[2009] UKFTT 303 (TC)

TC00247
CUSTOMS DUTY- civil penalty of £250 for being in possession and holding alcoholic liquors, which had not been stamped under section 2 A of The Alcoholic Duties Liquor Act 1979 

FIRST-TIER TRIBUNAL					Appeal number: Man/09/8021
TAX 

					MR N NOOR KHAN	Appellant

- and -

THE COMMISSIONERS FOR
				HER MAJESTY’S REVENUE AND CUSTOMS	Respondents

Tribunal: David S Porter Judge

Sitting in public in Birmingham on 30 October 2009

Richard Mansell counsel, instructed by the Acting Solicitor for HM Revenue and Customs for the Respondents and no one appearing for the Appellant.

© CROWN COPYRIGHT 2009

DECISION
1.	Mr N Noor Khan (the Appellant) appeals against the refusal to return 120.6 litres of Vodka and 1.40 litres of Whisky and the cancellation of a penalty of £250, contained in a review letter dated 17 February 2009. The Respondents say that the goods were not duty stamped and that as a result it was an offence for the Appellant to be in possession of the goods and to attempt to sell them. The Appellant says that the goods were bought from local “Cash and Carries” in good faith and that he had produced the relevant invoices.
2.	Richard Mansell of counsel appeared on behalf of the Respondents and produced a bundle of documents. No one appeared for the Appellant and the tribunal determined to proceed under rule 33 of the Tribunal Procedure (First-tier Tribunal)(Tax Chamber) Rules 2009
Preliminary issue
3.	The Appellant did not attend and the Judge confirmed that the Appellant had been notified of the hearing on this occasion and appears to have replied to earlier correspondence. It is clear from the office file that the Appellant is aware of the date and time of the hearing. The Judge decided to proceed under rule 33.

The facts
4.   On 3 December 2008 Neil John Grant, an officer of Customs and Excise, attended with other officers from Coventry Trading Standards at the Appellant’s N K Superstore at 667-669 Stoney Stanton Road, Coventry, in order to carry out an inspection of excise goods held by the business. He identified two bottles of Johnnie Walker Red Label Whisky, which did not bear UK Duty Stamps. The Appellant produced an invoice from Maini’s Cash and Carry dated 19 November 2008, since as all the goods on the invoice were not Duty Stamped Mr Grant seized the bottles of Whisky under section 139 of the Customs and Excise Management Act 1979. He then inspected the rear of the store and discovered a number of Glens Vodka boxes, all of which had been opened and re-sealed. Several bottles from each of the boxes were inspected and found to have been defaced, indicating that the goods were meant for export. The Appellant explained that he had bought the vodka from several Cash and Carry Wholesale Companies, depending what was on offer at the time. He also claimed that he had opened the boxes in order to examine the goods. There were 9 cases of Glens Vodka, 12 x Litre; and 12 cases and 6 bottles of Glens Vodka, 12 x 70cl. The Appellant was unable to identify the invoices evidencing the purchase of the goods. The Glens Vodka was accordingly forfeited. The Appellant was served with a Seizure Information Notice (C156) for the goods, which he signed to confirm the seizure of the goods. The total revenue of the seized goods was approximately £1555.46. On 8 December 2008 Mr Grant sent a Notice of Seizure under the Customs and Excise Management Act 1979 together with a penalty Notice in the sum of £250. The Appellant had written on his letter of 18 December 2008 (referred to below):
 “Please use this letter as an appeal to release my goods as per telephone conversation dated 5/1/2009”
5.	The Respondents replied to that request in a letter dated 29 January 2009 as follows:
“For an appeal against the legality of the seizure to be valid under Schedule 3 of the Customs and Excise Management Act 1979, it must be received, by H M Revenue and Customs, in writing within one month of the date of seizure. I note in your particular case that the goods were seized on 3 December 2008, therefore any appeal requested should have been submitted by 3 January 2009. This time limit is dictated by statute and cannot be altered or extended. As your request was received on the 8 January 2009 it is outside this time limit, therefore I regret we are unable to accept your appeal.
I note you have requested restoration. In order to consider your request we now have to collate all relevant information from the officers involved in this seizure. On receipt of this information your request will be considered and you will be informed of a decision in due course.”
6.	The request was dealt with in the review letter of 17 February 2009 on the basis that as the Appellant was out of time the goods were “deemed forfeit” under paragraph 5 of schedule 3 of the Customs and Excise Management Act 1979. For the record, the letter of 5 January 2009 from the Appellant asked for the appeal to be considered .Unfortunately that request was also out of time.
The Law
7.	The Excise Goods (Holding, Movement, Warehousing and REDS) Regulations 1992 (known as the REDS regulations) provide that under Regulation 16, excise goods on which duty has not been paid, when it should have been, are liable to forfeiture.
8.	The Customs and Excise Management Act 1979 Section 49 provides: Goods are liable to forfeiture; if duty should have been paid but it has not been and the goods are unshipped, unloaded from aircraft, or removed from their place of importation; or if the goods are imported concealed in a container holding goods of a different description; or if imported goods are concealed or packed in any manner appearing to be intended to deceive an officer.
9.	Section 100(2) (c) provides: Any goods which have been deposited in a warehouse or Queen’s warehouse are unlawfully removed therefrom or are unlawfully loaded into any ship aircraft or vehicle for removal or for exportation or use as stores; or
(e) Any goods which have been lawfully permitted to be removed from a warehouse or Queen’s warehouse without payment of duty for any purpose are not duly delivered at the destination to which they should have been taken in accordance with the permission; those goods shall be liable to forfeiture.
10.	Section 139 provides: Any thing liable to forfeiture under the customs and excise acts may be seized by an officer.
11.	The Alcoholic Duties Liquor Act 1979 (“ALDA”) Schedule 2 A (1)(1) provides: Retail containers of alcoholic liquors to which this schedule applies shall be stamped-
(a)	in such cases and circumstances, and with a duty stamp of such type, as may be prescribed.
12.	Schedule 2 A 5(1) provides: Except in such cases as may be prescribed, a person commits an offence if he-
(a)	is in possession of, transports or displays, or
(b)	sells, or offers for sale or otherwise deals in,
unstamped retail containers containing alcoholic liquor to which this schedule applies.
13.	Schedule 2A (10(1) provides: If a person fails to comply with a requirement imposed by or under regulations under this schedule-
(a)	    his conduct attracts a penalty under section 9 of the Finance Act 1994 (civil penalties)
(b)	any article in respect of which he fails to comply with the requirement is liable to forfeiture (including, in the case of a container, its contents).
14.	Finance Act 1994 Section 9(2) provides: Any person to whose conduct this Section applies shall be liable:
(a)	in case of conduct in relation to which provision is made by subsection (4) below [or by or under any other enactment] for the penalty attracted to be calculated by reference to an amount of, any duty of excise, to a penalty of whichever is the greater of 5% of that amount and £250: and
(b)	in any other case, to a penalty of £250
15.	Section 10 (2) provides: Where it appears to the Commissioners or, on appeal, an appeal tribunal that there is no reasonable excuse for a continuation of conduct for which there was at first a reasonable excuse, liability for a penalty under section 9 above shall be determined as if the conduct began at the time when there ceased to be a reasonable excuse for its continuation.
Summing up
16.	Mr Mansell submitted that the hearing today is in relation to the penalty of £250 as the Appellant had not pursued the request for the return of the goods. The Appellant had not given notice, within one month of the date of the seizure of the goods asking for condemnation proceedings to be commenced.. The goods are therefore deemed to have been duly condemned as forfeited. No evidence has been produced to the tribunal by the Appellant to show that he had a reasonable excuse. Nor has he produced any satisfactory evidence by way of invoices for the purchase of the goods showing that the duty had been paid. and the penalty was therefore correctly raised under section 9 of the Finance Act 1979. The appeal should be dismissed.
The decision
17.	Having considered the law and the facts I dismiss the appeal. The Appellant has not appeared for the hearing and in his letter of 16 December 2008 addressed to Mr Grant the Appellant said:-
“I have received your letter and I disagree with everything you have said. I am amazed that you are trying to disrupt my business at this critical time. I have shown invoices from both Maini Cash & Carry and East End Cash & Carry for the alcohol concerned. I have also shown you actual sample bottles from these wholesalers, which are exactly the same as those taken from my shop premises.
So I ask you to release my goods without further delay. I also ask you to remove the penalty that you have imposed on me”
18.	The Appellant has not pursued his request for the goods to be returned. The Appellant has provided no evidence for me to consider that request, I have had no sight of any invoices or been provided with any evidence by the Appellant as to any reasonable excuse he might have had for purchasing the goods, other than that he acted in “good faith”. In light of the “deemed forfeiture” I would need substantial evidence to consider the restoration of the goods. I would also need to be satisfied that there would be no “abuse of process” if there was such evidence and I heard it. I have therefore treated this appeal as an appeal against the penalty of £250. I have seen the witness statement provided by Mr Grant, who also attended the hearing and I have no reason to doubt his evidence. No invoices were produced to the tribunal and Mr Grant’s witness statement indicates that such invoices as were produced to him were inadequate. The evidence reveals that some of the goods had been tampered with in circumstances where it was reasonable for Mr Grant to consider that they were intended for export. In the circumstances I can only rely on the evidence before me and I therefore dismiss the appeal and confirm the penalty. No application has been made for costs so none are awarded.
19.	Since the hearing has taken place in the absence of the Appellant, the Appellant has a right to apply for this decision to be set aside pursuant to Rule 38 of The Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (“the Rules”).  The Appellant has a right to apply for permission to appeal against this decision pursuant to Rule 39 of the Rules.  The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice	

JUDGE
Release Date: 11 November 2009
MAN/09/8021