EXCISE DUTY - appeal against decision to restore vehicle subject to the condition of payment of a sum equal to the excise duty involved (£1,177.39) - Appellant appeared at, and was unsuccessful in, condemnation proceedings in Magistrates' Court and in Crown Court who found that the excise goods carried in the vehicle were held for commercial use - whether Tribunal now has jurisdiction to find, in the context of the appeal against a decision to restore subject to a condition, that the excise goods carried in the vehicle were held for personal use or for not-for-profit commercial use - yes - if so, whether the excise goods were for held for personal use - no - or for not-for profit commercial use - yes - whether Tribunal satisfied that the person making the decision could not reasonably have arrived at it - no - if so, what action the Tribunal should take - appeal dismissed - Council Directive (EEC) No 92/12 Arts 8 and 9; FA 1994 S 16(4) 

LONDON TRIBUNAL CENTRE

	PHILIP NEIL RILEY	Appellant

	- and -

	THE COMMISSIONERS OF CUSTOMS AND EXCISE	Respondents

			Tribunal: DR NUALA BRICE (Chairman)
MR R L JENNINGS FCA FTII

Sitting in public in London on 31 October 2003

The Appellant in person

Mr Sarabjit Singh of Counsel, instructed by the Solicitor for the Customs and Excise, for the Respondents

© CROWN COPYRIGHT 2003

DECISION

The appeal
1.	Mr Philip Neil Riley (the Appellant) appeals against a decision on review dated 6 May 2003 which was to restore the Appellant's vehicle to him on condition of the payment of a sum equal to that of the excise duty involved. We were informed that £1,177.39 was a sum equal to the amount of excise duty involved. 
The legislation relating to the issues in the appeal

2.	Section 152(b) of the Customs and Excise Management Act 1979 provides:

"The Commissioners may, as they see fit- …
(b)	restore, subject to such conditions (if any) as they think proper, any thing forfeited or seized under [the customs and excise] Acts … ."

3.	Section 16 of the Finance Act 1994 (the 1994 Act) provides that an appeal shall lie to the Tribunal against a decision on review under section 15. Section 15 provides for the review of decisions which come within section 14. Section 14(1)(d) includes any decision specified in Schedule 5. Paragraph 2(1)(r) of Schedule 5 specifies 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."

4.	Thus, although section 152(b) gives Customs and Excise a discretion as to whether or not to restore seized vehicles or goods, sections 14 to 16 of the Finance Act 1994 give a right of appeal to the Tribunal against a refusal to restore or the conditions of restoration. However, section 16 limits the jurisdiction of the Tribunal in respect of ancillary matters. Section 16(8) defines ancillary matters as those specified in Schedule 5. As a refusal to restore and the conditions of restoration are specified in Schedule 5 they are, therefore, ancillary matters. The relevant parts of section 16(4) provide:

"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)	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."

The issues     

5.	Customs and Excise imposed the condition on the restoration of the vehicle because they were of the view that excise goods had been carried in the vehicle and that those excise goods had been held for commercial purposes with the intention of making a profit. They also argued that, because the issue had been determined by both the Magistrates' Court and the Crown Court, the Tribunal had no jurisdiction to decide it again. The Appellant argued that the excise goods carried in the vehicle had been held by him for his personal use and so the refusal to restore the vehicle without conditions was unreasonable. 

6.	Thus the issues for determination in the appeal were:

(1)	whether, in the light of the fact that the Magistrates' Court and the Crown Court had already decided that the excise goods carried in the vehicle  were held for commercial purposes, the Tribunal had jurisdiction to find that they were held for personal use; if so

(2)	whether the excise goods were held for personal use; 

(3)	whether, in the light of the conclusions on the first two issues, the Tribunal was satisfied that the person making the decision to restore the vehicle subject to a condition could not reasonably have arrived at that decision within the meaning of section 16(4); and, if so

(4)	what action the Tribunal should take under section 16(4).  

The wider legislative framework

7.	Before summarising the evidence and finding the facts we outline the wider legislative framework as this assists in understanding the facts in the appeal. 

8	Article 99 of the Treaty of Rome (now Article 93 EC) provides that the Council of Ministers of the European Community should adopt provisions for the harmonisation of legislation concerning excise duties. The main excise duty directive was adopted on 25 February 1992 and is Council Directive (EEC) No. 92/12 on "the general arrangements for products subject to excise duty and on the holding, movement and monitoring of such products". The directive applies to mineral oils, alcohol and tobacco. The principles are set out in the recitals to the Directive and the sixth and seventh recitals provide:

"Whereas in the case of products subject to excise duty acquired by private individuals for their own use and transported by them, the duty must be charged in the country where they were acquired; 

Whereas to establish that products subject to excise duty are not held for private but for commercial purposes, Member States must take account of a number of criteria."

9.	Article 7 of the directive provides that, where excise goods are released for consumption in one member state but held for commercial purposes in another, then excise duty is chargeable in the member state in which the goods are held. Article 8 provides that, as regards products acquired by private individuals for their own use and transported by them, excise duty is charged in the member state in which they are acquired. Article 9 provides that, without prejudice to Articles 6, 7 and 8, excise duty is chargeable where products for consumption in one member state are held for commercial purposes in another member state; duty is due in the member state in which the products are held and the holder of the products is chargeable with the duty.  

10.	Thus the scheme of the directive is that where excise goods are acquired by private individuals for their own use and transported by them excise duty is charged in the member state in which they are acquired. If any excise goods are held for commercial purposes in another member state then duty is due in that state from the holder of the goods. 

11	Article 9.2 of the directive provides that, in order to establish whether goods transported by private individuals are intended for commercial purposes, member states must take account of certain criteria including: the commercial status of the holder of the products; his reasons for holding them; the place where the products are located; the mode of transport used; any documents relating to the products; the nature of the products; and the quantity of the products. As far as quantity is concerned, member states may lay down guide levels solely as a form of evidence. The guide levels may not be lower than 800 cigarettes, 400 cigarillos, 200 cigars and 1 kilogram of smoking tobacco. 

12.	The provisions of the directive were originally implemented in the United Kingdom by The Excise Duties (Personal Reliefs) Order 1992 SI 1992 No. 3155 (the 1992 Order).which was in force at the date of the seizure. The limits for tobacco products mentioned in that Order were 800 cigarettes, 400 cigarillos, 200 cigars and 1 kilogram of smoking tobacco.  

13.	Since 1 December 2002 the provisions of the directive have been implemented by The Excise Goods, Beer and Tobacco Products (Amendment) Regulations 2002 SI 2002 No. 2692 (the 2002 Regulations). Article 4 applies to tobacco products and provides that, 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.  "Own use" is defined as including a personal gift. However, Article 4 goes on to provide that, if the tobacco products in question are transferred to another person for money or money's worth (including any reimbursement of expenses incurred in connection with obtaining them) or the person holding them intends to make such a transfer, the products are to be regarded as being held for a commercial purpose. Finally, Article 4 provides that, in determining whether tobacco products are held or used for a commercial purpose, regard shall be taken of: the person's reasons for having possession or control of those products; whether or not that person is a revenue trader; the person's conduct, including his intended use of the products or any refusal to disclose his intended use of the products; the location of the products; the mode of transport used to convey the products; any document or other information relating to the products; the nature of the products including the nature and condition of any package or container; whether the person personally financed the purchase of the products; any other relevant circumstances; and the quantity of the products and, in particular, whether the quantity exceeds 3,200 cigarettes; 400 cigarillos; 200 cigars; and three kilograms of any other tobacco products.  

14.	Thus both the directive and the 2002 Regulations provide that, where excise goods are held for commercial purposes, then excise duty is due in the member state in which the goods are held. At first sight, therefore, it would appear that a conclusion that goods are held for commercial purposes would result in a demand for the tax due. However, the provisions relating to administration, collection and enforcement of excise duty are left to member states and in the United Kingdom they are contained in the Customs and Excise Management Act 1979 (the 1979 Act). There are also many regulations made under the provisions of that Act.

15.	Section 49 of the 1979 Act provides that goods which are imported without payment of duty are liable to forfeiture. Section 124 provides that, where imported goods have been relieved from duty on importation and any condition connected with the relief has not been complied with, the goods shall become liable to forfeiture. Section 141(1)(a) provides that, where a thing has become liable to forfeiture, then any vehicle used for the carriage of that thing is also liable to forfeiture. Section 139(1) provides that anything liable to forfeiture may be seized by a Customs Officer. 

16.	Paragraph 1 of Schedule 3 of the 1979 Act provides that Customs and Excise shall give notice of seizure to any person who, to their knowledge, was at the time of the seizure the owner or one of the owners. Paragraph 3 provides that, if a person claims that anything seized as liable to forfeiture is not so liable, he must give notice of his claim in writing to Customs and Excise within one month of the date of the notice of seizure or of the seizure. Paragraph 5 provides that, if a notice has not been given after that month, then the thing is deemed to be condemned as forfeit. Paragraph 6 provides that, if a notice has been given within that month, then Customs and Excise must take proceedings for the condemnation of the thing by the magistrates' court. If the court finds that the thing was liable to forfeiture then the court shall condemn it as forfeit. Paragraph 11 provides that either party may appeal against the decision of the magistrates' court to the Crown Court.        

17.	These legislative provisions make it clear that all matters concerned with forfeiture and seizure are not matters for the Tribunal but for the magistrates' court or the Crown Court. 

18.	As mentioned above, section 152(b) of the 1979 Act provides that Customs and Excise may, as they see fit, restore, subject to such conditions (if any) as they think proper, anything forfeited or seized and sections 14 to 16 of the 1994 Act provides for appeals to the Tribunal with respect to decisions about restoration or the conditions of restoration. 

19.	Thus, although there is no appeal to the Tribunal against either forfeiture or seizure, there is an appeal to the Tribunal against a refusal to restore a vehicle or excise goods or the conditions of restoration.

20.	With that wider legislative framework in mind we turn to find the facts in this appeal.

The evidence

21.	A bundle of documents was produced by the Appellant who also gave oral evidence on his own behalf. The Appellant exhibited a key ring from a foreign motor car dealer. 

22.	Another bundle of documents was produced by Customs and Excise. Oral evidence was given on behalf of Customs and Excise by Mr Gareth Morgan who conducted the review the subject of the appeal. Witness statements containing evidence on behalf of Customs and Excise were given by: Mr Graham Crouch, an Officer of Customs and Excise, who conducted the review of 16 September 2002; Mr Alan Evans, an Officer of Customs and Excise, who visited the Appellant on 18 February 2001 and who interviewed the Appellant; Mr Peter Michael Hodges, an Officer of Customs and Excise, who visited the Appellant on 18 February 2001; Mr Philip John Newport, an Officer of Customs and Excise, who visited the Appellant on 18 February 2001 and who took notes of the interview in his notebook; and Mr Brian John Rowland of P & O Stena Line who produced a schedule of twenty-three ferry trips made by the Appellant. As these witness statements had not been objected to they were taken as read at the hearing as evidence of the facts stated in them under Rule 21(3) of the Value Added Tax Tribunals Rules 1986 SI 1986 No. 590.   

The facts

23.	From the evidence before us we find the following facts.

24.	The Appellant is now about 60 years old and has full-time employment as a licensed aircraft engineer air-side in a customs controlled area at Heathrow Airport. He works a shift pattern of two twelve-hour days followed by two twelve-hour nights followed by four days off. The Appellant owns the vehicle the subject of the appeal, which is a Volkswagen Corrado registration number N396 PYM, and he also owns another vehicle. The Appellant valued the vehicle the subject of the appeal at about £16,000 as at 18 February 2001, the date of the seizure.

25.	 Between 28 December 1999 and 1 February 2001 the Appellant made twenty-three ferry journeys from Dover to Calais with P & O Stena Line, returning the same day. The twenty-three dates were: 28 December 1999; 22 February 2000, 1 March 2000, 9 March 2000, 16 March 2000, 29 March 2000, 11 April 2000, 19 April 2000, 27 April 2000, 18 May 2000, 20 May 2000, 6 June 2000, 10 June 2000, 28 June 2000, 8 July 2000, 19 July 2000, 8 August 2000, 6 September 2000, 13 September 2000, 25 September 2000, 7 October 2000, 29 November 2000 and 1 February 2001. The Appellant always paid by credit card and later joined a Voyager Club which meant that he got cheap tickets. 

26	All these journeys were made in the vehicle the subject of the appeal. Typically the Appellant would sail out of Dover some time between 6.15 am and 10.00 am and return the same day some time between 13.15 pm and 16.30 pm, thus averaging about six hours for each trip. A Mr P was a passenger in the vehicle on fourteen of the twenty-three journeys. It was not disputed that Mr P is known to Customs and Excise as having imported excise goods for commercial purposes. 

27.	On 7 October 2000 the Appellant was stopped by Officers of Customs and Excise. In the vehicle were eleven kilograms of hand rolling tobacco and 5,000 cigarettes. The Appellant stated that six kilograms of the hand rolling tobacco belonged to Mr P and five kilograms belonged to him. He was not detained. 

28.	In addition to the twenty-three sailing trips with P & O Stena Line the Appellant also made other trips. He flew to Copenhagen on 31 March 2000 and he travelled through the Channel Tunnel on 15 February 2001 when he brought back 800 cigarettes and 400 cigars. 

The seizure 

29.	 On 18 February 2001 Mr Evans, Mr Hodges and Mr Newport, all Officers of Customs and Excise, visited the home of the Appellant. The Appellant was not there as he was working a night shift. The Officers were allowed in by the Appellant's son, Mr Colin Riley, who showed them where some excise goods were. The Officers searched the house and found excise goods in various rooms. Some beer was found in the boot of the Appellant's car N396 PYM and some whisky was found in the boot of another car. The excise goods found in the house were: 1,350 cigarettes, 1,320 cigarillos and 375 cigars. 

30.	Mr Evans then interviewed the Appellant and Mr Newport took notes of the interview in his notebook. Thereafter Customs and Excise formed the view that the excise goods were not held for the personal use of the Appellant but for commercial purposes. As they had been imported without payment of duty they were therefore liable to forfeiture. The Customs Officers seized the excise goods and also the Appellant's car N396 PYM on the basis that the car had been used for the carriage of the excise goods. . 

31.	On 22 February 2001 Mr Jones of Customs and Excise wrote to the Appellant and gave him notice of the seizure of 990 cigarettes, 1,320 cigarillos and 375 cigars. He was also informed of his right of appeal. On 16 March 2001 the Appellant's then solicitors gave to Customs and Excise notice of a claim that the goods and the vehicle were not liable to forfeiture. 

The condemnation proceedings

32.	On 11 October 2001 the Slough Magistrates' Court adjudged that the complaint of Customs and Excise was true and ordered that the goods and the vehicle be condemned as forfeit. 

33.	The Appellant appealed to the Crown Court against the decision of the Slough Magistrates' Court and his appeal was heard on 8 March 2002. The Crown Court held that the vehicle was used to bring back the seized goods either on 1 February 2001 or earlier. The first issue considered by the Crown Court was whether the principle of proportionality, as established in John Richard Lindsay v The Commissioners of Customs and Excise [2002] EWCA Civ 267, applied to the seizure of a vehicle worth about £16,000 if the value of the seized excise goods were £300. The Crown Court held that the mandatory nature of the legislation relating to forfeiture did not contemplate the exercise of a discretion such as was implicit in proportionality and, in any event, the Court of Appeal in Lindsay had held that, if excise goods were held for commercial purposes, it would not be disproportionate to refuse to restore a vehicle used to transport them. 

34.	The Crown Court then went on to consider the second issue which was "whether the court were satisfied, on the balance of probabilities, that the goods in question were being held for commercial purposes". In considering this issue the Court first referred to the number of trips made by the Appellant (namely twenty-three from Dover to Calais in the thirteen months from 28 December 1999 to 1 February 2001) and said "that there would need to be a good reason for activities on this scale". As the Appellant accepted that hand rolling tobacco was brought back on almost every visit the Court held that these facts "properly lead to the inference that the true purpose was indeed the purchase of tobacco". Secondly, the Court referred to the reasons for the trips and said that it did not believe the Appellant's reasons about visiting car dealers, because the Appellant intended to buy a car and then have it modified at the Volkswagen factory and because the Appellant did not in fact buy any car. The Court also held that the Appellant's evidence about visiting memorials and museums in northern France was inconsistent with the notes of his interview where he said that the trips after September 2000 were day trips to buy excise goods. Thirdly, the Court referred to the duration of the trips which it considered were very short for any meaningful visits. And, finally, the Court referred to the amount of excise goods found when the Appellant was stopped on 7 October 2000 in the light of the fact that the Appellant did not smoke hand-rolling tobacco and that that amount of cigarettes would have lasted four months. From all these facts and circumstances the Court inferred that the goods were held for commercial purposes and not for the Appellant's own use. However, the Court did say that it did not think that there was any question of supply to the public at large but believed that the Appellant was part of a small syndicate of friends who probably shared expenses and possibly gave him some remuneration of some kind for his trouble.  

The refusal to restore

35.	After the judgment of the Court of Appeal the Appellant applied to have the vehicle restored under section 152(b) and on 27 June 2002 Customs and Excise decided not to restore the vehicle to the Appellant because it had been used to transport excise goods which were held for  commercial purposes. The decision also stated that the Appellant had given misleading information about the frequency of his journeys and the amount of goods held was unreasonable for gifts.

36.	On 17 September 2002 Mr Crouch reviewed the decision not to restore the vehicle. He knew that the Appellant had made twenty-three journeys between 28 December 1999 and 1 February 2001 and thought that sixteen of those journeys had been made with Mr P. 

37.	On 10 April 2003 the Tribunal directed another review.

38.	On 6 May 2003 Mr Morgan carried out the review which is the subject of this appeal.  He examined all the documents, including the notebook interview, and Mr Crouch's letter of 17 September 2002.  He referred to the applicable legislation including the 2002 Regulations which had come into force on 1 December 2002. He also referred to the policy that applied after 29 October 2002 which was that privately owned vehicles used for the improper importation of excise goods would not normally be restored but that restoration would be considered where the traveller could demonstrate that the goods were to be supplied at purchase price and not for profit and also that restoration would be considered for first offences involving small quantities of excise goods. 

39.	In his review Mr Morgan relied upon the following facts:

(1)	that the Appellant had stated at the interview that he had made only two or three trips with Mr P but in fact had made many more; 

(2)	that the Appellant had stated at the interview that he would visit two or three dealers spending about one and half hours at each and then spend four or five hours shopping; this was not possible bearing in mind the length of the trips; 

(3)	that during the search of the Appellant's house Mr Colin Riley had told the Customs Officers that he was going to pay the Appellant later for some of the excise goods found;

(4)	that during the search of the Appellant's house Mr Colin Riley had told the Customs Officers that the Appellant had given him some hand rolling tobacco the previous week wheras at the interview the Appellant had stated that he had only imported 800 cigarettes and 400 cigars on 15 February 2001 (and no hand rolling tobacco) and 1200 cigarettes and 400 cigars in December 2000; and

(5)	that on 7 October 2000 the Appellant had imported 11 kilograms of hand rolling tobacco and 7,000 cigarettes; at the interview the Appellant had stated that of that amount five kilograms was his and that he smoked 2 pouches each week for eight weeks and then decided that he did not like it and gave away four kilograms. It was unrealistic to spend so much money on tobacco if the Appellant had not tried it before and to persist in smoking it so long before giving it away.

40.	The review letter concluded that, as the quantity of seized goods was small, and as this was a first offence, conditional restoration of the vehicle would be offered on the payment of a sum equal to that of the excise duty involved.  

41.	In evidence which we accept Mr Morgan told us that he did not consider whether the excise goods were held for commercial or personal use as that had been decided by the Magistrates' Court and the Crown Court. He knew that the burden of proving that the goods were held for commercial use was on Customs and Excise but said that he did not take account of this. Mr Morgan was of the view that, at the date of seizure, the vehicle was worth about £8,500 because the price in Glass's Guide in December 2000 was £9,530.

42.	After Mr Morgan's review the post-seizure unit got in touch with the Appellant to see whether he accepted the condition of restoration. He said that he did not and that he would appeal to the Tribunal. 

Reasons for decision

43.	We consider separately each of the issues for determination in the appeal. 

Issue (1) - Does the Tribunal have jurisdiction to decide the use for which the excise goods were held?

44.	The first issue is whether, in the light of the fact that the Magistrates' Court and the Crown Court have already decided that the excise goods carried in the vehicle were held for commercial purposes, the Tribunal has jurisdiction to find that they were held for personal use.

45.	The Appellant argued that he had not had a fair hearing at the Crown Court and that some statements produced at the Crown Court had been untrue. He regarded the proceedings before the Tribunal as an appeal from the Crown Court. The Appellant also made a number of points about the legality of the seizure. He pointed out that no reasons for the seizure were recorded in any document at the time of the seizure. He also said that he was not given a caution of any sort before the interview. 

46.	For Customs and Excise Mr Singh argued that the Magistrates' Court and the Crown Court had decided that the excise goods were not for the Appellant's own use and the Tribunal did not have jurisdiction to decide that issue again.  Mr Singh cited paragraphs 55 to 58 of the judgment of the Court of Appeal in Gora and others v Commissioners of Customs and Excise [2003] EWCA Civ 525 as authority for the principle that the Tribunal had no jurisdiction to reconsider issues of seizure and forfeiture. He distinguished The Commissioners of Customs and Excise v Dickinson [2003] EWHC 2358 (Ch) and argued that the principle established in that case only applied where there had been no findings of fact by a Magistrates' Court or the Crown Court.  

47.	In considering this issue we start with the decision of the Court of Appeal in Lindsay (February 2002). In that appeal a motor car was seized because it contained a substantial quantity of cigarettes and tobacco. Unlike this appeal, there were no proceedings in the magistrates' court or the Crown Court. The appellant claimed that the excise goods were not held for a commercial purpose because they had been purchased for members of his family and other friends who would provide him with the purchase money. The Court of Appeal, in paragraph 17 of its judgment, accepted that such goods would not be held for "own use" and so were liable to duty, but did not accept that a traveller holding excise goods which were not for sale at a profit was holding them "for a commercial purpose". The court went on to consider whether the refusal to restore the vehicle was proportionate having regard to the aim of the prevention of the evasion of excise duty. In paragraphs 63 and 64 the Court held that the policy of non-restoration was appropriate for those who smuggled excise goods in order to sell them at a profit but, where goods were imported for social distribution to family and friends, the principle of proportionality required that each case should be considered on its own particular facts including the scale of importation, whether it was a first offence, whether there was an attempt at concealment or dissimulation, the value of the vehicle, and the degree of hardship.    

48.	Lindsay is of relevance in this appeal because of the distinction drawn between excise goods held for social distribution to family and friends in return for the cost, on the one hand, and excise goods held for the purpose of sale at a profit on the other. In this appeal the proceedings in the magistrates' court and Crown Court were proceedings to determine the legality of the seizure and the forfeiture. The relevant legislation was that in sections 49 and 141(1)(a) of the 1979 Act which provide that goods imported without payment of duty are liable to forfeiture and any vehicle used for their carriage is also liable for forfeiture. Under those provisions it is clear that goods held for social distribution to family and friends in return for the cost are liable to duty and so, if duty is not paid, they and the vehicle used to carry them are liable to forfeiture. That was the issue before the magistrates' court and the Crown Court for decision. 

49.	However, the relevant legislation in this appeal is section 152(b) of the 1979 Act and here the issue is whether a refusal to restore the vehicle subject to the condition of the payment of the duty is reasonable. The Tribunal, unlike the magistrates' court and the Crown Court, has to draw the distinction between excise goods held for social distribution to family and friends in return for the cost, on the one hand, and excise goods held for the purpose of sale at a profit on the other, as Lindsay is authority for the view that different considerations apply to each. In other words, because the issues before the magistrates' court and the Crown Court on the one hand, and before the Tribunal on the other, are different issues, it follows that the facts relevant to those issues will also differ. A finding by the Crown Court that goods were held for commercial purposes will be sufficient to establish the legality of the seizure but will not help the Tribunal which has to go on and find whether the goods held for commercial purposes were held for social distribution to family and friends in return for the cost, on the one hand, or held for the purpose of sale at a profit on the other. Also if the principle of proportionality requires that each case should be considered on its own particular facts including the scale of importation, whether it was a first offence, whether there was an attempt at concealment or dissimulation, the value of the vehicle, and the degree of hardship those facts have to be found.         

50.	At this stage we refer again to the judgment of the Crown Court, in March 2002, in the Appellant's appeal against forfeiture. The Crown Court considered whether the principle of proportionality, as established in Lindsay applied to the seizure of a vehicle worth about £16,000 if the value of the seized excise goods were £300. The Court found that the mandatory nature of the legislation relating to forfeiture did not contemplate the exercise of a discretion such as was implicit in proportionality. (We note that, at the time of the judgment of the Crown Court on 8 March 2002 the decision in The Commissioners of Customs and Excise v Ian Newbury [2003] EWHC 702 (Admin) had not been given; that judgment makes it clear that, notwithstanding the apparent mandatory terms of section 141 and of paragraph 6 of Schedule 3 of the 1979 Act, the magistrates' court and the Crown Court are entitled to reach their own independent judgment as to whether forfeiture would be so disproportionate as to be in breach of a person's rights under Article 1 of Protocol 1 in the Convention set out in Schedule 1 of the Human Rights Act 1998.)  However, the findings of the Crown Court in March 2002 highlight the difference of approach between a court looking at the legality of forfeiture on the one hand and the Tribunal looking at the exercise of a discretion to restore goods or a vehicle on the other. There are different issues before the court on the one hand and the Tribunal on the other.    

51.	Gora was decided on 11 April 2003. A number of issues were before the Court of Appeal but, so far as this appeal is concerned, the relevant issue was whether  the jurisdiction of the Tribunal was sufficient to satisfy Article 6 of the Convention in Schedule 1 of the Human Rights Act 1998.  That issue was considered by Pill LJ in paragraphs 37 to 39 of his judgment. In paragraph 38 he set out the views of Customs and Excise on the jurisdiction of the Tribunal. These were that appellants were entitled to raise issues of blameworthiness before the Tribunal and, if successful, the Tribunal could remit the matter to Customs and Excise with such directions as it thought fit under section 16(4) of the 1994 Act. Customs and Excise would then retake the decision with the Tribunal's ruling. The Tribunal was entitled to satisfy itself that the primary facts upon which Customs and Excise based their decision were correct. The Tribunal should then go on to consider whether, in the light of its findings, the decision on restoration was reasonable. Customs and Excise would not challenge such an approach and would conduct a further review in accordance with the findings of the Tribunal. In paragraph 39 Pill LJ accepted that view of the jurisdiction of the Tribunal and, in that light, decided that it met the requirements of the Human Rights Convention. 

52.	In the passages relied upon by Mr Singh, at paragraphs 54 to 59 of his judgment, Pill LJ considered whether the Tribunal had any jurisdiction in relation to forfeiture. He summarised the legislation relating to seizure and forfeiture and went on to hold that, where liability to forfeiture has been determined by a court, and also where liability to forfeiture is deemed because there have been no court proceedings, the Tribunal had no jurisdiction to re-consider the condemnation of the goods as forfeited. The Tribunal only had jurisdiction to consider appeals about non-restoration under section 152.

53.	 We do not read paragraphs 54 to 59 as authority for the view that, in appeals about non-restoration under section 152, the Tribunal cannot find the relevant facts. Such a conclusion would be inconsistent with paragraphs 37 to 39 of the same judgment. Also, they would cause injustice where there had been no court proceedings about seizure and forfeiture as then there would be no findings of fact by an independent and impartial Tribunal. They would also cause injustice where there had been court proceedings about seizure and forfeiture but where the facts found were not relevant to the issue before the Tribunal or, indeed, where fresh evidence came to light which was not available to the court but was available to the Tribunal.    

54.	Dickinson was decided on 15 October 2003. It is a judgment of the High Court and therefore binding on us. In that appeal a car was seized because it was carrying excise goods above the stated limits. The excise goods were worth £800 and the car was worth £1,800. There were no proceedings in the magistrates' court or the Crown Court. The appellant applied for restoration under section 152(b). Peter Smith J considered the question whether it was open to the appellant in the restoration proceedings to raise the issue of private use and said at paragraph 49:

"49.	I have come to the conclusion that it is open to Mr Dickinson in the restoration proceedings to raise the issue of private use for the purposes of seeking to invoke the discretionary procedure of restoration. That does not involve a challenge to the forfeiture, which cannot be done per Gora save in condemnation proceedings. I see nothing difficult in that. First it enables the matters to be dealt with whichever course of action is taken by the person seeking restoration of his goods. Otherwise there would be an injustice. The failure to issue the notice would preclude C & E and the Tribunal on review from considering restoration when evidence is later produced which shows that it was an own use purchase. Second of course the procedures are different. I do not see why it should not be possible within the ambit of the required explanation of the nature of the commercial transaction that Mr Dickinson could not bring the matters in. The restoration procedure is discretionary, whereas the challenge to the forfeiture is not. In the former case Mr Dickinson would be seeking a review of the decision of the C & E and one factor in that exercise would be the fact that the transaction he established was not for profit. By way of contrast, in the condemnation proceedings, if he established it, he establishes that the forfeiture was not valid."

55.	We take the judgment in Dickinson as authority for the principle that the Tribunal does not have any jurisdiction to consider the legality of forfeiture and seizure, whether or not there have been proceedings in the magistrates' court and/or the Crown Court. However, the Tribunal does have jurisdiction to hear appeals about a refusal to exercise the discretion to restore, and the conditions of restoration, and in that context may consider whether goods were held for personal or commercial use. That principle also confirms the principle laid down in paragraphs 37 - 39 of the judgment of the Court of Appeal in Gora.   

56.	Before leaving this issue we consider the arguments of the parties. It is clear from the legislation and the authorities that the proceedings before the Tribunal are not an appeal from the Crown Court and that the Tribunal has no jurisdiction to express any views about the legality of the seizure and the forfeiture. We agree with Mr Singh that in Dickinson there had been no findings of fact by a magistrates' court or the Crown Court but can find nothing in that decision which leads to the conclusion that the principle it establishes does not apply if there have been findings of fact by those courts. The principles in paragraphs 37 to 39 of Gora are of wide application and the principles in paragraphs 54 to 59 apply both where there has been a determination by a court and where there has been no court proceedings. 

57.	We therefore conclude that, even though the Magistrates' Court and the Crown Court have decided, within the context of the legality of forfeiture, that the excise goods carried in the vehicle were held for commercial purposes, the Tribunal has jurisdiction to find its own facts within the context of the refusal to exercise the discretion to restore the vehicle subject to a condition.

(2)	Were the excise goods held for personal use ?

58.	The second issue is whether the excise goods were held for personal use. 

59.	Here we are bound by the provisions of the directive and the 2002 Regulations and so, in determining whether the tobacco products were held by the Appellant for a commercial purpose we must have regard to: the Appellant's reasons for having possession or control of the excise goods; whether or not the Appellant is a revenue trader; the Appellant's conduct, including his intended use of the products or any refusal to disclose his intended use of the products; the location of the products; the mode of transport used to convey the products; any document or other information relating to the products; the nature of the products including the nature and condition of any package or container; whether the Appellant personally financed the purchase of the products; any other relevant circumstances; and the quantity of the products and, in particular, whether the quantity exceeded 3,200 cigarettes; 400 cigarillos; 200 cigars; and three kilograms of any other tobacco products.  

60.	We therefore start by considering the Appellant's reasons for having control of the excise goods and, in this connection, we consider the evidence of the Appellant about  the number and duration of his trips and the reasons for them. 

61.	In evidence the Appellant explained the number of his trips and the reasons for them as follows. In 1998 the Appellant's mother left him some money. For some months he had been looking for a Volkswagen Corrado car which was a limited edition from the end of production  He found one, bought it and modified it. (That is the vehicle the subject of the appeal). He then decided to look for a replacement and wanted a Volkswagen Golf GTI 1.8 Turbo.  

62.	In oral evidence the Appellant claimed that he visited a dealer on 28 December 1999 (trip 1) to see what they offered. The dealer said that he would not sell a single car but gave the Appellant a key ring which was exhibited in evidence  The Appellant then decided to try in France and went on 22 February 2000 (trip 2). There he was told that he would get a better deal in Belgium. He therefore went to Belgium on 1 March 2000 (trip 3); he took his price lists and brochures and found the prices and options cheaper there. The next two trips on 9 and 16 March 2000 (trips 4 and 5) were made with Mr P and the Appellant said he bought a Belgian Autotrader magazine of which he produced a copy of the front page. The Appellant also said that he flew to Copenhagen on 31 March 2000 and visited two dealers neither of whom would sell cars in single units. The next sailing was on 29 March 2000 (trip 6) when the Appellant said that he visited a Volkswagen agent in Ostend. On the next trip on 11 April (trip 7) he visited another dealer of cars and also the Atlantic War Museum in Ostend. On 19 April 2000 (trip 8) he dropped his passenger off to shop and visited a dealer. On 27 April (trip 9) he did the same. On 18 May 2000 (trip 10) he went to have his car serviced but the garage did not have the right sort of oil so he said he would bring his own and he returned on 20 May 2000 (trip 11) when the car was serviced. On 3 and 4 June 2000 he visited the imported car show at Sandown Park, Esher, Surrey and picked up some leaflets and on 6 June 2000 (trip 12) he travelled to Belgium and visited a dealer. He passed an Air Force base which was advertising a Belgian National Air Day on 10 June so on 10 June 2000 (trip 13) he visited the Air Day. When he was there he picked up leaflets about World War 1 museums and historic sites. At about that time he approached his bank enquiring about making a payment abroad in order to purchase a car in Belgium. On 28 June 2000 (trip 14) he visited the museums at Flanders and Ypres and on 8 July 2000 (trip 15) he visited a museum near St Omer, which was north of Calais. While there he obtained a book of tickets for visiting neighbouring museums. On 19 July 2000 (trip 16) he visited the La Cupole museum near St Omer and a V2 rocket site and on 8 August 2000 (trip 17) he visited the Calais War Museum. On 6 September 2000 (trip 18) he visited a museum near Boulogne and on 13 September 2000 (trip 19) he visited another museum near Boulogne. 

63.	The Appellant then claimed that in about September 2000 the Secretary of State, Mr Stephen Byers, made a statement that the price of cars in the United Kingdom would fall dramatically and so he (the Appellant) decided not to import a car. He thought he might like to buy a four wheel drive Golf V6 in the United Kingdom. Instead of importing a car he thought that he might prefer to re-fit his kitchen instead. On 25 September 2000 (trip 20) he had his tyres replaced. On 7 October 2000 (trip 21) he visited kitchen shops near Dunkirk and in Calais, priced some kitchen units and picked up some brochures. He also bought cigarettes and tobacco and was stopped by Customs and Excise who were happy with his explanation. The trip on 29 November 2000 (trip 22) was for Christmas shopping and he also bought cigarettes on that trip. The trip on 1 February 2001 (trip 23) was a shopping trip but he bought no cigarettes. 

64.	In order to establish what weight to give to this oral evidence we have considered the supporting documentary evidence. Much of the documentary evidence consisted of copies of extracts from a number of motoring magazines dealing with the purchase of cars abroad.  One magazine indicated that the best savings could be found in Holland. The Appellant said that he looked up Volkswagen dealers in a dealers' guide and found two in Oostburg and Terneuzen. He produced a copy of a map with these two towns ringed. One magazine was dated November 1999 and could have been read before the first trip on 28 December 1999. The Belgian Autotrader magazine did not have a date but could have been purchased on 16 March 2000. Another was a copy of Volkswagen Audi car magazine dated April 2000 which advertised a firm which specialised in procuring brand new Volkswagens from a main Belgian dealer for delivery in the United Kingdom saving up to £4,000; this magazine could well have been purchased on the 29 March 2000 (trip 6). We also saw leaflets advertising the imported car show at Sandown Park, Esher, Surrey in June 2000 and are satisfied that the Appellant most probably attended that show. We saw a witness statement from the Appellant's bank and are satisfied that in about June 2000 he did approach his bank to enquire about making a payment abroad. We saw an invoice from a French garage in respect of a tyre change which could well explain the visit on 25 September 2000.

65.	In the light of this documentary evidence we are prepared to find that the trips on 28 December 1999, 16 March 2000 and 29 March 2000 were spent in looking for cars and that the trip on 25 September 2000 was spent in having some tyres replaced. However, that explains only four out of twenty-three trips, not forgetting that fact that other trips were made by air and through the Channel Tunnel. Having weighed both the oral and documentary evidence before us we find that, although four of the twenty-three trips could well have been made to look for another car, or for the replacement of tyres, the Appellant has not satisfied us that most of the trips were  made for the purposes he claimed. 

66.	The second matter we must consider is whether or not the Appellant was a revenue trader. He was not.

67.	The third matter we must consider is the Appellant's conduct, including his intended use of the products or any refusal to disclose his intended use In this connection we have found it convenient to consider the Appellant's evidence about the notebook interview.

68.	Generally, the Appellant claimed that he arrived home at 12.09 pm on the day of the seizure and that the interview did not start until 13.08 pm and that there had been conversations before the interview started. We accept that that is most probably the case. The Appellant also claimed that he was not asked to clarify his answers and we have taken that into account when considering his evidence about the notebook interview.  

69.	The notebook recorded that the Appellant was asked if he knew Mr P and the Appellant relied that "he has been on two or three trips with me". When asked at the hearing how that was consistent with the fact that Mr P had been on fourteen trips the Appellant replied that two or three trips were looking for cars. We do not find this explanation convincing. 

70.	During the notebook interview the Appellant was asked how often he travelled and he then replied "every 2 - 3 months, same quantities each time". At the hearing the Appellant explained that he said this in February 2001 and his previous trip had been in December 2000 which was about two months earlier. However, we have found as a fact that the previous trip had been through the Channel Tunnel on 15 February 2001 and that the previous sailings were 1 February 2001 and 30 November 2000.  

71.	During the notebook interview the Appellant was asked about the frequency of his visits and he said that before December 2000 he had made a visit in October and previously two months before October; and that he had made about ten trips in 2000. However, we have found as a fact that there was also a visit in November 2000 and  there were, in addition, three visits in September 2000 and one in August 2000. In the year 2000 there were a total of twenty-one visits. 

72.	The notebook recorded that the Appellant was asked what brands he smoked and replied "I occasionally smoke Superkings Menthol mainly cigars and Marlborough Lights. No tobacco".  Later the notebook recorded that the Appellant was asked what he had done with the tobacco he had imported on 7 October 2000 and he replied that he had smoked some of it himself "but could not get on with it" and so gave the rest away. At the hearing he explained his first answer of "no tobacco" by saying that, at the date of the interview, he had stopped smoking hand rolling tobacco as he had lots of cigarettes but that he did smoke hand rolling tobacco. We find that the Appellant's first answer was most probably correct and that he did not smoke hand rolling tobacco. 

73.	During the notebook interview the Appellant was asked what he would do in Belgium while he was looking for cars and he replied "I would go to two to three dealerships a trip" and would spend one and a half hours at each showroom. At the hearing he argued that he would perhaps visit three dealers but would spend time at only one and pay very quick visits to the others. We find that in this respect the notebook was correct. 

74.	We accept some of the evidence of the Appellant about the notebook interview. In the notebook there were incorrect references to the Appellant bringing in 7,000 cigarettes on 7 October 2000 when we have found as a fact that he brought in 5,000. The notebook also recorded that the Appellant was asked "When you go shopping how long do you spend over there?" and he replied "Shopping 4-5 hours, cars all day" On this point we accept the evidence of the Appellant that he meant that he either shopped, in which case he spent four or five hours, or he looked at cars in which case he spent all day. The notebook recorded that the Appellant had stated that he purchased only cigarettes and cigars on 15 February 2001 but that Mr Colin Riley had said that the Appellant had given him (Colin) a gift of five pouches of hand rolling tobacco "the previous week". The Appellant argued that it was ridiculous to infer that he had brought back the tobacco "the previous week" and argued that he had some left over from his trip in October. We accept that the notebook did not record the fact that Mr Colin Riley had said that the tobacco given to him had been purchased the previous week and there was no reason to infer that it had been purchased on 15 February 2001.   

75.	The Appellant also pointed out some other inconsistencies in the documentation. For example, the seizure document stated that 1,350 cigarettes were seized but the letter of 22 February 2001 stated that 990 cigarettes were seized. No satisfactory explanation was given to us for this discrepancy. 

76.	Having considered the Appellant's evidence about the notebook interview we find that, although some of the entries in the notebook were successfully challenged by the Appellant, most were not and the inconsistencies between what he said at the interview and what he claimed at the hearing reflect on his conduct and his credibility as a witness. 

77.	The fourth matter which we have to consider is the location of the products. It is relevant that the excise goods were found at the Appellant's house and none of the goods which were seized were found in the car which was seized. However, from the facts which we have found, especially the number of voyages, we infer that the excise goods found at the house had been imported in the car on previous voyages.  

78.	The fifth matter which we must consider is the mode of transport. From the evidence before us we infer that the car N393 PYM was used to import the excise goods.

79.	Other matters which we must consider include:

any document or other information relating to the products. It is significant that no document or other information relating to the products was produced by the Appellant;

the nature of the products; we draw no inferences from the nature of the products;

whether the Appellant personally financed the purchase of the products; we had no evidence on this matter; and

any other relevant circumstances; none were mentioned to us.

80.	The final matter which we must consider is the quantity of the products. The excise goods seized on 18 February 2001 were 1,350 cigarettes, 1,320 cigarillos and 375 cigars. All these quantities exceeded those in the 1992 Order (in force at the date of seizure). The number of cigarillos and cigars exceeded the quantities mentioned in the 2002 Regulations (in force at the date of the review decision under appeal) but, on the other hand, the number of cigarettes did not. No hand rolling tobacco was seized. 

81.	On its own we would not regard the quantity of the seized goods as leading inevitably to the conclusion that they were not held for personal use. However, taking into account all the factors which we must take into account, especially the Appellant's reasons, his conduct, the mode of transport and the frequency of the trips, we conclude that the excise goods were not held for personal use.  

82.	We go on to consider whether the goods were held for social distribution to family and friends on a not-for-profit basis. We recall that the Crown Court said that it did not think that there was any question of supply to the public at large but believed that the Appellant was part of a small syndicate of friends who probably shared expenses and possibly gave him some remuneration of some kind for his trouble. Although it was not part of the Appellant's case we find that it is most probable that the excise goods were held for distribution to family and friends in return for payment of the cost. 

83.	Our conclusion on the second issue is that the excise goods were not held for personal use but were held for not-for-profit commercial purposes.  

(3)	Was the review decision unreasonable?

84.	The third issue is whether, in the light of the conclusions on the first two issues, the Tribunal is satisfied that the person making the decision to restore the vehicle subject to a condition could not reasonably have arrived at that decision within the meaning of section 16(4) of the 1994 Act.

85.	For Customs and Excise Mr Singh argued that Mr Morgan's review decision was reasonable. He had looked at all the source material including the Officer's notebooks and had applied the 2002 Regulations 
 
86.	From our conclusions on the first two issues in the appeal it is clear that Customs and Excise were reasonable in deciding to restore the Appellant's vehicle on condition that he paid the excise duty. Excise goods which are imported for distribution to family and friends in return for payment of the costs are not held for personal use and so are chargeable with duty.  

87.	Having said that we have some reservations about whether Mr Morgan took into account all relevant factors and disregarded all irrelevant factors. In particular, Mr Morgan did not appear to consider separately all the factors mentioned in the directive and the 2002 Regulations as matters which must be considered.  Further, Mr Morgan appeared to assume that, because the notebook recorded that Mr Colin Riley had told the Customs Officers that the Appellant had given him some hand rolling tobacco the previous week it had been imported the previous week. We have found that Mr Colin Riley did not say that the Appellant had imported the tobacco the previous week. Also Mr Morgan did not consider whether the excise goods were held for commercial or personal use as that had been decided by the Magistrates' Court and the Crown Court. In our view he should have considered whether, within the context of the exercise of the discretion, the goods had been held for personal use or for not-for-profit commercial purposes. 

88.	However, even if Mr Morgan had considered all these matters, in the light of the findings of fact which we have made he would inevitably have come to the same conclusion. Accordingly, we are satisfied that the person making the decision to restore the vehicle subject to a condition could reasonably have arrived at that decision.

(4)	What action should the Tribunal take?

89.	The fourth issue is what action the Tribunal should take under section 16(4). We dismiss the appeal.  

Decision

90.	Our decisions on the issue for determination in the appeal are:

(1)	that, even though the magistrates' court and the Crown Court have decided that the excise goods carried in the vehicle  were held for commercial purposes, the Tribunal does have jurisdiction to decide whether the excise goods were held for personal use or commercial not-for-profit use within the context of an appeal against a refusal of unconditional restoration;

(2)	that the excise goods were not held for personal use but were held for commercial not-for-profit use;

(3)	that, in the light of the conclusions on the first two issues, we are satisfied that the person making the decision to restore the vehicle subject to a condition could reasonably have arrived at that decision within the meaning of section 16)(4); and

(4)	that we should dismiss the appeal.  

77.	The appeal is, therefore, dismissed.

78.	We record that, at the hearing of the appeal, the Appellant made the point that some of the cigars which had been seized were in fact cigarillos and so liable to a lower rate of duty. We had no evidence upon which to reach any conclusion about this but Customs and Excise said that, if the Appellant were correct, then an appropriate adjustment would be made to the amount of duty due.  

DR NUALA BRICE

CHAIRMAN

                                               RELEASE DATE:

LON/2003/8131
08.12.03
C:\riley