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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 >> Galbraith v Revenue & Customs [2006] UKVAT(Excise) E00993 (27 September 2006) URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2006/E00993.html Cite as: [2006] UKVAT(Excise) E993, [2006] UKVAT(Excise) E00993

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E00993

Restoration of vehicle seized by Customs sought - order in condemnation proceedings declared forfeit goods (25kgs. hand rolling tobacco and 600 cigarettes) and seized vehicle in which they were carried - vehicle used for part-time taxi business - exceptional hardship and proportionality considered - appeal dismissed

JOHN GALBRAITH APPELLANT

and

THE COMMISSIONERS for

HER MAJESTY'S REVENUE AND CUSTOMS RESPONDENTS

Tribunal: Elsie Gilliland (Chairman)

Carol A. Roberts (Member

Sitting in public in Manchester on 20 July 2006

The Appellant in person

James Puzey,counsel, instructed by the Acting Solicitor of HM Revenue and Customs for the Respondents

DECISION

1. The appeal heard by the tribunal was that of John Galbraith (the Appellant) against a decision of Customs on review on 22 November 2005 not to restore to the Appellant certain excise goods (the goods) and the motor vehicle (the vehicle) in which they were being carried seized from him at Dover Eastern Docks on 4 September 2005.
2. It is not disputed that the Appellant had been stopped by Customs that day when he was travelling with a passenger in the vehicle which was a Ford Mondeo LX TD index W942 CJN. The passenger was the Appellant's nephew John William Bentley. Both men had agreed to be interviewed by Customs as to the goods they were bringing into the U.K. from the Continent. The goods in the case of the Appellant comprised 25 kg hand rolling tobacco and 600 cigarettes. Mr. Bentley was said to have carried a similar quantity of hand rolling tobacco also seized but we were told that he had not appealed the seizure. The appeal before us the Appellant confirmed was against the seizure of the vehicle not the goods.
3. There had been condemnation proceedings in the matter and we had in the documents produced for our attention a copy of an order of 10 April 2006 in the East Kent Magistrates Court sitting at Dover by which the goods and the vehicle were condemned as forfeit. Accordingly the legality of the seizure has been confirmed. The issue of commerciality was not in any event raised by the Appellant.The two main issues on which the Appellant based his appeal for our consideration were first the hardship caused to him by the seizure of the vehicle with the loss of income and financial problems that ensued and secondly the proportionality of that seizure. Both hardship and proportionality have been judicially considered in cases to which we have been able to refer
4. The Appellant presented his own case and submitted to cross-examination by Counsel for Customs. He told us that the vehicle had been used by him as a taxi on evenings and at weekends to supplement his income. His day-time occupation was as a senior team leader with a Blackpool concern. That company had however been cutting back for some time and would close at the end of the year and relocate. He would be without a job. There had been previous redundancies and the business had had a troubled history but he had stayed with the job which he liked to remain in employment. His redundancy entitlement on the works ultimate closure would be less than £1000.He had a mortgage on his property of £258 per month which he paid.. He and his partner shared the bills.
5. He had obtained a business loan from Royal Bank of Scotland. He could not remember the exact date but it was in October 2004 in the sum of £3500 and the period of the loan was 3 years. The monthly repayments were £145 and there was unemployment protection cover. Despite the seizure of the vehicle he still had to continue to meet the loan repayments. He was pressed in cross-examination as to why he had not sought to replace the vehicle but he put it to the tribunal that such financing would be beyond his resources. To meet Local Authority regulations no hire vehicle could be more than eight years old; there were regular inspections and pit inspections to be paid for. Nor could he obtain employment as a driver as he carried an increased insurance premium because of drink driving charges on his record.
6. In the review decision the review officer had referred to some other vehicles registered to the Appellant and available to him. Cross-examined as to these he explained that the first one an S reg. Vectra which had been used by him as a taxi before he bought the seized vehicle had been sold to a nephew who lived half the year in Denmark. He had sold a Jaguar which had been his and a Suzuki Cappucino which was his partner's and he now used a J reg.Vauxhall Carlton as his transport and they had bought a moped for use by his partner.
7. Counsel analysed the Appellant's financial position on the basis that the Appellant could have taken steps to improve his position and re-establish his taxi business for instance by making more use of the funding from the sales of the vehicles and savings of some £1500 to which he had referred at the time of the seizure. He told the tribunal at the hearing that he now had an overdraft. The Appellant's response was that he had weighed up the pros and cons and decided that his financial position was such that it would be more prudent to wait and see what happened in the meantime but with a view to buying a new taxi when the current loan had been paid off.
8. The role of the tribunal in ancillary matters such as that before us is to determine whether the decision made by Customs was one which could not reasonably be arrived at (Finance Act 1994 s.16(4).To act reasonably the review officer must have taken into account all relevant matters disregarded any irrelevant ones and properly considered the law. At the time of the review letter the decision in the condemnation proceedings had not been made and the officer accepted that if the claim of the Appellant in those proceedings were to be successful her review decision would be different. However it was determined in those proceedings that the goods were imported for a commercial purpose and the vehicle was forfeit as used for the carriage of those goods into the United Kingdom. Accordingly this further information is before us as we consider the reasonableness of the review decision.
9. In the decision of the Court of Appeal in Lindsay v Customs and Excise Commissioners [2002] EWCA Civ 267 Lord Phillips set out the legal position namely that normally the circumstances of the deliberate use of a car for smuggling to make a profit will take a case beyond the point where the value of the vehicle can carry significant weight although he pointed out that exceptional hardship must also be considered (para.63). Clearly there has to be proportionality between the policy, the aim of the legislation to prevent commercial smuggling and the penalty, the means employed to prevent it. The hardship involved is defined as "exceptional". There is also the human rights point to be taken into consideration that no one shall be deprived of his possessions but this is subject to the right of a State to seek payment of tax properly due under its laws.
10. The Appellant claimed that it was the action of Customs in seizing his vehicle that had resulted in his no longer having a taxi business and that his right to earn a living had been infringed. His had been a first offence. We did not see any business accounts though the Appellant did bring some copy bank statements to the tribunal which we understand were not available to the review officer.
11. Any loss of a vehicle is likely to cause problems leaving the owner with a number of decisions to make affecting both his financial commitments and lifestyle more particularly so where there is a business dimension. What we are examining in the instant case is whether the circumstances of the seizure gave rise to a situation outside and beyond what might normally be expected and causing exceptional hardship. The Appellant was and still is in full-time employment. Clearly he is repaying a loan on a vehicle which he no longer has. He has had other assets and made a choice as to how these should be used in his new circumstances. He took the opportunity to pay off a personal loan; he decided to put his part-time business operation on hold until the initial loan should be paid off. These were decisions he took but there were other options available to him . He did not explain to us why he was not bringing into his calculations prospective income from working with a new vehicle to meet alternative financial commitments including additional repayments. Whilst we accept also that there are further expenses in putting a vehicle on to the road as a taxi these are not unreasonable costs in the setting of a profit-making concern. It is our view that the Appellant was not left in a position of exceptional hardship.
12. Equally we do not consider that the seizure of the vehicle was out of proportion. The Appellant told us that he had paid £ 1375 for the goods. Counsel for Customs quoted the duty due on the goods as £ 2679 and produced evidence putting the value of the vehicle at the time of seizure at £ 2700. ( The Appellant had purchased it in October 2004 at a price of £3400). The loss of duty is equivalent to the value of the vehicle at seizure and we consider the figures to be balanced and proportional. We do not consider that the Appellant's submissions as to the underlying merits of his case stand up to scrutiny. The review decision was reasonably arrived at.
13. We dismiss the appeal.
14. Customs have not sought costs and we make no direction as to costs.

ELSIE GILLILAND

CHAIRMAN

Release Date: 27 September 2006

MAN /05 /8058