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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 >> Ross v Revenue & Customs [2007] UKVAT(Excise) E01068 (11 October 2007)
URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2007/E01068.html
Cite as: [2007] UKVAT(Excise) E01068, [2007] UKVAT(Excise) E1068
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E01068
Excise duty: sending of postal packet containing 600 cigarettes from Spain by father to daughter; whether gift; whether gift concession appropriate; officer proceeding on inadequate evidence and assumption to disbelieve the statement that the packet was a gift: Matter remitted for a further review to take into account the whole evidence now available. Customs Notice 143.
EDINBURGH TRIBUNAL CENTRE
CHARLES HENRY ROSS Appellant
- and -
THE COMMISSIONERS FOR
HER MAJESTY'S REVENUE & CUSTOMS Respondents
Tribunal: (Chairman): T Gordon Coutts, QC
Sitting in Inverness Sheriff Court on Thursday 4 October 2007
for the Appellant Mr C Ross
for the Respondents Mr B Mills, Barrister
© CROWN COPYRIGHT 2007.
DECISION
This appeal concerns a letter dated 22 January 2007 in which an offer was made to Miss Karen Ross of restitution of goods seized at as told to the Tribunal Mount Pleasant Post Office, but which was described in the Statement of Case Coventry Hub Parcel Post Depot, (an error propounded by the review officer in the letter of 22 January) of 600 cigarettes in a small parcel. The Tribunal were not favoured with much information from the Respondents and accordingly do not know whether the Appellant or Miss Ross was provided with sufficient detail of any appropriate Magistrates Court at which to challenge the seizure. In any event there is an air of unrealism about the idea of challenging this matter in a Magistrates Court at some unknown distance from the Appellants residence. In the event the Respondents offered restoration for the sum of £118.65 being the duty said to be evaded plus VAT thereon but purporting to add a penalty, for some reason, of 15% of the duty and VAT. In some circumstances that might be an appropriate penalty in others it may be wholly inappropriate.
The cigarettes were sent in a small parcel wrapped in ordinary brown paper. The parcel contained no other matter. The parcel had been sent by the Appellant Charles Henry Ross. He was the proper owner of the goods, they never having been delivered to Karen Ross. However the result of the circumstances of the receipt of the parcel was that the Notice of Seizure was sent to Miss Ross, the addressee.
She communicated with the Respondents Appeals and Review Team at Plymouth in the following terms:
"The above mentioned cigarettes were sent to me by my parents, as a gift. My dad had sent these to me as a birthday present. My parents at the time were living in Spain, (Alicante). Neither of us realised that sending these via the post had any legal implications. The reason there was 600, as supposed to 200, is that the cost of postage is the same for up to 1 kilo of weight.
I am writing to you to ask if there is anything else that can be done. As I am a single parent on benefits, and can not contemplate either the restoration offer or to appeal to a court, which would be very costly, according to the leaflet sent with the notice of seizure.
The Notice of seizure was received by me on the 20th of November 2006, however it was dated on the 3rd of November 2006.
In case it helps at all, my parents Phone Number is 07748 183193, if you need to contact them.
Please can you help me?"
Miss Ross received nothing other than a formal reply dated 14 December 2006 and it would appear that the Respondents treated her letter as a request for a review, although the appropriate person would have been the actual Appellant. In any event no suggestion was made by Mr Mills that the present appeal could not be entertained. In January 2007 she was sent the decision under appeal. After receiving that decision she wrote on 18 February 2007 in the following terms:
"After receiving your letter dated 22nd of January, (received 31st January). I have been left somewhat confused. Especially the point where you stated after speaking to my father, you have found my submissions incorrect. Could you please elaborate with this matter?
Furthermore, after thoroughly reading through all the documentation received with the letter, I have found that according to appendix B, section 4.5, my gift meets each of the required criteria. This section did not state that the gift had to be gift wrapped. And there was no other correspondence along with the parcel as my birthday card was sent earlier."
That, the Tribunal finds to be a reasonable and moderate response, albeit that it post dated the decision letter about the substance of which she was not asked to comment.
From the evidence given by Mr Ross at the Tribunal it appeared that an officer of Customs and Excise had telephoned him when he was on the road travelling in France and a somewhat desultory conversation took place. Although various matters had plainly been discussed the officer noted only part of the telephone conversation in a letter to Miss Ross of 5 March 2007 presumably in an attempt to explain his review decision as follows:
"In your letter dated 3rd December 2006 you state; "My parents at the time were living in Spain (Alicante). In my telephone conversation with your father he informed me that he was not resident in Spain but only visiting at the time. If your father had wished to give you an unsolicited gift of cigarettes he should have brought them through Customs controls himself."
The Tribunal cannot find that as justifying the assertion that Miss Ross' letter of 3 December was "not actually accurate" or the officer purporting to have followed that up by not accepting the status of the parcel as one of gift.
The circumstances of this whole matter are confused and vague. They have not been assisted by the Respondents incorrect attribution of the ownership of the goods nor was the Tribunal assisted by any account from the officer about the conversation upon which he apparently founded, nor any findings despite him having produced a witness statement.
The Tribunal note that in that witness statement no detail was given by him of that conversation, i.e. merely made an oblique reference to his comment in the letter of 5 March.
There could be no dispute about the law relevant to the above circumstances. Excise Goods must be accompanied if imported and there is no statutory allowance. The statutory allowance for accompanied excise goods is for an amount ?rd greater than the amount at issue here.
The Respondents have and say they operate what they term a "gift concession" be an appendix to the letter under appeal, the account given of that concession reads as follows:
"4.5 Can I receive alcohol and tobacco from the EU?
This depends upon the nature of the consignment. If you receive an unsolicited gift through the post we will not make additional charges for alcohol and tobacco providing all the following conditions are met:
v the goods must have been sent by one private person to another private person.
v the goods must be for your own use. Note: you will be committing an offence if you sell alcohol and tobacco for which UK excise duty has not been paid.
v you must not have paid for the gift either directly or indirectly, and there must not be
v any commercial or trade element to the contents of the consignment.
v the gift must be of an occasional nature only e.g. for a birthday or anniversary.
If you receive alcohol and tobacco by post on a commercial basis this is known as 'distance selling', and there is a liability to both excise duty and import VAT. The sender should have made prior arrangements to account for these taxes no later than the date of despatch from the exporting Member State. It is in your own interests to ensure these arrangements have been completed otherwise the goods may be liable to forfeiture. You can find more information about this in Notice 203 Registered Excise Dealers and Shippers, and on the HM Revenue & Customs website www.hmrc.gov.uk 'Buying tobacco over the Internet'. If you are in doubt about the duty liability of goods you have received you should contact our National Advice Service."
Needless to say neither the Appellant nor Miss Ross was not involved in any commercial or trade element treating the transaction as a straightforward occasional gift.
It was contended by the Respondents that the review officer was entitled to come to the conclusion he did on the evidence he had. Leaving aside the question about what evidence he had which was by no means clear it was submitted to the Tribunal that the officer had failed to give appropriate weight to the circumstances of the particular transaction even as subsequently explained to him.
It was however or should have been abundantly clear to him that the sender and the proposed recipient regarded the matter as being an unsolicited gift. They were known to be father and daughter but whether or not the officer knew of the particular circumstances of the family at the time and the illness of Mrs Ross was not clear.
The facts as explained to the Tribunal however were that Mr and Mrs Ross who normally lived in Spain in the winter months with Mrs Ross' brother at his house acquired to come home urgently because Mrs Ross was ill. Karen Ross was attentive and helpful, went to the airport, provided transport and accommodation and did all the usual daughterly things to assist her mother and father. Her father wished to pay something to her for that but she refused. He accordingly thought that he would combine thanks with a birthday present, Karen Ross' birthday being around that time and so sent the gift. He explained that it was not gift wrapped because he regarded that as a plain invitation to dishonest postal employees.
The Tribunal was left in the dark as to what it was the officer would regard as constituting a gift concession, and equally in the dark as to why the concession was not appropriate in the whole circumstances of this case.
Factors which he might have taken into account were that instead of the 800 cigarettes allowed on personal importation there were only 600; that no suggestion other than that they were a gift was made; that he had no evidence that they were not a gift, that the parties were related. Further had he been aware, which the Tribunal knows not, because there was no account from him of his conversation with the Appellant of the particular circumstances of Mrs Ross' illness and had he had any awareness of the attitude to payment in circumstances such as these and the closeness of Highland families no reasonable officer could have come to the conclusion that this was not a gift. In any event he had not considered that the Appellant was the true owner of the goods, a matter conceded at the Tribunal.
There was nothing to indicate that it was not a gift: and the matters alluded to by the review officer do not make the Appellants assertion that it was a false one.
Furthermore where one of the series of criteria given by the officer in his letter was whether "in all cases whether the result is fair, reasonable and proportionate in all of the circumstances" it appears to the Tribunal that he wholly failed to apply that. The amount of excise goods, 600 cigarettes, is virtually de minimis, the circumstances are entirely consistent with there being no commercial content. The implied reason given for doubting the matter of gift in the correspondence produced i.e. that there was some discrepancy between whether Mr Ross senior was staying in or visiting Spain is absurd. There is a complete absence of proportion in this matter, compounded by the fact that the Respondents, for a sum at issue of £118.65, saw fit to instruct an English Barrister to appear to argue the matter in Inverness and the Tribunal regrets that it cannot deal with the matter itself but is required by virtue of s16(4) Finance Act 1994, since this appeal concerns an "ancillary matter", to direct the Commissioners to conduct a further review of the original decision. This they do with the Direction that a full consideration of the whole circumstances surrounding this event be taken into account together with any statements obtained from the owner of the goods and all surrounding circumstances to determine whether there was any justification for the withholding of the gift concession, and the imposition of a penalty of 15% in arriving at a sum for restoration of £118.65.
T GORDON COUTTS, QC
CHAIRMAN
RELEASE: 11 OCTOBER 2007
EDN/07/8003