they had expected, decided to buy tobacco instead. They bought 300 pouches (15kg) but then decided, as they did not intend to make a similar trip for a long time, or indeed ever, that they would buy more, so went back into the shop and bought a further 200 pouches making a total of 25 kgs. (I did not, incidentally, have any evidence about the purchase of the 400 cigarettes). They placed the tobacco in the boot of the car, where it was not concealed in any way, and returned to Calais in order to take the ferry back to Dover. On arrival, they were stopped by Customs officers and, after interview, the goods and the car were taken from Mrs Bennett.
5. Mrs Bennett assured me that she and Mr Grimes had bought the goods entirely for their own use and that neither had any intention of selling them. The tobacco was to be shared equally between them, but they both intended to give some to their respective children.
6. The notes made by the officers of their interviews of Mrs Bennett and, separately, Mr Grimes, had been signed by them. Mrs Bennett added a note, in her own handwriting, that the interview record was true and accurate. The officers have added thereafter their reasons for seizing the goods, which included inconsistencies between Mrs Bennett's and Mr Grimes' accounts about how the goods were paid for (Mrs Bennett said that she had paid for all of them, upon the footing that Mr Grimes would reimburse her the cost of his share when he was financially able to do so) and that Mr Grimes gave a poor account of his consumption of tobacco. The officers were also not satisfied that Mrs Bennett and Mr Grimes had the means to pay for so much tobacco. I add only that there were also some minor discrepancies between Mrs Bennett's evidence before me, and the content of the interview notes. .
7. Mr Rayden, as both his evidence and his letter made clear, came to much the same conclusion as the seizing officer. The quantity of tobacco was, he said, enormous, yet Mrs Bennett who, by her own account, was financially extremely stretched (as her evidence before me confirmed), thought it appropriate to increase her credit card indebtedness by buying so much tobacco not only for herself but also for Mr Grimes on the strength of a promise from Mr Grimes (who at the time was unemployed) to pay her back when he could. That factor, the discrepancies revealed by the interviews and Mr Grimes' inability to account satisfactorily for his tobacco consumption all led him to the conclusion that this was in reality a commercial importation, that is to say the goods were intended for resale at a profit. That being so, he concluded that it was appropriate for the Respondents to seize the goods and the car and not to restore them. He reached that conclusion applying the judgment of the Court of Appeal in Lindsay v Commissioners of Customs and Excise [2002] STC 588, in which it observed that the Respondents' policy of seizing and not restoring cars used for illicit commercial importations was reasonable.
8. This tribunal's jurisdiction is limited by section 16(4) of the Finance Act 1994 to considering whether or not the decision on review, that is Mr Rayden's decision in this case, is one at which he could reasonably have arrived; only if I am satisfied that it was not may I allow the appeal. In considering that question I am not, as a general rule, permitted to examine questions which ought to have been raised before the magistrates in condemnation proceedings. I can do so exceptionally, as various Court of Appeal authorities (particularly Gora and others v Commissioners of Customs and Excise [2004] QB 93 and Gascoyne v Commissioners of Customs and Excise [2005] 2 WLR 222) have made clear, when the person concerned was effectively prevented from causing condemnation proceedings to be brought. In such a case I am required to consider whether, by allowing the person to raise the same issues before this tribunal, I will be permitting an abuse of process. Mrs Bennett told me that she had considered the paperwork given to her by the Respondents when her goods and car were seized and had made enquiries of the Respondents by telephone about her possible courses of action. She was told, she said, that if she required the Respondents to take condemnation proceedings, her claim for restoration would be deferred until the condemnation proceedings had been concluded. She said she tried to obtain advice from a solicitor about her best course of action, but could find no-one who was able to help her. Thinking, she said, that the restoration claim would be resolved more quickly, she decided to ask for restoration and not to require condemnation.
9. Mr Grierson's argument was that Mrs Bennett had effectively been prevented from requiring condemnation proceedings to be brought. He asked me to consider the wording of Notice 12(A), published by what was then HM Customs & Excise in October 2002 (that is, the version current at the time Mrs Bennett's goods and car were seized), and to compare it with the version issued in October 2004. There are differences between the two documents, and it is fair to say that the more recent version is easier to understand but I cannot accept Mr Grierson's argument that the earlier version gives the impression that a traveller in Mrs Bennett's position must choose between condemnation proceedings and restoration proceedings; on the contrary, in my view, the document does say (though, as I accept, not as clearly as in the later edition) that a traveller may pursue both avenues. I am aware that, at that time, the Respondents (subject to any direction of the tribunal to the contrary), did endeavour to have condemnation proceedings concluded before dealing with restoration and that they no longer do so but I am unable to regard that as an exceptional circumstance, in the sense meant by the Court of Appeal, justifying Mrs Bennett's failure to require that condemnation proceedings be brought. I am satisfied that she could have caused the Respondents to bring condemnation proceedings, and chose not to do so. I sympathise with her in that she was unable to obtain appropriate advice, but many others in her position do instigate condemnation proceedings without advice and I cannot regard the absence of advice as an exceptional factor. For those reasons I do not think it is possible for Mrs Bennett to explore before me the question whether the goods were in fact for her own use and to challenge Mr Rayden's decision on that basis.
10. The only question for me, therefore is whether Mr Rayden's decision was one at which he could reasonably arrive; that is the limit of the tribunal's jurisdiction as it is conferred on it by section 16(4) of the Finance Act 1994. Only if his decision was unreasonable – in that it was perverse, failed to apply the law correctly or was based on an irrelevant factor or omitted to take account of a relevant factor - may I allow the appeal. I am far from persuaded that Mr Rayden's decision fails that test. I am satisfied that he took account of all the relevant material, was not swayed by irrelevant considerations, applied the law correctly and came to a conclusion which was not perverse.
11. The appeal must be dismissed. I make no direction in respect of costs.

COLIN BISHOPP

CHAIRMAN
Release Date: 14 August 2006

MAN/04/8041