E00809

	CATCHWORDS  — Excise Duty — Importation of 20.5kg hand rolling tobacco and 5200 cigarettes and 1050 cigarillos by two men travelling in a vehicle — forfeiture of vehicle and goods — whether decision not to restore was reasonable — appeal dismissed 

MANCHESTER TRIBUNAL CENTRE

 
 	
	SHAUN PATRICK COONEY	Appellant

	- and -

	THE COMMISSIONERS OF CUSTOMS AND EXCISE	Respondents

				Tribunal:	Mr I E Vellins (Chairman)
						Mrs G Pratt (Member)	

Sitting in public in York on 27 September 2004

No attendance or appearance by Appellant 

Mr V Ward of counsel, instructed by the Solicitor for Customs and Excise for the Respondents

	© CROWN COPYRIGHT 2004

DECISION

1.	In this appeal the Appellant is Mr Shaun Patrick Cooney who resides in Brigg, North Lincolnshire.  He appeals against the decision of the Respondents, the Commissioners of Customs and Excise, who on 10 September 2001 upheld a decision not to restore to the Appellant a Ford Mondeo vehicle registration number R896 RPY, together with various Excise goods which had been seized by Officers of Commissioners on 24 May 2001 at the UK control zone in Coquelles when the Appellant and his passenger Mr David Charles Cook were returning to the United Kingdom from Belgium and Calais.
2.	At the hearing of this appeal at York on 27 September 2004 the Respondents were represented by counsel Mr V Ward.  There was no attendance or appearance by the Appellant at the hearing.  We are satisfied that notice of the hearing of the appeal had been sent to the Appellant.  We proceeded to hear the appeal under Rule 26(2) of the Value Added Tax Tribunals Rules 1986 in the absence of the Appellant. 
3.	Background. 
4.	On 24 May 2001 Officers of the Commissioners stopped the Appellant and his passenger David Charles Cook at the UK control zone in Coquelles.  In response to initial questions put to him by the Officers the Appellant stated that the vehicle belonged to him and that he had owned it for four months.  He stated that he and his passenger had just been to Calais and Belgium and had left the United Kingdom just over four hours previously that day.  The Appellant stated that he had bought “some tobacco, cigarettes for my wife, cigars for my Dad and drink”.  Mr Cook stated “I have some tobacco”.
5.	The vehicle in which the Appellant was travelling was found to contain 20.5kg of hand rolling tobacco, 5200 cigarettes, 1050 cigarillos, 3 litres of spirits, 40.5 litres of still wine and 234 litres of beer.
6.	The Appellant stated that he had made a previous trip to France about two weeks previously, and a trip prior to that “around Christmas time”.   The Appellant stated that 10.5 of the kilograms of hand rolling tobacco was his and that 1000 cigarettes, the small boxes of Stella, three boxes of Blue Nun and two bottles of whiskey were for his wife.  He said that the goods had cost about £800 in all and he that he had paid for them himself.  He then stated that he owed his brother £250 for work done by his brother for him and that he would “pay him back in tobacco”.  He then stated that 5kg of Golden Virginia tobacco was for himself, the Old Holborn tobacco was for his brother and the Drum tobacco “was for a lad a work”.  He continued to say that “it will not be a present”.  The Appellant told the Officers that the cigarillos were to be a gift to his father who would in turn “give them away for his business”.  He stated that he had paid for his own goods and Mr Cook had paid for his own goods. 
7.	When questioned about his smoking consumption the Appellant stated that he used about two pouches of tobacco a week and that he expected the tobacco to last him until after Christmas.  He said that he rolled about 70 cigarettes per pouch, but he had no hand rolling tobacco with him.  He confirmed that there were no cigarette butts in his car and that on the day he had only smoked a couple of cigarettes because he had a sore throat.  The Officer observed that there was no appearance of nicotine on his fingers.
8.	When questioned about previous trips the Appellant agreed that he had travelled on 6 March 2001, 20 March 2001 and 10 May 2001 and that in fact this was his fourth trip in two and a half months.  He stated that the previous trips were mainly to buy beer and that he had not purchased any tobacco since Christmas, when he had travelled in a different vehicle, and had bought 30 pouches of Golden Virginia tobacco.  He said that Mr Cook had last travelled with him in January and that he was on his own in March.  When questioned about his earnings the Appellant stated that he earned £29,000 per year, that his wife worked part time, that he had two dependent children and that he had savings of about £900.
9.	Mr Cook told the Officers that Mr Cook had purchased 10kg Samson hand rolling tobacco, 4200 cigarettes, 2 boxes of wine, and 6 cases of beer.  This had cost him about £603.  Mr Cook said that the goods were for himself, his wife, and for the girlfriend of his son.  He went on to say that the girlfriend of his son “will pay me the price”.
10.	When questioned about his tobacco consumption Mr Cook told the Officers that he smoked about three pouches of 25g per week and that his main brand was Samson.  He said that he normally rolled 40-50 cigarettes per 25g pouch, and that he would pay £8.00 for a 50g pouch and £3.99 for a 25g pouch in the United Kingdom at his local Spar shop.  He estimated the tobacco that he had purchased would last about a year and he might give away some as gifts to friends but he was not sure how much.
11.	Mr Cook confirmed to the Officers that this was his second journey with the Appellant and that he had travelled on two previous occasions to purchase excise goods. 
12.	When questioned Mr Cook stated that he had no smoking materials with him and had not smoked all day.  The Officer showed Mr Cook a piece of paper in Mr Cook’s possession with names and details of excise goods and prices.  Mr Cook explained that one of the names was that of the girlfriend of his son, another name was that of her friend and that his wife’s name was also included on the paper.  Mr Cook said that he was a smoker and stated that he had savings of about £8000.
13.	The Officers seized the goods and vehicle for the reasons that the tobacco was more than ten times in excess of the minimum indicative levels, that the travellers had made multiple previous trips with the opportunity to purchase excise goods, that they did not have smoking materials on their persons or in the vehicle, and both travellers had indicated that there would be a reimbursement of the cost of tobacco, directly or indirectly, and in the case of the Appellant by way of repayment of a debt.
14.	On 1 June 2001 and 13 June 2001 solicitors on behalf of the Appellant wrote to the Commissioners indicating that the Appellant was seeking relief from forfeiture in connection with the goods and vehicle.
15.	On 18 June 2001 the Appellant himself wrote to the Commissioners applying for restoration of his vehicle.  In the letter he stated that his wife was the main user of the car and needed the car to take his daughter and seven year old son to school and to take herself to work.  He stated that his wife had had to rely on lifts from other people and taxis.  He stated that his wife was also an occasional courier and had had to turn down work because of having no vehicle.  He stated that the seizure of his vehicle had caused great disruption and distress to all his family and he wished for the return of his vehicle.
16.	On 29 June 2001 an Officer of the Commissioners replied to the Appellant that the Commissioners were not prepared to offer the vehicle for restoration.  He pointed out to the Appellant that the vehicle had been used for the carriage of excise goods that were liable to forfeiture and that there was no exceptional circumstances which would justify a departure from the policy of the Commissioners.  The Commissioners replied in similar terms to the solicitors.
17.	The Commissioners notified the Appellant and the solicitors that if they wanted the decision not to restore goods reviewed, they could request such a review.  
18.	The Appellant then wrote to the Commissioners on 27 July 2001 expressing dissatisfaction at the decision of the Commissioners which had refused to offer restoration to the Appellant of the seized vehicle.  In his letter the Appellant explained that he was finding it very difficult to cope without the vehicle, especially with having a young son to transport to and from school.  He stated that he and his wife had had to take buses and taxis and the loss of the vehicle had caused a loss of earnings for his wife. He stated he had not been planning to sell any of the excise goods and that the excise goods were for his own personal and family’s use.  He stated that the car had cost him over £3400 and the money to pay for the car had come from a loan which he had taken out on the security of his house which he was still paying back.  He asked the Commissioners to reconsider and to return the vehicle to him.
19.	A Review Officer of the Commissioners Mr R Brenton then carried out a review of the decision, having treated the letter of the Appellant of the requirement to conduct a review.
20.	In the review letter of 10 September 2001 the Officer considered the notes of the Officers who had stopped the Appellant and Mr Cook, and the answers given by the Appellant and Mr Cook to the questions asked by the Officers.  Officer Brenton also considered the applicable legislation, and restoration policy of the Commissioners.  Officer Brenton considered that the decision which the Appellant was contesting was not a decision which no reasonable body of Commissioners could have reached.  He considered that the goods in the vehicle were appropriately seized in the first instance.  The Appellants at his interview and Mr Cook at his interview had clearly stated that some of the excise were being imported for other people.  The Appellant had stated that he owed his brother £250 and that the tobacco would be a repayment for that debt.  He had also stated that the cigarillos were being given to his father to give away for the business of his father.  Mr Cook when asked had stated that the girlfriend of his son was to reimburse him for the purchase of the goods.  Mr Cook was also carrying what appeared to the Officer to be a shopping list with UK comparable prices, excise goods brand names and names of individuals.  The Appellant and Mr Cook were accordingly not bringing back the goods for their own use.  
21.	The Officer also concluded that the quantity of excise goods had been far in excess of the minimum indicative levels in that the tobacco was more than ten times the guidelines.  The Officer did not believe it to be plausible that this was an importation for own use and considered that the quantities were commercial quantities.  The Officer noted that on the initial interception of the Appellant he had informed an Officer that he had made a previous trip about two weeks beforehand and a trip prior to that about Christmas time.  This was found to be untrue and in fact the Appellant had travelled on four previous occasions within two and half months.  During interview the Appellant had admitted to these previous journeys when the Officer presented these dates to him.  Mr Brenton considered that it stretched the bounds of credulity that the Appellant had forgotten these previous trips when the Officer had initially asked about them.  Mr Brenton concluded that the Appellant had deliberately attempted to mislead the Officer.
22.	Although the Appellant and Mr Cook had presented themselves as regular smokers, neither of them had carried any smoking materials.  There was no tobacco in use in the vehicle and there were no used butts within the vehicle or ashtrays.  Mr Brenton concluded that neither of them were smokers.
23.	Mr Brenton was satisfied that the goods were liable to forfeiture and were properly seized and that the vehicle was also liable to forfeiture for having transported the goods.  The Officer was satisfied that the vehicle too was appropriately seized.
24.	The Officer concluded that the vehicle should not be restored, and that the Appellant has not made out a case for not applying the normal policy of the Commissioners.  The Officer did not consider that the claim by the Appellant that he required the car for transportation of his family and for his wife to work were factors which would render restoration appropriate.  He considered that the decision of 29 June 2001 had been equitable in that it treated the Appellant no more harshly or leniently than anyone else in these circumstances, and the Officer could not conclude that it was a decision that a reasonable body of Commissioners could not have reached.  The Officer confirmed the contested decision not to offer restoration of the vehicle.
25.	The Appellant appealed and in his Notice of Appeal indicated that he wished to appeal against the review decision not to restore his car which he considered to be worth £3500.  His grounds of appeal were that the penalty was disproportionate, that the value of the vehicle was £3500 and he had not been informed of the value of the duty involved which he anticipated would be considerably less than the value of the vehicle.
26.	Prior to the hearing of the appeal the Commissioners served on the Appellant the witness statement of Officer Brenton to which he had annexed the notes of the original Officers, and the correspondence.  The Commissioners also served on the Appellant witness statements from two of Officers of the Commissioners setting out the Commissioners’ policies in relation to seized vehicles.  The Appellant did not object to those witness statements.
27.	The Appellant did not appear at the hearing of this appeal.

28.	Findings of Fact and Conclusions.
29.	We have considered all the evidence in this appeal and the principles of law involved.
30.	We make the following findings of fact.
31.	We find that on 24 May 2001 the Appellant was travelling back to the United Kingdom from Calais and Belgium in his Ford Mondeo car registration number R896 RPY, with David Charles Cook as his passenger.  They had in their vehicle 20.5kg of hand rolling tobacco, 5200 cigarettes, 1050 cigarillos, 3 litres of spirits, 40.5 of still wine and 234 litres of beer.  The Appellant told the Officer of the Commissioners that he had sole use of the vehicle.  When the Appellant was asked by an Officer about his previous trips he told the Officer that his last trip was about two weeks previously and the time before that was around Christmas time.  We find that this was untrue and in fact the Appellant had travelled on 6 March, 20 March and 10 May.  When these dates were put to him by the Officer the Appellant admitted to these previous journeys.  Accordingly the Appellant had in fact travelled on four previous occasions within two and a half months.  We find that the Appellants did deliberately attempt to mislead the Officer.
32.	The Appellant had told the Officer that he had purchased for about £800 10.5kg of hand rolling tobacco, 1000 cigarettes, boxes of Stella and Blue Nun and 2 bottles of whiskey.  He told the Officer that the hand rolling tobacco was for himself and that the other goods were for his wife.  He then told the Officer that he owed his brother £250 for work done for him by his brother and that he would pay back the brother in the form of tobacco.  When further questioned he stated that 5kg of the tobacco were for himself, 5kg for his brother and some of the tobacco were for a lad at work and that it would not be a present.  He also stated that the cigarillos were a gift to his father who would in turn give them away for his business.  We are accordingly satisfied that the Appellant had admitted that some of the excise goods were being imported for other people.  We are further satisfied that the Appellant had received or was to receive payment for some of the goods.
33.	We further find that Mr Cook had purchased 10kg of hand rolling tobacco, 4200 cigarettes, 2 boxes of wine and 6 cases of beer which had cost him about £603.  He had told the Officer that some of the goods were for himself, some for his wife and some for the girlfriend of his son.  He told the Officer that the son of the girlfriend would pay him the price.
34.	We find that Mr Cook had a piece of paper on which was named excise goods and prices and on which was named the girlfriend of his son, her friend, and Mr Cook’s wife.
35.	We find that although the Appellant and Mr Cook both claimed to be regular smokers of hand rolling tobacco neither of them had any smoking paraphernalia on them or in the vehicle.  We find that the Officer reached a reasonable conclusion in concluding that neither of them were in fact smokers.
36.	Mr Cook had told an Officer that this was his second journey with the Appellant and that he had travelled on two previous occasions to purchase excise goods.
37.	We find that the decision of the Commissioners was reasonable.
38.	We find that the goods were not being imported by the Appellant and Mr Cook for their own use.  They had admitted that they were receiving in consequence money or money’s worth in connection with some of the goods.  We conclude on all the evidence that the Appellant and Mr Cook were importing for commercial purposes.  
39.	The decision of the Officers was made before the decisions in the cases of Hoverspeed and Lindsay, and on the basis of the then view that the burden of proof as to commerciality was on the Appellant, and on the basis of the Commissioners policies at that time.  The Hoverspeed decision puts the burden on proof as to commerciality on the Commissioners.  We are satisfied however that the importation of the goods by the Appellant and Mr Cook was in fact a commercial importation, and that had Commissioners taken the Hoverspeed decision into account, their decision would inevitably have been the same.
40.	We find that the amount of the excise goods was considerable.  It was considerably in excess of the guidelines.  By the legislation duty is chargeable when goods are held for a commercial purpose.  The goods and vehicle are rendered liable to forfeiture under the Customs and Excise Management Act 1979.  The Appellant made no challenge as to the legality of the seizure and the goods and vehicle were condemned as forfeited under the provisions of that Act.  The Act provides that the Commissioners may as they think fit restore subject to such conditions, if any, anything forfeited or seized.  The Finance Act 1994 sets out the procedure in relation to reviews.  Section 16 of the Finance Act 1994 sets out the jurisdiction of the Tribunal.
41.	 We find that the Officer of the Commissioners took into account all relevant circumstances in concluding that the vehicle should not be restored to the Appellant.  We find that the Commissioners acted reasonably in concluding that there were no exceptional circumstances which would justify the restoration of the vehicle to the Appellant.  We find that the Review Officer acted reasonably in reaching that review decision.  He took into account all the circumstances and the information given to the Commissioners by the Appellant including his submissions of the hardship which he contended had been caused.  The amount of the duty evaded was £3226.01.  The Appellant stated that the value of his vehicle was £3400.  We find that the refusal to return the vehicle to the Appellant was proportionate bearing in mind the amount of the duty evaded, the value of the vehicle and the policy of the Commissioners.  We find that the refusal was a reasonable exercise by the Commissioners of their discretion.  The decision of the Commissioners was reasonably arrived at; the Commissioners have not acted in a way that no reasonable Commissioners could have acted, they have not taken into the account irrelevant matters or disregarded something to which they should have given weight.  
42.	The appeal is dismissed.  The Commissioners applied for costs based upon the Appellant not having appeared at the hearing.  We find in all the circumstances that there should be no order for costs and we make no order as to costs.

MR I E VELLINS
CHAIRMAN
      Release Date: 21 October 2004
MAN/01/8350