United Kingdom VAT & Duties Tribunals (Excise) Decisions

 


E00998

Excise – restoration of vehicle – importation of tobacco products for commercial purpose – nature of that commercial purpose – reasonableness of Commissioners' decision to refuse restoration – hardship – appeal dismissed

MANCHESTER TRIBUNAL CENTRE

DAVID BELL Appellant

- and -

THE COMMISSIONERS FOR

HER MAJESTY'S REVENUE AND CUSTOMS Respondents

Tribunal: Lady Mitting (Chairman)

Roland Presho FCMA

Sitting in public in Birmingham on 25 September 2006

The Appellant appeared in person

Miss E McClory, Counsel, instructed by the Acting Solicitor for HM Revenue and Customs for the Respondents

© CROWN COPYRIGHT 2006

DECISION

1. The Appellant, Mr David Bell, appeals against the decision of the Respondents, taken on review and notified by letter dated 12 May 2006, to refuse restoration of the Appellant's Vauxhall Vectra motor vehicle DN04 PYV which had been seized on 24 February 2006.
2. The only ground of appeal had been to seek restoration "on humanitarian grounds" but in view of the breadth and nature of the oral evidence which we heard we took a rather wider view of the case and considered the overall reasonableness of the decision. We heard oral evidence from Mr Bell and from the review officer, Mrs Deborah Gillespie.
3. Mr Bell had been intercepted at Coquelles. With him was his daughter, Miss Julie Bell. The following excise goods were found in the vehicle, having been imported without payment of duty

a. 32 kilos hand-rolling tobacco

b. 49 litres beer

c. 2.4 litres spirits

d. 49.5 litres wine

The excise duty evaded on the tobacco was £3,429.76 and on the entire consignment (including the tobacco) £3,546.47.

4. In initial questioning, Mr Bell said he had been away for three hours shopping; had spent £400 in cash and had last travelled two weeks earlier. When asked, he produced receipts for the alcohol and when further asked if he had bought any cigarettes or tobacco he showed the officer a black sack on the rear seat containing 4 kilos of tobacco. The officer then said he was going to carry out some checks, on returning from which, he asked Mr Bell if he had any more tobacco than he had shown him on the rear seat. Mr Bell said he had a further 5 packs. A search of the vehicle revealed, in the boot, a further 28 kilos of tobacco packed in wine boxes and stacked underneath boxes of beer
5. Mr Bell agreed to stay for interview during the course of which he said he had not

kept a receipt for the tobacco because his wife's brothers trusted him. He said that with hindsight he should have told the officer about the tobacco but had not thought he was breaking any law. He had put the tobacco into wine boxes because it was easier to carry and so he could distribute it when he got home. He said his daughter would be having as much of the tobacco as she could afford and that his wife's three brothers had all chipped in towards the purchase as well as his father if he could get the money off him. The brothers all paid about £1,400 and they had also paid for his ticket for the crossing and his petrol. They would be having about £1,400 worth between them, they being David Webb, John Webb, Stephen Webb, David Tomkinson and Jim Bell. When asked how much cash they had given him, he replied that offhand he could not say but they would know when he got back. On his previous trip a couple of weeks earlier he had only purchased some alcohol and a couple of bales of tobacco because he had not got the money together. Mr Bell said he was a welder but had been laid off for three weeks and he earned £24,000/year gross. Eight kilos of the tobacco would be for him as he would be buying some more when he went to Spain in July. He was asked where he normally bought his tobacco to which he replied it was from a bloke at work who smuggled it in. A lot of the lorry drivers at his place of work also sold it. Mr Bell concluded the interview by saying he was not selling the tobacco and apologising for not owning up.

6. Miss Julie Bell was also interviewed. Her goods, she said, were 2 bottles of Vodka 40 Marlborough Lights and 10 pouches of tobacco for which her father had paid. She knew the family were having some of the tobacco but did not know who was having what as her father had arranged it. Miss Bell said that they had last travelled two weeks previously when they had purchased "loads of wine, spirits, tobacco" although she did not know how much tobacco because she did not buy it and she got hers off her father. She and her father had also been over twice before that but had not brought back much tobacco on those occasions.
7. The officer concluded the importation was for a commercial purpose and he seized goods and vehicle. By letter dated 27 February 2006, Mr Bell expressly did not contest the seizure of the goods but requested restoration of his vehicle. He stated that he had acted foolishly in failing to declare the extra tobacco which he bought on behalf of his family; he knew there was a guideline but did not know how much it was. He sought his vehicle back on the grounds of hardship. He was a shift worker in Telford and it was costing him some £20/day for a taxi to get to and from work as he lived in Bridgnorth. His wife also needed the car for week-end work at a care home. His father who lived next door to him was 80 years old, had had a stroke four years ago and relied on Mr Bell to do his shopping and take him to the Doctor and hospital appointments etc. Additionally, he had to collect his grandchild from school on certain days. He concluded that his vehicle was worth about £7,000 and he could not afford to buy another at that price.
8. By letter dated 24 March 2006, restoration was refused and by letter dated 28 March 2006, Mr Bell's solicitors wrote in requesting a review of that refusal. The request for restoration was on the grounds of hardship reiterating very much what Mr Bell had said in his earlier letter but adding that Mr Bell had never been in any Court of Law in relation to any criminal matter in his life. It fell to Mrs Gillespie to carry out the review, her letter being dated 12 May 2006 and being the decision under appeal.
9. Mrs Gillespie, in her letter, started by reviewing the history of the seizure, the interviews and the correspondence subsequently received. She went on to summarise the Respondents' newly introduced policy for the restoration of private vehicles. The policy was that vehicles used for the improper importation of excise goods would not normally be restored. However, in the discretion of the Commissioners, they could be restored, subject to conditions, if the excise goods were destined for supply on a "not for profit" basis or if the excise goods were destined for supply for profit but the quantity was small and it was a first occurrence. Where goods were to be supplied to others on a "not for profit" reimbursement basis, vehicles would not normally be seized in the first place in "non-aggravated" cases. An aggravated case would be where the individual had been involved in a previous offence or where there was a large importation (in the case of tobacco, 6 kilos) or where there were other circumstances that would result in restoration not being appropriate. Whether or not a vehicle would be seized and restored and if restored, on what terms, would be dictated in aggravated cases by the number of such aggravated offences within the previous 12 months.
10. In her decision, Mrs Gillespie had initially therefore to decide whether or not the goods were to be passed on to others on a not for profit basis or whether they were to be sold on for profit. Mrs Gillespie concluded that the importation was for profit, citing a number of reasons, including the amount which she considered to be a "commercial quantity"; the initial concealment; the failure to produce receipts; previous trips and the fact that Mr Bell admitted to normally purchasing tobacco illegally. Given that in Mrs Gillespie's view, this was a commercial, for profit, importation and it certainly was not of a "small quantity" then the Commissioners' policy would be one of non-restoration. On the question of hardship, whilst sympathising with Mr Bell she concluded that he would have to expect a considerable inconvenience as a result of having his car seized and that the hardship being suffered by Mr Bell was, neither in terms of inconvenience or expense, exceptional.
11. In her oral evidence, Mrs Gillespie said that had she believed that the importation was not for profit then she would have restored the vehicle for 100% of the revenue as it would have been a first aggravated detection. She also clarified one point which had arisen out of Mr Bell's interview with the intercepting officer. He had told the intercepting officer that in the boot there were "5 packs" of tobacco which would only have been 2.5 kilos. This Mrs Gillespie considered to have been another layer in the deception in that whilst finally admitting there was some tobacco in the boot he still failed to disclose the true amount. Mr Bell's oral evidence to us was that by "packs" he in fact was not using the term in a technical sense but had meant "boxes", each box containing 6 kilos. Mrs Gillespie appeared to accept that Mr Bell had not meant this to be a further deception and had genuinely confused the two types of packaging.

In his oral evidence, Mr Bell told us that the tobacco had been purchased for himself, his three brothers-in-law, his daughter, his daughter's boyfriend, his father and two workmates. When this was further explored however it appeared that the workmates would be having only half a kilo each. They had not yet paid for it but would square up when Mr Bell got back. His father would not be paying for any tobacco but would be given the odd pouch if he wanted it, likewise his daughter. Mr Bell did not appear to know precisely what he was purchasing for his three brothers-in-law. He told us they had, between the three of them, put in £1,500. They had not placed a specific order but would merely take whatever that had purchased. It was estimated that this would be in the region of 25 kilos which Mr Bell appeared to accept. He said that despite his answer to the Customs Officer, he did not normally buy illegally smuggled tobacco but had done on only one occasion. He admitted and accepted that he had deliberately concealed the tobacco so that it would not be seen because he "knew it was too much".

12. On the issue of hardship, Mr Bell said that he had been without a car for 4 months but had then purchased a replacement vehicle, a Nissan Primera costing £8,500. This had been paid for by cashing in an Endowment Policy for £5,000, a gift of £3,000 from his father and mother-in-law and he put in a further £500. He owed £14,000 on his mortgage and as he was now £5,000 short on paying it off he would have to raise an equivalent sum from elsewhere in 5 years time. We explored with him in greater detail the grounds of hardship put forward in the correspondence. It appears that his wife works in an old people's home as a support carer and, under the terms of her contract, is on week-end call if needed and periodically. During the 4 months when they had no car she was allowed to work within the confines of the care home and was not asked to do any on call work. Mr Bell works shifts and there was no public transport at times appropriate to his shift. He therefore had to travel by taxi which cost him a round trip of £20/day but he did not always have to go by taxi and periodically he was given a lift. He does help his daughter by collecting the grandchildren occasionally from playschool but his daughter does have her own vehicle and is a full time mother. His father is 82 and lives next door to Mr Bell. He has had a couple of strokes and on the occasion of the last stroke in October 2005, Mr Bell had to rush him to hospital in his car and would need a car for any similar emergency. Fortunately there does not appear to have been any such emergency whilst Mr Bell was without a vehicle and we also ascertained that both Mr Bell's daughters live on the same estate as himself and his father. They both have cars and are also able to help in running their grandfather around.

Finally, Mr Bell was able to produce the receipt for the tobacco which he had thought he had lost. It appeared that his daughter had in fact picked the receipt up and had kept it, being unaware that the officer had asked for it.

13. Conclusions

Our jurisdiction is limited to considering the reasonableness of Mrs Gillespie's decision. In so doing, we consider whether there are any facts which she omitted to take into account or anything which she considered which she should not have done. We have to consider whether she gave excessive weight or insufficient weight to any particular matter or whether she made any error of law. Specifically we have to consider whether she gave sufficient consideration to the issue of hardship and whether her decision was proportionate, although it has to be said that Mr Bell did not seek to argue that it was disproportionate.

14. Given the nature of the Commissioners' policy, and the fact that Mrs Gillespie accepted that had she believed the importation was not for profit then her appropriate course of action would have been to have restored the vehicle on payment of 100% of the revenue, we have to consider whether Mrs Gillespie's view that this was a fully commercial, for profit, importation was reasonable. We consider this in the light of all the evidence which Mrs Gilllespie had but also with the benefit of having heard Mr Bell's oral evidence. In the light of all of this we consider that her view that this was a "for profit" importation was a perfectly reasonable view. There was a discrepancy over exactly how much tobacco had been imported. Mr Bell maintained it was 31 kilos whereas all the seizure paperwork referred to 32 kilos but either way this is a large amount. In the region of 25 kilos of it was not going to be for Mr Bell at all but was apparently going to be for his three brothers-in-law who we were told had also paid for the trip. The tobacco was not only not declared to the intercepting officer but the vast majority of it was quite deliberately concealed. Mr Bell had told the intercepting officer that he did not know he was doing wrong but he told us that he knew that he was bringing in an excessive amount and that he had deliberately concealed it for that reason. The evidence of the previous trips was contradictory. Mr Bell implied that on the previous journey they had brought back very little whereas Miss Bell told the officer that they brought back "loads of wine, spirits and tobacco". She also refers to two earlier trips which were not referred to by Mr Bell. We do not draw attention to this by way of criticism of Mr Bell because he was at no time asked how often he had travelled in the past but it does give an additional history of frequent travel.