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	United Kingdom VAT & Duties Tribunals (Excise) Decisions
You are here: BAILII >> Databases >> United Kingdom VAT & Duties Tribunals Decisions >> United Kingdom VAT & Duties Tribunals (Excise) Decisions >> Wells v Customs and Excise [2004] UKVAT(Excise) E00772 (29 July 2004) URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2004/E00772.html Cite as: [2004] UKVAT(Excise) E772, [2004] UKVAT(Excise) E00772

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E00772

EXCISE DUTY – Appeal against decision not to restore vehicle and excise goods – application by Respondents to strike out appeal on three grounds (i) no decision i.e. restoration had been made at time Tribunal had ordered a review (ii) no appeal lay to Tribunal in respect of the legality of the seizure because the goods had been condemned as forfeit by the Magistrates Court (iii) the vehicle had been returned to its lawful owner – Application (i) withdrawn by Respondents because point previously conceded by Respondents – Application (ii) dismissed because appellant had notified court and Respondents of intention to withdraw appeal to Magistrates – (iii) dismissed because vehicle restored to lawful owner but not to person legally entitled to possession

RESTORATION appeal – Whether goods for `own use' – Decision re excise goods properly made – Proportionality not properly considered in respect of vehicle – Guidelines in Lindsay not considered – Appeal allowed in part

LONDON TRIBUNAL CENTRE

DAVID RAYMOND WELLS Appellant

and –

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: MISS J C GORT (Chairman)

MR R BATTERSBY

Sitting in public in London on 16 June 2004

Mr T Roberts, Amicus, appeared on behalf of the Appellant

Mr S Singh of Counsel instructed by the Solicitor's Office appeared on behalf of the Respondents

© CROWN COPYRIGHT 2004


 


DECISION

1. This is principally an appeal against the seizure by the Respondents not to restore 8,000 cigarettes, 3 kilogrammes of hand-rolling tobacco, 144 litres of beer, 135 litres of wine, 3 litres of spirits and vehicle registration number V808 LSB. This decision was upheld in a review dated the 3 September 2003.
2. Prior to hearing the appeal the Respondents applied to the Tribunal that the appeal should be struck out or dismissed under Rule 18(1) of the Value Added Tax Tribunal Rules 1986 (as amended) on the grounds that no appeal lay to the Tribunal.
3. On 29 July 2003 the Tribunal had released a direction ordering a review of the Respondents' decision not to restore the above items. It was submitted by the Respondents that at that date no decision had been made in relation to restoration which could be reviewed under Section 14 of the Finance Act 1994. Although such a decision was made on the 4 August 2003, the Appellant had at no stage required a review of this decision, therefore the review dated the 3 September 2003 was not a statutory review; the Respondents were not required to conduct the review in accordance with the provisions of Section 14 of the 1994 Act, and therefore an appeal could not lie from the review decision under Section 16 of the 1994 Act.
4. At the Tribunal hearing in July 2003 there had been a similar application by the Respondents to strike out the Appellant's appeal. At that hearing it was conceded on behalf of the Commissioners (who at that time were not represented by Mr Singh) that the Appellant, who was not represented, might have been misinformed by the Respondents as to his rights of appeal, the application was effectively withdrawn and the Appellant's right to appeal was conceded. It was at the invitation of the Respondents that the Tribunal made the direction released on the 29 July 2003 that a review should be carried out by the Respondents.
5. At the hearing of this appeal Mr Singh quite properly withdrew the application to strike out or dismiss the appeal on the above grounds. However he maintained an application to strike out the appeal on the basis that the Appellant was seeking to challenge the legality of the seizure and no appeal lay to the Tribunal in respect of this issue. In respect of this matter he referred to the Tribunal to the case of Gora and Others v Customs and Excise Commissioners (2004) QB93.
6. On 22 August 2003 at a hearing in the Magistrates Court the goods had been condemned as forfeit, with the exception of the motor vehicle which had already been returned by the Respondents to Motability Finance Limited on 11 June 2002. It was contended by the Respondents that Motability Finance Limited was the rightful owner of the vehicle and therefore the Appellant had no legitimate claim over it and accordingly the Appellant's appeal insofar as it related to the registration of the vehicle should be struck out or dismissed.
7. With regard to the condemnation of the seized goods in the Magistrates Court, the Respondents relied on the principle of res judicata to contend that the Appellant should not be allowed to raise the same issue of "own use" again for the Tribunal.
8. Correspondence was produced to the Tribunal which showed that the Appellant had withdrawn his appeal to the Magistrates and had made every attempt to informed the Respondents and the court of this decision. Nevertheless the proceedings had taken place and a condemnation order had been made. However, this order had been made without the court having heard any argument by or on behalf of the Appellant.
9. Mr Singh also referred the Tribunal to the case of Philip Neil Riley (decision number E/00560), the case of James Royston Williams, (decision number E/00715) and the High Court decision of Darren Lee Dickinson [2003] VAT & Duties Reports 390. In the case of Dickinson it was held that the issue of private use could be raised in restoration proceedings, Mr Singh submitted that the reasoning in Gora ought to be preferred, and in any event Dickinson did not concern a case where the issue of private use had already been determined by the Magistrates Court.
10. In the two Tribunal cases cited by Mr Singh the Tribunal had on each occasion held that in similar circumstances an Appellant may adduce evidence as to whether goods were imported for his own use, and both Tribunals had considered the case of Gora. Neither Tribunal decision was being appealed by the Respondents. In the circumstances we see no reason to depart from the earlier decision of the High Court and the Tribunal and the Respondents' application to strike out on these grounds is also dismissed.
11. With regard to a further application to strike out or dismiss the appeal on the grounds that the vehicle had been restored to its rightful owner, we heard evidence from the Appellant that he was in receipt of a mobility allowance of £41 per week because of a disability, and that he had a three-year contract with Motability Finance ("Motability"). He had paid a £2,000 non-returnable deposit, and thereafter his mobility allowance was paid to Motability. At the time of the seizure he had already paid the £2,000 and the £41 per week for a period of 18 months. Since the seizure of the vehicle he had lost the remaining 18 months of the lease with the dealer. He would only be entitled to rehire from them if the outcome of the case was successful.
12. We find that, whilst the Respondents returned the vehicle to the legal owner, they did not restore the vehicle to the person who was legally entitled to possession of the vehicle at the time, namely the Appellant. We therefore also dismiss the Respondents application to strike out this appeal on the grounds that the Appellant has no legitimate claim over the vehicle.

Legislative Provisions

13. Both European and Domestic Regulation applied to the importing of excise goods. Article 8 of Council Directive 92/12/EEC provides:

"As regards products required by private individuals for their own use and transported by them, the principal governing the internal market lays down that excise duty shall be charged in the Member State in which they are required to stop".

14. Article 7 provides that where excise goods are released for consumption in one Member State but held for commercial purposes in another then excise duty is chargeable in the Member State in which the goods are held.
15. Article 9.1 provides:

"Without prejudice to Articles 6, 7 and 8, excise duty must become chargeable where products for consumption in a Member State are held for commercial purpose in another Member State.

In this case, the duty shall be due in the Member State in whose territory the products are and shall become chargeable to the holder of the products."

16. Article 9.2 provides for certain matters to be taken into consideration in establishing whether goods are intended for commercial purposes, and that Member States must take account of certain criteria including: the commercial status of the holder of the products; his reasons for holding them; the place where the products are located; mode of transport used; any documents relating to the products; the nature of the products; and the quantity of the products. As far as quantity is concerned, Member States may lay down guide levels solely as a form of evidence. The guide levels may not be lower than 800 cigarettes, 400 cigarillos, 200 cigars and one kilogramme of smoking tobacco.
17. The provisions of the directive were originally implemented in the United Kingdom by the Excise Duties (Personal Reliefs) Order 1992 number 3155 ("the 1992 Order") which was in force on the date of seizure. The limits for tobacco products mentioned in that order were as above.
18. Since 1 December 2002 the provisions of the directive have been implemented by the Excise Goods, Beer and Tobacco Products (Amendment) Regulations 2002 SI 2002 number 2692 ("the 2002 Regulations"), which amended Regulation 4 of The Excise Goods (Holdings, Movement, Warehousing and REDS) Regulations 1992, Regulation 15 of The Beer Regulations 1993 and Regulation 12 of The Tobacco Products Regulations 2001. Regulation 4 applies to tobacco products and provides that, in the case of tobacco products acquired by a person in another Member State for his own use and transported by him to the United Kingdom, the excise duty point is the time when those products are held or used for a commercial purpose by any person.
19. "Own use" is defined as including a personal gift. However, Regulation 4 goes on to provide that, if the tobacco products in question are transferred to another person for money or monies worth (including any reimbursement of expenses incurred in connection with obtaining them) or the person holding them intends to make such a transfer, the products are to be regarded as being held for a commercial purpose.
20. Regulation 4 also provides for an increase in the minimum indicative levels: 3,200 cigarettes; 400 cigarillos; 200 cigars; and 3 kilogrammes of any other tobacco products.
21. Article 5(1) states:

"The reliefs afforded under this Order are subject to the condition that the excise goods in question are not … held or used for [a commercial purpose] whether by the Community traveller who imported them or by some other person who has possession or control of them; and if that condition is not complied with in relation to any excise goods, those goods shall, without prejudice to article 6 below, be liable to forfeiture."

22. The provisions relating to administration, collection and enforcement of excise duty are contained in the Customs and Excise Management Act 1979 ("the 1979 Act").
23. Section 49 of the 1979 Act provides that goods that are imported without payment of duty are liable to forfeiture. Section 124 provides that, where imported goods have been relieved from duty on importation and any condition connected with the relieve has not been complied with, the goods shall become liable to forfeiture. Section 141(1)(a) provides that, where a thing has become liable to forfeiture, then any vehicle used for the carriage of that thing is also liable to forfeiture. Section 139(1) provides that anything liable to forfeiture maybe seized by a Customs officers.
24. Paragraph 1 of Schedule 3 of the 1979 Act provides that Customs and Excise shall give notice of seizure to any person who, to their knowledge, was at the time of the seizure the owner or one of the owners. Paragraph 3 provides that, if a person claims that anything seized as liable to forfeiture is not liable, he must give notice of his claim in writing to Customs and Excise within 1 month of the date of notice of seizure or of the seizure. Paragraph 5 provides that if a notice has not been given after that month, then the thing is deemed to be condemned as forfeit. Paragraph 6 provides that, if a notice has been given within that month, then Customs and Excise must take proceedings for the condemnation of the thing by the Magistrates Court. If the court finds that the thing was liable for forfeiture then the court shall condemn it as forfeit. Paragraph 11 provides that either party may appeal against a decision of the Magistrates Court to the Crown Court.
25. Section 152(b) of the 1979 Act provides that Customs and Excise may, as they see fit, restore, subject to such conditions (if any) as they think proper, anything forfeited or seized and Sections 14 to 16 of the 1994 Act provide for appeals to the Tribunal with respect to decisions about restoration or the conditions of restoration.
26. Section 16(4) of the 1994 Act sets out the relevant power of the Tribunal which:

"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, so 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; and

( c) in the case of a decision which has already been acted on or taken effect and cannot be remedied by a further review, to declare the decision to have been unreasonable and to give directions to the Commissioners as to the steps to be taken for securing that repetitions of the unreasonableness do not occur when comparable circumstances arise in future."

27. The Tribunal was referred to the following cases:

Gora & Others v Commissioners of Customs & Excise (2004) QB 93

Riley v Customs and Excise Commissioners Decision No. E.00560

Commissioners of Customs and Excise v Dickinson [2003] EWHC 2358

Williams v Commissioners of Customs and Excise Decision No. E 00715

Lindsay v Commissioners of Customs and Excise [2002] EWCA Civ 267

Newbury v Commissioners of Customs and Excise (2003) 1 WLR 2131

The evidence

28. Both parties produced bundles of documents, the Appellant's bundle included inter alia a photocopy of a letter from his daughter, a typed letter from his son and a further letter from the Appellant's mother-in-law. None of these three letters had been seen by the Respondents, but no objection was made to their admission in evidence.
29. The Tribunal heard oral evidence from Mr Christopher Mitchell, an officer of Customs and Excise based in Plymouth and from Mrs Hilda Marshall, the review officer. The Appellant gave evidence on his own behalf.

The Facts

30. The Appellant who lives in Bristol had on the 27 May 2002 travelled in his vehicle to France via the P&O Ferry. On that occasion he had purchased a quantity of alcohol and tobacco goods. On the following day, the 28 May, he had travelled to France via Hoverspeed and had again purchased tobacco and alcohol. He had returned to his vehicle in a car park at the terminal and had been spoken to by members of a clamping unit. Immediately afterwards he was approached by a Custom's officer who identified himself and proceeded to ask him some questions about his journey.
31. In response to the initial questioning the Appellant told the officer, Mr Christopher Mitchell, that he had just returned from France and that he had purchased 2,000 Lambert and Butler cigarettes and 1 kilogramme of Golden Virginia hand rolling tobacco. He had not travelled earlier that day, but he had travelled the day before. When asked if he had purchased any tobacco goods he said no, only wine. On opening the back of the vehicle Mr Mitchell saw a number of cartons of cigarettes, which the Appellant said he had forgotten to tell him about. The Appellant signed a notebook.
32. After a subsequent search of the vehicle the following goods were removed from it: 20 cases of "mini" wine, 5 cases of "Ashgrove" wine, 12 cases of beer, 7,200 Lambert & Butler king-size filter cigarettes, 800 king-size Rothman king-size filter cigarettes, 3 kilogrammes of Golden Virginia hand-rolling tobacco, 2 litres of vodka, 1 litre of Gin.
33. Following the reading of a "commerciality statement" in which the Appellant was told that Mr Mitchell required him to satisfy him that the goods were not held for commercial purpose, and if he failed to do so the goods would be seized as being liable to forfeiture, the Appellant was interviewed. There was no reference at any point by the officer to the possibility of the vehicle being seized.
34. In the course of the interview the Appellant stated that the tobacco goods were for his own and his family's personal consumption. He referred to his mother-in-law and his father-in-law and said that there was about 2-3 months supply. He had paid for all the goods and he was not going to be reimbursed. He understood that as long as he had bought the goods for personal use and not for resale there was no limit to the amount a person could bring in. He travelled about three times a year and had last travelled the previous November or December. He had travelled the previous day in the car because it was too far to drive from Bristol and back in one day. He made two trips because he understood there was an allowance per trip. In addition there was a special offer on wine on the Hoverspeed and he wanted to take advantage of it. He had not planned to do this, but he said "it was to keep within the guide levels and to buy some stuff I wanted that was all."
35. When asked why he had told the officer he had not brought any tobacco goods the previous day, just wine, he said that he was not thinking properly, and he had thought the officer was one of the clampers. He had produced two receipts for the purchases he had made that day, which included 7,200 Lambert and Butler king-size filter cigarettes and 3 kilogrammes of Golden Virginia hand-rolling tobacco. He said he had not bought them the previous day because he had only been going over for the wine on the second trip, but as he had some money over, he thought he would get some cigarettes. He no longer had the receipts for the previous day's purchases having cleared his filofax.
36. Two pieces of filofax paper had been found in the vehicle and the Appellant was asked about the writing on them. He stated that one was a list of people he had to pick up on the taxi work he did two nights a week and the other he was not certain about, but might have been the last time he went over when he had worked out what he should get and what it might cost.
37. The names `Gary' and `Liz' appeared on one of the pieces of paper and the Appellant told the officer they were friends of his. He said that he only purchased goods for his family and not for them. The names `John' and `Bev', which also appeared, were his father-in-law and mother-in-law for whom he was purchasing stuff.
38. The Appellant is disabled but worked two nights a week as a taxi driver earning probably £140-£150 per week. He had been made redundant several years previously and been given a lump sum of £16,000. He owned his own house free of mortgage. His wife also worked and had a good job as an executive for a furniture company. The items had been paid for by cash, the money coming from a joint account.
39. The officer's reasons for seizure were given as follows –

1. The goods were in excess of the minimum indicative limits.

2. Frequency of travel.

3. Told lies when initially questioned.

4. Evidence of "shopping" for others in filofax.

5. Income does not support purchase and giving as gifts.

40. By a letter dated 2 June 2002 the Appellant set out various facts in support of his appeal. In that letter he stated inter alia that all the excise goods were both for personal use and as gifts. He considered that the seizure of the vehicle breached the Human Rights Act 1998 insofar as, given the value of the vehicle, the seizure was not reasonably proportionate. He stated that he was severely disabled and was as a consequence of the seizure completely housebound, he offered to pay the excise duty for the release of his vehicle and his goods to relieve the hardship to himself and his family. He asked for an urgent meeting with the review officer to discuss the case. In addition he stated as follows: "The goods purchased over two trips on Monday 27 and 28 March. The total cigarettes were 4,000 per trip and were solely for personal and family usage. The wine/beer was for Queen's Jubilee celebrations to be held at our home, together with birthday and World Cup celebrations." At the hearing of the appeal we were informed by Mr Roberts that he himself had written this letter on behalf of the Appellant, although it was signed by the Appellant.
41. The matters taken into account by the Review Officer, Mrs H Marshall, were inter alia as follows:

(i) The officer had been told about the Appellant's disability and would have considered that issue at the appropriate time and had decided that the Appellant's circumstances did not warrant an immediate restoration of the vehicle.

(ii) The Appellant failed to declare all of the goods he had purchased when first asked about them. The Appellant's explanation that he had thought the officer intended to clamp the car lacked credibility.

(iii) He had told the officer he understood there was no limit to the goods he could bring into the UK for personal use, the Appellant was therefore aware of the regulations and there was therefore no need to make two trips to purchase excise goods for legitimate reasons. When the Appellant said he made two trips to enable him to purchase twice the allowance he was not telling the truth. Nor was it creditable when he told the officer he had made two trips to keep within the guide levels, since he had well in excess of the guide levels on each trip.

(iv) The Appellant had agreed that the paper found in his filofax was a "shopping list", but went on to say that, although he had purchased the goods listed against his father-in-law and mother-in-law's names, he had not purchased any items for the friends who had also had excise goods shown against their names.

(v) On 28 May he agreed that he had purchased the goods on the receipts which included 2,400 cigarettes. In his letter of 2 June 2003 he said he had purchased 4,000 cigarettes on each of the two trips. One of those statements could not be true.

(vi) The revenue involved was not inconsiderable at £1,963.94.

42. Mrs Marshall concluded that the goods purchased were for a commercial purpose and that the Appellant had attempted to mislead the Customs both during interview and in correspondence. There were no exceptional circumstances which warranted restoration.
43. With regard to the vehicle, Mrs Marshall had taken account of the fact that the Appellant did not own it, but considered that the fact that he was housebound without the vehicle was a situation he had brought upon himself. As there were two other vehicles registered to other members of his family at his home address he was not without transport in emergency.
44. In her evidence to the Tribunal Mrs Marshall said that she had not considered proportionality in the course of her review because it was not relevant as the vehicle had been restored to its owner and so she was not in a position to restore it to the Appellant.
45. In his evidence the Appellant confirmed that he had not driven back to Bristol on the 27 May because he was not feeling very well and he decided there and then to stay in Dover. However he also said that he was concerned that if he had brought the whole quantity in one trip he would have been concerned that he would be over the limit and he might have his goods and vehicle seized. We found his evidence very contradictory, in that he also said that he was not always intending to buy the total amount that he had eventually purchased. In answer to a later question from the bench he said that when he set off he intended only to buy the quantity he had purchased on the first trip.
46. The Appellant told the Tribunal that he had received money from his son, and regarded the purchases as a joint family purchase.
47. With regard to the piece of paper with the names of Gary and Liz on it, the Appellant's evidence was that this had not been in his filofax which he cleared once a month, but must have been somewhere in the car, which he did not clear very often. Some three to four months previously he had been on a coach trip with Gary and Liz and he had paid for all the goods they had purchased in the supermarket, when they all returned to Bristol his own goods were unloaded into his car and he believed the piece of paper must have ended up in his car then. That journey had been on the 19 January and had been a night-time journey.
48. The other piece of paper found in the car was a list of pieces that he played on his guitar for charity. The name "Greg" which appeared on that piece of paper was his son's name. The "five L" also on the paper meant that his son was going to pay a contribution for the Lambert and Butler cigarettes on the Appellant's return. This paper possibly did relate to the day of seizure, or possibly to a previous trip. His in-laws also sometimes gave him money towards the purchases.
49. In cross-examination the Appellant was asked about the reference in his letter of 2 June 2002 to having purchased 4,000 cigarettes per trip, the Appellant replied that it did not make any difference, he did not have the receipts and that is what he had assumed. This was surprising evidence as subsequently Mr Roberts revealed to the Tribunal that he himself had written that letter. We accept what Mr Roberts says about this, and in particular note that in the letter he referred to journeys on 27 and 28 March, whereas the journey in question occurred on the 27 and 28 May.
50. The receipts found in the Appellant's car show that on the 28 May he had, apart from the cigarettes and hand-rolling tobacco referred to, purchased 1 litre of Beefeater Gin and a bottle of vodka. There is no reference to any wine being purchased. The Appellant had confirmed in his evidence that only the items on those receipts had been purchased on the 28 May.

The Respondents' Case

51. In his submissions Mr Singh relied principally upon the same matters as Mrs Marshall had in her review decision. As these are set out above, they will not be repeated here.
52. In addition Mr Singh relied on the fact that in his evidence Mr Wells had said that all the goods he had purchased on the 28 May were shown on the two receipts. Those receipts showed no purchase of wine. Furthermore in the letter of the 2 June 2002 the Appellant had said that he had no recollection of the filofax notes which had been found, whereas to the Tribunal he had come up with an explanation as to their meaning and origin.
53. In his interview the Appellant said he would not be reimbursed, whereas in his evidence to the Tribunal he had said that his son would reimburse him for some of the purchases and also that his in-laws contributed. The Appellant had however produced a letter from his son dated 14 June 2004 in which his son had stated that the items were purely gifts. There was in addition the letter from Mrs Doreen Critchley, the Appellant's mother-in-law, also dated 14 June 2004, in which she said that her daughter and son-in-law had given her both cigarettes and alcohol drinks and that they had never requested payment for these.
54. Whilst the Appellant accepted that he had a "shopping list" in his possession, it was not credible that he had purchased goods for some of the people on the list but had no intention of purchasing goods for others on the list.
55. With regard to proportionality it was submitted that whilst Mrs Marshall in her oral evidence had said that she had not considered proportionality, nonetheless her review decision letter makes clear that she had considered the issue of hardship in relation to the Appellant. The Respondents also relied on the fact of damage to legitimate trade. In addition the Appellant was in breach of the statutory requirements and there had to be some penalty for this breach otherwise the statutory requirements would be rendered meaningless and inoperable. If the Respondents' policy were to offer seized excise goods or vehicles for restoration upon payment of the outstanding duty in cases of for profit commercial importations, the deterrent to prevent breaches of the statutory requirements would be weak, and the penalty for breaches would be minimal and non effective.
56. It was, however, conceded by Mr Singh that, following the case of Newbury v Customs and Excise Commissioners (2003) 1 WLR 2131, the Tribunal was entitled to reach its own independent judgment on the issue of proportionality. The Respondents relied on the case of Lindsay v Commissioners of Customs and Excise [2002] EWCA CIV 267 in which the Court of Appeal held the Respondents' policy of non restoration of vehicles used for commercial smuggling was lawful.
57. It was further submitted that there were no exceptional circumstances in the Appellant's case justifying restoration of the goods. With regard to the vehicle, the Appellant had no legitimate claim to the vehicle. There were no exceptional circumstances justifying restoration of the vehicle, and there were two other vehicles registered to members of the Appellant's household and so he was not without transport.
58. It was finally submitted that he decision struck a fair balance between ensuring compliance with UK Revenue Law and protecting revenue on the one hand, and the right to enjoyment of property of Article 1 of Protocol 1 of the European Convention of Human Rights on the other.

The Appellant's case

59. On behalf of the Appellant it was acknowledged that he had been economical with the truth and evasive, but it was submitted that was of itself no evidence of commerciality. The Appellant had been intimidated, and had feared that a reason would be found to seize his vehicle. In the circumstances it was perfectly reasonable for him to want to purchase a reasonable quantity of goods given that he had to undertake a 450-mile round trip. It was also reasonable to make two trips in order to protect his car from being seized.
60. It was wrong that because the Appellant was on a disability benefit that he should be judged to be more likely to have a commercial motive, it was just such people who had more reason to wish to benefit from the lesser duty payable on excise goods on the continent.
61. Both during the interview and on the review the burden of proofing commerciality had been placed wrongly upon the Appellant. It could not be maintained that the Appellant had intended to sell the goods for profit.
62. Conflicting advice had been given to the Appellant saying he could seek restoration whilst the condemnation proceedings were on foot. The Respondents had brought about an undue delay in these proceedings. The Respondents had at no time properly explained to the Appellant the different appeal procedures.
63. There was no evidence that the Appellant had previously been concerned in smuggling, nor that he knew what he was doing was wrong. Evidence had been produced as to the wife's salary and bank statements had been produced. The Appellant had an overdraft limit of £7,000. The seizure was based solely on the Appellant's evasive replies because he was apprehensive about the prospect of losing his vehicle. It was quite wrong that because he was on disability benefit and above the minimum indicative levels that that should mean that he had a commercial motive.
64. The Tribunal was referred to various decisions of the Tribunal where appeals had been allowed.
65. It was submitted that the seizure of the vehicle and excise goods by the Commissioners was in breach of Article 1, Protocol 1 and contravened the Appellant's right to the peaceful enjoyment of his possessions. Furthermore the Commissioners had not acted in a reasonable way, their blanket policy of non-restoration of the excise goods fettered their exercise of their discretion under CEMA 1979. The Commissioners' policy went further than was strictly necessary and was an unacceptable obstacle of the free movement of goods under European law.
66. Finally it was submitted that the Commissioners' decision was unreasonable since it gave no consideration to the hardship caused to the Appellant due to his poor health. It is for the Respondents to show that they have acted in accordance with the Appellant's rights under both the United Kingdom and European laws and their decision was one that no reasonable body of Commissioners could have reached.

Reasons for Decision

67. When Mr Wells was interviewed by Mr Mitchell at no time was he told that his vehicle was liable to seizure. He was however issued with the appropriate notice of seizure on the 28 May 2002.
68. Whilst we had difficulty with some of the Appellant's evidence which was confusing and contradictory, we do not find that he was importing the tobacco products for a commercial purpose in the sense that he was intending to make a profit from the goods. It was his own evidence however that he was expecting money from his son, Greg Wells, in respect of various of the tobacco products. The letter written by Greg Wells refers to his making regular monetary payments to his parents although it does not say what for. Whilst it is right to say that Greg Wells says that any excise goods he has received from his parents have been received purely as gifts, this is not consistent with the Appellant's own evidence, which we prefer, not having heard from Greg Wells in person.
69. The Appellant gave confusing and inconsistent evidence to the seizing officer, and this confusion was further compounded by the letter of 2 June 2002 written to the review officer. In the circumstances Mrs Marshall cannot be faulted for upholding the seizure of the goods.
70. We do, however, find that the Respondents did not give full consideration to the issue of proportionality where the vehicle was concerned. It was Mrs Marshall's own evidence that she had not considered proportionality. In the case of John Richard Lindsay v Commissioners of Customs and Excise [2002] EWCA Civ 267 Lord Philips MR said at paragraph 64:

"The Commissioners' policy does not, however, draw a distinction between the commercial smuggler and the driver importing goods for social distribution to family or friends in circumstances where there is no attempt to make a profit. Of course even in such a case the scale of importation, or other circumstances, may be such as to justify forfeiture of the car. But where the importation is not for the purpose of making a profit, I consider that the principle of proportionality requires that each case should be considered on its particular facts, which will include the scale of importation, whether it is a "first offence", whether there was an attempt at concealment or dissimulation, the value of the vehicle and the degree of hardship that will be caused by forfeiture. There is open to the Commissioners a wide range of lesser sanctions that will enable them to impose a sanction that is proportionate where forfeiture of the vehicle is not justified."

71. Whilst Mrs Marshall did refer in her review letter to hardship, but she did so only to a limited extent. She stated as follows:

"Moving on to the matter of the vehicle, it is interesting to note that you consider non-restoration of the vehicle to be disproportionate, as the vehicle belonged to Motability Finance; you did not own it. You say you are house-bound without a vehicle, which is unfortunate, but appears to be a situation you have brought upon yourself. According to information made available to me, there are two other vehicles registered to other members of your family, at your home address, so it would seem that you are not without transport in an emergency."

Mrs Marshall has not taken account of any of the matters referred to by Lord Philips, although the case of Lindsay was heard on 20 February 2002 and Mrs Marshall's review letter was dated 3 September 2003.

72. We have seen evidence of the Appellant's wife's pay, which shows net pay of £1,926.27 for the month of May 2004, we have seen the bank statement from Lloyds TSB dated 14 may 2004 in the name of the Appellant and his wife which shows an overdraft limit of £7,000 and a credit balance of £3,258.59, this balance being reduced to £2,811.92 by 7 May 2004. There was evidence before the Respondents that he earned between £140 and £150 a week, and that he had been given a redundancy payment of £16,000 some three years previously. He owned his own house free of mortgage. In all the circumstances therefore the Appellant was able to afford the purchases without the need to make a profit on the enterprise, this not being a matter which was considered by the Respondents who did not take account of the Appellant's wife's earnings, nor of any contribution made by his son. Given that Mrs Marshall was aware of the presence of two other vehicles at the Appellant's house, it might have been expected that she would have been aware of the possibility of other relevant incomes in the household.
73. There is no evidence of any previous importation i.e. it was a "first offence", there was no attempt of concealment of the goods, although there was dissimulation by the Appellant with relation to when he had purchased tobacco goods.
74. Insofar as the value of the vehicle is concerned, the Appellant had lost his £2,000 non-returnable deposit. He has a contract for three years with Motability, and, apart from the initial deposit, he had paid £41 per week. At the time of the seizure the contract had 18 months to go and the Appellant therefore lost his mobility allowance of £41 per week which had to continue to be paid to Motability. He had also lost the possibility of hiring another suitable vehicle.
75. We did not hear very much evidence as to the Appellant's physical disability, however the fact that he has a disability allowance is relevant when considering the Appellant's need for a vehicle.
76. The Respondents returned the vehicle to Motability who, whilst being the legal owners of the vehicle, were not at the time of the seizure or the restoration, the people lawfully entitled to possession of the vehicle. This was not a matter which was considered by the Respondents. We find that the Appellant was importing goods for social distribution to his family which he was not doing for profit, but in respect of which he was expecting some payment. We accept his evidence with regard to the piece of paper with the names of 'Gary' and 'Liz' on it, and that he was not on this occasion purchasing any excise goods for them. However, we do not consider that it was unreasonable for the Commissioners to have concluded as they did that some of the purchases were for Gary and Liz.
77. We consider that in the circumstances, particularly given the Appellant's evasions, the seizing of the excise goods was reasonable and was properly considered by the Respondents, but we do not consider that the seizure of the vehicle was proportionate, nor do we consider that the matter of proportionality was properly considered by the Respondents. We also consider that forfeiture of the vehicle was so disproportionate as to be in breach of the Appellant's rights under article 1, Protocol 1 to the Convention and we therefore refer this matter back to the Commissioners in respect of the seizure of the vehicle for them properly to consider the issue of proportionality in the light of our findings and in the light of the comments of Lord Philips MR's in the case of Lindsay..
78. This appeal is allowed in part. The Respondents to pay the Appellant's reasonable cost of and relating to this appeal.

J C GORT

CHAIRMAN

RELEASED:29/07/2004

LON/03/8192