EXCISE GOODS –seizure of tobacco products – non-restoration – appeal dismissed.

LONDON TRIBUNAL CENTRE

	TREVOR CHAPMAN	Appellant

	- and -

	THE COMMISSIONERS OF CUSTOMS AND EXCISE	Respondents

				Tribunal:	MR R BARLOW  (Chairman)
						MR BATTERSBY

Sitting in public in London on 31 July 2003

No appearance by the appellant.

Ms V Sloane of counsel instructed by the solicitor for the Customs and Excise for the respondents.

© CROWN COPYRIGHT 2003

DECISION

1.	The appellant appeals against a review decision made by the Commissioners contained in a letter dated 16 July 2002 by which they confirmed their earlier decision not to restore 1000 cigarettes and 2.5 kilograms of hand rolling tobacco seized from the appellant on 4 April 2002 at Portsmouth.

2.	This is the unanimous decision of the tribunal and it is that the appeal is dismissed.

3.	When the case was called on the appellant did not appear.  No communication had been received from him or from anyone acting on his behalf explaining his non-appearance or asking for an adjournment and so we decided to proceed in his absence under rule 26(2) of the Value Added Tax Tribunal Rules 1986.  

4.	Ms Sloane had asked us to dismiss the appeal summarily under rule 26(1) but we held that we had no jurisdiction to do so.  That rule clearly states that it applies when ‘no party’ appears and as Customs and Excise had appeared it had no application.  Ms Sloane pointed out that the rule states that the tribunal may dismiss an appeal or strike it out in such cases and that therefore the words ‘no party’ should be taken to refer to the appellant alone.  Apart from the fact that such a reading of the apparently clear words ‘no party’ would fly in the face of logic the answer to the point Ms Sloane made is that the tribunal may dismiss or strike out the appeal or an application where no party appears and it is therefore applicable to the Commissioners as respondents as well as the appellant, at least in cases where an application has been made by the Commissioners.  

5.	It may be that the rule ought to permit the tribunal to allow the appeal where no party appears but its wording is clear.  It may be that the rule was drafted as it was because at the time it was drafted the burden of proof always lay upon the appellant.  Now that some appeals relate to circumstances where the burden of proof lies upon the Commissioners it may be that the rule should be re-drafted to permit appeals to be allowed as well as dismissed but that makes no difference to its interpretation at present.

6.	Having decided to proceed in the appellant’s absence we heard evidence from Mr P Smurthwaite, customs officer, and Mr G Murray, who had carried out the review.  We also considered the documents in the respondents’ bundle and a print out from P&O Ferries records relating to previous trips made by the appellant.  Ms Sloane provided a very helpful skeleton argument.  

7.	The appellant had been stopped at Portsmouth by Mr Smurthwaite at 13.50 on 4 April 2002 and at the time he was openly carrying bags of the type supplied by P&O to passengers buying tobacco and drinks on its ferries.  The appellant had just disembarked from a ferry that had arrived from Le Havre.  Mr Smurthwaite, whom we found to be a straightforward, truthful and careful witness, said he could not now recall why Mr Chapman was stopped but it was probably because he was obviously carrying bags which showed that he was carrying excise goods.

8.	Mr Smuthwaite then interviewed the appellant.  He produced a notebook in which he had noted contemporaneously the initial part of the interview that he conducted with the appellant and in which he noted the later part soon after the questioning was completed.  The appellant had signed both parts of the note stating that he had read the notes and agreed with them.      

9.	In the absence of any evidence from the appellant those notes provide very good evidence of the circumstances of the appellant’s trip to France and his purchase of tobacco.  There are some discrepancies between what he said in interview and statements he made in correspondence subsequently.

10.	The facts as we find them to be are that Mr Chapman travelled to France on 3 April 2002 leaving Portsmouth at 22.15 and arriving in Le Havre at about 6.45 on 4 April.  He left Le Havre again about two hours later on the same ferry.  His tickets cost a total of £21 which included £6 for a reclining chair.  On eight other occasions in March 2002 he had made similar journeys, all leaving at 22.15 and returning on the return sailing arriving back in the UK about 13.00 the following day, i.e. having spent the night on the ferry and returning as soon as possible.  On those earlier occasions the total cost was either £12 or £13.50 and reclining chairs appear to have been provided without charge.

11.	Mr Chapman’s income is about £400 a month consisting of a pension and income support.  He thus spent about a quarter of his total income on ferry fares in the month or so before he was stopped by Customs and Excise.  He claimed, in interview, that he had not bought excise goods at all on his immediately previous trip and that he had made four trips in the last month.  In correspondence he stated that he had not made large purchases on any of the previous trips and implied that he had only purchased for his own consumption except on the day he was stopped.  On that occasion he said that the larger quantities he had purchased were for himself and relatives as gifts but that he had been able to buy more because he had received a loan from the Social Security office.

12.	Mr Chapman had sent to Customs and Excise a letter from the Department of Work and Pensions dated 19 March 2002 referring to a social fund payment of £282.08 which that department said it had told him ‘some time ago’ would have to be repaid and saying that the repayment would be made by deduction from his income support payments.  In correspondence Mr Chapman had said that he had just received the loan before the trip on 3 April and that he had not had the money available to him on his earlier trips because the cheque had not then cleared.  We reject that evidence because the letter dated 19 March 2002 makes it clear that the loan was paid to Mr Chapman some time before that date.  Social Fund payments under section 138 of the Social Security Contributions and Benefits Act 1992, which it appears the loan referred to was, are made for prescribed purposes and it is obvious that they do not include the purchase of excise goods as gifts.  The fact that the loan was for a specific amount makes it clear that it was for a specific purpose and we find that the evidence shows not only that the amount was paid well before Mr Chapman’s trip to France but also that it would have been spent well before that date (on whatever expenditure had given rise to the loan).  Accordingly the source of the payment for the tobacco purchased on 3 April is unexplained and difficult to reconcile with Mr Chapman’s income.

13.	We find that Mr Chapman’s stated consumption of tobacco and cigarettes when he was questioned was entirely untrue.  He stated that he smoked 120 self-rolled cigarettes a day and 20 manufactured cigarettes.  Apart from the level of consumption being plainly incredible it was then contradicted in correspondence when he sated that he smokes 42 self-rolled cigarettes a day.

14.	Mr Chapman stated that his reason for travelling to Le Havre was to get away from the maddening (sic) crowd.  This in itself is somewhat incredible especially in light of the fact that he also admitted to fewer visits than he had in fact made.

15.	These facts lead us to find that Mr Chapman had travelled on the ferry on 3rd/4th April specifically to buy tobacco and that it was not for his own consumption or as a gift for family and friends but that he had bought it to sell commercially.

16.	It follows that the Commissioners’ review decision was entirely reasonable and that the appeal will be dismissed.

17.	Ms Sloane applied for costs and, as the appellant had not attended, this is one of the categories of case in which the Commissioners’ usual practice of not seeking costs does not apply.  Ms Sloane asked us to assess the amount of costs that it would be reasonable to award and we award £250.  Clearly that figure will not fully reimburse Customs and Excise but this is not a case in which it would be reasonable to enter into a full assessment process and we consider it right to have some regard to the appellant’s likely ability to pay.      

R BARLOW
CHAIRMAN

RELEASED:

LON/02/8225