Morris v Customs & Excise [2003] UKVAT(Excise) E00507 (20 October 2003)

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URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2003/E00507.html
Cite as: [2003] UKVAT(Excise) E507, [2003] UKVAT(Excise) E00507

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EXCISE DUTIES – Non-restoration of seized vehicle and tobacco goods – whether reasonable – yes.

LONDON TRIBUNAL CENTRE

JULIA MORRIS Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: Peter H Lawson (Chairman)

Miss Angela West FCA

Sitting in public in Cardiff on 19 August 2003

The Appellant in person

Valentina Sloane, Counsel, for the Respondents

DECISION

This is an appeal by Miss Julia Morris who lives at Nantyfyllon, Maesteg, Bridgend, Glamorgan, against a decision on review not to offer for restoration a car, registration number N785 MNY, seized from the Appellant on 7 August 2001. The car was a Vauxhall Corsa.

The review officer was Mr Brian Rayden, based in Plymouth, and he gave evidence before us. Miss Morris also gave evidence on her own behalf.

Although Miss Morris was not represented at the hearing of the appeal, she had previously consulted the Citizens Advice Bureau in Maesteg and a firm of solicitors, Messrs Howe & Spender, of Port Talbot.

The grounds of appeal were: "that the Customs Officer was unable to prove that the 12 kgs of hand rolling tobacco in my personal possession was not for my own use and as gifts for my daughter and her boyfriend, that my car was illegally impounded and sold off sometime between 8 August 2001 and 22 March 2002 before appeals against this confiscation had even been replied to".

For convenience we append as an Appendix a copy of Mr Rayden's review letter (addressed to Messrs Howe & Spender) dated 30 April 2002 which sets out the relevant facts, which we accept as correct, and the relevant legislation in force at the time of seizure.

There are two points in Mr Rayden's review letter which, in our view, call for comment. The first is that when Miss Morris was stopped at Coquelles and the officer asked "where have you been to", she replied "Calais" and when she was asked whether she had been "anywhere else" she said "No". However, the handwritten notes of the initial interview show that, when Miss Morris was asked where she bought the tobacco she said "in Belgium" although she could not remember the name of the place, which was in fact Adinkerke, "a notorious source of cheap tobacco for smuggling".

The second point is that Mr Rayden referred to the tobacco being "hidden under boxes of beer and cigarettes in a manner that the officer considered was intended to deceive him". Mr Rayden did not, apparently, take account of the fact that Miss Morris's car was small and there were three passengers in addition to the driver. In our view, it is just as plausible to say that beer and cigarettes were placed in the car above the tobacco because there was nowhere else to put them. These points are not, however, sufficient to vitiate his decision.

Cross-examined by Miss Sloane, Miss Morris gave details of her monthly expenses and said that on 7 August 2001 they had set off between 11 am and 12 noon, and it had taken until 6 pm to reach the Tunnel. They had just wanted to see the Tunnel and this was in fact stated in the initial interview.

Miss Sloane put it to Miss Morris that one of the purposes of the trip was to buy excise goods and that applied to her travelling companions also. There was no mention of excise goods until Miss Morris was specifically asked about them at the initial interview. She was unable to explain why she had not mentioned the HRT or the visit to Belgium.

Miss Morris was asked at the initial interview how much of the tobacco in the car was hers and she said "we just fetched it between us" and when asked how she would divide it up, she said "three ways – it is for my pleasure and my daughter and son-in-law and her boyfriend".

Miss Morris confirmed that the visit to Belgium was spontaneous. She could not remember whose idea it was and it had not been the intention from the beginning. She did not even know how far it was to Belgium – in fact it was only 40 minutes' drive in the car.

The other passengers in the car were Mrs Alison Marie Keenan and Miss Julia Anne Valetta, both of whom live near Neath. According to a letter from the solicitors addressed to the Customs Post-Seizure Unit dated 23 August 2001, of the 4,000 mixed KSF cigarettes, 600 were purchased by the Appellant, 800 by Miss Valetta and 2,600 by Mrs Keenan. Of the HRT, the solicitors said they understood that 2 boxes were purchased by the Appellant, 1 box by Miss Valetta and 1 box by Mrs Keenan. The spirits, beers and wines were purchased by, and belonged to, the Appellant.

The review decision in this case is a decision as to an "ancillary matter" and the Tribunal's jurisdiction over review decisions of ancillary matters is supervisory only. Section 16(4) Finance Act 1994 provides:

"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 persons 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) In the case of a decision which has already been acted on or taken effect and cannot be remedied by a further review, to declare the decision to have been unreasonable and to give directions to the Commissioners as to the steps to be taken for securing that repetitions of the unreasonableness do not occur when comparable circumstances arise in the future".

We accept, of course, that the appeal is not an appeal on the merits of the review decision. The jurisdiction is that described by Lord Lane in CCE v Corbitt (Numismatists) Ltd (HL) [1980] STC 231.

Miss Sloane helpfully drew our attention to recent developments in the law relating to this appeal, as follows:

Since the review decision was taken, there have been two significant developments in the law which relates to this appeal:

(i) The presumption of commerciality under section 3A of the Excise Duties (Personal Reliefs) Order 1992 has been revoked. New legislation places the burden of showing commerciality on the Commissioners.

(ii) In order for a check of a traveller to be valid under domestic law, the Commissioners must have reasonable grounds to suspect that a person has excise goods chargeable with unpaid duty.

i) New legislation

The application of the presumption of commerciality under section 3A of the Excise Duties (Personal Reliefs) Order 1992 was held by the Divisional Court in the Hoverspeed case to be incompatible with Council Directive 92/12/EEC ("the Excise Directive") and Article 28 of the EC Treaty.

The Excise Duties (Personal Reliefs) Order 1992 was revoked with effect from 1 December 2002. The legislative provisions relevant to this case are now found in the Tobacco Products Regulations 2001, as amended by the Excise Goods, Beer and Tobacco Products (Amendment) Regulations 2002 with effect from 1 December 2002, which provide as follows:

12 Excise duty point
......
(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) For the purposes of paragraph (1A) above -
......
(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 intends to make such a transfer,
those products are to be regarded as being held for a commercial purpose.
(d) if the products are not duty and tax paid in the member State at the time of acquisition, or the duty and tax that was paid will be or has been reimbursed, refunded or otherwise dispensed with, those products are to be regarded as being held for a commercial purposes,
(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,
ii) whether or not that person is a revenue trader (as defined in section 1(1) of the Customs and Excise Management Act 1979),
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) the mode of transport used to convey those products,
vi) any document or other information whatsoever relating to those products,
vii) the nature of those products including the nature and condition of any package or container,
viii) the quantity of those products, and in particular, whether the quantity exceeds any of the following quantities -
3,200 cigarettes,
400 cigarillos (...),
200 cigars,
3 kilogrammes of any other tobacco products
ix) whether that person personally financed the purchase of those products,
x) any other circumstances that appears to be relevant.

The effect of the legislation in this appeal is two-fold:
(1) In seizing excise goods, it is for the Commissioners to show, on the balance of probabilities, that the goods were used, or intended to be used, for a commercial purpose.

(2) The guideline quantity of hand-rolling tobacco has been increased from 1 kg (prevailing at the time of the seizure of the Appellant's vehicle and goods) to 3 kg and the guideline quantity of cigarettes has been increased from 800 to 3200.

Miss Sloane, for the Commissioners, made the following submissions:

The Court of Appeal in Hoverspeed has held that in order for a spot check of an individual to be valid, the Commissioners must have reasonable grounds to suspect that a person has with him excise goods chargeable with unpaid duty:

"There must under s.163 [CEMA] be "reasonable grounds to suspect that a vehicle or vessel is or may be carrying any goods chargeable" with unpaid duty, or, in the case of s.163A, "reasonable grounds to suspect a person ... has with him, or at the place where he is, any goods to which this subsection applies". But there is nothing to limit the basis on which such grounds may arise or the nature of the matters that may be taken into account. There is nothing to exclude reliance on profiles and trends to establish "reasonable grounds" to suspect one of the matters stated." (at paragraph 39(iv)).

Whether or not the Commissioners have "reasonable grounds" to stop an individual is a fact-specific question (para 40 of the Court of Appeal decision in Hoverspeed). The Commissioners did not present any evidence in this Appeal on the question of whether or not there were reasonable grounds for checking the Appellant.

A seizure of excise goods is not, however, automatically invalid merely because it occurred as a result of a check which was invalid (paras 44 to 49 of the Court of Appeal decision in Hoverspeed). The lawfulness of the seizure is independent of the validity of the check (paras 44 and 45 of the Court of Appeal decision in Hoverspeed). The invalidity of a check relates only to the question of the admissibility of the evidence thereby obtained. In an appeal such as the present, which does not involve criminal proceedings, there are no grounds on which to exclude as inadmissible the evidence obtained by means of an invalid search. This is clear from the Court of Appeal decision in Hoverspeed:

"If proceedings in which an issue arose whether goods were "liable to forfeiture" were viewed as criminal, it would need to be determined whether answers obtained from or statements made by a traveller during the course of an unlawful check could properly be used to incriminate. Whatever the position in that regard, we believe that English law, fortified by the European Convention on Human Rights, would ensure that no unfairness resulted from an unlawful check. We do not however see any unfairness in the seizure of goods liable to forfeiture, even though their presence happens only to be discovered in the course of an unlawful check. That may be bad luck, but it is not unfair".

For the reasons set out in the original decision, in the review decision, in the Statement of Case and in the evidence provided by the interviews and the correspondence, the Respondents were entitled to confirm the decision not to restore the vehicle or goods to the Appellant on the following grounds:

i) The Appellant was importing the goods for a commercial purpose

In the light of the revocation of the Excise Duties (Personal Reliefs) Order 1992, it is appropriate for the Tribunal to proceed on the basis that the burden of showing commercial purpose lay at all times on the Commissioners.

The Commissioners can reasonably be said to have established, on the balance of probabilities, that the Appellant was importing the tobacco for commercial purposes.

Extremely large quantity of goods imported

Firstly, the Appellant and her companions were importing a total of 480 pouches or 24kg of hand-rolling tobacco and 4000 cigarettes, an extremely large quantity for purportedly personal use.

Each individual was importing an amount of hand-rolling tobacco well above the guidance levels. Even if the Appellant is taken alone, she was importing twelve times the guidance limit of 1kg in force at the time of the seizure; even with the newly increased guidance levels in force, the quantity imported remains four times the guidance limit (3kg). The Appellant's companions each imported 6kg – double even the newly increased guidance limit.

It was proper for the Commissioners to take this into account as a relevant factor in arriving at their decision: see regulation 12(1B)(e)(viii) of the amended Tobacco Products Regulations 2001.

Inconsistent and implausible statements about the purpose of the trip

Secondly, the Appellant's credibility is undermined by her inconsistent and implausible explanations for the purpose of the trip:

(a) When asked where she had been, the Appellant replied "Calais". When asked specifically if she had been anywhere else, she replied "No". In fact, the Appellant had travelled a considerable further distance to Belgium in order to purchase excise goods.

(b) When asked the reason for the trip, the Appellant replied "We wanted to see the tunnel".

(c) When questioned specifically about the fact the Appellant had stated she had been only to Calais, the Appellant claimed that she could not say where they had been in Belgium, that they "had some time to kill" and that she had always wanted to do the tunnel. The Appellant specifically denied that she was intending to buy tobacco when she travelled over.

It is not wholly implausible that "to see the tunnel" was the primary reason for the trip and that the purchases in Belgium were spontaneous, particularly given that:

(i) the Appellant and her companions were making a considerable journey from Wales to Calais;

(ii) they travelled not only to Calais, but on to a location in Belgium, some 40 minutes from Calais;

(iii) Miss Valetta had been given money in advance by her partner to purchase excise goods for him.

However, such implausible explanations for the trip undermine the Appellant's claim that she and her fellow travellers were bona fide purchasers of excise goods for their own consumption.

Inconsistent statements regarding ownership of the goods

Thirdly, the Appellant's credibility is further undermined by her reluctance to declare the goods and the vague and inconsistent statements regarding ownership of the goods:

(a) When asked what they had imported, the Appellant initially stated "beer". It was only when asked specifically if she had imported anything else, that the Appellant declared "about 3 cartons" of cigarettes each [equivalent to 600 cigarettes each].

(b) Despite the specific questioning, the Appellant made no mention of the other 3400 cigarettes or the 24kg of hand-rolling tobacco. These quantities were discovered only when an officer searched the vehicle and found the hand-rolling tobacco packed under the front seats and under the beer and cigarettes in the boot.

(c) At the beginning of her interview , when asked how much of the tobacco in the vehicle was hers, the Appellant stated "We just fetched it between us".

(d) Upon individual questioning, the amounts claimed by the Appellant and her companions as their own accounted for all 24kg of hand-rolling tobacco but only 3200 cigarettes. This left 800 cigarettes unclaimed, equivalent to the entire personal allowance for cigarettes prevailing at the time.

(e) A subsequent letter of 23 August 2001 from the Appellant's solicitors stated that 600 of the cigarettes were purchased by the Appellant, 800 by Miss Valleta and 2600 by Mrs Keenan. Although this now provides an explanation for the total of 4000, the explanation put forward by the letter is inconsistent with the amounts claimed in interview by the Appellant (600) and Mrs Keenan (2000) and is also inconsistent with the amount shown on the receipt produced by the Appellant.

Implausibility that the Appellant's goods were for her own use

(f) Fourthly, it is implausible that the Appellant was importing all 12kg of tobacco – an amount very considerably in excess of the guidance limits – and 800 cigarettes for her own consumption and for use as gifts. In particular, it is not credible that an individual on the Appellant's limited income would spend some £500 on tobacco intending to give two-thirds of it away as a gift.

ii) No exceptional circumstances

In the case of Lindsay v Commissioners of Customs and Excise [2002] EWCA Civ 267, the Court of Appeal held the Respondents' policy of non-restoration of vehicles used for commercial smuggling to be lawful:

"Those who deliberately use their cars to further fraudulent commercial ventures in the knowledge that if they are caught their cars will be rendered liable to forfeiture cannot reasonably be heard to complain if they lose their vehicles. Nor does it seem to me that, in such circumstances, the value of the car used need be taken into consideration. Those circumstances will normally take the case beyond the threshold where that factor can carry significant weight in the balance. Cases of exceptional hardship must always, of course, be given due consideration." (at paragraph 63)

Although no point has been taken in this respect, it is irrelevant that (as could be the case) the profits in question may have been small; see the comment of Judge LJ in Lindsay at paragraph 72:

"Given the extent of the damage caused to the public interest, it is, in my judgment, acceptable and proportionate that, subject to exceptional individual considerations, whatever they are worth, the vehicles of those who smuggle for profit, even for a small profit, should be seized as a matter of policy".

Such cases rightly attract the full rigour of the Respondents' seizure policy, and the application of the Respondents' policy to them cannot be criticised as unreasonable or disproportionate. In other words, the Respondents are entitled to apply their strict policy without having to show that the Appellant was in any way a substantial trader in smuggled goods.

Miss Sloane's final submission was that the review decision was not a decision that "could not have reasonably been arrived at" within the meaning of section 16(4) of the Finance Act 1994. We are grateful for Miss Sloane's submissions, which we accept, and accordingly we dismiss the appeal. There will be no direction as to costs.

Appendix

Letter to Howe & Spender, solicitors dated 30 April 2002 from the Review Officer (Mr Brian Rayden)

Dear Sirs

Your Client Miss Julia Morris

Thank you for your letter of 14^th March 2002 in which you express dissatisfaction at a decision contained in a letter dated 5^th February 2002, refusing to offer restoration of Miss Morris' excise goods and car.

I have treated your letter as a valid requirement to conduct a review of the decision within the two-tier system of reviews, and appeals as created by the Finance Act 1994 Section 14 and schedule 5. Section 2(1)(r) of that schedule renders reviewable:

"any decision under 152(b) [of the Customs and Excise Management Act 1979] as to whether or not anything forfeited or seized under the customs and excise Acts should be restored to any person or as to the conditions subject to which any such thing is so restored".

I have now completed my review and set out below is my conclusion and the basis upon which it has been reached.

Background

I have examined all of the papers made available to me including the officer's notebooks and seizure documents together with all of the ensuing correspondence. My understanding of this case is as follows:

On 7^th August 2001 in the UK Control Zone at Coquelles, France, Miss Morris was travelling in her car, registration number N785 MNY when she was stopped by Customs. With Miss Morris in the car were Julie Anne Valetta and Alison Marie Keenan.

The officer asked: "Where have you been to?"
Miss Morris, the driver, replied: "Calais"
The officer: "Anywhere else?"
Miss Morris: "No"
The officer: "What was the reason for the journey?"
Miss Morris: "We wanted to see the tunnel."
The officer: "What have you obtained?"
Miss Morris: "Beer."
The officer: "Anything else?"
Miss Morris: "Cigarettes."
The officer: "How many?"
Miss Morris: "Well, about 3 cartons each." (600 cigarettes
in all.
The officer found 4,000 cigarettes, 1.4 litres of spirits; 23.25 litres of beer; 13.25 litres of wine; 4 boxes of handrolling tobacco (24Kg or 480 pouches in total). The tobacco was hidden underneath the beer and cigarettes and under the front seat of the car.

The officer stated that the travellers were not under arrest and read to them a formal statement that:
They had in their possession (or control) excise goods in excess of the guidance levels (which were explained); and requiring them to satisfy the officer that the goods had not been held for a commercial purpose; and if they failed to satisfy the officer, the goods would be seized as being liable to forfeiture.

All three said that they understood and elected to stay for interview. They were interviewed separately:-

Miss Morris
The officer: "How much of the tobacco in the vehicle is yours?"
Miss Morris: "We just fetched it between us."

She then said that they had separate receipts, producing hers from All Tobacco Bv BA in Belgium for 240 pouches of tobacco (2 boxes or 12Kg) and 2 cartons of Lambert & Butler cigarettes (400 cigarettes). The tobacco for her own consumption but she would make gifts of some of it to her boyfriend and her daughter. She smoked 20 cigarettes ad ay and consumed ½ or ¾ of a pouch of tobacco a day, but did not know how many cigarettes she obtained from a pouch of tobacco. There was nothing else significant to this review in the interview. At the end of the record in the officer's notebook Miss Morris wrote "This is an accurate record" and added her signature.

Ms Valetta
The officer: "What in the vehicle belongs to you?"
Ms Valetta: "A box of tobacco (6Kg or 120 pouches) and 4 sleeves
of cigarettes." (800 cigarettes and (some wine)
She said that she had paid cash for her own goods, at a shop in Adinkerke in Belgium. The goods were for her and her boyfriend, with whom she did not have a joint income, who had not travelled with her, and he had assisted her with the cost.

The officer: "How much has he given you?"
Ms Valetta: "£150 to £160."
There was nothing else significant to this review in the interview. At the end of the record in the officer's notebook Miss Valetta wrote "I have read the above interview notes and agree them to be a true and accurate account" and added her signature.

Ms Keenan
The officer: "What goods belong to you?"
Ms Keenan: "A box of tobacco and about 10 sleeves of cigarettes."
(1,000 cigarettes)
All of the goods were for consumption by her and her husband. She had paid for her goods herself. There was nothing else significant to this review in the interview. At the end of the record in the officer's notebook Ms Keenan wrote "I confirm that this is a true account" and added her signature.

The officer seized 3,400 cigarettes, 24Kg of tobacco and 1.4 litres of spirits because it was not declared and because the tobacco was concealed. 4,000 cigarettes and 24Kg of tobacco were also seized because, being in excess of the guideline quantities for importing excise goods, the officer was not satisfied that they were for own use. The remainder of the excise goods were seized because they were packed with goods liable to forfeiture, and the car was seized because it was used to carry goods liable to forfeiture. The reasons for not being satisfied about own use were that Miss Morris tried to mislead the officer about where they had been; she failed to declare the tobacco, 3,400 cigarettes and 1.4 litres of spirits; her consumption rate for tobacco was not credible; and not all of the goods were claimed.

On 23^rd August 2001 you wrote asking for the return of the goods on behalf of all three clients. You said that the three should have been dealt with separately. You wrote that 600 cigarettes, 2 boxes of tobacco, and all of the beer, wine and spirits belonged to Miss Morris; 800 and 1 box to Ms Valetta; 2,600 and 1 box to Ms Keenan. You mentioned misleading signs in France, and that all of the goods were for own use. In a following letter you wrote that the loss of the car was causing Miss Morris difficulties in supporting her aged parents and visiting a family member in hospital. After establishing that you were applying for restoration and not appealing against the legality of the seizure, an officer replied on 5^th February 2002, refusing to offer restoration of the goods or vehicle.

On 14^th March 2002 you wrote again, on behalf of Miss Morris only, asking for a review of the decision of 5^th February 2002. It is this letter that I am replying to now. As your letter is detailed I am responding to each point in my consideration below.

Applicable Legislation
I have set out below some details of the key legislation for your information.
The Excise Duties (Personal Reliefs) Order 1992 as amended ("the PRO").
Article 3 states that:
"Subject to the provisions of this Order a Community traveller entering the United Kingdom shall be relieved from payment of any duty of excise on excise goods which he has obtained for his own use in the course of cross-border shopping and which he has transported."
"Own Use" is defined in the Order as:
"Own Use" includes use as a personal gift provided that if the person making the gift receives in consequence any money or money's worth (including any reimbursement of expenses incurred in connection with obtaining the goods in question) his use shall not be regarded as own use for the purpose of this Order."

Article 5(3) of the Order establishes that:
"Paragraphs (3A) to (3C) below apply to a person who has in his possession or control any excise goods afforded relief under this Order in excess of any of the quantities shown in the Schedule to this Order.

(3A) The Commissioners may require a person to whom this paragraph applies to satisfy them that the excise goods afforded relief under this Order are not being held or used for a commercial purpose.

(3B) Where a person fails to satisfy the Commissioners that the excise goods in question are not being held or used for a commercial purpose the condition imposed by paragraph (1) above shall, subject to paragraph (3C) below, be treated as not being complied with.

(3C) Paragraph (3B) above shall not apply where a Court or Tribunal is satisfied that the condition imposed by paragraph (1) above has been complied with."

The Schedule referred to above specifies 1 kilo of tobacco, 110 litres of beer, 90 litres of wine, 10 litres of spirits and 800 cigarettes as quantities above which a traveller may be required to satisfy the Commissioners in this way.

Article 5(1) of the Order states that if this condition is not met:
"...... those goods shall, without prejudice to Article 6 below, be liable to forfeiture."

The Channel Tunnel (Alcoholic Liquor and Tobacco Products) Order 2000
Article 9 of that Order applies to shuttle trains and the control zone the same reliefs and conditions that apply on arrival in the UK by adding the following article 3A to The Excise Duties (Personal Reliefs) Order 1992 (the PRO). It stipulates that:

(1) In relation to shuttle train goods, this Article shall have effect for the purpose of determining whether relief has been treated as having been afforded under Article 3 above (the PRO).

(2) No relief shall be treated as having been afforded if the goods are held for a commercial purpose.

(3) Where the shuttle train goods exceed any of the quantities shown in the Schedule to this Order (the PRO) the Commissioners may require the person holding the goods to satisfy them that the goods are not held for a commercial purpose."

Paragraph (5) provides that:
"If the person holding the goods is required so to do but fails to satisfy the Commissioners that he does not hold them for a commercial purpose, it shall be presumed that the goods are held for a commercial purpose."

The Customs and Excise Management Act 1979 ("CEMA")
Section 49(1) Where -
(f) any imported goods are concealed or packed in any manner appearing to be intended to deceive an officer those goods shall, subject to subsection (2) below, be liable to forfeiture.

Section 78(4) provides that:
"Any thing chargeable with any duty or tax which is found concealed, or is not declared, ......, shall be liable to forfeiture."

Section 139(1) provides that:
"Any thing liable to forfeiture under the Customs & Excise Acts may be seized by an officer ..."

Section 167:
"(1) If any person either knowingly or recklessly – (b) makes any statement in answer to any question put to him by an officer ... he shall be guilty of an offence ... and any goods in relation to which the statement was made shall be liable to forfeiture."

Section 141(1) provides that:
"(a) any ship, aircraft, vehicle, animal, container (including any article of passengers' baggage) or other thing whatsoever which has been used for the carriage, handling, deposit or concealment of the thing so liable to forfeiture, either 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."

Section 152 provides that:
"The Commissioners may, as they see fit -
(a) [not relevant]
(b) restore, subject to such conditions (if any) as they think proper, any thing forfeited or seized under the Customs and Excise Acts."

The Finance Act 1994 establishes the statutory two-tier system of formal reviews and appeals. I am empowered by Section 15 of the 1994 Act to confirm, vary or withdraw a reviewable decision on behalf of the Commissioners.

Restoration Policy for Goods
It is this Department's general policy that seized excise goods are not restored. However, each case is examined on its merits to determine whether or not restoration may be exceptionally offered. In conducting this examination the presence of any one of the following factors will militate against restoration:

- any evidence of previous smuggling or failure to comply with legal requirements;
- any evidence that the person involved knew what they were doing was wrong;
- any evidence that the person was paid to make the journey;
- large quantities of goods which might damage legitimate trade;
- any evidence that the goods were for a commercial purpose.

Restoration Policy for Private Vehicles
With effect from 14 July 2000 the Commissioners' policy regarding privately owned vehicles used for the improper importation of excise goods is that they will not be restored, even on the first occasion they are used. That policy applied at the time of seizure of the vehicle. However, each case is considered to determine whether the affected party has substantiated that restoration should exceptionally be allowed.

Consideration
In reviewing the Commissioners' exercise of their discretion as to whether or not to restore, I have taken a fresh look at all information available to me and I have also considered the words of Lord Lane in Customs & Excise Commissioners v J H Corbitt (Numismatists) Ltd:-

"[The Tribunal] could only properly [review the discretion] if it were shown that the Commissioners had acted in a way which no reasonable panel of Commissioners could have acted; if they had taken into account some irrelevant matter or had disregarded something to which they should have given weight."

Before considering the matter of restoration I have firstly examined whether or not the excise goods and vehicle were appropriately seized in the first instance. Because of the volume of excise goods the travellers were holding they are required under the legislation, when asked to do so, to satisfy the Officer that the goods are for own use and rebut the statutory presumption of commerciality.

As you can see from the quotations above, your client was very clear in saying that the travellers had been nowhere else but Calais and did not tell the officer that they had been to Adinkerke in Belgium, a notorious source of cheap tobacco for smuggling. I do not believe either that they travelled all the way from Wales to "see the tunnel". Miss Morris then said that they had "beer" and it was only when asked if there was anything else that she declared "Cigarettes". When prompted she declared 600 cigarettes in total but she did not declare the tobacco or the spirits. Furthermore, the tobacco was hidden under boxes of beer and cigarettes in a manner that the officer considered was intended to deceive him. On these grounds alone the undeclared 24Kg of tobacco, 2,400 cigarettes and 1.4 litres of spirits were liable to forfeiture under sections 78(4) and 156(1)(b) of CEMA along with the rest of the excise goods packed with them and the car used for carrying the goods under section 141(1).

The officer read to the travellers a clear statement requiring them to satisfy him that the goods were not for a commercial purpose. With 12Kg of tobacco your client Miss Morris was importing twelve times the guideline quantity and the two other travellers with 6KG each were importing six times the guideline quantity. I quote the Chairman, Mr T Gordon Coutts QC's remarks in the case of Boyd (EDN/96/8006):-

"The Tribunal came to the view that even half the quantities involved would have raised a justifiable suspicion but where 9.6 Kilos of handrolling tobacco are imported it strains the credulity beyond acceptable levels that this could be for one man's own use. The importation of twenty odd pounds of tobacco of the handrolling variety is sufficient justification in itself for (Customs) not being satisfied that this was for personal use."

In addition Miss Keenan had 2,600 cigarettes, more than three times the guideline quantity.

Miss Valetta admitted that her boyfriend had paid her £150 - £160 for some of her excise goods and not only this places them firmly outside the definition of own use, but liable to forfeiture along with all of the other excise goods packed with them and the car used for carrying the goods.

The tobacco and cigarettes claimed by the three travellers in interviews do not equal the quantities found, nor do they agree with the figures given in your letter of 23^rd August 2001.

I find Miss Morris' claimed consumption of tobacco credible and would not support seizure on those grounds. However, if the goods were for own consumption there was no need for her to mislead the officer about where she had been, to make a false declaration about the goods imported, or to conceal goods from him.

Taking into account all of the above, I agree with the officer in not being satisfied that the goods were for her own use. In my opinion, the seizure of the tobacco was correct under Article 5(1) of the PRO and section 139(1) of the CEMA and therefore the seizure of the other excise goods and the car was also correct under section 141(1) of CEMA.

I am not aware of any appeal to a Magistrates Court contesting the legality of the seizure and the goods and car are therefore condemned as forfeit to the Crown by the passage of time.

Having dealt with the seizures, it remains for me to address the issue of restoration of the goods and car. From the attempts to deceive the officer Miss Morris clearly knew that what she was doing was wrong. I have read your letters to see whether you have presented a case for disapplying the Commissioners' policy of non-restoration.

In your letter of 23^rd August 2001 you refer to advertising in France that invites travellers to buy as much excise goods as they like, but that does not mean that they may import as much as they like into the UK. Shops abroad are trying to sell as much goods as they can and a prudent traveller would not rely on their advertising for information about UK Customs regulations. Most people are well aware that there are UK Customs regulations and try to inform themselves about them before travelling, especially with the prominent media coverage of tobacco smuggling cases. The travellers could have obtained a Customs Notice number 1 by telephoning the National Advice service (telephone number at the foot of this page) or any Customs & Excise office; or when passing through the outbound controls. The notice is also displayed prominently on the shuttle trains and available on ferries.

Dealing with the points raised in your letter of 14^th March 2002:-

I do not agree that each passenger should be considered in isolation. Your client clearly indicated a joint enterprise "We just fetched it between us". It was impossible to separate the three sets of goods in any case because the claimed cigarettes did not add up to the total found.

1. Each of the travellers exceeded the guidelines for tobacco and Miss Keenan exceeded the guidelines for cigarettes. It is up to the travellers to satisfy the officer that those goods were for own use and they failed to do so. All the other goods are liable to forfeiture because they were packed with them.

2. The officer clearly asked what goods they had, not what they were entitled to.

3. I have considered the false declarations and the concealment together and conclude, on the balance of probability, that the goods were put where they were in an attempt to deceive the officer.

4. Your client signed the officer's notebook to say that it was an accurate records. It records that she said "Calais" and when asked "Anywhere else?" she replied "No". That is clear enough for me.

5. I have not considered Miss Valetta's previous trips in my decision.

6. In a joint enterprise, if Miss Valetta's goods are liable to forfeiture, then so are Miss Morris'. However, there are sufficient grounds to seize Miss Morris' goods without that connection.

In the mitigating circumstances I find nothing to support your views. In particular:-

1. I am unaware of any previous smuggling and have not taken any such into account when making my decision.

2. Miss Morris was not truthful, she must have known that what she was doing was wrong, or there would be no reason to try to deceive the officer.

3. I have not taken into account any payment for travelling in making my decision.

4. I consider that 24Kg of handrolling tobacco is sufficient to damage legitimate local trade.

5. If is for your client to satisfy the officer that the goods were not for a commercial purpose. Considering the quantity of handrolling tobacco and her attempts to deceive the officer she must accept that there must be a serious suspicion that the goods were for resale.

As in the first point 6.

7. I have considered the value of the vehicle and conclude that, in the aggravating circumstances of the attempts to deceive the officer, the loss of the car is both appropriate and proportionate.

8. I have studied Lindsay and, in the light of the previous paragraph, I believe that it should not alter my decision.

9. See below.

I sympathise with the difficulties that the loss of the car is causing for your client, especially in supporting her aged parents and visiting her sick family members. However, that was for her to consider before deciding to smuggle tobacco and cigarettes in the car and before trying to deceive the officer, not for the Commissioners to consider afterwards.

I conclude that you have offered no reason for departing from the policy of non-restoration of the goods or the car. I am of the opinion that the application of the Commissioners' policy in this case treats your client no more harshly or leniently than anyone else in similar circumstances and I can find no reason to vary the Commissioners' policy of non-restoration in her case.

Conclusion
For the reasons set out above I exercise my option to confirm the contested decision not to offer restoration of the goods and vehicle.

If you are not satisfied with the outcome of this review you may now lodge an appeal with the VAT and Duties Tribunal that is independent of Customs and Excise. An appeal should be made on the appropriate forms available with an explanatory leaflet from a Tribunal Centre. An appeal should be sent within 30 days of the date of this letter and should be accompanied by a copy of it.

The Tribunal Centre for your area is:

15-19 Bedford Avenue
London WC1B 3AS
Tel no: 020 7631 4242 Fax no: 020 7436 4150/4151

Yours sincerely

Brian Rayden
Review Officer.

PETER H LAWSON

CHAIRMAN

RELEASED:

LON/02/8325

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You are here: BAILII >> Databases >> United Kingdom VAT & Duties Tribunals Decisions >> United Kingdom VAT & Duties Tribunals (Excise) Decisions >> Morris v Customs & Excise [2003] UKVAT(Excise) E00507 (20 October 2003) URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2003/E00507.html Cite as: [2003] UKVAT(Excise) E507, [2003] UKVAT(Excise) E00507