EO00953                                                                            
	EXCISE DUTY – Community travellers – importation of 14620 cigarett4es – cigarettes seized as liable to forfeiture – appellants commenced proceedings in tribunal and required HMRC to bring condemnation proceedings – in condemnation proceedings held that goods held for commercial purpose - tribunal appeal allowed on basis that HMRC applied incorrect burden of proof – second appeal to tribunal – held that under decision in  Gora v HMRC first tribunal bound by finding that goods held for commercial purpose – decision not to restore goods not unreasonable appeal dismissed.  

MANCHESTER TRIBUNAL CENTRE

 
 	
	MR ALAN & MRS VERONICA GRIFFITHS	Appellant

	- and -

THE COMMISSIONERS FOR
	HER MAJESTY’S REVENUE AND CUSTOMS	Respondents

				Tribunal:	David Demack (Chairman)
						Elizabeth M Pollard

Sitting in public in York on 16 March 2006

The appellants in person

Miss Laura Addy of counsel, instructed by the Acting Solicitor for HM Revenue and Customs for the Respondents 

	© CROWN COPYRIGHT 2006

DECISION

1.	On 2 March 2004, the Appellants, Mr Alan Griffiths and Mrs Veronica Jean Griffiths (his wife), returned to the United Kingdom from Spain bringing with them 14,620 cigarettes and 2 kilos of hand rolling tobacco.  As travellers from one country in the European Union to another, they were entitled under Community law to import into the United Kingdom duty free excise goods such as their tobacco products duty paid in that other country which were for their own use.
2.	The Commissioners of Her Majesty’s Revenue & Customs (“HMRC”) have offered guidance on the quantities of excise goods which they accept as being for own use.  In the case of tobacco, it is one kilo per person, and in the case of cigarettes, 3,000 per person.  Mr and Mrs Griffiths’ importation of cigarettes therefore substantially exceeded the guideline figure.
3.	Mr and Mrs Griffiths were stopped by an officer of HMRC on arrival at Birmingham Airport.  They were required to satisfy him that their tobacco products were for their own use, but failed to do so.  Consequently he seized them as liable to forfeiture.
4.	Mr and Mrs Griffiths appealed against the seizure, claiming that it was invalid.  The appeal resulted in HMRC bringing condemnation proceedings in the Solihull Magistrates’ Court.  They also appealed to this tribunal against a decision made on review by HMRC not to restore the tobacco products to them.
5.	The tribunal hearing took place on 23 March 2005.  HMRC failed to appear and, in their absence, the tribunal allowed the appeal because Mr and Mrs Griffiths had been required to prove that the tobacco products were not held by them for a commercial purpose, whereas the decision of the Divisional court in R (on the application of Hoverspeed Limited and Others) v Commissioners of Customs and Excise [2002] 4 All ER 912 indicated that the burden of proving that goods were held for a commercial purpose fell on HMRC.  But the tribunal could not direct HMRC to restore the tobacco products to Mr and Mrs Griffiths; its jurisdiction was (and is) restricted to directing HMRC to carry out a further review of the decision not to restore the products to them (see section 16, Finance Act 1994).  The tribunal therefore directed a further review.
6.	The tribunal decision contains no mention of the condemnation proceedings.  Although Mr and Mrs Griffiths insisted before us that the tribunal was told of them, we have grave doubts as to whether it was.  Had it been, we doubt that it would have made the decision it did in fact make.  Our doubt arises because the condemnation proceedings were heard on 27 October 2004, and the magistrates condemned Mr and Mrs Griffiths’ tobacco products as forfeit, holding that they had been validly seized as having been held for a commercial purpose.

7.	The tribunal was bound by the magistrates’ decision that the goods were held for a commercial purpose.  That was decided in the case of Gora v Commissioners of Customs and Excise [2003] 1 WLR 93.  In that case, the Court of Appeal – the second highest court in England and Wales, and by whose decision we are bound – held that while the division of jurisdiction between the magistrates’ court and the tribunal might be “curious”, “the division is clear and it is not intended that the tribunal should have jurisdiction to reconsider the condemnation of goods as forfeited” (see Pill LJ at p.113, paragraph 58).  Subsequently, in the case of Gascoyne v Commissioners of Customs and Excise [2005] 2 WLR 222 – another decision of the Court of Appeal – Buxton LJ said, at paragraph 46 of his judgment, “I do not think it can have been intended that the importer before the tribunal would have a second bite at the cherry of lawfulness having failed in the condemnation proceedings …”.  Against the background of those decisions of the Court of Appeal, Lewison J in the Commissioners of Customs and Excise v Albert Charles Smith ChD (2005) unreported, explained the tribunal’s function in cases such as this as “analogous to a sentencing court once a defendant has been convicted.  No matter that the defendant still protests his innocence of the charge against him, the function of a sentencing court is to accept mitigation but not to question the original conviction” (paragraph 22).
8.	It follows from that case law that, had the first tribunal been told of the result of the condemnation proceedings, it would have had to make its decision, not on a consideration of where the burden of proof lay, but on the basis that Mr and Mrs Griffiths had imported their tobacco products for a commercial purpose.  And, had it done so, all that it could have done to allow the appeal was to take account of “mitigating circumstances”. No such circumstances appear in the decision.  
9.	Notwithstanding the tribunal’s incorrect application of the law, HMRC did act on the tribunal decision and carried out a re-review of their decision not to restore the tobacco products to Mr and Mrs Griffiths.  Again, it proved adverse to them.  And it is against the decision on re-review that they made their present appeal.
10.	We too are restricted to taking account of “mitigating circumstances” in dealing with the appeal; or, to paraphrase the statutory language, to determining whether the review decision not to restore the tobacco products was one at which HMRC could not reasonably have arrived (again, see section 16(4) of the Finance Act 1994).  We have to ask whether, in making their decision, HMRC took account of something they ought to have ignored, ignored something which they should have taken into account, or came to a conclusion at which no reasonable body of Commissioners could have arrived (see Commissioners of Customs and Excise v J H Corbitt (Numismatists) Limited [1980] STC 231).  Mr and Mrs Griffiths made no claim as to the unreasonableness of HMRC’s decision, and we are unable to hold that it was unreasonable against a background of nothing more than their continuing to maintain that the tobacco products were imported for their own use.  It was certainly proportionate.  We therefore dismiss the appeal

.

DAVID DEMACK
CHAIRMAN
Release Date: 2 May 2006
MAN/05/8044