Dickens v Customs & Excise [2003] UKVAT(Excise) E00539 (11 November 2003)

EXCISE DUTY  -  excise goods and van transporting goods seized at Dover on return to UK and forfeited  -   review decision upholding decision not to restore  -  held on facts to be reasonable for Customs to conclude goods for commercial purposes and for neither van nor goods to have been restored  - principle of proportionality inapplicable  -  appeal dismissed     

MANCHESTER TRIBUNAL CENTRE

 
 	
	RAYMOND HORACE DICKENS 	Appellant

	- and -

	THE COMMISSIONERS OF CUSTOMS AND EXCISE	Respondents

							

Tribunal:	Mr M S Johnson (Chairman)
					Mrs E M MacLeod CIPM

Sitting in public in Birmingham on the 8th October 2003

The Appellant appeared in person

Mr I Speed, counsel instructed by the Solicitor for the Customs and Excise, for the Respondents

	© CROWN COPYRIGHT 2003

DECISION
1.	In this case the appellant is appealing, pursuant to section 16 of the Finance Act 1994 (“the Act”), against the outcome of a review decision of the Commissioners of Customs and Excise (“Customs”) upholding an earlier decision of Customs not to restore to the appellant quantities of excise goods (“the goods”) and a Mercedes-Benz Vito van (“the vehicle”), Registration No W494 SBF, in which the goods were being carried.
2.	We heard oral evidence from the appellant, who represented himself, and we had the opportunity to read and consider the contents of a bundle of documents relevant to the case, helpfully passed to us by Counsel appearing for Customs.  There were also witness statements from the reviewing and interviewing officers of Customs.  
3.	We find that the facts relevant to this appeal are as follows. 
4.	The goods and the vehicle were seized and forfeited at the Port of Dover on 30 October 2002, when the appellant was re-entering the UK via the P & O ferry from Calais.  The appellant had been to the continent, along with his fellow traveller, his brother Mr Steven John Dickens, allegedly for the purpose of carrying out pieces of work including grouting and tiling to their brother Neil’s newly-built villa near Torrevieja, Spain.  They had driven right across France to Spain and back in three days.  
5.	The goods consisted of the following:
50,000 cigarettes
35 cigars
8.5 litres of spirits.
6.	The goods and the vehicle were seized and forfeited because, in the circumstances ascertained by interviewing the appellant and his brother, Customs formed the view that the goods were for commercial purposes, rather than for the travellers’ own use. 
7.	The appellant sought the restoration of the goods and the vehicle by letter dated 1 November 2002 written to Customs on his behalf by Smith Dawson, solicitors, of 8 Princess Street, Wolverhampton.   Customs replied on 14 November 2002, refusing restoration on policy grounds.  Customs’ letter made it clear that the large quantity of goods being transported in this instance, coupled with an inadequate explanation of the reasons for holding the goods, led Customs to conclude that the appellant was smuggling.
8.	That letter from Customs crossed with another letter from Smith Dawson to Customs dated 15 November 2002, providing further information in relation to the request for restoration.    In that second letter from Smith Dawson it was asserted that the appellant and his brother were both heavy smokers and had no intention of re-selling the cigarettes seized.  The vehicle, it was said, was being acquired on hire purchase, in order to assist the appellant with employment opportunities.  Any attempt to evade excise duties was denied.
9.	On 10 December 2002, Smith Dawson wrote to Customs indicating that the appellant would like to appeal against the seizure of the vehicle.  At the same time, by another letter of even date, the solicitors wrote seeking a review of the decision not to restore.  In that letter it was indicated that the appellant had several pending contracts necessitating the use of the vehicle.  The appellant was said to have purchased 3 to 4 months’ supply of cigarettes, further that he would have been giving away some cigarettes and also cigars attached to a bottle of whisky as Christmas presents.
10.	On 19 December 2002, Customs wrote to inform the appellant’s solicitors that the appellant was out of time to request condemnation proceedings in respect of the seizure, but that Customs would action the requirement for a review of the decision not to restore.
11.	The review was carried out by Mrs Gillian Martha Hurrell, of the Law Enforcement Review Team of Customs in Hastings, who wrote a 15-page letter in that regard to Smith Dawson on 30 January 2003.  In that letter, she comprehensively detailed the contents of the interviews carried out with the appellant and his fellow traveller at Dover on 30 October 2002, the applicable legislation and the restoration policy of Customs, and she then considered at some length (6 type-written pages) the case for restoration.
12.	In our opinion the particularly salient points of that consideration were these:
•	The 40 cigarette per day consumption of Mr S J Dickens and his wife, amounting to approximate weekly expenditure of £98, was in excess of what he had stated that they could afford, having regard to their weekly income of £130/£140;
•	The alleged 100/140 cigarettes per day consumption of the appellant, his wife and son, meant that the 25,000 cigarettes allegedly to be smoked by them would last twice the amount of time stated in Smith Dawson’s second letter of 10 December 2002;
•	The appellant had spent approximately £2,000 on cigarettes, more than his savings and hire purchase commitments on the vehicle and intended business plans reasonably allowed him to do;
•	Computer records showed that the vehicle had travelled to the continent on 15 and 23 October 2002, as well as from 28 – 30 October, although the vehicle was stated by the appellant only to have been owned by him for 2 to 3 weeks prior to its seizure;
•	The stated journey to Spain to work on the villa was so short in duration that, allowing time for driving and for sleep, the travellers would have had virtually no time at the villa to carry out any work as alleged; 
•	The cash taken to purchase the goods would appear to make that the main reason for the journey.
13.	Mrs Hurrell accordingly expressed the view that the goods appeared to be for commercial use for sale at a profit.  She considered the decision of the Court of Appeal in Lindsay v C & E Comrs [2002] 3 All E R 118 at 137-8 (paragraphs 63-4) (“the Lindsay case”), in which Lord Phillips MR, with whom Judge and Carnwath LJJ agreed, differentiated between the proper treatment of the forfeiture of vehicles in cases of such sale and cases where there is no intention to make a profit.  In the latter case, considerations of proportionality often arise, but in the former case, they do not. 
14.	She therefore felt that the seizure of the vehicle was justified and that it would not be disproportionate not to offer restoration.   On the evidence this was not a case in which excise goods were being offered at cost price without profit to family and friends, of the kind where considerations of proportionality were relevant.
15.	Mrs Hurrell also expressly took account of the alterations in legislation since the date of the seizure, whereby the minimum indicative levels for excise goods brought into the UK were increased, and to take account of the decision of the Divisional Court of the Queen’s Bench Division in R (on the application of Hoverspeed Ltd and Ors) v C & E Comrs [2002] 4 All E R 912, and on appeal to the Court of Appeal at [2003] 2 All E R 553.
16.	The conclusion arrived at by Mrs Hurrell was that the contested decision not to restore should be confirmed.  She ended by notifying the appellant of his right to appeal to this tribunal.
17.	Smith Dawson consequently indicated by letter to Customs dated 5 February 2003 their client’s intention to bring this appeal, but in the event they have not represented him at the hearing.  The appellant informed us that that this was because he could not afford their charges.
18.	The stated grounds of appeal contained in the Notice of Appeal are as follows:
“I have lost my business as a result of my property being confiscated.  I am now unemployed with limited income and cannot afford to purchase another van.  I was originally self-employed.  Since losing my property I have lost many contracts and the business has suffered as a result.  Explanations have been given for the reason of large quantity of purchase”.
19.	In evidence, the appellant explained how the cigarettes he purchased had been for himself, his wife and his grown-up son and daughter to smoke.  Some of the items would be given as Christmas presents to his 7 brothers, particularly the double-packs with whisky attached.  He had been twice to Calais, the week before with his wife.  They had brought back some wine and a couple of boxes of cigarettes bought on the ferry.
20.	The appellant explained about the trip to the villa in Spain.  He had been out to Spain before, for recreational purposes, in September 2002.  He had bought the vehicle because he intended to start using it to fulfil work contracts in the UK.  He had bought such a large quantity of goods on the occasion with which the tribunal is concerned because he had no plans to travel again in future.  He thought that the cigarettes he brought back would last some four months.
21.	The appellant was not cross-examined by Mr Speed, appearing for Customs.  No other witness was called by either side.
22.	For Customs, Mr Speed submitted that the only question for the tribunal in this appeal, having regard to section 16(4) of the Act, was as to the reasonableness of the decision arrived at by Customs.  That sub-section provides that the tribunal’s powers on an appeal such as the present are exercisable only “ … where the tribunal are satisfied that the Commissioners or other person making that decision could not reasonably have arrived at it … ”.   If the tribunal are so satisfied, then various powers are open to the tribunal, including directing a further review of the original decision.   But, Mr Speed submitted, it had not been shown in this case that there was anything unreasonable about the decision.
23.	The decision was that this was an instance of commercial smuggling.   That being so, the Lindsay case had been correctly applied.  This was not a case where it was unreasonable not to have offered restoration of the goods or the vehicle.
24.	The appellant submitted that the attitude of Customs was all wrong.  It was legitimate for a European traveller to bring back as much in the way of excise goods as he wanted from the continent, provided that these were for personal and family use.  The huge saving of duty produced by bringing back big quantities justified the investment in doing so.
25.	We have carefully considered everything that we have heard and read and we have concluded that we cannot fairly hold that the review is at fault in this case.  The matters highlighted in paragraph 12 above seem to us to be particularly strong indicators that the original decision was justified, as the review confirmed.  We do not consider that the appellant has really explained, either to Customs or to this tribunal, why he and his fellow traveller should have brought back such large quantities of excise goods in the light of their respective financial circumstances and smoking requirements.  In the circumstances, the conclusion of commercial smuggling was a justified one.
26.	We also feel that there was an element of obfuscation in the explanation given about the reason for the trip to Spain, which we are satisfied was primarily, if not exclusively, to bring back the goods.  The villa may have been the destination, but the real object was to purchase the goods.
27.	We can well understand the unfortunate consequences to the appellant of losing his vehicle, but that comes of having used the vehicle to transport the goods.  It was, after all, the vehicle that made the trip possible. 
28.	We accept Mr Speed’s submission as to the limitation on our jurisdiction.  We are not prepared to hold that Mrs Hurrell could not reasonably have arrived at the conclusion expressed in her review.  
29.	That being so, we dismiss this appeal.  We make no order as to costs, none having been sought.

M S JOHNSON
CHAIRMAN
RELEASE DATE:

MAN/03/8057