Case No: CO/3221/2015 & CO/3432/2015
Neutral Citation Number: [2015] EWHC 3665 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 16/12/2015

Before :

LORD JUSTICE McCOMBE

And

MR JUSTICE OUSELEY

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Between :

	(1)	AMBER SERVICES EUROPE LIMITED
(2)	GEMARLAK-FLEX KFT
(3)	PAR-CELL KFT	

Appellants	
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	THE DIRECTOR OF BORDER REVENUE	Respondent	

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Ian Stebbings (instructed by Cartwright King) for the First Appellant; Christopher Snell (instructed by Rayner Hughes) for the Second and Third Appellents
Will Hays (instructed by Cash Forfeiture and Condemnation Legal Team) for the Respondent

Hearing date: 26 November 2015

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Judgment
Lord Justice McCombe: 
1.	We have before us two appeals by way of case stated from decisions of 12 May 2015 of District Judge Barron, sitting in the Magistrates Court at Dover, whereby the judge found that certain goods (raw tobacco) were liable to forfeiture and ordered them to be condemned as forfeited, pursuant to the Customs and Excise Management Act 1979. The decisions were reached in two sets of condemnation proceedings under section 139(6) of, and Schedule 3 to, the 1979 Act, to which, first, Amber Services Europe Limited (“Amber”), and secondly, Gemarlak-Flex KFT (“Gemarlak”) and Par-Cell KFT (“Par-Cell”) respectively were the respondents in the Magistrates Court. In the case of Gemarlak and Par-Cell, the vehicle in which the goods were carried on importation was also forfeited, pursuant to section 141 of the 1979 Act.
2.	The forfeiture provision relied upon by the respondent was that enacted in section 170B(2) of the 1979 Act. It is convenient to quote section 170B in full at the outset. It is in these terms: 
“Offence of taking preparatory steps for evasion of excise duty.
(1) If any person is knowingly concerned in the taking of any steps with a view to the fraudulent evasion, whether by himself or another, of any duty of excise on any goods, he shall be liable—
(a) on summary conviction, to a penalty of the prescribed sum or of three times the amount of the duty, whichever is the greater, or to imprisonment for a term not exceeding six months or to both; and
(b) on conviction on indictment, to a penalty of any amount or to imprisonment for a term not exceeding seven years or to both.
(2) Where any person is guilty of an offence under this section, the goods in respect of which the offence was committed shall be liable to forfeiture.”
3.	That section was inserted into the 1979 Act by the Finance (No. 2) Act 1992.
4.	In neither of these cases has any person been convicted of an offence under subsection (1) of this section and the Appellants contend that, absent such a conviction, the liability to forfeiture does not arise.
5.	In Amber’s case, the agreed facts and judge’s findings of fact were as follows (quoting the relevant passages of the case stated):
“THE AGREED FACTS 
15. It was not in dispute that:
(a) Amber Services Europe Limited were the owners of 5740.80 kilograms of unprocessed tobacco leaf;
(b) On the 18th November 2013 Amber Services caused the tobacco to be imported into the United Kingdom. The haulier was F.H.U. Makar and the vehicle LLU5P29. The delivery documentation described the goods as “96 karton Hand Strips Burley”.
(c) The unprocessed tobacco leaf was not liable to duty at the point of importation into the UK as it was not at that time a ‘tobacco product’ as defined by the Tobacco Product Duty Act 1979. If the unprocessed leaf was later processed into a tobacco product it would become liable for duty;
(d) The vehicle was stopped by Border Force and enquiries made. Border Force is part of the Home Office and carries out immigration and customs controls for people and goods entering the UK.  Border Force exercises general functions concurrently with Her Majesty’s Commissioners for Customs and Excise in accordance with the Borders, Citizenship and Immigration Act 2009;
(e) As a result of those enquiries a decision was made to seize the vehicle and tobacco;
(f) The tobacco and vehicle were seized under section 139 of the Act;
(g) The reason for the seizure of the tobacco was that Border Force believed it was liable to forfeiture under section 170B of the Act on the grounds that had the vehicle been allowed to proceed the unprocessed tobacco would have been used in the production of illicit tobacco products upon which duty would have been evaded;
(h) The vehicle was seized as liable for forfeiture under section 141(1)(a) of the Act in that it was used in the carriage, handling, deposit or concealment of a thing liable to forfeiture;
(i) The hauliers had their vehicle returned after payment of a penalty and did not pursue a claim under schedule 3 of the Act;
(j) On the 4th December 2013 in accordance with paragraph 3 of Schedule 3 of Act, Amber Services, gave notice that the tobacco was not liable to forfeiture;
(k) On the 6th May 2014, in accordance with paragraph 6 of Schedule 3 of the Act, the Director of Border Revenue (Secretary of State for the Home Department) started proceedings in the magistrates’ court by way of complaint for condemnation and forfeiture of the vehicle and tobacco;
(l) As at the date of the hearing no one had been charged with or convicted of an offence under section 170B of the Act in relation to the seized goods.
MY FINDINGS OF FACT
16. At the hearing on 12th May 2015 I found the following facts which I set out only to the extent that they are necessary for the specific purpose of the appeal.
17. I note that Amber Services did not give evidence during the condemnation proceedings of present any positive case at trial other than to advance legal arguments.
(a) Amber Services had recently imported another load of unprocessed tobacco into the UK. That load had not been seized;
(b) In small quantities raw/unprocessed tobacco can be easily processed into “other smoking tobacco” or “hand rolling tobacco” (as defined in the Tobacco Products (Descriptions of Products) Order 2003) using domestic equipment.  Dried uncut tobacco leaves can be quickly hydrated by simply spraying with water or coming into contract with steam, and cut with equipment such as a knife or paper shredder.  Once tobacco has been processed so that it in a smokeable state it becomes liable to excise duty at the appropriate rate;
(c) Anyone using raw/unprocessed tobacco for the purpose of making a tobacco product is required to register their premises as a factory. The registration must take place before any duty can be paid. The process is tightly controlled and regulated to prevent the evasion of duty. HMRC public notice 476 sets out the strict requirements for registration. These requirements make it highly unlikely that a domestic premises would satisfy the criteria for registration;
(d) As at the 23rd July 2014 (date of the statement of the witness Neil Pederson a HMRC Senior Tobacco Excise Policy Adviser) there were less than 25 registered manufacturing/importing premises in the UK and all premises registered were in respect of Limited Companies.  I was satisfied that at the time of seizure on the 18th November 2013 the position had been no different;
(e) Whilst there may be other uses of tobacco leaf in products such as pesticides, wood staining and animal bedding there was no evidence that that was the intended use for the goods imported by Amber Services;
(f) Amber Services was not registered in respect of a manufacturing/importing premises for tobacco products;
(g) Amber Services had sold a significant quantity of the earlier load of unprocessed tobacco to members of the public through Internet sales in weights of approximately 60 Kg per box at a price of £5.13 per kilogram. 46 “Cash sales” receipts were produced in evidence issued by Amber Services for the period from the 7th November 2013 until the 14th November 2013.
(h) These sales receipts did not include excise duty and contained a disclaimer ‘The product within this packaging, in the original form which it is sold, is not a dutiable product. Once the leaves within this packaging are transformed into a smokeable state, duty is liable to be paid to Her Majesties Revenue and Customs using a TP7A form. If you intend to manufacture a smokeable product from the leaves within this packaging, you will be bound by legislation set by HMRC and should take advice from notice 476 before commencing production. Advice, if required should be sough from HMRC representatives or a reputable law firm.’
(i) Amber Services would have sold the seized load in a similar manner;
(j) This was a scheme of importation and sale deliberately created by Amber Services to avoid and eventually evade the payment of excise duty.  Amber Services imported the unprocessed tobacco, with the primary intention of selling the tobacco on to mainly individual purchasers who would then process the tobacco and smoke it;
(k) Amber Services and its directors were aware of the legal requirements in relation to the payment of duty.  They referred to them on each sales receipt.  I concluded that they also must have been aware of the requirements to register premises at which tobacco was processed and the difficulties of doing so for domestic purchasers;
(l) Amber Services and its directors knew that its purchasers would not register their premises and pay the excise duty but would process the tobacco into a dutiable product and evade the duty;
(m) No duty had been paid by the purchasers of unprocessed tobacco from Amber Services as no one had registered their premises by July 2014 in respect of the purchases they had made.  I am satisfied that these purchasers had no intention of paying the duty at the time of purchase and then processed the tobacco into a smokeable form and the duty was evaded;
(n) I concluded that Amber Services and its directors operated their business and sales on the basis that duty would not be paid on the tobacco.  They found a ready market for their tobacco product precisely because the price was extremely competitive as it did not include duty and could thus undercut legitimate tobacco sales and still provide a significant profit for the company.  There had never been any real prospect that their purchasers would register their premises and pay the duty thus ensuring the market and sales continued.  In the absence of that duty free competitive edge the business would have evaporated;
(o) Once dried and shredded into hand rolling tobacco the duty payable on the seized load would have been in excess of £991,000 and the VAT payable would have been £244,000”
6.	In the case of Gemarlak and Par-Cell the agreed facts and the facts as found by the judge were these (again quoting from the case stated): 
“THE AGREED FACTS
16. It was not in dispute that:
(a) Gemarlak Flex KFT were the owners of 12,960 kilograms of unprocessed tobacco leaf;
(b) Par-cell KFT, the haulier, was the owner of vehicle LEJ264 and trailer XVZ478 in which the tobacco was carried;
(c) On the 12th April 2013 Gemarlak-Flex caused the tobacco to be imported into the United Kingdom by Par-cell KFT.  The delivery documentation described the goods as 108 cartons of ‘Mahogoni Tobacco Leaf’;
(d) The unprocessed tobacco leaf was not liable to duty at the point of importation into the UK as it was not at that time a ‘tobacco product’ as defined by the Tobacco Product Duty Act 1979.  If the unprocessed leaf was later processed into a tobacco product it would become liable for duty;
(e) The vehicle was stopped by Border Force and enquiries made.  Border Force is part of the Home Office and carries out immigration and customs controls for people and goods entering the UK.  Border Force exercises general customs functions concurrently with Her Majesty’s Commissioners for Customs and Excise in accordance with the Borders, Citizenship and Immigration Act 2009;
(f) As a result of those enquiries a decision was made to seize the vehicle and tobacco;
(g) The tobacco and vehicle were seized under section 139 of the Act;
 (h) The legal grounds for the seizure of the tobacco was the Border Force believed it was liable to forfeiture under
a. Section 170B of Act; and/or
b. Section 49(1)(a) of the Act; and/or
c. Regulation 88 of the Excise Goods (Holding Movement   and Duty Point) Regulations 2010; and/or
d. Section 7(2) of the Tobacco Products Duty Act 1979
(i) Subsequently Border Force accepted that because the tobacco leaf was unprocessed and not a tobacco product a liability for forfeiture did not arise under section 49, regulation 88 or section 7(2);
(j) The reason given for the seizure was ‘there is no indication of duty payment or how it will be accounted for, or the ultimate end use if noon dutiable, or otherwise.  There are indications that if this product had not been intercepted, it would have been used in the manufacture of illicit tobacco products’;
(k) The vehicle and trailer were seized as liable for forfeiture under section 141(1)(a) of the Act in that they were used in the carriage, handling, deposit or concealment of a thing liable to forfeiture;
(l) On the 18th April 2013 in accordance with paragraph 3 of Schedule 3 of the Act, Gemarlak-flex and Par-Cell, gave notice that the tobacco was not liable to forfeiture;
(m) On the 11th October 2013, in accordance with paragraph 6 of Schedule 3 of the Act, the Director of Border Revenue (Secretary of State of the Home Department) started proceedings in the magistrates’ court by way of complaint for condemnation and forfeiture of the vehicle and tobacco;
(n) As at the date of the hearing no one had been charged with or convicted of an offence under section 170B of the Act in relation to the seized goods.
MY FINDINGS OF FACT
17. At the hearing on 12th May 2015 I found the following facts which I set out only to the extent that they are necessary to understand the background to the point appealed.
18. Gemarlak-flex and Par-Cell did not give evidence during the condemnation proceedings (other than to confirm ownership and required by paragraph 10 of Schedule 3 of the Act) or present any positive case at trial other than to advance legal arguments and challenge the sufficiency of the evidence.
(a) Gemarlak-Flex had purchased the tobacco for 93,816 euros [sic] in April 2013 from Italian Flair a specialist tobacco supplier based in Italy;
(b) The tobacco was to be sold and delivered to Camel 21 Company Limited with an address of 24-25 Nutford Place, W1H 5YN in London.  This name and address appeared on the consignment documentation (CMR) that travelled with the goods;
(c) Camel 21 Company Limited was not a business registered for VAT.  No business was registered for VAT at 24-25 Nutford Place.  Camel 21’s Director since the 28th March 2012 was recorded as Peter Marton.  When visited on the 3rd May 2013 the premises were locked and did not appear to have been used for several months;
(d) On the 11th April 2013 Gemarlak-Flex had issued an invoice to Camel 21 in the sum of 110,664 Euros.  This invoice required ‘100% Advance Payment’.  The destination of the goods on the invoice was shown as Unit 38, Rosemont Road, London although this is not the address that appeared on the CMR;
(e) When visited on the 3rd May, Unit 38 was registered under the name Partia Patel trading as ‘Uniflora’ which was for declared trade as a florist.  A sign on the premises indicated it had been repossessed on the 7th March 2013 and the Unit did not appear to be in use.  Enquiries established, and I accept, that the unit was owned by Network Rail Infrastructure Limited who confirmed that the unit was not rented at the time of seizure and neither Camel 21 nor its CEO Peter Marton, had ever rented Unit 38 or been a Network Rail tenant of any of its property;
(f) The invoice had not been paid in full in advance as required but the goods had nevertheless been shipped by Gemarlak-Flex to Camel 21;
(g) No evidence was given to me by Gemarlak-flex or Camel 21 about the trading relationship between the two companies but I concluded that the relationship was a close one because Gemarlak-Flex were prepared to deliver goods with a value of over 110,000 euros [sic] to Camel 21 on credit or with minimal security;
(h) Peter Marton wrote to the UK Border Agency on the 19th April 2013 on behalf of Camel 21 claiming that the tobacco was not for use in tobacco products but was to be used in the manufacture of nicotine strips;
(i) Enquiries by Border Force to trace or interview Peter Marton were unsuccessful;
(j) In small quantities raw/unprocessed tobacco can be easily processed into ‘other smoking tobacco’ or ‘hand rolling tobacco’ (as defined in the tobacco Products (Descriptions of Products) Order 2003) using domestic equipment.  Dried uncut tobacco leaves can be quickly hydrated by simply spraying with water or coming into contact with steam, and cut with equipment such as a knife or paper shredder.  Once tobacco has been processed so that it is in a smokeable state it becomes liable to excise duty at the appropriate rate;
(k) Anyone using raw/unprocessed tobacco for the purpose of making a tobacco product is required to register their premises as a factory.  The registration must take place before any duty can be paid.  The process is tightly controlled and regulated to prevent the evasion of duty.  HMRC public notice 476 sets out the strict requirements for registration.  These requirements make it highly unlikely that a domestic premises would satisfy the criteria for registration;
(l) As at the 23rd July 2014 there were less than 25 registered manufacturing/importing premises in the UK and all premises registered were in respect of Limited Companies
(m) Gemarlak-Flex, Camel 21 and Peter Marton were not and had never been registered in respect of a manufacturing/importing premises for tobacco products.  Unit 38 Rosemont Road never been registered as a manufacturing site;
(n) Whilst there may be other uses of tobacco leaf in products such as pesticides, wood staining and animal bedding there was no evidence that that was the intended use for the goods imported by Gemarlak-Flex.  I would expect commercial sized imports of raw/unprocessed tobacco entering the UK to go to premises registered for the manufacture of tobacco products;
(o) I did not accept the unsupported assertion of the Director of Camel 21, Peter Marton, that the goods were for use in the manufacture of nicotine patches.  If that assertion were true it would have been easily verifiable by Border Force being provided with the details of the actual manufacturer.  The manufacture of nicotine patches was likely to be a complex industrial process and I found it inconceivable that Camel 21 would have imported the unprocessed tobacco, a perishable product, for that purpose without already having established who would manufacture the nicotine patches;
(p) In the absence of any evidence from Gemarlak-Flex, Par-Cell, Camel 21 or Peter Marton, and having regard to the other anomalies in relation to the company and the delivery address I had no doubts that the intended destination of the tobacco was for the black market.  It would be sold to purchasers who would process it into a tobacco product in smokeable form and the duty would be evaded;
(q) Having regard to the nature of the relationship between Gemarlak-Flex and Camel 21; the apparent lack of any due diligence checks; the type of goods imported (tobacco which is strictly controlled and subject to high duties); the commercial quantity of the import; the delivery address; the dubious nature of Camel 21; its lack of VAT registration; the absence of any credible explanation; and the evidence as a whole, I concluded that it was likely on a balance of probabilities that Gemarlak-Flex was not an innocent trader but knew at the time of import and seizure that the goods were intended for the black market and duty would be dishonestly and fraudulently evaded;
 (r) Once dried and shredded into hand rolling tobacco the duty payable would be in excess of £2,238,710.40 and the VAT would be £551,422.08.”
7.	The judge concluded that, on his findings, an offence or offences had been committed under section 170B(1) of the Act in each case and that, therefore, even absent a conviction, the requirements for forfeiture contained in subsection (2) of the section had been satisfied. In the result, the goods (and vehicle in issue in the Gemarlak case) were condemned as forfeited, pursuant to the procedures to be found in Schedule 3 to the 1979 Act. The appellants contend that he was wrong to do so. They contend that the liability to forfeiture, enacted in section 170B(2), does not arise if there has been no conviction of any person for an offence under section 170B(1).
8.	Upon those facts, the appellants appeal to this court from the decisions of the learned Judge and the Magistrates Court, in each case, poses the following question for the opinion of this court:
“Is a conviction for an offence contrary to section 170B(1) of the Customs and Excise Management Act 1979 required in order for goods to be liable to forfeiture under section 170B(2)?”
The arguments on the appeal
9.	The arguments advanced by Mr Stebbings, adopted and supplemented by Mr Snell, for the appellants are essentially similar. They point out that here Parliament has introduced a new criminal offence and has added to it, as an adjunct, a liability to forfeiture in the event that a person is guilty of that offence. It is emphasised that the liability to forfeiture in subsection (2) arises only, “Where any person is guilty of an offence under this section…” (words emphasised by Mr Stebbings) and specifies as liable to forfeiture, “…the goods in respect of which the offence was committed shall be liable to forfeiture” (emphasis again added). The only sanction provided is, so it is submitted, a criminal one, rather than a penalty under the Finance Acts. It is submitted that the power is designed to enable the convicting Crown Court to exercise a power of forfeiture. If it were not to be so, the procedure would be (as adopted here) civil proceedings in the Magistrates Court (or the High Court).
10.	It is pointed out that sections 24(5)(b) and 50(2) of the 1979 Act confer a power of detention in respect of a person who is guilty of an offence under those sections, implying (it is said) that the power only arises as a consequence of a finding of guilt and conviction. It is submitted that these parallel provisions indicate that where the Act speaks of a person being “guilty” of an offence, it is a prerequisite that there should have been an anterior conviction.
11.	Mr Stebbings relies upon the decision of the Supreme Court in R (Eastenders Cash and Carry plc & ors.) v Commissioners of Her Majesty’s Revenue and Customs [2014] UKSC 34 for the now uncontroversial proposition that the phrase “liable to forfeiture” is not to be based upon reasonable suspicion of customs officers but upon the goods concerned actually being liable to forfeiture. The outcome must, he submits, turn on ascertained facts and not upon beliefs or suspicions of customs officers. Thus, it is argued, absent a conviction there are insufficient “ascertained facts” to sustain a finding of liability to forfeiture. If the legislation had been intended to found liability to forfeiture based upon reasonable suspicion alone, without conviction, then the Act would surely have said so.
12.	Finally, in the skeleton argument of Mr Snell for Gemarlak, it was originally argued that the liability to forfeiture in section 170B(2) is dependent upon the relevant goods being liable to excise duty, whereas it is common ground that no duty is or was eligible upon raw tobacco. The submission was based upon a dictum of the First-tier Tribunal (Tax Chamber) in Wnek v Director of Border Revenue [2014] CMLR 48 as follows: 
“[41] We note that section 49(1)(a) CEMA makes liable to forfeiture goods which were chargeable with excise duty on importation and which were imported without payment of that duty; and that Regulation 88 makes goods which are dutiable and on which duty has not been paid liable to forfeiture if there is a breach of those regulations.
Section 170B CEMA provides that if a person is knowingly concerned in the taking of any steps with a view to the fraudulent evasion of excise duty on any goods, he commits an offence, and that the goods in respect of which the offence was committed shall be liable to forfeiture.  All these provisions are dependent upon the goods being liable to excise duty.” (Emphasis added)
However, Mr Snell told us, in our view realistically, that he did not pursue that point on his client’s appeal.
My conclusions
13.	For my part, I do not accept the appellants’ arguments and consider that the learned District Judge was correct in his decision largely for the reasons that he gave.
14.	In my judgment, this conclusion flows from a number of features.
15.	First, the subsection in issue (s.170B(2)) is, as the appellants themselves point out, one of a number of provisions giving rise to a liability to forfeiture of goods, arising from the use of the phrase “liable to forfeiture”. Section 139(6) of the 1979 Act provides:
“(6) Schedule 3 to this Act shall have effect for the purpose of forfeitures, and of proceedings for condemnation of any thing as being forfeited, under the customs and excise Acts”.
There can be no doubt that, while the liability to forfeiture in section 170B(2) was only introduced into the 1979 Act in 1982, it is a liability to forfeiture under one of the Customs and Excise Acts, i.e. the 1979 Act. Thus, determination of the liability (if disputed) is to be resolved in accordance with the provisions of Schedule 3. Under those provisions, when any thing has been seized as being liable to forfeiture, the Commissioners must give notice of the seizure to the owner (paragraph 1(1)). (However, it is to be noted notice need not be given to “the person whose offence or suspected offence occasioned the seizure” (emphasis added): paragraph 1(2)(a).) Any person claiming that the seized thing is not truly liable to forfeiture, is required to give notice of his claim to the Commissioners (paragraph 3). In the absence of such notice of claim within the prescribed time the thing in question is deemed to be duly condemned as forfeited (paragraph 5). If notice of claim is duly given, the Commissioners must take proceedings for the condemnation of the thing in question in court, and “if the court finds that the thing was at the time of seizure liable to forfeiture the court shall condemn it as forfeited” (paragraph 6).  Paragraph 8 then provides:
“Proceedings for condemnation shall be civil proceedings and may be instituted – 
(a) in England or Wales either in the High Court or in a magistrates court;…”.
16.	Far from conferring a power on a Crown Court dealing with an offender for an offence under section 170B(1) (as argued in the skeleton argument for Gemarlak – paragraph 18(iii)), it seems to me that by virtue of these provisions the determination of ultimate liability to forfeiture is effected in civil proceedings under Schedule 3 to the 1979 Act. That result follows from section 139(6) which I have quoted above. Section 170B(2) is merely one of the provisions in this Act under which such liability has to be decided in this way. In conducting this exercise, as happened in this case, the relevant court will decide in civil proceedings whether the pre-condition of liability (viz. that a person is guilty of an offence under section 170B(1)) is satisfied. Provided that this is the case, as the judge found it to be here, liability to forfeiture and condemnation is established. It seems to me that, provided the court is satisfied to the civil standard that a person, i.e. some person (identified or not), is guilty of an offence under the section liability for forfeiture arises. By its own terms, therefore, the subsection does not require proof of any conviction.
17.	Secondly, in my judgment, the Supreme Court decision in the Eastenders case does not assist the appellants. It has to be recalled that what was in issue in that case was whether certain detained goods had been lawfully so detained by the Commissioners. In each of the cases considered by the court a significant portion of the goods initially detained had been seized by the Commissioners and either had been already condemned as forfeit (the Eastenders case) or were subject to pending condemnation proceedings (the First Stop case) at the time of the hearing of the appeals. The Supreme Court was not concerned with the seized goods; it was only concerned with the goods detained in respect of which inquiries had turned out to be inconclusive: see paragraphs 4 and 8 of the judgment of Lord Sumption and Lord Reed, with whom the other Justices agreed).
18.	True it is that the court found that the right to seize or detain property under section 139(1) of the Act was dependent upon that property actually being liable to forfeiture under one of the various forfeiture provisions of the Act. That turned, said Lord Sumption and Lord Reed, “…on the objectively ascertained facts, and not upon the beliefs or suspicions of the Commissioners or their officers, however reasonable”: see Loc. Cit. paragraph 23. The court found, therefore, that the power of detention in section 139 could not be relied upon to justify detention of goods which could not be shown to be liable to forfeiture. As is clear, however, their Lordships found that the various Customs and Excise Acts had not abrogated a pre-existing common law power which they held to be available to justify the detention that could not be so justified under the statutory power. There were no such difficulties in respect of goods that were established by appropriate condemnation proceedings to be truly liable to forfeiture.
19.	Thirdly, in my judgment, the Commissioners (and the respondent in this case) have power under section 139 of the Act to seize and detain goods which ultimately turn out to have been properly liable to forfeiture, as the Supreme Court held in the Eastenders case. The procedure for determining that liability is set out in schedule 3 to the Act. If they seize or detain goods in respect of which they fail to establish liability to forfeiture under those provisions they remain potentially liable in an action in tort: see the Supreme Court judgment  in Eastenders at paragraph 23(5), subject to immunity from an award of damages if they acted reasonably: section 144(2) of the Act.
20.	Fourthly, as Mr Hays for the respondent argues, the contrast between the consequences of conviction (s.170B(1)) and of “any person [being] guilty of an offence” (s.170B(2)) is a clear one and is made by the draftsman with a purpose, i.e. to indicate that conviction is not a prerequisite of the liability under section 170B(2). He also points out that under other statutes powers to make deprivation, confiscation and destruction orders are conferred expressly upon conviction of a person for an offence: see e.g. Powers of Criminal Courts (Sentencing Act) 2000, s.143, Misuse of Drugs Act 1971, s.27, Prevention of Crime Act 1953, s.1 and the Firearms Act 1968, s.52. This course was not adopted when enacting section 170B of the 1979 Act. 
21.	I agree that these are pointers towards the conclusion that I have reached independently, based upon the words of the 1979 Act themselves and the procedures provided for determining liability of goods to forfeiture under that Act. As Mr Hays submits, in section 170B(2), the liability is imposed in respect of the goods, not in respect of a person whose guilt is established; the liability may arise, even if the identity of the offender cannot be established.
22.	It appears to me that there is a further telling feature in favour of the respondent’s favoured construction of section 179B(2) to be found in section 170(2) of the Act. Section 170 provides for penalties for fraudulent evasion of duty that has arisen under the Act, as opposed to the offence of taking preparatory steps to that end as governed by section 170B. Section 170(2) provides:
“…[I]f any person is, in relation to any goods, in any way knowingly concerned in any fraudulent evasion or attempt at evasion-
(a)	of any duty chargeable on the goods;
(b)	of any prohibition or restriction for the time being in force with respect to the goods or by virtue of any enactment; or
(c)	of any provision of the Customs and Excise Act 1979 applicable to the goods,
he shall be guilty of an offence under this section and may be arrested.” (Emphasis added)
23.	While section 170 goes on to provide, in subsection (3), that a person guilty of an offence is liable on conviction to certain penalties, it seems impossible to think that the power of arrest in subsection (2) can have been intended by Parliament only to be exercisable only upon conviction. Subsection (2) uses precisely the words, “…guilty of an offence under this section…”, which Mr Stebbings relies upon as importing a requirement of a conviction before the rest of the statutory provision arises.
24.	Further, I note that sections 23 (control of movement of hovercraft) and 24 (control of movement of goods by pipeline) of the 1979 Act provide for criminal penalties on conviction and that “any goods in respect of which the offence was committed shall be liable to forfeiture”: section 23(3) and section 25(5). However, for similar reasons, I do not consider that the securing of a conviction is a pre-condition of the potential liability to forfeiture arising.
25.	Fifthly, it seems to me that the construction of section 170B(2) advanced by the appellants would give rise to a number of highly anomalous and undesirable scenarios which cannot be thought to have been intended by Parliament in enacting the provision. There were several that were canvassed in argument, but it is convenient to pick out one that was advanced by Mr Hays in his skeleton argument (paragraph 28). He postulated a case where notes were discovered identifying a clear plan to evade duty in respect of specific goods, but where it is not possible to identify the specific person or persons who have committed the offence under this section. Mr Hays submitted that there can be no reason why the goods in question should not be “liable to forfeiture” even though no criminal charge has been brought, let alone a conviction returned. It is submitted that Parliament cannot be thought to have intended such a result. I agree.
26.	While, for reasons already given, I consider that the construction of the language of the section and the scheme of the Act indicates that conviction is not a prerequisite of liability of goods to forfeiture under this provision, if alternative constructions of the Act were possible, I consider that the court would be justified in adopting a construction that avoided such potentially absurd results. In my judgment, in this case, the construction advanced by the respondent would be the one to favour for this reason.
Result
27.	For these reasons, I would answer the question (posed in identical terms by the Magistrates Court in each of the cases stated) in the negative and would dismiss both appeals.
Mr Justice Ouseley
28.	I agree. S170B provides for criminal penalties on conviction under subsection (1) and civil penalties under subsection (2). Both require an offence to have been committed; but the civil penalty does not require a conviction whereas the criminal penalty does. The provisions are not sequential, or alternatives; they create different routes to different forms of penalty. The language of subsection (1) is similar to the common statutory formulation for criminal penalties: a person who does [the deed] shall be guilty of an offence and liable on conviction to [criminal penalty]. The language of S170B(1) does not  provide simply for the different sentences following conviction of an offence triable either way; it provides, in the usual way, that conviction  is the necessary precursor to criminal penalty.  There is no necessary implication, in providing that where someone is guilty of an offence and the goods in respect of which it is committed are liable to a [civil penalty], that liability to civil penalty must be preceded by a criminal conviction.
29.	Such an implication is not merely unnecessary, but introduces large gaps for the benefits of those evading duty. Mr Stebbings had to accept that, were his argument correct, no powers of seizure, and only powers of detention not intended or apt for this purpose, would be available to the Respondent before conviction. The goods would have to be waved on their way from the docks.  And a conviction is required, not a trial. If consignor and haulier are acquitted and consignee or ultimate consignee cannot be found, there would be no conviction, and so no civil forfeiture, even though on the civil burden of proof, the consignee was guilty of an offence.   Parliament should not be taken to have legislated for such results in the absence of clear words.