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United Kingdom VAT & Duties Tribunals (Excise) Decisions

You are here: BAILII >> Databases >> United Kingdom VAT & Duties Tribunals Decisions >> United Kingdom VAT & Duties Tribunals (Excise) Decisions >> Butler v Revenue & Customs [2007] UKVAT(Excise) E01031 (08 March 2007)
URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2007/E01031.html
Cite as: [2007] UKVAT(Excise) E1031, [2007] UKVAT(Excise) E01031
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Ronald Butler v Revenue & Customs [2007] UKVAT(Excise) E01031 (08 March 2007)
    E01031


    EXCISE GOODS – NON RESTORATION OF MOTOR VEHICLE – The appellant was owner of the vehicle – not present at the seizure – the driver and his passengers imported excise goods for sale at profit – Appellant complicit in the commercial importation – non-restoration of vehicle proportionate – review decision reasonable – Appeal dismissed

    MANCHESTER TRIBUNAL CENTRE

    RONALD BUTLER Appellant

    - and -

    HER MAJESTY'S REVENUE and CUSTOMS Respondents

    Tribunal: MICHAEL TILDESLEY OBE (Chairman)

    ROLAND PRESHO FCMA (Member)

    Sitting in public in York on 15 February 2007

    The Appellant did not appear

    Christopher Watson, counsel instructed by the Acting Solicitor for HM Revenue & Customs, for the Respondents

    © CROWN COPYRIGHT 2007

     
    DECISION
    The Appeal
  1. The Appellant was appealing against the Respondents' decision on review dated 18 August 2006 refusing restoration of a motor vehicle, Vauxhall Vectra Estate registration number S641 NJH (hereinafter known as the vehicle).

  2. The Appellant's ground of Appeal was that

    3. "I lent Mr Clayton my car to go to Belgium. I didn't know who was going with him and I certainly didn't know he had been stopped on his return from Spain or anywhere else, he used my car because his isn't reliable enough. He brought me back some brandy and wine, which was given back to him. I didn't know the amount of goods he was bringing so I cannot see why I cannot have my vehicle back as I was not involved, I was at work. I am prepared to take this to the European Court of Human Rights".
    The Issue
  3. On 15 May 2006 at the UK Control Zone at Coquelles France, Customs Officers stopped the vehicle which was driven by a Mr M Clayton who was accompanied by three passengers, Mr J Clayton, Mr R Brown and Mr L Duke. The Officers were satisfied that the 15.50 kilograms of hand rolling tobacco and 7,500 cigarettes brought in by Mr Clayton and his passengers were held for a commercial purpose. The Officers seized the excise goods and the vehicle.

  4. The vehicle belonged to the Appellant who had not travelled with Mr Clayton and his passengers on the 15 May 2006. The Appellant lent his vehicle to his neighbour, Mr Clayton, because his car was not reliable enough to make a long journey.

  5. Mr Clayton and his passengers have not appealed to the magistrates' courts against the seizure of the excise goods. They have made no request for restoration of the goods. The Appellant has made no appeal to the magistrates' courts against the seizure of the vehicle but requested restoration of the vehicle. On 18 August 2006 Mr Crouch, the review officer, refused restoration.

  6. We are required to determine whether Mr Crouch's refusal of restoration of the vehicle was a decision which no reasonable body of Commissioners could have arrived at. In order for the decision to have been reasonable Mr Crouch must have considered all relevant matters and must not have taken into consideration irrelevant matters.

  7. The disputed issue was whether it was proportionate not to restore the Appellant's vehicle when he was not directly involved in the unlawful importation of excise goods.

    8. The Hearing
  8. The Appellant did not attend the hearing. Prior to the hearing he indicated to the Tribunal that he would not attend. The Tribunal contacted the Appellant on the morning of hearing when he confirmed he would not be appearing.

  9. We granted the Respondents' application to proceed with the Appeal in the absence of the Appellant pursuant to rule 26 of Tribunal Rules 1986. We were satisfied that the Appellant was aware of the hearing date and chosen not to appear for no good reason.

  10. We heard evidence from Mr Graham Crouch, the review officer, and received a bundle of documents from the Respondents.

    11. The Review Decision of 18 August 2006
  11. Mr Crouch took account of the following matters in reaching his decision to refuse restoration of the vehicle:

    12. (1) Mr Clayton and his passengers gave misleading statements to the Customs Officers about their previous trips to the continent, and importations of excise goods. The statements contained discrepancies between their consumption rate of tobacco and quantities imported. They paid for the goods in cash. Mr Clayton was a frequent traveller to the continent. Mr Clayton and his passengers did not claim that the excise goods were purchased on a "not for profit" basis.
    (2) The vehicle had been used on 18 Channel trips to France from 11 December 2004 to 19 April 2006. Mr Clayton was recorded as lead passenger on at least seven of those trips. The Appellant accompanied Mr Clayton on at least three of the seven trips. Mr Clayton admitted in interview that he imported tobacco on the three trips since Christmas 2005.
    (3) The Appellant failed to disclose in his replies to the Respondents' questionnaire that he travelled with Mr Clayton to the continent on the three trips recorded. According to the Appellant, he set no conditions on the use of the vehicle by Mr Clayton other than bringing it back with a full tank of petrol. The Appellant was aware of the consequences of unlawful importations of excise goods because cigarettes were seized from him at Manchester airport in respect of a trip to Spain.
    (4) Two other vehicles, a Renault Megane registration number Y61 VCT and a Mitsubishi L200 Warrior, registration number FY54 OFR, were registered with DVLA at the Appellant's address. The Renault was registered in the name of the Appellant's wife.
  12. Mr Crouch concluded from the above facts that

    13. (1) Mr Clayton and his passengers purchased the excise goods seized on 15 May 2006 for onward sale at profit.
    (2) Mr Clayton, on balance of probabilities, travelled on the 18 previous trips recorded for the vehicle and on each occasion had imported tobacco and cigarettes.
    (3) The Appellant was complicit in allowing his vehicle to be used on a regular basis for the improper importation of excise goods.
    (4) The Appellant had suffered no exceptional hardship from the non-restoration of his vehicle.
    The Appellant's Account
  13. Although the Appellant did not give evidence, the bundle contained two letters, one from the Appellant's wife, the other from the Appellant. A copy of a questionnaire completed by the Appellant on 17 June 2006 was also within the bundle.

  14. The Appellant's wife indicated that the vehicle had been bought for her to take their dogs out and to do the shopping. They were both working when the vehicle was seized by the Respondents. The Appellant stated that he would not lend the vehicle out again if it was returned to him. The Appellant admitted in the completed questionnaire that he lent the vehicle to Mr Clayton on previous occasions as and when needed. He imposed no conditions on the use of the vehicle other than to leave the tank full. The Appellant knew that Mr Clayton was taking the vehicle abroad to purchase excise goods. He also accepted that he travelled with Mr Clayton before and had been stopped by the Respondents at Manchester airport where cigarettes had been seized from him.

    15. Reasons for Our Decision
  15. We are concerned with the reasonableness of Mr Crouch's decision to refuse restoration of the vehicle. We assess reasonableness against the standard of how a reasonable panel of Commissioners would have acted, in the sense of whether Mr Crouch had full regard to relevant matters and disregarded irrelevant matters in reaching his decision. We are not permitted under section 16(4) of the Finance Act 1994 to substitute our own decision about restoration. In reaching our decision about reasonableness, we are not restricted to the facts known to Mr Crouch at the time he made his decision. In restoration proceedings we have a comprehensive fact finding jurisdiction, so as to satisfy ourselves that the primary facts upon which Mr Crouch based his decision were correct.

  16. At the heart of this dispute is whether it was proportionate not to restore the Appellant's vehicle bearing in mind that he was directly involved in the importation of the excise goods on 15 May 2006. In Lindsay v Customs and Excise Commissioners [2002] 1 WLR 1766 Lord Phillips MR stated that persons who were smuggling for a commercial purpose for profit generally took themselves beyond the threshold whereby a lesser penalty than deprivation of property can be considered subject to the issue of exceptional hardship.

  17. Mr Crouch concluded that the importation of tobacco and cigarettes by Mr Clayton and his passengers was for onward sale at profit. Mr Crouch based his conclusion on their misleading statements, discrepancies between their consumption rate of tobacco and the quantities imported, cash payments and Mr Clayton's frequent trips to the continent to purchase excise goods. Further Mr Clayton and his passengers had not challenged the seizure or made any claims that the goods were bought for onward distribution on a non-profit basis. We are satisfied from those facts that it was reasonable for Mr Crouch to conclude that it was a commercial importation for profit.

  18. Mr Crouch decided that the Appellant was complicit in the commercial importation of excise goods on the 15 May 2006 by Mr Clayton and his passengers. Mr Crouch derived his decision from the Appellant's admissions that he imposed no conditions on Mr Clayton's use of the vehicle. On at least three occasions the Appellant had travelled with Mr Clayton in the vehicle to the continent for the purpose of purchasing excise goods. The Appellant was aware of the consequences of unlawful importations of excise goods in view of the previous seizure of cigarettes at Manchester airport. We are satisfied from those facts that it was reasonable for Mr Crouch to decide that the Appellant was complicit in the commercial importation of excise goods for profit by Mr Clayton and his passengers.

  19. We find that the Appellant willingly allowed his vehicle to be used for the commercial importation of excise goods at profit, and, therefore, was equally to blame as Mr Clayton and his passengers for the importation. We consider that the Appellant's actions take him beyond the threshold whereby a lesser penalty than deprivation of property can be considered. We are satisfied that the non-restoration of the vehicle was proportionate to the Appellant's degree of blameworthiness with the commercial importation of the 15 May 2006.

  20. The only ground of hardship put forward by the Appellant was that his wife required the vehicle to take their dogs out and to do the shopping. We agree with Mr Crouch's finding that the ground did not constitute exceptional hardship, particularly as the Appellant and his wife had access to two other vehicles.

    21. Our Decision
  21. We are satisfied for the reasons set out above that the Respondents' decision on review dated 18 August 2006 refusing restoration of a motor vehicle, Vauxhall Vectra Estate registration number S641 NJH was reasonably arrived at within the meaning of section 16(4) of the Finance Act 1994.

  22. We, therefore, dismiss the Appeal.

  23. The general rule is that the Respondents make no application for costs against unsuccessful Appellants. However, the Hansard Statement of 24 July 1986 entitled "Costs in Tribunal Cases" sets out several exceptions to the general rule. One exception is where the Appellant has misused Tribunal procedure by failing to appear at the Tribunal hearing without sufficient explanation. We are satisfied that the Appellant falls within this exception. We order the Appellant to pay the Respondents' costs of £300 plus VAT. We note that the Respondents did not apply for their full costs incurred on the Appeal.

  24. The Appellant can apply to the Tribunal to set aside this decision provided he makes application in writing to the appropriate Tribunal centre (Manchester) within 14 days from the release date of this decision.

    25. MICHAEL TILDESLEY OBE
    CHAIRMAN
    RELEASE DATE: 8 March 2007

    MAN/06/8049

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