EXCISE DUTIES –Seizure of vehicle and trailer containing large quantity of smuggled cigarettes – whether terms of Respondents offer to restore vehicle and trailer reasonable

LONDON TRIBUNAL CENTRE

	EURO LOGISTICS 2000 LIMITED	Appellant

	- and -

	THE COMMISSIONERS OF CUSTOMS AND EXCISE	Respondents

				Tribunal:	Peter H Lawson (Chairman)
					 	Richard D Corke FCA

Sitting in public in Bristol on 29 April 2003

Mr D J Payne, VAT Consultant, for the Appellant

Sarabjit Singh, Counsel, for the Respondents

© CROWN COPYRIGHT 2003

DECISION

1.	This is an appeal by Euro Logistics 2000 Limited (“Euro Logistics”) against a decision made by a letter dated 23 July 2002 in which the Commissioners notified the Appellant that they upheld, on review, the decision to offer restoration of a vehicle, registration number N75 DYG and trailer upon payment of a restoration fee of £14,150.  The sole issue in the appeal is the reasonableness of the Commissioners' decision.
2.	The legislative background is that s.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) or they think proper, anything forfeited or seized …”

By s.14(2) of the Finance Act 1994 a person affected by a decision of the Commissioners, which includes a decision under s.152(b), may require it to be reviewed.

The Tribunal’s jurisdiction is contained in s.16 of the Finance Act 1994 which applies to matters contained in Schedule 5 including decisions on restoration.
S.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, as 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 …”

In relation to the issue of reasonableness guidance was given by Lord Lane in Commissioners of Customs and Excise v J H Corbitt (Numismatists) Limited [1980] STC 231 at 239 that the tribunal can only properly review the Commissioners’ decision “if it were shown that the Commissioners had acted in a way in which no reasonable panel of Commissioners could have acted; if they had taken into account some irrelevant matter or had disregarded something to which they should have given weight.”

It is a strict test and, as Lord Lowry said in R v Secretary of State for the Home Department Ex parte Brind [1991] 1 AC 696 at 765: “ … it is not enough if a judge feels able to say, like a juror or like a dissenting member of Cabinet or fellow councillor, ‘I think that is unreasonable: that is not what I would have done’.  A less emotive but, subject to one qualification, reliable test is to ask, ‘could a decision maker acting reasonably have reached this decision?’.  The qualification is that the supervising court must bear in mind that it is not sitting on appeal but satisfying itself as to whether the decision-maker has acted within the bounds of his discretion.”
3.	Except as mentioned below, there was no dispute about the facts of this case.
4.	The Commissioners’ Statement of Case sets out the factual background based on tape recorded interviews with Mr James Leonard Tyler and Mr David Paul Layne.  In paragraph 1 it starts by saying that Mr Tyler was the owner and keeper of a Ford Volvo Globetrotter vehicle, registration number N75 DYG.  It is not material to this Decision but in fact we believe that Mr Tyler was the general manager of Euro Logistics.  In the course of the interview referred to below, Mr Tyler said that he operated two businesses, Barnwood Car & Commercial and Euro Logistics; Barnwood carried out all the repairs and maintenance of the vehicles and the vehicles were hired by Barnwood to Euro Logistics.  My Tyler also stated in a letter dated 13 March 2002 addressed to the Queens Warehouse Keeper that his company Barnwood was the owner of the Globetrotter vehicle N75 DYG which was on hire to Euro Logistics.
5.	Paragraphs 2 to 16 of the Statement set out the factual part of the review letter as follows:

"2.  On Saturday 9th March 2002, at approximately 1950 hours, the vehicle was intercepted by Officers of Customs and Excise at the freight terminal, Eastern Docks, Dover.  The driver of the vehicle was David Paul Layne.

3.  In response to initial questions, Mr Layne stated that he was carrying speakers to Gloucester, which he had collected from Austria.  He was present when the goods were loaded, and he had not previously collected goods from that particular depot in Austria.

4.  Mr Layne handed the Officer questioning him a CMR document for the load, and his passport.  Mr Layne stated that the load was not sealed, and that the trailer had been opened in France by French officials who were checking for immigrants.

5.  Mr Layne confirmed that he was aware of the prohibitions and restrictions on importing goods such as firearms and drugs.  When asked whether he had any excise goods, Mr Layne stated that he had 100 pouches of tobacco, 11 sleeves of cigarettes and 1 crate of beer.

6.  The vehicle was taken to an examination bay, where excise goods were found in the cab.  The trailer contained 11 shrink-wrapped and banded pallets of audio speakers.  When the speakers were examined, 1,389,100 cigarettes were found, with an excise duty value of £191,251.29.

7.  As the cigarettes were concealed, the excise goods were seized together with the vehicle and trailer.  The excise goods found in the vehicle cab belonging to Mr Layne were also seized.

8.  My Layne was arrested on suspicion of being involved in the evasion of duty and tax on excise goods, and was given a formal criminal caution.  He was interviewed the following morning, on Sunday 10th March 2002, in the presence of his solicitor, Mr M Hewitt.

9.  Mr Layne supplied the following information in response to questioning:

a)  He did not put the cigarettes into the speakers, and did not see the cigarettes placed in the speakers.  He was not aware that the speakers contained cigarettes.

b)  He was employed by Euro Logistics in Gloucester.  He had worked for them for approximately 8 years.  The cab and trailer were owned by Euro Logistics.

c)  He made regular trips to France, Belgium, Holland and Germany and carried goods such as frozen chips, cornettos, yoghurt, wood and car bumpers.  He did regular refrigerated work for Solstor, South London Storage.

d)  In relation to the present trip, Mr Tyler had telephoned him on Tuesday night, when he was coming back from Germany with a load of yoghurt that he was taking to Redditch.  Mr Tyler told him that he had a trip for him to Austria, that he was waiting for the fax details and would arrange for someone to meet him en route to exchange trailers.

e)  When he returned to the UK on Tuesday, he exchanged trailers at Reading Services.  He dropped the load of yoghurt, picked up an empty trailer and returned to Dover.

f)  Mr Tyler gave him instructions to collect 11 pallets of electrical goods in Austria.  He thought he had received two faxes – one gave the address for collection, and the other gave him directions.

g)  The faxes, which were shown to him during the interview and stated that he was to pick up 11 pallets of different goods from Global Logistics in Vienna which were destined for DES Electrical in Gloucester, were given to him by the driver he exchanged trailers with at Reading, whose name was Martin.  He was also given a partially completed CMR document.

h)  He received another CMR document when he collected the load in Austria.  The Appellant had given him £500 in cash so he could pay for the ferry crossing, which was handed to him by Martin when the trailers were exchanged at Reading.

i)  The trip was different because he was going to Austria with an empty load.  The Appellant told him that the client was paying for the round trip.

j)  In relation to the outbound trip to Austria, he arrived at Dover on the evening of Wednesday 6th March 2002.  He paid cash of £470 for the ferry ticket.  He travelled from Dover to Calais at approximately 2115 hours.

k)  He used maps in the interview to detail the route he travelled from Calais to Austria and the stops he made.  He purchased his own cigarettes and tobacco en route in Luxembourg.

l)  He arrived at the premises of Global Logistics near Vienna on the morning of Friday 8th March.  he met a man with a foreign accent who spoke good English, who did not give him his name.

m)  He was directed to a loading bay by this man, where a CMR form was completed by a person unknown and signed by him (Mr Layne).

n)  It took approximately half an hour to load the trailer.  When the loading began, he went for a coffee break.  Upon his return, two-thirds of the pallets had been loaded onto the trailer.  He then watched the loading continue.  During the loading, he went into the trailer to check that the pallets were secure.  He pushed some pallets to make sure they did not rock or move.

o)  The 11 pallets amount to about half a load.  The pallets were shrink-wrapped and banded and he did not look at the speakers.  He secured the trailer with a padlock.

p)  In addition to the CMR form he was given a Global Logistics loading list/invoice, which showed the name DES Electric in Bristol.  He understood this to be the delivery point.  He left the depot between 1430 and 1445 hours on Friday 8th March.

q)  He used maps during the interview to indicated his journey back to the UK along with the stops he made.  He stopped overnight on Friday at motorway services on the E40 in Germany.  On his way back he purchased a case of beer and two packs of washing powder at a store called Pidou's in France.

r)  He caught a ferry from Calais back to Dover on the afternoon of Saturday 9th March.  During his trip back, he telephoned the Appellant to advise him which ferry he was catching and to make arrangements for unloading.  The Appellant wanted him to drop the trailer at the yard in Gloucester.  He planned to get back to the yard at about midnight.  He had a key for the gate.

s)  For security reasons, he was going to park the trailer in a yard belonging to Cheltenham Servicing next door to Euro Logistics.  Mr Tyler rented this yard, and he would have to telephone and meet Mr Tyler there in order to open the gates and deal with the alarms.  He expected to drop the trailer at the yard and take the vehicle away.  He then expected to go home and have a break.

t)  When questioned about a receipt for tobacco products dated 7th March from BP Luxembourg SA showing Superkings, Embassy, Old Holborn and Golden Virginia totalling 762 euros, he said that it was a receipt for the goods in his cab.

u)  He thought he knew that the guide level for cigarettes was 800.  He usually brought back 15 to 20 sleeves of cigarettes.  He was aware that UK duty was payable on cigarettes and tobacco brought into the UK, but only if a person was selling them, which he was not doing.  He was a smoker.

v)  The first he knew of the cigarettes in the trailer was when Customs had shown him an open speaker containing cigarettes the previous night.  Nobody had forced him to take the load and no threats had been made against him.

w)  He lived in a rented flat.  He detailed the rent he paid for this accommodation.  He earned about £350 per week, which was paid in cash.

x)  He confirmed that it was not normal for the CMR to be half completed.

10.  Mr Tyler was first interviewed on Thursday 14th March 2002 between 1248 and 1332 hours, in the presence of his solicitor.

11.  Following a formal criminal caution, Mr Tyler supplied the following information in response to questioning:

a)  In relation to the collection of the load in Austria, he received a telephone call from Mr Woodward of Hillcourt Transport towards the end of the previous week.  Mr Woodward had previously called him several weeks earlier asking him if he was interested in any continental work that Hillcourt Transport could not handle.  He told Mr Woodward that he was interested and could give him a price at any time.  The first job Mr Woodward asked him about was in Germany, but it fell through.

b)  When Mr Woodward called at the beginning of March, Mr Woodward told him that his customer had a load in Vienna and wanted a price for the haulage.  He quoted Mr Woodward £1,300 if he had enough notice and could get a back load, and he also thought he told Mr Woodward that the ferry cost would be extra.

c)  Mr Woodward then called him on Monday or Tuesday (4th or 5th March) and told him the job was on and the load could be picked up on Thursday.  He told Mr Woodward that he could not collect the load because of the short notice, as he did not have a lorry in Germany that could be sent to Austria.  He told Mr Woodward that the only way he could do the job was if Mr Woodward paid the round trip rate of £2,300.

d)  Mr Woodward contacted him on Tuesday afternoon and confirmed that the customer was willing to pay this price.  He asked Mr Woodward to fax details of the trip and he would then dispatch a driver.  He then decided to send an empty trailer from the yard and give the job to Mr Layne, who was one of his more reliable members of staff.

e)  He received a hand written fax from Mr Woodward, which was shown to him by the interviewing Officer and stated "Page 1 of 2".  He did not think there was a second page to the fax.

f)  He prepared a set of CMR's from the fax, which were placed along with the fax from Hillcourt Transport and £500 cash for the ferry fare in an envelope for Mr Layne.

g)  He had partially completed the CMR, which was shown to him by the interviewing Officer as CMR number 1476942, because he had left spaces for Global Logistics to complete, as he did not know how many pallets there would be in the load.

h)  The delivery address on the CMR was DES Electrical Trade Centre, Bristol Road, Gloucester, which he took from another unidentified document.

i)  He gave the envelope to another of his drivers, Martin Farrell, and instructed him to meet Mr Layne at Reading Services and exchange trailers with him.  Mr Farrell left to do this on the morning of Wednesday 6th March.  Mr Layne was travelling back from Germany with a load of yoghurt, which he would exchange with Mr Farrell's empty trailer at Reading, and then Mr Farrell would complete the delivery of the yoghurt.

j)  He called Mr Layne on the works mobile telephone on Tuesday 5th March to inform him of the job.  He could not send the lorry anywhere until he received a fax from Hillcourt.

k)  Mr Layne and Mr Farrell swapped trailers at Reading.  He had to give Mr Layne cash for the ferry fare because he had a problem with P & O accounts in Dover, as an earlier cheque he used had not cleared and he had to pay on a cash account basis.

l)  Mr Layne departed for Austria with an empty trailer.  He called Mr Layne at approximately 0930 hours on Friday 8th March to check his progress, and Mr Layne told him that he was about 2 ½ hours away from the pick up address.

m)  At midday on Friday, he was informed by someone at Hillcourt that the pick up address in Austria was closed at 1pm British time.  As he was not aware of this, he called Mr Layne to inform him of this fact.  Mr Layne called him shortly afterwards to say that he had arrived and that the goods were being loaded.

n)  Later, Mr Layne called him again, informed him that the load was a set of expensive speakers, and asked where he could put the speakers over the weekend.  He told Mr Layne that the speakers could be put in the yard or the yard next door and he would contact Hillcourt to see if he could deliver the load on a Sunday.

o)  The yard next door to his had security beams and he had an arrangement with the owner allowing him to use it.  Mr Layne called him on the morning of Saturday 9th March, and informed him that he expected to be in the UK at 2330 hours.  He arranged for Mr Layne to call him when he disembarked from the ferry, which would give him four hours notice of Mr Layne's arrival at the yard.  He would then consider possible delivery over the weekend.

p) Hillcourt Transport would pay him for the haulage.  He had no contact with DES Electrical and did not know them.  He was to deliver the goods to DES.  The arrangement was that he would give Hillcourt an invoice and would be paid one day after delivery.

q) He received a fax on Monday 11th March from Hillcourt Transport of 2 Bogworth Villas which stated that the load was 11 pallets and had to be collected by 1pm.  He did not understand the fax because the load had already been seized.  He tried unsuccessfully to contact Hillcourt by telephone.  He then sent Hillcourt a fax, which he produced during the interview, stating:

”Fax from Euro Logistics for the attention of Mr Woodward dated 11th March 2002 – Re load ex Austria, please contact me urgently, we cannot deliver as instruction.  I suspect we’ve been conned as goods were stuffed with contraband.  Customs have seized my vehicle trailer and the load and driver was detained 16 hours, I’ve tried phoning without success. Regards Jim Tyler.”

r)  In response to this fax, Steve Woodward called him later on Monday 11th March 2002.  He explained the position to Mr Woodward, told him that he had been unable to contact DES, and asked him to look into matters at his end.  Mr Woodward called him again later that Monday stating that the number for DES was unobtainable, and that he was going down to see them or had been down to see them, to find a man called Stuart.

s)  He had no further contact with Mr Woodward, and was sure that the date of his last contact with Mr Woodward was Monday 11th March.

t)  In relation to his previous dealings with Mr Woodward, a while ago Mr Woodward had asked him to repair the clutch for a lorry Mr Woodward intended to buy.  He had bought the clutch, but then Mr Woodward did not buy the lorry and so he was stuck with the clutch.  He had known of Mr Woodward for two years but he did not in fact know him.

u)  In relation to the way his business operated, he did not have any regular contacts and worked on an ad hoc basis, although he did do regular work for a fridge company called Solstar who covered northern Europe and Spain.  He had 4 or 5 regular drivers and some casual drivers.  He would have liked to charge £1.20 per mile as his haulage rate, but the business was competitive and so he often only achieved £1 per mile.  The business had a court judgment pending and he had a problem with the bank.

v)  He operated two businesses – Barnwood Car and Commercial, and Euro Logistics.  Barnwood carried out all the repairs and maintenance of the vehicles, and the vehicles were hired by Barnwood to Euro Logistics.

w)  He intended to ring Hillcourt first thing on Monday 11th March to arrange a book-in time for delivery to DES Electrical.  He thought he received the delivery address for DES on the second page of the fax he received from Hillcourt.  He wrote the address on the CMR and threw away page 2 of the fax.  He had never heard of Global Logistics prior to this trip.

x)  Mr Woodward was about 30ish, with a big nose and blondish hair.  He came from the Forest of Dean and had a sort of medium build.

12.  Mr Tyler was interviewed again on the same day between 1432 and 1455 hours.  His solicitor was present throughout, and he was reminded that he was still under caution.

13.  Mr Tyler supplied the following information in response to questioning:

a)  He would not carry out any checks such as company checks before accepting a haulage job, but would accept these jobs without such checks, as it “May be foolhardy but it is relative standard practice … not industry wise perhaps.”

b)  If he was potentially doing a lot of work with large amounts of money, then he might well carry out a credit check.

c)  When asked what instructions he gave to drivers about the security of loads, he stated that “I consider my drivers to be suitably professional in the stowing of loads and the protection of loads for getting them in and out of the country in good order.”

d)  His drivers were responsible for the loads, although he advised his drivers on immigrants as they were a serious problem.

e)  He intended to invoice Hillcourt Transport for the job and he had the invoice address.  Either he would call on Mr Woodward for payment or Mr Woodward would call on him.  No specific arrangement had been made.  He still intended to invoice Hillcourt Transport for the job.

14.  Following the interviews with Mr Tyler and Mr Layne, it was decided that no criminal proceedings would be instituted against them.

15.. By letter dated 23rd May 2002, the Respondents wrote to the Appellant’s business and informed the Appellant that the vehicle and trailer would be restored to him upon payment of a restoration fee in the sum of £14,150.  The Appellant sought a review of this decision, by letter dated 31st May 2002.

16.  On 23rd July 2002, the Respondents wrote to the Appellant and notified him that a formal review of the decision had taken place, which upheld the original decision to restore the vehicle and trailer to the Appellant upon payment of a restoration fee of £14,150.”
6.	The author of the Review letter was Mr Gordon A Murray.  After reciting the facts the letter went on to set out the relevant legislation, namely:

s.49 Customs and Excise Management Act “CEMA”) – forfeiture of goods improperly imported
s.139 CEMA – provisions as to detention, seizure and condemnation of goods etc
s.141 CEMA – forfeiture of ships etc used in connection with goods liable to forfeiture
s.152 CEMA – Power of Commissioners to mitigate penalties etc
Restoration policy HGV Seizure and Restoration Policy.
The Commissioners’ policy concerning the restoration of heavy goods vehicles (HGV) is designed to rigorously tackle cross border smuggling and significantly disrupt the supply of excise goods to the illicit market.  The current policy has been effective since 16th July 2001.

(1)  Where the Commissioners cannot be satisfied that the driver or haulier are not knowingly involved in smuggling excise goods and the revenue is significant, on the first detection the vehicle may be seized and not restored.

(2)  Where the Commissioners are not satisfied that the driver or haulier has carried out what Customs consider to be basic reasonable checks, which would have identified the illicit load, on the first occasion the vehicle may be seized and restoration offered for a fee equal to 20% of the revenue involved or the trade value of the vehicle, which ever is lower.  On the second detection, the vehicle may be seized and not restored.

NB ‘vehicle’ in the above policy should also be read to include the trailer.

Consideration

Firstly, I should explain how the restoration fee of £14,150 was calculated.  The Post Seizure Unit applied the restoration policy for freight vehicles at paragraph 2 above.  They considered that basic reasonable checks had not been carried out which would have identified the illicit load of cigarettes.  A total of nearly 1.4 million cigarettes were seized with a total of £191,251.29 due in UK duty.  From paragraph 2 of the policy above 20% of the sum £191,251.29 yields £38,250.25.  From the information you provided Customs valued the Volvo Globetrotter tractor unit and 3 axle fridge trailer at £14,150.  The value £14,150 is less than 20% of the UK duty on the cigarettes and this lower value of the vehicle and trailer was set as the amount of the restoration fee.

Before considering the matter of the restoration fee for the Volvo vehicle and trailer I have firstly examined whether or not these items were appropriately seized in the first instance.

It seems abundantly clear from the evidence detailed above that the cigarettes were found inside the audio speakers within the trailer.  I consider this strong evidence of deliberate concealment and thereby the cigarettes were liable to forfeiture under the provisions of Section 49(1)(f) to the Customs and Excise Management Act 1979.  The cigarettes were concealed/packed in a manner for the purposes of deceiving Customs.  I consider that the cigarettes were properly seized as liable to forfeiture under the provisions of Section 139 of the Customs and Excise Management Act 1979.  With regard to the Volvo tractor unit and trailer used to transport the excise goods I consider that they were liable to forfeiture under the provisions of Section 141(1) of the same Act and appropriately seized under Section 139.

Determination of the issue in this case concerns the question of whether the driver of you carried out what Customs consider to be basic reasonable checks on the load.

With regard to the driver, Mr D P Layne, I consider from his evidence that for him it was not a usual load,; it appears that he did not do regular trips to Austria, he did not normally pick up electrical goods and he had not previously been to the premises of Global Logistics.  It also appears that it would not be normal for him to travel over to the continent with an empty trailer.  Customs view is that in such circumstances the driver should check that the load conforms to the available paperwork, this to include checking a reasonable sample of the goods.  It is evident that Mr Layne was present when the pallets of speakers were loaded, I consider that it was encumbent upon him as part of his reasonable checks to have examined the speakers (a small number).  Clearly he did not examine the speakers and I consider that he did not carry out an expected basic reasonable check.

With regard to yourself, it is evident from your interview that you had not previously carried out sub-contract haulier work for Mr Woodward and Hillcourt Transport.  From the evidence it appears that you were somewhat unclear as to where the load should be delivered and when, further, it appears that there were no written contracts between you and Hillcourt Transport in relation to the load.  In such circumstances a reasonable check would be to contact DES Electrical to verify that they were expecting the goods and confirm the delivery address.  From the interview it appears that when you received the fax from Hillcourt Transport and agreed to do the work you did not know precisely what the goods were, nor did you know the quantity.  Taking everything into account I consider that you did not take reasonable steps to establish the credibility of the load being carried and the destination, particularly since this was the first time you had worked for Hillcourt Transport.

I am of the view in this case that both you and your driver did not carry out the basic reasonable checks expected.  I therefore concur with the imposition of the restoration fee in the sum of £14,150.  The restoration fee set is properly in accordance with Customs restoration policy for freight vehicles.”
7.	Oral evidence was given before us by Mr Tyler and Mr Layne.  Mr Payne asked Mr Tyler what would be the usual procedure for arranging the international carriage of goods by road.  Mr Tyler stated that arrangements were now usually made by fax.  Hauliers would not expect anything more with wines and spirits, cigarettes or tobacco.  In this case nothing was out of the ordinary.  It would have been unethical for him to contact the clients of the principal contractor.  Indeed, he had no right to check with the principal.  There was nothing suspicious in the arrangements at all.  Initially, there was a phone call and that was followed up by a fax.
8.	We were provided with a copy of a fax which was headed 
“Hillcourt Transport Limited
Nationwide and European Distribution
Groupage Specialist
Address: 2 Blockworth Villas, Cirencester Road, Cirencester, Blockworth Glos GL3 4PM
Tel/Fax No: and a Mobile No.”
9.	The fax was for the attention of Mr J Tyler, Euro Logistics 2000 Limited, and the contact name was said to be S Woodward, Hillcourt Limited, address as above.
10.	The text read 
“ref telephone conversation
collection of 11 pallets of electric products (tanks) from Austria and delivered to Gloucester
DES Electric Supplies, 52/54 Bristol Road, Gloucester
Many thanks" (and a signature which was not very legible but could be S Woodward).
11.	There was also a copy of a fax headed “DES Trade Centres, Inc VL Lighting Solutions, 52/54 Bristol Road, Gloucester GL1 5SD addressed for the attention of Hillcourt Transport.  The message was “With reference to our telephone conversation for the collection of 11 pallets of electrical goods from Austria, the said price is £3,000 plus VAT.  Please would you contact me on the delivery time.  My contact number is 01452 790646.  Regards Stuart
For the attention of Mr McKenzie – Please could you contact me on receiving this fax.  Many thanks.  Mr Steve Woodward”.
12.	Mr Tyler said that he had no right to contact clients of the principal contractor.  The instructions came from Hillcourt, not DES.  Nothing was suspicious at all.  Their contact was initially by phone and followed up by fax.  The only question raised by Hillcourt was related to the fact that the trip could only be a round trip requiring an empty outgoing trailer and they said they would pay.  No cash payment was offered and Hillcourt agreed to pay within 14 days of invoice.
13.	Mr Tyler had no reason, or right, to contact DES.  As a haulier he just does what he is instructed to do.  There were no exceptional rates for the job.  If rates are higher then this indicates something illicit.
14.	He went on to say that the driver’s responsibility is the safety of the load and the vehicle.  Tampering with either may be an indication of theft.  All the driver needed to do was to see that the goods were properly stowed.
15.	There was nothing to give rise to a suspicion that all was not in order.
16.	Mr Tyler’s only previous contact with Mr Woodward was in connection with a damaged clutch for a vehicle and Mr Tyler obtained this for the vehicle in question but Mr Woodward never turned up.  This was the reason why he asked for 50% payment for the trip to Austria up front.
17.	Mr Singh asked Mr Tyler if there were any unusual aspects of the transaction and Mr Tyler said not.  Both Mr Woodward and DES Electric Supplies were new customers.  The destination, Vienna, was quite clear.  He did not know DES as a customer and he did not know the identity or the quantity of the goods except that they were electrical.  The CMR document was not his responsibility.  It stated that the goods were speakers.  He did not agree that drivers should check the goods carried.  No haulier would have stripped down the speakers to examine the contents.
18.	The CMR, Mr Tyler explained, is a recognised international delivery note.  There are four copies, of which one is kept by the Sender (in this case the Austrian sender); the centre box in the form is signed by the driver.  The second copy goes to the Consignee, and the third and fourth copies would go to the Hauliers, so that the third in this case would have gone to Hillcourt.  Any fault in the CMR entitles the consignor not to pay.
19.	Mr Tyler said that he had made no contact with DES and he had no reason to do so.  The consignee was not his customer.  He said that Hillcourt might think Euro Logistics was trying to get the trade.
20.	Mr Tyler admitted that he was now more aware of possible risks and where he might be vulnerable.  He would now make more checks than he had previously thought necessary.  Mr Woodward was not a dubious character; he was a local resident.  If Mr Woodward had not paid he, Mr Tyler, would have made credit checks etc.  On the whole, he tries to avoid new customers and prefers to work with people he knows.  Asked by Mr Singh how often he did a one way load, he said there are always goods which have to be brought into the UK.  It is more common for a vehicle to leave the UK empty but it is very unusual to enter the UK empty.
21.	Mr David Layne also gave evidence before us.  He has been a fulltime lorry driver for five years.  Mr Tyler had phoned him regarding a journey to Austria.  He had been on the way back from Germany.  He met the driver at Reading and dealt with all the paperwork and two faxes.  One of the faxes gave him the address in Austria and the other had details of how to get there.  He thought it was odd leaving the UK empty.  He arrived about 3 pm in Vienna and Euro Logistics wanted to know how far he had got.  He saw the speakers being brought out of a warehouse.  They were very large.  He walked to the back of the trailer and checked that they would not fall over.  It was a straightforward load, as far as he was concerned.  It was his responsibility to ensure that the load was safe for travelling.  He was not allowed to open up the load.  There was a padlock on the back and there were no reasons for him to tamper with the load or open up the boxes which were banded to the pallets.  They were in Vienna for about one hour or 75 minutes.  He signed the CMR and drove back to the UK.  He was stopped by German police between Cologne and Frankfurt for a tacho check.  There was no problem and he went on his way.
22.	The delivery instructions were to Bristol Road, Gloucester but he was pulled over at Dover.  There was a problem with the scanner and so the lorry was examined in the bay.  He said that a female Customs Officer had tried to dismantle one of the speakers.  It took between 30 – 45 minutes.  Cigarettes were found concealed in the speakers and he was placed under arrest.  He asked to see the cigarettes and saw they were SuperKings.
23.	Except for the fact that there was only half a load, there was nothing special or unusual as far as he was concerned.
24.	In response to Mr Singh, Mr Layne agreed that he did not make regular trips to Austria and his usual load was yoghurts, pallets and car bumpers but not electrical goods though he had carried car headlights in the past.  The exchange of trailers at Reading was quite normal.  He works in Europe all the time and thus does not get to meet UK drivers.
25.	The trailer was empty when he took over.  It was impossible for him to check the goods.  His only responsibility is to ensure that the goods are properly loaded.  There were 11 pallets and this is slightly less than one half of a full load.  Mr Tyler had given him no instructions to check the load.  He had no reason to check or open the speakers himself.  He is only a driver.  He saw the last four or five pallets loaded.  The eleven pallets conformed with the CMR.  He did not think it suspicious that he should go to the Continent to pick up only half a load of eleven pallets.  He disagreed that there was anything likely to give rise to suspicion.  The weight was not noticeable.  If there is not a full load, he would make sure that the pallets were secure.  There was nothing unusual about the load and he had no reason to doubt what was inside.  He received no instructions contrary to those which he had already received.
26.	Mr Singh, for the Commissioners, called Mr Paul Weaver as a witness.  He is a Detection Officer who works in Dover and his job is to intercept lorries.  He intercepted Mr Layne.  He did not open the speakers but was present when they were opened.  They were of poor quality and very heavy.  It took two officers to lift one speaker.  They had handles.  They could be drilled from the back in order to remove the screws inside the handles.  There had been no grounds to suspect this load and no prior information had been received.  The seizure itself has not been challenged.
27.	Mr Peter James Norley, who was the leading interview officer in this case, also gave evidence.  He accepted that there was nothing to connect Mr Layne with smuggling and he had no concerns about Mr Tyler.
28.	Mr Ian Ross McKenzie was another Case Officer in this case.  He was also present at the interview with Mr Tyler which was tape recorded.  He had no doubts about Mr Tyler.  He had looked for Mr Woodward without success and also DES.  Mr Woodward had had a mobile number but it was a "pay as you go" phone and no trace could be found of it.  It was not clear whether the address given by Mr Woodward was followed up.  He himself was only concerned with criminal proceedings.  He had tried to contact Mr Woodward who refused to take calls and gave a false address.  Hillcourt Limited was Mr Woodward's company.
29.	Mr Gordon Arthur Murray, the Review Officer, made a Witness Statement and also gave oral evidence.
30.	Mr Murray was cross-examined by Mr Payne who pointed out that one of the objectives of the Commissioners' Policy was to protect the honest and innocent haulier who has taken all reasonable steps to protect the goods.  Mr Murray said they do restore vehicles in these circumstances free of charge.  Mr Murray suggested that Mr Tyler did not have clear instructions, but Mr Payne pointed out that the fax of 5 March showed in fact that Mr Tyler and Mr Layne had perfectly clear instructions.  With reference to Mr Layne's evidence, the goods were palleted and the speakers were shrink wrapped and there was nothing to show that anything was amiss.  Mr Layne was not under any obligation to check more than the number of pallets.  He was not entitled to, and did not check, the contents.  What would Mr Murray have expected Mr Layne to have done?  Mr Murray suggested that he could have opened one of the pallets but Mr Payne pointed out that he had no authority to open up the pallets at all.  All he could have done was to take the front or back off a pallet.  Mr Murray suggested that a driver should check that goods on board comply with the CMR.
31.	Mr Singh for the Commissioners said the Commissioners in this case reasonably took into account and applied their policy in relation to the restoration of heavy goods vehicles.  They considered all the facts and matters surrounding the seizure of the excise goods and the vehicle and to representations made by the Appellant.
32.	Mr Singh also submitted that the application of the policy in this case complied with the requirements of proportionality.  A fair balance was struck between the deterrence of smuggling and the protection of the Revenue on the one hand and the right to enjoyment of property under Article 1 of Protocol of the European Convention on Human Rights on the other hand.  This was not disputed by Mr Payne.
33.	Mr Singh submitted that in the present case, the Respondents reasonably concluded that both the driver and the Appellant failed to carry out basic reasonable checks that would have identified the illicit load.
34.	There was a particular onus, Mr Singh said, on Mr Layne to carry out basic reasonable checks, as both the load and the circumstances in which it was carried were so unusual.  Mr Layne did not make regular trips to Austria, nor did he normally collect electrical goods.  It was also unusual for him to travel over to the continent with an empty trailer.  Most important perhaps, Mr Layne had never previously been to the premises of Global Logistics, which made it even more important for him to carry out certain basic checks.
35.	Such basic checks would have been relatively straightforward for Mr Layne to carry out.  He should have checked that the load conformed to the available paperwork, which would have included checking a reasonable sample of the goods.  However, despite being present when the pallets of speakers were being loaded, Mr Layne failed to even check a small sample of the speakers.
36.	As in Mr Layne's case, Mr Singh said, there were a number of unusual aspects of this transaction that should have alerted the Appellant to the need for basic reasonable checks.  The Appellant had not previously carried out sub-contract haulier work for Mr Woodward and Hillcourt Transport, and there was no written contract between the Appellant and Hillcourt Transport in relation to the load.  The Appellant was also unclear as to where and when the load was to be delivered. When the Appellant received the fax from Hillcourt Transport and agreed to do the work, he did not know what the goods were, nor did he know the quantity of the goods involved.
37.	In these circumstances, at the very least the Appellant should have contacted DES Electrical, to verify that they were expecting the goods, to find out the nature of the load, and to confirm the delivery address.  There would have been nothing "unethical" or "impractical" about such basic checks, as alleged by the Appellant in his Notice of Appeal.
38.	In closing Mr Payne said that Mr Murray had tried to suggest that there was a degree of blameworthiness on the part of Mr Layne but he, Mr Payne, disagreed.  In his view, neither Mr Tyler nor Mr Layne did anything wrong.  In particular, it is not suspicious to leave the UK with an empty trailer.  There was no inaccuracy.  There were eleven pallets of electrical goods.  Mr Payne pointed out that any criminal investigation would have shown that Mr Layne and Mr Tyler were entirely innocent.  The only sufferers here are Euro Logistics.
39.	Mr Tyler had carried out his normal commercial practice.  It would have been unethical to speak to Hillcourt's client direct.  Mr Layne had checked the paperwork.  He could not possibly have known there were cigarettes concealed in the speakers and the Customs Officers concerned have accepted that neither Mr Layne nor Mr Tyler were knowingly involved in smuggling.  Mr Tyler and Mr Layne had done all they were obliged to do and the option which should have been followed was to restore the vehicle and trailer without any charge or penalty.  
40.	In the present case, we consider that Mr Murray was acting unreasonably in making his decision, in particular that it was incumbent upon Mr Layne as part of his reasonable checks to have dismantled and examined the inside of the speakers.  As we have pointed out above, this was not only impracticable but it was beyond his responsibilities.  He could not in fact have opened the loudspeakers themselves because they were too heavy to move.  His responsibilities were confined to ensuring the safety of his load and that the goods he was to carry agreed with the CMR.
41.	Further,
(a)	it was not reasonable to say it was “not a usual load”.  Mr Layne had said that he had carried goods such as frozen chips, cornettos, yoghurt, wood and car bumpers.  The electrical goods, in fact speakers, were no more unusual than car bumpers.
(b)	it was not reasonable for Customs to expect the haulier to contact the main contractor’s customer.  We accept the evidence that this would have been regarded as unethical.
(c)	Nor was it reasonable to highlight the fact Mr Layne had not been to Austria before.  Vienna is no more unusual than any other destination on continental Europe.
(d)	To travel out with an empty trailer was Euro Logistics’ decision, not a requirement of the customer, and nothing suspicious should have been inferred from that.
42.	We agree that the driver should, as a reasonable basic check, ensure that the load conforms to his instructions and to the available paperwork.  This Mr Layne did.  He satisfied himself that his load was the required quantity of speakers.  In the absence of anything which clearly suggested something was amiss, which is not the case here, it is unreasonable for Customs to expect a driver to search out hidden contraband.  The load was credible, it was a consignment of speakers.  It is a very big step from this to suggest that the driver should have ascertained that speakers were in fact speakers concealing cigarettes.
43.	Mr Tyler and Mr Layne did all they were required to do and the Commissioners should have adopted the third option, i.e. to restore the Volvo vehicle and trailer without charge or penalty.  Pursuant to our powers under s.16(4)(a) of the Finance Act 1994 we, therefore, direct that the Commissioners' decision shall cease to have effect so far as it requires a restoration fee of £14,150.
44.	The Appellant is entitled to its reasonable costs of the appeal and, if they cannot be agreed, it may apply to the Tribunal for directions.

PETER H LAWSON
CHAIRMAN

RELEASED:

LON/02/8230