E00527

Excise Duty – importation of tobacco goods above guidelines – forfeiture of goods – whether refusal to restore reasonable –Gora – appeal dismissed.

MANCHESTER TRIBUNAL CENTRE

	DAWN HILL	Appellant

	- and -

	THE COMMISSIONERS OF CUSTOMS AND EXCISE	       Respondents

			Tribunal	Lady Mitting: (Chairman)
					 Mr J D Kippest 	

Sitting in public in Birmingham on Monday 8 September 2003

The Appellant in person

Mr J Puzey of counsel instructed by the Solicitor for the Customs and Excise for the Respondents	

© CROWN COPYRIGHT 2003.

DECISION
Background to the Appeal
1.	This is an appeal by Miss Dawn Hill against the Commissioners’ refusal to restore to her tobacco and cigarettes seized at Dover Hover port on 22 April 2001.  Miss Hill was a passenger in a vehicle owned by Miss Sharon Hickin, the partner of her brother Christopher Hill, who was also in the vehicle.  The vehicle was intercepted and following interviews with all three, the vehicle was seized together with 4.5 kg of hand rolling tobacco, 7,560 cigarettes and 0.7 litres of spirits.  A letter of request for restoration was received by the Commissioners on 26 April 2001 but was signed only by Mr Hill and Miss Hickin and was treated as a request for restoration of their goods only.  Restoration was refused.  
2.	All three instructed solicitors, Messrs Parkinson Wright, who wrote on behalf of all three to the Commissioners on 7 June 2001 seeking a review of the decision and also seeking to appeal against the seizure under Schedule 3 Customs and Excise Management Act 1979 (CEMA).  The time limit for seeking condemnation proceedings had already expired and the matter therefore proceeded as a review of the decision to refuse restoration.  Correspondence followed and by letter dated 15 August 2001, the Commissioners wrote to Messrs Parkinson Wright advising that no review had been carried out within the 45 day time limit and that the original decision not to restore had thus been deemed to have been upheld.  Notices of appeal to the Tribunal were then lodged by all three travellers.  It was then realised that in fact Miss Hill had at no time, in her own right, expressly requested restoration, the original request having been from her brother and his partner only.  Her solicitors thus formerly requested restoration which was considered and refused by Miss Tracey Wheeler by letter dated December 2001 (no date).  No request for a review of that decision was ever made but given that notices of appeal to the Tribunal had already been lodged, on Mr Puzey’s suggestion we are taking Miss Wheeler’s decision as the appeal decision.
3.	Miss Hill’s grounds of appeal were that the goods were for personal consumption only and that she had purchased in accordance with advice given to her by staff at Euro Tunnel.
4.	We heard oral evidence from Miss Hill and Miss Tracey Wheeler.

Evidence
5.	Miss Hill appeared in person and gave her evidence by reference to a statement prepared and submitted on her behalf by her solicitors.  Her case was that in April 2001 she travelled to France with her brother and his partner.  She told us that the purpose of the trip was for her brother and Miss Hickin to look at properties which they were contemplating buying.  She had not been abroad for some 20 years and decided to join them for the overnight trip.  They travelled on the 21st, through France and into Belgium staying in a bed and breakfast.  On the journey across Miss Hill bought a single packet of cigarettes and was told that she could buy and bring across as much tobacco as she wanted for her own use.  She was given similar advice on the return journey.  On the morning of the 22nd her brother looked at properties and as she knew he was going to buy some cigarettes she gave him £200 to buy some for her at the same time.  She left him to sort out the details of what to buy and to make the purchase as she did not understand currency issues.  She was primarily interested in cigarettes, not having had a lot of experience of hand rolling tobacco but as she was going to be off work for some time for an operation on her back she decided it would be cheaper to buy some tobacco and make her own cigarettes.  She smokes 15-20 cigarettes a day and has done for some 20 years.
6.	When the travellers were interviewed, initially they were interviewed together and Mr Hill, answering on behalf of all three said they had bought in 2,000 cigarettes each and 1.5 kg of tobacco each.  A few questions later this was amended to 2,200 cigarettes.  All three signed the officer’s note book at the foot of these questions and were then interviewed separately.
7.	In her interview, Miss Hill claimed ownership of 2,400 cigarettes and 1.5 kg of tobacco; estimated that the cigarettes and the tobacco would each last her 2 months; said she smoked 200 cigarettes a week and a pouch of hand rolling tobacco a week; one pouch of tobacco would last her a week and she could get 300 thin roll ups from a pouch and that she had given her brother £200 to make the purchase for her and he had some change from this.
8.	The seizing officer noted in his note book “no open pouch of tobacco smoking Benson and Hedges cigarettes on person.  No open pouches in the vehicle, ashtray clean”.  He gave as the reasons for the seizure:
1.	mislead officer on initial declaration;
2.	unreasonable consumption;
3.	economics of hand rolling tobacco unreasonable;
4.	no evidence of smoking hand rolling tobacco.
9.	In her oral evidence, Miss Hill sought to explain her answer of 300 roll ups from a pouch by saying that initially she had maintained she didn’t know how many she could get because she hadn’t done this a lot and hadn’t counted but the officer had insisted on an answer so she thought she would give “a silly answer to a silly question”. 
10.	Miss Wheeler had before her when she made her review the Commissioners’ guidance, the seizing officer’s notebook and the correspondence between Parkinson Wright and the Commissioners.  She refused restoration on much the same grounds as the original seizure had been made, namely that Miss Hill had not made a full declaration of the quantity of excise goods being carried; the officer had not been satisfied that the consumption rate was reasonable; there were inconsistencies within the interviews of the three travellers concerning previous trips and Miss Hill had carried no evidence that she was a smoker.
11.	Miss Wheeler concluded that the goods had been rightly seized in accordance with the departmental policy and there were no exceptional circumstances to justify a departure from this policy.  Miss Wheeler accepted in her evidence that the fourth ground had been incorrect in that she had understood that Miss Hill had carried no smoking materials on her at all but she now accepted that this had been a reference to tobacco and that in fact Miss Hill had been carrying an opened pack of Benson and Hedges.

Findings of Fact
12.	Miss Hill claimed ownership of 2,400 cigarettes and 1.5 kg of tobacco.  We do not accept that this was a truthful claim, certainly with regard to the tobacco and possibly but to a lesser extent with regard to the cigarettes.  As far as the cigarettes are concerned, Miss Hill was a regular and long standing smoker, smoking, so she told us in evidence, and we believe this to be truthful, 15-20 cigarettes a day.  2,400 cigarettes would thus last between 4 and 5 months, not the 2 months given in answer in interview.  Miss Hill also said that her brother had change for her out of the £200 that she had given him.  He had told the interviewing officer he had spent £800 in total and the cigarettes had cost £19 for 200 (he had no receipt).  2,400 cigarettes would thus have cost £228 and there certainly would not be change out of £200.  We feel it probable therefore that rather less of the cigarettes were for Miss Hill than she maintained but not substantially so.  With regard to the tobacco we do not accept any of this was for her.  She gave utterly contradictory answers in interview and ended by asserting she smoked one pouch a week (which would actually be consistent with her stated consumption) and that the load would last 2 months.  It would of course at this rate have lasted over 6 months.  She, for no good reason that we can see, over-estimated her consumption at 200 per week instead of between 100 and 140.  This is a quite major over-estimate and one which we assume was given to justify the claim for the additional amount of goods.  Most importantly however Miss Hill’s financial contribution to the purchase would as we have said, not even cover 2,400 cigarettes and certainly none of the tobacco.
13.	We therefore find that contrary to Miss Hill’s assertion, the tobacco was not purchased by her and for her own use, but she allowed a portion of the import to be allotted to her, presumably to reduce the amount brought in by the others.  We do believe that this importation was in the nature of a joint venture between the three travellers and in this regard it is worth noting a discrepancy in the evidence of Mr and Miss Hill.  Miss Hill maintained in interview and in evidence that she had given her brother her £200 to make the purchase before hand but Mr Hill maintained in interview that he had paid for everything and Miss Hill would repay him when they got back.
Conclusions
14.	Against these findings of fact we now consider the appeal decision.  Our jurisdiction is strictly circumscribed by statute under Section 16(4) Finance Act 1994.  Our power is to review the reasonableness of the Commissioner’s decision.  There are clear flaws in Miss Wheeler’s decision.  First and foremost she required Miss Hill to satisfy her that the goods were for her own use, failing which there would be a legal presumption of commerciality.  This was the burden of proof which the Commissioners did apply at the time but which has since been accepted by the Commissioners as being incorrect (Regina (Hoverspeed Ltd) v CEC [2002] 3WLR 1219).
15.	Miss Wheeler also by her own admission took an incorrect view of the smoking materials carried by Miss Hill.
16.	Although this was not argued by Miss Hill, we did give some thought to whether it was reasonable for Miss Wheeler to have taken into account the evidence of Mr Hill and Miss Hickin of their previous trips, this being Miss Hill’s first trip.  The background to this is that the Commissioners’ records showed Miss Hickin’s vehicle to have travelled to France on 12 occasions within the previous couple of months, rather unsatisfactory explanations of this being given in interview by Mr Hill and Miss Hickin.  On balance we believe that this was a relevant consideration given our finding that the tobacco did not belong to Miss Hill and must therefore have belonged to one or other of Mr Hill or Miss Hickin.
17.	We do not believe Miss Wheeler’s error over the cigarettes carried by Miss Hill to be critical to her decision but the application of the incorrect burden of proof (albeit through no blame on Miss Wheeler’s part) is an error of law which would normally render the decision fatally flawed.  However in the light of John Dee Limited v CEC [1995] STC 941, if the decision, applying the corrected burden of proof, would inevitably have been the same, the Tribunal can still dismiss the appeal.  In this case we believe the decision or the outcome on a re-review would be exactly the same.  The tobacco, on our findings of fact, was not for Miss Hill’s own consumption.  It was never her case that it was purchased as a gift and it must therefore be assumed to have been for some commercial purpose, albeit probably to a minor extent.  She was claiming it as hers, but it was liable to UK Duty which had not been paid and was therefore correctly seized.  The cigarettes, although we accept that these were for Miss Hill’s own use, were equally liable to seizure as being part of the overall consignment (Section 141(1)(b) CEMA).
18.	Miss Hill’s submission to the tribunal was that the goods were for her own use.  For the sake of completeness, we have given our findings of fact on this but we also accept Mr Puzey’s submission that in the light of Gora and Others v CEC (Court of Appeal 2003 EWCA SIV 525) this is not a question which the Tribunal should address.  Miss Hill did not serve a notice of claim under Schedule 3 CEMA within the statutory time limit.  Schedule 3 Paragraph 5 provides that if such notice is not given the goods “shall be deemed to have been duly condemned as forfeited”.  It follows from this that these goods have been deemed not to have been for personal use and this is not an issue which can be reopened before the Tribunal.  The Tribunal is not concerned with the seizure of the goods.  The only issue before us is whether Miss Hill has established that the decision not to restore the goods was one which the Commissioners could not reasonably have arrived at.  For all the reasons already given we are satisfied that the decision was Wednesbury reasonable.  There was no challenge to the reasonableness of the Commissioners’ policy and we do in fact believe it to be a reasonable policy and to have been correctly applied.
19.	The appeal is therefore dismissed.  There was no application for costs and we make no order.

LADY MITTING
CHAIRMAN
Release Date: 31 October 2003
MAN/01/8196

££Hill v Customs and Excise [2003] UKVAT(Excise) E00527 (31 October 2003)