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You are here: BAILII >> Databases >> First-tier Tribunal (Tax) >> Harte & Ors v United Kingdom Border Agency [2012] UKFTT 560 (TC) (03 September 2012) URL: http://www.bailii.org/uk/cases/UKFTT/TC/2012/TC02237.html Cite as: [2012] UKFTT 560 (TC) |
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[2012] UKFTT 560 (TC)
TC02237
Appeal number: TC/2011/07356, TC2011/07358, TC/2011/07359
Excise Duty – S139 and 141 CEMA 1979 – Seizure of Tobacco Products for failure to pay Excise Duty – Decision not to Restore upheld – Appeal Dismissed
FIRST-TIER TRIBUNAL
TAX CHAMBER
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MOIRA HARTE, ANTHONY HARTE & FIONA MULLIGAN |
Appellant |
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UK BORDER AGENCY |
Respondents |
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TRIBUNAL: |
JUDGE IAN HUDDLESTON |
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Sitting in public in Belfast on 16 May 2012
The Appellants did not appear
Mr. D. Sharpe BL for UKBA
© CROWN COPYRIGHT 2012
DECISION
1. These appeals have been conjoined on the basis of the factual similarities which arise.
6. Each of the Appellants travelled to Malaga on the 15 April 2011 as part of a family arrangement.
7. It was a day trip, and upon being questioned by UKBA upon their return to Belfast International Airport, it was transparent that the sole purpose of the trip was to acquire cigarettes and tobacco.
8. Upon being stopped by the UKBA and the Goods having been found amongst their luggage, each of the Appellants was interviewed.
9. It transpired that the Goods had been acquired in Torremolinos at a cost of approximately £2,000 with the intent that they would be distributed amongst various family members.
10. Mr. Harte paid for all of the Goods in cash, but there were no actual receipts.
11. As part of the interviews, information was given to the UKBA that the intended family recipients had given the Appellants approximately £2,000 to contribute to the purchase of the tobacco products and the costs of the trip.
12. In the case of Mrs. Harte, she confirmed initially at interview that she didn’t actually smoke herself, and that she was carrying the goods for other parties.
13. As I have said above, the UKBA took the view that the Goods were held for a commercial purpose, were not for the Appellants own use, and therefore seized them.
14. There followed correspondence between the Appellants’ representatives, Messrs. Harte Coyle Collins, Solicitors, and UKBA.
15. In their first letter of the 18 May 2011, the Appellants’ representatives asked that the Goods to be restored and challenged the legality of the seizure.
16. After some debate, it appears to have been established between the parties that that initial application was received outside of the one month time limit which applies and that the Goods had already been forfeit to the Crown.
17. On the 16 June 2011 a UKBA Officer wrote to the Appellant refusing the application for restoration of the Goods.
18. The Appellants’ representative sought a review of that decision. That too rejected restoration, and it is against that decision in relation to which the Appellants submitted a notice of appeal on the 8 September 2011.
19. Allowing for various factual changes in relation to the nature of the Goods etc, the notice of appeals for each of the Appellants are in exactly the same terms.
20. The Appellants’ case (broadly) is that the Appellants consider that the purchase was not “commercial” in the traditional sense of the word.
21. The Appellants in each case stated that the family members for whom the cigarettes were intended contributed to the cost of the acquisition of the Goods and the flights to Spain, and that the Appellants may have received some money for the trip, but that in each case this was an entirely separate transaction and that any “profit” (being excess over cost) made on the trip overall is irrelevant.
22. The submission was made in writing that any money received for flights, cigarettes and tobacco amount to less than or equal to the total cost to the Appellants and that the overall transaction was as a favour to family members to save on the cost of tobacco products, and therefore was not a business transaction.
23. That being so, this is a non-aggravated case for the purposes of the UKBA restoration policy, and that the Goods should be returned to the Appellants for an associated fee.
(1) the legality of the seizure is not something which can be part of the appeal, and that therefore it is not for the Tribunal to consider “own use” in the context of these proceedings;
(2) that where excise goods are held for profit – in money or moneys worth – to use the wording of the UKBA standard policy – they should not normally be restored;
(3) that if the Goods were to be passed on to others on a “not for profit” reimbursement basis where there are aggravating circumstances, then depending on the degree of that aggravation, it is reasonable to refuse restoration;
(4) that in this case there are aggravating circumstances in that it is UKBA’s position that the Appellants, certainly in the case of Mrs. Moira Harte, initially claimed when she was interviewed that she was a non-smoker, but that in subsequent correspondence claimed to be a “heavy smoker” – in support of the “own use” argument;
(5) that where there is a monetary benefit or benefit in kind which is to a value greater than the cost price (ie. the purchase price of the Goods alone) that that a transaction will be considered smuggling for “profit”;
(6) that on the facts of this case, the Appellants made the trip solely to purchase the Goods, they were financed by others, and in each case they were receiving, over a combination of flights, expenses etc., an amount greater than the cost price for the Goods;
(7) that therefore there was a “profit” and that applying the UKBA’s policy the Goods should not normally be restored;
(8) that non-restoration is fair, reasonable and proportionate in the circumstances.
25. Section 139(1) of CEMA provides:
“Anything liable to forfeiture under the Customs and Excise Acts may be seized or detained by an officer or constable, or any member of Her Majesty’s Armed Forces or Coast Guard.”
26. It is accepted law that where items are subject to forfeiture, then if the legality of the seizure is to be challenged, then that action lies solely to the Magistrates Court – see HMRC v Jones [2011] EWCA Civ 824.
28. What does come before this Tribunal is HMRC’s decision not to restore.
29. Section 152 of CEMA establishes that:
“The Commissioners may, as they see fit …
(b) restore subject to such conditions (if any) as they think proper, anything forfeited or seized under the Custom & Excise Acts.”
32. Section 16(4) of the Finance Act 1994 provides as follows:
“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 appeal under this Section shall be confined to a power, where the Tribunal are satisfied that the Commissioners or other persons making that decision could not reasonably have arrived at it, to do one or more of the following.”
37. Primarily the reasons which brought him to his decision appear to be as follows:
(1) that where goods are bought and the person who transports them receives money, then that is seen as a commercial transaction;
(2) that where there is a profit (ie. anything over and above the actual cost of the products) that any such transaction is seen as falling within the category of “aggravating circumstances” in terms of the UKBA policy on restoration;
(3) that on the evidence of the Appellants, there was clearly a divergence between the original information provided to the interviewing officer where, for example, Mrs. Harte indicated that she did not smoke, as compared to the paper submissions from the Appellants’ representatives where it was alleged that each of the Appellants were heavy smokers.