United Kingdom VAT & Duties Tribunals (Excise) Decisions

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URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2008/E01111.html
Cite as: [2008] UKVAT(Excise) E1111, [2008] UKVAT(Excise) E01111

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Brian Joseph Peet v Revenue & Customs [2008] UKVAT(Excise) E01111 (14 May 2008)

E01111

EXCISE DUTY – restoration of goods – cigarettes and tobacco – appeal against re-review ordered by previous tribunal – "guideline" amounts not exceeded – some of the goods intended to be provided on a non-profit basis to others – on re-review part of the goods was to be restored - re-review decision reasonable – appeal dismissed

MANCHESTER TRIBUNAL CENTRE

BRIAN JOSEPH PEET Appellants

- and -

THE COMMISSIONERS FOR

HER MAJESTY'S REVENUE AND CUSTOMS Respondents

Tribunal: Ian Vellins (Chairman)

Arthur Brown (Member)

Sitting in public in Manchester on 6 March 2008

The Appellant appeared in person

Katie Jones, counsel, instructed by the Acting Solicitor for HM Revenue and Customs for the Respondents

© CROWN COPYRIGHT 2008


 


DECISION

The appeal

1. In this appeal the Appellant is Mr. Brian Joseph Peet, who lives in Wigan, Lancashire. He appeals against a decision of a review officer of the Respondents ("Customs") dated 1 August 2007 re-reviewing an original decision of Customs not to restore 3,200 cigarettes and 3kg of hand-rolling tobacco to the Appellant which had been seized from the Appellant on 26 April 2006. In the re-review decision dated 1 August 2007 the officer decided to restore to the Appellant 0.6kg and 675 cigarette but decided that the remaining goods should not be restored to the Appellant.
2. At the hearing of this appeal in Manchester the Appellant represented himself, and the Respondents were represented by Katie Jones, counsel. Oral evidence was given by the Appellant himself and by the re-reviewing officer, Mr. David Cawthraw. A written witness statement from the original review office, Mr. Graham Crouch, which had not been objected to by the Appellant, was read at the hearing.

The background

3. On 26 April 2006 the Appellant was a coach passenger on a trip to the continent, when the vehicle was stopped and the passengers questioned at the UK Customs control zone at Coquelles, France, preparatory to their returning to England. The Appellant had in his possession the "guideline" amounts of 3,200 cigarettes and 3kg of hand-rolling tobacco ("the goods"), purchased by him in Luxembourg. The Appellant answered questions. The goods were seized by Customs on the basis that they were not for the traveller's own use and therefore liable to UK excise duty.
4. The Appellant contended that the goods were purchased for his own use, and wishing to get the goods back. The Appellant filled in and sent to Customs a printed appeal letter, but he did not sign either Part A or Part B of the printed appeal letter as he stated that he did not know which signature to sign. Part A of the printed letter provided for the commencement by Customs of condemnation proceedings of the Magistrates Court. Part B provided for the institution of restoration proceedings before the VAT and Duties Tribunals, if on review a reviewing officer upheld the decision not to restore the goods. It appeared that condemnation proceedings in the Magistrates Court were not instituted, because, in a letter from the Appellant to Customs dated 15 May 2006, the Appellant wrote that he would like to contest the seizure of the goods only he could not afford to do so and the only course left to him was to request restoration. Customs in response on 24 May 2006 wrote to the Appellant that condemnation proceedings had been withdrawn.
5. On 12 June 2006 Customs issued a decision refusing to restore the goods to the Appellant. On 18 June 2006 the Appellant wrote to Customs reiterating that the goods were for his own use and complied with the "guidelines". He stated why he did not challenge in the Magistrates Court the legality or correctness of the seizure and asked for the decision to be reviewed. The review decision was dated 31 July 2006 prepared by Mr. Crouch. The decision was adverse to the Appellant upholding the earlier decision against restoration. The Appellant appealed against that review decision, and his appeal was heard in Manchester on 10 April 2007 before a tribunal whose chairman was Mr. Michael Johnson. In that decision Mr. Johnson at length reviewed the statutory provisions and the case law relating to the effect on the Appellant's case that the Magistrates Court condemnation proceedings had not proceeded. Mr. Johnson stated "the Appellant lives in Pemberton, Wigan. It has thus been a straightforward matter for him to attend a tribunal hearing in Manchester. Attending a Magistrates Court hearing in Dover – which is the relevant court for a seizure at Coquelles – would have meant a day's travel each way for him, plus an overnight stay. We can therefore understand the cost considerations in his electing for a tribunal hearing. It seems to us however that the Appellant in essence still wanted – and wants – to contest the seizure. Not being able to afford to do so in court, he elected to put his case in tribunal instead, seeking restoration of the goods. His case is the same as it has always been. We think that in the circumstances it would be contrary to the Appellant's human rights for him not to be able to rely before us on the case that he would have advanced before the court."
6. Mr. Johnson in his decision decided that the original review officer Mr. Crouch had not taken into account various matters, namely why the Appellant did not persevere with his challenge in the Magistrates Court, the fact that the imported goods did not exceed the "guideline" amounts, and the fact that at the hearing of the appeal before Mr. Johnson, the Appellant gave evidence that some of the goods were acquired in the knowledge that they would probably be surplus to his own consumption requirements, that he intended to pass on to his brothers some of the goods, and the recipients would pay him cost price for what they received, although they had not commissioned him to buy the goods for them.
7. Accordingly a re-review took place on behalf of Customs by a different review officer, Mr. David Cawthraw, whose decision was sent to the Appellant on 1 August 2007. In that re-review decision Mr. Cawthraw reviewed again the decision of Customs, taking into account the findings of the tribunal hearing in Mr. Johnson's decision. He calculated that the percentage of the goods which were for the Appellant's own use was 21%, and that accordingly 0.6kg of tobacco and 675 cigarettes should be restored to the Appellant free of charge (by way of ex-gratia payment), and that the remaining 79% of the goods should not be restored to the Appellant as they were to be passed on to others at cost price, in the same manner that the Appellant had previously passed on goods to others four weeks previously.
8. On 16 August 2007 the Appellant sent notice of appeal, appealing against that re-review decision stating as his grounds of appeal "hardship".

The interview

9. At his interview on 26 April 2006 at Coquelles, by an officer of Customs, the Appellant declared 3,200 cigarettes and 3kg of Drum hand-rolling tobacco, and told the officer that all of the goods were for the Appellant. He stated that he smoked both cigarettes and tobacco, smoking cigarettes when he was out socially and tobacco when he was out fishing. He stated that he expected the goods to last him for months but he was unable to give a specific amount of time because he had not purchased that amount of goods before. He stated that he did not know how long a pouch of tobacco would last for him nor did he know how many cigarettes he obtained from one pouch. He stated that he purchased that amount of goods because he had the money. He also stated that the last time he had travelled he had purchased more wine and less tobacco. He stated that he had left the United Kingdom with about £700 and had about £205 left.
10. The Appellant told the officer that he had arthritis and that he had been a builder but was currently on incapacity benefit of £86 per week. He stated that he had no other source of income and had no savings, only the cash he had with him. He stated that his weekly outgoings took all of his benefits. He stated that the money he had spent buying the goods was from what he had saved over the years, as sometimes he was able to save £10 out of his £85 benefit. The Appellant produced receipts for the tobacco part of the goods showing that he had spent £456 on the tobacco. The Appellant was asked if he thought it was reasonable to spend £500 on these goods when he only received £85 a week, and he replied that it was saving him money in the long run and that was why he did it. He stated that he smoked 20 to 30 cigarettes a day.
11. The Appellant stated that he last travelled abroad about a month previously and had purchased wine, 800 cigarettes, and 40 pouches of tobacco. He said that he still had some goods left, but not much, about three-quarters of a pack of tobacco (which contained pouches), and 160 cigarettes. Prior to that trip he had travelled abroad about three to four months before on a weekend break to Luxembourg. He had also travelled once previously in that year, but could not remember when that was. He confirmed that in about four weeks he had smoked approximately 30 pouches of tobacco. He stated that he did let his brothers have some, but did not sell the tobacco. He stated that he had three brothers. He stated that nobody had assisted him financially with the purchase, he had saved up, and he did not expect to receive any favours for the goods. He stated that he knew that it was illegal to sell excise goods in the UK without first paying the duty. He confirmed that he expected the goods to last months but was not specific about the time. He also stated that he had travelled abroad four times in the last twelve months. He stated that two of his brothers smoked, however he did not know how many pouches he had given them, from the previous purchase four weeks before. He said that he had about 8 pouches left at home. He confirmed that he had been on benefits for three to four years. The notebook was read back to him and he agreed with the recording and after making one amendment signed the notebook.
12. The interviewing officer was satisfied that the goods were held for a commercial purpose, being not for own use, and therefore seized them, issuing the Appellant with the relevant notices, including the notice that he could challenge the validity of seizure in the Magistrates Court.

The original review decision of Mr. Crouch

13. In his original review decision dated 31 July 2006, the review office Mr. Crouch decided to confirm the original decision that the excise goods should not be restored to the Appellant.
14. Mr. Crouch stated that in considering restoration he had looked at all the circumstances surrounding the seizure but had not considered the legality or the correctness of the seizure itself, as the Appellant had not appealed to the Magistrates Court.
15. Mr. Crouch then examined the circumstances to consider if the excise goods were held for a profit, if they were to be passed on to others on a not for profit reimbursement basis, whether there were aggravating circumstances, whether there were exceptional circumstances, and whether the result was fair, reasonable and proportionate in all the circumstances.
16. Mr. Crouch concluded as follows:-

"On the one trip you have spent £456 in cash. It is not reasonable for a person who is barely able to save £10 a week from their sole source of income, which is derived from state benefits and who has no savings apart from money you have left, to have spent just over five weeks' income on a consumable product. I consider it implausible that you have funded this purchase from savings that you have made "over the years". It is even more implausible if you take into account your further expenditure of approximately £200 on cigarettes and tobacco four weeks previously. It is more likely that you have been paid by others in advance in order to fund this purchase. Looking at the tobacco and cigarettes that you maintain you purchased on that earlier trip, 800 cigarettes and 40 pouches of tobacco, you told the office that you had 160 cigarettes left and 8 pouches of tobacco. You told the office that you smoked both cigarettes and tobacco and that you smoked 20 to 30 cigarettes per day. Therefore in a four week period you have smoked 640 cigarettes and have got through 30 pouches of tobacco, apart from the odd ones given to your brothers. It is generally accepted that 80 to 100 cigarettes can be obtained from a pouch of tobacco. That means that in the period in question you have smoked in the region of 3,000 cigarettes. This represents a consumption rate of approximately 100 cigarettes per day compared to your declared 20 to 30 cigarettes per day, which would mean that if you were awake for 16 hours per day you would have to consume one cigarette every ten minutes, which stretches the bounds of credulity beyond acceptable levels. I can only conclude that from the excise goods you'd purchased previously were disposed of by other means than your personal consumption, ie disposed of commercially and that the tobacco goods purchased on this occasion were also destined for commercial disposal and should therefore not normally be restored. I am of the opinion that non-restoration is fair, reasonable and proportionate in these circumstances. I have found no reason for disapplying the policy of Customs and no exceptional circumstances."

The hearing before Mr. Johnson's tribunal

17. The Appellant had given oral evidence at the hearing of his appeal, heard by Mr. Johnson on 10 April 2007. In that evidence he stated that some of the cigarettes and tobacco that he had previously imported on a trip in March 2006 he had given to his brothers and that they had paid him cost price for the goods. He went on to state that some of the goods that were the subject of the hearing were also to be passed on to his brothers at cost price.
18. Mr. Johnson concluded that Mr. Crouch's original review decision was unreasonable because it failed to take into account the matters referred to by Mr. Johnson in paragraphs 14, 19, 21, and 24 of his decision, and directed that a further review of the decision not to restore was to take place, conducted by a different reviewing officer of Customs to Mr. Crouch, to take into account paragraphs 14, 19, 21 and 24 of Mr. Johnson's decision.
19. Mr. Johnson's decision contained the following paragraphs:-

"14. The reasons why the Appellant did not proceed with his court challenge were firstly that it was going to be too expensive and secondly that he trusted that justice would nevertheless be done by this tribunal. The review decision does not seem to us to take proper account of that background.

We think that the reasons for the Appellant in this case not having argued his case before the Magistrates Court are good ones. They are the reasons stated in paragraphs 14 of this decision. Those reasons should have been taken into account by the reviewing officer.

The imported goods did not exceed the "guidelines" amounts. We find that the Appellant believed that if he limited his importation of cigarettes and tobacco to those amounts, it could not reasonably be assumed against him that the importation was for commercial purposes. That was a circumstance that it does not appear to use that the reviewing officer took into account in reaching the decision.

In tribunal the Appellant told us, and we accept, that some of the cigarettes and tobacco were acquired in the knowledge that they would probably be surplus to his own consumption requirements. We find that this aspect of the matter was touched on but not fully clarified in interview. It appears that he intended to pass onto others some of the cigarettes and tobacco, and the recipients from the Appellant would pay him at cost price what they received, on the basis that the Appellant could not afford to make gifts. We are told, and we accept, that it was not a case of the recipients having commissioned the Appellant to buy cigarettes or tobacco for them; rather it was a case of the Appellant having available some spare cigarettes and tobacco that he might provide at cost price if not needed by him."

The review decision of Mr. David Cawthraw

20. In his re-review decision dated 1 August 2007, the different review officer Mr. David Cawthraw re-reviewed the decision taking into account the directions of Mr. Johnson in his decision at the hearing in Manchester.
21. Mr. Cawthraw considered the reasons of the Appellant for not pursuing the proceedings in the Magistrates court namely that it was too costly and that justice could be done by a tribunal hearing. In considering that matter Mr. Cawthraw stated:-

"When your goods were seized you were issued with Notice 12A, What You Can Do If Things Are Seized By Customs. This explained the options open to you. You initially challenged the legality of the seizure and completed the appeal letter from notice 12A but did not sign the document. Concurrently you requested restoration of the goods. Your letter dated 15 May 2006 clearly stated that although you wished to challenge the legality of the seizure you could not afford to do so. This was taken, reasonably in my view, that you wished to withdraw from those proceedings. You said that you could not afford to challenge the legality of the seizure and I assumed by those comments you meant the travel costs involved in travelling to Dover. I note that this aspect does not deter you from travelling to Dover and to buy excise goods abroad though in any case you could have requested a Magistrates Court hearing nearer to your home address. Furthermore Notice 12A fully explained the restoration and appeals procedures. That said I accept that Customs could have sought clarification from you at that stage and explained to you the available options."

22. Mr. Cawthraw then turned to the other directions of the tribunal. Mr. Cawthraw had information from Mr. Crouch, the first reviewing officer who attended at the original appeal hearing before Mr. Johnson, that the Appellant had told the tribunal that some of the cigarettes and tobacco that he imported a month earlier were to be given to his brothers in return for favours they had done to him. He had stated that his brothers would not accept those goods without offering the Appellant the cost price for them, and the Appellant receiving the cost price for them. Mr. Cawthraw concluded that this was a commercial transaction. Mr. Cawthraw further understood that at the original tribunal hearing the Appellant had stated that on the current trip also some of the tobacco goods were to be passed on to his brothers at cost price on the basis that the Appellant could not afford to make gifts. Mr. Cawthraw therefore concluded that there was clear evidence on both trips that a proportion of the goods were to be passed on to others on a not for profit basis.
23. Mr. Cawthraw summarised Customs' restoration policy for excise goods seized which were not for own use but were to be passed on to others on a not a profit reimbursement basis. He concluded that because a proportion of the Appellant's goods was to be passed on to others on a not for profit basis and as this was a second occurrence or "offence" then that proportion should not be restored to the Appellant as this was an aggravating circumstance.
24. As the quantity of goods that the Appellant claimed to pass onto others on a not for profit basis had not been identified by the Appellant, in order to arrive at a reasonable and equitable split of the goods that were for his own consumption and those goods to be passed onto others at cost price, Mr. Cawthraw calculated the following:-

"You told the officer that you smoked 20-30 cigarettes a day and on your previous trip, a month earlier, you had bought 800 cigarettes and 40 pouches of tobacco. You claimed you had 8 pouches and 160 cigarettes left from that trip. That means that you had consumed or given away 640 cigarettes and 32 pouches. Your own consumption in a 30 day period would have been, using an average of 25 cigarettes a day, 750 cigarettes.

It is generally accepted that one can obtain 80/100 cigarettes from a 50 gramme pouch of tobacco. Therefore in the remaining 32 pouches you had the equivalent of 2,880 cigarettes (90 (average per pouch) x 32 = 2.880). When this is added to the 640 tailor made cigarettes, this totals 3,520; less your own consumption of 750 cigarettes = 2,770 cigarettes passed to others at cost price. This figure represents 78.69% (or 79% rounded up) of the total goods. Your share therefore is equal to 21%. I have used this percentage to calculate the split of tobacco goods in this case: 3kg tobacco x 21% = 0.6kg rounded down. 3,200 x 21% = 675 cigarettes rounded up. These goods should be restored to you free of charge. The remaining goods should not be restored to you as they were to be passed to others at cost price and this was a second offence."

Evidence at hearing of appeal

25. At the hearing of the appeal before us, the original review officer Mr. Crouch attended. He had previously submitted a written witness statement which was not objected to by the Appellant. He confirmed that at the previous hearing by Mr. Johnson the Appellant had stated that some of the cigarettes and tobacco that he had previously imported on a trip in March 2006 he had given to his brothers and that they had paid him cost price for the goods. He had also stated that some of the goods that were the subject of the hearing were also to be passed on to his brothers at cost price.
26. At the hearing before us oral evidence was given by the re-review officer David Cawthraw. He stood by his re-review decision dated 1 August 2007 and the reasons contained therein, except that he explained that he had made an error in calculation. When in his original calculation he had made reference to 640 tailor made cigarettes, this should have been 160 tailor made cigarettes. Accordingly when he had added to the figure of 2,880 cigarettes from the pouches, this should have totalled 3,040 instead of 3,520, and after deducting his own consumption of 750 cigarettes this meant that the officer calculated that the equivalent of 2,290 cigarettes were passed to others at cost price, instead of the figure of 2,770 cigarettes referred to in his calculation. This amended figure of 2,290 represents 75% of the total goods (and not 79%), and the Appellant's share would be calculated at 25% and not 21%.
27. In correcting that error then Mr. Cawthraw calculated the split of tobacco goods as 3kg of tobacco x 25% = 0.75kg (instead of the original figure of 0.6kg), and 3,200 cigarettes x 25% = 800 cigarettes (not 675 cigarettes).
28. Mr. Cawthraw therefore stated that Customs would be restoring to the Appellant an additional 0.15kg of tobacco and 125 cigarettes, in addition to the 0.6kg of tobacco and 675 cigarettes referred to in the review decision. Accordingly he confirmed that the total goods to be restored to the Appellant free of charge would now be 0.75kg of tobacco and 800 cigarettes.
29. In his oral evidence at the hearing of the appeal the Appellant confirmed that he had previously thought that he was entitled to bring back to the United Kingdom 3,200 cigarettes and 3kg of tobacco whether it was all for his own use or not. He agreed that on his previous trip four weeks earlier out of the goods that he brought back he had passed on some of the goods to two of his brothers. He stated that on that previous trip they had not asked him to bring back any goods for them, but he had decided to give some of the goods to two of his brothers. He said that he gave to two of his brothers 200 cigarettes each totalling 400 cigarettes. He said that he had intended that these should be a gift to his brothers because of favours that they had done to him. He said however that they had given him the money for these 400 cigarettes, being the price that the Appellant had paid for them. He said that he had not given them any tobacco from that previous trip, as far as he could recall, but he said that he might have done but he could not recall.
30. The Appellant confirmed that he stopped working as a builder 5 to 7 years ago, and since then he had been in receipt of benefits totalling £85 per week now. He said that on that previous trip he did not give any of the goods away to anyone else other than to his brothers.
31. The Appellant confirmed that on the trip that was the subject of this appeal he intended to offer to his two brothers a similar amount on the same basis that he had accepted that they would reimburse him the cost price of those items, although he said that he had made no previous arrangements with them to that effect. He said that he had just intended to give his brothers a couple of hundred cigarettes each like he had done the last time. He said that he did not think that his brothers smoked tobacco.
32. After further questions which had been put to the Appellant, the Appellant then said that he had a girlfriend, Doreen who smokes, and some of the cigarettes would have been for her but he could not say how many. She only smokes cigarettes, about 5 to 10 cigarettes a day. He said that he would not charge her for any of those cigarettes. He agreed that he had not mentioned supplying any cigarettes to his girlfriend at his interview or at the previous hearing. He said that when he was originally interviewed by the officer, he hadn't told that officer that he had 8 pouches and 160 cigarettes left from his previous trip, but he said that he had also told the officer that he did not know how many cigarettes he had had left from his previous trip. He agreed that he had signed the notebook of the Officer Price as having read the notes and agreed the notes. The Appellant also said that his two brothers smoked tobacco rolled from pouches at the time of his previous trip, but he said that they did not do so now. He said that he might have let his brothers have some smoking tobacco from the previous trip. He accepted that at his interview he had told the interviewing officer, when asked if he had a rough idea of how many pouches he had given, "no, no… only odd ones". He denied the suggestion that he was now changing his story.

Findings of fact and law and conclusions

33. The law relating to the issues in this appeal is set out in the Tobacco Products Duty Act 1979, the Excise Goods (Holding, Movement, Warehousing and REDS) Regulations 1992, Council Directive (92/12/EEC) Articles 8 & 9, Excise Goods, Beer and Tobacco Products (Amendment) Regulations 2002, and Customs & Excise Management Act 1979.
34. The effect of the Excise Goods, Beer and Tobacco Products (Amendment) Regulations 2002 is that in the case of tobacco products acquired by a person in another Member State for his own use and transported by him to the United Kingdom, the excise duty point is the time when those goods are held or used for a commercial purpose by any person. If the goods in question are transferred to another person for money or money's worth (including any reimbursement of expenses incurred in connection with obtaining them), or the person holding them intends to make such a transfer, those goods are to be regarded as being held for a commercial purpose. The 3,200 cigarettes and 3kg of any other tobacco products referred to therein are guidelines.
35. By section 141 of the Customs & Excise Management Act 1979, (paragraph 1), where anything has become liable to forfeiture under the Customs & Excise Act - .. (b) any other thing mixed and or found with the things so liable shall also be liable to forfeiture. Section 153 (b), Customs & Excise Management Act 1979 provides that the Commissioners may restore as they see fit, subject to such conditions (if any), anything forfeited or seized.
36. The Appellant, when intercepted at Coquelles, had in his possession 3,200 cigarettes and 3kg of hand-rolling tobacco which he was importing without payment of duty. He had confirmed to the interviewing officer that he had made other trips to the continent to purchase goods in the previous year, including in particular a trip to Luxembourg four weeks previously when he had purchased wine, 800 cigarettes and 40 pouches of tobacco. In his interview he had indicated that he had left about three-quarters of a pack of tobacco and 160 cigarettes. When he was questioned by the office about the packages of cigarettes from that previous trip he told the officer that he had let his brothers have some. When asked by the officers how many packages he had given to his brothers he said that he did not have a rough idea how many "only odd ones". At the previous hearing of his appeal before Mr. Johnson, he told the tribunal that some of the cigarettes and tobacco he had previously imported from the trip in March 2006 he had given to his brothers and that they had paid him the cost price for the goods. At the current hearing before us the Appellant had claimed at further length he had not supplied to his brothers any of the tobacco from that earlier trip, only a total of 400 cigarettes. When further questioned he had admitted that he might have passed on to his brothers smoking tobacco but he said he could not recall.
37. We found the Appellant to be an evasive witness. We found that the Appellant was vague, and endeavouring to avoid giving direct answers to questions by claiming that he could not recall matters or remember matters. We find as a fact that the Appellant had supplied to this two brothers from that earlier trip both cigarettes and tobacco.
38. The Appellant had admitted at the earlier hearing before Mr. Johnson that he had accepted from his brothers the cost price of the goods that he had handed over to his brothers. He also confirmed at the hearing before us that that had taken place. His evidence at both hearings was that he had not made any previous arrangement with his brothers for them to reimburse him for the costs of the those goods, but when he had given the goods to his brothers for services that they had previously rendered to him, that they had paid to him the cost price of such goods. We find accordingly that the Appellant on his previous trip had passed on excise goods to his brothers on a not for profit reimbursement basis.
39. It is common ground that the Appellant on 26 April 2006 was bringing back with him on the coach from Luxembourg 3,200 cigarettes and 3kg of hand-rolling tobacco. At the previous hearing before Mr. Johnson the Appellant gave evidence that on this trip it was his intention that he would supply some of the goods to his brothers who would give him the money for such goods to reimburse the Appellant for the cost price of those goods. At the hearing before us the Appellant again gave evidence that he had intended to supply some of the goods to his two brothers on the same basis as before, namely that they would reimburse him for the cost of such goods. At the hearing before us, the Appellant maintained that he was only intending to pass on at cost price 400 cigarettes to his brothers, and not any tobacco. We do not accept this. We did not find the Appellant to be a credible witness, and found him vague and evasive. We find that the Appellant intended to supply to his brothers smoking tobacco as well as cigarettes, at cost price.
40. The Appellant at the hearing before us gave evidence that he intended to give some of the cigarettes to his girlfriend. This was not mentioned by him at his earlier interview, nor at the earlier hearing of his appeal. We did not accept that the Appellant intended to give any of the cigarettes to his girlfriend.
41. The Appellant had retired from work over five years ago. His only income was the £85 per week which he received from benefits. Money which he took with him on the trip had exhausted all his savings. He had made four trips within the year. On his previous trip, to the one the subject of this appeal, he had admitted to purchasing wine, 800 cigarettes and 40 pouches of smoking tobacco. The Appellant was vague and evasive as to how much of that was left when four weeks later he made the current trip to the continent to purchase more goods.
42. We find that the decision of the review officer, Mr. David Cawthraw on re-review, and that recalculated by him at the hearing, not to restore part of the seized goods, was in accordance with the publicly stated policy of Customs, was a reasonable exercise by Customs of their discretion, and we further find that the officer had taken into account the matters raised by the original chairman Mr. Johnson in his original decision.
43. We find that the officer did take proper account of the reasons given by the Appellant not to persevere with his challenge in the Magistrates Court, namely that it was going to be too expensive and that he trusted that justice would be done by the tribunal. In the review decision the officer reasonably took into account the reasons why the Appellant did not pursue his challenge in the Magistrates Court.
44. We further find that the officer properly and fully took into account that the imported goods did not exceed the guideline amounts and that the Appellant believed that an importation of goods equivalent to those guideline amounts was permissible.
45. We further find that the officer took into account the assertion by the Appellant that some of the cigarettes and tobacco previously purchased by him in the earlier trip were acquired in the knowledge that they would probably be surplus to his own requirements, and that he had intended to pass on to his brothers some of the cigarettes and tobacco, the brothers paying him the cost price for what they received on the basis that the Appellant could not afford to make gifts. The officer took into account the assertion by the Appellant that it was not a case of the recipients having commissioned the Appellant to buy cigarettes or tobacco for them, rather it was a case of the Appellant having available some spare cigarettes or tobacco the Appellant made available to them at cost price those spare cigarettes.
46. Accordingly we find that the review officer Mr. Cawthraw did take into account those matter as directed by Mr. Johnson. We find that he properly took these into account and that his conclusions were reasonable.
47. We find that the re-review decision, as recalculated by the officer was a reasonable exercise by Customs of the discretion of Customs under section 152(b) CEMA 1979. Mr. Cawthraw has decided that in total Customs will restore to the Appellant the value of 0.75kg of smoking tobacco and 800 cigarettes.
48. We find that the seizure by Customs of the 3,200 cigarettes and 3kg of hand-rolling tobacco was lawful. The interviewing officer had been satisfied that goods were held for a commercial purpose, being not for own use, and had seized the goods under section 139(1) of CEMA as being liable to forfeiture under both regulation 16 of the REDS regulations and section 49 (1)(a)(i) of CEMA. The appropriate notices were issued to the Appellant. The Appellant did not persevere with a challenge to the legality of the seizure in the Magistrates Court. The goods were condemned as forfeited to the Crown by the passage of time under paragraph 5 of schedule 3 of CEMA.
49. We find that the officer in his decision applied the policy of Customs in relation to the seizure of excise goods, and the Customs policy for seized excise goods which are not for own use but are to be passed on to others on a not for profit reimbursement basis. The officer took into account the previous trip of the Appellant in which he had brought back goods for his brothers on a not for profit reimbursement basis. The officer also took into account the Appellant's admission that some of the goods on the current trip were to be passed to his brothers on a similar not for profit reimbursement basis.
50. The quantity of those goods had not been identified by the Appellant. In order to arrive at a reasonable and equitable split of the goods that were for the Appellant's own consumption and those goods to be passed on to his brothers at cost price the review officer carried out calculations. He took into account the Appellant's stated smoking consumption of cigarettes from the cigarettes and tobacco that he had purchased, and his claims as to what was left from that previous trip. We find that the officer reasonably calculated the amount of the equivalent number of cigarettes that the Appellant would have had left over from the remaining pouches and cigarettes in his possession, and from that the amount that he would have supplied to his brothers. The officer made a mistake in his calculations which were revised at the hearing. We find that the officer has reasonably calculated that the Appellant's share of the goods was equal to 25% and the share passed on to his brother equal to 75%. We find that the officer has reasonably calculated on all the evidence that a similar proportion of the Appellant's excise goods on the current trip was the Appellant's share, and a similar percentage was the share of his brothers. On the evidence before us we find that the Appellant has not satisfied us that the decision of Customs was unreasonable.
51. We find that the excise goods that the Appellant was bringing to the United Kingdom were regarded as being held for a commercial purpose. We find that goods were held by the Appellant intending to make a transfer to his brothers for money or money's worth (including any reimbursement of expenses incurred in connection with obtaining them), as defined in the Excise Goods, Beer and Tobacco Products (Amendment) Regulations 2002. We find that under section 141 CEMA 1979 those goods which the Appellant intended to transfer to his brothers were mixed, packed or found with the other goods for the Appellant's own use, and as such were liable to forfeiture. We find that Customs have reasonably decided not to refuse to restore all the goods to the Appellant, although Customs have the power to do so under section 141. We find that the review officer acted reasonably in deciding the restore to the Appellant 800 cigarettes and 0.75kg of tobacco. We find that the officer acted reasonably in deciding not to restore the remaining cigarettes and kilograms of tobacco to the Appellant. We find that the decision of the officer was in accordance with section 152(b) CEMA 1979 which provides that Customs may as they see fit restore, subject to such conditions (if any) as they think proper, anything forfeited or seized. The officer properly applied Custom's policy, and the law.
52. We did not accept the Appellant's claims that he had been able to save from his benefits all the money that he took with him to the continent on the current trip. The Appellant was unemployed and received £85 per week benefits. We find that it is not credible or probable that the Appellant had been able to save the entire funds that he took with him to the continent from such benefits. He had previously travelled to Luxembourg four weeks previously to purchase excise goods. He could not have saved sufficient money for the current trip since that previous trip. It is not credible that he did not purchase further excise goods on that previous trip, if he had already had the savings to do so. We find that it is more probable than not that his brothers had contributed and paid to him funds prior to the current trip.
53. We find that the Appellant was vague and evasive, was not credible, and failed to properly identify the quantity of goods that he intended to pass on to his brothers on a not for profit basis. We find that the officer did arrive at a reasonable and equitable split of the goods that were for the Appellant's own consumption and those goods to be passed on to his brothers at cost price. We find that his revised calculations are reasonable. We find that there has been no error on a point of law by Customs. We find that Customs have not acted in a way that no reasonable panel of Customs could have acted, and that they have not taken into account irrelevant matters or disregarded something to which they should have given weight.
54. Accordingly we dismiss the Appellant's appeal.
55. Customs did not apply for costs and we make no order as to costs.

MAN/2007/8057

Ian Vellins

CHAIRMAN
Release Date: 14 May 2008