Henderson v Customs & Excise [2003] UKVAT(Excise) E00519 (20 October 2003)

EXCISE DUTY —  appeal against Customs refusal to restore cigarettes seized on importation as for commercial purpose — on facts Customs decision not to restore held reasonable — appeal dismissed

MANCHESTER TRIBUNAL CENTRE

	WILLIAM ANTHONY HENDERSON	Appellant

	- and -

	THE COMMISSIONERS OF CUSTOMS AND EXCISE	Respondents

				Tribunal:	MR J D DEMACK   (Chairman)

Sitting in public in Newcastle upon Tyne on 19 July 2003

The Appellant in person

Mr Jonathan Cannan of counsel instructed by the Solicitor for the Customs and Excise for the Respondents

© CROWN COPYRIGHT 2003

DECISION

1.	Mr William Anthony Henderson appeals against a decision of the Commissioners of Customs and Excise on review by letter of 1 March 2001 not to restore 4000 cigarettes, 5 kilos of hand-rolling tobacco and 0.7 litres of brandy seized from him on 9 December 2000 in the following circumstances.

2.	Shortly before midnight on 9 December 2000, Mr Henderson returned to the UK from the continent by coach. The coach was stopped at Dover by Customs’ officers.  He was informally questioned.  He explained that he had been to Belgium and had bought cigarettes and tobacco most of which were for him, but were also for his invalid mother who was unable to travel, and for friends who had carried out work for him and would not accept payment for their work.  He claimed to know the guide levels (MILS) for importing cigarettes and tobacco, thinking them to be 800 cigarettes and 2 kilos of tobacco.  He also disclosed that he had travelled to Bruges on a Shearings coach on 17 November 2000 when he had brought back 1000 cigarettes, 10 pouches of Golden Virginia hand-rolling tobacco and 10 pouches of Drum tobacco (1 kilo in all).  He refused to sign the questioning officer’s notebook.

3.	Under the domestic legislation then in force, the officer required Mr Henderson to satisfy him that the excise goods were not held or to be used for a commercial purpose, and he was invited to be interviewed.  But he declined, saying that he would “write in” and plead his case. The officers then seized the excise goods.

4.	On 10 December 2000, Mr Henderson wrote to the Commissioners seeking restoration of the goods seized.  In his letter, he explained that prior to his visit to the continent he had called at ‘the Customs office’ and had spoken to ‘a supervisor’ explaining his personal circumstances, particularly those of his disabled mother (he said she had had both hips replaced, and suffered from angina).  He added that, “the tobacco I bought was to make some presents for my mother’s neighbours, not to be given in place of money.”

5.	Officer Marwood responded to his letter on 21 December 2000 recommending that the goods were not offered for restoration.

6.	By letter of 14 January 2001, Mr Henderson required the Commissioners to review Mr Marwood’s decision.  In his letter he continued to maintain that the goods were for his personal use and for gifts, and said that he had been to Belgium three times in 2000 “for goods for my own use, when I could have bought the same goods, albeit illegally, locally, without any chance of seizure.”

7.	The review was carried out by Mr McEntee, who responded to Mr Henderson by the letter of 1 March 2001.  Having considered all the facts, and set out the domestic legislation then in force, he explained Customs’ restoration policy as one of not restoring seized goods, except in exceptional circumstances.  Before considering whether the excise goods should be restored he first examined the circumstances to see whether they had been properly seized, and concluded that they had been.

8.	(We shall return to the matter of seizure later in our decision).

9.	Mr McEntee then went on to list the matters he had taken into account in reaching his decision.  First, he observed that Mr Henderson was seeking to import 5 times the quantity of both cigarettes and tobacco referred to in the then guide levels.  Secondly, he noted that Mr Henderson had decided not to avail himself of the opportunity to remain for interview, and had also refused to verify the officer’s account of events by declining to sign his notebook.  Next, he took account of the fact that Mr Henderson had spent an estimated £520 on 2 different brands of tobacco and 2 brands of cigarettes, treating the variety of purchases as indicative of their not all being for his own consumption.  Fourthly, Mr McEntee took account of the fact that Mr Henderson had not indicated whether his mother or others had provided money for him to buy the excise goods, whether a barter system was in operation for work carried out by friends, and what had happened to the excise goods he had bought but 20 days earlier.

10.	Mr McEntee observed that two matters militated against restoration of the goods:

(1)	they were deemed to be for a commercial purpose, and there was evidence that Mr Henderson knew what he was doing was wrong because he also knew there were guide levels for importing goods which he had exceeded by a significant margin; and 

(2)	that the application of the Commissioners’ policy treated him no more leniently or harshly than anyone else in his position.

Mr McEntee confirmed that Mr Henderson’s goods would not be restored.

11.	In his evidence to us , Mr Henderson said that he had travelled to the continent in December 1999 when he had imported 10 kilos of Drum tobacco and 2600 or 2800 cigarettes, and had satisfied Customs on being interviewed that the goods he had were for his own use, so that they had allowed him to proceed with them.  He also disclosed that he had made a coach trip to the continent in November 2000 when he had bought 1000 cigarettes, 10 pouches of Golden Virginia hand-rolling tobacco and 10 pouches of Drum tobacco.

12.	Mr Henderson gave other evidence which, coupled with the contents of his bank statements for November 2000 (which he sent to the Commissioners on 13 March 2001), clearly illustrates to us that his claim that the goods seized were for own use is not credible.   In the bank statement, Mr Henderson is shown as having made two credit card purchases from Jerry’s Cigar Bar Bruges on 21 November 2000, one for £371.52 and the other for £378.06.  He claimed that one or other of those purchases – he could not say which – related to purchases for himself, whilst the other related to a purchase he had made on behalf of a couple unknown to him, he having persuaded them to pay him in cash for their purchases, so that he might make a profit on the transaction.  We are unable to accept that there was any possibility of his making a profit on such a transaction : indeed, we go further, and say that we are not satisfied that Mr Henderson made a purchase for anyone other than himself.  We so say against a background of his own admission in evidence that Jerry’s Bar not merely invoiced in sterling, but also accepted English currency.  It also emerged in his cross-examination that the excise goods he claimed to have purchased for himself on the November trip would have cost approximately £160 at Belgium prices, so that, even ignoring one of his credit card purchases, he was required to account for the balance of over £200 on the other purchase.  In response to a question from the chairman, he said that Jerry’s Bar sold only tobacco, so that the remaining £200 could only have been spent on tobacco products.  (He later tried to retract his claim in that behalf, and said that Jerry’s Bar also sold chocolate, but when asked what chocolate products might have cost £200, he made no response).  We find, that Mr Henderson did purchase tobacco products to the value of approximately £370 on the second Jerry’s Bar invoice.  It follows that we also find that Mr Henderson purchased tobacco products to a total value of £750 in November 2000.

13.	The jurisdiction of the tribunal in this case is restricted to determining whether the decision of the Commissioners not to restore seized goods is one which no reasonable body of Commissioners could have made.  Just after we heard this case the Divisional Court gave judgment in the case of Regina (Hoverspeed Ltd and Others) v Customs and Excise Commissioners and held that the seizure of goods in circumstances where a person was stopped at random was invalid.  Subsequently, the Court of Appeal reversed that decision.  Meanwhile, we had held back the release of our decision.  We are now able to proceed to release it, both parties having indicated that they wish to make no further submissions in the light of the Hoverspeed judgments.

14.	In its judgment, the Court of Appeal confirmed that the burden of proving that excise goods were held or to be used for a commercial purpose rested on the Commissioners, and that the Excise Goods (Personal Reliefs) Order 1992, in reversing that burden, incorrectly implemented the EC Excise Directive 92/12.  The result was that the 1992 Order was revoked in December 1992 and replaced.  Consequently, there was a flaw in the procedure adopted by the Commissioners in this case.

15.	Mr Henderson admitted in evidence that his only income was disability benefit of £100 per week.  After paying his rent and other outgoings he claimed to be able to save some part of his income, and to have total savings of about £400.  We doubt both of  the claims, but find it unnecessary to take the matter further.

16.	In all the circumstances of this case, we consider Mr McEntee was entitled to look sceptically at his claim that some of his tobacco was intended for his mother, and some for friends for favours received.  Even based solely on Mr McEntee’s calculation that Mr Henderson had spent £520 on tobacco products on his 9 December 2000, in our judgment it was not unreasonable of him to decide that Mr Henderson’s goods should not be restored.

17.	The question then is : does the procedural flaw avail Mr Henderson anything?  We are quite satisfied that it does not.  In the instant case the Commissioners’ decision not to restore Mr Henderson’s goods would inevitably have been the same had there not been the procedural flaw (see John Dee Ltd v Customs and Excise Commissioners [1995] STC 941 at p.953).

18.	We hold that the Commissioners’ decision not to restore the goods was a reasonable one, and dismiss the appeal.

DAVID DEMACK
CHAIRMAN

RELEASED:

MAN/01/8040