United Kingdom VAT & Duties Tribunals (Excise) Decisions

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URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2008/E01093.html
Cite as: [2008] UKVAT(Excise) E1093, [2008] UKVAT(Excise) E01093

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Ernest Andrew Mason v Revenue & Customs [2008] UKVAT(Excise) E01093 (06 March 2008)

E01093

EXCISE DUTY – parcel containing hand-rolling tobacco including a receipt for the tobacco and the postage – whether a gift – no – restoration on payment of the duty and a penalty reasonable – appeal dismissed

LONDON TRIBUNAL CENTRE

ERNEST ANDREW MASON Appellant

- and -

THE COMMISSIONERS FOR HER MAJESTY'S

REVENUE AND CUSTOMS Respondents

Tribunal: DR JOHN F AVERY JONES CBE (Chairman)

Sitting in public in London on 3 March 2008

The Appellant did not appear and was not represented

Rupert Jones, counsel, instructed by the General Counsel and Solicitor to HM Revenue and Customs, for the Respondents

© CROWN COPYRIGHT 2008

DECISION

Mr Ernest Andrew Mason appeals against a decision on review in a letter dated 18 June 2007 that the Respondents ("Customs") would restore 500 grams of hand-rolling tobacco on payment of a fee of £74.33 being the duty and VAT plus a penalty fee of 15 per cent. The Appellant asked the Tribunal to decide the appeal in his absence as he could not afford the cost of travel fro his home in Gloucester; Mr Rupert Jones appeared for Customs.

The issue in this appeal is whether Customs were unreasonable in reaching their decision to restore the tobacco on those terms.

I find the following facts:

(1) A parcel sent by post from Spain containing 10 pouches of 50g each of hand-rolling tobacco addressed to the Appellant was intercepted by Customs and seized on 25 April 2007. Customs offered to restore the goods on payment of a fee of £74.33, being the duty and VAT plus a penalty fee of 15 per cent in accordance with their policy for a first occurrence with no aggravating features. Two receipts were found in the parcel, one for the tobacco for 43 euros plus 1 euro for a magazine and the other for the postage of 10.6 euros.

(2) On 12 May 2007 the Appellant wrote to Customs asking for a review of the decision and requesting restoration having been sent a copy of Notice 12A which explains the difference between challenging the legality of the seizure and restoration. The Notice states that if seizure is challenged and Customs win they will apply for costs in the region of £1,500. Customs invited him to provide evidence that the parcel was a gift. On 21 May 2007 the Appellant confirmed that it was a gift and said that the tobacco would last for a year. He said that there was a problem producing evidence of a gift as his Spanish friends did not read or write English.

(3) On 18 June 2007 the review decision confirmed the original decision.

(4) The Appellant wrote to Customs again on 20 and 29 June 2007 saying that his Spanish friends would write a letter but no such letter was ever received by Customs.

The Appellant contends that the parcel was a gift and the concession should be applied.

Mr Jones, for Customs, contends:

(1) It is an abuse of process for the Appellant to raise the issue of a gift not having appealed against the seizure, see Gascoyne v Customs and Excise Commissioners [2005] Ch 215 and HMRC v Smith 17 November 2005). In Customs and Excise Commissioners v Weller [2006] EWHC 237 Evans-Lombe J said at [16]:

"…whether or not an importer, having suffered a deemed forfeiture under paragraph 5 of Schedule 3, is able to raise the validity of the forfeiture on a review by the Commissioners and on appeal from them to the Tribunal, depends on two questions, first, did the importer have a realistic opportunity to invoke the condemnation procedure and, secondly, if he did, are there nonetheless reasons, disclosed by the facts of the case which should persuade the Commissioners or the tribunal to permit him to reopen the question of the validity of the original seizure on an application for return of the goods."

(2) The amount exceeds the limit for the Excise Duties (Small Non-Commercial) Consignments) Relief Regulations 1986. However, if it had been shown that the parcel was a gift Customs would have operated a concession provided in Notice 143. Since there is no evidence of a gift Customs refusal to restore the goods was reasonable.

(3) The Appellant's statement that the tobacco would last him a year undermines his credibility. On the basis that a 50g pouch would produce 80 to 100 hand-rolled cigarettes, the package would produce 800 to 1,000 cigarettes, which would last a 20-a-day smoker for 40 to 50 days. The Appellant implies that he smokes 2 to 3 cigarettes a day, which is not credible.

Section 152 of the Customs and Excise Management Act 1979 provides that: "The Commissioners may, as they see fit…(b) restore, subject to such conditions (if any) as they think proper, anything forfeited or seized…." By section 14(2) of the Finance Act 1994 a person affected by a decision of the Commissioners, which includes a decision under section 152(b), may require it to be reviewed.

The Tribunal's jurisdiction is contained in section 16 of the Finance Act 1994 which applies to matters contained in Schedule 5 including decisions on restoration. Section 16(4) provides that

"In relation to any decision as to an ancillary matter, or any decision on the review of such a decision, the powers of an appeal tribunal on an appeal under this section shall be confined to a power, where the tribunal are satisfied that the Commissioners or other person making the decision could not reasonably have arrived at it, to do one or more of the following, that is to say—

(a) to direct that the decision, so far as it remains in force, is to cease to have effect from such time as the tribunal may direct;

(b) to require the Commissioners to conduct, in accordance with the directions of the tribunal, a further review of the original decision;…."

I do not consider that where the issue depends on restoration for £74.33 the fact that the Appellant did not challenge the legality of the seizure where this might have involved him in costs of £1,500 if he lost, there is any abuse of process in raising the same issue in restoration proceedings. No rational person would challenge seizure in these circumstances. He did not have a realistic opportunity to invoke the condemnation procedure. Accordingly the Appellant may raise the issue of the parcel being a gift in these proceedings.

The Appellant was given plenty of opportunities of providing evidence that the parcel was a gift but failed to do so. I do not give any weight to his statements that the sender did not read or write English. It would, I am sure, have been no problem to Customs to translate a letter from Spanish. I infer from the fact that the receipts for both the goods and the postage were contained in the parcel that the sender expected to be paid for both of these. It is not credible that these would be enclosed with a gift. I find that this was not a gift.

On this basis I find nothing unreasonable in the offer of restoration on these terms. Accordingly I dismiss the appeal. Customs do not ask for costs.

JOHN F AVERY JONES

CHAIRMAN

RELEASE DATE: 6 March 2008

LON/07/8066