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	England and Wales High Court (Chancery Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> HM Revenue & Customs v Mills [2007] EWHC 2241 (Ch) (04 October 2007) URL: http://www.bailii.org/ew/cases/EWHC/Ch/2007/2241.html Cite as: [2007] EWHC 2241 (Ch)

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IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		04/10/2007

Mr Justice Mann :

Introduction

1. This is an appeal from the decision of the VAT Tribunal dated 4^th January 2007 (chairman Mr Charles Hellier) in which the Tribunal allowed an appeal by Mr Mills, the taxpayer, from the decision of a reviewing officer in relation to the forfeiture of his car. Mr Mills' car had been forfeited because it was used to transport a quantity of tobacco which was adjudged by Her Majesty's Revenue & Customs ("HMRC") to be a quantity imported for commercial use in respect of which duty had not been paid. On 20^th January 2006, Mr Mills and his business partner, Mr Robert Kerry, took a trip across the channel. They drove a Volvo car which, he says, belongs to his wife. On the way back they were stopped by Customs in the control zone at Coquelles, France. In the car they had 43.5kgs of Golden Virginia tobacco in several boxes. Within the boxes were polythene bags ("sleeves") which contained a large number of 50g pouches of the tobacco. They also had a small quantity of ready made cigarettes and a couple of bottles of spirits – these latter items do not matter for the purposes of the present appeal. It was explained to the customs officers that the tobacco was owned equally by Mr Mills and Mr Kerry. After questioning, the officers satisfied themselves that the tobacco was held for a commercial purpose, and not for "own use", and it was forfeited under the statutory provisions to which I shall refer below. The car was also forfeited under the same provisions. Mr Mills applied to have his car restored to him. That was refused. He sought a review, which confirmed the decision. He appealed from there to the Tribunal, and succeeded. The Tribunal ordered a reconsideration of the review. HMRC appealed that decision. On the appeal before me Miss Darroch of counsel represented HMRC; Mr Mills appeared in person.

The statutory background

2. Before turning to the details of this appeal, and more details of the facts, it will be useful to set the statutory background first. That statutory background is as follows. An individual is entitled to bring in a certain amount of dutiable goods (in this case, tobacco) free of duty, but there are limits. The circumstances in which an individual can bring in goods free of duty is set out in the Excise Goods Beer and Tobacco Products (Amendment) Regulations 2002. A person who brings in excise goods for his own use (which includes use as a personal gift) is not liable to pay excise duty. Regulation 4(1) of that Order amends previous regulations so as to provide:

"(1A) In the case of tobacco products acquired by a person in another member State for his own use and transported by him to the United Kingdom, the Excise duty point is the time when those products are held or used for a commercial purpose by any person.

(1B) ... (b) " own use" includes use as a personal gift,

(c) if the tobacco products in question are -

(i) transferred to another person for money or money's worth (including any reimbursement of expenses incurred in connection with obtaining them), or

(ii) the person holding them in tends to make such a transfer,

those goods are to be regarded as being held for a commercial purpose."

Guidance is given as to how personal use is to be judged in sub-paragraph (e):

"(e) without prejudice to sub-paragraphs (c) and (d) above, in determining whether tobacco products are held or used for a commercial purpose by any person regard shall be taken of --

(i) that person's reasons for having possession or control of those products,

(iii) that person's conduct, including his intended use of those products or any refusal to disclose his intended use of those products,

(iv) the location of those products,

(v) and the mode of transport used to convey those products,

...

(viii) the quantity of those products, and in particular, whether the quantity exceeds any of the following quantities --

3200 cigarettes,

....

3 kilograms of any other tobacco products

(ix) whether that person personally financed the purchase of those products,

(x) any other circumstance that appears to be relevant."

There is therefore an important distinction between "own use" and importation for commercial purposes. Some of the tests for distinguishing between the two are set at in the above provisions. Importation for the latter purpose attracts excise duty. If excise duty has not been paid or secured prior to the time that the goods are held for a commercial purpose, they are liable to forfeiture under section 49(1) of the Customs and Excise Management Act 1979 ("CEMA").

3. However, it is not only the relevant goods that are liable to forfeiture. Section 141 of CEMA permits the forfeiture of other items with which the goods have been mixed, and of vehicles in which the goods are conveyed. It provides:

"141(1) Without prejudice to any provision of the Customs and Excise Act 1979, where anything has become liable to forfeiture under the customs and excise Acts -

(a) any ... . vehicle.. or other thing whatsoever which has been used for the carriage, handling, deposit or concealment of the thing so liable to forfeiture, and at a time when it was so liable or for the purposes of the commission of the offence for which it later became so liable; and

(b) any other thing mixed, packed or found with the thing so liable, shall also be liable to forfeiture."

It was pursuant to these provisions that Mr Mills' car was forfeited.

4. Section 152 (b) of CEMA provides that the Commissioners may, as they think fit, restore anything forfeited or seized. The present case concerns the exercise by the Commissioners of that jurisdiction.
5. Statute provides a mechanism for challenging a seizure of goods. Schedule 3 to CEMA provides for an appeal against seizure of goods:

"(3) Any person claiming that anything seized as liable to forfeiture is not so liable shall, within one month of the date of the notice of seizure or, where no such notice has been served on him, within one month of the date of the seizure, give notice of his claim in writing to the Commissioners at any office of customs and excise.

(5) If on the expiration of the relevant period under paragraph 3 above for the giving of notice of claim in respect of any thing no such notice has been given to the Commissioners, or if, in the case of any such notice given, any requirement of paragraph 4 above is not complied with, the thing in question shall be deemed to have been duly condemned as forfeited.

(6) Where notice of claim in respect of any thing is duly given in accordance with paragraphs 3 and 4 above, the Commissioners shall take proceedings for the condemnation of that thing by the 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."

(The deeming provision in paragraph 5 should be particularly noted for the purposes of this judgment.) Those paragraphs contain a statutory route where the taxpayer seeks to challenge the underlying legality of the forfeiture, whether that challenge is based on law or fact or both. Had Mr Mills sought to challenge the legality of the forfeiture itself, then he ought to have taken the appeal route just described. He did not do so. He invoked a separate jurisdiction to review a decision of HMRC. Under section 14(1)(d) of the Finance Act 1994 certain decisions of the Commissioners may be made the subject of a review by HMRC and appeals as provided in sections 14 to 16 of that Act. One of the matters subject to this regime is a decision as to whether or not to restore a forfeited article to its owner:

"Any decision under section 152(b) as to whether or not anything forfeited or seized under the customs and excise Acts is to be restored to any person or as to the conditions subject to which any such thing is so restored."

Section 16(2) and (8) of the 1994 Act give a right of appeal to the VAT Tribunal in respect of a review. A decision not to restore a vehicle is an "ancillary matter". As such the powers of the VAT Tribunal on an appeal are limited by section 16(4):

"In relation to any decision as to an ancillary matter, or any decision on the review of such a decision, the powers of an appeal Tribunal on an appeal under this section shall be confined to a power, where the tribunal are satisfied that the Commissioners or other person making that decision could not reasonably have arrived at it, to do one or more of the following, that is to say --

(a) to direct that the decision, so far as it remains in force, is to cease to have effect from such time as the tribunal may direct;

(b) to require the Commissioners to conduct, in accordance with the directions of the tribunal, a further review of the original decision; and

(c) [not material to this appeal]."

The appeal to the Tribunal and the fact leading up to it

6. As I have already indicated, Mr Mills approached solicitors. On the 30th January 2006 Messrs Mustoe Shorter wrote to the Post-Seizure Unit at Dover as follows:

"We would be grateful if you would accept this letter as a request on behalf of our clients to have [the car] given back to him. We would respectfully suggest that there is no basis upon which to continue to retain our client's vehicle.....

We also note further items seized from our clients include some Golden Virginia, some cigarettes, and some spirits. We would respectfully suggest that there should be no objection to either the cigarettes or the spirits being returned to our client bearing in mind the quantities seized. As far as the Golden Virginia is concerned, our client has indicated that this is for his own personal use and we would be grateful if you could outline the basis upon which you intend to retain the Golden Virginia tobacco."

HMRC responded on 31st January 2006. It said:

"Because the basis of your client's request appears to be that the excise goods were for his own use or seized illegally, we are also treating your client's request as a claim of Appeal against Seizure as in Part A Notice 12A (see section 2 of Notice 12 A enclosed). As only a court can determine the legality of the seizure your client's case will be prepared for condemnation proceedings in the Magistrates Court. If your client does not wish those proceedings to happen you must notify us in writing within 14 days of the date of this letter. If you do not reply we will assume that your client is appealing against the legality of the seizure and civil proceedings will be instigated without further notice. If your client withdraws from the proceedings after they have been started, or fails to attend court when summonsed, costs may be awarded against your client.

… Unless your client decides to withdraw from condemnation proceedings, your client's appeal against the legality of seizure will continue separately and in due course a court will decide whether the seizure was lawful."

It seems that Mustoe Shorter's letter must have been sent to the Falmouth office of the Post Seizure unit, because on 3rd February they acknowledged receipt of the 31^st January letter and said that they aimed to provide a response by 3^rd March, and invited further inquiry to be directed to them.

7. Messrs Mustoe Shorter responded to the Dover unit on 9 February 2006. They stated that they had received a letter from Falmouth, enclosed a copy of their letter in response (which I have not seen) and went on:

"Our client simply wants his car returned to him and that is what we seek from you.

Please clarify whether we should deal with yourselves or whether we should deal with the Post Seizure Unit based in Falmouth"

The Dover unit responded by saying:

"As you stated in your original letter that the goods were for your client's own use, we have to establish whether he is contesting the legality of the seizure, which is why we wrote to you on 31 January 2006.

You have stated in your letter dated 9 February 2006 that your client simply wants his car returned to him, and therefore the matter will be dealt with by the Post-Seizure Unit in Falmouth.

In the event of further enquiry please liaise directly with the Falmouth Office quoting the above reference number."

The thrust of that correspondence is that Messrs Mustoe Shorter first gave an indication that the legality might be challenged, but clarified the position to indicate that they were seeking restoration and not condemnation proceedings. It is quite apparent that that is how HMRC took it, and the ensuing events clearly took place on the footing that that was the case.

8. On 23 February 2006 HMRC issued its decision on the restoration application by a letter from Mr David Willbourne, who described himself as a "review officer". It starts by thanking the solicitors for their letter "requesting restoration of your client's share of the seized excise goods and his vehicle." It goes on to describe the tobacco and spirits forfeited "because they were held for a commercial purpose and UK excise duty had not been paid on them". It then said "The vehicle was liable to forfeiture under section 141(1)(a) of the Act because it was used to carry the excise goods liable to forfeiture". On the second page there is a section headed "Customs' Policy for the Restoration of Private Vehicles Seized For Carrying Excise Goods Liable To Forfeiture." it sets out various factors which went to the discretion of the Commissioners to restore the property; it was clearly dealing with restoration, and not with the initial forfeiture. At the foot of the second page he says:

"In considering restoration I have looked at all of the circumstances surrounding the seizure but I do not consider the legality or the correctness of the seizure itself. If you have contested the legality or correctness of the seizure on your client's behalf the appeal will be heard in a Magistrates' Court in due course as explained in Customs Notice 12A issued at the time of seizure." [the writer's emphasis].

It is obvious that in that letter HMRC is treating itself as dealing with a request for the restoration of the vehicle.

9. On 14 March 2006 Messrs Mustoe Shorter acknowledged the letter from Mr Willbourne in which he said he "has decided not to restore the motor vehicle registration number BL51 ZDJ to our client. We would be grateful if this letter could be accepted of [sic] our client's application for this decision to be reviewed by an impartial review officer." The letter goes on to set out some of the factual background to the seizure upon which Mr Mills sought to rely in support of a case that the car be not forfeited. It refers to the fact that Mr Mills intended to keep his share of the dutiable items seized for his own personal use. It makes a case for saying that.
10. The result of this process was a long letter from a Mrs Gillespie which amounted to the review sought by Messrs Mustoe Shorter. She concluded that the vehicle should not be restored. Her careful document goes into the circumstances in which the dutiable items and car were seized, including the contents of interviews of Mr Mills and his travelling companion Mr Kerry. On the fifth page she summarised the policy of HMRC for the restoration of private vehicles including the fact that restoration might take place if the excise goods were destined for supply on a "not for profit" basis. Such cases would be affected where there were "aggravating" circumstances, which included large quantities of goods (a large quantity of tobacco being more than 6 kg of hand rolling tobacco). She pointed out that in considering restoration she had looked at all the circumstances surrounding the seizure but had not considered the legality or correctness of the seizure itself. Having taken into account certain matters, including her view that 43.5 kg was a commercial quantity, she determined that the vehicle should not be restored.
11. Mr Mills appealed that decision to the VAT Tribunal, as he was entitled to do. The Tribunal delivered a written decision. It starts by recording that the Tribunal heard oral evidence from Mr Mills, Mr Kerry, Mrs Mills and Mrs Gillespie. It saw copies of the notes of interviews of Mr Mills and Mr Kerry and certain other documents. In paragraph 4 it deals with "Findings of Fact". It shows that the tribunal heard evidence and made findings about all the circumstances of the trip abroad and the subsequent seizure. They also made findings about the correspondence leading up to the two reviews. It is apparent from that paragraph that the Tribunal embarked on this part of the exercise as though it were a full fact-finding body. In paragraph 5 it considered what conclusions might be drawn from the quantity of tobacco acquired by Mr Mills (435 pouches or 21.75 kg). It found that, while tobacco would deteriorate over time, the deterioration of sealed pouches would not have been so marked 18 months or two years after purchase as would cause either Mr or Mrs Mills to throw it out. This was presumably intended to be part of its consideration of whether it could accurately be said that the tobacco, in what was on anyone's view a large quantity, was for personal use. In doing so it took into account the personal experience of a member of the tribunal of eating significantly out-of-date tinned food and anecdotal evidence from that member's father as to the quality of a cigar kept for five to six years.
12. Between paragraphs 6 and 30 the Tribunal set out the relevant statutory provisions. It obviously identified all the correct ones. At paragraph 21 the Tribunal's decision says:

"21. The Appellant's solicitors' letter of 30 January 2006 was taken by the Respondents as [a notice of claim for the purposes of proceedings challenging forfeiture.] We believe that they were right to do so. We note that there is no provision in Schedule 3 for the withdrawal of a notice. The Act simply provides that if a notice is served then the Respondents are required to take confirmation proceedings."

The following paragraphs consider whether a notice could be withdrawn. In paragraph 22 the Tribunal observes that there would be difficulties in deciding within what period such a notice could be withdrawn. In paragraph 24 it observed that nothing in fairness or administrative convenience compelled a conclusion that it could be withdrawn. Having outlined some of the procedure it says:

"The actual procedure adopted does not therefore call for the ability to "undo" a notice and release the Commissioners from their obligation under Schedule 3. The provisions of paragraph 10 of Schedule 3 reinforce this view: if the appellant does not turn up to make oath as required judgement is to be given for the Commissioners. We therefore see no reason either in the language of Schedule 3 or in the practice of the Courts to write into Schedule 3 provision permitting the "un-giving" of a notice."

The decision goes on in paragraph 25 to say:

"25. The Appellant's solicitors' letter of 9 February said "our client simply wants his car back". That did not read to us like an unambiguous notification that confirmation proceedings should be stopped (even if that were possible). Neither did the Respondents seem to take it as such -- see [another paragraph in the letter of the 23rd February] It was only on 14 March 2006 that Mr Mills' solicitors unequivocally indicated that they were not seeking to challenge the legality of seizure. But by that time notice had been well and truly given."

Then in paragraph 26 they reach a conclusion which is important to the whole basis of the appeal to me. They say:

"Thus it seems to us that paragraph 5 of Schedule 3 CEMA does not apply to deem forfeiture proceedings to have been concluded in the Respondents' favour: notice was given in the 30 day period, and even if it was possible to undo the notice, the undoing was not due [sic] in that period. It is difficult to countenance undoing, but even more difficult to treat a letter sent 4 months after the end of the statutory period as retrospectively undoing something within that period."

13. In paragraphs 32 and following the Tribunal considers various authority on the question of whether it would be an abuse of the process to reopen any question of forfeiture. Having considered that authority (to some of which I shall refer below) it came to the conclusion that it would not be an abuse of the process for the tribunal to consider the legality of forfeiture.

"37. .... That is for the following reasons:

First, as noted at paragraphs 20 to 24 above, we see nothing in Schedule 3 which permits a notice, once given, to be ungiven. If that is right then the Respondents remain under a duty to take condemnation proceedings and paragraph 5 does not apply. There is therefore no presumption that the goods are legally forfeited which binds us;

"Second, even if our first reason is wrong, we do not read the Appellants' solicitors' letter of 9 February 2006 as the cancellation of the original notice. All the letter of the March 2006 [sic] as being capable retrospectively of withdrawing the earlier notice.

38. We conclude that it would not be an abuse of process for the Appellants to re-open the issue of legality of forfeiture or for us to consider it. However, for the reasons set out in Section D. below we find, on the facts as we have found them, that the car was lawfully forfeit. But for the reasons also set out below we are not precluded from considering whether Mr Mills' 21.75 kg of tobacco were for his Own Use. And that is the case notwithstanding our finding that the car was lawfully forfeit, and even if we are wrong in concluding that notice was given under para 3 Schedule 3 CEMA or wrong in concluding that if it was given it was not withdrawn."

14. The next section of the decision deals with the nature of the Tribunal's jurisdiction. It acknowledges that the Tribunal was only permitted to make one of the specified orders if it was satisfied that the person making the decision could not reasonably have arrived at it. Having set out certain authority the Tribunal said that the nature of its exercise as follows:

"41. On this basis we asked ourselves the following questions:

(1) Did the officers [sic] reach a decision which no reasonable officer could have reached?

(2) Did she take into account all relevant considerations?

(3) Did she leave out of account all irrelevant considerations?"

15. Section D is headed "Discussion: Own Use". In paragraph 45 the Tribunal finds that since Mr Kerry's tobacco was not for his Own Use, and since Mr Mills' tobacco was mixed with Mr Kerry's, Mr Mills' tobacco was lawfully seized. Accordingly, if Mr Mills had appealed against the forfeiture of his tobacco in condemnation proceedings, such an appeal would have failed. It would, however, have failed by dint of the mixing with Mr Kerry's goods, so it was still open to the Tribunal to consider whether Mr Mills' tobacco was indeed for his Own Use; that was a distinct question from whether it should have been forfeited or not. Having set out that question, the Tribunal considered all the evidence and determined that it was clear that the tobacco was indeed for Mr Mills' Own Use. At paragraph 51 the Tribunal considered that nevertheless, since the goods of both Mr Kerry and Mr Mills were liable to forfeiture, then Mr Mills' vehicle was also liable to forfeiture.
16. A section E the Tribunal turns to consider the reviewing officer's letter. At paragraph 56 they quote from Mrs Gillespie's letter:

"if your client is claiming that the goods were for "Own Use" -- then he should have appealed to a Magistrates Court...

... having had an opportunity of raising the lawfulness of the seizure in the Magistrates' Court, and he does not have a second chance of doing so at a tribunal or a statutory review."

The Tribunal then observes:

"57. It is clear that the Respondents are in this passage treating the question of the legality of forfeiture as the same as a decision that goods were not for Own Use. They are assuming that the effect of a deemed decision by virtue of paragraph 5 Schedule 3 CEMA is that the goods cannot be for the relevant person's Own Use. This is plainly wrong.

58. It is wrong because a conclusion that Mr Mills' tobacco was or was not for Mr Mills' Own Use was not necessary to a finding that it or his car was duly forfeit. The deeming of paragraph 5 is a specific: the thing which is deemed to be decided against the relevant appellants is simply that the thing is forfeit: only if a finding that the thing was not for Own Use would have been a necessary precondition to a finding that the thing was forfeit can that be deemed to be the case by paragraph 5.

59. It is only where such a finding of Own Use would be necessary to such a finding that the question as to whether it would be an abuse of process to raise that question again in a different forum be relevant.

60. As a result, on the basis of the facts we have found, the review officer failed to consider a materially relevant question -- namely whether or not Mr Mills' goods were for his Own Use."

17. Those paragraphs contain the Tribunal's decision on one of the two points on which it decided the appeal. The second point turned on a determination by the reviewing Officer as to Mr Mills misleading a customs officer. The Tribunal quotes from the letter:

"Initially Mr Mills declared 82 sleeves [of 10 patches each] (41 kilos) when he actually had 43.5 kilos thus misleading the officer about the true quantity of them. If he had nothing to hide there was no need to mislead the officer, and on those grounds alone, I'd have good reason to doubt his credibility. Furthermore, as he was carrying receipts for the full quantity, he clearly knew he was misleading the Officer".

18. In paragraph 62 of the decision the Tribunal concludes that the finding of the misleading was not one which could have reasonably been drawn from the evidence. The under-declaration of 2.5 kilos was not very significant, and the Tribunal found that Mr Mills could scarcely be said to be trying to convince the officer that the importation was materially smaller than it really was. The fact that Mr Mills and Mr Kerry tendered receipts shortly afterwards for the whole 43.5 kilos suggested the contrary. That meant that again the reviewing Officer had reached a decision that she could not reasonably have arrived at.
19. The decision ends by considering various factors which are not germane to the appeal before me.

Summary of the findings and reasoning of the Tribunal

20. The route taken by the Tribunal is not always easy to follow, so it may be helpful to summarise the steps in its reasoning here:

(i) Mr Mills' solicitors had served a notice requiring condemnation proceedings to be taken in the magistrates' court.

(ii) That notice had not been withdrawn, and could not be withdrawn.

(iii) Therefore the requirement for proceedings was still extant.

(iv) Therefore there was no deemed determination that the forfeiture was proper.

(v) Therefore there was no implicit finding, via that route, that Mr Mills' goods were not for his own use.

(vi) Therefore it was not, on the reasoning thus far, an abuse of the process for Mr Mills to seek to take the own use point before the reviewing officer, and before the Tribunal.

(vii) However, the forfeiture was in fact proper because, even if Mr Mills' goods were for his own use, Mr Kerry's were not for his (Mr Kerry's own use), so the forfeiture of the car was justified on the basis that it was carrying mixed (forfeitable and non-forfeitable) goods.

(viii) Nevertheless, it was still not an abuse of process for Mr Mills to take the own use point because such a forfeiture did not necessarily carry the implication that Mr Mills' tobacco was for his own use.

(ix) Accordingly the reviewing officer erred in not considering the own use point. She should have done so.

(x) Furthermore, she erred in finding that Mr Mills deliberately tried to mislead the customs officers over the quantity of tobacco that he had bought.

The appeal before this court

21. At the appeal before me HMRC argued that the Tribunal erred considering that it was open to Mr Mills to assert that the tobacco was for his own use. Its principal point was that the issue was deemed to be closed to Mr Mills because he had not exercised his right to challenge the lawfulness of the seizure by giving notice to HMRC and thus obtaining a hearing in the magistrates' court. Once he had failed to do that, the deeming provisions of Schedule 3 of CEMA applied to make the forfeiture binding and complete, with the result that he could no longer take the own use point. The Tribunal erred in finding that the notice requiring condemnation proceedings could not be withdrawn, and thus that the CEMA deeming provisions did not operate, and went on to err in conducting its own fact-finding exercise and in coming to the conclusion that the tobacco was for Mr Mills' own use. HMRC says that the Tribunal was bound by the deeming provisions of CEMA, and it was wrong to conduct a fact-finding exercise in relation to own use at all. So far as the reversal of the finding of misleading is concerned, HMRC supports the reviewing officer's determination and says that the Tribunal was wrong to reverse it.

The application of abuse of process principles

22. The concept of abuse of process does have a part to play in this situation. It is apparent that it may be treated as an abuse of process to try to raise before the
    Tribunal matters that could and should have been raised previously. The background to the Tribunal hearing is that the car has been forfeited by HMRC, Mr Mills had an opportunity to have forfeiture questions tested and ruled on in the magistrates' court, the restoration claim has been determined by an officer and there has been a review. It is not necessarily possible for Mr Mills to raise all possible matters at all stages in that procedure. It may be an abuse of process for him to seek to do so. The taxpayer will normally be expected to challenge the forfeiture in the magistrates' court if he wishes to challenge it at all, and if he does not do so then not only will the forfeiture be treated as having been effective, he will not be able to challenge the facts which will be taken to have been the basis of the forfeiture, which will usually (in these sort of cases) be an intention not to use the tobacco for own use. In other words, the own use point will usually be taken to be decided against him. That is via the deeming provisions in CEMA.
23. That that is normally the case appears from the decision of Evans-Lombe J in Commissioners of Customs & Excise v Weller [2006] EWHC 237 (Ch). He cited previous authorities, including in particular a decision of Lewison J in Commissioners of Revenue & Customes v Smith (unreported, 17^th November 2005). At paragraph 15 of his own judgment Evans-Lombe J said (citing Lewison J):

"15. At paragraph 22 of his judgement, having referred to Lord Justice Buxton's judgement in the Gascoyne case, and, in particular, to paragraph 76, Mr Justice Lewison says this:

'22. It is, in my judgement, clear from that passage that in the run of the mill cases where there has been a failure to give a paragraph 3 notice invoking the condemnation proceedings the deeming provision will operate against the applicant in any subsequent appeal to a Tribunal. 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. Lord Justice Buxton's reference to the abuse of process or to considerations analogous to abuse of process are, in my view, references to the well-known principle that it may be an abuse of process to raise in one tribunal matters that could and should have been raised in another. So the relevant questions will always be, first, could the applicant have raised the question of the lawfulness of forfeiture in other proceedings and, if the answer to that question is yes, why did he not do so? In the light of his reasons for not raising the matter in condemnation proceedings the Tribunal can then answer the question should he have done so and if they answer that question 'yes', then it will be, in most cases, an abuse of the process for him to raise the question before the Tribunal.'

I respectfully agree with Mr Justice Lewison's approach in this case, namely, that, whether or not an importer, having suffered a deemed forfeiture under paragraph 5 of schedule 3, is able to raise the validity of the forfeiture on a review by the Commissioners and on appeal from then 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, were 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. The first question will almost always be answered in the affirmative, since facts would have to be very unusual to base a conclusion that an importer was prevented, in the 30 days succeeding forfeiture, from giving notice to the Customs to initiate condemnation procedure in the Magistrates court."

24. These formulations require a little more elaboration in their application to the present case. They are made in terms of preventing a challenge to the validity of the forfeiture. However, the principles and the facts of the case demonstrate that they are capable of applying to a challenge to the facts underlying the forfeiture as well, which is the point that arises in this case. So far as principle is concerned, the doctrine of abuse of process goes to prevent not only a re-litigation of determinations actually made at a previous stage of proceedings, but also the necessary facts. In the present context that is demonstrated by the facts of Weller. The point in issue in the case was whether the Tribunal was right to proceed:

"… on the basis that the Tribunal has jurisdiction to consider whether the seized goods were for the Appellant's personal use even though there have been no condemnation proceedings and condemnation has not been challenged".

Thus the point in the case was whether the failure to require condemnation proceedings meant that the own use point should be held to be no longer open to the taxpayer. The substance of the decision was that the failure to require condemnation proceedings meant that the forfeiture, and therefore the own use point which underlay it, could no longer be challenged because it would be an abuse of process to do so. It is HMRC's case that that principle operates in the present case.

25. It is also apparent that the abuse point operates not only at the level of the Tribunal. It also operates at the level of HMRC's own decision and review process. Again, this is a natural application of the principles giving rise to the abuse of process doctrine, and Evans-Lombe J said as much in paragraph 16 of his judgment - "whether an importer … is able to raise the validity of the forfeiture on a review by the Commissioners or the tribunal …". This would be the basis on which HMRC would be entitled to decline to open issues which ought to have been ventilated before magistrates, and in most cases will doubtless justify the application of their general policy as set out in the documents referred to below. Where they have taken that view one of the questions on any appeal to the Tribunal may well be whether they were entitled to take it in the case in question, and as will appear below that is indeed one of the questions that arises in the present case.

The application of those principles in the present case

26. On analysis, it seems that the Tribunal considered that it was not an abuse of process for Mr Mills to raise the own use point for two reasons. First, because there was an outstanding request for condemnation proceedings which had not been acceded to; Mr Mills was therefore not the subject of any deeming provisions. Second, had there been any such proceedings they would inevitably resulted in a forfeiture because of the mixing of the goods with Mr Kerry's goods, so they would not necessarily have determined the own use point; so Mr Mills should not be taken to be bound by the deeming provisions of CEMA in this respect.
27. The first point acknowledges the deeming effect of CEMA, but (implicitly) finds that that deeming effect can only take effect when the time limit for requesting condemnation proceedings has passed. The Tribunal implicitly found that it cannot have passed where there is an outstanding requirement for those proceedings, and it expressly found that there was such a requirement on the part of Mr Mills which had not been withdrawn because it was legally impossible to withdraw such a notice. It also found that even if a notice was capable of being withdrawn the correspondence which passed did not actually withdraw it. Accordingly, on either footing, the deeming provisions of CEMA had not come into play.
28. I consider that the Tribunal clearly erred in this respect. As a matter of principle, I can see no reason why a notice requiring condemnation proceedings to be commenced should not be withdrawn before the proceedings are commenced. The Tribunal gives the following reasoning in paragraph 22 of its decision:

"22. The suggestion that the withdrawal of a notice is contemplated by the Act gives rise to a number of questions unanswered by the words of the Act: in what period would the withdrawal have to be made? What if the notice is given within the one-month period and withdrawn after the expiration of that period? If the notice is withdrawn within the period, can it be given again within the month? The fact that such questions are not addressed suggests that the withdrawal of a notice was not contemplated by the Act."

I am afraid that I do not find this reasoning at all convincing. One could pose a number of different answers to the various circumstances suggested, depending on the facts, and produce an entirely workable regime, and indeed an entirely sensible regime. What is not sensible is to say that a notice simply cannot be withdrawn. Were that the case, then in every instance where a notice was given or arguably given, and the taxpayer decided not to pursue it, then in order to achieve finality HMRC would have to start proceedings and then procure their (presumably consensual) termination. That is impossible to justify. What is much more sensible is to allow the withdrawal of a notice (and particularly of something which might be said to be equivocal), especially where HMRC is content to treat that as having occurred. That avoids unnecessary proceedings and bureaucracy. I can see no question of principle which would stand in the way of such a course. The fact that difficult questions might arise as to timing and the re-giving of notice in some cases (though frankly I am not convinced that that is at all likely) is no reason for determining that the statute implicitly prohibits or prevents it where those difficulties do not arise. Accordingly, I find that the Tribunal erred in this respect.

29. The next question is whether, on the facts, Mr Mills did indeed withdraw his notice, if he gave one. I have set out above the relevant parts of the correspondence. There is one significant piece of background which needs to be added to it. The letter from HMRC dated 31^st January 2006 refers to Notice 12A. That notice is a standard form document, a copy of which was given to Mr Mills at the time he was interviewed by the customs officers (and subsequently to the solicitors) which sets out the rights of HMRC and the individual in the circumstances in which Mr Mills found himself when he re-entered the country. It sets out, very clearly, what the individual can do. In section 1.2 it sets out the alternatives open to Mr Mills under the heading "What can I do now":

"A) You can appeal against the legality of the seizure by sending us a Notice of Claim, advising us that you do not agree with the seizure in which case we will institute a condemnation hearing in a Magistrate's Court. You will then be able to put your case to a Magistrate who will decide whether the seizure was legal. (See Section 2)

Or

B) You can ask us to consider returning the thing to you – even if you accept the seizure was legal. We only return smuggled excise goods in very exceptional circumstances, but depending on the individual merits of the case, we may be able to offer to return vehicles (usually for a sum of money). There is a separate appeals process for people who are dissatisfied with decisions about returning items, this involves an internal review and a subsequent appeal if necessary to an independent Tribunal.

Or

C) You can follow both appeal routes simultaneously ie contest the legality of the seizure and ask us to consider returning seized thing(s) in the meantime ….."

Section 2 clearly set out what should be done if "I don't think the thing(s) should have been seized". It sets out clearly and carefully how the procedure will work. Paragraph 2.20 answers the question: "What if I do not agree that the thing(s) were liable to seizure, but I do not want to go through this procedure?" It answers it by pointing out that if notices not given within one month from the date of seizure, ownership will pass automatically to customs "and you will then be unable to appeal against the legality of the seizure." It ends by saying:

" you should note that we are very unlikely to return seized excise goods solely on the grounds that you maintain they were not liable to seizure (e.g. alcohol or tobacco goods were for your 'own use')."

30. Section 3 deals with the circumstances in which the individual can ask for the return of the seized thing. It points out that this request can be made if it is accepted that the thing was liable to seizure, if the seizure is challenged and a court hearing is pending or if the time limit for challenging the seizure has expired and the ownership of the thing has automatically passed to Customs. It is stated in terms:

"if you maintain that the seized thing(s) should not have been seized (for example because the goods were for your own use, were to be given away, were within your statutory allowance, or were not prohibited or restricted) you cannot rely on that as a reason for them to be returned to you. In those circumstances you must also challenged the legality of the seizure as set out in Section 2 of this Notice."

31. Thus the alternatives open to Mr Mills were spelled out to all concerned. The correspondence has to be interpreted in the light of that, and once that is done there is only one way in which the correspondence can be read, and that is that Mr Mills was not seeking to give a notice leading to condemnation proceedings, but was exercising his right to have the seizure of the car considered by Customs. HMRC apparently considered the initial letter from Mustoe Shorter as probably being a statutory notice, but gave the solicitors 14 days to indicate otherwise. The solicitors clearly did just that in their letter of 9^th February. That letter does not in terms say that no condemnation proceedings were sought, but it does say that Mr Mills just wants his car back, and that that request is directed to Customs (" … and that is what we seek from you"). The reference to the Post-Seizure Unit emphasises that. The Tribunal regarded that letter as equivocal. I am afraid that I do not agree – it seems to me to be quite unequivocal. That correspondence can only be read as a clear indication that condemnation proceedings were not sought, and that is how HMRC interpreted it. In those circumstances the initial letter from the solicitors can either be regarded as an equivocal communication, whose equivocation was resolved in favour of its not being a notice requiring proceedings, or it can be regarded as a notice which was impliedly but clearly withdrawn by the latter letter. As I have said above, there is no procedural or statutory bar on either of those having occurred, and every good reason in terms of sensible practice why it should be permissible. Thereafter all parties proceeded at all times as though what Mr Mills required was a reconsideration by Customs, and there has never, as far as I am aware, been a suggestion that the magistrates' court option was being kept open in parallel.
32. It follows from that that the Tribunal was wrong to find that there were potentially extant condemnation proceedings which stood in the way of the deeming provisions of CEMA. There were none, with the effect that the tobacco and car fall to be regarded as lawfully forfeited under Schedule 3 of CEMA.
33. HMRC effectively say that that is an end of the matter. Since the forfeiture is deemed to have taken effect, the own use point should also be taken to be decided against Mr Mills too, and the Tribunal should not have investigated it and allowed it to be re-opened. The Tribunal considered that it was not bound to assume that point against Mr Mills, and its reasoning seems to be because the magistrates would in any event have been bound to have found that the forfeiture was proper because the goods were mixed with Mr Kerry's illegal goods. This, the Tribunal considered, meant that the own use point was not necessarily to be taken to be determined against Mr Mills.
34. In my view whether or not the Tribunal was right in its view depends on the abuse of process point referred to above. I consider that the Tribunal was right in its approach on this. In the normal case contemplated by Lewison J the only basis for forfeiture is likely to be the absence of own use. That factual point, if it is to be determined in those cases, is appropriately determined in the magistrates' court, and HMRC's notes on Notice 12A reflect that. In such a case it would be right and fair to say that a failure to take the point before the magistrates makes it an abuse of process to seek to take it subsequently in restoration proceedings.
35. However, the present case is not a normal case in that sense. Mr Kerry's goods complicate the position. He did not seek to challenge the forfeiture of his goods. The Tribunal held that in the magistrates' court a challenge to the forfeiture of the car would have failed because of the mixing of Mr Mills' goods with Mr Kerry's, whether or not Mr Mills was found to have imported the goods for his own use or for a commercial purpose. The Tribunal treated that as an inevitable outcome. That is not quite the right analysis. If Mr Mills had decided to challenge the forfeiture in the magistrates' court it would have been open to him to try to prove that Mr Kerry's goods were not in fact liable to forfeiture. He would not himself have been bound by Mr Kerry's failure to apply within time. That emerges from the decision of Lightman J in Fox v HMCE [2002] EWHC 1244 (Admin). However, a similar point to the Tribunal's point can be made. If Mr Mills had applied to the magistrates' court he might still have failed to prove that Mr Kerry's goods were for his (Mr Kerry's) own use; if he had so failed then Mr Kerry's goods would have been properly forfeited, and so would Mr Mills' (with which they were mixed) and the car which carried them. The result is the same as the Tribunal's decision - in those circumstances one cannot say that a deeming of a proper forfeiture arising out of a failure to apply for forfeiture proceedings inevitably carries with it an assumption or inference of own use on the part of Mr Mills.
36. Accordingly, while it would be an abuse to challenge the forfeiture, one cannot identify other underlying facts which must also be assumed against Mr Mills. The abuse point therefore does not run, or at least not in the same way. One can test the matter in this way. Had there been a debate in the correspondence about whether own use could be argued in the restoration proceedings at the outset, and had HMRC sought to say that if he wanted to take the point then Mr Mills should go through condemnation proceedings so that it could be determined there, the correct stance for Mr Mills to have taken would have been to have said that the point would not necessarily be decided there because of the mixing with Mr Kerry's goods. He would therefore have been entitled to require HMRC to consider it as part of the restoration exercise, and to do so would not have been an abuse. By the same token, inviting the Tribunal to consider it on appeal would not have been an abuse.
37. Of course, that did not happen in the present case, and judging from the evidence that degree of subtlety did not occur either to HMRC or to Messrs Mustoe Shorter. The latter firm did not insist on HMRC considering the own use point on the footing that the magistrates' court would not decide it. They merely indicated that they did not wish to apply to the court and then put forward all their submissions to HMRC. It is therefore necessary to decide whether that makes a difference.
38. I do not consider that it does. Mr Mills did not clearly acquiesce in an assumption being made against him on the own use point - the correspondence does not show that, and Notice 12A only makes it plain that forfeiture, and not all conceivable bases of forfeiture, will be assumed against him. Since the logic of the procedure does not mean that Mr Mills must be taken to have conceded the own use point, I do not see why it should be an abuse of the process for him to take it. Absent some clear act of acquiescence on the part of Mr Mills, it would be unfair to conclude that he is debarred from running a point when a proper appreciation of the situation would have meant he would have been entitled to run it in the restoration proceedings anyway because HMRC could not have "insisted" that it be determined in the magistrates' court.
39. It is plain that Mrs Gillespie considered that own use arguments were not open to Mr Mills. The Tribunal's decision records her as saying as much:

"In considering restoration I have looked at all of the circumstances surrounding the seizure but I have not considered the legality or the correctness of the seizure itself. if your client is claiming that the goods are for 'Own use' - then he should have appealed to a Magistrates' Court within 1 month of the date of the seizure as explained in the 'background' above." [Mrs Gillespie's emphasis]

It follows that she approached her exercise on the basis of a wrong assumption, and the Tribunal was, to that extent, justified in concluding (as it did) that she took an irrelevant consideration into account.

40. I have considered whether despite that she actually purported to come to her own independent conclusion on own use. Although she does not say that despite the assumption she embarked on a fresh consideration of the point, on pages 7 and 8 she does at first sight seem to come to an independent conclusion that the importation was for commercial purposes. However, I do not think that it is right or safe to conclude that she did, or that she arrived at a fair one, for two reasons. First, having just indicated that an own use argument was not open to Mr Mills, it is not fair to conclude that she put that conclusion entirely on one side. Second, in the course of her reasoning she made a finding which the Tribunal found to have been erroneous, namely the misleading point referred to above. The Tribunal found that that determination was an unreasonable one on the evidence, and I think it was right about that. The under-declaration was only 2.5 kg, which is not significant in the circumstances since it did not bring him close to any particular guideline that might have helped him, and he was carrying receipts (which he might well have anticipated would need to be produced) which showed the true quantities. It is impossible to infer a sensible motive or reason for Mr Mills lying about this, and in those circumstances it is not right to find him to have lied.
41. In fairness to HMRC I should say that it was prepared to say that it would not want the reviewing officer's decision to stand if the finding against Mr Mills for misleading the customs officers was an unjustified one. Since I agree with the Tribunal that it was unjustified this appeal could have been determined on that ground alone, but since the other points were argued fully by Miss Darroch I considered it right to deal with them all.
42. The Tribunal concluded that in those two respects the reviewing officer failed to take a relevant consideration into account and took an irrelevant one into account. As a matter of language such errors do not, by themselves, come within the concept of the reviewing officer making a decision that could not reasonably have been arrived at, which is the statutory concept behind section 16(4) of the 1994 Act. The Tribunal relied on dicta in a tribunal decision in Jason Thomas Bowd v Commissioners of Customs & Excise [1995] V & DR 212 as bringing reliance on irrelevant matters and disregarding relevant matters within the concept. Miss Darroch did not dispute that approach, so I find that the Tribunal were correct to adopt it. Clearly the matters that the Tribunal relied on in criticising the review were fundamental matters which must materially have affected the conduct and result of the review.
43. It therefore follows that I shall dismiss this appeal. The Tribunal directed that HMRC carry out a further review, and gave directions as to matters to which it should have regard in carrying out that review. They included the following:

"(i) the only goods being carried in the car which were not for Own use were some of those of Mr Kerry.

(ii) those of Mr Kerry's goods which were not for his own use were destined to be supplied on a 'not for profit' basis".

At the appeal before me Miss Darroch submitted that on the facts of this case the Tribunal was not entitled to consider the question of own use, particularly since the reasons given for allowing the appeal did not involve its doing so. The main grounds on which it found the reviewing officer erred did not require it to come to any conclusions itself about own use since they were criticisms of the quality of the decision-making rather than of the actual decision. Furthermore, if one looks at the Tribunal's own decision on the point it was wrong. The Tribunal was wrong to rely on its own subjective views of sell-by dates (or their equivalent) and failed to give sufficient weight to the fact that the quantities involved were 7 times over those which HMCE considers to be reasonable for personal use.

44. The power of the Tribunal to make its own decisions on questions of primary fact is established by authority - see Golobieswska v Commissioners of Customs & Excise [2005] EWCA Civ 607. It appears that the Tribunal is entitled, amongst other things, to investigate whether the primary facts on which the Commissioners have based their decision are correct. Quite where that takes one in any particular case will, of course, depend on the facts of that case. If it had been sufficiently apparent that the argument before the Tribunal was to be confined to the main points on which it allowed the appeal then I can see a strong argument for saying that it was inappropriate for it to embark on its fact-finding exercise. However, it is not clear to me that it was always apparent that it was so confined, and Miss Darroch, who appeared before the Commissioners as well as before me, told me that no submissions were made as to the taking of the oral evidence before the Tribunal. There was therefore no opposition to it. It is therefore now a little late for HMRC to say that the exercise should not have happened. And since it cannot object to the exercise, it seems to me that it cannot properly object to the expression of the fruits of that exercise in the form of findings of fact.
45. So far as the quality of the findings is concerned, any attack on those will suffer from the usual difficulties of a challenge in an appellate tribunal to facts found below on the basis of oral evidence. Miss Darroch did not embark on a sustained and detailed attack on the findings. I did not even have the transcripts. It is apparent enough from the Tribunal's decision that it considered the evidence carefully, and of course it had the opportunity of seeing the witnesses themselves. It plainly had in mind the excess of the tobacco over the quantities that HMRC would normally consider to be appropriate for personal use. Having considered all that material it came to the conclusion that Mr Mills was indeed importing for own use. It matters not that the conclusion might be surprising in view of the quantities involved. I cannot say that it was a conclusion that it was not entitled to reach.
46. That conclusion helps to deal with another point which was raised, which is the directions given to the reviewing officer for the next review. Those directions include a direction to conduct the review on the footing that the tobacco was brought in for own use. If the proceedings on the appeal had been narrowly confined to the matters necessary to consider the procedural correctness of the reviewing officer the Tribunal would not have heard evidence which would have entitled it to make such a direction. But it was allowed to range more widely, and in those circumstances it seems to me impossible to say that it should not be entitled to pass on the fruits of that exercise to the reviewing officer who has to conduct the next review. In fact there are benefits in that being done. If it were not done then the officer would have to reach a conclusion on own use. Any such conclusion would not take place with the benefit of the first- hand material available to the Tribunal - the reviewing officer would be unlikely to conduct an oral hearing with sworn testimony. The Tribunal's exercise was more thorough on the own use point than anything which would be done by the reviewing officer. In those circumstances, while one can anticipate that HMRC would not like the starting point that Mr Mills imported the tobacco for his own use, someone has to decide the point, and the Tribunal has done so as a result of a procedure in which HMRC acquiesced.
47. In those circumstances, and subject to any fine tuning which might be necessary as a result of further argument, the order of the Tribunal stands.