[2012] UKFTT 403 (TC)
TC02098
Appeal number: TC/2011/03603
TYPE OF TAX – s. 16 Finance
Act 1994 – was Reviewer’s decision not to restore vehicle reasonable – yes.
FIRST-TIER TRIBUNAL
TAX CHAMBER
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KENNETH DAVISON
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Appellant
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- and -
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UK BORDER AGENCY
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Respondents
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TRIBUNAL:
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JUDGE ALISON MCKENNA
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IAN ABRAMS
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Sitting in public at Bedford Square on 17 May 2012
The Appellant appeared in
person
Ms Holmes of counsel,
instructed by the Director of Border Revenue, appeared for the Respondents
© CROWN COPYRIGHT
2012
DECISION
1.
This appeal concerns Mr Davison’s application to the United Kingdom
Border Agency (“UKBA”) for restoration of his vehicle, namely a Citroen
Picasso, which was seized at Coquelles, France on 10 January 2011. Customs
officers had searched the vehicle and found it to contain 18.5 kilograms of
rolling tobacco which, as we heard, was sufficient to roll some 33,000
cigarettes, and the importation of which should have attracted customs duty of
£2397.42.
2.
UKBA’s decision not to restore Mr Davison’s vehicle was reviewed on 18
April 2011 and it follows that this was an appeal against the review decision
of that date. The Tribunal’s jurisdiction in such an appeal is derived from s
16 (4) of the Finance Act 1994 which provides that, in order to succeed, the
Appellant must satisfy the Tribunal that the reviewer could not reasonably have
arrived at the review decision. If the Tribunal decides that the decision was
unreasonable it may direct that the reviewer’s decision ceases to have effect
and/or require UKBA to conduct a further review of the decision not to restore.
3.
The legality of the seizure of the vehicle was not challenged by Mr
Davison in the Magistrates Court. Consequently it was deemed to have been duly
condemned as forfeited. The legality of the seizure and the deemed forfeiture
was not an issue before us in these proceedings.
The Facts
4.
The Tribunal heard that Mr Davison was stopped by customs officers at
Coquelles on 10 January 2011. He was in the company of a Mr Woods and they told
officers that they had been on a “recce” to visit Royal Marine graveyards with
a view to bringing new recruits to visit them on a later date. Both gentlemen
told the customs officers that they were in possession of substantially less
tobacco than proved to be the case. Mr Davison said in interview that 5
packets of tobacco were for himself; 4 were for Jeff Rock and 2 were for Sandra
or Susan Robinson, a work colleague. He said he would pass the tobacco on at
cost price and would be reimbursed for his petrol. Mr Woods had also stated
that some of the tobacco was for himself and some for others.
5.
The Citroen (of which Mr Davison was the registered keeper) was seized
on the basis that it had been used for the carriage of goods liable to
forfeiture. Mr Davison was issued with the standard form telling him that he
could challenge the legality of the seizure in the Magistrates Court within one
month. Mr Davison did not proceed to a Magistrates Court hearing and
accordingly the vehicle was deemed forfeit and its ownership passed to the
Crown.
6.
Mr Davison wrote to UKBA requesting the restoration of the vehicle.
Restoration was refused and Mr Davison asked for a review of that decision, as
he was entitled to do. The review decision of 18 April 2011 was carried out by
UKBA officer Ian Sked. The letter of that date communicating the decision to
Mr Davison sets out the factors taken into account, including the initial
statements of Mr Wood and Mr Davison that they each only had four or five
packets of tobacco; the larger quantity found in the vehicle when it was
searched; the explanations given for the importation and the later explanation
given in correspondence. He considered the individual circumstances of Mr
Davison and had regard to the HMRC policy document on restoration of vehicles.
He concluded that this was a case of smuggling for profit, with a substantial
amount of tobacco involved and the aggravating feature of dishonestly by those
who imported it. He concluded that if Mr Davison had not been intercepted on
this occasion it was likely that the smuggling activity would have continued
and that it was proportionate in all the circumstances not to restore the
vehicle. He finally concluded that there were no humanitarian grounds for
restoration.
7.
By the time of the appeal hearing in May 2012 Mr Sked was on sick leave
and we heard evidence from UKBA officer Mr Brenton, who had acquainted himself
with Mr Davison’s case and had adopted Mr Sked’s witness statement of 13
February 2012. Mr Davison had been notified in advance that Mr Brenton would
be giving the evidence in his appeal and had not objected to this.
8.
Mr Brenton’s evidence to the Tribunal was given on oath. He told us
that the review decision not to restore the vehicle to Mr Davison was in
accordance with UKBA policy. He explained that the relevant factors pointing
to non-restoration were the quantity of the tobacco (which suggested that it
was being imported for a commercial purpose) and the aggravating features of
the dishonesty of Mr Davison and Mr Woods when questioned by officers. Mr Sked
and Mr Brenton had both formed the view that the explanation given by Mr
Davison and Mr Woods that they had been on a “recce” for a war graves visit for
new recruits and had purchased the tobacco for family and friends on a
non-commercial basis was not a credible explanation. The two men had not only
given inconsistent accounts of where they had been but were also unable to
recall the locations of the war graves they said they had visited. Furthermore,
Mr Davison had also been unsure of the name of a woman for whom he said he had
purchased the tobacco; there had been a suggestion from Mr Davison in interview
that his petrol money would have been paid for by those for whom he imported
the tobacco, which rendered the enterprise a commercial one. Mr Davison had also
stated that some of the tobacco was for his personal consumption but he had
declined the opportunity to smoke when offered it during his detention and had
no smoking paraphernalia (such as a lighter) in his pockets when stopped so
this was not believed. The relatively short duration of the visit (a 4 hour
round trip) also suggested that it had been undertaken for the sole purpose of
purchasing the tobacco.
9.
Mr Brenton told us that he had also considered, in line with UKBA’s
policy, whether exceptional hardship would arise as a result of the forfeiture
of the vehicle. He produced documentary evidence to show that four vehicles
were registered at Mr Davison’s address, of which the Citroen was one. He
agreed with Mr Sked’s decision that there were no humanitarian issues which
suggested the vehicle should, exceptionally, be restored in this case.
10.
Mr Davison gave evidence to the Tribunal on oath. He told us that he was
currently employed as a security guard at the Norton Fitzwarren Royal Marines
base near Taunton. He had himself been a Royal Marine and had received both
long service and good service medals. He accepted that 18.5 kilograms of
tobacco had been in his vehicle, but said that he had not been aware of what
was in Mr Woods’ bag in the boot. He said he had known that Mr Woods had
purchased some tobacco but he had not realised how much. He said he had been
annoyed with Mr Woods when he realised how much tobacco he had placed into the
vehicle but that the customs officer had not recorded this in his notes. He
had, in later correspondence, attributed blame to Mr Woods for importing the
majority of the tobacco. He said that one of the four vehicles referred to as
registered to his address had been borrowed after the seizure of the Citroen
Picasso. He explained that he was still paying the monthly finance payments
for the Citroen which had been seized. He told the Tribunal he was sorry to
have caused inconvenience but that the loss of the Citroen was causing him
hardship and he wished it to be restored.
11.
Mr Davison told the Tribunal he would like to apologise to the UKBA for having
initially given the wrong name of the woman for whom he had purchased tobacco.
He said she was the friend of a friend and he had been unsure of her name. He
had subsequently written to UKBA with her correct name. Mr Davison told us
that they had looked at some war graves but that he had not known the names of
the places where they were located as he had focussed on the route. He said he
had been confused and could not pronounce the names of the places they had
been. He denied that the tobacco had been imported for a commercial purpose.
He said he had been being “flippant” when he told the customs officer that he
would be paid his petrol money and there had in fact been no agreement to this
effect.
12.
In the hearing before us Mr Davison did not produce any evidence, such
as letters from the others said to be involved, to confirm his story. He did
not in particular produce any evidence from the persons for whom he said he had
purchased the tobacco on a non-commercial basis. He did not produce any
evidence from Mr Woods or otherwise to substantiate the alleged purpose of the
trip, indeed he said that he had told no one at work about his intentions in
that regard.
The Law
13.
UKBA has discretion under s 152(b) of the Customs and Excise Management
Act 1979 to restore anything that has been forfeited or seized. The Finance
Act 1994 provides a mechanism for appealing against an exercise of discretion
not to restore. As noted above, s 16(4) of the Finance Act 1994 provides that
(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 [HMRC] or other person making that
decision could not reasonably have arrived at it, to do ne 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 [HMRC] to conduct, in accordance with
the directions of the tribunal, a review or further review as appropriate of
the original decision; and
(c) in the case of a decision which has already been
acted upon or taken effect and cannot be remedied by a review or further review
as appropriate, to declare the decision to have been unreasonable and to give
directions to [HMRC] as to the steps to be taken for securing that repetitions
of the unreasonableness do not occur when comparable circumstances arise in the
future.
14.
UKBA’s policy is generally to restore private vehicles used for improper
importation. However, its policy is not to restore such vehicles where there
are aggravating features, including where the quantity of improperly imported rolling
tobacco exceeds 6 kilograms and where the importation is considered to be for
profit. This is subject to any exceptional circumstances of hardship.
15.
Ms Holmes submitted that the test of reasonableness was one essentially
derived from Associated Provincial Picture Houses v Wednesbury
Corporation [1948] 1 KB 223 namely that the Tribunal must ask itself
whether the reviewer’s decision was one that no reasonable reviewer could have
come to because the reviewer had taken irrelevant matters into account, had not
taken relevant matters into account, or had made an error of law. We accept
that submission.
16.
The case law in relation to the restoration of seized goods was recently
reviewed by the Upper Tribunal (Tax and Chancery Chamber) in HMRC v Jones [2010] UKUT 116 (TCC). The Upper Tribunal in that case reviewed the earlier
authorities, including the Court of Appeal’s decision in Gascoine v Customs
and Excise Commissioners [2004] EWCA Civ 1162, in which it was confirmed
that as forfeiture potentially interferes with the Appellant’s rights to
property under article 1 to the First Protocol of the European Convention on
Human Rights, issues of proportionality were a relevant consideration for the
Tribunal. This means that, although each case must be considered on its facts,
there must be a reasonable relationship of proportionality between the means
employed and the aim pursued by UKBA in forfeiting the vehicle.
Conclusion
17.
Mr Davison did not, in his appeal before us, provide any evidence which
would lead us to conclude that UKBA’s decision not to restore the vehicle was
unreasonable. We concur with the reviewer’s conclusion that the stories of Mr
Davison and Mr Woods’ stories were not credible and with his conclusion that,
in the absence of any credible explanation, the motivation of the trip
reasonably appeared to be that of obtaining tobacco for commercial sale. We
take into account the relatively large amount of tobacco in the vehicle. We
note that if the purpose of the trip was a “recce” for a future visit with new
recruits then Mr Davison would have needed to be able to find his way back to
the graves he said he had visited and probably also to produce an itinerary for
those concerned. He was clearly unable to do so. We conclude that because Mr
Davison and Mr Woods both told untruths to the officers when stopped that they
were in fact engaged in a joint enterprise in relation to the importation of
the total amount of tobacco. We do not accept that Mr Davison was tricked by
Mr Woods, as he suggested in later correspondence. We note that Mr Davison
told the officer that he would be paid for his petrol and agree with the reviewer’s
conclusion that this was a commercial factor. We were not satisfied by Mr
Davison’s later description of that statement as “flippant” and conclude that
this was a relevant factor for the reviewer to take into account.
18.
We have, as we are required to do, considered the issue of proportionality
in this case. We note the value of the vehicle was said to be around £ 16,000
and that Mr Davison has not yet finished paying for it. We note that the
customs duty due on the imported tobacco was substantially less than the value
of the vehicle, however we take into account the likely profit to be made from
importation of a large quantity of rolling tobacco for commercial purposes. We
consider that the aim of preventing commercial importation without the payment
of duty and of interrupting the onward sale of the tobacco, with associated
future loss of duty, makes the non-restoration decision in this case
proportionate. We do not find that there are any grounds of exceptional
hardship for setting aside the review decision.
19.
In all the circumstances we consider that UKBA’s review decision of 18
April 2011 was reasonable and shall stand.
20.
This document contains full findings of fact and reasons for the
decision. Any party dissatisfied with this decision has a right to apply for
permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure
(First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be
received by this Tribunal not later than 56 days after this decision is sent to
that party. The parties are referred to “Guidance to accompany a Decision from
the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this
decision notice.
ALISON
MCKENNA
TRIBUNAL JUDGE
RELEASE DATE: 22 June 2012
