United Kingdom VAT & Duties Tribunals (Excise) Decisions

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URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2008/E01133.html
Cite as: [2008] UKVAT(Excise) E1133, [2008] UKVAT(Excise) E01133

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David Lord v Revenue & Customs [2008] UKVAT(Excise) E01133 (06 August 2008)

E01133

EXCISE DUTY – application for restoration only – jurisdiction of the tribunal – could the tribunal consider personal use – no – reasonableness of the commissioners' decision – appeal dismissed

MANCHESTER TRIBUNAL CENTRE

DAVID LORD Appellant

- and -

THE COMMISSIONERS FOR

HER MAJESTY'S REVENUE AND CUSTOMS Respondents

Tribunal: LADY MITTING (Chairman)

Mr. J P M DENNY (Member)

Sitting in public in Manchester on 7 July 2008

The Appellant appeared in person

Jennifer Blewitt, counsel, instructed by the Solicitor for HM Revenue and Customs for the Respondents

DECISION

Mr. David Lord appeals the decision of the Commissioners to refuse restoration of 12,600 Royal cigarettes seized from him at Manchester Airport on 25 September 2007.

We heard oral evidence from Mr. Lord and his wife, Mrs. Susan Lord and on behalf of the Commissioners from Mrs. Julie Wiggs, the review officer.

Mr. Lord had not applied for condemnation proceedings but merely for restoration. However he sought before us to argue that the cigarettes had been imported for his own personal use. We therefore, as a preliminary issue, dealt with whether or not this tribunal could adjudicate upon own use. In this regard we heard from Mr. Lord as to the circumstances in which application was made for restoration only. He accepted that when he had left the airport he had been given Notice 12A. He had not read the forms but gave them to his wife to read. She filled in both letter A, appealing the seizure and letter B, applying for restoration. Mrs. Lord told her husband that Notice 12A warned of a costs liability of £1,500 if he were to appeal the seizure but lost. This caused Mr. Lord great concern and he asked himself whether he risked losing not only his cigarettes but a considerable amount of money. Was it worth it? Was there an easier way of recovering the cigarettes without incurring costs? Mr. Lord therefore rang a series of Customs telephone numbers eventually getting through to a helpline. Mr. Lord told us that he had told the operator what had happened; that the cigarettes were for his own personal use but that he was worried about the cost of going to court. Mr. Lord told us that the operator had said that as the cigarettes were for own use, he had done nothing illegal so he was not in fact contesting the legality of the seizure but merely seeking restoration of the cigarettes and that way he didn't have to go to court. This advice came as a great relief to Mr. Lord who told us that he would have had to have taken out a bank loan if any costs order had been made against him. The form from Notice 12A was returned to Customs with letter A crossed through and the words "not appealing" written on the bottom leaving letter B as the effective letter. Mr. Lord told us that he was not advised that he could not argue own use before the tribunal. Had he known, he does not know what he would have decided to do. It would have been a very hard decision but he thought that on reflection he probably would not have risked another £1,500 and would have dropped the case.

Mrs. Wiggs managed, over the telephone, to track down a recording of Mr. Lord's telephone conversation to the helpline which we all listened to. It was clear that the actual course of the conversation had not been quite as Mr. Lord had recalled it. He had described at length to the operator the background to the seizure. He told the officer that he wanted his cigarettes back; that he had the booklet in front of him but it was frightening him because he could not afford the costs of going to court and losing. The operator asked for confirmation that the booklet he had in front of him was Notice 12A, then the officer explained that if he was contesting the seizure he would have to go to court and to challenge the seizure he would have to complete letter A, but it would be letter B if he was seeking restoration. Mr. Lord told the operator he did not want to go to court and the operator responded that in that case he should rub out letter A and fill in letter B.

The question we the tribunal asked ourselves is that set out by Mr. Justice Lewison in The Commissioners of Revenue & Customs v. Albert Charles Smith (CH/2005/APP/0117):

"So the relevant question will always be, first, could the applicant have raised the question of lawfulness or forfeiture in other proceedings and, if the answer to that question is yes, why did they not do so? In the light of his reasons for not raising the matter in condemnation proceedings the Tribunal can then answer the question should he have done so and if they answer that question 'yes' then it will be, in most cases, an abuse of process for him to raise the question before the Tribunal."

Clearly Mr. Lord had the opportunity to appeal the seizure. In fact letter A was initially completed and then crossed through. We have heard Mr. Lord's case as to why he did not proceed with this course of action but in our view this does not give him grounds to reopen the matter before us. Notice 12A, paragraph 2.1, clearly states that the legality of the seizure should be challenged if the excise goods were for the traveller's own use or to be given away. This is repeated in paragraph 3.1 and even more forcefully in the note at the foot of letter B, which reads:

"If your only reason for requesting the return of seized things is that you think that Customs had no legal right to seize them (eg that excise goods were entirely for your own use or they were to be given to others as gifts free of charge) you cannot rely on that as a reason for it to be returned to you. In those circumstances you must also challenge the legality of the seizure as set out in section 2 of this notice."

All this gives Mr. Lord full advice as to how he should have proceeded if he was maintaining that the cigarettes were purchased for own use and gave him fair warning that if he did not appeal the seizure he would not be able to raise this argument before the tribunal. We considered with great care the contents of the telephone conversation and concluded that although Mr. Lord appears to have misinterpreted what he was told by the operator, in fact there was nothing in what the operator said which could or should have lead Mr. Lord to believe that he could challenge the seizure in restoration proceedings. In reality the operator appears to have done little more than reiterate what Mr. Lord should have read in Notice 12A. For all these reasons we concluded, and told Mr. Lord at the time, that we could not allow him to argue before us that the cigarettes were brought in for own use. We explained to him the deeming provisions and the implication of this.

Mr. and Mrs. Lord were intercepted at Manchester Airport on 25 September 2007 at lunchtime on their return from Palma. Mr. Lord was found to be carrying 4,000 cigarettes and Mrs. Lord, 8,600. They were questioned separately. David Lord, when asked how many cigarettes he was carrying stated that he did not know because he had just bought what he could afford and thought there were approximately 60 cartons. He said that they were for "us"; that he had no cigarettes on him because he had had the flu. He had last travelled three weeks previously when they had been away one week and had not brought any cigarettes back with them. These were the only two occasions they had travelled in the last six months. The cigarettes had been purchased with money from the bank and had been purchased on the first day of their holiday.

Mr. Lord produced receipts to the officer. One receipt was for 12,000 Royals. The four other receipts were identical and were for 800 cigarettes each. Mr. Lord's recorded explanation was that his was the single receipt for 12,000 cigarettes but that the remaining receipts belonged to his friends. It was also ascertained on inspection that the baggage labels on Mr. Lord's case were in the name of a Mr. Alderson. When asked why this was, Mr. Lord replied that it was because he had booked everything. He was asked if Mr. Alderson had travelled with him, to which he replied "no". Mr. Lord smoked 20 cigarettes a day but answered that he did not know how many his wife smoked.

Mr. Lord refused to stay for interview, explaining that his coach was waiting and that there were other passengers waiting for him. He was asked if he wished to return at a later date to be interviewed but refused. He also refused to read or sign the officer's notebook.

Mrs. Lord when questioned answered that she and her husband had been away twice to Majorca this year. She replied that her husband had brought cigarettes back on the previous occasions but she did not know how many. She smoked about 15 per day but had no cigarettes on her as she had had a cough and did not smoke while she was away. She did not know how many cigarettes had been bought on this current occasion and did not know when her husband had made the purchase. Mrs. Lord also declined to stay for interview, explaining that people were waiting for them. The cigarettes were duly seized by the officers and Mr. and Mrs. Lord duly went on their way.

Mr. and Mrs. Lord then wrote in asking for restoration of the cigarettes. Their letter stated that the cigarettes had been brought back for their own personal use and as presents for their adult children. This letter also sought to explain the issue of the receipts in the following terms; "I gave the Customs officer the receipt for the cigarettes, initially I could not find the receipt so I went back to the shop where I bought them and the Spanish assistant just gave me a slip from the counter, then I found the original slip and gave it to the Customs officer, he kept them". By letter dated 30 October 2007 restoration was refused. This letter explained that the officer had not looked at the legality or correctness of the seizure as that had not been appealed and the goods therefore were deemed to be imported for a commercial purpose. The officer found no matters to justify restoration.

Mr. Lord then wrote in by letter dated 29 November 2007, his letter being treated as a request for review. He stated that the cigarettes had not been purchased for a commercial purpose but for their own use, and also sought to explain why application for condemnation proceedings had not been made.

The matter came before Mrs. Wiggs for review. She had in front of her the documentation from the original interception including the officer's notebooks and the two letters from Mr. Lord. Mrs. Wiggs replied by letter dated 28 December 2007. After outlining the circumstances of the interception, she stated that as the legality of the seizure had not been challenged, the cigarettes were deemed to have been imported for a commercial purpose and she was not therefore concerned with any arguments as to own use. She set out the legislation and she also set out the Commissioners' policy on restoration which in certain circumstances allowed for restoration on terms in a "not for profit" importation. As the Lords did not claim that the goods had been purchased on a not for profit basis, she did not consider restoration appropriate under that provision. In all the circumstances known to her she concluded that the goods had been held for profit and should not therefore be restored. In her oral evidence to the tribunal she expanded upon these reasons. She was influenced by the receipts. Not only were there no receipts for three cartons of the cigarettes but there were receipts for purchases which had not been made by the Lords. She knew that Mr. Lord had to have been incorrect when he told the officer that Mr. Alderson had not travelled with them as otherwise his name could not have come to have been on the baggage tags. She thought it strange that Mr. Lord did not know how many cigarettes his wife smoked and she had also noted the contradictory answers given by Mr. and Mrs. Lord as to whether or not there had been a purchase of cigarettes on the previous trip. She also took into account that neither of them had any cigarettes on them when stopped. There was also the fact that Mr. Lord refused to sign the officer's notebook and although she understood why they could not stay for interview, Mr. Lord had been offered the chance of returning for interview, which he had refused. For all these reasons, she could find no relevant reason why restoration should be offered and she thought non-restoration in the circumstances was fair, reasonable and proportionate.

Mr. Lord explained in his evidence that their purchase had been made with the aid of tax refunds, which were documented before us and we have no reason to doubt. Mr. and Mrs. Lord had decided to spend the refunds on cigarettes for their own personal use and as presents for their adult children. He explained that he and his wife had been away for a week very shortly before this trip but they had been robbed and apart from 200 cigarettes which they had managed to buy, they had no money to make any other purchase. The position of Mr. Alderson was that Mr. Alderson was a friend of Mr. and Mrs. Lord's. Mr. Alderson and a friend had been proposing to travel to Majorca and when Mr. and Mrs. Lord also showed an interest, Mr. Alderson booked four flights. The four of them shared a taxi, checked in together and indeed got on the plane together but once they got to Spain they went their separate ways and holidayed completely separately. They did not meet up again until arrival at Palma for their return trip. The purchase of the cigarettes had been made by Mr. Lord on the first day of the holiday so that there was no risk that his money could be stolen before the purchase was made. His wife would not have known that he had made the purchase because she was in bed asleep when he went out. The reason he did not know how many there were was because he merely converted £1,000 into Euros, took the cash to the shop and asked for as many cigarettes as that would purchase. When he later told fellow holidaymakers how many cigarettes he had, they all advised him that he would need to produce receipts for them. He thought he had mislaid the receipt so he went back down to the shop and was merely handed a fistful of random receipts which he took away with him. He then found the original receipt which he was able to produce to the officer but of course he also had the other receipts which had not belonged to him. He told us that he had explained this to the officer but the officer had incorrectly written down his answer. He and his wife had both been ill on holiday with chest infections and colds and had not been able to smoke. That is why they had no smoking materials on them. They were unable to stay for interview because Mr. and Mrs. Lord were sharing a taxi with Mr. Alderson and his friend. The taxi was waiting on a short stay car park and during the questioning that did take place Mr. Lord was constantly getting phonecalls asking them to get back quickly. He saw little point in returning for interview as the officer had made it totally clear he did not believe anything Mr. Lord had told him.

As we explained to Mr. Lord, our jurisdiction is limited to considering the reasonableness of Mrs. Wiggs' decision. We have to consider whether she took account of all relevant factors or whether there were any matters which she ought to have considered but which she failed to. We have to consider whether she gave proper weight to the matters before her. We look at whether she made any error in law and in the light of all these matters we then have to weigh up whether the decision which she reached was a reasonable one. Mrs. Wiggs' starting point was that the seizure had not been challenged and when the matter came before her therefore the importation was deemed to have been for a commercial purpose. The factors which she took into account, as outlined above, were all in our view entirely relevant and it was not unreasonable for her to put upon the evidence before her the interpretation which she did or for her to form the view which she did. Some matters were more important than others. There was no proper explanation before Mrs. Wiggs as to the variety of receipts presented to the officer. She knew that Mr. Alderson must have travelled and yet the interview note before her contained Mr. Lord's denial of this. There was the obvious discrepancy as to whether or not there had been a purchase on the previous trip. It is hardly surprising that on the evidence which Mrs. Wiggs had in front of her she had a serious doubt over credibility. In the light of the information which Mrs. Wiggs had before her at the time when she made her decision, we find that the conclusions which she drew were reasonable and that her decision to refuse restoration was also reasonable. Given the limitation of our jurisdiction, having found that Mrs. Wiggs acted reasonably and that the decision she reached on the basis of what she had before her was reasonable, the appeal must fail. The appeal is therefore dismissed. The Commissioners made no application for costs and no order is made.

MAN/2008/8014

Lady Mitting

CHAIRMAN

Release Date: 6 August 2008