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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 >> Gerald v Revenue & Customs [2008] UKVAT(Excise) E01155 (03 December 2008) URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2008/E01155.html Cite as: [2008] UKVAT(Excise) E01155, [2008] UKVAT(Excise) E1155

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E01155

EXCISE DUTY – Restoration appeal – tobacco goods seized from the appellant on her entry to the UK – the appellant did not institute condemnation proceedings – she was served with Customs Notice 12A and filled in the form Letter B which was appropriate to restoration proceedings not to condemnation proceedings – the appellant did not appear and was not represented before the Tribunal – held that it would be an abuse of the Tribunal's process to consider an argument that the seizure was not legal because the goods were intended for the appellant's own use – Gascoyne v CCE and later cases considered – alternatively, if the Tribunal had considered an 'own use' argument, it was unlikely on the facts that the Appellant would have been able to discharge the burden on her to prove that the Commissioners' decision that the goods were held for commercial purposes and not for her own use was unreasonable – appeal dismissed

LONDON TRIBUNAL CENTRE

YVONNE GERALD Appellant

- and -

THE COMMISSIONERS FOR HER MAJESTY'S

REVENUE AND CUSTOMS Respondents

Tribunal: JOHN WALTERS QC (Chairman)

MRS R.S. JOHNSON

Sitting in public in London on 4 September 2008

The Appellant did not appear and was not represented

R. Jones, of Counsel, instructed by the Solicitor for HM Revenue and Customs, for the Respondents

© CROWN COPYRIGHT 2008


 


DECISION
1. The notice of appeal in this case (dated 25 February 2008) gives no details of the decision appealed against or the grounds of appeal, but it is clear from the accompanying documentation before the Tribunal that Ms. Gerald ("the Appellant") appeals against the Commissioners' decision on a review not to restore to her 3,200 Benson & Hedges cigarettes and 3 kilograms (60 50-gram pouches) of Golden Virginia hand rolling tobacco ("the Excise Goods"). The decision is contained in a letter dated 15 January 2008 sent to the Appellant by Customs Review Officer H.B. Perkins. In that decision letter Officer Perkins confirmed the original decision refusing restoration (communicated to the Appellant by Office J Aston of the Commissioners' Post Seizure Unit by a letter dated 27 November 2007).
2. In their Statement of Case, the Commissioners state that the Appellant had attached to her notice of appeal a separate sheet of paper giving reasons why she believed the Excise Goods should be returned to her. In the Statement of Case it is stated that the reasons were: (1) that the money given to her from her mother (part of the funds used by the Appellant to purchase the Excise Goods) was money owed to her and was not borrowed; (2) that the Appellant has proof in the form of a bank statement that she had withdrawn £500 from her bank statement (the inference being that these funds made up the amount that was used to purchase the Excise Goods); that the only reason she had menthol cigarettes on her person at the time of the seizure was that she found them to be beneficial to smoke at the time as she had a cold; that she was initially told that the Excise Goods would be returned to her within 3 weeks; and that the Excise Goods were for her own personal use.
3. The Appellant did not appear and was not represented. On the application of Mr. Jones, for the Commissioners, we agreed to consider the appeal in the absence of the Appellant pursuant to rule 26(2) of the VAT Tribunals Rules 1986 (SI 1986/590). A letter dated 13 February 2008, unsigned but apparently sent by the Appellant to the Tribunal Centre making various points in support of her appeal, was before us and we considered it, as appears later in this Decision.
4. The Appellant was returning from Luxembourg to the UK as a coach passenger on 9 October 2007 when she was stopped by Customs Officers at the UK Control Zone at Coquelles, France. She was questioned by the Officers and confirmed that she had purchased the Excise Goods for her own use. She had spent nearly £600 on the Excise Goods on this trip.
5. She said she had last travelled abroad two years previously and that she smoked between 12 to 20 rollups a day and maybe 20 cigarettes a day. She confirmed that a pouch of hand rolling tobacco would last her about a week.
6. She said she was not employed by reason of ill health and that she had not worked since 2002. Of the nearly £600 spent on this trip, £200 had been obtained by the Appellant from her mother, and the rest had been withdrawn from her bank account.
7. In the letter dated 13 February 2008, which was chiefly concerned with stating the source of the money used to buy the Excise Goods, the Appellant stated that the £200 obtained from her mother had been in repayment by her mother of a loan of £200 made by the Appellant to her mother.
8. Other details relating to the Appellant's finances are as follows. She has one bank account. She receives £246 from the Department of Pensions and £56 family allowance (we assume, per week) and her rent is paid for her each week. She pays £500 a year for car insurance. She does not have any credit cards or loans. She said that she had received a compensation payment from a road accident a year previously, of about £2,000. On the day before the seizure (8 October 2007), as recorded in the bank statement in the Tribunal's papers, she had a credit balance of £869.73 in her bank account. On that day she made a cash withdrawal of £500 from the account, leaving a balance of £69.73
9. The Appellant has five children ranging in age from 7 years to 16 years.
10. When she was stopped, the Appellant had a packet of menthol cigarettes on her person. She was asked at interview why she had bought Benson & Hedges, if she smoked menthol cigarettes. She replied that sometimes she wanted a change.
11. The interviewing Officer was satisfied that the Appellant held the Excise Goods for a commercial purpose and not for her own use and seized them under section 139(1) of Customs and Excise Management Act 1979 ("CEMA"), as being liable to forfeiture.
12. The Appellant was issued at the time of the seizure with a "Seizure Information Notice" and Customs Notice 12A "What you can do if things are seized by Customs". She did not challenge the legality of the seizure and the Excise Goods were condemned as forfeit to the Crown under paragraph 5 of Schedule 3 to CEMA.
13. The Appellant wrote to the Commissioners on 10 October 2007 requesting restoration of the Excise Goods. She used a form letter (Letter B). That letter is part of Customs Notice 12A and is for use if a person wishes restoration of his/her seized things. The Notice makes it clear that if a person wishes to appeal to a court against the seizure itself, alleging that it was unlawful, then a different form letter (Letter A) should be used. Letter B (the form which the Appellant used) carries the following Note:

"Note: If your only reason for requesting the return of seized things is that you think that Customs had no legal right to seize them (e.g. that excise goods were entirely for your 'own use' or they were to be given to others as gifts 'free of charge'), you cannot rely on that as a reason for it to be returned to you. In those circumstances you must also challenge the legality of the seizure as set out in Section 2 of this notice."

14. Section 2 of the Notice is headed "I don't think Customs had a legal right to seize the thing(s)". The introductory note to the section makes it plain that it is concerned with challenges to the legality of seizure including challenges on the basis that excise goods seized were 'for your own use or to be given away'. Paragraph 2.1 of the section informs the use of the Notice that a challenge of this sort can be made by using Letter A in section 6 of the Notice.
15. Section 3 of the Notice, on the other hand, is headed "I want Customs to return the seized thing(s)". Paragraph 3.1 of the section explains the process of restoration and when it can be requested. It contains the sentence:

"If you maintain that a seized thing should not have been seized you cannot rely on that as a reason for it to be returned to you. In those circumstances you must also challenge the legality of the seizure as set out in Section 2."

16. Paragraph 3.3 of section 3, under the heading "How do I ask Customs to restore a seized thing?" includes the sentence:

"You can use Letter B in section 6 of this Notice or, if you prefer to write in your own words, you must make it clear that you want the seized thing restored to you."

17. It appears, therefore, that the Appellant represented to the Commissioners that she was seeking restoration of the Excise Goods rather than alleging the illegality of their seizure, at all times after the seizure and prior to the release of the decision letter dated 15 January 2008.
18. The Appellant had requested a review of the original decision in a letter dated 11 December 2007 in which she did not raise an 'own use' argument, but, as a reason for requesting the review, indicated that the Commissioners had not formed a correct view of her banking arrangements. Indeed the Appellant's letter dated 13 February 2008 does not expressly raise an 'own use' argument, even though it may be inferred that she was writing about her banking arrangements in order to support an argument that she had acquired the Excise Goods for her own use, or to make gifts of them, or some of them, to others free of charge. The argument that the Excise Goods were for the Appellant's own personal use was, it seems, first advanced expressly in the separate sheet of paper accompanying the Notice of Appeal lodged on 25 February 2008.
19. The Commissioners (as is usual in cases of this type) first raise an argument that this Tribunal cannot consider the "own use" issue because it would be an abuse of our process to do so. They advance the argument, alternatively, that if this Tribunal does not accept their first argument, then their decision not to offer the Excise Goods for restoration was nevertheless one that was and could have been reasonably arrived at on the basis that the Officer(s) concerned reasonably concluded that the Appellant held the Excise Goods for a commercial purpose and not for her own personal use.
20. The Commissioners' first argument is founded on the line of cases starting at the decision of the Court of Appeal in Gora v CCE [2004] QB 93, and continuing through the decision of the High Court in Dickinson v CCE [2004] 1 WLR 1160, the decision of the Court of Appeal in Gascoyne v CCE [2005] Ch 215, the decisions Lewison J in CCE v Albert Charles Smith (17 November 2005, unreported) and the decision of Evans-Lombe J in CCE v Weller [2006] EWHC 237.
21. In Gascoyne, the Court of Appeal stated that where there have been no condemnation proceedings, and so the goods have been deemed lawfully forfeited by virtue of the deeming provisions in paragraph 5 of Schedule 3 to CEMA, an importer should not be "completely shut out" from ventilating before the Tribunal on restoration proceedings the matters deemed to be decided against him, but added the cautionary note that the Tribunal would have to be very conscious of issues of abuse of process before deciding that such matters should in fact be ventilated before it. The Court of Appeal added that "the mere fact that the applicant has not applied to the Commissioners, and therefore there have been no condemnation proceedings" would not be enough to enable issues such as 'own use' to be raised before the Tribunal.
22. In Albert Charles Smith, Lewison J considered the Court of Appeal's reasoning in Gascoyne and stated: "There must, therefore, be something more than a failure on the part of the applicant to invoke condemnation proceedings before the Tribunal is empowered to question the legality of the forfeiture." He added: "The Tribunal's function, therefore, is 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."
23. In Weller, Evans-Lombe J agreed with the approach of Lewison J in Albert Charles Smith. He said that whether or not an importer, having suffered a deemed forfeiture under paragraph 5 of Schedule 3 to CEMA, is able to raise the validity of the forfeiture on a review by the Commissioners and on appeal from them to the Tribunal, depends on two questions, first, did the importer have a realistic opportunity to invoke the condemnation procedure, and, secondly, if he did, are there nonetheless reasons, disclosed by the facts of the case, which should persuade the Commissioners or the Tribunal to permit him to reopen the question of the validity of the original seizure on an application for the return of the goods.
24. This Tribunal readily recognises the complexity of the procedural and administrative issues surrounding condemnation and restoration of seized goods and is aware of the possibility, even the likelihood, of an unrepresented appellant –and of this unrepresented appellant – being bewildered by and failing to understand them. This Tribunal also takes into account the fact, which is clear from the two letters from the Appellant which are before us, that the Appellant is a person of limited education (though not necessarily of limited understanding).
25. Nevertheless, the terms of Customs Notice 12A which we have referred to, and, in particular, of the form of Letter B which the Appellant used, and which she signed, are in our view sufficiently clear for the Commissioners to be able to rely on them to establish that the Appellant had a realistic opportunity to invoke the condemnation procedure and that there are no reasons, disclosed by the facts of the case, which should have persuaded them, or should persuade this Tribunal, on appeal, to permit her to reopen the question of the validity of the original seizure of the Excise Goods in her application for restoration.
26. At the very least, the terms of Customs Notice 12A and the form of Letter B establish a prima facie case that the position is as stated in the preceding paragraph. If the Appellant had been before us it is possible that she might have been able to persuade us that she had in fact had no realistic opportunity to invoke the condemnation procedure or, if she had, that there was some other reason or reasons which should have persuaded the Commissioners, or would have persuaded us, that it would not have been an abuse of our process to permit her in these restoration proceedings to reopen the question of the validity of the seizure of the Excise Goods and to argue that she held them for her own personal use and not for commercial purposes.
27. However, the Appellant was not before us and there is nothing in the papers which ought to persuade us that it would not be an abuse of our process to consider an "own use" argument. We therefore hold that we cannot consider such an argument and, because no other coherent argument was advanced which would suggest that the Commissioners' decision to decline restoration of the Excise Goods was unreasonable, we dismiss the appeal. (We announced our decision to dismiss the appeal at the end of the hearing.)
28. We would add that if we had held that it would not have been an abuse of our process to consider an "own use" argument, we consider that it would have been unlikely that we would have allowed the appeal. This is because the burden of proof would have been on the Appellant to show that the Commissioners' decision to decline restoration of the Excise Goods on the grounds that the Appellant held them for commercial purposes was unreasonable. It appears to the Tribunal that it would have been unlikely that the Appellant could have discharged that burden of proof.
29. The Commissioners put forward several reasons to support the reasonableness of their decision. Of the 8 reasons put forward, the following 4 appear cogent to the Tribunal:
30. First, the Appellant stated at interview that she had had no need to buy tobacco in the UK since her last trip to the Continent over two years previously. The Commissioners' records showed that she had purchased the same amount of tobacco goods on her last trip as on the trip in question in this appeal – that is, 3 kg. of hand rolling tobacco and 3,200 cigarettes. At her stated consumption rate of 20 cigarettes a day and one pouch of hand rolling tobacco a week, that consignment would have lasted her 160 days (for the cigarettes) and 60 weeks (for the hand rolling tobacco), much less than two years.
31. Secondly, the Appellant had been out of work since 2002, in receipt of benefits and family allowance to support herself and (apparently) five children. In the Tribunal's view, in these circumstances the Commissioners' assumption that she would not have spent £600 on the Excise Goods if she had not expected some kind of reimbursement is reasonable.
32. Thirdly, there was inconsistency in the evidence of the Appellant's cash withdrawals from her bank account. At interview she stated that she had withdrawn £400 from her bank account. She provided with her letter of 10 October 2007 a bank statement as evidence of the cash withdrawal, however the only cash withdrawal of £400 was made on 19 July 2007, almost three months before her trip to Luxembourg. There was, however, as stated above, a withdrawal of £500 made on 8 October 2007, the day before the seizure.
33. Fourthly, when the Appellant was stopped, she had menthol cigarettes on her person. The cigarettes comprised in the Excise Goods were Benson & Hedges, not a menthol cigarette. The interviewing Officer noted at the time of interview that the Appellant had no hand rolling tobacco roll-up papers on her person, nor had she bought any in Luxembourg. The Appellant stated at the interview that she was smoking menthol cigarettes at the time of the interview because she wanted a change of brand. She later stated that it was because she had a cold at the time of the interview. In the Tribunal's view, the Officer reasonably suspected that the Excise Goods were not intended for the Appellant's personal use, because of the difference between the brand of cigarettes purchased and the brand she was smoking at the time of the interview, and because she had no hand rolling tobacco roll-up papers to hand at the time of the interview.
34. We record that the Commissioners made no application for a direction that the Appellant should pay their costs. Accordingly we make no such direction.
JOHN WALTERS QC
CHAIRMAN RELEASE DATE: 3 December 2008

LON/2008/8016