United Kingdom VAT & Duties Tribunals (Excise) Decisions

Turner v Revenue & Customs [2006] UKVAT(Excise) E00984 (12 July 2006)

E000984

EXCISE DUTY- wine seized at import – restoration refused – own use? – no – appeal dismissed.

MANCHESTER TRIBUNAL CENTRE

NIGEL TURNER Appellant

and –

HER MAJESTY'S REVENUE AND CUSTOMS Respondents Tribunal: Richard Barlow (Chairman) Carol Roberts

Sitting in public in Manchester on 5 and 6 April 2006

For the Appellant Mr David Porter of counsel instructed by Vincent Waring & Co

For the Respondents Mr John Gray of counsel instructed by the solicitor for the Revenue and Customs

© CROWN COPYRIGHT 2005
DECISION
1. On 4 April 2001 Mr Nigel George Turner arrived at Dover Hoverport from France driving his Mercedes Sprinter Van P458 HVU which was carrying 1029.5 litres of still wine, 9.75 litres of sparkling wine, 4.5 litres of beer and a quantity of potato crisps.
2. The van and contents were seized by Customs and Excise on that day in the presence of Mr Turner who did not give a notice of claim requiring Customs to commence condemnation proceedings. The seized goods were therefore condemned as forfeit under paragraph 5 of Schedule 3 to the Customs and Excise Management Act 1979 (the Act) one month after the seizure.
3. Mr Turner did request the return of the goods in a letter from solicitor's acting for him dated 26 April 2001. Customs correctly treated that request as a request for restoration under section 152 of the Act but refused the request. Mr Turner required a review of that decision within the time allowed under section 14 of the Finance Act 1994 (FA 1994) but Customs failed to conduct the review within the time limit allowed by section 15(2) of FA 1994 so Mr Turner appealed to the tribunal.
4. The tribunal directed a further review on 2 June 2005 which was carried out within the time limit but Customs refused to restore the goods and it is that review decision which is now before the tribunal.
5. It is not disputed that the excise goods seized (i.e. the alcoholic drinks) were duty paid goods purchased in another European Union country and so were only liable to seizure if they were not for the appellant's own use. It was also not in dispute between the parties that, as the goods had been condemned as forfeit, the tribunal's powers are limited in the ways established by statute and by authority and in particular as explained in the case of Gascoyne –v- Customs and Excise Commissioners [2004] EWCA Civ 1162. We cannot examine the correctness of the seizure as such if to do so would be akin to an abuse of process which means that something more than a mere failure on the part of the importer to give a notice of claim would be required before he could ask us to examine the legality of the seizure. Where, as here, he had taken a decision not to give a notice of claim after taking legal advice there is no scope for a challenge of that sort on any view.
6. However the tribunal can and must make findings of fact relevant to a decision about whether the Commissioners' refusal to restore the goods was one they could reasonably have reached. In that context questions such as whether the goods were for a non-commercial use though not actually for the importer's own use arise, as was made plain in the case of Lindsay –v- Customs and Excise Commissioners [2002] STC 588. The possible categories of circumstances in which a refusal to restore would be unreasonable are not closed and each case must be examined on its own facts.
7. In this case Mr Turner puts his case, in part, on the ground that some of the excise goods were for his own consumption including entertaining friends and family at home or as small gifts for friends and family, particularly when he is invited to their homes for meals. The rest he claims were for use at functions he had arranged which were themselves at least partly for charitable purposes.
8. Customs, on the other hand put their case on the basis that at least a large part of the excise goods were not for those purposes at all and were either to be sold for profit or at least to be provided on a re-imbursement basis and that in view of the quantity it was reasonable for the Commissioners to refuse to restore the goods even if they were to be disposed of on a re-imbursement basis. Such of the goods as would have been for Mr Turner's own use, if any, were mixed with the others and the Commissioners contend that they could not reasonably be expected to restore any of them as the proportion for own use would not be identifiable. The Commissioners also contend that some of the goods were for the use of Mr Turner in his business by way of entertaining workers who had worked on building renovation projects for him.
9. We heard evidence form three Customs officers and from Mr Turner.
10. It is not in dispute that an officer, who did not give evidence, directed Mr Turner to the inspection bay. Mr Turner said that that officer had asked what was on the van and he had said crisps and wine. We find that to be truthful evidence because officer Paul Rowe, who did give evidence and who spoke to and interviewed Mr Turner immediately after the unidentified officer had directed him, also stated that Mr Turner had told him there was wine on the van and indeed Mr Turner had said straight away that it was a large amount.
11. An issue arose between the parties as to whether the crisps that were loaded on the van were deliberately used to hide the wine. We find that the crisps did largely obscure the wine when the doors of the van were first opened but we agree with Mr Turner that the crisps had to be on top of the wine as they would have been crushed if placed under the wine. The crisps were in large open trays rather than boxes and were placed on top of the wine and in front of the wine but as they were bought last it was natural that they would be nearest the door. The fact that Mr Turner mentioned the wine as soon as he was stopped is inconsistent with an intention to hide it so we do not find that the crisps were used as a deliberate attempt to conceal the wine. We add that the van does not have windows in the load compartment so the crisps would only obscure the wine, so far as they did so, when it would have been too late to deceive Customs, which is to say after they had opened the door.
12. Officer Rowe produced his notebook in which he had noted an interview with Mr Turner conducted from 11.55am to 1.25pm on 4 April 2001. Officer Rowe was adamant that it was a verbatim account even when the tribunal asked him to confirm that it contained every word spoken in the exact order in which they were spoken and without any omissions. We do not accept that. Crossings out are inconsistent with that and the note is too short to have been a verbatim account of an interview lasting 90 minutes. Officer Rowe asked questions and the interview was observed by Officer Esposito who asked some further questions after Officer Rowe. He also insisted the note was a verbatim account. Officer Esposito's questions are in the same notebook and after the questioning Officer Esposito recorded in the book that Officer Rowe read out the notes to Mr Turner who then wrote "I agree the above is a true account" and signed the notebook.
13. Both officers gave their evidence in a sensible and careful manner and the notebook is carefully written. Even without Mr Turner's endorsement we would have accepted the note as a genuine and reasonably accurate account of what was said, though not literally a verbatim account.
14. Although Mr Turner signed the notebook as a true account he gave evidence that he signed "after a fashion under strong protests" and that one of the officers had put his hand over the notebook so as to prevent him from reading what was recorded before he signed. We reject those allegations. Before the hearing there had been correspondence with Mr Turner's solicitor which included a 15 page document containing a full account of his case and making various complaints. Some of the complaints were patently exaggerated. For example there is a reference to hours of harrowing questioning.
15. What is conspicuously absent is any allegation that Mr Turner was protesting as he signed the note or that it was obscured. Mr Turner also said that while the note was being read to him he made strong objections and interrupted the officer who refused to change the note. We are sure that if those allegations had been conveyed to Mr Turner's solicitor they would have been included in the correspondence. The manner in which the allegation was made during the oral evidence also conveyed the impression that it was simply invented at that point. We reject the allegations completely but more to the point we also regard them as severely undermining Mr Turner's credibility as a witness.
16. When cross examined Mr Turner claimed that he was told that if he did not sign he would not get his van back and the interview would have to be done again. This appeared, for the same reasons, also to be invented at the time Mr Turner was giving evidence.
17. Mr Turner's credibility as a witness was further undermined by a claim he made that he had only said he had travelled abroad four or five times in the previous year because he thought the officers had made up their minds that they would maintain the seizure of the goods and so when they asked that question he said "put what you want down" and the officer had said "five or six times" to which Mr Turner had replied "if you say so just put that down". We observed Mr Turner give evidence for over half a day and we are quite sure he would not have been so broken down in spirit by a 90 minute interview as to have surrendered in that way. We also see no reason whatsoever to think the officers, whose evidence and demeanor we also observed, would have acted in that way.
18. The notes record that Mr Turner had admitted that some of the wine would be used for a "topping out party" for the builders on the successful completion of a building project. We are satisfied that the phrase "topping out party" was not used by Mr Turner. The correct phrase, as we understand it, would be "topping out ceremony" and would occur at the successful conclusion of a much bigger building project than any Mr Turner was involved with. His business is renovation of buildings not building large scale projects. The phrase no doubt entered the notebook as the officer's shorthand for a longer conversation. This seems to be corroborated by the letter from the appellant's solicitor dated 26 April 2001 in which there is reference to wine being used at an impromptu party at the successful conclusion of one of his (i.e. Mr Turner's) projects.
19. In evidence Mr Turner said that he had been repeatedly pressed to give an example of an impromptu type of party at which wine might be consumed because he had said half the wine might be used at two functions and the rest might be used by him at impromptu parties. Mr Turner then said he had given as an example of an impromptu party the successful completion of a building project but that he had actually been referring to a party of that type given by a friend of his. When he gave evidence Mr Turner had no difficulty in identifying impromptu parties which he might hold at home or which he might attend at the homes of friends and family and to which he might take wine. We are satisfied that when he referred to parties at the end of building projects he meant parties held for his sub-contractors as indeed the letter from his solicitor to which we have already referred makes clear. Therefore although we do not think he used the phrase "topping out party" we do regard the note of that part of the interview as being largely accurate.
20. We find that Mr Turner's assertion that he had referred to parties given at the conclusion of building projects only by other builders is untrue and further undermines his credibility.
21. Apart from actual own use Mr Turner's explanation for the purchase of the large quantity of wine was that about half of it would be used at two functions to be held at premises owned by Linekers Ltd in Blackpool on 17 April 2001 and 16 May 2001. These functions were described by Mr Turner in the interview as being for various local charities and he said that there were no tickets but that he expected enough guests to turn up and he hoped they would give cash to charity and hopefully it would be "more than we have spent".
22. The fact that he said more than "we" have spent appears to suggest that there was some expectation that the cost of the wine would be reimbursed and the balance would be given to charity.
23. In evidence Mr Turner expanded on this aspect of the case and said that each of the two events would be attended by about 250 people and that they would be friends and extended family members. He named three charities that were intended to benefit.
24. A letter from Linekers Ltd dated 21 March 2001 was produced at the hearing. It refers to a booking for two functions on the dates mentioned and to the fact that the booking fee was reduced because of the charitable nature of the functions. Mr Turner said he had taken that letter with him when he travelled to France to buy the wine and that he had attempted to show it to the officers who were not prepared to look at it. We reject that allegation. It is surprising that he took it unless he was expecting he might have to explain why he had bought so much wine and if we find that the wine was not for those events then taking it was a step towards a deliberate attempt to deceive Customs. However, we find that whether he had it with him or not, he did not show it to the officers, as they would certainly have noted the fact the letter was shown and would then have asked him about it during the interview.
25. The quantity of wine in this case is the equivalent of over 1250 bottles and it is noticeable that it is all white wine. Even if 250 people attended each party and even if all were adults who drank only white wine and even given that as much as half the total was to be consumed at the functions (i.e. over 300 bottles at each function) that would be the equivalent of about one and a quarter bottles per person.
26. We are not satisfied that the functions occurred on anything like the scale contended for. In the time that has elapsed since the seizure and given that he has had legal advice throughout, Mr Turner has had ample opportunity to obtain evidence about the functions. Mr Turner said that this type of function had occurred before April 2001 and so, even if these functions were cancelled because of the seizure, corroborative evidence should have been readily available from people who had been invited and from charities who had benefited in the past. Other than the letter from Lineker's no such evidence was produced.
27. If the other half of the wine was to be consumed by Mr Turner for his own use as he claimed that would be nearly two bottles a day for a year. We regard the year as a realistic outside limit as Mr Turner had previously imported a large quantity about one year before this trip. Even allowing for gifts to family members and parties at home we regard the consumption of two bottles a day on average as unlikely because Mr Turner said he consumed one bottle a day and he made no claim that anyone else in his household regularly accounted for any more. In fact in evidence Mr Turner said he consumed two to three cases a week by drinking one bottle a day himself and by entertaining or taking wine as gifts when he was invited out. That would mean he was using between 17 and 29 bottles a week as gifts or for entertaining (after deducting his own consumption of seven bottles).
28. Those figures are barely credible but after taking into account our findings about Mr Turner's credibility generally we have no hesitation in finding that his evidence about the intended disposal of the wine was untrue.
29. We ask ourselves what purpose Mr Turner might have to lie about the destination and intended use of the wine other than to conceal the fact that it was for commercial resale and our conclusion is that that was his intention. We do not doubt that some of the wine would have been used in the ways he stated but we find that a large part of the quantity imported would have been disposed of commercially.
30. It might be open to argument whether wine used, on a large scale, for the purpose of raising money for charity would be being used for a purpose that should give rise to restoration when the wine was liable to seizure as not being for the importer's own use. We do not find it necessary to make a decision about that, or therefore to direct a further review, because we find that at least a large part of the wine was imported for actual commercial purposes.
31. We hold that where wine is imported in a single consignment and at least a significant part of it is imported for commercial purposes the Commissioners would be acting reasonably if they decided not to restore any of it. That could be so, though not necessarily, even if the importer could identify which wine was for his own use. Where, as here, no such identification has been made the case for a further review does not arise.
32. As the Court of Appeal pointed out in Lindsay –v- Customs and Excise Commissioners [2002] STC 588 where excise goods are imported for a commercial use without payment of duty there is no reason why the seizure of a vehicle used to carry the goods should be considered disproportionate even if it has caused the importer hardship.
33. Accordingly the appeal is dismissed.
CHAIRMAN RELEASED: 15 July 2006

MAN/05/8043.