United Kingdom VAT & Duties Tribunals (Excise) Decisions

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URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2008/E01101.html
Cite as: [2008] UKVAT(Excise) E1101, [2008] UKVAT(Excise) E01101

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Elisabeth Stefaniak v Revenue & Customs [2008] UKVAT(Excise) E01101 (20 March 2008)

E01101

EXCISE DUTY – restoration of vehicle used for attempted smuggling of 80,000 cigarettes – numerous previous trips by the same vehicle and another car and on two occasions the occupants were leaving the UK carrying large sums of cash – whether non-restoration reasonable – yes – appeal dismissed

LONDON TRIBUNAL CENTRE

ELISABETH STEFANIAK Appellant

- and -

THE COMMISSIONERS FOR HER MAJESTY'S

REVENUE AND CUSTOMS Respondents

Tribunal: DR JOHN F AVERY JONES CBE (Chairman)

ALEX MCLOUGHLIN

Sitting in public in London on 19 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

Mrs Elisabeth Stefaniak appeals against a decision on review in a letter of 10 August 2007 not to restore a Volkswagen Transporter registration number PO20014 seized on 26 February 2007. The Appellant gave notice that she would not appear or be represented; the Respondents ("Customs") were represented by Mr Rupert Jones.

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;…."

The issue in this appeal is whether Customs' could not reasonably have arrived at their decision not to restore the vehicle.

We find the following facts:

(1) The vehicle driven by Mr Bogdan Sanja ("the driver") was stopped at Dover on 26 February 2007. The driver said he spoke no English. Customs searched the vehicle and found 80,000 cigarettes in boxes of food products. They seized the vehicle and cigarettes, the duty on which is £13,045. The then value of the vehicle was £2,150.

(2) The Appellant's Polish lawyer requested restoration of the vehicle on the basis that the Appellant was the owner; that it is used for transport by the hotel in Poland that was the Stefaniak's property (which we take to mean owned by the Appellant and her husband); that a hotel guest Andrzej Sykolik who was temporarily resident in the UK requested to pay for the vehicle to transport foodstuffs to a shop he manages in the UK because his vehicle had broken down; and neither the Appellant nor the driver, who is employed in the hotel and is the Appellant's cousin, could have known that the vehicle would be used to smuggle cigarettes. Mr Sykolik was not known to the Appellant and had been a guest at the hotel for one night; he agreed to pay £700 but had not paid and the Appellant could not contact him.

(3) A review of the decision not to restore the vehicle and cigarettes was requested by the Appellant's Polish lawyer, Mr Lech Slawski. The review officer, Mr Raymond Brenton asked the Appellant on 20 July 2007 if she had any further information to provide but nothing was heard. On 10 August 2007 Mr Brenton upheld the decision not to restore the vehicle. The Appellant appealed against that decision.

(4) Customs records showed that the vehicle had travelled to the UK on 5 or 6 occasions on bookings in the name of Gellert (another hotel employee) and once in the name of Stefaniak. Mr Gellert was stopped when leaving the UK on 7 November 2006 saying that he had been to London for one night and Canterbury for one night. He had £3,000 in cash which he said he was carrying to buy a car. Mr Gellert and Mr Stefaniak (the Appellant's husband) were stopped on 10 December 2006 and stated that they were in Canterbury for two days to visit family. Mr Gellert said that he travelled four times a month. On 17 December 2006 Mr Gellert and Mr Sanja (the driver of the vehicle in this appeal) said that they were going to supply a shop with fruit juice and other groceries. On 20 January 2007 Mr Stefaniak and Mr Gellert were stopped leaving the UK in a Mercedes registration number PO7766AC having £16,000 in cash (Mr Gellert £9,000 and Mr Stefaniak £8,000) which they claimed was to purchase a shop in Maldon to sell Polish foods but they were unsuccessful. Customs detained the cash und the Proceeds of Crime Act 2002. The same Mercedes travelled to the UK between 16 May 2006 and 5 February 2007 on eight occasions, with bookings in the name of Gellert and once in the name of Stefaniak.

The Appellant contends that she is the innocent owner of the vehicle and did not know it was being used in a smuggling attempt.

Mr Rupert Jones, for Customs, contends in outline:

(1) The decision not to restore was reasonable because Customs took into account their policy to restore a vehicle to an innocent and blameless owner of a vehicle so long as he took reasonable steps to prevent smuggling. This was not satisfied as it was not reasonable to rent a hotel vehicle and driver to an individual the Appellant had not met before without taking any money in advance.

(2) The Appellant or the driver were involved in the smuggling attempt. The cigarettes were concealed with food products. It is unlikely that a third party would attempt to smuggle without the driver being aware because of the risk that the driver would discover them and alert Customs. It was unlikely that the cigarettes were hidden during the journey.

(3) The Appellant's answers to their questionnaire to which the Appelalnt replied on 29 May 2007 were dubious. She said that the vehicle had been to the UK a few times in connection with the move of he daughter to Canterbury where she had been living since July 2006. This did not correspond to Customs' information.

(4) Even if the Appellant had no involvement with the smuggling attempt any person transporting goods across frontiers should be aware of the risks and should vet the borrower of the vehicle carefully.

(5) The Appellant would not suffer exceptional hardship. The Appellant and her husband own another vehicle Mercedes PZE 909X (which we assume is the successor to the Mercedes PO7766AC).

We have taken into account the representations made by the Appellant's Polish lawyer. The same vehicle had been to the UK on 7 November 2006, 10 December 2006, 17 December 2006, 20 January 2007 and 26 February 2007 (the journey under appeal) with Mr Gellert, Mr Stefaniak or the driver. In addition, the Mercedes came to the UK between 16 May 2006 and 5 February 2007 on eight occasions, with bookings in the name of Gellert and once in the name of Stefaniak. On two occasions the occupants were leaving the UK carrying significant sums in cash. There is a pattern of visits that the Appellant has not been frank about, mentioning only visits in connection with her daughter's move to Canterbury. We do not believe the Appellant's explanation about the hotel guest hiring the vehicle. We suspect that the cash found on Mr Gellert or Mr Stefaniak was the proceeds of smuggling on other occasions. The Appellant must have been aware of the other trips to the UK made by the vehicle and the Mercedes. We infer that the Appellant must also have been aware of the £16,000 taken by Customs from her husband and Mr Gellert, an employee at the hotel.

We find nothing unreasonable in Customs' decision not to restore the vehicle. Their policy requires that the vehicle owner should be innocent of and blameless for the smuggling attempt and that the owner had taken reasonable steps to prevent smuggling. We consider that it is probable, and so find, that the Appellant together with her husband and two hotel employees were engaged in commercial smuggling on the occasion in question (and probably on other occasions) and she cannot be considered innocent of, and blameless for, the smuggling attempt in question. Since we find that she was engaged in smuggling the question of whether she too reasonable steps to prevent smuggling does not arise. The value of the vehicle is far below the amount of duty involved and we do not regard the non-restoration as disproportionate. Nor do we consider that it will cause excessive hardship.

Accordingly, we dismiss the appeal.

JOHN F AVERY JONES

CHAIRMAN

RELEASE DATE: 20 March 2008

LON/07/8093