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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 >> Holwell v Customs and Excise [2004] UKVAT(Excise) E00835 (08 December 2004) URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2004/E00835.html Cite as: [2004] UKVAT(Excise) E00835, [2004] UKVAT(Excise) E835

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E00835

EXCISE DUTY – Restoration – Goods and vehicle – Appellant and daughter imported 8 kg tobacco and 2,000 cigarettes – Seizure on grounds of quantity and inconsistencies between accounts given by Appellant and daughter – earlier appeal against refusal of restoration allowed and further review directed – subsequent further review refused restoration – whether decision reasonable – yes– appeal dismissed

LONDON TRIBUNAL CENTRE

BRIAN HERBERT HOLWELL Appellant

and –

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: JOHN WALTERS, Q.C. (Chairman)

ANGELA WEST, F.C.A.

Sitting in public in Plymouth on 29 September 2004

Mr I Millard, of Counsel, instructed by Woollcombe Beer Watts, Solicitors, for the Appellant

Miss F Darroch, of Counsel, instructed by the Solicitor for the Customs and Excise, for the Respondents

© CROWN COPYRIGHT 2004


 


DECISION

Introduction

1. This is the second appeal arising out of the seizure of a Peugeot motor car, registration H899 EKP, and excise goods, from the Appellant, Mr. Holwell, at Coquelles on 10^th January 2002. The first appeal was heard by a Tribunal (Chairman: Mr. Angus Nicol) on 27^th March 2003. On that appeal (reference E 00450, Tribunal Decision release date: 17^th July 2003) the Tribunal of which Mr. Nicol was Chairman ("the earlier Tribunal") directed the Commissioners to carry out a further review of the decision to refuse restoration of the goods and vehicle, to be carried out by an officer who has had no previous connection with the case who should have regard to all the facts of the case, and in particular the matters referred to in paragraphs 38 to 40 of the Decision of the earlier Tribunal. The reasoning which led the earlier Tribunal to allow the appeal appears at paragraphs 43 to 46 inclusive of their Decision. It is clear from the context that by the reference to "paragraphs 38 to 40" of the Decision the earlier Tribunal meant to refer to paragraphs 43 to 45 inclusive.
2. The earlier Tribunal added a direction that if the decision on the further review was adverse to the Appellant, the Appellant may, if so advised, appeal against it to this Tribunal. The further review which was so directed was carried out by Mr. Gareth Morgan, an officer of the Commissioners who gave evidence before us. The result of his further review was to confirm the contested decision not to offer restoration of the excise goods and vehicle (see: his review letter dated 12^th August 2003). It is against Mr. Morgan's decision that the Appellant appeals to this Tribunal.
3. In fact, the earlier Tribunal heard two appeals by the Appellant. The first was against a decision of the Commissioners not to restore to him a Vauxhall motor car and a quantity of excise goods which were seized on 18^th May 2001 at Coquelles. That appeal was dismissed by the earlier Tribunal. The second was in relation to the seizure on 10^th January 2002. As we have noted, the earlier Tribunal allowed that appeal and directed a further review of the decision to refuse restoration of the goods and vehicle.
4. We reproduce paragraphs 7 to 9 inclusive of the earlier Tribunal's Decision, which is taken from that part of the Decision which deals with the facts. This passage summarises the earlier Tribunal's findings as to the events of 10^th January 2002, the stopping of the Appellant's car and the separate interviews which then took place with the Appellant and his daughter, Theresa Holwell. It will serve to introduce the facts of the case relevant to our Decision.

10 January 2002

On 10 January 2002 the Appellant and his daughter had travelled from Exeter for the purpose of attending Dover Magistrates' Court on the occasion of the hearing of condemnation proceedings in respect of a previous seizure from the Appellant which had taken place on 18 May 2001. They had decided to travel on to France and Belgium, since they had come so far in any event, so as to make the trip worthwhile. They had been to Adinkerke for the purpose of buying tobacco, cigarettes, and spirits. When stopped at Coquelles, as well as some wine and spirits, they had 1,000 cigarettes each and 4 kg (80 pouches) of tobacco each. After the officers had read to the Appellant and his daughter the "commerciality statement", which requires a traveller to satisfy the Commissioners that any excise goods imported by him are not imported for a commercial purpose, the Appellant and his daughter were interviewed separately.

According to the statement of case, the Appellant, when first stopped, said that they had been to France and to Adinkerke in order to buy tobacco, cigarettes and spirits, and he declared the amount of cigarettes and tobacco that they had. When interviewed separately from his daughter, the Appellant said that he had owned the vehicle since June or July, and mentioned that his previous vehicle had been seized on 18 May 2001. He explained that the purpose of the journey was to go to Dover Magistrates' Court, and they had travelled to Belgium to buy the goods to make the trip worthwhile. The Appellant said that the Dunhill cigarettes were his and the Bensons were his daughter's. Half the tobacco, the Amber Leaf and six packs of the Old Holborn were his. He considered that the cigarettes would last him about six weeks, and his daughter's would last her and her boyfriend six or seven weeks. The tobacco would last him about 6 months. He said that he smoked between two and three pouches of tobacco and about 200 tailor-made cigarettes a week. He had paid for all the goods, which cost £537; his daughter had given him £100, and still owed him £150. He had also paid for the trip. He said that he had last travelled in May 2001, when he had bought one box of Amber Leaf and 1,000 cigarettes, and the same amount two days earlier. He said that he had never seen a Notice 1 before; the previous time that he had been stopped he was issued with a card.

Miss Holwell, when interviewed, said that half the excise goods were hers. She could not remember the name of the brand of tobacco 80 pouches of which was hers. She said that the Benson and Hedges cigarettes were hers. She said that the goods had cost about £500, or £250 each, and that her father had paid cash for all the goods. No-one had assisted her with the purchase, she had drawn money from her own bank account. She said that she usually smoked Royals, and used to smoke Bensons. She did not name the brand of tobacco she smoked, because she chopped and changed. She said that she smoked about 20 cigarettes a day and one pouch of tobacco every two weeks. She thought she got about 50 cigarettes out of a pouch. She did not know how long the goods would last her, she thought perhaps about three or four months. Miss Holwell said that she was employed as a carer in an old people's home. The last time she had travelled abroad had been to Germany about ten years previously.

5. We reproduce paragraphs 43 to 46 inclusive of the earlier Tribunal's Decision which contain the reasoning which led the earlier Tribunal to allow the appeal:

2: 10 January 2002

This review decision relies in a significant part upon the view taken by Mr Crouch that Miss Holwell was not telling the truth and that it could be inferred from that and from what she had said that she was in fact importing the tobacco for her father and not for herself. The Commissioners rely in particular upon what Miss Holwell said in interview: first, that she was not able to name the brand or brands of tobacco which she usually smoked, and secondly, that she had paid only £100 out of a half-share of more than £250, and it was not believed that she owed her father the balance of £150. That evidence can only have come from the interview. But the interview notes as produced by the interviewing officer shew that what Miss Holwell is alleged to have said was not what she did in fact say. She did not say that she did not know what brand she usually smoked, she said only that she smoked different brands and chopped and changed (see paragraph 14 above). As to the money, Miss Hoyland's evidence was that the Appellant had said that his daughter still owed him £150, whereas Miss Holwell said "that she had given him the money already". The interview notes, on the other hand (see paragraph 13 above) shew that she was asked if she had given her father cash, and said that she had. She was not asked and did not say how much cash she had given him. It is quite clear that in these two instances, each of which was of significance in making both the original decision not to restore and the review decision, the review officer was considering an erroneous account of the evidence. As a result, the review officer concluded that Miss Holwell had not been telling the truth, and concluded, "Taking this further, I consider that the position was that all of the 8 kilos of tobacco belonged to Mr Holwell." It should also be noted in passing, though not of such central significance, that Miss Hoyland said that she was unaware of the 2.0 p.m. Magistrates' Court hearing, although it is mentioned in her interview notes; and that Miss Hoyland ignored the existence of Miss Holwell's partner, although she was aware of it.

It is therefore clear that Mr Crouch took into consideration two matters which were seriously in error in communicating to him the evidence on which he was to review the case. They were matters which should not have been taken into consideration for that reason.

It is also the case that during the interview it could have been put to Miss Holwell that she was bringing in half of the tobacco for her father, so that the amount appeared to be halved between them and not therefore so greatly in excess of the guideline levels. But for some reason no such suggestion was made to her, nor to the Appellant, during the interviews, indeed it was not suggested to either of them in person until cross-examination at the hearing of the appeal. The first time it was suggested was in the review letter. If an inference is to be drawn as to the conduct of a person importing excise goods which the Commissioners say have been improperly imported, then such an inference must be drawn from facts. It is not enough to draw or attempt to draw such an inference from facts which do not exist, nor to draw it from subjective opinions as to the habits of people in general. An instance is, "It is unreasonable to buy such a quantity of tobacco so far ahead." People are not statistics who behave in stereotyped ways, each one the same as the next. They are individuals, and whilst a number of people may and often do act in similar ways, there are many who do what another person, whether a Customs officer or anyone else, might think unreasonable, or implausible, or foolish. However, the inference may be truly drawn from facts supported by evidence, such as a quantity of tobacco so large that it would be unreasonable to suppose that it could be for the personal use of one person. An illustration of that is to be found in the case of Boyd, already referred to. In this context, it is to be remembered also that Mr Crouch said, in evidence, that he would not have considered 4 kg an unreasonable quantity to import.

We remind ourselves that we have no jurisdiction to arrive at a new conclusion on the facts of the case. Whether on the evidence we would have come to the conclusion that the Appellant was importing tobacco for a commercial purpose or for his own use, or using his daughter to assist that purpose, has no part in this decision. We must do no more than consider whether the review decision was reasonable in the Wednesbury sense, as outlined in paragraph 30 above. For the reasons given in paragraphs 38 to 40 above, we consider that the decision was in an important respect based upon error, and was therefore not reasonable.

6. It can be seen that the crux of the matter, which led the earlier Tribunal to allow the appeal, was that the relevant Customs officers had taken an incorrect view of what Miss Holwell had said in the interview on 10^th January 2002 as a basis for reaching their conclusions that her assertions that 1,000 cigarettes and 4 kg (80 pouches) of tobacco (especially the 4 kg of tobacco) imported in the Appellant's car had been for her use and that she had paid for it (or would pay for it) were false. On that basis they had concluded that the 4 kg of tobacco (at least) had been imported by the Appellant rather than by his daughter and that it was not for his own use and that it was a commercial importation.
7. As we have stated, the review directed by the earlier Tribunal was carried out by Mr. Gareth Morgan. In his review letter, dated 12^th August 2003, he stated that he had "re-examined the officer's notebook in regard to the interview with Theresa Holwell". He accepted the earlier Tribunal's exposition of the interview evidence; that is, that instead of the fact being that Miss Holwell was not able to name the brand of tobacco that she smoked she said that she normally smoked different brands and that she "chopped and changed", and that she had said that she had given her father cash (to assist in the purchase) without being asked or specifying how much, rather than giving a different answer which was inconsistent with the Appellant's statement at interview that she had paid him £100 out of a half share of more than £250 and still owed him the balance.
8. Nevertheless Mr. Morgan in the review letter drew the inference that Miss Holwell had not in truth purchased half of the imported hand-rolling tobacco for her own use (or that of her partner) from the following facts or matters:

(a) her admitted failure to remember the brand of the pouches which she said had been purchased for her;

(b) that the £100 which she had given the Appellant could more plausibly be considered to be the purchase price of her share of the Benson and Hedges cigarettes (which had cost £95) rather than a payment on account of something in excess of £250 for half of the hand-rolling tobacco as well;

(c) her inconsistent answers relative to her consumption of hand-rolling tobacco – she said that she smoked one pouch of tobacco every two weeks and that her share would last her 3 or 4 months, whereas at that rate it would take over 3 years to smoke 80 pouches of tobacco. Mr. Morgan also observed that Miss Holwell was not asked if anyone else would share the tobacco with her and that she did not volunteer any information in that respect which he could take into account, except that the Appellant told the officer that he expected the cigarettes to last Miss Holwell and her boyfriend 6 to 7 weeks – but the Appellant did not mention her tobacco.

(d) Miss Holwell's statement to the officer that she got about 50 roll ups from a pouch but that she did not use them all as "sometimes they don't stick and you have to throw them away". Mr. Morgan found that very difficult to accept because there would be no need to throw away the tobacco if the papers did not stick, and the comment suggested that Miss Holwell was not a regular user of handrolling tobacco, certainly not one who was going to spend £150 on it. It was also Mr. Morgan's experience that nearer 100 roll ups could reasonably be expected to be obtained from a 50 gram pouch of tobacco.

Witness Statement made by Miss Holwell and dated 23^rd September 2004

9. At the start of the appeal hearing we heard an application on behalf of the Appellant to receive in evidence a Witness Statement made by Miss Holwell and dated 23^rd September 2004 – that is, six days prior to the appeal hearing. This application was opposed by Miss Darroch on behalf of the Commissioners. We decided to admit the Statement but we said we would be cautious when attributing weight to the evidence contained in it, particularly having regard to the fact that it was made so late in the day and it appeared that Miss Holwell would not be making herself available to be cross-examined on it.
10. In the Statement, Miss Holwell addresses the fact that her estimate of her personal consumption at the interview on 10^th January 2002 has been questioned. She says that at that interview she was confused as to whom the goods were for and how long it would have taken to consume them. She attributed this confusion to an underactive thyroid condition from which she was suffering and which she was keeping secret. She annexed to her Statement a doctor's statement to the effect that hypothyroidism had been diagnosed on 5^th February 2001 and treated by the prescription of increasing doses of thyroxine. She also annexed documents to explain her non-attendance at the Tribunal. It appears from these documents that she had applied for 5 days' holiday from work, from 27^th September to 1^st October 2004 inclusive (that is, the week of the appeal hearing), but that this application had been rejected because that week was a particularly busy week for the University of Exeter, where she was employed.
11. In the Statement she did not give an alternative or revised estimate as to the time it would have taken for the tobacco goods to be consumed. She did say that when she was questioned she forgot to mention "that part of the goods bought would be for [her boyfriend's] consumption and that when she gave her estimate she did not take account of his share". She states that he "is a smoker and consumes more cigarettes per day than myself", but does not specifically refer to any use by him of handrolling tobacco.
Oral evidence before us
12. The Appellant gave evidence before us. He said he was buying the excise goods for his own use, although he would expect to give some away to family members as a friendly gesture. When asked whether he was aware of the kind of tobacco smoked by his daughter and her boyfriend, he replied "Golden Virginia". When asked whether he was looking for that, he replied "Not for myself. I was buying Amber Leaf and Old Holborn". He knew his daughter had smoked Amber Leaf before because he had given it to her; she did not express a preference for a particular brand of tobacco, but she did express a preference for a brand of cigarettes. He had bought 1,000 Dunhill cigarettes for himself and 1,000 Benson and Hedges cigarettes for his daughter. He had bought 8 kg (160 pouches) of handrolling tobacco – 5 kg Amber Leaf and 3 kg Old Holborn and he said that up to half of the handrolling tobacco was his daughter's. He also bought a quantity of alcohol (including two bottles of Martini), and had with him some Grolsch, given him by the shop at Adinkerke, or sold at a discounted price.
13. In cross-examination, the Appellant said that he had bought tobacco on the black market in the UK. His daughter had not been with him when he made the tobacco purchases at Adinkerke, but had been "browsing" elsewhere in the shopping area. He accepted that his daughter had given her £100 and the 1,000 Benson and Hedges cigarettes had cost £90 to £95 and "she got the Martini". In re-examination he accepted that his daughter "was probably not aware of what I'd bought".
14. The review officer, Mr. Gareth Morgan, also gave evidence before us. He confirmed his view, having considered the interview notes and the earlier Tribunal's Decision that Miss Holwell was likely to be a smoker of ready made cigarettes, not of handrolling tobacco. He did not accept that the Appellant had been victimised in his treatment at the hands of Customs officers.
Submissions
15. In his submissions, Mr. Millard, for the Appellant, said that it had been established by the decision of the Divisional Court in R (on the application of Hoverspeed Ltd.) v Customs and Excise Commissioners [2002] All ER 498 that article 9 of Council Directive 92/12/EEC ("the Excise Directive") did not impose a persuasive burden on the holder of imported goods, and so an individual found in possession of goods in excess of the guide levels (which was accepted to be this case) was subject at most to an evidential burden to provide an explanation (i.e. that the goods were imported for personal rather than commercial use). It followed that although the Tribunal had to decide how much of the goods were in fact imported by Miss Holwell, however much that was, we could still find that the Appellant imported the rest for his own use. He submitted that the Appellant had discharged the evidential burden referred to in Hoverspeed.
16. On the question of the amount imported by Miss Holwell, Miss Darroch, for the Commissioners, emphasised that her contemporaneous evidence (the notes of her interview on 10^th January 2002) showed that she had paid £100 to her father towards the costs of the purchases but also that she had not said she owed anything more. As to the Witness Statement served for the purposes of the appeal hearing, besides her objection that it had been served late and by an absent witness (which reduced its credibility), it confirmed that on 10^th January 2002 she was being treated for her condition and if the condition was under control it was unlikely that it had affected her ability to answer the officer's questions correctly and without confusion.
Decision
17. Our function is to decide whether Mr. Morgan's decision not to restore the Appellant's goods and vehicle was a decision at which Mr. Morgan "could not reasonably have arrived" (s.16(4) Finance Act 1994). The burden of proof lies on the Appellant (section 16(6) Finance Act 1994).
18. Mr. Morgan unambiguously based his decision on his conclusion that the Appellant and Miss Holwell had dissembled in what they had said regarding Miss Holwell's importation of one half of the handrolling tobacco. Mr. Morgan's conclusion from the material before him (scrutinised in the light of the earlier Tribunal's Decision) was that the whole of the handrolling tobacco had been imported by the Appellant rather than Miss Holwell (in the sense that the Appellant had paid for it without any expectation of reimbursement by Miss Holwell). He further decided on the basis of this conclusion that the Appellant had imported the handrolling tobacco for commercial purposes, having regard to the quantity imported and also to the fact that he had falsely pretended that half of the importation had been by Miss Holwell. He was "further persuaded to this view when [he took] into account [the Appellant's] previous trips and dealings with Customs". (This was a reference to the Appellant's trips on 16^th May 2001 and, two days later, on 18^th May 2001. On both of these occasions the Appellant had imported (or attempted to import) excise goods.)
19. We find as a fact from the evidence before us that Miss Holwell intended that the Appellant should purchase for her 1,000 Benson and Hedges cigarettes and, perhaps, other goods, such as two bottles of Martini, up to a purchase price of £100, the sum of money that she had given him. We do not accept that the Appellant purchased 4 kg (80 pouches) of handrolling tobacco for his daughter or for her use or for the use of her boyfriend. We agree with Mr. Morgan's scepticism based on the matters he identified and which we have listed above at paragraph 8. We find that Miss Holwell was not a regular smoker of handrolled cigarettes. Neither was her boyfriend.
20. We are not dissuaded from this view by the contents of Miss Holwell's Witness Statement dated 23^rd September 2004. The fact that this evidence was produced so late in the day, coupled with the fact that it introduces a case which was not mentioned at the appeal before the earlier Tribunal, causes us to view it with scepticism. We would have expected Miss Holwell to present herself for cross-examination and we find her excuse for not doing so inadequate. She needed to be at the Tribunal for an hour or so, or half a day at most. Her excuse for non-attendance is that she was unable to get leave off work, but the evidence annexed to her Statement shows that she relied on her employers' refusal to grant her a week's leave. It is clear that she made an insufficient effort to be present at the hearing and we consider that this suggests that she was unwilling to face cross-examination. In any case the only point arising from her Statement which might have improved her case was the assertion that she was going to share with her boyfriend the goods she allegedly imported. This assertion does not displace the conclusion we have come to, based on the matters listed above at paragraph 8.
21. Mr. Millard's case, for the Appellant, based on Hoverspeed, is that the Appellant's assertion that he was importing the goods for his own use (or for gifts to family and friends) satisfied any requirement laid on him by the Excise Directive as a prerequisite for being able to bring all the excise goods in issue in to the country without paying UK excise duty on them. For the purposes of the Excise Directive we find that he was importing at least 4 kg of handrolling tobacco for commercial purposes, namely the handrolling tobacco that he falsely claimed was being imported by his daughter. Thus, he was smuggling at least that amount of tobacco. We, like Mr. Morgan, in reaching this conclusion, have regard to the evidence as to the overall quantity of handrolling tobacco imported by the Appellant and to his previous trips and dealings with Customs, but the chief reason for our conclusion is our finding that that the Appellant and Miss Holwell had dissembled in what they had said regarding Miss Holwell's importation of one half of the handrolling tobacco.
22. It follows that we hold that Mr. Morgan's decision was one which he could reasonably arrive at, and we dismiss the appeal.
23. The Commissioners made no application for costs and so we make no costs order.
JOHN WALTERS, Q.C. CHAIRMAN RELEASED: 8 December 2004

LON/03/8183