United Kingdom VAT & Duties Tribunals (Excise) Decisions

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Cite as: [2008] UKVAT(Excise) E1131, [2008] UKVAT(Excise) E01131

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Jeffrey Richard Uncle v Revenue & Customs [2008] UKVAT(Excise) E01131 (05 August 2008)

E01131

EXCISE DUTY – restoration of alcohol and car – Appellant is owner of a pub and the Respondents considered that the wine was purchased for the pub – whether reasonable – yes – appeal dismissed

LONDON TRIBUNAL CENTRE

JEFFREY RICHARD UNCLE Appellant

- and -

THE COMMISSIONERS FOR HER MAJESTY'S

REVENUE AND CUSTOMS Respondents

Tribunal: DR JOHN F. AVERY JONES CBE (Chairman)

ROBERTA S. JOHNSON

Sitting in public in London on 29 July 2008

The Appellant appeared in person

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

© CROWN COPYRIGHT 2008

DECISION

Mr Jeffrey Richard Uncle appeals against a decision on review dated 19 October 2007 not to restore 383.18 litres of red wine (of which 360 litres comprise 40 cases of a particular red wine), 13.5 litres of white wine and 3.4 litres of spirits, and to restore a Ford Galaxy car, registration number HW05 HOA, on payment of the duty on the alcohol of £696.61. The Appellant appeared in person; the Respondents ("Customs") were represented by Mr Rupert Jones.

We heard evidence from the Appellant and find the following facts:

(1) The Appellant was stopped on 13 August 2007 at Portsmouth Ferry Terminal carrying the alcohol listed above in the car having been out of the country for 24 hours. After interview the car and alcohol were seized on the basis that they were held for a commercial purpose. The car was restored on payment of the above amount.

(2) At interview the Appellant initially denied being involved in the retail trade saying he was retired. He stated in answer to the question "Who's this for?" that the wine was for his daughter's engagement party, saying initially that the party was for 800 people (which he now says was tongue in cheek) but later changed to 100 to be held on 17 September 2007 or the nearest Saturday. Having said that he was not involved in the retail trade, he was asked where the party was being held. He then asked if retail trade included a pub, and then said that he owned a pub, the Roadside Inn, that he had taken over in March 2007, refurbished and opened on 7 May 2007, which is where the party was to be held. (He told us that he had only a tenancy at will of the pub, paying rent of £3,268 per month, but if that is the case it seems unlikely that he would have spent the £65,000 to £70,000 that he told us he spent on improvements.) At the hearing he said that the excise goods were for his own use and the mention of the party was merely that some of them were likely to be used for that purpose. The interview notes do not convey this and we prefer the statement in the interview notes that the wine was for his daughter's engagement party. However, we do not believe that the goods were for the party. Virtually all the wine was red and we presume that anyone buying for the party would buy both red and white wine. Nor is the quantity of wine suitable for the party. Even if each of the 100 people drank a whole bottle this would account for 75 litres out of the total 383 litres (or 360 litres of the particular red wine). The details of the party also seem surprisingly vague for a party to be held in just over a month's time.

(3) He said that he bought that quantity of red wine because he was offered a discount of 20 per cent for 40 cases (a crate). The cost was Euros 1,920 (£1,280) which he paid in cash from the pub takings.

(4) He was asked at interview whether anyone had given him money for the goods, to which he replied no. He now says that 2 litres of vodka and 20 litres of Vinibag were for friends who would reimburse the cost.

(5) He told us that he did not dispute the seizure because he thought that if the amount exceeded the indicative limit of 90 litres he could not do so. Initially at the hearing he denied to us that he had received Notice 12A but it was pointed out to him that he had signed as correct the interview notes saying that it was given as well this being recorded on the Seizure Information Notice. We find that he did receive the Notice. When he wrote to Customs on 29 August 2007, 16 days after the seizure, he quoted information obtained from the Tribunal and quoted from art 3 of the Excise Duties (Personal reliefs) Order 1992 by name. This was before he was given details of the tribunal in the review letter of 19 October 2007. He must therefore have been enquiring into the position. The letter of 29 August 2007 applied for restoration in the way set out in the Notice; for example enclosing evidence supporting his claim (see below). We find that he was aware by 29 August 2007 that he could have disputed the seizure and chose not to do so.

(6) The Appellant enclosed with his letter of 29 August 2007 a number of invoices dated between 18 September 2001 and 12 February 2007 from Pieroth Limited for wine as evidence of his wine consumption. These are all addressed to "The Roadside Inn, Att Mr J Uncle." He did not give any satisfactory evidence of how these were addressed to the pub when he had taken it over only in March 2007. We do not accept these invoices as evidence of his wine drinking, and indeed they throw doubt on his evidence that he had recently acquired the pub at the time of being stopped. We consider that it is likely that he was already managing the pub and these invoices relate to purchases for the pub. This makes it more likely that the goods seized were also purchases for the pub.

The Appellant contends that the wine was for his personal consumption and should be restored with the car without any fee.

Mr Rupert Jones, for Customs, contends:

(1) It would be an abuse of process to allow the Appellant to argue that the goods were for his own use having failed to apply for condemnation proceedings, 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) Customs' decision that the wine was held for a commercial purpose was correct and their decision not to restore the alcohol and to restore the car on payment of the duty was entirely reasonable.

On abuse of process, we agree with Mr Jones that the Appellant having failed to challenge the seizure in condemnation proceedings, cannot raise the issue of own use in this appeal. We have found that he had received Notice 12A, was aware that he could dispute the seizure and chose not to. Accordingly, he had a realistic opportunity to invoke the condemnation procedure. We have not accepted the reasons given by him at the hearing that he thought he could not dispute seizure of more than the indicative limit of 90 litres in the light of his knowledge shown by his 29 August 2007 letter. While there are perfectly rational reasons for not disputing seizure, such as the costs of losing the proceeds being quoted as likely to be not less than £750 (which is more than the duty), he did not rely on this, or disclose other reasons. Accordingly we consider that he cannot raise the issue of own use now.

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;…."

The Tribunal's jurisdiction is therefore limited to considering the reasonableness of Customs' decision not to restore the excise goods and to restore the car on payment of the duty. Customs' policy is not to restore excise goods held for profit; to restore goods to be passed on to others on a not for profit basis but for a fee, unless there are aggravating circumstances; to restore where there are exceptional circumstances; and to consider whether the result is fair, reasonable and proportionate in all the circumstances. So far as the vehicle is concerned Customs' policy is to restore vehicles at their discretion for a fee where the supply is for profit but it is a first occurrence and the quantity is not large; or if they are for supply on a not for profit basis.

We have disbelieved the Appellant's explanation at interview about the party being the reason for the purchase and we consider that Customs were fully entitled to take the same view. The quantity of wine, and its being almost all red (including 40 cases of one particular wine), makes it likely that it was for his and his family's personal consumption. The other invoices addressed to him at the pub on dates before he says he took it over throw doubt on his credibility. He also initially denied but now contends that some of the alcohol was for friends who would reimburse him for it. Other points have changed between the interview and the hearing. We are not inclined to believe the Appellant's explanation. We consider that the most probable explanation is that the wine was purchased for the pub and we so find. We see nothing unreasonable in Customs drawing this conclusion. This means that the alcohol was held for a commercial purpose and, in accordance with Customs' policy, the excise goods are not restored, and the car only restored exceptionally, which is what Customs have done for payment of the duty. There seem to us to be no reasons why Customs were unreasonable in not following the policy.

Accordingly we dismiss the appeal.

JOHN F AVERY JONES

CHAIRMAN

RELEASE DATE: 3 August 2008

LON/07/8112